JINDAL STEEL AND POWER LIMITED
ANNUAL REPORT 2009-2010
DIRECTOR'S REPORT
To
The Members,
Your Directors are pleased to present the 31st Annual Report together with
the Statement of Accounts for the year ended 31st March, 2010.
FINANCIAL RESULTS
(Rs. in Crores)
Particulars Standalone Consolidated
Financials Financials Financials Financials
Year ended Year ended Year ended Year ended
31.3.2010 31.3.2009 31.3.2010 31.3.2009
Sales & other income 7,484.90 7,799.43 11,151.82 10,913.37
Profit before interest
and depreciation 2,612.13 2,603.82 5,907.99 5,231.81
Profit before tax 1,907.50 2,001.88 4,553.45 3,811.10
Profit after tax 1,479.68 1,536.48 3,634.56 3,007.15
Appropriations:
Interim dividend - - 3.38 -
Final dividend 116.52 85.33 116.52 85.28
Corporate tax on Dividend 4.28 - 19.96 14.75
General reserve 150.00 155.00 150.00 155.00
FURTHER ISSUE OF CAPITAL
Company has allotted 77,56,51,530 Bonus shares of Re.1/- each on 19th
September, 2009 in the ratio of 5 bonus shares for each existing equity
share of Re. 1/- 11,81,875 equity shares of Re. 1/- each were also allotted
on various dates against options granted under the Company's Employee Stock
Option Scheme - 2005.
DIVIDEND
Your Directors recommend a dividend of 125% i.e. Rs. 1.25 per equity share
of Re. 1/- each. Stock Options under Series I (Part III) and Series III
(Part II) have vested in the employees and shares will be allotted against
these Options in due course. These shares will rank pari - passu with the
existing shares in all respects. Accordingly, provision for payment of
dividend for 2009-10 has also been made in respect of 32,29,029 equity
shares being the number of shares that may be allotted on exercise of these
Options.
OPERATIONAL REVIEW
The Company, on a consolidated basis, has achieved an aggregate income of
Rs. 11,151.82 Crores as compared to previous year's Rs. 10,913.37 Crores.
Profit before tax has increased to Rs. 4,553.45 Crores from previous year's
Rs. 3,811.10 Crores. Profit after tax has increased to Rs. 3,634.56 Crores
from previous year's Rs. 3,007.15 Crores. Reserves and Surplus have
increased to Rs.10,301.32 Crores.
Sponge Iron
The Company has produced 13,09,408 MT of Sponge Iron in the year under
report as against previous year's production of 12,48,511 MT and achieved
capacity utilisation of 95.6%.
Steel
The production of steel products during the year under report as compared
to previous year is given below:
Sl. Product Production in MTs
No. (2009-10) (2008-09)
1 Finished steel products 12,14,583 9,98,205
2 Semi steel products 19,64,032 15,78,790
Ferro Chrome
The Company has produced 540 MT of HC Ferro Chrome during the year as
against 16,143 MT in the previous year.
Power
The Company generated 2,976 million Kwh during the year as against 2,831
million Kwh of the previous year.
Raipur Unit
Raipur Unit produced 973 MT of MS ingots, 1,665 MT of casting and has done
machining of 8,885 MT as against previous year's figures of 937 MT, 1,964
MT and 4,210 MT respectively.
Mining
The production of calibrated iron ore at captive mine at Tensa in Odisha
was 12.34 lac MT as against previous year's production of 10.41 lacs MT.
The Company has exported 6.09 lacs MT of iron ore fines as against previous
years' 9.08 lacs MT. The production of coal at captive mine was 59.98 lac
MT registering a marginal increase over previous years' production.
PROJECTS UNDER IMPLEMENTATION
a) Projects at Raigarh, Chhattisgarh
1. 4 x 135 MW Captive Power Plant
The Company is setting up 540 MW (4 x 135 MW) captive power plant at its
coal mine at Tamnar, Raigarh in two phases which will cater to the
increasing power requirement of the steel complex at Raigarh. Environment
clearance has been obtained for 2x150 MW (1st phase) Power Plant and
Company has applied for environment clearance for 2x150 MW (2nd phase)
Power Plant. The estimated project cost of Phase I (2x135 MW) is Rs. 1,179
Crores and Phase II (2x135 MW) is Rs.1,080 Crores. The entire land required
for the project has been acquired. The order for Boiler Turbine Generator
(BTG) Package has been placed on M/S Shanghai Electric Company, China.
Complete BOP packages like CHP, AHP and Water Treatment Plant System,
Electrical System like HT/LT Switchgears, Bus Ducts, Transformers,
Switchyard, C&I Packages etc. have also been awarded. The first unit (135
MW) has been synchonised on May 03, 2010 and is expected to be commissioned
in June 2010. The second unit (135 MW) of 1st phase will be commissioned by
the end of 2010.
2. 2.0 MTPA Cement Plant
The Company is setting up 2.0 MTPA cement plant at Raigarh in two phases.
Slag Grinding Unit of 0.5 MTPA has been set up in first phase at a cost of
Rs.125 Crores and will utilise the slag generated by steel plant which will
help in solid waste management. The Company has acquired most of the
required land and balance is under acquisition. Prospecting license of
Banipather Mines, Kharsia, Raigarh has been obtained for Gudeli C & Gudeli
A block. Letter of intent for mining lease for Godadih Block of Chilhati
mines has been received and mining plan of the same is under progress.
3. 0.6 MTPA Medium and Light Section Mill
A Medium and Light Section Mill is being set up at Raigarh for rolling 100
to 300 MM Beams & Channels with a provision to extend up to 400 MM in
future at an estimated cost of Rs. 500 Crores. This Mill along with Rail
and Universal Beam Mill will be able to roll 100-900 MM wide Structurals at
Raigarh works. It would also have the capability to roll 100 to 200 MM
Angles, Rails (small) and Flats of various sizes. The critical equipment
and technology has been supplied by M/s Danieli Morgard Shammer of Italy.
Korus Engineering Solutions, New Delhi has been working as the Engineering
Consultant for this project. M/s Gannon Dunkerley & Co. Limited is the main
civil & structural contractor. The project is expected to be commissioned
in 2010.
b) Steel Plant in Angul, Odisha
The Company has taken steps for implementation of this project. Orders have
been placed for equipment and civil structure. Out of 4,331 acres of land
required for the project, 4,000 acres of land has already been acquired.
The integrated steel plant is expected to be commissioned by 2012.
c) Steel plant in Patratu, Jharkhand
The Company is setting up 6.0 MTPA integrated steel plant at Patratu in the
state of Jharkhand. The facility envisaged, in first phase, is 2 Rebar
Mills of 1.0 MTPA each, Wire Rod Mill of 0.6 MTPA, Coke Oven of 1.5 MTPA,
Sinter Plant of 4.27 MTPA and Blast furnace of 3.0 MTPA. Major orders for
various equipments have been finalised. Wire Road Mill of 0.6 MTPA has been
commissioned on 29th March 2010. The integrated steel plant is expected to
be commissioned by 2012.
d) Projects at Barbil, Odisha
As a part of mineral conservation, the Company is setting up iron ore
washing plant (Phase - II) with 9.6 MTPA capacity with an investment of Rs.
289 Crores. This plant is expected to be commissioned by the end of 2010.
Management is considering enhancing the production capacity of existing
Pellet plant from 4.5 MTPA to 10.5 MTPA.
e) Raipur Machinery Division, Chhattisgarh
Raipur Machinery Division has successfully commissioned following
facilities during the year under report, viz, two new 6 ton induction
furnace, three CNC lathe machines, two new horizontal machining centers,
one new CNC horizontal boring machine, two new CNC plano miller. Three
horizontal boring machines and two HMT conventional boring machines will be
installed by September, 2010. After completion of expnasion, the production
capacity of the workshop will increase to 8,200 MTPA and foundary to 4,200
MTPA.
