JHAGADIA COPPER LIMITED
ANNUAL REPORT 2008-2009
Your Directors have pleasure in placing before you the 45th Annual Report
together with Audited Accounts for the year ended on 31st March, 2009.
Your company's performance during the year ended on 31st March, 2009 is
Rs. Lacs Rs. Lacs
[1st April, 2008 to [1st October, 2006
31st March, 2009] to 31st March, 2008]
Net Sales 35852.03 35501.82
Job Work Income - Tolling 238.22 1146.66
Other Income 332.45 748.89
Total Expenditure (43701.79) (42243.22)
Profit / (Loss) before Interest,
Depreciation & Tax (7279.09) (4845.85)
Interest and Finance Charges 11213.42 11268.11
Profit/ (Loss) before Depreciation & Tax (18492.51) (16113.96)
Depreciation 7246.06 10876.30
Profit / (Loss) before Tax (25738.57) (26990.26)
Provision for Tax 47.34 11.52
Net Profit / (Loss) (25785.91) (27001.78)
2. Operational Highlights:
During the year, the Smelter and Refinery continued to operate`
successfully with various imported raw materials. The operation of the
entire plant was stable with increased production and cost efficiencies.
During the year, Kaldo Furnace was run with Direct Revert Charging System
with reduced cycle time and production costs. The Refinery was operated at
98.08% current and 96.09% time efficiencies respectively at par with world
During the year, 12,675 MT copper cathodes conforming to LME Grade 'A'
specifications were produced from the raw materials purchased and procured
on tolling basis, against production of 9,913 MT copper cathodes for the
same period in the pervious year.
During the year, the total sale of copper cathodes was 11,202 MT of the
value of RS. 305 crores including export of 8641 MT. The aggregate value of
exports done by the company in last 4 years have exceeded Rs. 852 crores.
During the year, the plant was operated at 25.3% capacity mainly because of
inadequacy of working capital and adverse market conditions due to lower
treatment/refining charges on medium grade and lower discount on high grade
materials. The low capacity utilization has adversely affected the margins.
3. Transfer of long term financial assistance to Asset Reconstruction
Company (India) Limited:
During the year, IFCI Limited and State Bank of India have transferred
outstandings of their long term financial assistance extended to the
company to Asset Reconstruction Company (India) Limited (ARCIL). As on 31st
March, 2009 ARCIL was holding 88.22% of the outstanding of the long term
financial assistance extended to the company.
Your Directors are unable to recommend any dividend on both equity shares
and preference shares in view of the losses incurred during the year.
5. Environment, Safety and Health:
During the year, the emphasis was continued on maintaining the highest
standards of environment management for carrying out operations.
During the year, the safety and health continued to be one of the top
priorities of the company and the reportable accident frequency rate has
During the year, the efforts in maintaining highest standards of
environment, safety and health have been acknowledged by continuing ISO
9001: 2000, ISO 14001: 2004 and OHSAS 18001: 2007 certifications by DNV.
6. Management Discussions and Analysis:
The Management Discussions and Analysis Report is annexed as Annexure-1 to
7. Corporate Governance:
As per Clause 49 of Listing Agreement with Bombay Stock Exchange Limited,
the Corporate Governance Report is annexed to and forms part of this
8. Employee Stock Options Scheme:
The details of stock options granted, outstanding and other relevant
details are provided in Annexure-2 and forms part of this Report.
The company has made arrangements for adequately insuring its insurable
During the year, Shri P.P. Vora resigned as Director of the company and
Chairman of the Board. Shri R.K. Sukhdevsinhji, Director has taken over as
Chairman of the Board w.e.f. 25th April, 2009 in place of Shri P.P. Vora.
After close of the year Shri PParvathisem, Director resigned as Director of
During the year, IFCI Limited nominated Shri R.P.Singh as its nominee
director in place of Shri Mahendra Kumar Sharma. The nomination of Shri R.P
Singh was subsequently withdrawn by IFCI Limited on transfer of its
outstanding of long term loans to Asset Reconstruction Company (India)
During the year, Shri Rajendra Mittal resigned and ceased as Managing
Director & CEO of the company w.e.f. 2rd January, 2009.
During the year, Shri Om Prakash Chugh has been appointed as Additional
Director and Managing Directors & CEO of the company w.e.f. 9th February
Shri Chugh holds office as Additional Director upto the date of next annual
general meeting of the company pursuant to Article 95 of the Articles of
Association of the company. The company has received the notice under
Section 257 of the Companies Act, 1956 from a member proposing candidature
of Shri Chugh as Director of the company.
At the ensuing Annual General Meeting, in accordance with the provisions of
Section 259 of the Companies Act, 1956 and Article 107 of the Articles of
Association of the company, Shri R.K. Sukhdevsinhji, Director retires by
rotation at the ensuing Annual General-Meeting is eligible for
Your Directors place on record their profound gratitude for the valuable
contributions made by Shri P.P. Vora during his tenure as Chairman of the
company. Your Directors also place on record their appreciation for the
valuable contributions made by the outgoing Directors.
