PROCEDURES FOLLOWED IN THE DECISION-MAKING

PROCESS, INCLUDING CHANNELS OF SUPERVISION

AND ACCOUNTABILITY

The decisions making process in the Company involves the following Channel:

BOARD OF DIRECTORS

CHAIRMAN-CUM-
MANAGING DIRECTOR

FUNCTIONAL DIRECTOR

EXECUTIVES

Overall management of the Company rests with the Board of Directors of the Company, the
highest decision making body within the Company.

The Board of Directors is accountable to the shareholders of the Company, who are real owners
of a Company. RINL being a Public Sector undertaking and fully owned by Govt. of India, the
Board of Directors of the Company are accountable to Government of India.

As per the provisions of the Companies Act, 1956 certain matters require the approval of the
shareholders of the Company in general meeting. Similarly, in terms of the Articles of
Association of the Company and guidelines of Department of Public Enterprises, certain matters
require the approval of the President of India.

The primary role of the Board is that of trusteeship to protect and enhance shareholder’s value.
The Board overseas the Company’s strategic direction, reviews corporate performance,
authorizes and monitors strategic decisions, ensures regulatory compliance and safeguards
interests of shareholders. The Board ensures that the Company is managed in a manner that
fulfils stakeholders aspirations and societal expectations.
The day-to-day management of the Company is entrusted with the Chairman-cum- Managing
Director who is supported by Functional Directors and other Officers and staff of the Company.

The Board of Directors has also set up several Committees like Committee of Management
(COM), Committee for Award of Contracts (CAC), High Power Steering Committee (HPSC),
Committee for Award of Contracts relating to Project Expansion Proposals (CACEP) and Audit
Committee.

For effective discharge of his functions, the Board of Directors has delegated substantial
powers to the Chairman-cum-Managing Director. The Chairman-cum- Managing Director, in
turn delegated specified powers to Functional Directors/Officers subject to due control being
retained by him and subject to such conditions which are consistent with the need of prompt,
effective and efficient discharge of responsibilities entrusted to such a Director/Officer.

The Chairman-cum-Managing Director is accountable to the Board of Directors. Functional

Directors are accountable to the Chairman-cum-Managing Director. The Officers are
accountable to concerned Functional Directors.

Rashtriya Ispat Nigam Limited (Visakhapatnam Steel Plant) is a business organisation

operating in highly competitive business environment in domestic as well as international steel
markets. Given the dynamic nature of the environment, it is imperative to have speedier
decision-making processes to enable the company to quickly respond and siege the business
opportunity at right time. While the company has well laid out processes of decision-making,
which includes necessary flexibility in the processes so as to cut short the cycle time.
Generally, the proposals requiring decisions are initiated at the appropriate level of the
executives, depending upon the type of decision, financial implication, administrative
exigencies etc. Normally, the proposals are initiated by front line executives (up to the level of
Manager/Deputy Chief Manger), and vetted by next higher authorities (generally Addl.Chief
Manager/Dy.General Manager). Wherever concurrence of finance is required, the proposal is
examined and concurred by finance executives and approved by competent authority as per
DOP. In respect of the proposals which are not within the scope of the powers of CMD, Board
Notes are processed for clearance of concerned Functional Director, concurrence of Director
(Fin.) and approval of CMD for placing the proposal before the Board for their consideration
and decision.

With a view of minimizing the cycle time for decision-making, efforts aremade to clear
the file through a minimum levels of3 to 4 i.e. proposing level, vetting level, concurrence level
& approving level. In some case where there is need for consultation with 2 to 3 departments,
committee approach is followed to clear the file instead of routing it through 3 or 4
departments. Purchase Committee etc. are examples of such decision-making processes.
Within the organisation, the apex decision-making committee is the Committee of Management
(COM) consisting of Chairman-cum-Managing Director and other Functional Directors. Besides
this, some time high-powered committees are constituted to take decision on some important
matters. In nutshell continuous efforts are being made to make the processes of decision-
making quicker, simpler and qualitative.