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Jindal Stainless Directors Report, Jindal Stainles Reports by Directors
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Jindal Stainless
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Download Annual Report PDF Format 2014 | 2013 | 2012 | 2011 | 2010
Directors Report Year End : Mar '14    Mar 13
THE MEMBERS,
 
 The Directors have pleasure in presenting the 34th Annual Report on
 the business and operations of your Company together with the Audited
 Statement of Accounts for the year ended 31st March, 2014.
 
 Financial Results
 
 Your Company''s performance for the financial year ended 31st March,
 2014 is stated below:
 
                                                      (Rs. In Crores) 
 
 Particulars                    Standalone            Consolidated
 
                     Year Ended   Year Ended   Year Ended  Year Ended
                     31.03.2014   31.03.2013   31.03.2014  31.03.2013
 
 Revenue from 
 operations (Gross)   12,972.73    11,121.88   13,875.94   12,128.47
 
 Less: Excise Duty 
 on sales              1,019.69       835.67    1,000.74      823.73
 
 Revenue from 
 Operations (Net)     11,953.04    10,286.21   12,875.20   11,304.74
 
 Profit before other 
 Income, Finance Cost,   885.66       614.97     1016.19      708.56
 Depreciation, 
 Exceptional Items, Tax 
 & Amortisation (EBIDTA)
 
 Add: Other Income        40.06        44.13       39.10       35.04
 
 Less Finance Costs    1,234.70       990.29    1,295.13    1,043.44
 
 Less: Depreciation / 
 Amortisation            687.66       701.31      728.39      740.14
 
 Profit /(Loss)Before 
 Tax & Exceptional 
 Items                  (996.64)   (1,032.50)    (968.23)  (1,039.99)
 
 Add: Exceptional 
 Items  Gain/(Loss)    (416.90)     (166.96)    (418.74)    (183.99)
 
 Profit/(Loss) Before 
 Tax                  (1,413.54)   (1,199.46)  (1,386.97)  (1,223.98)
 
 Less: Tax Expenses      (23.45)     (378.64)     (20.67)    (381.94)
 
 Net Profit /(loss) 
 after Tax             (1390.09)     (820.82)  (1,366.30)    (842.04)
 
 Share in Profit / 
 (Loss) of Associate       -           -           (0.38)      (0.41)
 
 Minority Interest         -           -           (1.56)       1.74
 
 Net Profit / (Loss) 
 (After Adjustment for 
 Associate &           (1,390.09)    (820.82)    (1368.24)   (840.71)
 Minority Interest) Add:
 
 Amount brought forward    -          618.69         -        530.87
 
 Debenture Redemption 
 Reserve written back       3.14        3.77         3.14       3.77
 
 Amount available for 
 Appropriation         (1,386.95)    (198.36)   (1,365.10)   (306.07)
 
 Transfer to General 
 Reserve                   -           -             0.42       0.08
 
 Less: Being deficit, 
 Set off from General 
 Reserve                   430.21    (198.36)      320.92    (306.15)
 
 Net surplus/(deficit) 
 in statement of Profit 
 & Loss                   (956.74)     -        (1,044.60)       -
 
 During the year, the Gross Revenue from operations of your Company on
 standalone basis has increased by 16.64% at Rs. 12,972.73 crore as
 compared to Rs. 11,121.88 crore during previous financial year 2012-13.
 The Profit before other income, Finance Cost, Depreciation, Exceptional
 Items, Tax & Amortisation on standalone basis stood at Rs. 885.66 crore
 as compared to Rs. 614.97 crore during previous year.
 
 Further, during the year, the Consolidated Gross Revenue from
 operations of your Company has increased by 14.41% at Rs. 13,875.94 crore
 as compared to Rs. 12,128.47 crore during previous financial year
 2012-13. Consolidated Profit before other income, Finance Cost,
 Depreciation, Exceptional Items, Tax & Amortisation stood at Rs. 1016.19
 crore as compared to Rs. 708.56 crore during previous year.
 