M/s N.M. Raiji & Co., Chartered Accountants, Statutory Auditors of the
company shall retire at the ensuing Annual General Meeting and being
eligible have offered themselves for reappointment. Further, as required
under Section 224 of the Companies Act, 1956 a certificate from M/s N.M.
Raiji & Co., Chartered Accountants has been obtained that their re-
appointment as Statutory Auditors, if made, would be in conformity with the
limits prescribed in the said Section. Your Directors propose them for
reappointment as Statutory Auditors of the company.
12. Auditors' Report:
In respect of Auditors' qualification as per Paragraph 4 of theAuditors'
Report, the Directors are of the view that impairment of assets have not
been worked out as restructuring of business is contemplated, which is
likely to impact the value of fixed assets and carry forward losses. On
completion of the restructuring exercise, the management will be in the
position to ascertain the impairment of assets.
13. Energy, Technology and Foreign Exchange:
The details as required under Section 217 (2A) of the Companies Act, 1956,
read with the Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules, 1988 are given in Annexure-3 to this Report.
14. Particulars of employees:
The particulars of the employees as required under Section 217 of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 as amended are set out in the Annexure-4 to this Report.
15. Directors' Responsibility Statement:
Pursuant to the provisions contained in Section 217(2AA) of the Companies
Act, 1956, the Directors of your company confirm that subject to the
Auditors' Qualification in respect of impairment of assets:
i) in the preparation of the annual accounts, the applicable accounting
standards have been followed and that there are no material departures;
ii) they have, in the selection of the accounting policies, consulted
statutory auditors and have applied them consistently and made judgments
and estimates that are reasonable and prudent so as to give a true and fair
view of the state of affairs of the company at the end of the year i.e.
31st March, 2009.
iii) they have taken proper and sufficient care, to the best of their
knowledge and ability, for the maintenance of adequate accounting records
in accordance with the provisions of the Companies Act, 1956, for
safeguarding assets of the company and for preventing and detecting fraud
and other irregularities;
iv) they have prepared the accounts on a going concern basis.
16. Personnel/Industrial Relations:
During the year, the personnel and industrial relations with the employees
remained cordial in all respects.
Your Directors place on record their appreciation and thanks to all the
financial institutions and banks, Asset Reconstruction Company (India)
Limited, the State Trading Corporation of India Limited, Central and State
Governments and Local Authorities and all stakeholders for their continued
support in the working of your company.
Your Directors also extend their wholehearted thanks to entire JCL team and
For and on behalf of the Board
Place : Mumbai R.K. Sukhdevsinhji
Date : 29th July, 2009 Chairman
Annexure-1 to the Directors' Report
MANAGEMENT DISCUSSION AND ANALYSIS
During the year, the plant has operated at 25.30% capacity (peaked to
34.46%) with 12,675 MT copper cathodes production of consistent quality
conforming to the LME Grade 'A' specifications.
During the year, the flexibility of the plant in processing various types
of raw materials continued to be demonstrated by processing reverts;
concentrates with high insolubles, irony copper, copper dross, copper cake,
blister and other copper bearing raw materials.
During the year, the sale of copper cathodes continued at par with the
market premium, although not yet registered with LME.
Absorption of Technology
The company has successfully absorbed technology of smelting of various raw
materials through Top Blown Rotary Converter (Kaldo) and Refining
technologies envisaged in the design. Kaldo and Converter have been
successfully operated with different types of raw materials.
The Refinery has consistently operated at higher current efficiency
(98.05%) and time efficiency (96.08%) than envisaged in the design
operating parameters (current efficiency 96% and time efficiency 95%).
Status of Working Capital Finance
During the year, the company continued to face shortage of working capital
finance due to higher LME prices of copper upto third quarter of 2008 and
the lower production levels as sufficient quantities of the medium grade
raw materials at favorable treatment / refining charges and high grade raw
materials at higher discounts could not be procured due to adverse market
Raw Materials Market Scenario
The raw materials used by the company are different in nature as-compared
to the raw materials used by primary copper smelters. However, the
treatment and refining charges (TC/RCs) and discounts of the raw materials
used by the company have direct linkages with the TC/RCs of concentrates
used by primary copper smelters.
During the year, the global economic melt down and lower TC/RCs and
discounts over LME had adversely affected the company as the world market
of raw materials remained tight.
Safety and Occupational Health
During the year, plant operated with Zero Accident because of management's
continued focus and commitment. The regular in-house training programs were
carried put to maintain highest standards of the safety consciousness. The
departmental and central safety committee meetings were regularly
conducted. The efforts of the company in maintaining highest standards of
safety and health were recognized by upgradation of the OHSAS 18001-1999
Standard to OHSAS 18001-2007 Standard.
During the year, health checks were carried out for all the employees and
no occupational disease was detected.
