Balance Sheet

  APPLICATION OF FUNDS :
2010 2009 2008 2007

 Cash and Bank 303.04 509.3 471.48 339.46

  Sundry Debtors 696.39 399.05 539.06 245.96
 Inventories 2,866.74 2,924.56 2,181.74 1,012.11
Other Current Assets
  Loans and Advances 1,603.79 1,260.03 928.41 881.47
  Total Current Assets 5,469.96 5,092.94 4,120.69 2,479.00
Net Property, Plant, Equipment 22,351.98 19,092.29 15,814.00 8,193.40
Other Long term Assets
  Investments 628.2 396.6 469.58 245
 Capital Work in Progress 6,956.18 9,585.18 5,770.80 2,012.47
  Miscellaneous Expenses not written off 0 0 0 195.01

Total Assets 35,406.32 34,167.01 26,175.07 13,124.88

SOURCES OF FUNDS

   Total Current Liabilities 8,072.70 8,262.82 4,706.42 2,302.26

  Long term Debt 16,173.04 16,550.22 12,136.22 4,173.03
Other Long term Liabilities 1,684.78 1,276.82 1,251.71 1,012.53
Preference Share 279.03 288.93 288.93 279.03
Total Equity Capital 9,196.77 7,788.22 7,791.79 5,358.03

Total Liabilities 35,406.32 34,167.01 26,175.07 13,124.88

P& L STATEMENT

(Rs in Crs)
Mar Mar Mar Mar
   Year 10(12)  09(12)  08(12)  07(12) 

15,934.8 12,427.7
  Net Sales 18,957.17 4 0 8,554.95

 Raw Materials 11,213.29 9,985.51 6,678.54 3,961.04

  Power & Fuel Cost 1,047.53 803.78 582.65 393.1
 Employee Cost 479.54 518.58 392.15 175.81

11,307.8
Total 12,740.36 7 7,653.34 4,529.95
67.206022 70.9631 61.5829 52.9512
Less:Cost of sales 8 9 2 2

  Other Manufacturing Expenses 1,826.45 1,583.87 1,464.47 992.32

 Selling and Administration
Expenses 116.68 158.66 79.66 60.38
  Miscellaneous Expenses 185.56 1,063.98 216 238.36

Other Expenses 2,128.69 2,806.51 1,760.13 1,291.06

17.6124 14.1629 15.0913

Other Expenses Percentage 11.228944 1 6 8

Interest Expense 1,114.91 1,168.13 625.57 406.86

5.8812048 7.33066 5.03367 4.75584
Interest Expense Percentage 4 7 5 3

15.683828 4.09373 19.2204 27.2015

Earnings before taxes 3 4 5 6

Less Income taxes 228.05 -13.87 324.76 347.91

  Deferred Tax 418.16 78.91 435.17 270.64

Taxes 646.21 65.04 759.93 618.55

3.4087893 0.40816 6.11480 7.23031
Taxes 9 2 8 7
0.0117106 0.59592 0.00596
Extraordinary Items 1 -4.06185 7 1
 12.263328 7.74742 12.5097 19.9652
Net Income 3 6 2 8

Key events affecting the financial statements during the year

2009-10

Notes to the Balance sheet and P& L statement

1)

The PAT of the Company went up by 341% over last year due to the significant growth in revenues
during the year mainly attributable to the marketing strategy of prudent sales mix, focus on
domestic market, widening of the product basket and market presence. Domestic revenue
increased, due to strategic shift to local markets and improved realizations gradually from their lows.
The Company strengthened its dealership network, widening pan-India visibility. The domestic
volumes went up significantly by 96% over last year, but there was drop in steel prices compared to
last year.

2)

Increase in Cost of Goods Sold

Raw Materials

Mainly due to higher level of production, resulting from the commissioning of new facilities of 2.8
MTPA expansion project.

3)

Manufacturing & Other Expenses

There was increase in power consumption on account of higher volume of production, in particular,
increase in production of Rolled products - Flat & Long and Value added products. Increase in other
costs mainly relate to higher consumption of stores and spares (43% increase to Rs. 280 crores) and
Repairs & Maintenance (27% to Rs. 63 crores), due to increase in scale of operations.

4)

Interest

Long-term interest went up on account of long-term borrowing pertaining to expansion projects

which started operations in April ’09 and working capital interest reduced, mainly due to reduction
of interest rates.
5)

Fixed Assets

Gross block increased during the year due to capitalization of 2.8 MTPA expansion project. Also 30
MW power plant at Tarapur and first unit of Phase-1 of the beneficiation plant at Vijayanagar.Capital
work-in-progress as at 31 March 2010, comprises of ongoing projects which are under
implementation

6)

Investments

Infusion of equity capital in subsidiaries amounts is Rs. 313 crores and rest towards investment in
mutual funds.