Raipur Machinery Division is also setting up facilities for manufacturing
pressure vessels. The estimated cost of this project is Rs. 31.70 Crores.
Required land has been acquired and environment clearance has also been
obtained. The Unit will be commissioned in 2011.
f) Wind Mill Power, Maharashtra
The Company had decided to establish 16 wind mills each having power
generation capacity of 1.5 MW, in technical collaboration with Vensys of
Germany at a cost of Rs. 163 Crores in village Bhud and Amberi in District
Satara in the state of Maharashtra. Ten wind mills have started generating
power from March 2009. Remaining six mills have become operational in the
year under report. Power generated by these wind mills is supplied to
Maharashtra State Electricity Transmission Company Limited.
g) El-Mutun Iron Ore Mine, Bolivia
A Joint Venture Contract has been executed between Jindal Steel Bolivia S.
A.(JSB), a subsidiary of the Company and the entities of Government of
Republic of Bolivia subsequent to the awarding of exploitation rights by
the Government of Republic of Bolivia over an area of El Mutun Mine. This
contract has also been approved by the Bolivian parliament. The Company
proposes to invest US$ 2.10 billion in next 8 years for development of the
mine in the granted concession and setting up mining facilities, steel
making facilities and the requisite infrastructure through JSB.
SUBSIDIARY COMPANIES AND THEIR BUSINESS
Jindal Power Limited (JPL) is operating 1000 MW (4 X 250 MW) power plant in
Raigarh (Chhattisgarh). JPL has closed financial year 2009-10 with a total
income of Rs. 4,054.93 Crores (Previous year Rs. 3,314.27 Crores) and
earned profit after tax of 2,318.76 Crores (Previous year Rs. 1,581.93
Crores). JPL is expanding its power generation capacity by setting up 2,400
MW (4 X 600 MW) power plant at the existing site at Tamnar, Raigarh. JPL
also envisages setting up 4,000 MW Etalin hydro electric power plant, 500
MW Attunli hydro electric power plant and 1600 MW middle Subhansiri hydro
electric power plant in the state of Arunachal Pradesh in Joint Venture
with Hydro Power Corporation of Arunchal Pradesh Limited. JPL is a member
of Indian Energy Exchange Limited and its subsidiary, Jindal Power Trading
Company Limited has obtained C' category power trading license and is a
member of Power Exchange of India Limited and both are trading in power on
their respective power exchanges.
Company is working actively in African Continent to explore different
business opportunities to be undertaken through subsidiaries. Presently, it
is active in four countries in Africa. Kasai Sud Diamant SPRL, Congo,
possessed mining rights for diamond and has till end of April 2010 produced
12,000 carats of diamonds. Drilling has been started at Banalia Site to
prove Diamond kimberlite. In sourth Africa, Jindal Mining SA (Pty) Limited
is operating a coal mine namely Keipersol Collinery in Piet Retief. TiIl
April 2010 end, total coal produced was about 2,25,000 tonnes and presently
this mine is producing 70,000 tonnes per month. The Coal is being sold in
local market as well as being exported. The Company is targeting to produce
one million tonne coal in the year 2010-11. In Mozambique, JSPL Mozambique
Minerais LDA has applied for mining concession for coal block after
completing first phase drilling. The second phase drilling to convert the
reserve into the category of measured reserves has been started. Efforts
are being made to get more mining concessions in Mozambique. In Madagascar,
the Company is operating through two subsidiaries, namely Osha Madgascar
SARL and Jindal Madgascar SARL which has acquired three Limestone blocks
and is currently exploring these blocks. The Company is stepping up its
efforts to expand its business activities in Africa and substantially
increase the investment.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to Section 205C of the Companies Act, 1956, the Company has
transferred unpaid / unclaimed dividend for 2001-02 amounting to Rs.
13,94,928/- to Investor Education and Protection Fund of Government of
India. The details including dates with respect to transfer of unclaimed /
unpaid dividend amounts to Investor Education and Protection Fund of
Central Government is given at the end of the Notice of the Annual General
Meeting.
EMPLOYEES STOCK OPTION
Details of allotment of shares made pursuant to Employees Stock Option
Scheme-2005 to the employees of the Company and its subsidiary, Jindal
Power Limited is given below:
Sl. Series No. of equity Date of allotment
No. Shares allotted
1 Series II (Part I) 57,136 13th April, 2009
2 Series I (Part II) 4,20,487 21st July 2009
3 Series III (Part - I) 4,52,246 30th January 2010
4 Series II (Part II) 2,52,006 13th April 2010
Options under Series I (Part-III) and Series III (Part II) have vested in
the employees on 26th November, 2009 and 27th April, 2010 respectively and
employees are entitled to exercise their options during their respective
exercise periods of six months from the date of vesting.
As required by Clause 12 of SEBI (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 information with respect to active
Stock Options as on 31st March, 2010 is given in a separate statement as
Annexure-I forming part of this Report.
LISTING
The equity shares continue to be listed on The Bombay Stock Exchange
Limited (BSE) and the National Stock Exchange of India Limited (NSE). Both
these stock exchanges have nation wide terminals and therefore,
shareholders / Investors are not facing any difficulty in trading in the
shares of the Company from any part of the country. The Company has paid
annual listing fee for 2010-11 to The Bombay Stock Exchange Limited and The
National Stock Exchange of India Limited and annual custody fee to National
Securities Depository Limited and Central Depository Services (India)
Limited. Shares issued against stock options and bonus shares have been
listed and trading permission have been granted by these stock exchanges.
FIXED DEPOSITS
The Company has received Rs. 41.63 Crores as fresh deposits from 7,055
applicants during the year under report. The aggregate amount outstanding
in respect of fixed deposits as on 31st March, 2010 was Rs. 70.58 Crores
representing 14,689 fixed deposit holders. Amount of deposits that have
matured but were unclaimed as on 31st March, 2010 was Rs.73.06
lacsrepresenting 315 deposit holders. Since then 65 deposits totaling
Rs.17.20 lacs have been paid / renewed.
DIRECTORS
Shri Arun Kumar, Additional Director will cease to be a director on the
date of forthcoming Annual General Meeting. A member has given notice under
section 257 of the Companies Act, 1956 for his appointment as director of
the Company. Shri Asok K. Mohapatra and Shri Ashok Alladi resigned from the
directorship of the Company from 26th June, 2009 and 31st August, 2009
respectively. Shri Naveen Jindal, Shri Vikrant Gujral, Shri R.V. Shahi and
Shri Arun Kumar Mukherji, Directors of the Company will retire by rotation
at the forthcoming Annual General Meeting and being eligible have offered
themselves for re-appointment.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN
EXCHANGE EARNINGS AND OUTGO
Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read
with Rule 2 of the Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988 regarding conservation of energy,
technology absorption and foreign exchange earnings and outgo is given in
Annexure II forming part of this report.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 217(2A) of the Companies Act, 1956,
read with the Companies (Particulars of Employees) Rules, 1975, the
particulars of employees are set out in Annexure-III to this Report.
However, as per the provisions of Section 219(1)(b)(iv) of the said Act
read with Clause 32 of the Listing Agreement, the Annual Report excluding
the aforesaid information is being sent to all the members of the Company
and others entitled thereto. Any member interested in obtaining such
particulars may write to the Company.
CORPORATE GOVERNANCE
Your Company has implemented the conditions of Corporate Governance as
contained in clause 49 of listing agreement. A separate report on Corporate
Governance and Management Discussion and Analysis along with necessary
certificates are given elsewhere in this report as Annexures IV & V and
form a part of this report.
