28 Annual Report 2009-10

28th Annual Report 2009-10
RASHTRIYA ISPAT NIGAM LIMITED BOARD OF DIRECTORS CHAIRMAN-CUM-MANAGING DIRECTOR Shri P K Bishnoi FUNCTIONAL DIRECTORS Personnel Shri Y Manohar Commercial Shri C G Patil (upto 28th February, 2010) Finance Shri K S Shankar ( upto 31st October, 2009) Shri P Madhusudan ( w.e.f. 2nd November, 2009) Operations Shri Umesh Chandra Projects Shri A P Choudhary (w.e.f. 1st June, 2009) GOVERNMENT DIRECTORS Shri BS Meena ( upto 30th March, 2010 ) Shri S Machendra Nathan (w.e.f. 24th May, 2010) Shri U P Singh ( 12.11.2009 to 19.1.2010) Dr. Dalip Singh (upto 11.11.2009 & w.e.f. 2.3.2010) INDEPENDENT DIRECTORS Dr. Jagatpal (upto 1st March, 2010) Prof. Ramesh Chandra (w.e.f. 3rd August, 2009) COMPANY SECRETARY Shri P Mohan Rao BANKERS State Bank of India Bank of Baroda Canara Bank State Bank of Hyderabad Allahabad Bank UCO Bank State Bank of Mysore State Bank of Indore HSBC Bank IDBI Bank Ltd. Andhra Bank ICICI Bank HDFC Bank Central Bank of India Oriental Bank of Commerce Punjab & Sind Bank IndusInd Bank Exim Bank AUDITORS M/s B V Rao & Co. Chartered Accountants Visakhapatnam CONTENTS Chairmans Address Directors Report Management Discussion & Analysis Report A Glance of Financial Results Annual Accounts Cash Flow Statement CEO & CFO Certification Auditors Report Comments of C&AG Report on Corporate Governance Certificate on Compliance of Guidelines on Corporate Governance Secretarial Compliance Report Vision, Mission & Objectives
3 6 30 39 41 68 70 71 79 80 88 89 96
REGISTERED OFFICE Administrative Building Visakhapatnam Steel Plant Visakhapatnam 530 031, Andhra Pradesh Website: www.vizagsteel.com
Chairmans Address
Dear Shareholders, My colleagues on the Board and I extend a warm welcome to you all at the 28th Annual General Meeting of your Company. The Directors Report and the Audited Statement of Accounts for the year 2009-10 and the Notice to the Shareholders have already been circulated and with your permission, I take them as read. Year 2009-10 The year 2009-10 has been an eventful year for the Company as because the impact of the Global Financial crisis that started in the second half of the previous year has been gradually assimilated and the Company withstood the crisis consequent to a strong recovery in the Indian economy, thanks to the timely and proactive initiatives of the Govt of India to boost economic growth by enabling injecting funds in various industries like construction, infrastructure, auto mobile and Power Sectors. Yet, 2009-10 was at best a year of cautious recovery but encouraging year for the Company. The Steel Markets saw a growth in consumption but the prices continued to be under pressure. During the year, the Company has achieved some of the best ever yearly performances in respect of production of value added steel (2.403 million tonnes), steel dispatches by rail of 2.07 million tonnes and best ever gross sales of Rs.10635 Crores in addition to best techno-economic parameters achieved in terms of yields (Wire Rods and MMSM Mills) and Specific Water Consumption of 2.16 Cub. Mtrs./tls. This could be possible despite certain constraints like Power availability, etc. Global Steel Industry The Global Economy has showed signs of recovery with Global Steel Capacity utilization ratio showing improvement at 75.1 % in Dec 09 (as compared to 58.1 % in Dec 08). The financial crisis in the previous year has effected many Nations. However, the Indian Economy showed tremendous resilience and withstood the global volatility by maintaining the GDP Growth relatively at a higher level as compared to the earlier period. The Indian steel industry has also shown signs of improvement everywhere by a positive growth of 2.7% over the previous year, while other developed countries showed a negative growth. The consumption of Steel continues to be a major growth driver and the consumption growth projected at 7% based on GDP Growth rate of 7% to 7.5% and production of 110 million tonnes much earlier than 2019 20 as was projected in the National Steel Policy. Global Crude Steel production reached 1220 million tonnes. Further, consolidation in the Industry has facilitated the growth and investor confidence and the international prices have been high in the year helping the Companies in India for improving their margins. The World Steel Association forecasts an increase in the apparent use of Steel finished products during 2010 and 2011 by 10.7% and 5.3% respectively. World Steel Association also expects the apparent steel use for the year 2010 to reach 1.241 billion tonnes compared to 1.121 billion tonnes for 2009 and this is expected to rise to 1.306 billion tonnes in 2011. It is also predicted that Asia will lead in terms of Steel demand with a share of 66.2% of the World Steel demand in 2010 and 65.5% in 2011. Emerging economies like India will drive the growth and this augurs well for the industry. Indian Steel Scenario India has emerged as 5th largest producer and recorded a growth rate of 2.7% and emerged as the largest sponge iron producer in the World. The Industry is looking forward for Expansion Plans of the Steel Companies including PSUs and if implemented on schedule, India could become the second largest Crude steel producer in the world by the year 2016. The growth in infrastructure and other developmental activities arising out of increased outlays in these sectors by Govt of India have rejuvenated the Steel Market in the Country and the building of capacities to cater to the diversified demands is the main thrust area now onwards.
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RASHTRIYA ISPAT NIGAM LIMITED
Outlook for the Company in 2010-11 On the back of strong commitment for infrastructure funding and revival and strong come back by the auto sector, the Steel demand in the country is projected to go up by 10% giving an encouraging opportunity for the Company to improve its overall performance. However, the raw material prices continue to be a major concern as they have cut into the margins of the company for the year and shall continue to show a negative impact in the coming year as well cutting into the bottom line of the company. The Iron ore prices have already been increased by 40% from the price level of 2009-10 and are likely to go up further while the imported coking coal prices have gone up by 56% in the First Quarter of 2010-11. The Company will continue to face stiff competition from steel producers in the private sector who are making higher availability of long products in the market particularly in the Southern India Region. Efforts are on for improvement of the net sales realization by value added production and better delivery mechanisms to enhance consumption. The company is looking at optimization of product and market mix and production at higher levels of efficiency and productivity with a focus on cost reduction to partially neutralize the impact of cost escalations. All said and done, steep increase in prices of key raw materials like coking coal and iron ore and the sluggish market and declining selling prices is and further likely to put pressure on the margins. The Company, in the current year, is also focusing on synchronization for commissioning of various units of the Expansion project (6.3 Mt stage) in logical sequence to the extent possible so as to minimize logistical/operational over heads with increase of production. RINL is continuing its efforts on strategic initiatives for acquiring overseas coal mines through the Joint Venture Company, International Coal Venture Ltd., and long term contracts with the major coal suppliers and through the joint venture company RINMOIL formed for setting up of ferro alloy plant with M/s MOIL. Further, to improve energy efficiency of the Plant, the company entered into an MOU with NEDO for a 20.60 MW waste heat recovery system. Our people, the RINL collective, continue to be the key to the success of the Company. The Steel Ministrys Trophy, which was given for the first time, was received by the Company in the year and this, alongwith many other recognitions like Energy efficient unit conferred by CII, Rajbhasha Award, CMMI Level 3 Certification, Gold and Bronze medals ICQCC Philippines, Indias Best Companies to Work for 2009 etc., is a testimony to the companys commitment to Excellence in Steel making. Steps towards a promising future The Company embarked upon Expansion Plan for doubling the capacity from 3 million tonnes to 6.3 million tonnes and it is estimated that Ist Phase Units will be commissioned in the 4th quarter of the year 2010-11. The Coke Oven Battery No.4 has been commissioned during the year and was dedicated to the Nation by the Honble Union Minister for Steel in May 2010. The Company during the year took upon Modernization & Upgradation of CCM-2 with EMS facility and TG-I Automation along with Combined Blowing facility in SMS-1. Care for Society The Company has committed Rs.12.75 Crores for the year 2009-10, as against Rs. 38.83 Crores in the previous year, towards Corporate Social Responsibility activities. The reduction is largely due to the reduced PAT for the year. Corporate Governance Your Company is committed to conforming to the highest standards of corporate governance by ensuring transparency, disclosures, and reporting as required under the Corporate Governance Guidelines issued by the Department of Public Enterprises. Dividend for the year 2009-10 The Net Profit for the financial year 2009-10 has eroded by 40% as compared to that of the previous year due to lower net sales realization. Considering the financial position of the Company and the need to have adequate internal resources for the on going Expansion Project and to support modernization and key raw material securitisation plans, there is a requirement to conserve funds.
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It gives me a great pleasure to announce that the Board of Directors of your Company have since recommended a total dividend of 10% of Profit After Tax (PAT) to Equity Shareholders (amounting to Rs.79.67 crores) and 7% on Preference Share Capital to Preference Shareholders (amounting to Rs.205.62 crores) including the interim dividend of Rs.100.01 crores already paid to Equity and Preference Shareholders for the financial year 2009-10 and the Shareholders, at the 28th AGM of the Company held on 24th July, 2010, have declared the dividend for the year 2009-10 accordingly. Acknowledgements I, on behalf of the RINL collective, acknowledge the support extended by the Stakeholders of the Company and look forward to their continued support in the years to come. I take this opportunity to express my thanks to all the Stakeholders, Ministry of Steel, Government of India, Government of Andhra Pradesh and various other Departments of the Government and other Institutions. The Company acknowledges the unstinted commitment and collective efforts of its employees for their excellent performance in various activities. I am confident that the commitment, expertise, acumen and the trust built over the last 28 years will continue to be available and with your dedicated and innovative efforts, we can pave the way to building capacity upto 16 million tonnes by 2020, as enshrined in our Mission statement. Thanking you,
Dt. 24th July, 2010 Visakhapatnam
( P.K. Bishnoi ) Chairman
Dear Members,
DIRECTORS REPORT
Global Crude Steel production reached 1220 million tonnes. Further, consolidation in the Industry has facilitated the growth and investor confidence and the international prices have been high in the year helping the Companies in India for improving their margins. The World Steel Association forecasts an increase in the apparent use of Steel finished products during 2010 and 2011 by 10.7% and 5.3% respectively. World Steel Association also expects the apparent steel use for the year 2010 to reach 1.241 billion tonnes compared to 1.121 billion tonnes for 2009 and this is expected to rise to 1.306 billion tonnes in 2011. It is also predicted that Asia will lead in terms of Steel demand with a share of 66.2% of the World Steel demand in 2010 and 65.5% in 2011. Emerging economies like India will drive the growth and this augurs well for the industry. Indian Steel Scenario India has emerged as 5th largest producer and recorded a growth rate of 2.7% and emerged as the largest sponge iron producer in the World. The Industry is looking forward for Expansion Plans of the Steel Companies including PSUs and if implemented on schedule, India could become the second largest Crude steel producer in the world by the year 2016. The growth in infrastructure and other developmental activities arising out of increased outlays in these sectors by Govt of India have rejuvenated the Steel Market in the Country and the building of capacities to cater to the diversified demands is the main thrust area now onwards. Outlook for the Company in 2010-11 On the back of strong commitment for infrastructure funding and revival and strong come back by the auto sector, the Steel demand in the country is projected to go up by 10% giving an encouraging opportunity for the Company to improve its overall performance. However, the raw material prices continue to be a major concern as they have cut into the margins of the company for the year and shall continue to show a negative impact in the coming year as well cutting into the bottom line of the company. The Iron ore prices have already been increased by 40% from the price level of 2009-10 and are likely to go up further while the imported coking coal prices have gone up by 56% in the First Quarter of 2010-11. The Company will continue to face stiff competition from steel producers in the private sector who are making higher availability of long products in the market particularly in the Southern India Region. Efforts would continue for improvement of the net sales realization in general
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On behalf of the Board of Directors of the Company, I take great pleasure in presenting the 28th Annual Report of the Company for the financial year ended 31st March 2010, together with the Audited Statements of Accounts, the Auditors Report and the Comments on the Accounts by the Comptroller and Auditor General of India. Year 2009-10 The year 2009-10 has been an eventful year for the Company as because the impact of the Global Financial crisis that started in the second half of the previous year has been gradually assimilated and the Company withstood the crisis consequent to a strong recovery in the Indian economy, thanks to the timely and proactive initiatives of the Govt of India to boost economic growth by enabling injecting funds in various industries like construction, infrastructure, auto mobile and Power Sectors. Yet, 2009-10 was at best a year of cautious recovery but encouraging year for the Company. The Steel Markets saw a growth in consumption but the prices continued to be under pressure. During the year, the Company has achieved some of the best ever yearly performances in respect of production of value added steel (2.403 million tonnes), steel dispatches by rail of 2.07 million tonnes and best ever gross sales of Rs.10635 Crores in addition to best techno-economic parameters achieved in terms of yields (Wire Rods and MMSM Mills) and specific Water consumption of 2.16 Cub. Mtrs./tls. This could be possible despite certain constraints like Power availability, etc. Global Steel Industry The Global Economy has showed signs of recovery with Global Steel Capacity utilization ratio showing improvement at 75.1% in Dec 09 ( as compared to 58.1% in Dec 08). The financial crisis in the previous year has effected many Nations. However, the Indian Economy showed tremendous resilience and withstood the global volatility by maintaining the GDP Growth relatively at a higher level as compared to the earlier period. The Indian steel industry has also shown signs of improvement everywhere by a positive growth of 2.7% over the previous year, while other developed countries showed a negative growth. The consumption of Steel continues to be a major growth driver and the consumption growth projected at 7% based on GDP Growth rate of 7% to 7.5% and production of 110 million tonnes much earlier than 2019 20 as was projected in the National Steel Policy.
