TO THE MEMBERS,
The Directors have pleasure in presenting the 33rd Annual Report on the
business and operations of your Company together with the Audited
Statement of Accounts for the year ended 31st March, 2013.
Your Company''s performance for the financial year ended 31st March,
2013 is stated below:
(Rs. in Crores)
Particulars Standalone Consolidated
Year Ended Year Ended Year Ended Year Ended
31.03.2013 31.3.2012 31.03.2013 31.03.2012
operations (Gross) 11,121.88 8,498.33 12,128.47 9,364.29
Less: Excise Duty
on sales 835.67 607.28 823.73 598.98
Operations (Net) 10,286.21 7,891.05 11,304.74 8,765.31
Profit before other
Cost, Depreciation, 614.97 904.04 708.56 947.65
Tax & Amortisation
Add: Other Income 44.13 75.31 35.04 57.88
Less: Finance Costs 990.29 516.80 1,043.44 570.17
Less: Depreciation /
Amortisation 701.31 408.61 740.14 448.50
Tax & Exceptional
Items (1,032.50) 53.94 (1,039.99) (13.14)
Items - Gain/(Loss) (166.96) (207.76) (183.99) (231.45)
Before Tax (1,199.46) (153.82) (1,223.98) (244.59)
Less: Tax Expenses (378.64) (49.91) (381.94) (63.15)
Net Profit /(loss)
after Tax (820.82) (103.91) (842.04) (181.44)
Share in Profit /
(Loss) of Associate - - (0.41) (1.22)
Minority Interest - - 1.74 2.89
Net Profit / (Loss) (820.82) (103.91) (840.71) (179.78)
for Associate &
Amount brought forward 618.69 716.58 530.87 704.63
Reserve written back 3.77 6.01 3.77 6.01
Amount available for
Appropriation (198.36) 618.69 (306.07) 530.87
General Reserve - - 0.08 -
Less: Being deficit,
Set off from General
Reserve (198.36) - (306.15) -
Net surplus in
statement of Profit
& Loss - 618.69 - 530.87
During the year, the Gross Revenue from operations of your Company on
standalone basis has increased by 31% at Rs. 11,121.88 crore as
compared to Rs. 8,498.33 crore during previous financial year 2011-12.
The Profit before other income, Finance Cost, Depreciation, Exceptional
Items, Tax & Amortisation on standalone basis stood at Rs. 614.97 crore
as compared to Rs. 904.04 crore during previous year.
Further, during the year, the Consolidated Gross Revenue from
operations of your Company has increased by 30% at Rs. 12,128.47 crore
as compared to Rs. 9,364.29 crore during previous financial year
2011-12. Consolidated Profit before other income, Finance Cost,
Depreciation, Exceptional Items, Tax & Amortisation stood at Rs. 708.56
crore as compared to Rs. 947.65 crore during previous year.
The financial results of the Company during the year 2012-13 have been
adversely impacted inter-alia on account of (i) Economic slowdown in
Europe and most large countries in Asia, resulting into weak demand for
Stainless Steel internationally, squeezing margins in markets; (ii)
Over capacity in China and dumping of Stainless Steel material into
India leading to reduced margins in the Company''s markets; (iii)
Owing to above factors, the Company slowed down the ramp-up of Jajpur,
Odisha Stainless Steel operations leading to lower margins as the
Company could not enjoy economies of scale at that plant; and (iv)
Monopolistic pricing policies of certain PSU companies leading to
erosion of margins in ferro chrome unit.
(A) Hisar Division:
Despite the slowdown in Global economy Hisar plant has been able to
achieve 98% of its planned capacity at Steel melting shop by producing
719,353 MT of steel as compared to 723,418 MT during financial year
2011-12. Hot Rolling Mills were utilized as per market dynamics and
produced 523,200 MT as compared to 540,671 MT during financial year
2011-12. During the year, Cold Rolled Annealed Pickled production was
243,458 MT as compared to 257,335 MT during financial year 2011-12.
Your Company focused on effective utilization of available resources
and productivity improvement at various lines to achieve cost
efficiency. Steel melting shop has achieved landmark of 50 heats in a
day, similarly others lines have also performed efficiently in this
slow down period to meet the expectations.
During the year, two new Grades JSLU - DD & JSLU - SD have been
launched to cater to utensils market. Now, these Grades are welcomed
and accepted by markets and are in regular production. During the year
no major capital expenses have been incurred and ongoing projects have
been completed in Special product division.
