Financial Year 2006 07

8/6/2019 Financial Year 2006 07

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STEEL AUTHORITY OF INDIA LIMITED

Performance HighlightsPerformance Highlights 20062006 -- 0707


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Contents

Performance Highlights 2006-07

Steel Industry Outlook

SAILs Expansion Plans

CSR & Environment Management


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Performance Highlights 2006-07


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Record Turnover of Rs.39189 crore up 21%

Highest ever PBT Rs.9423 crore up 65%

PAT of Rs.6202 crore up 55%

EBDIT/SALES 32%

PAT / Net worth 36%

Debt / Equity Ratio : 0.24:1 (virtually debt-free, as short

term deposits exceed borrowings)

EPS Rs.15 up by Rs.5.30

Dividend 31% - Interim 16% and proposed final dividend 15%

Financial Highlights FY 07


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Quarter-wise Profit

21002164

2234

1386 1443 1471

1902

2925

0

500

1000

1500

2000

2500

3000

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

(Rupeesin

crore)

PBT

PAT

FY 2006-07


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Financial Highlights FY 07 : Q4January March 2007

Record Quarterly Turnover of Rs.11534 crore up 14 % over CPLY

EBDIT of Rs.3262 crore up 96% over CPLY

PBT of Rs.2925 crore up 133% over CPLY

PAT of Rs.1902 crore up by 72% over CPLY


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Performance Highlights FY 07

Highest ever saleable steel production of 12.6 million tonnes (MT)

- growth of over 4%

Avg. Capacity utilisation (saleable steel) about 114%

Production growth in high value/special quality steels 16%

Production through Concast up by 5%

Lowest Energy consumption of 7.16 Gcal/TCS

Coke Rate lower by 2 kg per tonne of hot metal

BF productivity up from 1.46 to 1.50 tonnes/cub. m/day


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10.411.0 11.0

12.112.6

7.0

8.0

9.0

10.0

11.0

12.0

13.0

14.0

FY 03 FY 04 FY 05 FY06 FY07

Saleable Steel (Million Tonnes)

Finished Steel

FY07FY06FY05FY04FY03

8184 828180

% of

Sal.

Steel

Highest saleable steel and finished steel production in 2006-07.

RecordProduction

Production Performance


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PIPES

0.7%

RAILWAY MATERIALS

8%

STRUCTURALS

6.2%

CR COILS / SHEETS

8.7%

COATED PRODUCTS

2.5%

ROUNDS / BARS10.2%

SEMIS

18.8%

PLATES

20.2%

HR COILS / SHEETS

24.1%

Product Mix Of Saleable Steel Production FY 2007


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Energy Consumption (Gcal/tcs)

7.167.24

7.29

7.467.50

6.50

7.00

7.50

8.00

FY 03 FY 04 FY 05 FY06 FY07

6.60

7.347.63

7.93

8.32

4.00

5.00

6.00

7.00

8.00

9.00

FY 03 FY 04 FY 05 FY 06 FY07

Concast Production (Million Tonnes)

Techno-Economic Improvements


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538

542

536

543541

520

530

540

550

560

FY 03 FY 04 FY 05 FY 06 FY 07

Coke Rate (kg/thm)

Techno-Economic Improvements

516

506

492

478

460

450

460

470

480

490

500

510

520

530

FY 03 FY 04 FY 05 FY 06 FY 07

Sp. Power Cons. (Kwh/tss)


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132973

138211

126,857

131,910137,496

147,601

156,719159,940

174,736 13.5013.47

12.1012.08

11.30

10.6810.54

9.9910.07

100,000

110,000

120,000

130,000

140,000

150,000

160,000

170,000

180,000

FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07

Manpow

er(Nos.)

8.00

9.00

10.00

11.00

12.00

13.00

14.00

Production(milliontonnes)

Manpower Crude Steel Production

Manpower Vs Production


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19207

24178

3180532280

39189

15000

20000

25000

30000

35000

40000

45000

------RsCrore------

FY 03 FY 04 FY 05 FY 06 FY 07

-------Year------

Sales Turnover


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9.2

9.5

10.3

10.7

11.4

8.5

9.5

10.5

11.5

FY 03 FY 04 FY 05 FY 06 FY 07

0.86

1.17

0.46

0.58 0.51

0.20

0.70

1.20

FY 03 FY 04 FY 05 FY06 FY 07

Domestic Sales (Million Tonne) Exports (Million Tonne)

FY 05 and FY 06 Includes ISP

Sales Volume


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New Product Development

Spring SteelSpring Steel Billets (SUP

11A)

High Speed RailVanadium Micro-Alloyed

Rail

Coastal RailwaysCu-Cr Rail

Diesel Loco WheelsS Profile Loco Wheels

ChainsMC12 HR Coil

LPG CylinderEN Series HR Coil

Tunnel ConstructionRockbolt TMT

Earthquake Resistant ConstructionHCR-EQR TMT

ApplicationNew Products


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2512

6817

4013

6202

0

1000

2000

3000

4000

5000

6000

7000

FY 03 FY 04 FY 05 FY 06 FY 07

Net Profit after tax/Loss [Rs./Crs.]