and by value added production and better delivery mechanisms to enhance consumption. But recent financial crisis in some European countries affecting Steel market sentiments including in India and reduced scrap prices etc. are putting considerable pressure on prices and the negative sentiments are leading to sluggish market. The company is looking at optimization of product and market mix and production at higher levels of efficiency and productivity with a focus on cost reduction to partially neutralize the impact of cost escalations despite Brown Field Expansion work at times coming in the way as also overdue repairs and maintenance of key Units. All said and done, steep increase in prices of key raw materials like coking coal and iron ore and the sluggish market and declining selling prices is and further likely to put pressure on the margins. The Company, in the current year, is also focusing on synchronization for commissioning of various units of the Expansion project (6.3 MT stage) in logical sequence to the extent possible so as to minimize logistical/operational over heads with increase of production . RINL is continuing its efforts on strategic initiatives for acquiring overseas coal mines through the Joint Venture Company, International Coal Venture Ltd., and long term contracts with the major coal suppliers and through the joint venture company RINMOIL formed for setting of Ferro Alloy Plant with M/s MOIL. Further, to improve energy efficiency of the Plant, the company entered into an MOU with NEDO for a 20.60 MW waste heat recovery system from the existing Sinter Plant a first for an Integrated Steel Plant. The RINL collective, continue to be the key to the success of the Company. The Steel Ministrys Trophy, which was given for the first time, was received by the Company in the year and this, alongwith many other recognitions like Energy efficient unit conferred by CII, Rajbasha Award, CMMI Level 3 Certification, Gold and Bronze medals ICQCC Philippines, Indias Best Companies to Work for 2009 etc., is a testimony to the companys commitment to Excellence in Steel making. Steps towards a promising future RINLs operation of its assets at VSP has been amongst the most competitive in the steel industry and capacity expansion has been one of the key strategies for the organization. RINL draws its greatest strength and its competitive position from its productivity, quality and highly skilled work force. RINL has an excellent layout and associated infrastructure facilities to expand the capacity many fold. Leveraging upon these strengths, RINL had drawn its long term directional plan
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Corporate Plan 2020 to expand the capacity of liquid steel to 16 million tonne in phases by the year 2020. In the midst of changing business dynamics and its quest to maintain its dominant position in the Indian steel market, the Corporate Plan is being revisited as per which VSP has the potential to expand to 20 million tonne per annum at the existing location ; thereby could become the largest single location steel plant in the country and enjoy economic benefits. In the above endeavour, the Company has already embarked upon its first phase of expansion for doubling its capacity from 3 million tonnes to 6.3 million tonnes of liquid steel per annum. In the current phase, RINL is focusing on further establishing its brand leadership in long products category view of the projected infrastructure growth of the country and in the next phase, VSP proposes to enter into flat products category with which product mix of RINL would get enriched. The implementation of the first phase of expansion is in advanced stage and the production is all set to commence by end of the financial year 201011. This phase of expansion consists of a new Blast Furnace with state of the art technology, Sinter Plant and Raw Material Handling System, new Steel Melting Shop along with latest technological facilities to produce clean steel, Wire Rod Mill and associated units. The existing plant of RINL was installed mainly utilising Russian technology. In the current expansion phase, RINL has sourced latest technology from all major countries, partnering with reputed technology suppliers for supply, installation and commissioning of the units which includes M/s Paul Wurth, Italy, SMS, Germany, Siemens VAI, Austria, Danieli, Italy, TPE, Russia, along with reputed Indian partners viz., M/s MECON, BHEL, L&T, Bridge & Roof etc. To meet the additional requirement of coke, a new Coke Oven Battery No.4 has already been commissioned which was dedicated to the Nation by the Honble Union Minister for Steel in May 2010. The Company during the year also took up a number of Modernization & Upgradation projects like CCM-2 with EMS facility and Combined Blowing facility in SMS-1 which have been put into operation. In Stage II of current phase of expansion, two new finishing mills Special Bar Mill and Structural Mill along with associated facilities are being installed which will be brought into operation progressively during next financial year i.e 2011-12. Apart from capacity enhancement, the expansion also focuses on reduction in energy efficiency, stepping up of productivity & yield, newer products with more stringent tolerance limits and above all more environmental friendly technologies.
To reduce energy consumption, several energy efficient technologies are being adopted in expansion such as multi slit burners, waste heat recovery in sinter coolers, PCI in Blast Furnace, newer design of BF stoves, Top recovery turbine for waste heat recovery, 100% continuous casting, efficient reheating furnaces in Mills, efficient electrical drives, oscillating combustion in Rolling Mills, furnace control integrated with Mill control, side charging and discharging of furnace, low temperature rolling, housing less stands, warm charging of billet, high speed rolling, single family roll pass design and the like. Measures for environmental protection and resource conservation, has always been the top priority of RINL that has helped the company in maintaining lowest water consumption, one of the lowest in energy consumption, highest utilization of waste gas heat through generation of about 40 MW of power etc., The new systems / technologies being introduced in expansion include zero discharge system, mechanical, biological & chemical treatment unit for effluent treatment, Dry fog dust suppression system in RMHP dog house (secondary fume extraction system) in , SMS, several de-dusting facilities of efficient design etc. The thought process for the next phase of expansion to a level of 11 to 12 million tonne per annum of liquid steel has already commenced. In this phase, RINL intends to enter into flat products & high grade steels which are currently either not being manufactured in the country or partly getting imported. CARE FOR SOCIETY The Company has committed Rs.12.75 Crores for the year 2009-10, as against Rs.38.83 Crore in the previous year, towards Corporate Social Responsibility activities. The reduction is largely due to the reduced PAT for the year. CORPORATE GOVERNANCE Your Company is committed to conforming to the highest standards of corporate governance by ensuring transparency, disclosures, and reporting as required under the Corporate Governance guidelines issued by the Department of Public Enterprises. The Net Profit for the financial year 2009-10 has eroded by 40% as compared to that of the previous year due to lower net sales realization. Considering the financial position of the Company and the need to have adequate internal resources for the on going Expansion Project and to support modernization and key raw material securitisation plans, there is a requirement to conserve funds. BUSINESS PERFORMANCE: The year gone by has been very eventful for the Company as much as it has surpassed the previous best achieved for any year as detailed below: PRODUCTION Unit:000t Items Ovens pushed (Nos./day) Hot Metal Pig Iron Liquid Steel Billets Bar products Wire Rods MMSM Products Finished Steel Saleable Steel Value added production Value added heats (Nos.) Power Generation (MW) DPR Actual % fulmt 2009-10 2008-09 on DPR 296 3900 408 3399 1983 870 1016 1073 2959 3167 2403 18327 203.1
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% growth over 2008-09 16 10 27 8 4 6 5 44 16 17 20 21 2
3400 556 3000 1857 710 850 850 2410 2656
256 3546 322 3145 1904 825 972 748 2544 2701 2008 15192 198.8
** 115 73 113 107 123 119 126 123 119 ** ** **
Best Production and Technical Parameters Yearly Peaks

Item Production Value added production Value Added heats Met. waste consumption Technical Parameters CO&CCP Nut coke yield Sinter Plant Power consumption BF Heat Consumption SMS Avg. Ladle Life Avg. Tundish Life Cast Blooms yield Heat Consumption WRM Wire rods yield Power Consumption MMSM MMSM Products yield Overall Sp. Water consumption Unit Actual 2009-10 2403 18327 375 6.16 45.95 470 96.38 5.27 94.31 33 98.06 118.94 96.25 2.18 Previous best
'000 t Nos. '000 t % KWH/t GS Mcal/t HM Heats Heats % Mcal/t LS % kwh/t blt rld % Cum/t LS
2008 15192 360 6.12 46.67 482 88.00 4.93 94.20 33.9 97.90 119.31 95.88 2.29
2008-09 2008-09 2006-07 2004-05 2006-07 2005-06 2007-08 2008-09 2008-09 2007-08 2006-07 2008-09 2007-08 2006-07
Production in all major units exceeded 100% of rated capacity for the 9th consecutive year ; 20.6 MW waste heat recovery system in Sinter Plant (with NEDO, Japan) is being installed which is First time in India; Other Highlights : Installation of Combined Blowing facilities in all the 3 LD converters done. Modernization & Automation of CCM-2 during Aug/Sep' 09. Commissioning of two units of Argon tanks in ASP for the supply of Argon gas for combined blowing facilities. Upgradation of control and instrumentation for TG-1 in Dec '09. Commissioning of Battery-4 in Apr '09. Reduction of chilled water temperature by commissioning of chillers of CWP-1. Receipt of Coal through Conveyor from Gangavaram Port. Usage of straight coking coal for coal blend optimization. Highest ever Value Added Steel production of 2.4 Mt 20% growth over the previous best in 2008-09; 76% of value added steel in total saleable steel production (best since inception) Hot metal & Liquid Steel crossed 62 Mt & 50 Mt Landmark on 21.01.10 & 07.03.10 respectively. Zero Net Demurrage was achieved for three consecutive months (Jan-Mar '10) in the year 2009-10. Despatch of 2.07 Mt of Steel by Rail is the Best for any Year since inception. The Company has once again crossed the landmark Turnover of Rs.10,000 Cr for the third time in a row. The focus of fiscal measures in the Company continued to be on optimizing expenditure on interest, bank charges and insurance while improving the earnings on surplus funds.