(B) Odisha Division
Your Company has been successfully operating stainless steel making
facility at Jajpur, Odisha, with a capacity of 800,000 tons per annum
and has been rolling of stainless steel products from this facility for
over two years. The ramp-up and stabilization of finishing facilities
are in progress. During the year under review, steel melting shop
produced 313,258 tons, hot strip mill processed 300,435 tons and
facilities in cold rolling mill processed 255,130 tons of stainless
steel. The stainless steel facilities under operations at Odisha are
state of art facilities and have substantially enhanced the product
portfolio of the Company including wider width products of upto 1600
The ferro alloys production during the year stood at 83,290 tons. There
were challenges in procuring the chrome ore from domestic sources at
cost effective prices, which impacted the overall production and the
capacity utilizations during the year. However, in order to reduce the
costs, the Company worked on imported low Grade chrome ore from Gulf,
improving chromium recoveries & higher usage of hard lumpy ore &
replacing usage of coke with anthracite coal. The Company has also
taken up the matter with various Government agencies to rationalize the
chrome ore bidding process.
The operations at 250 MW thermal power plant were adversely affected on
account of higher input prices of thermal coal and drop in prices of
surplus power sold to the state Grid. It operated mostly on imported
low ash coal from Indonesia blended with Indian coal. Both the two
power plants were producing power and generated around 1089.53 million
units (net), of which around 34.13 million units were exported to Hisar
plant. The power plant has achieved highest ever PLF of 107.19% on 22nd
January, 2013. It also achieved PLF of more than 100% for many days
consistently during the 4th Quarter. The production at 14 MW power
plant was 50.32 million units (net).
Jindal Chromite Mine produced 28,955 MT of chromite ore concentrate
from its beneficiation plant and also achieved 96,022 MT chrome ore
from Mines pit for the year, which is much higher than previous year
production. The mines dispatched 20,568 MT of concentrate ore and
23,099 MT of chrome ore to Vizag plant during the year.
The coke oven facility was operated under lease with work arrangement
for conversion of coal into coke. The coke oven battery successfully
produced metallurgical coke with gradual ramp-up. For the year, the
total production out of the coke oven facility stood at 251,593 tons of
(C) Vizag Division
The Vizag Plant produces High Carbon Ferro Chrome with annual capacity
of 40,000 Tons per annum. Vizag Unit uses Chrome Ore supplied from
captive Sukhinda Chromite Mines and transfers the output to Hisar
Plant. The division has achieved 50% of the installed capacity by
producing 20,169 tons of High Carbon Ferro Chrome during the year
2012-13 as compared to 24,832 tons during the preceding year. The
production was less during the year 2012-13 due to Power restrictions
being imposed by the APEPDCL from September''2011 onwards.
Further Vizag Unit despatched 21,069 tons to JSL, Hisar during the year
2012-13 as compared to 24,805 tons during the preceding year on Job
During the year, your Company''s proposal in relation to re-work of its
term debt obligations (Rework Scheme) under CDR mechanism was
approved by CDR EG and Rework Letter of Approval (Rework LOA) was
issued on September 18, 2012. The Rework Scheme inter-alia includes
reworking of repayment schedule, interest funding, adjustments in
interest rates to ensure protection of net present value of the
respective facilities, etc. w.e.f. 31st March, 2012 (Reworking
Cut-off Date). Consequently, the Amended & Restated Master
Restructuring Agreement (Amended MRA) has been executed on
September 25, 2012 with certain lenders. As on date of this report,
except HDFC Bank, all CDR lenders have executed the necessary
Besides reworking of its domestic term debt obligations, your Company
during the year has also successfully completed the restructuring of
its debt obligations in relation to ECB facilities of USD 250 million
availed for the part financing of Odisha Phase II project and has
executed requisite amendment agreements with all the ECB lenders. The
revised terms inter-alia include deferment of repayment schedule and
increase in interest rates etc.
During the year under review, the Company allotted 10,21,922 equity
shares upon conversion of 560 Convertible Bonds of US$ 5,000 each.
Further, in order to meet the requirements of approved Reworked
Corporate Debt Restructuring (CDR) Scheme, the Company had obtained
approval of the Shareholders by means of Special Resolutions passed
through Postal Ballot on 15th February 2013, for issuance of equity
shares to a Promoter Group Company (hereinafter referred to as the
proposed allottee in following manner:
(i) 1,35,50,000 equity shares of face value of Rs. 2/- each on or
before 31st March, 2013, and
(ii) 1,35,50,000 equity shares of face value of Rs. 2/- each on or
before 30th June, 2013.
Pursuant to the aforesaid Shareholders'' approval, the Company
allotted the 1st tranche of 1,35,50,000 equity shares of face value of
Rs. 2/- each at an issue price of Rs. 74/- each (including a premium of
Rs. 72/- per equity share) amounting to Rs. 100.27 crore on
preferential basis to a promoter group company, on 30th March, 2013.