AUDITORS
M/s S.S.Kothari Mehta & Co., Auditors of the Company hold office upto the
conclusion of the ensuing Annual General Meeting. The Company has received
communication from them to the effect that their re-appointment, if made,
would be within the limits prescribed under Section 224(1B) of the
Companies Act, 1956. They are proposed to be re-appointed as Auditors of
the Company for the financial year 2010-11.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Sub Section 2AA of Section 217 of the
Companies Act, 1956 with respect to the Directors Responsibility Statement,
it is hereby confirmed:-
i) that in preparation of the annual accounts for the financial year ended
31st March, 2010 the applicable accounting standards had been followed
along with proper explanations relating to material departures.
ii) that the Directors had selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of the
Company at the end of the financial year and of the profit of the Company
for the year under report.
iii) that the Directors had 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 by preventing and detecting fraud and other irregularities.
iv) that the Directors had prepared the accounts for the financial year
ended 31st March, 2010 on a going concern basis'.
APPRECIATION
Your Directors wish to place on record their gratitude for the valuable
guidance and support given by Government of India, various State Government
departments, Financial Institutions, Banks, and various stake holders, such
as, shareholders, customers, suppliers etc. The Directors also commend the
continuing commitment and dedication of the employees at all levels which
has been critical for the Company's growth. The Directors look forward to
their continued support in future.
For & on behalf of the Board
Place : New Delhi Savitri Jindal
Date : 4th May, 2010 Chairperson
ANNEXURE TO DIRECTOR'S REPORT
ANNEXURE - I
Statement as at 31st March, 2010 pursuant to Clause 12 of the Securities
and Exchange Board of India (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999.
A. Options granted:
During the year 2009-10 no stocks options were granted to the employees and
Wholetime Directors of the Company and its subsidiaries.
B. Pricing formula:
As approved by shareholders in their Annual General Meeting held on 25th
July, 2005 price of shares arising on exercise of Options is equivalent to
75% of the average of the daily closing price of equity shares of the
Company during 30 trading days preceding the date of grant of Options as
quoted on the Bombay Stock Exchange Limited, Mumbai (BSE) or the National
Stock Exchange of India Limited (NSE) wherever the trading volume of equity
shares in aggregate during the said period is more.
C. Option vested:
49,54,110 (Part - III Series-I) and 5,18,625 (Part -II Series- II) (pre
bonus)
D. Options exercised : 9,29,869.
E. Total number of Ordinary Shares arising as a result of exercise of
Options:
57,136 equity shares of Re.1/- each allotted on 13.04.2009; 4,20,487 equity
shares of Re.1/- each allotted on 21.07.2009 and 4,52,246 equity shares of
Re.1/- each allotted on 30.01.2010 aggregating to 9,29,869 equity shares of
Re.1/- each.
F. Options lapsed:
On account of leaving of service, due to resignation, retirement or
otherwise, by the employees of the Company and its subsidiary, 16,39,821
stock options lapsed during the year 2009-10.
G. Variation of terms of Options : NIL
H. Money realised by exercise of Options:
Rs. 12,58,01,467/- (Includes premium of Rs.12,48,71,598/-).
I. Total number of Options in force : 74,72,610* stock options.
J. Details of Options granted to:
i) Senior managerial personnel : NA
ii) Any other employees who received : NA
a grant in any one year of Options
amounting to 5% or more of the Options
granted during that year.
iii) Identified employees who were granted : NA
Options during any one year, equal to
or exceeding 1% of the issued capital
(excluding outstanding warrants and
conversions) of the Company at the
time of grant.
K. Diluted Earnings per Share (EPS) pursuant : Rs. 15.78
to issue of Ordinary Shares on Exercise
of Options calculated in accordance with
Accounting Standard (AS) 20 Earning Per
Share.'
L. i) Method of calculation of employee : The Company has calculated
compensation cost: the employee compensation
cost using the intrinsic
value method of accounting
to account for stock-based
compensation cost as per
the intrinsic value method
for the financial year
2009-10.
ii) Difference between the employee The employee
compensation cost so computed compensation cost
at (i) above and the employee would have been
compensation cost that shall have decreased by
been recognised if it had used the fair Rs. 2.84 Crores.
value of the Options.
iii) The impact of this difference on Profits The effect of adopting
and on EPS of the Company. the fair value method on
the net income and
earnings per share is
presented below:
(Rs. in Crores)
Net Income, as reported 1479.68
Add: Intrinsic Value Compensation Cost (4.85)
Less: Fair value Compensation Cost
(Black Scholes Model) (2.01)
Adjusted Net Income 1472.82
Earning per share Basic (Rs.) Diluted
(Rs.)
As reported 15.90 15.78
As adjusted 15.82 15.70
M. Weighted average exercise price and Options granted whose
weighted average fair value of Options exercise price is less
granted for Options whose exercise price than the market price
either equals or exceeds or is less than the of the stock (adjusted
market price of the stock. for stock split):
Weighted average Exercise Price NA
Weighted average fair value NA
N. A description of the method and The fair value of each
significant assumption used during the options estimated using
year to estimate the fair values of Options the Black Scholes Options
Pricing Model after
applying the following
key assumptions
i) Risk free interest rate NA
ii) Expected life NA
iii) Expected volatility NA
iv) Expected dividend NA
v) The price of the underlying shares in
market at the time of option grant NA
* Company has allotted bonus shares in the ratio of 5:1 on 19th September,
2009 the number of options and exercise price were adjusted accordingly.
ANNEXURE-II
Particulars required under the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988
A. Conservation of energy
a) Energy conservation measures taken:
* Replacement of 2 x 2500 NM3/Hr Roots blower with 1 x 3500 NM3 / Hr Roots
Blower in DRI-2.
* Installation of coal drier at coal mines to reduce specific coal
consumption in DRI-2.
* Increasing the productivity by 6% (6,13,000 MT to 6,50,000MT) to reduce
electrical power consumption in DRI-2.
* Installation of lighting transformer in 225MW power plant.
* Reduce make-up water consumption and 100% recirculation of water in RUBM.
* Replacement of 2 nos. of high head pumps of 160kW each with 90kW low head
pump for high pressure water in ash conveying system of 2x55 MW power
plant.
* Installation of booster pump to increase high water pressure there by to
reduce running hour of conveying system of 2x55 MW power plant.
b) Additional investments and proposals, if any, being implemented for
reduction of consumption of energy:
* Installation of VFD drives in ID fan of 2x55 MW power plant.
* Use of THERMOL an eco-friendly multifunctional fuel additives to reduce
specific consumption of FO in RUBM reheating furnace
* Installation of on-off control of rites inspection lighting for rails
from bed-4 pulpit.
* Redistribution of lights to 12 hrs & 24 hrs and cable cellar illumination
zone in LDB and optimisation of segregated power by the timer control
circuit in BF plant.
* Reduction of FO consumption in plate mill by closing oil firing according
to mill stoppage duration.
* Reduction of electrical power consumption in plate mill by switching-off
various electrical systems and subsystems according to mill stoppage
duration.
c) Impact of the measures at (a) and (b) for reduction of energy
consumption and consequent impact on the cost of production of goods:
* Electrical power saving of 60.0 kW/hr is achieved.
* Specific consumption of coal per ton of DRI reduced from 1.48 MT to 1.42
MT.
* Electrical power consumption reduced from 85.32 kWh/ton to 83.12 kWh/ton.
* Electrical power saving of 12 kW/hr is achieved.
* Make up water consumption reduced from 1.4 m3/MT to 0.5 m3/MT.
* Electrical power saving of 70.0 kW/hr is achieved.
* Running hour reduced by 4 hrs thereby electrical power saving 15 kW/hr is
achieved
d) Total energy consumption and energy consumption per unit of production.