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KEY FINANCIALS (Rs Crores) 2009-10 Gross Turnover 10635 Total Income 10567 Total Expenditure 8964 Gross Margin 1603 Interest Charges 78 Cash Profit 1525 Depreciation 277 Profit Before Tax 1248 Provision for taxations 451 Net Profit 797 ENVIRONMENT MANAGEMENT
2008-09 10411 10052 7697 2355 88 2267 240 2027 691 1336
4. Usage of LPG for bloom cutting, in place of Acetyle gas in CCM 1, 2 and 3. 5. Utilisation of LD slag in Sinter Plant (SP) and Blast Furnace (BF) to reduce consumption of Limestone. 6. Utilisation of Lime dust in SMS by way of Briquetting the lime. 7. Reclamation of scrap from maintenance activities and use in SMS. 8. Improvement in tundish life from 4.93 to 5.27 Heats. 9. Conservation of power 10. Water conservation. 11. Collection and processing of copper scrap from electric motors, tuyeres, etc. SALES PERFORMANCE 1. Recap of 2009-10 The year 2009-10 witnessed improved demand for steel products compared to 2008-09. During 2009-10, Construction Sector and Automobile Sector registered recovery over that of the previous year. Construction and Automobile Sectors registered estimated growth rates of about 10% and 25% respectively in 2009-10 over 2008-09. Upto July 2009, the recovery in domestic market prices continued and margins turned positive. Subsequently, there was a dip in the market prices, exerting pressure on the margins, which continued till December 2009. Recovery of market prices started by end of December 2009 and continued till the end of the financial year. Due to stable International prices, VSP exported Pig Iron as well as Steel especially during the above period of lull in the domestic market. Due to improvement in the growth of Automobile Sector in 2009-10, the demand for Value Added Steels has increased during the year. Sales of Value Added Steel have gone upto 2.36 Million Tonnes (Mt) representing a growth of 19% in 2009-10 over that of 2008-09. 2. Marketing Performance Highlights Registered best ever Sales Turnover of Rs.10635 Cr. since inception. The Sales Turnover corresponds to a target fulfillment of 108% against MOU target of Rs. 9861 Cr. The sales volume of Saleable Steel during the year stood at 3.131 Mt, registering a growth of 20% over 2008-09. The sales of Value Added Steels constituted 75% of Saleable Steel sales. Premium for Value Added Steels over Mild Steels showed improvement during the year. Exports value of Rs.351 Cr. has been achieved during the year 2009-10, against Rs.78 Cr. in 2008-09.
The company was audited by M/s BVCI for continuation of ISO 14001:2004 certificate, which is valid till Aug 2010. The company in its endeavor to move beyond adherence to stipulated norms, has identified the following projects to improve the environmental performance:Major Environmental projects completed during 2009-10
Sl. No.
1
Projects completed
Installation of High temperature, Membrane Bag filters in CRMP-1, 2, 3 and 4 are completed. Installation of Electronic controllers in ESPs of TPP Boilers 1,2 & 5 Nitrification, De-nitrification of MBC effluents for control of Ammonical Nitrogen. Replacement of compressors working on ODS with non-ODS / CWP chillers. Total
Cost
(Rs. in Lakhs)
1256
120
4600
650
6626
COST REDUCTION MEASURES The companys commitment towards containing costs continued during the year with the following measures : 1. Nut coke in partial replacement of metallurgical coke in Blast Furnace. 2. Use of Metallurgical waste to partially replace Iron Ore fines at Sinter plant. 3. Blending of different types of straight coking coals to reduce Carbon Rate.
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Achieved record sales value of By-products of Rs.266 Cr. during the year 2009-10 as compared to Rs.214 Cr. during the year 2008-09, which represents a growth of 24%. During 2009-10, not only the granulated slag produced in the year could be sold but also the slag from Dump Yard was sold. The percentage disposal of granulated slag produced during the year 2009-10 stood at 117%. Appointed three new Consignment Sales Agencies during the year 2009-10 at Kadapa and Visakhapatnam in Andhra Pradesh and Damtal, Kangra District in Himachal Pradesh. 48 New DLDs have been appointed during the year 2009-10. 3. Sales Performance Gross sales of Rs 10,635 Crores has been achieved in 2009-10 against MOU target of Rs. 9861 Crores representing target fulfillment of 108% and growth of 2% over that of the previous year (2008-09). Further, the details of the break-up of actual performance w.r.t. targets for 2009-10 are indicated below : Volume : '000 Tonnes, Value : Rs. Cr.
ITEM 2008Growth Target Actual Fulfillment 09 2009-10
Sales Turnover (excluding Internal Consumption) during the last 3 years

Domestic Turnover (Rs. Crs)
10333 9878 10284
07-08
08-09
09-10
Export Turnover (Rs.Crs)

555 351 78
07-08
08-09
09-10
Sales Turnover (Rs. Crs)

10635 10433 10411
Sales Volume Domestic Pig Iron Steel Export Pig Iron Steel Total Pig Iron Steel 336 3080 527 3131 157% 102% 269 2617 96% 20% 150 100 145 58 96% 58% 23 542% 186 2980 382 3073 205% 103% 246 2617 55% 17%
07-08 08-09 09-10
4.
Exports
VSP exported both Pig Iron and Saleable Steel during the year. In 2009-10, Export Sales of 145 thousand tonnes of Pig Iron and 58 thousand tonnes of Saleable Steel have been achieved. The Export Sales stood at Rs.351 cr. during 2009-10. 5. Value Added Steels In 2009-10, 2.36 Mt of Value Added Steel Products have been sold compared to 1.98 Mt in the year 2008-09, representing a growth of 19%. Sales of Value Added Steel as a percentage of Total Saleable Steel stood at 75.3% during 2009-10. The details of sale of Value Added Steel Products are given below :
Unit : 000 Tonnes 2008-09 2009-10 % Gr. Value Added Steel Total Saleable Steel Value Added Steel % of Total Steel 11 1981 2617 75.7 2359 3131 75.3 19 20
Sales Value Domestic Exports Total 9360 501 9861 10284 351 10635 110% 10333 70% 78 348% 2%
108% 10411
During the year 2009-10, sales volume of Pig Iron and Saleable Steel represented target fulfillment of 157% and 102% respectively against MOU target and registering a growth of 96% and 20% respectively over 2008-09.
The graphical representation of sales of Value added steel in the last four years are as under : Unit : '000 Tonnes
7.
By-Products Sales
The sales value of By products of Rs.266 Cr. achieved during the year corresponds to MOU target fulfillment of 159% and represents a growth of 24% over that of 2008-09. The sales of By products during the year 2009-10 and 2008-09 are given below :
Unit: Rs. Cr.
2009-10 Item By-Products Target 167 200809 Actual % Fulfillment 266 159 214 % Growth of 2009-10 over 200809 24
8.
Inventory Control
6.
Project Sales
During the year 2009-10, 6.59 lakh tonnes (including Internal Consumption at VSP) of steel products have been sold to Project Customers, compared to 6.71 lakh tonnes in the year 2008-09. Region-wise sales of steel products to Projects are given below :
While the inventory of Saleable Steel as on 31.3.2010 remained almost at the same level as that of at the beginning of the year, there was a substantial reduction in inventory of Pig Iron during the year 2009-10. The position of inventory of Pig iron, Semis, Finished Steel and Saleable Steel as on 1st Apr. 2009 (beginning of the year) and as on 1st Apr. 2010 (end of the year) are as follows :
Unit : 000 Tonnes
Item Accr (+) / As on As on Dec (-) over 01/04/2009 01/04/2010 01/04/2009
Region East North West South Andhra Internal Consumption Grand Total
Unit : 000 Tonnes 2008-09 2009-10 71 128 98 172 166 35 671 77 202 93 137 116 34 659
Iron Finished steel Semis Saleable steel (*Meant for sale)
125 171 23 194
7 175 *16 191
-118 4 *-7 -3
The Northern and Eastern Regions have recorded highest yearly Project Sales of 202 thousand tonnes and 77 thousand tonnes in 2009-10, corresponding to 58% and 8% growth respectively over that of 2008-09. Graphical representation of Region-wise sales volume ('000 t) and share (%) of steel products to Projects is brought out below : unit : volume in 000 tonnes
It may be observed that the total production of Saleable Steel during the year 2009-10 has been sold in the year. 9. E-Marketing During 2009-10, 92,008 tonnes of Steel products were e-auctioned through 1389 awarded e-auctions. In addition to these, 16,887 tonnes of Pig Iron and related products were e-auctioned through 14 awarded e-auctions. About 71,322 tonnes of By-products were e-auctioned through 202 awarded e-auctions. The Value of e-auctions stood at Rs. 278 Cr. During the year, 72 e-reverse auctions were awarded for transportation of 3.6 lakh tonnes of Iron and Steel products. 10. Rural Marketing The District Level Dealership Scheme (DLDS) was introduced in RINL-VSP in 2004-05, with a view to making steel available to the rural customers at nearby locations. The number of District Level Dealers (DLDs) has increased from 15 in 2004-05 to 136 by the end of 2008-09.
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During the year 2009-10, 84 DLDs ceased to be in the list of DLDs at the end of the year due to the following reasons. Registration of the some of the DLDs lapsed, as the contractual period, including option for extension, completed. Registration of some of the DLDs lapsed, as the extension option was not exercised due to poor performance. Based on the experience gained and the inputs received like vigilance suggestions, feedback from District Level Dealers, as a part of Corporate Governance, DLDs Policy has been revised and new registration for DLDs started from 2009-10 onwards. During the year 2009-10, 48 new DLDs have been appointed. At the end of the year, there were 100 DLDs in position. MATERIALS MANAGEMENT : For the production of Metallurgical Coke required in Blast Furnaces, the Indian Steel Industry is dependent on Imported Coking Coals due to lack of certain essential parameters in Indigenous Coking Coals. Dependence on Imported Coals is relatively higher in case of RINL due to lack of captive mines and relatively large Blast Furnaces. The annual prices under Long Term Agreements for Imported Coking Coals are normally finalized at the beginning of the Financial Year for deliveries from July to June. Thus prices were finalized before the economic meltdown for the period from July '08 to June '09. The crash of Steel prices in the meantime, due to economic meltdown of Sep '08, meant erosion of profits for the Company. Under these Circumstances, the Company successfully negotiated with the Coal Suppliers to change the procurement cycle to Apr '09 to Mar '10 and to defer the contract quantities outstanding on 31.03.09 over the next 3 years. This initiative of the Company has given some relief for the operations of the Company in this difficult year, as the prices settled for Apr '09 to Mar '10 procurement cycle were much lower than those settled for July '08 to June '09 procurement cycle. The blend of various Imported and Indigenous Coking Coals for production of Metallurgical Coke is optimized from time to time to achieve optimum properties at optimum cost from the available Coals. The Australian Coal suppliers were, hitherto supplying Coals blended at their end. To increase the flexibility for blending at our end, the Company persuaded the suppliers to supply Coals without any blending at their end. This initiative is expected to help the Company especially during the periods of uncertain receipts of one or more Coals owing to natural calamities or otherwise.