 - The financial results of the Company during the year 2013-14 have
 been adversely impacted inter alia on account of Continued dumping of
 stainless steel flat products in India and in particular the continued
 influx of cheap stainless steel from China.
 
 - Continued build up of capacity in China despite the prevailing
 situation of excess production vis--vis local consumption and
 continued slowdown in local demand.
 
 - Adverse Duty Structure for the Domestic Stainless Steel Industry,
 both in terms of import duty on raw materials as well as finished goods
 vis--vis other countries and in particular with reference to China.
 
 - Increase in basic custom duty on import of Steel Scrap.
 
 - Increase in raw material cost due to volatile currency.
 
 Operations
 
 (A) Hisar Division
 
 Year 2013-14, shows a little recovery and stabilization, however, was a
 tough year for stainless steel industry on account of surplus
 capacities in other countries and dumping by China all around the
 world. JSL, Hisar Unit is able to achieve its highest ever dispatches
 of 673,254 MT in the year and crossed land mark achievement of 1.0
 Million Ton Stainless steel dispatches from the organization. All the
 production facilities are aligned to serve value added products. The
 total steel melting shop production was approx. 7.20 Lac ton for the
 year.
 
 The focus of the Company during the year for Hisar plant was on value
 added products and the Company achieved highest ever dispatches of 3370
 MT coins and 9,004 MT finished Razor Blade Stainless strips of 0.10 mm
 or less thickness razor blade steel.
 
 During the year Bright annealing facilities in CR complex has been
 modified & re-commissioned to cater white good sector market in feritic
 grade providing unit to leverage its strength and convert to higher
 value added products in the coming years. Others finishing facilities
 like slitting and eye wrapping line in SPD has been installed to cater
 rising market.
 
 (B) Odisha Division
 
 Despite slowdown in global economy the performance of Jajpur, Odisha
 improved substantially as compared to last year.  During the year under
 review Steel Melting Shop produced 4,13,863 MT as compared to 3,13,258
 MT, Hot Strip Mill produced 4,00,947 MT against 3,00,435 MT, Plate
 Finishing Shop produced 35,634 MT against 25,169 MT and facilities in
 CRM produced 3,32,535 MT against 2,54,597 MT produced last year.
 
 The stainless steel facilities at Odisha have substantially enhanced
 the product portfolio of the company including wider width products of
 up to 1650 mm. Our products were are approved by many reputed
 organisations like IGCAR and BHEL, Trichy for 300 series and YAMAHA
 Motors India for 409L grade.
 
 Jajpur unit received accreditations like Construction Product
 Regulations (CPR) and Pressure Equipment Directives (PED)
 Certifications thereby enabling our products to sell in the European
 market for Construction and Pressure applications.
 
 The production at Ferro Alloys during the year was 1,35,678 MT against
 83,290 MT produced last year which is 63% more as compared to last
 year. In spite of challenges in procuring chromite ore from domestic
 sources at cost effective prices, we could achieve the production by
 consuming concentrated ore and high usage of imported hard lumpy ore.
 
 Both the power plants (2X125MW) generated power 1,190.925 million units
 (net) as compared to 1,089.53 million units (net) in the last year. Out
 of the total generation 88.828 million units were exported to Hisar
 plant and 22.92 million units sold through exchange. The Cokeoven
 facility was operated under lease till Oct, 2013. Total coke produced
 were 2,17,193 MT.
 
 Jindal Chromite Mine produced 28055 MT of chrome concentrate from its
 beneficiation plant. The mine has reached the ultimate pit bottom so
 far as the friable ore is concerned and there has been no friable ore
 production during the year.  However, lumpy chrome ore production from
 the mines was 64086 MT. The mine dispatched 39471 MT of chrome
 concentrate and 50237 MT of chrome ore to our Vizag Plant during the
 year.
 