* As per Form A given hereafter
FORM - A
Form for disclosure of particulars with respect to Conservation of Energy:
a. Power and fuel consumption:
Current year Previous Year
1. Electricity
(a) Purchased
Unit in (000 kwh) 60,257.13 32,912.11
Total amount (Rs. In lacs) 2,615.24 1,625.92
Rate/Unit (Rs.) 4.34 4.94
(b) Own generation
i) Through diesel generator
Units (000 Kwh) 4,201.01 673.97
Units per ltr. of diesel Oil 3.43 6.19
Cost / unit (Rs.) 9.99 14.39
ii) Through steam turbine / generator
Units (in 000 Kwh) 19,99,854.16 18,19,481.24
Units per ltr. of fuel Oil / Gas NIL NIL
Cost / unit (Rs.) NA NA
2. Coal
(a) Non Coking Coal*
Quantity (MTs) 46,29,105.54 42,74,065.02
Total cost (Rs. in lacs) 42,800.36 34,733.34
Average rate / MT (Rs.) 924.59 812.65
(b) Coking Coal**
Quantity (MTs) 10,23,075.23 9,79,923.30
Total cost (Rs. in lacs) 1,00,234.64 97,968.85
Average rate / MT (Rs.) 9,797.39 9,997.60
3. Coke
Quantity (MTs) 1,15,671.15 1,14,603.72
Total cost (Rs. in lacs) 10,616.00 14,497.71
Average rate / MT (Rs.) 9,177.74 12,650.29
4. Furnace Oil
Quantity (K. ltrs) 40,128.35 28,986.84
Total cost (Rs. in lacs) 10,378.94 7,432.28
Average rate / Ltr (Rs.) 25.86 25.64
5. Others internal generation
Quantity NIL NIL
Total cost (Rs. in lacs) NA NA
Average rate / Kg. (Rs.) NA NA
*Used in the manufacturing of Sponge Iron/Power Plant.
**Used in coke oven and ultimately Consumed in Blast Furnace.
b. Consumption per unit of production
Sl. Particulars Current Year Previous Year
No.
1. Electricity
For Sponge Iron mfg. (unit / ton) 81.79 76.36
For Ferro Chrome mfg. (unit / ton) NIL 3,232.11
For Slabs/rounds/Beam/Blank Mfg. (unit/ton) 572.56 625.60
For Rails / Beams / Channels Mfg. (unit / ton) 165.22 172.05
For Plate / Coil Mfg. (unit / ton) 109.06 122.51
For Steel melting (Ingots & Casting) (unit / ton) 978.00 819.00
For Machine / Machinery parts Mfg. (unit / ton) 355.00 476.00
For Pellet (unit/ ton) 65.00 NA
2. Fuel Oils:
For Sponge Iron Mfg. (litre / ton) NIL NIL
3. Coal:
For Sponge Iron Mfg. (mt. / ton) 1.43 1.45
For Ferro Chrome Mfg. (mt. / ton) NIL 0.04
For Power Plant (Kg / Kw) 0.81 0.81
B. Technology Absorption:
Efforts made in technology absorption as per Form B given below:
Form - B
Form for disclosure of particulars with respect to absorption
Research and development (R&D):
a. Specific areas in which R&D carried out by the company.
1. Pilot coke oven trials with various proportion of bio-diesel (5-10%) to
achieve coke properties for use in blast furnace.
2. Improvement in coke quality through study on effect of weathering on
coking coal fluidity and its maceral content.
3. Introduction of refractory dam in coal based sponge iron kiln.
4. Evaluation of welded joints for fatigue using MTS (Material testing
System).
5. In house development of burden distribution software in Blast Furnace
with Bell-less top charging.
6. Development of high strength brick by using fly ash % to as high as 70%
(Under trial runs).
7. Elimination of longitudinal crack in Beam Blank through optimising mold
flux composition.
8. In House Development of break out prediction system in collaboration
with m/s Rockwell automation and IITKanpur at one fifth cost of imported
technology (project under trial runs).
9. Study to minimise accretion in coal base DRI kilns.
10. Development of software for mix grade casting in collaboration with IIT
-Kanpur.
11. Water modeling study of Near -net-shape caster for reducing tundish
skull and improving steel cleanliness in collaboration with IIT -Kanpur.
12. Process optimisation for iron ore pellet in rotary kilns for increasing
productivity.
13. Substitution of existing coking coal by using various sources of coking
/ non coking coal with the help of petrographic and pilot coke oven
studies.
14. Initiation of iron ore fines washing to reduce slag rate at BF: Field
trial completed.
15. Production and usage of dolomatic lime instead of costly lime from
Jaisalmer for steel making.
b) Benefits derived as a result of the above R&D:
1. This will act as an environment friendly substitute for hard coking coal
(in the event of rising cost of hard coking coal).
2. With the help of above study, each variety of coal can be evaluated.
This will be helpful in selection of coal for coke making.
3. This has helped to increase sponge iron productivity and quality
especially with iron ore pellets.
4. This has helped to select correct welding process, that is expected to
have desired life.
5. This has helped to decide the burden distribution pattern for coke as
well as Iron ore, along with correct positioning of LMG (Lower Material
Gate), ultimately improving the gas utilisation and thus the productivity.
The productivity increased to as high as 2. 8 mt/m3/d from 2.2 mt/m3/d.
6. This will be helpful to increase the consumption of fly ash in brick
manufacturing process.
7. A drastic reduction in occurrence of longitudinal cracks in rolled
products achieved.
8. This will identify the stickers in slab caster moulds with subsequent
auto correction to prevent break outs.
9. Initial field trials taken in DRI kiln.
10. Initial trials taken at slab caster.
11. Initial trials are under progress.
12. Trial completed with 12% increase in productivity.
13. Trials taken in coke oven and results were as per the expectations.
14. Slag volume decreased from 295 Kg/thm to 280 kg/thm.
15. Initial trials were successful in reducing cost of steel by Rs. 80/-
per tonne.
c) Future plan of action:
1. Effect of washing of I/ Ore on Sinter Quality & parameters of BF.
2. Conditions for deposition of Ti (C,N), in BF hearth.
3. Development of low carbon micro alloyed plate w.r.t mechanical
properties, grain size and plate surface quality.
4. Study the effect of Spinel and Chrome ore fines on accretion formation
in DRI kiln #1.
5. Reducing Moisture content of Coke and to study its effect on yield.
6. Tundish design modification of combi Caster tundish to reduce tundish
skull weight.
7. Performance of pellets and factors influencing quality of DRI.
8. Application of Break out Prediction System to improve slab quality &
caster productivity.
9. Development of steel grades for wire drawing applications.
10. Reduction of inclusions and surface defects in steel.
11. Reduction in ferroalloy consumption at SMS.
12. Improvement of snorkel life and lower vessel refractory life of R-H.
13. Application of refractory sheaths in steel ladles to reduce heat
losses.
14. Introduction of Rail length measuring system using LASERS.
15. Improvement of end straightening of rails thru modification in
straightening line.
d) Expenditure on R&D:
a) Capital : Rs. 50.06 lacs
b) Recurring : Rs 278.71lacs
c) Total : Rs 328.77 lacs
d) Total R&D expenditure as a percentage of total : 0.04%
turnover Technology absorption, Adaptation, and
Innovations:
a) Efforts in brief, made towards technology absorption, adaptation and
innovation:
1) Installation of new 100T EAF supplied by M/S Sarralle.
2) In house fabrication of combi caster.
3) Revamping of Mini Blast Furnace to a higher capacity with Bell Less top
and PCI injection.
4) Injection of lime fines and sand to control EAF slag condition.
5) Breakout prediction system at slab caster.
6) Modification in cross transfer of billet caster to improve productivity
of billet caster.
7) Modification of fume extraction system in EAF which has improved furnace
availability as well as improvement of furnace floor environment.
8) CTL line at plate mill.
9) Dedusting system at Tandem Mill.
10) Installation of additional dedusting system at Steel Melt Shop.
b) Benefits derived as a result of the above efforts:
1) Increase in steel making capacity.
2) Increase in beam blanks, rounds and blooms production capacity.
3) Increase in productivity of Blast Furnace with reduced coke rate.
4) Decrease in slag handling delay and utilisation of lime fines which are
otherwise treated as waste in steel melt shop.