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The Company utilized the services of Gangavaram Port, a mechanized deep draft port, being in the vicinity, to the best advantage of the Company. The Company started availing Capesize vessels, which meant lower freights. For other smaller vessels, the choice between Visakhapatnam Port and Gangavaram Port was made based on Vessel-to-Vessel calculation of economics. The Company has been giving continuous thrust for e-initiatives. About 75% of the value of Spares and Consumables procured in the year were through e-procurement. An online Vendor Registration System has been implemented to facilitate the intending Vendor to apply Online and view the status of their application Online. TRAINING & DEVELOPMENT ACTIVITIES : The Company has an exclusive Training and Development Centre to take care of the Training requirements of the Officers and workmen as well as the newly recruited Management Trainees etc. The Training initiative includes Special need based Programmes, Trade Tests and Orientation programmes catering to the requirements of various Departments of the Company. The Total number of employees trained during the year was 32850, the total number of programmes conducted was 1156. Freshers' Training was imparted to 766 and total Training Mandays was 12.9 per employee/year with Training effectiveness of 85.4% with a Human Capital Development Index of 1.64. Training programme was imparted to 14 engineers from Essar Steel, Hazira for a period of 30 working days. Vocational Training/Project Work facilities were extended to 5112 students from different Engineering Colleges. Total revenue generated from training activities was Rs.76.84 lakhs. INFORMATION TECHNOLOGY : RINL has taken the initiative to match with international software development standards. The Company underwent 'Assessment by the International Certification Authority'. In the final CMMI assessment, the Company was awarded prestigious CMMI Level-3 Certificate by Software Engineering Institute, USA, in August 2009. This certification is first of its kind in the Indian Manufacturing and Steel Industry. E-INITIATIVES TAKEN UP DURING THE YEAR : Intranet portal (www.vspsite.org), Internet web site (www.vizagsteel.com) and Chairman On-Line System were developed. The Reverse e-auction for Marketing transport contracts for MRO's, Import Purchase cases and for Stores transport contracts were also developed and e-auctions worth Rs.722 Crores have been transacted.
The internet web site, www.vizagsteel.com was ranked second in popularity amongst the websites of all steel producing companies in the country. An ERM Portal for Risk Management was developed. A drive towards Paperless office has been initiated covering various areas like, sending ITTs (along with drawings) to suppliers through E-mail was implemented. Provision was made for new vendors to register through web. Online Leave Management System was implemented for Materials Management and Personnel Departments. Administrative Budget Management System (ABMS) was deployed in the web for use by all the branches. Intranet portals of Legal Affairs, Safety, Town Administration, General Administration, Instrumentation and Environment Management were launched. In addition, under Process control initiatives, New SCADA (Supervisory Control and Data Acquisition) system was commissioned. ENTERPRISE RESOURCE PLANNING During the year 2009-10, the Company launched the implementation process of "Enterprise Resource Planning". M/s Wipro Infotech Ltd are the Implementation Partner & Consortium lead with M/s HKP M/s SAP and , M/s Tulip as other members of the consortium for implementing ERP solution in the Company. ERP solution will facilitate the Company to achieve standardization and seamless integration of all its business processes and improve internal efficiencies across the organization. ERP signifies single transaction data base that is shared, updated and drawn upon by the entire organisation and facilitates visibility and transparency of information across all levels of stakeholders. The Project is likely to go live during financial year 2010-11. MANAGEMENT SERVICES : The Management Services Department took initiative for implementation of Quality Circle Projects, Generation of Suggestions and 5S Certification and the major achievements during the year are as follows :
S.No. Objective Target Actual
The Company secured Gold and Bronze medals in the International Convention on Quality Control Circles2009 (ICQCC) at Cebu, Philippines. VSP has added another feather in its cap by bagging Govt. of India Vishwakarma Rashtriya Puraskar (VRP) 2008 awards at national level. VSP has won this distinction fifth time in a row. STRATEGIC INITIATIVES DURING THE YEAR : RINL has taken a number of initiatives for growth of business of the company in addition to its Expansion plan, which includes formation of Joint Ventures, acquisition of assets, mergers etc. both in India and abroad. VSP has been very actively exploring various options to ensure its raw material security through acquisition / JV route. Some of the major initiatives pursued are given below : JV with M/s MOIL : RINL-VSP has formed a joint venture company with M/s Manganese Ore India Ltd-RINMOIL Ferro Alloys Pvt Ltd. The company was incorporated on 29.07.09. The JVC with one 27 MVA furnace and one 9 MVA furnace is envisaged to produce 37,500 tonnes per annum of Silico Manganese and 20,000 tonnes per annum of Ferro Manganese. The JV will serve to meet VSP's ferro alloy requirement besides opportunity to export. The JV will also help in beneficial use of low grade Manganese ore of the Company's existing mines and also Manganese from M/s OMDC etc. BIRD Group of Companies : Union Cabinet in its meeting held on 10.09.09, has approved the restructuring proposal of BIRD Group of Companies. In the proposed restructuring, M/s OMDC and M/s BSLC will be made subsidiaries of M/s EIL, which in turn will be made a subsidiary of RINL, thus bringing M/s EIL, M/s OMDC and M/s BSLC under the umbrella of M/s RINL. The other two companies viz., M/s KDC & M/s SSL would be phased out. M/s OMDC have 6 Mining leases for Iron ore with reserves of 200 Mt & Manganese reserves of 45 Mt and M/s BSLC have 375 Mt of Lime stone and 287 Mt of Dolomite reserves. This alliance would be of mutual benefit. Iron Ore Security : Applications for Mining Leases (ML) in two areas were filed in Bhilwara Iron Ore Mines, Rajasthan. Pelletization Plant : RINL is getting its entire iron ore requirements from M/s NMDC's Bailadilla Mines since inception. There have earlier been major disruptions to the railway line (KK line) transporting the iron ore, due to disruptive activities. In order to ensure secure transportation of iron ore from Bailadilla and further value addition, an EOI was invited for setting up
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No. of QC projects implemented 3800 4277 in the organization during 2009-10 No. of Suggestions generated 35299 36021 across the organization during 2009-10 No. of depts. facilitated for 5S 11 18 certification during 2009-10 45 52 - Cumulative certified Depts.
Pelletization Plant at Visakhapatnam of capacity 6-8 mtpa through SPV, with transportation of iron ore in slurry form. SMS grade limestone: Suitability of limestone in Dubai(UAE), Philippines, etc are being explored. PROCESS IMPROVEMENTS The structure of formulation of annual plans in the company was revised with the introduction of the concept of Roll-on plan and accordingly Sustainability Plan 2009-10 & Roll-on Plan till 2013-14 were finalized. This was done with a view to maintain thrust on important aspects without compromising on the long term goals and also to carry forward unfinished agenda in the plan to subsequent year after due corrections. AWARDS : During the year 2009-10, VSP was declared as the recipient of the First Steel Minister's Trophy for the year 2006-07. As per the survey conducted by The Great Place to Work Institute (USA) in association with The Economic Times for "India's Best Companies to Work for - 2009," the Company was adjudged among the: Top Fifty Indian companies to work for in India Top Two PSUs Top Four among the large organizations Top Six in the manufacturing segment RAW MATERIAL SECURITY Madharam Dolomite Mine (MDM) : Production & Despatch : The percentage growth in respect of Production is 14.03% and Despatch is 10.39% as compared with that of last year 2008-09. The current year performance of MDM is 96.10% in production & 92.31% in dispatch for meeting MOU targets of Hot metal & Liquid steel. Other Achievements : All time Day Record of drilling 567 Mtrs on 13th Feb, 2010 (previous 462 Mtrs on 22.10.09). MDM team bagged Par Excellence Award in NCQC2009. Zero accident rate achieved. Jaggayyapeta Limestone Mine : Production & Despatch: The performance of Jaggayyapeta Limestone Mine against targets for the year 2009-10 is 103 % in production and 99 % in dispatch for meeting MOU targets of Hot metal & Liquid steel .
Other Achievements Reduction of Inventory by 3.17% over previous year. Demurrages paid to railways were brought down to Rs.5.21/tonne from Rs.9.31/tonne during 2008-09. The consumption of Electricity, explosives, HSD, Lubricants, Electrodes and spares showed favourable against targets. Highest Month Drilling (2390 Mtrs.) performance during July 2009. Zero accident rate achieved. Garbham Manganese Mine : Production & Despatch Performance : The % growth in respect of production is 14.51% and dispatch is (-)41.43% as compared with that of last year 2008-09. Shortfall against targets in this year is due to transporters could not mobilize trucks as per Company's needs. Despatch Performance : The dispatch of River Sand from Sarepalli Sand Mine is 11277 Tonnes, a growth of -57.63% over that of last year. Shortfall against targets in this year is due to Contractors could not mobilize the trucks with the plant's requirement. NEW INITIATIVES / NEW MINING LEASES Iron Ore : RINL/VSP has submitted 2 mining lease applications for iron ore deposits in the State of Rajasthan for an area of 2303.75 & 2948.50 hactares respectively. Coking Coal : Two Coal Blocks for underground mining have been allotted to RINL/VSP in the State of Jharkhand. One at Mahal vide Lr.No. 13016/64/2004-CA/CA-1, dt. 09.12.2005 and the other at Tenughat Jhirki vide Lr. No. 38011/11/2006-CA-1, dt. 10.09.2008. Both the blocks are difficult mines with deep seated seams, steep inclinations, highly gaseous, number of faults, nallah/river blocking substantial reserves, low recovery etc. The Company has requested Ministry of Coal / GOI to allot a good coking coal block with open cast mining so that the allotted blocks can be handed over. Dolomite : A fresh application was submitted in the office of ADMG, Kothagudem on 02.11.2009 for Dolomite Mining Lease at Dharmapuram Village, Khammam District, AP District . Collector, Khammam advised to make a joint survey by Forest and Revenue Departments to take suitable decision to give NOC to RINL/VSP .
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Quartzite : Over an extent of 40.47 ha. in survey No. 268 of Pindrangi village, K.Kotapadu Mandal, Visakhapatnam District for a period of 30 years vide Memo No.9133/ M.III(2)/2007-, dt. 27.01.2009 by Department of Industries & Commerce, Govt. of Andhra Pradesh has been sanctioned in favour of RINL. Over an extent of 20.64 ha. in survey no. 1 of Marrivalasa village, K. Kotapadu Mandal, Visakhapatnam District for a period of 30 years vide Memo No. 9132 / M.III (2) / 2007-3, dt. 27.01.2009 by Department of Industries & Commerce, Govt. of Andhra Pradesh has been sanctioned in favour of RINL. To obtain Environmental clearance, M/s Apitco Limited, Hyderabad (Recognised by MoEF/GoI) has been appointed for preparation of (i) Environmental monitoring baseline data for one season and (ii) Environmental Impact Assessment & Environmental Management Plan. PROJECTS DIVISION RINL is at the forefront of the expansion drive in the country to raise its capacity to 6.3 Mtpa and would be the first plant among PSUs to bring its expanded capacity on stream commencing from 2010-11. The entire expansion is under implementation in two stages. Under the stage-I, new Blast Furnace, Converters, Billet Casters and Wire Rod Mill will be commissioned progressively during Financial Year 2010-11. Subsequently, the facilities under stage-II consisting of two major finishing mills - Special Bar Mill and Structural Mill will also be commissioned during 2011-12. There has been significant progress in physical activities during the year 2009-10. With this, the target of Capital Expenditure for Expansion was also met; touching the total expenditure to a level of around Rs 6000 Crs. Progress of Work : In the area of Expansion and other projects, there has been accelerated progress during the year 2009-10: Orders have already been placed Detailed engineering already completed for auxiliaries etc Civil work almost completed for Stage-1 Major structural fabrication completed The following facilities were commissioned and other projects brought to advanced stage of execution : Main Receiving Station: 220KV system to meet additional power requirement of about 150MW.
