The Directors are pleased to present the 32nd Annual Report on the
business and operations of your Company together with the Audited
Statement of Accounts for the year ended 31st March, 2012.
Your Company''s performance for the financial year ended 31st March,
2012 is stated below:
( Rs. in Crores )
Particulars Year Ended Year Ended Year Ended Year Ended
31.03.2012 31.03.2011 31.03.2012 31.03.2011
operations (Gross) 8,498.33 7,351.27 9,364.29 8,035.85
Less: Excise Duty
on sales 607.28 512.29 598.98 503.62
Operation (Net) 7,891.05 6,838.97 8,765.31 7,532.23
Profit before other
Cost, Depreciation, 904.04 1,081.03 947.65 1,173.66
Exceptional Items, Tax
& Amortisation (EBIDTA)
Add: Other Income 75.31 56.99 57.88 49.26
Less: Finance Costs 516.80 388.74 570.17 429.25
Less: Depreciation /
Amortisation 408.61 356.14 448.50 395.46
Profit /(Loss)Before Tax
& Exceptional Items 53.94 393.13 (13.14) 398.21
Add: Exceptional Items
– Gain/(Loss) <207.76) 54.22 (231.45) 74.77
Profit/(Loss) Before Tax (153.82) 447.36 (244.59) 472.97
Less: Tax Expenses (49.91) 129.02 (63.15) 154.20
Net Profit /(loss)
after Tax (103.91) 318.34 (181.44) 318.77
Share in Profit / (Loss)
of Associate - - (1.22) (0.49)
Minority Interest - - (2.89) 4.11
Net Profit / (Loss)
(After Adjustment for
Associate & Minority
Interest) (103.91) 318.34 (179.78) 314.17
Add: Amount brought
forward 716.58 374.65 704.39 379.67
Reserve written back 6.01 23.59 6.01 23.59
Amount available for
Appropriation 618.69 716.58 530.63 717.43
Less: General Reserve - - - 13.04
Net Surplus in the
Statement of Profit
& Loss 618.69 716.58 530.63 704.39
During the year, the Gross Revenue from operations of your Company on
standalone basis has increased by 16% at Rs. 8,498.33 crore as compared
to Rs. 7,351.27 crore during previous financial year 2010-11. The Profit
before other income, Finance Cost, Depreciation, Exceptional Items, Ta
x & Amortisation on standalone basis stood at Rs. 904.04 crore as
compared to Rs. 1,081.03 crore during previous year.
Further, during the year, the Consolidated Gross Revenue from
operations of your Company has increased by 17% at Rs. 9,364.29 crore as
compared to Rs. 8,035.85 crore during previous financial year 2010-11.
Consolidated Profit before other income, Finance Cost, Depreciation,
Exceptional Items, Tax & Amortisation stood at Rs. 947.65 crore as
compared to Rs. 1,173.66 crore during previous year.
The financial results of your Company during the year have been
adversely impacted inter-alia on account of (i) adverse exchange
fluctuation arising on account of sharp depreciation of Indian Rupee
(ii) subdued global economic sentiments emanating from European crisis
and surge in imports of stainless steel flat products into India caused
by aggressive price under cutting, dumping and other trade restrictive
practices adopted by overseas stainless steel producers (iii)
unprecedented increase in raw material prices of chrome ore and coal.
Change of Name
During the year, the name of your Company has been changed from JSL
Stainless Limited to Jindal Stainless Limited. Consequent upon change
of name, the Registrar of Companies, has issued fresh Certificate of
Incorporation on 7th December, 2011.
Your Company is the largest integrated stainless steel Company in India
producing diversified stainless steel flat products. It has three
manufacturing facilities in India, located at Hisar in the State of
Haryana, Jajpur in the State of Odisha and Vizag in the State of Andhra
Pradesh. The facilities include captive chromite mines, ferro-alloy
facilities, captive thermal power plants and stainless steel melting,
hot rolling, cold rolling and downstream value-added facilities.