 (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 Jindal Chromite Mine and Transfers the output to the Hisar
 Plant. The division has achieved 77% of the Installed capacity by
 producing 30,648 Tons of High Carbon Ferro Chrome during the year
 2013-14 as compared to 20,169 Tons during the preceding year. The
 Production is less during the year 2013-14 due to Power
 restrictions/holiday being imposed by the APEPDCL time to time during
 2013-14.
 
 Further Vizag Unit dispatched 28,137 tons (including of 19,900 for Job
 Work A/c) to JSL-Hisar during the year 2013-14 as compared to 21,069
 tons Job Work A/c during the preceding year. The Job work A/c
 production was stopped w.e.f. 21.11.2013
 
 Debt Restructuring
 
 Pursuant to the Reworked Corporate Debt Restructuring Scheme approved
 by CDR EG and Rework Letter of Approval (Rework LOA) issued on
 September 18, 2012, the approved Reworked CDR package has been
 implemented by all CDR lenders and the Company had executed all the
 necessary documents.
 
 During the year under report, the Company had arranged execution of
 corporate guarantee of 13 promoter group companies (out of total 30
 promoter group companies) and is in discussions with the remaining
 promoter group companies for resolution of pending issues related to
 collateral security.
 
 Restructuring / Reorganisation of the Company
 
 The Board of Directors has constituted a ''Reorganization Committee'' to
 explore and evaluate various options of reorganizing the Company''s
 assets in an optimal way. The said Committee is empowered to work upon,
 determine and decide upon the relevant suitable structure.
 
 Share Capital
 
 During the year, the Company has received conversion notice for entire
 remaining 300 FCCBs amounting to USD 1.50 million and subsequently the
 company has allotted 547,458 fully paid equity shares.
 
 During the quarter ended 31st March, 2014, the Company has raised Rs.
 100,00,00,566, by way of issue and allotment of 1,07,50,000 equity
 shares of Rs. 2/- each and 1,58,10,440 Cumulative Compulsory Convertible
 Preference Shares (CCCPS) of face value of Rs. 2/- each at a price of Rs.
 37.65 per equity share /CCCPS (including a premium of Rs. 35.65 per
 equity share/ CCCPS) in accordance with SEBI (ICDR) Regulations, 2009
 to JSL Overseas Limited, a member of promoter group, on preferential
 basis.
 
 Consequently, the paid-up share capital of the Company has increased
 from Rs. 40,81,55,094 to Rs. 46,23,70,890 divided into 215,375,005 equity
 shares of Rs. 2/- each and 1,58,10,440 Cumulative Compulsory Convertible
 Preference Shares (CCCPS) of Rs. 2/- each.
 
 Dividend
 
 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, 2014.
 
 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. 27,19,400 to
 Investor Education and Protection Fund of Government of India during
 the year 2013-14.
 
 Employees Stock Option Scheme
 
 During the year under review, 4,26,024 stock options were vested in
 eligible employees. 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
 Report.
 
 Information Technology
 
 During the year, the Company''s IT & SAP department has stabilized the
 SAP ECC 6.0 environment and has established a delivery team and
 mechanism for the Business Support. This Support Mechanism on SAP has
 enabled and empowered the Business users in continuing to conduct
 real-time transactions and analysis, across the locations on a single
 platform. It is the endeavour of the SAP team to further enhance the
 capabilities of the JSL SAP platform for a delightful Business User
 experience. The IT team of the company has also been successful in
 providing secure and non-disruptive IT (Hardware, Network, Software)
 services to your company throughout the year. Many initiatives like
 Exchange Migrations, Multi-platform mobile solutions, Barcoding and
 Management Analytics, etc have been planned & delivered.
 
 The IT & SAP department plan to rollout further Business Enhanced
 support & solutions to your company in the coming year as well.
 
 Subsidiary Companies
 
 As on 31st March, 2014, 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.
 