5) Increase in productivity of slab caster.
6) Increase in productivity of billet caster.
7) Higher fume suction capacity and better shop floor environment.
8) Fulfilment of customer expectations with respect to size of plates.
9) Cleaner work environment at RUBM shop floor.
10) Cleaner work environment at EAF shop floor.
c. In case of imported technology (imported during the last 5 years
reckoned from the beginning of the financial year) following information
may be furnished.
a. Technology Imported:
2005-06 2006-07 2007-08 2008-09 2009-10
1) 2.4 Million 1) Universal 1) RH degasser 1) 100T 1) Medium Light
tonne sinter tandem Electric Structural Mill
plant rolling Arc supplied by
technology in Rail & Furnace, M/S Danielle.
Universal Ladle
Beam Mill Furnace
& FES
from
Sarrale,
Spain.
2) Intermediate 2) slag
stands and grinding
finishing stand unit for
replaced by CCS production
stands and both of cement
structural using fly
sections and ash and
rails rolled blast
with Universal furnaceslag
configuration.
b) Year of import: as given above
c) Has technology been fully absorbed: Yes
d) If not fully absorbed, areas where this has not taken place, reason
therefore and future plans of action:
Foreign Exchange Earnings And Outgo:
a. Activities relating to Export.
I) Initiative taken to increase export:
Enhancement of product basket has been achieved by diversifying into export
of newer products in both long & flat category such as Wire rods, Sheets,
etc. Diversification from channellised sales (through agents/traders) to
direct sale to end users/ customers resulting in increase in sales
realisation also. ADW-2000 certification by TUV NORD for supplies to
pressure vessel/boiler industry in Europe. Plant approvals and
certifications by various international bodies such as LRS, ABS, DNV, etc.
Improvement of packaging/markings on products.
II) Development of new export market for products and services and export
plans:
Inspite of shortfall in export during 2009-10, due to huge price gap
between domestic and international market as well as a sharp fall in demand
for stucturals in Middle East and Europe, we have been able to add
following new destinations for our porducts -Nepal (Semis / Plates / Beams
/ Wire rods); Brazil (Rails); Srilanka (Semis & Beams); South Africa
(Beams); Kenya (Beams) With growing volumes and product range, we plan to
develop a consistent strategy in exports by commitment to provide for a
certain quantum of annual sales towards exports in a consistent manner.
Strategic pricing (i.e. Region specific prices) in line with International
market, for immediate volumes. Focusing on acquisition of new customers and
retaining existing ones through re-assurance of support to customers on -
Supplies , Competitive price, Quality, & Delivery schedule.
Focusing on signing yearly off take understanding with large steel users.
Focusing on aggressive exposure (visits) of sales team to various export
markets to have first-hand learning of market activities and trends and
practice being followed by competitors' globally. Building a strong
shipping and chartering team at corporate level. Developing supply
discipline and logistics to target project segments in export market which
require tighter delivery schedules & quality norms.
b. Total Foreign Exchange used and earned
i. Foreign currency used : Rs. 3,147.38 Crores
ii. Foreign currency earned : Rs. 410.41 Crores
MANAGEMENT DISCUSSION AND ANALYSIS
BUSINESS REVIEW:
Global economy started recovery in 2009 but the speed of recovery remained
slow. The process of recovery will get consolidated during 2010 in which
Emerging Market Economies (EMEs) including India will play a significant
role. The World Trade Organisation is of the view that world trade will
stage a strong recovery in 2010. However, the risks to the recovery could
be large public debt in developed economies, high unemployment rates and
weak financial systems. The improvement in global macroeconomic conditions
is witnessed by the turnaround in India's exports and the return of capital
inflows.
Indian economy is on steady growth trajectory and recovery is getting more
broad-based. Domestic output is expected to improve as the economy grows.
There are better prospects for the Rabi crop and services and manufacturing
sectors have also shown great resilience. Output growth during 2010-11 is
expected to increase due to increasing levels of capacity utilisation in
recent months. India's export and import sector has improved along with the
recovery in the global economy. Union Budget for 2010-11 lays greater
emphasis on quality of fiscal adjustment which would contribute to
improving the overall medium-term growth outlook. Volatility in the
domestic financial markets was much lower during 2009-10 than in the year
before, when the crisis erupted. During 2009-10, foreign exchange reserves
increased by US$ 27.1 billion. Net capital inflows are expected to increase
further during the current year, reflecting the prospects of higher growth.
Inflation had reached peak levels but is expected to moderate in the coming
months. There are, however, upside risks to inflation. International
commodity prices, particularly oil, have started to increase again. In
several commodities, the import option for India to contain domestic
inflation is limited, because of higher international prices. Increase in
private sector consumption and the increasing demand supply gap will add to
inflationary pressures.
Economic growth in 2010-11 is expected to be higher than in 2009-10 on
account of overall growth of agriculture, industry and service sector.
However, there are some risks like monsoon uncertainty, less consumption
demand, pace of global recovery and decline in exports. Decision of the
Government to exit from fiscal stimulus and the growth-supportive monetary
policy could impact the growth process.
With an impressive track record, the country has assumed a favourable place
in the world steel industry. Global steel giants from all over the world
have shown interest in the industry because of its good performance. The
crude steel production in India registered a moderate year-on-year growth
of 2.7% in 2009 and reached 56.6 Million Metric Tons. On the other side,
some Asian countries such as Japan and South Korea saw significant decline
in their production levels. This further signifies the resilience and
strength of the Indian steel industry against external risk factors.
Global economic slowdown hampered the growth of various steel intensive
industries, such as, construction in 2009 and its impact also fell on steel
demand. However, the Government's proactive incentive plans to boost
economic growth by injecting funds in various industries like construction,
infrastructure and power will help the steel industry to again achieve its
previous growth trajectory. Steel consumption in India is expected to grow
significantly in coming years since per capita finished steel consumption
is far less from other countries. According to the year-end review by the
Press Information Bureau, India has emerged as the fourth largest producer
of steel in the world and the second largest producer of crude steel.
The National Steel Policy has a target for taking steel production up to
110 MT by 2019-20. With the current rate of ongoing greenfield and
brownfield projects, the Ministry of Steel has projected that India's steel
capacity is expected to touch 124.06 MT by 2011-12. Based on the status of
Memoranda of Understanding (MoUs) signed by the private producers with the
various State Governments, such as Odisha, Jharkhand, Chhattisgarh, West
Bengal, India's steel capacity is likely to be 293 MT by 2020. India
accounts for around 5 per cent of the global steel consumption. However,
its use in railway coaches, wagons, airports, hotels and retail stores is
growing immensely. India's steel consumption rose on account of improved
demand from sectors like automobile and consumer durables. The scope for
raising the total consumption of steel is huge, given that per capita steel
consumption is only 35 kg compared to 150 kg across the world and 250 kg in
China.
While the demand for steel will continue to grow in traditional sectors
such as infrastructure, construction, housing, automotive, steel tubes and
pipes, consumer durables, packaging and ground transportation, specialised
steel will be increasingly used in hi-tech engineering industries such as
power generation, petrochemicals, fertilisers, etc. The new airports and
railway metro projects will require a large amount of stainless steel. With
the growing need for oil and gas transportation infrastructure, huge
opportunity is waiting to be tapped by steel manufacturers in the coming
years.
OPPORTUNITIES AND THREATS
Steel industry plays an important role in the development of a country.
India, a developing nation, requires huge contribution from this industry,
to expedite its run to reach new heights in world economy. India has large
reserves of mineral resources, such as, coal, iron ore etc and is in a
strong position to mobilise these resources into productive use. Vast
market potential with increasing middle class provides assured market to
the industry. Recovery in Indian economy during 2009-10 has given rise to
new investment opportunities which will increase demand for steel products.