Consequently, the paid-up share capital of the Company has increased
from Rs. 38,10,55,094 to Rs. 40,81,55,094 divided into 20,40,77,547
equity shares of Rs. 2/- each.
However, upon request of the proposed allottee, the Board of Directors,
subject to necessary shareholders'' approval, has approved the
infusion of balance amount of Rs. 100.27 crore by way of preferential
allotment of 1,35,50,000 equity shares at an issue price of Rs. 74/-
each (including a premium of Rs. 72/- per equity share) on or before
31st March, 2014 instead of 30th June, 2013. This will align with the
requirement of Reworked CDR approval which stipulates that the balance
capital be infused into the Company on or before 31st March, 2014.
The Board, considering the Company''s performance and financial
position for the year under review, has not recommended any dividend on
equity shares of the Company for the year ended 31st March, 2013.
Transfer to Investor Education and Protection Fund
Pursuant to section 205C of the Companies Act, 1956, the Company has
transferred unclaimed and unpaid amounts aggregating to Rs. 20,13,600
to Investor Education and Protection Fund of Government of India during
the year 2012-13.
Employees Stock Option Scheme
During the year under review, 5,34,771 stock options were vested in
eligible employees. The ESOS Compensation Committee granted 1,50,000
stock options to eligible employees under the ESOP Scheme of the
Company. The disclosure, under Clause 12 of Securities and Exchange
Board of India (Employee Stock Option Scheme and Employee Stock
Purchase Scheme) Guidelines, 1999 is set out in Annexure to this
During the year, the Company has completed the implementation of SAP
ECC 6.0 version. This SAP-ERP implementation project named as
Project Manthan has gone live from 1st May, 2013. This project
will integrate all business processes of your Company across all the
locations, on a real time basis and help in quick transactional and
decision making processes and ultimately assist the management in
enhancing stakeholder''s value.
With this SAP Go-live, the IT & Manthan teams have initiated a New SAP
era and have laid a foundation for further IT lead business benefit
projects in your Company.
As on 31st March, 2013, your Company has 17 direct and step down
subsidiaries, namely (i) Jindal Stainless UK Limited; (ii) Jindal
Stainless FZE, Dubai; (iii) PT Jindal Stainless Indonesia; (iv) Jindal
Stainless Italy S.r.l.; (v) Jindal Stainless Madencilik Sanayi VE
Ticaret A.S., Turkey (vi) Jindal Stainless Steelway Limited; (vii) JSL
Lifestyle Limited; (viii) JSL Architecture Limited; (ix) Green Delhi
BQS Limited; (x) JSL Media Limited; (xi) JSL Group Holdings Pte. Ltd.,
Singapore; (xii) JSL Ventures Pte. Ltd., Singapore; (xiii) JSL Europe
S.A., Switzerland; (xiv) JSL Minerals & Metals S.A., Switzerland; (xv)
Jindal Aceros Inoxidables S. L., Spain; (xvi) JSL Logistics Limited;
and (xvii) Iberjindal S.L., Spain.
Pursuant to the general circular No. 51/12/2007-CL-III dated 8th
February, 2011 issued by the Ministry of Corporate Affairs, Government
of India, the balance sheet, profit and loss account and other
documents of the subsidiary companies are not attached with the balance
sheet of your Company. The annual accounts and other related documents
of the subsidiaries are available at the website of the Company and
will be made available to any member of the Company who may be
interested in obtaining the same. The annual accounts of the subsidiary
companies will be kept open for inspection by any shareholder at the
registered office of the Company during normal business hours. The
consolidated financial statements of the Company include the financial
results of all the subsidiary companies.
The members, if they desire, may write to Company Secretary at O.P.
Jindal Marg, Hisar - 125005 (Haryana) to obtain the copy of the annual
report of the subsidiary companies.
The Board of Directors has appointed Mr. Uday Kumar Chaturvedi as an
additional director and designated him as Chief Executive Officer
with effect from 27th May, 2013. The Company has received Notice
pursuant to section 257 of the Companies Act, 1956, from a member
signifying his intention to propose Mr. Chaturvedi as a candidate for
the office of Director. The Board has also approved appointment and
terms of remuneration of Mr. Chaturvedi as Whole Time Director
designated as Chief Executive Officer of the Company, subject to the
approval of the Shareholders. The said appointment and remuneration of
Mr. Uday Kumar Chaturvedi is recommended for the approval of the
Shareholders in the Notice forming part of this Annual Report.
As on the date of this report, Mr. Jurgen Hermann Fechter, Mr. Ramesh
R. Nair and Mr. Subash Singh Virdi resigned from the Board of Directors
of the Company w.e.f. 6th February, 2013, 2nd April, 2013 and 27th May,
2013 respectively. The Board places on record its sincere appreciation
for the valuable contributions made by them during their tenure.