 Directors
 
 The Board of Directors has appointed Mr. Rajinder Parkash Jindal as an
 additional director and designated him as Executive Director with
 effect from 6th January, 2014. The Board of Directors has also
 appointed Mr. Girish Sharma as an additional director with effect from
 29th May, 2014. The Board has also approved appointment and terms of
 remuneration of Mr. Rajinder Parkash Jindal as Whole Time Director of
 the Company, subject to the approval of the Shareholders. The said
 appointment and remuneration of Mr. Rajinder Parkash Jindal and
 appointment of Mr. Girish Sharma will be placed before the shareholder
 for their approval.
 
 Smt. Savitri Jindal, Chairperson has resigned from the Board of
 Directors with effect from 28th October, 2013. The Board has conferred
 upon her the title of Chairperson Emeritus with effect from 28th
 October, 2013 and she will continue to provide her guidance on future
 endeavors of the Company.
 
 Mr. Uday Kumar Chaturvedi, Mr. Rajeev Bakshi and Mr. James Alistair
 Kirkland Cochrane resigned from the Board of Directors of the Company
 w.e.f. 31st December, 2013, 20th February, 2014 and 24th February, 2014
 respectively. The Board places on record its sincere appreciation for
 the valuable contributions made by them during their tenure.
 
 Mr. Naveen Jindal and Mr. Jitender P. Verma, who retires by rotation at
 the ensuing Annual General Meeting under the erstwhile provisions of
 the Companies Act, 1956 and being eligible offer themselves for
 reappointment.
 
 Brief resume of the abovementioned 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 Notice forming part of the annual report.
 
 Fixed Deposits
 
 The Company has accepted/renewed deposits amounting to Rs. 13,69,70,000
 during the year under review. There were no overdue deposits on 31st
 March, 2014, except Rs. 1,04,76,000 which remain unclaimed. The Company
 has stopped accepting / renewing any fresh deposits with effect from
 1st April, 2014.
 
 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
 report.
 
 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 with their willingness to
 continue as auditors of the Company, if appointed and have confirmed
 that the said appointment, if made,would be within the limits
 prescribed under the Companies Act, 2013 and that they are not
 disqualified for re-appointment.
 
 In terms of Rule 6 of the Companies (Audit and Auditors) Rules, 2014,
 M/s. Lodha & Co. and M/s. S.S. Kothari Mehta & Co.  having held office
 as Joint Statutory Auditors and M/s. N.C. Aggarwal & Co. having held
 office of Branch Auditors of Vizag division for a period of more than
 10 years prior to the commencement of the Companies Act, 2013, are
 eligible to be appointed as Auditors for a period of only three more
 years, that is until the conclusion of 37th Annual General Meeting of
 the Company.
 
 The notes to the accounts referred to in the auditors'' report are
 self-explanatory and, therefore, do not call for any further comments.
 
 Cost Auditors
 
 In accordance with the Order dated 30th June, 2011 issued by the
 Ministry of Corporate Affairs pursuant to Section 233B of the Companies
 Act, 1956, your Company is required to get its cost accounting records
 audited by a Cost Auditor and has accordingly appointed M/s. Ramanath
 Iyer & Co., Cost Accountants, for this purpose for FY 2013-14. The Cost
 Audit for FY 2012-13 was completed within specified time and report was
 filed with the Central Government.
 
 The Board of Directors at its meeting held on 29th May, 2014 has on the
 recommendation of the Audit Committee, re- appointed M/s. Ramanath Iyer
 & Co., Cost Accountants for conducting the audit of cost audit records
 in respect of Steel business of the Company for the financial year
 2014-15. The said appointment is subject to ratification of the members
 in terms of Section 148 of the Companies Act, 2013 read with Rule 14 of
 the Companies (Audit and Auditors) Rules, 2014.
 
 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, 2014 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
 irregularities; and
 
 (d) the Directors have prepared the annual accounts of the Company on a
 ''going concern'' basis.
 
 Corporate Governance
 
 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.
 
 Acknowledgement
 
 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
 
                                                      Ratan Jindal
 
                                    Chairman and Managing Director
 Place: New Delhi
 
 Date : 29th May, 2014
 
 
 
Source : Dion Global Solutions Limited
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