During the year, emphasis and commitment to maintain sound environmental
management practices for treatment of waste gases, water and solid /
hazardous wastes were continued. The treatment of waste gases from furnace
through scrubber or through bag filters was continued for ensuring
adherence to the norms set by Environment Authorities. The plant was
operated with Zero Discharge. The ISO 14001: 2004 certification by DNV was
continued by successfully maintaining the environment standards.
During the year, several energy conservation projects were taken up. Few of
the projects taken up were as under.
(a) Installation of variable frequency drive in cooling water pumps at main
cooling tower to take care of different flow requirements at optimum energy
(b) Anode furnace combustion air fans were provided with the variable
frequency drive to save energy consumption.
(c) Refinery ventilation fans were provided with the variable speed drive
to get significant saving on energy consumption.
Research and Development
During the year, Seminal Research & Development projects having relevance
to the existing operations were undertaken. Further few projects have-been
implemented in plant to improve operational efficiencies and reduce cost.
Annexure - 2 to the Directors' Report
Details of Stock Options under SEBI (Employee Stock Option Scheme)
1. Options granted - 19,36,500 Equity Shares of
Options lapsed - 12,90,500 Equity Shares of
Options outstanding (as on 31.03.2009) - 6,46,000 Equity Shares of
2. Pricing formula - Rs 10/- per share.
3. Options vested. - NIL Equity Shares of
4. Options exercised - NIL
5. Employee-wise details of Options
granted and Outstanding as on
- Senior Managerial Personnel - Nil Equity Shares of
- Others - 6,46,000 Equity Shares of
- Any other employee_ who is granted
options during the year amounting to 1%
or more of options granted. - NIL
- Identified employee who is granted
options during the year equal to or
exceeding 1% of the issued capital. - NIL
6. Diluted Earning Per Share (EPS)
pursuant to issue of shares on
exercise of options. - N.A.
ANNEXURE-3 TO THE DIRECTORS' REPORT
Particulars under the Companies ((Disclosure of Particulars in the Report
of the Board of Directors) Rules. 1988 for the year ended 31st March. 2009.
A. Conservation of Energy:
The details are furnished in Table 'A' below.
B. Technology Absorption:
The details are furnished in Table 'B' below.
C. Foreign Exchange Earnings and Outgo:
Rs. in Lacs Rs. in Lacs
(1st April 2008 to (1st October, 2006
31- March 2009] to 31st March, 2008]
FOB value of Exports 21994.19 32864.94
Gain on Hedging 10292.99 1144.28
Others 0.00 337.82
Total (a) 32287.18 34347.04
Raw materials 32593.73 33752.84
Stores & spares 95.68 81.45
Remuneration to Foreign Technicians 0.00 9.98
Foreign Travelling 7.12 5.74
Interest 804.55 3822.76
Testing Charges 8.00 14.73
Loss on Hedging 557.55 1075.53
Legal Expenses 16.88 0.00
Others 2.76 10.68
Total (b) 34086.27 38773.71
Form of Disclosure of Particulars with Respect to Conservation of Energy:
Particulars Unit Year ended Period ended
31st March, 2009 31st March, 2008
(1st April, 2008 to [1st October 2006 to
31st March, 2009) 31st March 2008
Power & Fuel Consumption
Purchase Unit MWH 6373 4471
(Excl. Demand Charges) Rs. Millions 33.01 19.64
Rate / Unit Rs./MWH 5180 4392
Own Generation Unit MWH 26522 43369
Rate Per Unit of Fuel Rs. 5.12 4.05
Cost / unit Rs. 5.44 4.11
Quantity KL 11393 18391
Total Amount Rs. Million 252.6 292.20
Average Cost Per Ltr. Rs. 22.17 15.89
Quantity KL 11.35 126.69
Total amount Rs. Million 0.37 3.51
Average Cost Per Ltr Rs. 32.97 27.69
Quantity MT 0 10
Total Amount Rs. Million 0 0.29
Average Cost Per Ltr. Rs. 0 29.84
Quantity MT 192 328
Total Amount Rs. Million 7.71 8.96
Average Cost Per Kg Rs. 40.18 27.31
Top Blown Rotary Converor (Kaldo) Technology:
The technology supplied by Outotec (Sweden) AB (formerly Boliden Contech
AB) consists of smelting of various copper bearing raw materials like
oxides, sulphides, metallics and other such compounds in lumpy and powdery
form. The technology uses oxygen flash smelting of concentrates as well as
smelting of lumpy material using oxygenfuel burner. This technology has not
only been absorbed but improvements like direct revert charging system and
burner lance air dilution, slag settling furnace were incorporated during
the period with in-house expertise and resources. The company has been able
to use all materials and develop processes for smelting all the items. The
quality of output (anodes) has been consistently as per design. All
operations like smelting, converting, anode furnace refining and cast wheel
operations have been stabilized.
X-STRATA (formerly Mount Isa Mines) supplied license and technology for
electrorefining using permanent cathodes. The various operations of anode
preparation, cell operations, cathode stripping, slime recovery, etc. have
been stabilized. The operating indices like cathodes quality, current
efficiency, scrap generation, etc. have been satisfactory in accordance
with the design.