Profitability


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62.9

35.6

47.2

26.5 32.3

29.3

5.7

12.96.5

11.321.6

38.6

0

10

20

30

40

5060

70

FY 02 FY 03 FY 04 FY 05 FY 06 FY 07

%

EBDIT /Cap. Employed EBDIT/Sales

Profitability Ratio


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1000

3000

5000

7000

9000

11000

13000

15000

FY 03 FY 04 FY 05 FY 06 FY 07

100

300

500

700

900

1100

1300

1500

1700Borrowings

Interest Cost

0.35

FY 06

0.240.581.876.50D/E Ratio

FY 07FY 05FY 04FY 03Year

SAILs market borrowings stood at Rs.4181 crore, a reduction of Rs.117 crore from the

previous year. Interest outgo was also lower by Rs.136 crore during FY 07.

Borrowings(Rs.

InCro

re)

Interest

Cost(Rs.

InCrore)

Reduction in Borrowings


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Sensex(Points)

SharePrice

(Rs)

Month

Closing Share Price & Sensex as on the last day of the month

Performance of SAIL Share price vis--vis BSE Sensex

108.15

114.1

83.3082.30 79.70

81.2

70.25 72.2

77.95

86.387.65

89.2

108.9513696.31

13786.9112961.9

12454.42

11699.05

13072.1

11,279.96

14090.92

10743.88

10609.25

11851.93

10398.61

12938.09

10.00

30.00

50.00

70.00

90.00

110.00

130.00

Mar-0

6

Apr-0

6

May-06

Jun-06

Jul-0

6

Aug-06

Sep-06

Oct-0

6

Nov-06

Dec-06

Jan-07

Feb-07

Mar-0

7

2000

4000

6000

8000

10000

12000

14000

16000

SAIL

SENSEX


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3635

13341

26000

34406

47128

3000

8000

13000

18000

23000

2800033000

38000

43000

48000

53000

58000

------RsCr

ore------

FY 03 FY 04 FY 05 FY 06 FY 07

-------Year------

Market CapitalizationMarket Cap crossed level of

Rs.50,000 crore on 11-4-2007


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1280*31*15.0*16.02006-07

33

20

Total

%

1363

826

Dividend

(Rs. in Crs)

18.0

7.5

Final

%

12.52005-06

15.02004-05

Interim %Year

Dividend Policy of SAIL governed by GoI Guidelines of September

2004

All profit making Public Sector Enterprises (other than Oil

Petroleum and other infrastructure sectors) shall declare a

minimum dividend on equity of 20% or a minimum dividend payout

of 20% of post tax profit, whichever is higher.

Dividend Policy

* Final Dividend For FY 2006-07 recommended by SAIL Board


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Projects

BF 2 upgradation at ISPBloom caster at DSP

Mae-West Block modification at BSLReplacement of Turbogenerator/B strand at WRM

BSP

CDI in BF at DSP, RSP & BSLCast house slag granulation

plant no. 7 at BF-4 BSL

Hot metal desulphurization at BSPAOD & EAF at ASP

Slab caster & RH degasser at SMS-2 at BSPUp gradation of BF-7 at BSP

COB at RSP, BSL & BSPNormalizing furnace at Plate

Mill RSP

Project under implementationProject Commissioned


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Steel Industry Outlook


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Global Steel Scenario

1240 Million Tonne Crude Steel Production in 2006, a growth of 8.8% over

2005. China accounted for most of the incremental production.

Further growth in production/consumption is expected to come from BRICcountries (Brazil, Russia, India and China).

Cost/Availability of raw materials (mainly iron ore & coal) a major challenge.

Region wise crude steel production as per IISI (in Million Tonne) is as under:

5.9%11.1198.4EU

8.8%99.91239.5World

3.3%3.7116.2Japan

18.5%65.4418.8China

7.6%3.144.0India

0.0%0.045.3South America

3.0%3.9131.5North America

Growth (%)Production Growth Over 20052006Region


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Global Steel Scenario

419 476575

821856

907

100

300

500

700

900

1100

1300

15001700

2006 2010 2015

Rest of the WorldChina

Source : IISI / WSD

World Crude Steel Production

Million

Tonne 1240 1332

1482


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Overview of Indian Steel Industry

7th largest steel producing nation in the world with crude steel production

of 44 million tonne in 2006

Apparent consumption of finished steel in FY 07 - approx. 44 million tonne,

growth of 11% over FY 06.