(A) Hisar Division:
Hisar is having stainless steel melting capacity of 800,000 tons per
annum. During the year, the plant has achieved highest ever production
in most of its production facilities, steel melt shop, hot rolling,
cold rolling and specia product division. The steel melt shop achieved
production of 723,418 tons as compared to 701,814 tons during financial
year 2010-11. Hot rolling mill and cold rolling mill processed 540,671
tons of hot rolled products and 260,447 tons of cold rolled annealed
pickled products respectively. The special product division produced
24,478 tons of speciality steel which represents growth of around 8%
over previous year. Higher value added product with thickness of 0.10
mm was also up by around 23%. Your Company is making all its efforts to
serve the market needs through various planned projects like 0.10 mm
thick blade steel production enhancement. 430 BA finishing facilities
are under advance stage and will be commissioned by March, 2013.
To control the product cost and protect environment, modernized Acid
Recovery Systems was successfully installed during the year. Further
various cost saving initiatives like reutilization of refractory, power
savings etc. have been taken throughout the year to control the product
costs. There has been special focus to maximize usage of stainless
steel scrap in production to reduce overall cost of production. This
also enables us to contribute to the green environment through
(B) Odisha Division
Your Company has successfully operated stainless steel making facility
with a capacity of 800,000 tons per annum and has started rolling of
stainless steel products from this facility for over a year. The
ramp-up and stabilization of finishing facilities are in progress.
During the year under review, steel melting shop produced 95,573 tons,
hot strip mill processed 114,137 tons and facilities in cold rolling
mill processed 67,351 tons of stainless steel. The project initially
conceived in SEZ has been de-notificated during the year due to the
changing global business scenario. 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 mm.
The ferro alloys production during the year stood at 57,316 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 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 low on
account of higher input prices of therma coal and drop in prices of
surplus power sold to the state grid. Only one of the two power plants
was primarily producing power and it generated around 741 million units
(net), of which around 119 million units were exported to Hisar plant.
The production at 14 MW power plant was 21.56 million units (net) and
the plant has achieved maximum days generation of 0.34 MU at a PLF of
101.19% in December, 2011.
The chromite mines division produced 32,875 MT of chromite ore
concentrate which is much higher than previous year production and also
achieved 66,000 MT chrome ore from Mines pit for 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 285,368 tons of
(C) Vizag Division
Vizag plant produces High Carbon Ferro Chrome (HCFC) with capacity of
40,000 tons per annum. The chrome ore required for the production of
HCFC is sourced from the captive mines at Sukinda and the output is
transferred to Hisar plant. During the year, the plant produced 24,832
tons of HCFC as compared to 32,836 tons during the previous year. The
primary reason towards the slowdown during the year was due to shutdown
of 16 MVA furnace for about two months for relining work and also the
power restriction imposed by the state power distributing company,
Corporate Debt Restructuring (CDR)
Pursuant to the approval of CDR (the Scheme) in January 2010 and
signing of Master Restructuring Agreement (MRA) in March 2010, the
financial obligations to the domestic lenders were rescheduled
including creation of funded interest term loan (FITL), adjustment in
interest rates and additional security in favour of lenders. The Scheme
was subsequently amended in December 2010 on account of early
completion of certain projects and reduction in FITL. However, keeping
in mind the current business & economic outlook environment, the
Company is in fresh negotiation with the domestic and international
lenders and has made fresh proposal to the lenders to re-work its debt
obligations including reworking of repayment schedule, adjustments
towards interest obligations, overdue financial obligations etc.
During the year, the Company allotted 21,89,833 equity shares of Rs. 2/-
each upon conversion of 1200 Convertible Bonds of US$ 5,000 each into
As on 31st March, 2012, the subscribed and paid up share capital of the
Company stands at Rs. 37,90,11,250/- divided into 18,95,05,625 equity
shares of Rs. 2/- each.
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, 2012.
Employees Stock Option Scheme
The Company has not granted / vested any stock options to Employees or
Directors during the year under review. Out of total 3,106,250 stock
options outstanding at the beginning of the year, 487,500 stock options
lapsed on account of leaving of service by Employees, due to
resignation, retirement or otherwise. As at the end of the year
2,618,750 stock options remain granted amongst the Employees &
The first vesting as per the approved Employees Stock Option Scheme,
2010 of the Company will be on 28th July, 2012.
Quality Management Systems
Your Company is committed to continual quality improvement of all of
its products, processes and services to meet customer requirements and
expectations by means of a stringent Quality Management System (ISO
9001:2008). While your Company is also an ISO 14001:2004 (EMS) & OHSAS
18001:2007 certified, it''s products are also certified for PED
(97/23/EC) and AD 2000 W0. These certifications demonstrate the
capability of our product to meet the stringent requirements of the
European Union for Pressurized applications like boilers, pressure
vessels, valves etc.