Last year the Company had undertaken comprehensive exercise on reducing
costs and improving quality of the products which has given a strong edge
to the Company in the market. The demand for steel is increasing and the
prices have also firmed up during the year under report. The increase in
steel making capacity by the Company will be absorbed by the increasing
demand for steel products.
Power, iron ore and coal are three key raw materials for production of
steel. Your Directors are making all efforts to ensure their availability
considering the proposed enhancement in the production capacity of steel.
In South Africa, Company is operating, through a subsidiary a coal mine
named as Kiepersol Colliery in Piet Retief, South Africa and started coal
production in December 2009. In Mozambique, Company has acquired coal block
in Tete province and is exploring the coal block. Efforts are being made to
get more mining concession in Mozambique. Jindal Steel Bolivia, S.A (JSB),
a subsidiary of the Company has been awarded exploration rights by the
Government of Republic of Bolivia over El-Mutun Iron Ore Mine. JSB will set
up mining facilities, steel making facilities and requisite infrastructure
for development of the mine in granted concession.
The Company is increasing captive power generation capacity for meeting
power requirement of steel plants. Phase-1(2x135 MW) of Captive power plant
of 540 MW (4x135 MW) capacity is under implementation at coal mine at
Tamnar, Chhattisgarh. Part I of 135 MW has been synchronised and will start
generating Power in June 2010. Setting up of captive power plants is a part
of the integrated steel plants being set up in Angul, Odisha and Patratu,
Jharkhandfor meeting their power requirements. The Company had, last year,
commissioned wind millpower plants in villages - Bhud and Amberi in
District Satara in the State of Maharashtra with an aggregate generation
capacity of 15 MW. During the year under report additional 9 MW wind mill
power generation capacity has been added.
Jindal Power Limited (JPL), subsidiary of the Company is expanding power
generation capacity of I,000 MW power plant at Raigarh, by setting up 2,400
MW power project. JPL has signed three joint venture agreements with Hydro
Power Development Corporation of Arunachal Pradesh Limited, a public sector
undertaking for setting up hydro electric power plants with an aggregate
capacity of 6,100 MW in Arunachal Pradesh.
Your Company has, over the years, built a strong technical and managerial
team who possesses sufficient experience in setting up big projects and
manage them efficiently. This team is competent enough to set up steel
projects in Angul, Odisha and Patratu, Jharkhand and expanding steel
production capacity in Raigarh. The Company is therefore poised well for
further growth and sustainable development.
There are however cost factors of financing which the Company has to
consider while taking strategic decisions. The upward pressure on inflation
has prompted RBI to increase its benchmark rates. This has increased the
cost of financing for working capital requirement. Additionally, it is also
putting pressure on all the expansion projects. Already the interest rates
for the short term and medium term loans have gone up by 25-50 basis points
in the last few months.
Cheaper imports from countries such as China and Ukraine will make steel
industry vulnerable. Further lowering of customs duty on steel products
which is 5% at present or further increasing of excise duty on production
of steel products which was raised from 8% to 10% in the union budget 2010
could adversely impact the revenue and profitability of steel industry.
United States of America and European countries are slowly coming out of
acute slow down of 2009 but unemployment figures and financial system is
still a worrying factor which could prove a little drag on the pace of
projected economic growth of the country in the current year. But the
internal economic factors indicate increasing demand for steel which is
expected to command better prices. Electricity continues to be in short
supply and its domestic and industrial demand is rising. As the Company is
self sufficient in supply of raw materials and has captive facilities for
meeting its electricity requirement, the Company is expected to do better
in coming years.
OUTLOOK
The global steel market has significantly improved since the low of 2008-
09. The first half of 2009 witnessed monthly steel production levels go
below 100mn MT due to global economic recession. The production levels
picked up from 2nd half driven by China as consumers across sectors started
replenishing stocks. Global Steel Production for 2009 was 1,220 MMTPA as
against 1,329 MMTPA in 2008.
World Steel Association in its April, 2010 report, forecasted that apparent
steel use will increase by 10.7% to 1,241 mmt in 2010 after contracting by
6.7% in 2009. This represents an improved figure over the Autumn 2009
forecast for both 2009 and 2010. With these projections, world steel demand
in 2010 will exceed pre-crisis levelsof 2007. In 2011, it is forecast that
world steel demand will grow by 5.3% to reach a historical high of 1,306
mmt. The resilience of the emerging economies, especially China, has been
the critical factor enabling the earlier than expected recovery of world
steel demand.
Indian steel industry was among the very few countries which registered
positive growth during 2009-10 and is expected to increase by 10-12% in
2010-11. This growth is to be driven by infrastructure sector which is
expected to grow at 17.5% in financial year 2010-11. Union Budget 2010 has
provided Rs. 1,73,552 Crore for infrastructure development. Steel
production in 2010-11 is likely to be 65 million tonnes compared to 60-61
million tonnes in the year 2009-10.
The rise in construction activities, too, fuelled volume growth for the
steel, thereby indicating that recovery in demand is broad-based and is
gathering pace. Companies across sectors are re-launching projects that
were shelved and this has increased demand for the metal. The process of
re-stocking inventories is also on a high in anticipation of price hike
going forward. The domestic demand, especially from the railways, and
varied use of stainless steel, will also act as a catalyst in growth of the
steel industry in India.
The prices of semi finished and finished steel in India have been closely
following international trend. International steel prices have been rising
steadily in the last few months mostly due to upswing in raw material
prices globally and demand pull in some of the products, mainly flat
products.
The price of the raw materials like coking coal and iron ore has been
rising continuously for a number of months now. Although the manufacturers
are absorbing some of the price increase, the long term financial
implications are forcing them to pass it on to customers. Over the last 12
months the price of coking coal has increased by 96% while the price of
iron ore has increased by 91%. The corresponding increase in Semis has been
15% and that for HR Coils has been 38% in India. Thus, much of the increase
in input prices has been absorbed by the manufacturers.
The Company plans to have 30% of its sales through MoU customers which will
insulate it from external factors related to price and ensure a steady
order pipeline. It will also focus on efficiently developing value added
grades for new applications to enter new markets and limit the impact of
competition for greater profitability. It will also focus on efficiently
increasing sales through the stockyards by keeping the optimum inventory
levels and product mix for just in time order delivery as well as for
serving a large number of smaller customers.
FINANCIAL PERFORMANCE
The overall operational performance of the Company has been satisfactory.
During the financial year 2009-10, the Company achieved net sales of Rs.
7,367.59 Crores and net profit after tax of Rs. 1,479.68 Crores registering
marginal decrease of about 4% as compared to 2008-09 due to lower price
realisation.
INTERNAL CONTROLS AND SYSTEMS
Internal controls and proper systems give authenticity to the information,
reports, records, documents, transactions and serve as a strong foundation
for decision making by the management. The Company has established proper
internal control systems and procedures which are compatible with size of
its operations and business. With a view to ensure that systems are adhered
to and controls are not flouted, three firms of chartered accountants are
conducting internal audit of operations, establishments, marketing offices
and stockyards quarterly. Cost Auditors are separately appointed to audit
cost accounts of the steel plants and their report is submitted to the
Central Government. Audit Committee reviews the reports of Internal
Auditors and Cost Audit Report and monitors effectiveness and operational
efficiency of internal control systems. Audit Committee is giving valuable
suggestions from time to time in improving the business processes, systems
and internal controls. Annual internal audit plans are prepared by internal
auditors in consultation with Audit Committee and audit is conducted in
accordance with this plan. Separate department headed by a Sr. Vice
President looks after internal control systems and assists internal
auditors and the Audit Committee and provides desired inputs to them.