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220KV transmission line from MRS to LBSS-6, LBSS-7, 1-LBDS-1, 2 & 3 test charged. Interconnections between existing and expansion completed for supply of Air, Nitrogen, Water and steam partly. 5 Nos Cranes in Wire Rod Mill & Blast Furnace commissioned and cold trials completed for 15 nos cranes in SMS and Sinter Plant. Testing and trial run of conveyors in RMHP, equipment in SP-3 & BF-3, electrical installation in various packages commenced. Some of the Major Modernization & upgradation projects implemented are : New facility of Coke Oven Battery-4 was commissioned in April 09 Combined blowing facilities in all the three existing converters was installed and commissioned Modernization and upgradation of Continuous Casting Machine (CCM)-2 in existing Steel Melt Shop was completed and commissioned Alba gas cutting machine was installed in CCM-1 Conveyor for transportation of Imported Coking Coal from Gangavaram Port (new facility) was commissioned Upgradation of ladle furnace PLC & MMI was completed in existing Steel Melt Shop Conversion of binding machine to automatic strapping machine in Bar Mill of existing plant New Mechanical & Biological Chemical Treatment Plant commissioned 100% MoU targets for the year 2009-10 have been achieved. New benchmarks (monthly performance) were set on the expansion front for VSP and in some areas for the Indian Steel Industry itself. Highest ever structural erection - 15,133 T achieved which is best achieved amongst Steel industry in India Highest ever concreting - 36,320 Cu.M achieved. Highest ever equipment supply of 14,298T achieved. Highest ever equipment erection of 10,075T achieved.
Some Major Highlights :
Physical progress for structural erection, equipment supply and equipment erection is depicted below:
Yearly trend
EMPLOYEES : During the period from 01-04-2009 to 31-03-2010, there was a net increase in the manpower by 605 i.e. from 17,225 as on 01-04-2009 to 17,830 as on 31-03-2010. As on 31-03-2010, the number of Displaced Persons on the rolls of the Company was 5693.
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Representation of Scheduled Castes (SC) and Scheduled Tribes (ST) : The group-wise representation of SCs and STs in the Company as on 31-03-2010 is as follows:
GROUP A B C D TOTAL TOTAL STRENGTH 5263 2370 7710 2487 17830 SC(No) 864 376 1214 394 2848 S C (%) 16.4 15.9 15.7 15.8 16.0 ST(No) 382 129 535 126 1172 S T (%) 7.3 5.4 7.0 5.1 6.6
Posts Filled by Recruitment :

Class of Posts Total no. of vacancies filled (1) A B** C D Total 122 599 100 821 No. of vacancies reserved for SC (2) 29 75 30 134 No. of candidates appointed SC ST (4) 25(3*) 105(6*) 18(2*) 148(11*) (5) 7 45(1*) 4 56(1*)
ST (3) 9 33 14 56
* (Figures in brackets show no. of candidates selected on merit out of total appointed) ** (No direct recruitment in Group-B posts) Group Distribution of Manpower as on 31.3.2010 :
CATEGORY Group Grand Total 5263 2370 7710 2487 17830 GEN 3490 1787 5396 1830 12503 OBC 527 78 565 137 1307 SC 864 376 1214 394 2848 ST 382 129 535 126 1172 GENDER Women 292 52 88 51 483 Men 4971 2318 7622 2436 17347 PWD No. % EX-SERV No. 6 1 % 0.11 0.04 1.22 1.73 0.81 159 885 2503 2146 5693 DP
A B C D Grand Total
10 0.19 11 0.46
56 0.73 94 18 0.72 43 95 0.53 144
GRIEVANCE REDRESSAL MECHANISM Public Grievances The system of redressal of Public Grievance has been streamlined, and its scope broadened to include complaints of suppliers, customers, etc. and systematic recording of receipt and disposal of such grievances are being carried out. To provide required thrust in this area, a senior executive in the rank of General Manager has been nominated as Officer on Special Duty (OSD) to handle and monitor the public grievances centrally. All Heads of Departments have been advised to accord due priority for redressal of public grievances as per time frame in each department. The status on public grievances received vis-a-vis is given below :
Received during the Period (1.4.2009 to 31.3.2010) 01

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Redressed during the Period (1.4.2009 to 31.3.2010) 01
Employees' Grievances RINL has a well laid down procedure for handling employees' grievances through committee system viz. Area Grievance Redressal Form (AGREF), Central Grievance Redressal Form (CENGREF). The redressal of employees' grievances are coordinated by the Zonal Personnel Executives who send monthly progress report on the number of employees' grievances received and redressed etc. for compilation, computerization and monitoring. The entire system of redressal of grievances is monitored centrally by Personnel Coordination Section. The status on employees' grievances received vis-a-vis redressed/ disposed off is given below :
Campaign on "Hazards of using mobile phone while driving" was conducted. A lecture on "Construction Safety" by Jt. Chief Inspector of Factories was organized covering Incharges of Projects and supervisors of contractors. A National Workshop on "Designing for Safety and Change Management" was organized jointly by Department of Factories and National Safety Council-AP Chapter during Dec 2009. CORPORATE SOCIAL RESPONSIBILITY RINL in its own way is committed to social upliftment and is aware of its obligations to the society and is in the forefront of serving the society through its CSR initiatives. 2% of its net profit is earmarked for CSR activities. The CSR initiatives cover Environmental care, Education, Health care, People care, Peripheral development, cultural Efflorescence, Help during Natural Calamities and as a Responsible Corporate Citizen rendering an helping hand to lead a meaningful life etc. The year 2009-10 has been the year of CSR and emphasis was upon all the thrust areas mentioned in our CSR Policy. The company had committed an amount of Rs 1275 lakhs towards CSR during 2009-10. The emphasis was on creation of assets in the form of infrastructure so that the future generations are benefitted thereafter. With the same approach CSR Projects were executed during this year, details of which are as under: Environmental Care : (Value: Rs.18.80 Lakhs & beneficiaries : 1300 approx.) Through CSR we have executed a unique project named "Jaladhara" by which the acute problem of drinking water in tribal areas of Visakhapatnam district has been addressed. The flow of water from natural spring to storage tank is due to gravity and does not require any electrical power supply to operate. The supply is
Received during the Period (1.4.2009 to 31.3.2010) 34

SAFETY & HEALTH
Redressed/Disposed of during the period (1.4.2009 to 31.3.2010) 33
Safety is given due importance and the implementation of OHSAS 18001 has ensured a safe work culture in the organization. RINL-VSP was successfully certified for the latest version of OHSAS 18001:2007 in May '09. Continuous efforts on the implementation of safety standards, monitoring of risk control and other proactive measures have resulted in reduction / elimination of potential hazards. More than 2500 Nos. of Hazard Identification and Risk Assessment sheets were prepared for fulfilling the OHSAS 18001:2007 certification criteria. Plant level mock drill was conducted at Crude and Finished Products Storage tanks of Benzol Plant in Jun '09 for testing the emergency preparedness of the plant in the presence of Jt. Chief Inspector of Factories and Inspector of Factories. Comprehensive Risk Assessment (HAZOP HAZAN, , Emergency Planning, Safety Audit, etc.) activity has been awarded to an external agency and the work started in Sep '09. The following proactive measures were also undertaken to inculcate safety awareness: Organization of interactive sessions between contract workers, contract supervisors and recognized trade union representatives on "working at height". Safety training programme on "Site safety and Road safety" Safety appliances exhibitions were organized.
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perennial so the water problem is solved permanently. The scheme was implemented under trying conditions in remote tribal areas of Paderu and Chintapalli. The project cost was Rs.18.80 Lakhs & about 1300 people were benefitted. Education : (Value: Rs.82.55 Lakhs & beneficiaries : 6090 approx.) As stated, focus has been upon infrastructure development in the field of education. 20 number of school buildings have been constructed in 4 RH Colonies and other resources like Desk-cum-Benches and play equipment have been provided to schools. CSR Department provided scholarships for 225 students belonging to economically and socially marginalised sections of society.
King George Hospital, Visakhapatnam (Rs.8 Lakhs) and Krushi Orthopaedic Welfare Society, Visakhapatnam (Rs.7.35 Lakhs) were extended financial support for procurement of medical equipments. The beficiaries are 100/day & 20/day (approx.) respectively. Items worth Rs.2.50 Lakhs, like Generators, Water filter, benches and fans to Health Centres at Vadlapudi and Aganampudi RH Colonies were provided to develop primary health care infrastructure. About 200 people/ day are benefitted.
Health Care : (Value: Rs.18.46 Lakhs & beneficiaries : 5320 approx.) Medical Camps were continued to be organized as part of CSR initiatives in all RH Colonies and Peripheral Villages around the plant. These camps (35 in number) covered about 5000 persons and 1253 persons benefitted from Cataract Surgery.
People Care : (Value: Rs.53.17 Lakhs & beneficiaries : 26020 approx.) Embarking to mitigate the hardships faced by the residents of RHCs and tribal areas, the following schemes were implemented: During the sweltering summer months, drinking water was supplied through tankers to 4 RH Colonies benefitting 15000 people per day, for a period of 64 days.
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differentially abled children, Mother Blood bank for IRCS were taken up and are continuing. Anganwadi building, Kitchen for mid-day meal program in school(with a cost of Rs.6.5 Lakhs benefitting about 200 children), Kitchen room & Toilet blocks for schools (with Rs.10 Lakhs benefitting about 150 students) were constructed to help the peripheral areas. Cultural Efflorescence : (Value: Rs.6.30 Lakhs & beneficiaries : 1200 approx.) Sewing machines and wet grinders worth Rs. 0.85 lakhs have been distributed to 20 persons at lowest economic strata to help them to start earning. Utensils, Glasses, Hearing Aids, Tricycles were distributed to poor and needy children. Support was extended for conducting District level Foot ball & hockey tournaments and other Sports events amounting to Rs.23.55 Lakhs benefitting about 6800 people. Towards empowerment for women and unemployed youth, vocational training programmes were organized through Jan Shikshan Samsthan at an expenditure of Rs.6 Lakhs and 500 people have been given training. Support given to Police Deptt. for procuring ALCO meters with a cost of Rs.5.27 Lakhs, which is used to test drunken drivers. Peripheral Development : (Value: Rs.16.50 Lakhs & beneficiaries : 350 approx.) One of the CSR's primary objectives is peripheral development. Number of projects like community welfare centres in RH Colonies and peripheral villages, Hostels for SC/ST students, School building for As a Responsible Corporate Citizen : A ballet on "Telugu Prasthanam" was organized during " Vidyalaya Diwas" through AP State Official Language Commission, bringing together the children of Ukkunagaram on to a platform of cultural efflorescence. Support given to World Music Day & SPICMACAY programs
CMD / RINL presenting a Cheque of Rs. 8 Lakhs to Dermatology Department of King George Hospital, Visakhapatnam.