Research & Development
Your Company produces wide range of flat stainless steel products
including austenitic, ferritic, martensitic and duplex grades and has
global recognition for pioneering work towards development and
commercialisation of 200 series of stainless steels. The wide spectrum
encompasses from lean austenitic to super-austenitic, lean duplex to
super-duplex, low cost ferritic to stabilized high chromium ferritic
stainless steels. The range of stainless steels covers complete
requirements of customers seeking materials that are lustrous,
resistant to corrosion, withstand high temperatures, highly weldable
and easy to deep draw. During the year under review, your Company has
successfully developed and marketed high nitrogen austenitic stainless
steel X8CrMnN18-18, lean duplex stainless steel UNS S32101 and
stabilized high chromium ferritic stainless steel UNS S 44500.
Your Company is rapidly expanding its operational capacity with
successful commissioning of its Phase II Odisha Plant. Given the growth
strategy of the Company, the IT department is working on building a
real-time, integrated, strong and stable ERP foundation to support its
business growth imperatives. During the year, it has initiated an ERP
lead, business transformation project to re-implement SAP ECC 6.0
version, which will cover all basic business, production and
operational functionalities along with the supply chain management,
treasury, IS-Mill, human resources and analytics solutions. This
massive SAP-ERP implementation project, named as Project Manthan will
have a total rollout period of approx. 2- 3 years for domestic and
As on 31st March, 2012, 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.
Pursuance to the general circular 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 and of the
respective Subsidiary companies 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.
During the period under report, the Board of Directors appointed Mr.
Ramesh R. Nair and Mr. Jitender P. Verma as Additiona
Directors with effect from 3rd November, 2011 and 9th February, 2012
respectively. The appointment of Mr. Ramesh R. Nair was subsequently
approved by the Shareholders in the Extraordinary General Meeting held
on 30th November, 2011. The Company has received a Notice pursuant to
section 257 of the Companies Act, 1956, from a member signifying his
intention to propose Mr. Jitender P. Verma as a candidate for the
office of Director.
During the above period, Mr. Arvind Parakh has resigned from the Board
of Directors of the Company with effect from 1st October, 2011. The
Board places on record its appreciation for the valuable contribution
made by him during his tenure.
Smt. Savitri Jindal, Mr. Naveen Jindal and Mr. Subash Singh Virdi,
directors, will retire at the Annual General Meeting by rotation and,
being eligible, offer themselves for re-appointment.
Brief resume of the above directors, 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 section on corporate governance in the
Listing on Stock Exchanges
The equity shares of your Company are listed on the BSE Limited (BSE)
and National Stock Exchange of India Limited (NSE). The annual listing
fee for the year 2012-13 has been paid to both the stock exchanges
where equity shares of your Company are listed. GDS of the company are
listed at Luxembourg Stock Exchange.
The company has accepted/renewed deposits amounting to Rs. 60,657,000
during the year under review. There were no overdue deposits on 31st
March, 2012, except Rs.12,461,000/- which remain unclaimed.
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 2012-13
subject to approval of the Central Government. Application for approval
of the Central Government for such re-appointment would be made by the
Company. 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, BL-4 (Paschmi),
Shalimar Bagh, Delhi – 110 088.
Names and Membership No. of Partners of Firm
Ms. R. Parvathy, M. No. 13848 Dr. D. Jagannathan, M. No. 5839 Mr. V. A.
Sundaram, M. No. 818
Due date for filing of Cost Audit Report for the financial year 2010-11
by the Cost Auditor with the Central Government
Within 180 days from the close of company''s financial year, i.e. upto
27th September, 2011.
Date of actual filing of Cost Audit Report for the financial year
2010-11 with the Central Government.
Cost Audit Report for the financial year 2010-11 was filed with the
Central Government on 27th September, 2011.
Dematerialisation of Shares
The members are aware that the Company''s equity shares are under
compulsory trading in dematerialised form for all categories of
investors. The members are, therefore, again advised to get their
shares dematerialised as trading of the shares will have to be in the
electronic form only.
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, 2012 and of the profit or loss 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 :29th May, 2012 Chairperson