FINANCIAL MANAGEMENT
Borrowing from Banks, Financial Institutions, other lenders in India and/or
abroad is integral to running the business. The Company has been availing
various types of financial facilities from Banks, Financial Institutions,
other lenders in India and/or abroad for meeting fund requirements for
implementing the projects, expansion plans and working capital. Options
available in the credit market are properly assessed and sufficient care is
taken to avail these facilities at competitive terms and conditions and are
appropriately secured as per terms of sanction. The borrowings are at
competitive cost and their disbursement is linked to the project/working
capital requirements. Senior managerial personnel are looking after the
arrangement of funds, servicing of debts and management of internal
accruals. The Company arranged Rs. 3,189 Crores from banks and FIs for
meeting capital expenditure in the year under report.
CORPORATE SOCIAL RESPONSIBILITY
Company believes that corporates impact society and the environment through
their operations, products and services. The Company has, from the very
beginning, devoted itself to the cause of up-liftment of under privileged
people and backward areas of the country. As a responsible corporate
citizen, the Company has a long history of social commitment in projects
that have been making meaningful contribution to the society in different
areas.Company believes that an effective growth policy must also take into
account the fulfillment of basic needs of the masses, especially of those
living in rural areas. It endeavors to improve the quality of life of the
community in the area it operates. To achieve this, it deploys its
resources to the extent it can reasonably afford, to improve the
infrastructure, education, health, water, sanitation, environment, etc. in
the area it operates. CSR activities undertaken during the year under
report by the Company's plants / mines are briefly given hereunder.
A) Plants
I) Raigarh, Chhattisgarh
Company has adopted 29 villages in Raigarh and contributes to the
development of the region through a more holistic effort. A hospital,
school, Jindal Institute of Technology, an english medium primary school in
tribal area, health centres, Asha school for the disabled, computer labs,
musical fountain, auditorium have been built at Raigarh. The Company is
also managing three State Government ITIs. Many initiatives are being taken
under the Company's Corporate Social Responsibility (CSR) policy, such as,
renovation of roads/school buildings, provision of facilities for drinking
water, vocational training to women and encouragement for sports
activities.
Women empowerment programme, education of the girl child and providing
teacher support for existing adult education programme for women is in
progress at 7 separate centers. 324 women have been imparted basic
education in the adopted villages.
For providing medical facilities to villagers in the surrounding villages,
Mobile medical van has been commissioned and about 14,317 persons were
examined, treated and provided free medicines. Patients are being treated
in O.P. Jindal Hospital & Research Centre, Raigarh and operations for
family planning are conducted under 'National Population Control Program'.
ii) Angul, Odisha
CSR activities at Angul project consists of six major components i.e.
Education, Health and Nutrition, Women empowerment, Sports- youth and
Culture, Infrastructure development and Employability. 33 community
teachers support was provided in ten schools and 1,231 children of 12
schools were covered under Art of Living, 4 schools were provided desks,
benches and electrical fittings etc., 147 medical camps were held in which
19,270 patients received medical treatment and 1,915 patients were treated
for eye diseases. 416 units of blood were collected from voluntary blood
donation camps. 16 awareness programmes were held in connection with HIV &
AIDS, anti alcohol and diarrhea control. For promotion of sustainable
livelihood and micro-entrepreneurship amongst the under privileged people
especially women and youth, 32 Self Help Groups comprising 742 members were
trained on income generation activities like mushroom cultivation,
stitching and embroidery, poultry farming, soft toy making etc. Company has
also installed 61 hand pumps and bore wells, 13 water bodies were renovated
and 860 households of 6 villages received drinking water through water
tankers. 16,601 meters of roads were constructed, 360 households got
electricity connections and 1,000 got solar lights as alternate source of
energy. 123 students have passed industrial training from O. P. Jindal
Institute of Technology (OPJIT), Angul in 7 trades and 100 under-matric
youths completed modular employment scheme in 4 various trades.
iii) Patratu, Jharkhand
Company is currently operating in 13 villages around Patratu and has in
collaboration with Jharkhand Silk Textile & Handicrafts Development
Corporation Limited 'JHARCRAFT', a Government corporation of Jharkhand,
provided training to 150 women in Kantha and Zardouzi stitches in 5
villages of Patratu. 38
Self Help Groups (SHG) were formed and required assistance is being given
to them for marketing of local goods. 4 mega health camps were organised
and village health camps are regularly held for routine health check-up,
vaccination, cataract operations etc. Veterinary camps were organised in
all operating villages for checkup and treatment of livestock. Company has
also constructed public toilets / soak pits for improving sanitation
facilities and installed hand pumps for providing drinking water. Benches,
desks, books were distributed in ten schools and science exhibition and Bal
mela was organised.
iv) Barbil, Odisha
The key areas for CSR initiatives at Barbil are in the field of Education,
Health and Basic Infrastructure development in the villages adjacent to its
operations. The Company has adopted the Govt. High school at Deojhar
Panchayat and has engaged additional teachers to coach class 9th and 10th
students for better results. The Company supports a residential tribal
school by bearing the cost of rice and providing uniforms to about 350
residential children. The Company has provided a school bus for the
children from nearby villages to attend school. This has decreased the
dropout of children specially girl child. 15 poor and meritorious children
were assisted financially to continue higher education. The local ITI at
Barbil is benefited through Public Private Partnership. The Company
provides free treatment and medicines and the benefits of this initiative
has reached to 10,000 people. Annually 8 -10 health camps are organised in
the area where the villagers get the benefit of specialist services. Poor
patients who need treatment at spcialised centers are assisted financially
on case to case basis. A dedicated ambulance is provided for delivery cases
and patients who need urgent medical attention. 68 delivery patients used
the ambulances services. Wherever possible piped water supply has been
provided and where it is not feasible, hand bore wells have been provided.
8 villages benefited from this Scheme. Local ponds have been renovated by
desilting and providing bathing steps. The storage capacity of the ponds
have been increased. 28 toilets have been constructed to promote sanitation
in the villages. Community centers have been built at Bhagalpur and Balita
Village. Village roads have been constructed and repaired for easy
transportation. Sewing Machines have been provided to two Self Help Groups.
To promote sports and cultural activities employees participate as
volunteers in all major local tournaments and festivals. Some of the
tournaments of football matches are sponsored by the Company. Company also
provides necessary help during major festivals observed locally. This
apart, the Company also responds to all the requests from the district
administration. The Company has sponsored major programmes organised by the
district administration like Palshree mela, sports and atheletic meet,
Adolescent Meet etc.
B) Mines
i) TRB Iron Ore Mine, Tensa, Odisha
15 K.M. road from Tensa to Barsuan and 19 K.M. road from Barsuan to
Kaleiposh was repaired and made motorable. Overhead water supply has been
provided at Tensa and Barsuan for supplying drinking water to the villagers
and additional water supply pipeline was laid for providing water to
residents in village Tantra. An ambulance is operating in five villages for
providing medical facilities to the villagers. An additional club room was
constructed for Mahila Samiti at village Tantra for socio-economic
development of tribal people. Turmeric powder machine and leaf plate press
machine was also provided to the club. Furniture has been provided to Koira
college and Aurobindo integral school, electrification work was done at
school building at Dengula Sebashrama and boundary wall was constructed for
school at Village Barsuan. The Company has constructed a residential school
for girls with modern facilities, called Baidapali Residential High School
at Tensa at cost of Rs. 3.5 Crores and is providing education upto class X
for 250 students.
ii) Coal Mines
a. Gare IV/1 and IV/6, Dongamahua, Chhattisgarh
Company is running O.P. Jindal School (primary wing) and has renovated
school buildings in various villages around the mine. Financial support was
given to meritorious students and certain facilities like drinking water,
computer and science lab, books, cycles, school bags, uniforms, study
material was provided to schools in the villages around mine area. An
education programme for elderly women is run under the project Chetna' and
177 women have benefited from this project. Company has organised medical
camps and 2,880 patients were treated, 36 cataract operations and 1,136
family planning operations were also performed. Medical van is also
attending to the patients in the villages. 2,116 livestock were treated for
various diseases through animal husbandry medical support. Training was
provided to the women for stitching, knitting and dona pattal making for
augmenting their income. Drinking water sources were developed through
borewells and submersible pumps and ponds have been constructed /
renovated.
b. Amarkonda Murgadangal Coal Mine & Jitpur Coal Mine, Jharkhand
Medical camps were organised for treating patients of malaria, brain fever,
eye ailments etc. Voluntary blood donation camps were organised and burn
unit was set up in Sadar Hosiptal, Dumka. Veterinary camps were organised
for routine immunisation and vaccination of all livestocks of projet
villages. Gram Sabha meetings were also organised in connection with
community development. 20 handpumps were repaired, new handpumps were
installed, 20 solar home lights and blankets were distributed and solar
street lights have been installed in villages around Dumka. Market sheds
have been constructed to facilitate marketing of local products. Sports
events were organised and sports material was distributed to the youth. A
school was adopted in village Daldali and study material was provided to
the students. A school has been adopted in village Jitpur for making it a
model school. The Company has constructed building for Industrial Training
Institute (ITI) at Godda which will start functioning from August 2010.