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Visakha Vimala Vidyalayam (VVV) (Ukkunagaram & BC Road), in total 225 students (i.e. 185 in VVVUkkunagaram & 40 in VVV- BC Road) were admitted in the year 2009-10. The expenditure towards school bus including, road tax, insurance, fitness certificate was provided to Arunodaya Special School for differentially abled children. TOWN ADMINISTRATION The Company, for the benefit of its employees, is having a Township with residential units with greenery all around. The maintenance of the Township is done professionally and 5 S Certificate was awarded for it in March '10 by the external auditors. Other initiatives include round the clock IVRS system for redressal of complaints, separate portal on intranet for online status and application of maintenance related activities etc. MEDICAL AND HEALTH SERVICES The Company has an in-house full fledged General Hospital extending medical facilities not only to its own employees residing in Ukkunagaram but also to other non-entitled persons in the vicinity/neighbouring areas. The Company believes that all employees has the right of access to health care. Some of the initiatives taken up in this direction are : Creating awareness of various preventable diseases especially during epidemic of "SWINE FLU". A number of awareness programmes were conducted during the year including Mines at Jaggayyapeta and Madharam. A special clinic was also started for the same. Conducting various medical camps; De-addiction, Eye screening, Child immunization, AIDS awareness etc. As a CSR initiative, Computer Training was given to 187 school children and Apprenticeship training was imparted to 272 and Vocational & Industrial Training was given to 5112 and 413 Plant Visits were organised covering 2029 visitors during the year. Under CSR initiative, 2 day Training Programme on "Towards Teaching Excellence" was organized in association with UGC Academic Staff College of Andhra University for Teachers of GVMC High Schools on 2nd and 3rd March, 2010. 40 GVMC High School teachers have attended this programme. 8 No. of Cultural Programmes were organized at VSP Schools by SPICMACAY Under "Promotion of Free Education" scheme which was introduced in the year 2007 as a CSR initiative at
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Community Welfare Centre wing at Durgavani Palem Help during Natural Calamities : (Value: Rs.500.00 Lakhs & beneficiaries : 7,00,000 approx.) During the calamitous floods in Andhra Pradesh, RINL came forward to mitigate the sufferings and Rs 500 lakhs was donated to the Chief Minister's Relief Fund in addition to contribution from VSP employees. About 7 Lakh people are benefitted.
Awareness programmes on nutrition and hygiene, early detection of breast and cervical cancer and osteoporosis; An unique programme of immunization against Hepatitis-B for 1500 school children from the areas in and around Rehabilitation colonies; Medical Services were extended to far flung places like Araku, Tenang etc. Health days like World Health Day, World Asthma Day, World Diabetes Day, National Voluntary Blood Donation Day etc. were observed. The Hospital was augmented with new advanced and sophisticated equipment for improving the facilities and better health care; Training to medical and para-medical
staff was given by the Specialists themselves who upgraded their areas with new equipments. An amount of Rs.28.63 lakhs could be earned by the Hospital from Non-entitled cases (Non-VSP cases) reflecting the quality of services rendered; Other initiatives include implementation of 5S in Medical Admn Wing and securing 2nd Best QC Team in 20th National Convention etc. IMPLEMENTATION OF RIGHT TO INFORMATION ACT 2005: During the year, out of 216 requests received, 179 have been disposed off by providing information to the concerned, 4 were rejected as per the provisions of the Act and 30 requests are pending as on 31.3.2010. A one day Round Table meeting with local Central Public Sector Enterprises employees was organised in September 2009. A one day Training cum Workshop for the officers of the Company was conducted in January 2010 dealing with RTI matters. All the requisite information has been updated on the Company's website in accordance with the requirement of Section 4 (1) of the Right to Information Act. Statutory reports like Monthly Returns, Quarterly Reports, Annual Returns, Annual Reports and any other reports as and when asked for are compiled and forwarded to the Ministry. A Guide on implementation of RTI Act-2005, FAQ and important CIC decisions has been placed in the Company intranet for the benefit of the officers dealing with RTI matters regularly in the organisation. COMPLIANCE WITH LAW/LEGAL REQUIREMENTS : The Company has put in a separate Intranet Portal on the Legal Affairs of the Company. In terms of the Guidelines issued by the Government, a Quarterly Report on the progress of Arbitration cases is being put up to the Board of Directors for Information. An Internal Reporting System has been introduced indicating the progress of the cases in various Courts indicating the status of the cases as at the beginning of the year and also at the end of the year for monitoring the progress by the Management. PROGRESSIVE USE OF HINDI The Company continued its efforts to implement the Official Language Policy of the Government. During the
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year, Special Hindi Workshops were conducted for the Sr. Officers in which 103 officers have been trained. A National level Hindi Seminar was organised on the topic viz. 'Importance of building good habits in Industrial Employees' in which 54 delegates have participated from the Company and other organisations. A special issue viz. 'Sanskar' has been released on this occasion containing the articles of the delegates. Hindi Week celebrations were organised at Headquarters and various Branches and Regional Offices. Various competitions in Hindi have been organised for the students, employees and their dependents. 4 issues of Hindi In-House Magazine "Sugandh" were also published. 4 Hindi Workshops were organised in which 117 employees were trained. 72 employees were trained on computers in Hindi. 200 employees have been trained in Hindi Prabodh/Praveen courses. Hindi classes are also organised separately for the housewives. A five day Hindi Translation Training programme has been conducted in March, 2010 by Central Translation Bureau, Ministry of Home Affairs in which 30 employees of the Company and 3 employees of CISF were trained. Hindi inspections were conducted in various Units of the Company and necessary assistance was extended. Prestigious Indira Gandhi Rajbhasha Shield was awarded to the Company. CMD, RINL received this Shield from Hon'ble President of India on 14th September, 2009. WOMEN EMPOWERMENT
Women employees have been associated in appropriate Committees to provide for an opportunity of exposure and development. Special programmes for women employees have been organized by HRD directly and also through the Women in Public Sector Undertakings (WIPS) which has been formed in the Company since 1997 under the aegis of SCOPE. Training and Development programmes aimed at career advancement, women empowerment, personality development, gender sensitization, safety awareness, occupational health, osteoporosis awareness, interpersonal skills, computer skills, communication skills, capacity building, work life balance leadership and safe and healthy living etc. have been organized. During the year, about 461 women employees were covered in such programmes.
The details are as follows :

S.No. I Details No. of Programmes conducted No. of participants 134
In house Management Development Programmes Exclusive Women Programmes a) Women Development Programmes b) Gender Sensitivity Programmes c) Outbound Programme External Nominations Total Programmes conducted for housewives
2 2 1 49 327 105 144
II III
In addition to the above, the following programmes were also conducted exclusively for women : Safety awareness and Occuptional health programme for women contract workers covering 45 participants. Osteoporosis Awareness programme covering the ladies from all walks of life i.e. employees of VSP PSUs and , Schools in the township, CISF and housewives, in association with Visakha Steel General Hospital was made for about 300 nos. About 145 women underwent Bone Mineral Densitometry (BMD) tests in this program. As a part of National Adolescent programme, an education programme was Kendriya Vidyalaya at Ukkunagaram; conducted for 300 girls of
In pursuance of the Honble Supreme Courts Judgement and keeping in view the Government instructions/guidelines on sexual harassment of women at work places, a Committee headed by a woman officer was constituted to inquire into the complaints of sexual harassment at work places. A provision in this regard has also been incorporated in the Conduct, Discipline and Appeal Rules / Standing Orders of the company. During the year under report, no incidence of sexual harassment of women or discrimination amongst women employees on the basis of gender has been reported. Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995. The status of implementation of Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 during 2009-10 is furnished below:
Direct recruitment (during Fin. year 2009-10) No. of vacancies reserved VH HH OH No. of appointments made Total VH HH OH Promotion (during Fin. Year 2009-10) No. of vacanies reserved NIL NIL Nil NIL NIL NIL NIL No. of appointments
Group
Number of employees appointed after the Act came into force (i.e. 7-2-1996) Total VH 2 10 3 15 HH 1 10 4 15 OH
VH HH OH Total VH HH OH NIL NIL NIL NIL NIL NIL NIL NIL -
Group Group Group Group Total
A 130* B C 1379 D 290 1799
4 1 2 1 18 6+1# 5+2# 3+1# 3 2# 2# 2# 25 7+3# 7+4# 4+3#
11* 1 2 599 2+1$ 1+ 1$ 7+3$ 100 1$ 1$ 1$ 710 3+2$ 1+2$ 9+4$ 24
* Posts identified for disabled # Recruitment under process $ Posts were notified prior to 1-4-2009 but joinings took place during 2009-10 Note : (I) VH stands for Visually Handicapped (persons suffering from blindness or low vision) (ii) HH stands for Hearing Handicapped (persons suffering from hearing impairment) (iii) OH stands for Orthopaedically Handicapped (persons suffering from locomotor disability or cerebral palsy) With a view to encourage and support physically challenged children of RINL employees, the following scholarships are provided: Criteria for Selection Nature and extent of disability of the child and the extent to which the training/education would help in rehabilitation of the child, as assessed by the Committee consisting of 4 members each from Medical, Sports, F&A and Personnel Amount of Scholarships Rs. 750/- per month for a period as recommended by the Committee No. of Scholarships 6 (six) Per annum
Applicable for
Children of employees with the following disabilities who are pursuing studies in any course in a Recognized School/ College/General or Vocational Institute: Blindness Hearing impairment Locomotors disability Mental retardation Mental illness Cerebral Palsy
Further, the following actions have been taken in RINL/Visakhapatnam Steel Plant for the convenience of differentially abled persons visiting different offices in Main Administrative Building i.e. the Corporate Office of RINL/VSP . i) Ramp way ii) Auditory signal in both the Lifts of the building. iii) Provision of a wheel chair at the Reception Centre located at the entrance of the Main Administrative Building. WELFARE ACTIVITIES : The following National and Other Functions were organized : S.No. Name of the Function 1 Independence Day Celebrations 2 Republic Day Celebrations 3 RINL Formation Day Celebrations
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Date 15-08-2009 26-01-2010 18-02-2010
The following Ceremonial Functions were organized :

S.No. 1 2 3 4 5 6 7 8 9 10 11 12 Name of the Function Dr.Babu Jagjeevan Ram Jayanthi Bharat Ratna Dr.B.R.Ambedkar Jayanthi Alluri Seetha Rama Raju Jayanthi Dr. Tenneti Viswanadham Jayanthi Mahatma Gandhi Jayanthi T Amrutha Rao Jayanthi Garlanding of Telugu Thalli on AP Formation Day Jawaharlal Nehru Jayanthi Bharat Ratna Indira Gandhi Jayanthi Dr. B R Ambedkar Vardhanthi Mahatma Gandhi Vardhanthi Potti Sreeramulu Jayanthi Date 05-04-2009 14-04-2009 04-07-2009 21-09-2009 02-10-2009 21-10-2009 01-11-2009 14-11-2009 19-11-2009 06-12-2009 30-01-2010 16-03-2010
An amount of Rs. 7.42 crores was released during 2009-10 towards Salaries & other Administrative expenditure to Kendriya Vidyalaya, DAVC Public School and Visakha Vimala Vidyalayams at Ukkunagaram & BC Road. Jawaharlal Nehru Awards - "Jawaharlal Nehru Awards" are being given every year on RINL Formation Day (18th February of the year) Celebrations, to the VSP employees in recognition of their outstanding performance. 24 Executives and 36 Non-Executives have been bestowed with 'Jawaharlal Nehru Awards' in the year 2009-10. Under welfare measures, the Company is extending scholarships to the children of RINL's Employees. The details are as follows :