Per capita steel consumption: approx. 38 kg

Finished steel exports in 2006-07: approx. 4.75 million tonne

Imports at 4.1 million tonne in FY 07 catching up fast with exports due to

buoyant domestic demand


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Overview of Indian Steel Industry

Crude Steel Production 2006-07

8.4ESSAR, ISPAT

& JSWL

14.5Others

45.1TOTAL

06-07

(Million tonne)

Company

3.5RINL

5.2TISCO

13.5SAIL

Source: JPC / Internal

TISCO

11%RINL

8%

SAIL

30%

ESSAR,ISPAT &

JSWL

19%

OTHERS

32%


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Indian Steel Industry

Steadily increasing consumption of steel in the country

Finished Steel Production, Consumption, Export & Import

Source: JPC

34

29

37

31

40

34

45

39

49

44

10

25

40

55

MillionTon

ne

FY 03 FY 04 FY 05 FY06 FY07

5

2

5

2

4

2

4

4

5

4

1

2

3

4

5

M

illion

Tonne

FY 03 FY 04 FY 05 FY06 FY07

ConsumptionProduction

Imports

Exports


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Source: JPC/PRIMARY

45.1 (Mn T)

MAJOR PRODUCERS

SAIL

TATA STEEL

RINL

ESSAR STEEL

JSW STEEL

ISPAT IND.

180~200 (Mn T)

MAJOR PRODUCERS

SAIL

TATA STEEL

RINL

ESSAR STEEL

JSW STEEL

ISPAT IND.

( + )

MITTAL STEEL

POSCO

2006-07 2019-20 (P)

CAGR

@1

1%

~12%

Indian Steel Industry Today and Tomorrow


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Indian Steel Industry Today and Tomorrow

Source: JPC/CRISIL/IISI

44

82

180

10

30

50

70

90

110

130

150

170

190

FY 2007 FY 2012 FY 2020

Demand Projection of Finished Steel India

Growth Trajectory of 11 % CAGR


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SAILs Expansion Plans


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SAILs Expansion Plan

Million Tonne

Particulars

10062Continuous Casting Production (% OF CS)

10078Production through BOF (% OF CS)

Saleable Steel

Crude Steel

Hot metal

2312.6

2413.5

2514.6

2010

(Plan)

2006-07

(Actual)


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Rs. In Crs.

1400

3000

17500

16500

0 5000 10000 15000 20000

Tenders to be issued

Tenders issued

Under execution

Completed

Investment Under Expansion Plan - 2010

Status of existing

Capital Schemes (Rs.38,400 cr.)

under expansion plan


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RAW MATERIALS

IRON ORE LINKAGES

Existing Mines +

Raoghat, Chiria &

Taldih + Thakurani

100~ 602020

Existing Mines +

Raoghat, Chiria &Taldih + Thakurani

43252010

Existing Mines2514.62006-07

Linkages of Iron OreIron Ore RequirementHot Metal ProductionYear

Mtpa


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Technological Shift post Expansion Plan

100%PartlyDesulphurization of Hot Metal

Full coveragePartial coverageAuxiliary Fuel Injection in BF

YesNoTop Pressure Recovery

Turbine

YesNoCoke Dry Quenching

YesNoPelletisation Plant

100%62%CC Route

100%78%BOF Steel making

After ExpansionCurrent StatusTechnology


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GoI in principle approval accorded for merger of NINL, MEL &BRL with SAIL.

Agreement concluded for setting up of cement plant in JointVenture with M/s JP Associates for utilising BF slag of BhilaiSteel Plant

Process under way for setting up a slag based cement Plantusing BF slag at BSL in the frame work of a JV

JV Companies supplying captive power to SAIL to augment theircapacities by setting up 500 MW plant additions each at BSP &BSL

Mergers & Acquisition & New JVs


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CSR & Environment Management


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Corporate Social Responsibility

SAIL unparalleled in community welfare promotion

Education : Opened 200 schools to provide education to 1,22,000children. In addition supports other public schools

Health : Over 2 million people served by SAIL hospitals 19 in number(including 4 superspeciality), 39 primary health centres, 18

reproductive and child health centres

Other Initiatives : Access to potable drinking water to 100,000 personsevery year. Construction of 40 kms of pucca roads every year. Supportfor extending benefits to physically challenged. Nurturing young talent

through specialized academies promoting sports.