Under project Hunar', stitching and embroidery centre has been set up for
women. Self Help Groups(SHG) have been formed and training has been
imparted to the SHG members for Dona patal making, vermin composting,
making of jute bags, poultry trade etc.Annual Report 2009-10
These initiatives will not only continue in future but will be broad based
to include more sections of the community and add more areas for
improvement.
ENVIRONMENT PROTECTION
Environmental issues in steel industry are so numerous, complex and
interconnected that an adhoc approach to problem solving is no longer
considered effective. The growing pressure from all stakeholders requires
steel companies to adopt environmental responsibility in all activities.
There has been a paradigm shift in the attitude of the corporates as it
switches over from Passive Environmental Strategies to Proactive
Environmental Strategies'. The Company operates on this philosophy and
active strategies for environment management and energy conservation
policies are formulated and implemented systematically.
Achieving a sustainable balance between environmental protection and
economic growth is one of Company's highest values. Company strictly
follows the principles of minimising pollution, wastages and energy usage
during manufacturing and maximising the harmony between mankind and his
surroundings. Environmental risk through air emission, noise and water
pollution, solid waste generation, occupational health and safety are
identified through environmental impact assessment studies and accordingly
environment management plans with programmes are adopted to
eliminate/minimise adverse impact. The Company at Raigarh has built up a
strong Environment Management Department (EMD) having multidisciplinary
team of professional and technical staff. EMD has established a modern
environmental laboratory having sophisticated instruments including
microbiological parameter testing facilities to monitor environmental
quality to assess the environmental risk.
The technology selection for new equipments is based on their environment
friendliness and the state of art pollution control devices are installed
to manage the terminal discharges. High efficiency Pulsejet bag filters,
Electro Static Precipitators, scrubbers & dust suppression systems are
installed at required locations to control air pollution. The health of
pollution control devices is constantly monitored through high precision
Opacity meters. The Company has installed 5 Online Ambient Air quality
monitoring stations around the factory and at Raigarh city to monitor air
quality. Waste minimisation and its utilisation are integral to environment
management efforts. The waste gases from DRI and Coke Ovens are usefully
utilised for generation of power. The flue gas from Blast Furnace and
Producer gas plant is used as fuel in rolling mills and for running
turbines.
Water conservation is done to the maximum and close circuit arrangement
exists to maintain zero discharge. The sewage from township and office area
are completely treated in 3 stateof- art Sewage treatment plants having a
combined capacity of 3050KL/day and the treated sewage water is fully
utilised for gardening and horticulture activities. Rainwater harvesting is
done through injection wells and water reservoirs. The company is expanding
its rainwaterharvesting project to additional areas including adjoining
villages. A 3 TPD bio-methanation plant is being erected under the
supervision of bio technology division of BARC, Mumbai. The degradable
waste generated in the premises would be usefully utilised for domestic gas
generation. All environmental regulations are strictly complied with.
The Company attaches great importance to development of greenery within the
premises of the factories, offices and its surroundings. Wide green belts
are created around the periphery of the plants. Green belts primarily
comprising of native species are developed all along the plant periphery
and their thickness varies between 5 to 150 meters. During this year alone
over 5 lacs tree plantation was done and the cumulative plantation figure
has crossed 2.0 million. The Company's environment policy is being applied
at all the projects of the Company.
INDUSTRIAL RELATIONS AND HUMAN RESOURCE MANAGEMENT
The Company is taking various initiatives and has adopted various policies
to provide better amenities to the employees to keep them motivated and
satisfied. The Company is on the trajectory of growth and the challenge is
to sustain the growth. Human Resource (HR) has emerged as a strategic
business partner in recent few years and sustainability of growth depends
on the robustness of its policies, systems and procedure. Keeping the above
in mind the Company has developed a Business Partnership Model and has
endeavoured to strengthen itself in the following areas viz, Culture
Building, Commitment Building, Competence Building and Systems Building.
Many contemporary HR initiatives have been undertaken within these building
blocks. The Company has engaged Hewitt Associates for the following
purposes:
a. Leadership Capability Development.
b. Conducting Development Centre for Top 55 High Potential leaders in the
organisation.
c. Executive Coaching intervention for 55 High Potential leaders.
d. Compensation & Benefit Benchmarking.
With an aim to enhance a culture of professionalism and building the
Company as an institution, McKinsey Associates were appointed for
Organisational Transformational Initiatives like:
a. Structure and role clarity - for complete clarity on roles and
responsibilities.
b. Critical processes - for documented, well established and effective
tools and processes used across entities.
c. Management committees - for management accountability and initiative
taking. There are managementcommittee(s) that yield collective and quality
decision making.
d. Culture and capabilities - for strong and recognisable culture across
various entities of the Company, which induces people to give their best
and which also attracts new talent.
The Company is providing medical & health facilities for employees such as
Group Mediclaim Policy which provides assistance to the employees and their
family members and reimburses hospitalisation expenses incurred for
treatment anywhere in India, up to the sum insured. Employees are also
covered under Group Personal Accident Insurance Policy.
All Workers are eligible for Workmen Compensation Insurance Policy.
Various steps are being taken from time to time to ensure safety of
employees in the factories, few among them are:
1. Safety week celebration
2. Safety tool talk at start of the shift
3. Work permit for jobs of hazardous nature
4. Awareness about work at height
5. Provision of personnel protective equipments for hot zones such as jeans
coat, aluminised coat, helmet, safety shoes etc.
6. DSO (Department Safety Officers) in each department
7. Safety inspection
8. Safety meetings with Heads of the departments, supervisors & contractors
9. Safety Induction programme and job specific training programme for
contract workers
The Company has also introduced various Schemes for enhancing motivation of
the employees such as i) Own your car Scheme, ii) Own your laptop Scheme ,
iii) Furniture loan Scheme, iv) Home furnishing loan Scheme, v) Marriage
gift policy and vi) Education assistance policy. Retirement benefits like
Provident Fund and Gratuity are also applicable to all the employees.
STATUTORY COMPLIANCE
The Company Secretary, as Compliance Officer, ensures compliance of the
SEBI regulations and provisions of the Listing Agreement. Compliance
certificates are obtained from various units of the Company and the Board
is informed of the same at every Board Meeting.
CAUTIONARY STATEMENT
This report contains projections, estimates and expectations etc. which are
just 'forwardlooking statements'. Actual results could differ from those
expressed or implied in this report. Important factors that may have impact
on Company's operations include economic conditions affecting demand /
supply and price conditions in the domestic and overseasmarkets, changes in
the Government regulations / policies, tax laws and other statutes and
other incidental factors. The Company assumes no responsibility to publicly
modify or revise any forward looking statements on the basis of any future
events or new information. Actual results may differ from those mentioned
in the report.
For & on behalf of the Board
Place : New Delhi Savitri Jindal
Date : 4th May, 2010 Chairperson
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