Category Group-1 (Professional Courses) Rs. 1,500/- p m Group-II (Degree/Diploma) Rs. 750/- p m Group-III(+2/ lntermediate) Rs. 400/- p m Total
General 11 3 11 25 SC 4 5 9 ST 2 2 4 Sub Total 17 3 18 38 6 scholarships @ Rs. 750/- p m each are provided to Physically Challenged children of RINLs Employees for studying any class/course. Total No. of Scholarships 44 Other Scholarships : Nature of Award Eligibility Criteria Award given Rs. 500/- for 1st position Rs. 250/- for 2nd position Rs. 5000/No of Awardees 54 Total Amount (Rs.) 20,250
Dr. B R Ambedkar Annual First or Second position in X exam among VSP Merit Cash Awards schools including those at Mines for the academic year 2008-09 Dr. Sarvepalli Radha Admission in IITs, IIMs, IISc, ISI, AIIMS, AFMC krishnan Merit Cash Pune, JIPMER during the year 2009-10 Awards Col. CK Nayudu Sports International Participation or 1st Prize in Nationals Cash Awards conducted by respective Federation of India or National Schools Games and Sports etc. during the year 2008-09 26
27
1,35,000
Rs. 5000/-
22
1,10,000
Management has released an amount of Rs.7.25 Lakhs as a matching grant to the Community Welfare Centres (CWCs) for the year 2009-10 for the various social activities. Special Casual Leave was sanctioned for 18 employees who had participated in National Desert Trekking Expedition and in National Himalayan Trekking Expedition during the year 2009-10. Sponsored 42 employee-artists who participated in various cultural programmes organized by Nandi Natakotsavam2009 (AP TV & Film Development Corporation, Govt, of A.P at Nizamabad) and other associations during the year 2009-10. Employee Family Benefit Scheme (EFBS) : The Scheme was introduced on 1st August 1995 for the benefit of dependents of deceased employees of the Company and medically unfit cases. The details of EFBS cases are given below : No. of EFBS Beneficiaries joined during the year 2009-10 Total No. of EFBS Beneficiaries Total no. of Exit (closed) Cases Total No. of Existing EFBS Beneficiaries on 31 March 2010
st
70 719 81 638
943 persons [(Couple-416*2=832 & Single-111) (Retired employees & their Spouses and spouses of Deceased employees)] were covered under Group Mediclaim Insurance Scheme till the year 2009-10. Employees Superannuation Benefit Fund Employee Superannuation Benefit Fund has been created and in existence for more than a decade and the beneficiaries were regularly paid the monthly amounts. PROMOTING WORK ETHICS/ VIGILANCE ACTIVITIES : Vigilance Department has taken various measures for promoting transparency, fairness and equity in RINL. As a part of preventive vigilance, studies were undertaken on the procedures being followed in purchases, sales and award of contracts, examination of contracts and purchase orders and surprise checks relating to quality and other aspects, weighments of material moved by rail and road, scrutiny of bills, study of audit reports and surveillance at sensitive areas etc. were carried out. Observations made alongwith suggestions for bringing about systemic improvements were communicated to the concerned departments. Various activities intended to create vigilance awareness were taken up among the various stake holders including the employees. Through e-auction, e-reverse auction and e-payments, IT was leveraged in key areas for promoting fairness and transparency and also for deriving advantage for the company. RINL website has been used for making relevant information available to the stakeholders. Quality Manual of Vigilance Department was reviewed and updated to bring it to the ISO 9001:2008 standard. A seminar on Implementation of Integrity Pact in Central Public Sector Undertakings was organized by RINL for sharing experience among the CPSUs which have adopted or are in the process of adopting IP Programme. A host of activities were organized on the occasion of the Vigilance Awareness Week - 2009 which included activities like slogan competition among employees and inviting suggestions from employees on leveraging of Information Technology for promoting greater transparency, fairness and equity in all dealings. Interaction sessions were also organized with contractors, vendors and customers of RINL. In order to extend the reach of the vigilance awareness drive, the children and women were also covered in the activities organized during the Vigilance Awareness Week. This was done by conducting various competitions among women and children. Essay writing competitions were held among the students of Zilla Parishad Schools located in and around the Steel Plant and essay writing and elocution competitions were held among the students of schools located in Jaggayyapeta and Madharam where RINL has its captive mines.
27
AWARDS AND ACCOLADES : RINL was the first recipient of the prestigious Steel Ministers Trophy for best integrated steel plant for 2006-07. RINL won the Energy efficient unit conferred by CII at the 10th National Award for Excellence in Energy Management. Two Quality Circle (QC) teams of RINL participated at ICQCC-2009 held at Cebu, Philippines during October 2009 and won One Gold and One Bronze medal. Twenty QC Teams participated in National Convention on Quality Circles conducted by Quality Circle Forum of India (QCFI) at Bengaluru during December 2009. Seven QC teams won Par Excellent and Thirteen teams won Excellent awards for the presentations. Two QC teams participated at CII State level QC competitions held at Hyderabad during Nov 09 and the one team won 3rd prize. RINL has won INSSAN Award for excellence in Suggestion Scheme (First prize) under Steel Units category in the National level from Indian National Suggestion Schemes Association (INSSAN), Mumbai. 5S Teams from departments of RINL bagged Par Excellent awards during National Convention on Quality Circles - 2009 held at Bengaluru. RINL was declared National Champions of National Management Quiz - 2009 conducted by All India Management Association AUDITORS M/s B V Rao & Company, Visakhapatnam have been appointed as the Statutory Auditors of the Company for the year 2009-10 by the Comptroller and Auditor General of India. MANAGEMENT DISCUS SION AND ANALYSIS REPORT The Management Discussion and Analysis Report, is annexed and forms part of the Directors Report. CORPORATE GOVERNANCE REPORT The Company strives to attain highest standards of corporate governance. In line with the Guidelines issued by Department of Public Enterprises, a separate section on Corporate Governance is annexed and forms part of the Directors Report. Certificate attested by the CEO/CFO is also form part of the Corporate Governance Report along with declaration
28
signed by CMD regarding Code of Conduct for Members of the Board and Senior Management. CERTIFICATE ON COMPLIANCE OF GUIDELINES ON CORPORATE GOVERNANCE The Certificate on Compliance of Guidelines on Corporate Governance as issued by DPE in June 2007, as obtained from a practicing Company Secretary is annexed and forms part of the Directors Report. SECRETARIAL COMPLIANCE REPORT FOR THE FINANCIAL YEAR 2009 10 The Secretarial Compliance Report confirming compliance to the provisions of Companies Act, 1956, Rules made thereunder and the provisions contained in Articles of Association & Memorandum of Association of the Company, as obtained from a practicing Company Secretary is annexed and forms part of the Directors Report. AUDITORS REPORT The Statutory Auditors Report on the Accounts of the Company for the Financial year ended 31st March, 2010 is enclosed to the Directors Report at Annexure-I C & A G COMMENTS Comments of the Comptroller and Auditor General of India (C&AG) on the accounts of the Company are enclosed at Annexure-II. REPORT ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, ETC. Information required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 regarding Energy Conservation, Technology Absorption and Foreign Exchange earnings and outgo during the Financial year 2009-10 are furnished in the Annexure-A to the report and also in Form-A and Form-B annexed to this report. FOREIGN EXCHANGE EARNINGS AND OUTGO The Foreign Exchange earnings during the year 200910 were Rs.351.73 Crores as against Rs.78.89 Crores during the previous year. The Foreign Exchange Outgo during the year 2009-10 was Rs.3565.24 Crores (including Rs.755.24 Cr on Expansion) as against Rs. 3910.30 Crores ( including Rs.309.53 Crores) during the previous year. PARTICULARS OF EMPLOYEES There was no employee of the company who received remuneration in excess of the limits prescribed under
Section 217(2A) of the Companies Act 1956 read with the Companies (Particulars of employees) Rules, 1975. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to provisions of Section 217 (2AA) of the Companies Act, 1956, the following statement relating to Annual Accounts for the financial year ended 31st March, 2010 is made : i) that in the preparation of the Annual Accounts, applicable Accounting Standards had been followed alongwith proper explanation 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 or loss of the company for that period; iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) that the Directors had prepared the Annual Accounts on a going concern basis. DIRECTORS (APPOINTMENT/CESSATION) The following changes took place in the Board of Directors of the Company during the year: APPOINTMENTS : Shri A P Choudhary was appointed as Director (Projects) w.e.f. 1st June, 2009. Prof. Ramesh Chandra was appointed as part-time nonofficial Director w.e.f. 3rd Aug. 2009. Shri P Madhusudan, was appointed as Director (Finance) w. e. f. 2nd November, 2009. Shri U P Singh was appointed as Director w.e.f. 12th November, 2009. Dr. Dalip Singh, IAS was appointed as Director w.e.f 2nd March, 2010. Shri S. Machendra Nathan, IAS , AS&FA, MoS was appointed as Director on 24th May, 2010.
CESSATIONS : Shri K S Shankar, superannuated as Director (Finance) on 31st October, 2009. Dr Dalip Singh, Director resigned w.e.f. 12th November, 2009. Shri UP Singh, IAS resigned as Director w.e.f. 20th January, 2010. Shri CG Patil superannuated as Director (Commercial) on 28th February, 2010. Dr Jagatpal, IAS, Independent Director resigned w.e.f. 2nd March, 2010. Shri B S Meena, IAS resigned as Director w.e.f. 31st March, 2010. The Board of Directors wish to place on record their appreciation of the valuable services rendered and contribution made by the outgoing Directors during their tenure on the Board of RINL. ACKNOWLEDGEMENTS Directors of the company acknowledge with deep appreciation the valuable guidance, assistance, cooperation and support extended by the Government of India, especially the Ministry of Steel and Govt. of Andhra Pradesh. Directors of the Company also place on record their appreciation for the cooperation extended by valued customers, suppliers, Railways, bankers, auditors, solicitors and business associates, the local District Administration and Law and Order authorities. Directors of the Company also appreciate the commitment, sincere efforts and hard work put in by all the employees of the company, Trade Unions and Steel Executive Association. Their whole hearted contribution has been vital in helping the company scale great heights. For and on behalf of the Board of Directors
(P K Bishnoi ) Chairman-cum-Managing Director Visakhapatnam Date: 24th June 2010 Adopted at the 28th Annual General Meeting held on 24th July, 2010.
29
MANAGEMENT DISCUSSION AND ANALYSIS REPORT FOR 2009-10

A. INDUSTRY STRUCTURE AND DEVELOPMENTS Economy Indian economy is tipped to grow in the range of 7.2 to 7.5 % during the year 2009-10, against a growth rate of 6.2% during 2008-09, as per Annual Policy Statement released by RBI in April 2010. RBI has placed baseline projection of real GDP growth for 2010-11 at 8.0%. Favourable projections are based on the impressive consumption demand growth in the country. Double-digit growth rate posted by industrial production every month since October 2009 (ranging from 10% to 18%) with an overall growth of 10.3% for 2009-10 is an indication of commendable recovery by the Indian economy. Steel Scenario As global steel markets struggled to recover from the impact of global meltdown that started from second half of 2008, developing economies led by China and India emerged as the only major steel producing countries to register positive year-on-year growth over 2008, as shown below :
Country China Japan Russia USA India South Korea Germany World 2009 (Mt) 567.8 87.5 59.9 58.1 56.6 48.6 32.7 1219.7 2008 (Mt) 500.3 118.7 68.5 91.4 55.1 53.6 45.8 1326.5 % Growth 13.5 -26.3 -12.5 -36.4 2.7 -9.4 -28.7 -8.0 C.