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Major schemes in 2006-07:

Community care :

Benefits to the SC/ST children through scholarships

Adoption of tribal children at Bhilai and at Bokaro for free education,boarding & lodging facilities, etc.

Preserving National heritage :

SAIL has adopted five monuments in Lodi Gardens, New Delhi forpreserving and maintaining in association with Archeological Survey ofIndia.

AIDS Awareness Program :

As a inter-sectoral collaborator with NACO, Ministry of Health for HIVAIDS programme, SAIL has covered around 6 lacs persons in the AIDSawareness programmes since 1999-2000.


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New projects identified:

Model Steel villages

17 villages have been adopted across 7 states.

Blue print being made including measures to be taken w.r.t. Medical &

Health Services, Education, employment generation, use of steel for

storage/construction/bullock carts, etc.

Literacy :

SAILs continuous efforts to improve literacy level has resulted in

literacy rate in steel townships reaching the range of 749-796 per

1000 against the national average of 520 (comparative analysis 2001).


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New projects identified:

Mid-day meal : Scheme to provide Mid-day meal to around 50,000 school

children in and around Bhilai Steel Plant, in association with a NGO

(Akshaya Patra Foundation) has been worked out.

Health care : Through CARE, 4 mobile vans to be deployed in Chiria area,covering 156 villages with more than 1 lakh population.

Education : A special 3-year project being planned in association with a

reputed NGO (Oxfam trust) for the mines, covering :


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Environment Management

Air emission reduced to 2.2 kg/tcs, reduction of 15% w.r.t. 2005-06(1995-96 : 10 Kg/tcs).

Solid waste utilization increased to 75 %, an improvement of 4%.

Water consumption reduced to 5.31 M3/tcs, an improvement of 5%.

3 lakh trees planted, cumulative plantation - over 13.5 million trees.

Restored over 150 acres of degraded mining area at Purnapani underthe Delhi University SAIL agreement.

Pisciculture has been taken up in the abandoned mining areas at Purnapaniand 50,000 fishlings released in quarry water .


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Accolades

41 employees awarded with Vishwakarma Rashtriya Puraskar - year 2005

one third of total awards conferred amongst employees of all PSUs as well

as private sector in the country.

10 employees were awarded Sharam Awards for the year 2004.

SCOPE Meritorious Award for Environmental Excellence and SustainableDevelopment for the year 2004-05.

First ever Sustainability Awards -2006 instituted by CII to recognize excellencein social, economic and environmental performance, bagged by Bhilai SteelPlant (BSP) of SAIL.

Bhilai also won Golden Peacock : Eco Innovation Award-2006.

National sustainability Award year 2006 1st prize to Salem Steel Plant byIndian Institute of Metals amongst secondary steel /alloy steel plants category.

Honble Vice President of India presented National Safety Awards for the year2002 and 2003 to Raw Materials Division on 14th February 07.

Rajiv Gandhi National Quality Award, 2006 - Best of all category to BSP.


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Abbreviations used

ASP Alloy Steel Plant

BF Blast Furnace

BOF Basic Oxygen Furnace

BSL Bokaro Steel LimitedBSOs Branch Sales Offices

BSP Bhilai Steel Plant

CCO Customer Contact Office

CDI Coal Dust Injection

CS Crude SteelDSP Durgapur Steel Plant

EBDIT Earnings Before Depreciation Interest & Taxes

G.Cal/tcs Giga Calories per tonne of Crude Steel

GoI Government of India

IISI International Iron & Steel InstituteISP IISCO Steel Plant


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Abbreviations used

JPC Joint Plant Committee

Kg/thm Kilo Gram Per Tonne of Hot Metal

MEL Maharashtra Elektrosmelt Limited

MT Million TonneMtpa Million Tonne Per Annum

PAT Profit After Tax

PBT Profit Before Tax

RDCIS Research & Development Centre for Iron & Steel

RINL Rashtriya Ispat Nigam LimitedRSP Rourkela Steel Plant

SSP Salem Steel Plant

VISL Visvesvaraya Iron & Steel Limited


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Statements / Data which do not relate to SAIL and are used / made in this

presentation are from sources which are considered reliable and Company cannot

be held for its authenticity.

Further, statement describing the Companys projections, estimates, expectations

are forward looking statements within the meaning of applicable securities laws

and regulations. Actual results may differ materially from those expressed

depending on the circumstances / situations.

Major factors that could affect the Companys operations include, among others,

economic conditions affecting demand / supply and prices in the domestic and

global markets in which the Company operates, changes in Government

regulations, tax laws and other statutes etc.

Disclaimer

Documents

Financial Year 2006 07