7)

Inventories:

Higher inventory of raw materials & spares is mainly due to commencement of new facilities.

8)

Other Current Assets(Loans & Advances)

The increase was mainly due to increase in entitlement of MAT credit of Rs. 259 crores.

9)

Current Liabilities

Reduction in current liabilities is mainly due to payment of project creditors relating to new 2.8
MTPA expansion project and other projects

10)

Secured and Unsecured Loans

Increase in debt is due to additional borrowings for expansion projects. The Company’s net long-
term debt equity ratio declined, as the Company met its entire repayment schedule in 2009-10.

===============================================================================

2008-2009

11)

Reduced PAT
The PAT on consolidated basis was lower than the standalone basis mainly on account of inventory
write-down and negative margins in the second half of FY 2008-09 in the overseas operations in UK
and USA accounted by continuous fall in product prices.

12)

Net Sales

The Company could not maintain its margins in spite of growth in volume and higher realization as
the cost of production went up by 49%. This led to a drop of 8. % in the EBIDTA margin which stood
at 21.8% for the year ended 31 March 2009. The flight of capital from equity markets of emerging
countries following the turmoil in financial markets put pressure on currencies including Indian
rupee. The steep depreciation of rupee by 27 % during the year resulted into a net foreign exchange
loss of Rs.790 crores.

13)

Raw Materials

The increase was largely due to the surge in long-term contract and spot raw material prices. Raw
material procurement was reduced during the month of November and December as the Company
throttled operations by 20%.

14)

Manufacturing & Other Expenses

Manufacturing and Other expenses increased by 16% because

 Increase in power and fuel cost by 2 % due to increase in rate of Coal and other fuel used in
generation of power.
 Increase in Rate and taxes by Rs. 46 crores on account of imposition of export duty by
government during first half of FY 2008-09.
 Increase in Carriage and Freight by Rs. 1 crores mainly due to high rate of crude oil price
during the year.

15)

Interest

The interest on Long term Loans went up mainly due to commencement of certain facilities under
2.8 MTPA expansion project during 2008-09 and new Cold Rolled Complex at Vijayanagar &
expansion project at Salem during 2007-08.

16)

Investment

Total investment increased from Rs. 924 crores in 2007-08 to Rs. 1,250 crores in 2008-09 mainly due
to infusion of equity capital in subsidiaries of Rs. 403 crores.
17)

Inventories

Increase in stores & spares were mainly due to commencement of new facilities. Increase of Finished
Goods was mainly due to inventory (Rs. 101 crores) arising out of trial run production of 2.8 MTPA
expansion project.

18)

Other Current Assets(Loans & Advances)

The increase was mainly due to

 Loans and advance given to JSW Steel (Netherlands) B.V. amounting to Rs. 664 crores.
 Minimum Alternative Tax credit entitlement of Rs. 9 crores.

19)

Current Liabilities

The increase was mainly due to increase in the value of purchases on account of expansion projects.

20)

Secured and Unsecured Loans

The increase in total debt were mainly due to :

 Increased scale of production and the global financial crisis leading to increased working
capital funds from day to day operations
 Withdrawal of additional funds for completion of critical projects
 Increases in borrowings accounted by translation losses due to steep depreciation

==================================================================================

2007-08

21)

Net Sale

 Revenue (net sales) increased by 33% in 2007-08 on account of enhanced production and
increased realization.
 Higher proportion of value added products – commercialization of new value added
capacities in the upstream and downstream units.
 New revenue vertical – Merger of SISCOL with JSW Steel w.e.f. 1 April, 2007.

22)

Taxation
The effective tax rate declined from 32.54% in 2006-07 to 30.43% in 2007-08 mainly attributable to
tax benefits claimed in respect of the power business.

23)

Equity share capital :

The growth in equity was on account of conversion of 80,00,000 warrants, issue of 1,50,35,711
shares of the Equity Shareholders of SISCOL on account of its merger and 33,799 FCCB conversion
during the year.

24)

Net Block

 Amalgamation of SISCOL with the Company

 Commissioning of the Cold Roll Mill at the upstream unit.

 Commissioning of a Galvalume line in the downstream unit.

25)

Inventory

Growing business volumes and increase in input cost necessitated an increased inventory
accumulation for seamless operation at the Company shop floor