Mr. Suman Jyoti Khaitan, Mr. T.S. Bhattacharya and Mr. James Alistair
Kirkland Cochrane, Directors, will retire by rotation at the ensuing
Annual General Meeting of the Company and, being eligible, offer
themselves for re-appointment.
Brief resumes of the Directors being appointed / re-appointed, nature
of their expertise in specific functional areas, details of
Directorship in other companies and the membership/ chairmanship of
committees of the board, as stipulated under Clause 49 of the listing
agreement with the stock exchanges, are given in the Notice forming
part of the annual report.
The Company has accepted/renewed deposits amounting to Rs.
21,12,61,000/- during the year under review. There were no overdue
deposits on 31st March, 2013, except Rs. 92,87,000/- which remain
Particulars Regarding the Conservation of Energy, Technology
Absorption, Foreign Exchange Earnings and Outgo
The Information relating to energy conservation, technology absorption,
foreign exchange earnings and outgo required to be disclosed under The
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is given in Annexure - 1 forming part of this
Particulars of Employees
As required by the provisions of section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
as amended, the names and other particulars of the employees are set
out in the annexure to the Directors'' report. However, as per the
provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the
report and accounts are being sent to all the Shareholders of the
Company excluding the aforesaid information. Any Shareholder interested
in obtaining such particulars may write to the Company Secretary at the
registered office of the Company.
Auditors and Auditors'' Report
M/s. Lodha & Co. and M/s. S.S. Kothari Mehta & Co., joint statutory
auditors of the Company, hold office until the conclusion of the
ensuing annual general meeting and are eligible for re-appointment. The
Company has received letters from them to the effect that their
appointments, if made, would be within the prescribed limits under
section 224 (1B) of the Companies Act, 1956 and also that they are not
otherwise disqualified within the meaning of sub section (3) of section
226 of the Companies Act, 1956, for such appointment.
The notes to the accounts referred to in the auditors'' report are
self-explanatory and, therefore, do not call for any further comments.
The Board of Directors has re-appointed M/s. Ramanath Iyer & Co., Cost
Accountants, the cost auditors for conducting the audit of cost audit
records in respect of Steel business for the financial year 2013-14
subject to approval of the Central Government. Particulars of Cost
Auditor and Cost Audit Report, as required vide General Circular No.
15/2011 dated 11th April, 2011 issued by Cost Audit Branch, Ministry of
Corporate Affairs, Government of India, are as under:
Name of the Cost Auditor: M/s. Ramanath Iyer & Co.
Cost Accountants, 808,Pearls Business Park,
Netaji Subash Place, Pitampura, New Delhi - 110 088
Names and Membership No. of Partners of Firm Ms. R. Parvathy, M. No.
Dr. D. Jagannathan, M. No. 5839 Mr. V. A. Sundaram, M. No. 818 Mr. S.
Laxminarayana, M. No.7664 Ms. Sona Sharma, M. No. 31446
Due date for filing of Cost Audit Report for the financial year 2011-12
by the Cost Auditor with the Central Government
Within 180 days from the close of company''s financial year, i.e. upto
27th September, 2012. However, Central Government vide its various
circulars issued from time to time extended the date of filing of Cost
Audit Report in XBRL format upto 28th February, 2013.
Date of actual filing of Cost Audit Report for the financial year
2011-12 with the Central Government.
Cost Audit Report for the financial year 2011-12 was filed by the Cost
Auditor with the Central Government on 18th January, 2013.
Directors'' Responsibility Statement
Pursuant to the requirement under section 217(2AA) of the Companies
Act, 1956 with respect to directors'' responsibility statement, it is
hereby confirmed that:
(a) in the preparation of the annual accounts, the applicable
accounting standards have been followed;
(b) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at 31st March, 2013 and of the profit of the Company
for the year ended on that date;
(c) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
(d) the Directors have prepared the annual accounts of the Company on a
''going concern'' basis.
A separate section on Corporate Governance and a certificate from the
practicing company secretary regarding compliance of conditions of
corporate governance as stipulated under clause 49 of the listing
agreement with the stock exchanges, forms part of the annual report.
Management Discussion and Analysis Report
Management discussion and analysis report as required under the listing
agreements with the stock exchanges is enclosed with this report.
Your Directors would like to express their gratitude for the valuable
assistance and co-operation received from shareholders, banks,
government authorities, customers and vendors. Your Directors also wish
to place on record their appreciation for the committed services of all
the employees of the Company.
For and on behalf of the Board of Directors
Place: New Delhi Savitri Jindal
Date : 27th May, 2013 Chairperson