India's growth in steel demand appears all the more imposing when compared with the forecast for China's growth in demand at about 6.8%. On the flip side is the firming up of prices of major raw materials like coking coal and iron ore. Spot prices of iron ore and coking coal have shot up by about 126% and 95% respectively during the period Apr-Mar 2009-10, resulting in the increase in contract price of coking coal by about 56% over 2009-10 and that of iron ore by 40% over Jan' 10 prices. B. STRENGTHS AND WEAKNESSES
Strengths Availability of funds. Ability to raise funds. Availability of land and layout for Expansion upto 20 Mt & proximity to port. Image as quality producer & value for money supplier. Superior basic technology at inception time. Cutting edge technology in Expansion to 6.3 Mt. Committed workforce. Weaknesses Lack of level playing field vis--vis others due to lack of captive iron ore & coking coal mines. Single location company Only long products, exposed to cyclic markets. Due for Major capital repairs and modernization. Consumption of coking coal contracted at higher cost being used in the year 2009-10. High cost of servicing huge equity.
OPPORTUNITIES AND THREATS Threats Increasing raw material prices & shift of value chain towards raw materials. Oligopolistic coal supply side. Single iron ore supplier located in disturbance prone areas. Predominant secondary sector in long products. Expansion of capacities by the competitors and entry of International players. Additional domestic Capacity creation both in public & private sectors.
However, the year 2009-10 was marked by downward pressure on steel prices in the country. Global steel capacity utilization ratio at 75.1% in Dec '09 registered an improvement from a low of 58.1% in Dec '08, but was substantially below the peak seen in June 2008 at 90.8%. International steel prices remained at lower levels, when compared to the domestic prices due to unutilized capacities in the world, which creates a constant threat of cheaper imports. Steel consumption in the country grew by 7.9% in 2009-10, as per provisional data by JPC. India continued to be a net importer of total finished steel. Even as industry reports peg growth in consumption of steel in the country at around 10% during 2010-11, World Steel Association (WSA) in its short range outlook has forecasted a growth rate of about 13.9% in apparent steel use in 2010 for India. The forecast for
30
Opportunities Large potential steel demand awaiting to be tapped. Investment of Rs.41,00,000 Cr in infrastructure in 12th five year plan (preliminary assessment). As per WSA, projected growth in apparent steel use in India 13.9% in 2010 & 13.7% in 2011. Ease of imports / exports with adjacent deep draft Gangavaram Port, VSPL & VPT (getting modernised with deep draft & mechanization). Addition of flat products in the next phase of Expansion.
AREAS OF CONCERN From the above SWOT matrix emerging issues / concerns are as follows: (i) Short term & Medium term As a result of continuous operation of the plant at higher capacities in special steel production, many of the plant equipment warrant immediate revamp and capital repairs.Utmost attention on maintenance related aspects is required so as to ensure upkeep of these equipments till the time major revamps / capital repairs are carried out. (a) Raw Material prices : Profitability will be adversely impacted by steep escalation in prices of major raw materials: Iron ore prices by 40% over 1st Jan. 2010 levels. Imported coking coal prices for the 1st quarter of 2010-11 by 56% over the contract prices of 2009-10. (b) Modernization & Capital Repairs Dovetailing of revamping programme of Steel Melt Shop (SMS) and Sinter machines with that of Category-I Capital repairs of Blast Furnaces is required, so as to minimize the loss in production on account of shutdowns in these units for carrying out major revamps / Capital repairs. (c) Expansion : Commissioning of Phase-1 Expansion units like Sinter Plant -3, Blast Furnace-3, Boiler6, Steel Melt Shop - 2 etc. as per logical sequence of commissioning to the extent possible, so as to minimize the logistical and operational overheads during startup and initial period of stabilization. (d) Sales : Thrust on optimizing market and product mix to maximize sales realisations and steps to ensure customer loyalty in view of: Entry of new players like JSW, JSPL and other secondary players in VSP's range of products resulting in higher availability. Quantum increase in year on year production in the next 3-4 years as Expansion units are progressively brought on stream. (ii) Long term In the long term, non availability of captive mines for iron ore and coking coal is a handicap for the company. Inconsistencies in supplies - quantity
31
and quality - along with rising prices have impacted the company's performance through out. To overcome this, RINL is exploring a collaborative approach with State Mineral Development Corporation(s) for acquiring Iron Ore Mines through Joint Ventures in Jharkhand, Orissa and Karnataka. Also, RINL is pursuing various opportunities for JVs / Strategic partnerships with existing players in the country and overseas for raw material security. Some of the strategic initiatives are: Formation of RINMOIL Ferro Alloys Pvt Ltd, a Joint Venture company with M/s MOIL to meet VSP's future Ferro Alloys requirement & encash upon export opportunities. Formalities for transfer of 51% stake in M/s EIL, the holding company of M/s OMDC & M/s BSLC to RINL are in the advanced stage of completion. This would give RINL access to around 200 Mt of Iron ore reserves. Application for Mining Lease in two areas was filed in Bhilwara iron ore mines, Rajasthan. To ensure secured transportation of iron ore from Bailadilla & further value addition, an EoI was invited for setting up of Pelletisation plant at Visakhapatnam through SPV. RINL joined M/s ICVL, a Special Purpose Vehicle formed for the purpose of acquisition of coal mining assets overseas. The International Coal Ventures Ltd (ICVL) was formed with equity participation by M/s NMDC, M/s CIL, M/s NTPC, M/s SAIL & RINL to acquire metallurgical and thermal coal assets overseas and ICVL was incorporated on 20th May 2009. ICVL is considering several proposals to acquire coal assets. RINL is also closely engaged with various Experts / Consultants in order to develop a Master plan for establishing a 16/20 Mt steel plant at its current location at Visakhapatnam. (iii) Outlook With Government's plans to boost economy by injecting funds in various sectors like infrastructure, construction, automobile and power, it is expected to see steady and further growth in India. However, high prices of coal and iron ore are likely to dent the profitability. The European Sovereign debt woes also may create some uncertainty in the global economy in the short term. The projected consumption growth of 13.9% and successful
commissioning of first phase Expansion units hold promise and to a large extent are likely to mitigate the adverse impact of input escalations and may have favourable impact on profitability. D. SEGMENTWISE PERFORMANCE : OR PRODUCTWISE
mechanisms. Annual Audit Programmes are drawn up covering critical areas of various departments in order to bring overall improvements in the Company. The Internal control systems are commensurate with the size of the Company and the reports containing significant Audit findings are submitted to the Audit Committee of the Company and to the Board through the Audit Committee. The Company has put in place an Enterprise Risk Management (ERM) Policy and procedure duly approved by the Board in the year and the same has been put on Company's Website. ERM is being implemented across the organization covering both Works and Non Works Departments by an In-house team. F. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE :
Details in respect of the above item has already been covered in the Directors' Report which may kindly be referred to. E. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company is having an efficient system of Internal controls for achieving the objectives of the Company by ensuring efficiency in operations, protection of resources, accuracy and promptness in financial reporting and compliance with the laid down policies and procedures alongwith relevant Laws and regulations. In RINL, there is a separate Internal Audit Department and the Internal Audit is a multi disciplinary function which is conducted by a team of experienced Chartered Accountants, Cost Accountants, Engineers and other employees. The Internal Audit Department carries out reviews, evaluates and appraises the various systems, procedures and policies of the Company and suggests meaningful and useful improvements alongwith corrective measures wherever required. The Internal Audit is subject to overall control environment under the supervision of the Audit Committee constituted by the Board to focus on transparency in the systems and internal control
G. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES, INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED : H. ENVIRONMENTAL PROTECTION AND CONSERVATION, TECHNOLOGICAL CONSERVATION, RENEWABLE ENERGY DEVELOPMENTS, FOREIGN EXCHANGE CONSERVATION : I. CORPORATE SOCIAL RESPONSIBILITY Details in respect of the above items i.e. F, G, H and I, have already been covered in the Directors' Report which may kindly be referred to.
32
Growth of Income
33
Growth of Net Worth Worth
34
BREAK UP OF INCOME 2009-10

Sale of By Products & Others Rs. 350 Crs (3%)
Interest Earned Rs. 535 Crs (5%) Other revenue Rs. 101.75 Crs (1%)
Internal Consumption Rs.121 Crs (1%)
Sale of Iron & Steel Rs. 10285 Crs (90%)
35
36
Gross Block & Net Block
37
FINANCIAL HIGHLIGHTS
2009-10 A OPERATING RESULTS (Rs Crs) Turnover Gross Income Gross Expenditure Gross Profit Gross Profit (excluding Interest on Term Deposits) Profit before Tax Net Profit After Tax B YEAR END FINANCIAL POSITION (Rs Crs) Share Capital Reserves and Surplus Capital Employed Capital Employed (excluding Term Deposits) Net Worth Gross Block Depreciation Net Block Inventory C PROFITABILITY AND OTHER RATIOS (i) Percentage of Gross Profit to Sales Net Profit to Sales Gross Profit to Net Worth Net Profit to Net Worth Gross Profit (excluding Interest on Term Deposits) to Capital Employed (excluding Term Deposits) Net Profit to Capital Employed Gross Profit to Share Capital Inventory to Sales Sales to Capital Employed (ii) Ratio of Current Assets to Current Liabilities Quick Assets to Current Liabilities 12.5 7.5 10.3 6.2 618.1 14.5 16.9 23.1 194.2 20.3 12.8 17.0 10.8 103.9 16.9 27.0 30.9 131.9 7827 5058 5476 132 12885 9474 8009 1465 2452 7827 4593 7892 1309 12420 8972 7750 1222 3215 10635 11392 10067 1326 819 1248 797 10411 11334 9219 2115 1359 2027 1336 2008-09
1.7 1.3
2.3 1.7
38
A Glance of Financial Results since inception

Rs Crs Nos
Capital
Income
Fixed Assets Gross Block
Fixed Assets Net Block
Profit / (Loss) after tax
Raw Materials consumed
Employees as on 31st March
Total Depreciation
Reserves & Surplus
Loans / Buyers Credit
Profit / (Loss) before tax
Stores, R&M, Power & Other Expenses
Interest & Wealth Tax
Depreciation & DRE
Stock (Accretion) / Depletion
Employee Benefits
Other Revenue
Turnover
175 402 680 875 (200) (50) (115) (118) 318 (95) (103) 62 281 26 (310) 66 24 (343) 1031 (917) 1157 415 1400 488 240 277 741 362 572 448 490 1006 481 476 49 1748 11 1997 31 2346 49 2525 32 2854 88 2842 78 2439 406 455 123 1635 375 475 291 1504 (75) 521 1547 2254 1890 2222 2995 2027 1248 408 445 351 1364 (291) 272 432 382 1303 (562) 255 111 361 1151 (457) 210 439 198 1211 (177) (177) 6494 (457) 6494 (562) 7827 (291) 7827 (75) 7827 521 7827 1547 7827 2008 7827 1252 7827 346 1363 7827 1711 1943 7827 3654 1336 7827 4593 797 7827 5058 174 422 430 1163 (246) (246) 6494 155 430 407 1107 (204) (204) 6494 128 415 366 855 (364) (364) 6494 160 103 340 347 655 (573) (573) 6494 (152) 77 340 198 758 (568) (568) 3706 (70) 54 449 437 509 (987) (987) 3506 5476 5031 3495 6157 3474 7326 3735 8289 3831 8392 3735 8548 2205 8592 2243 8615 2343 8635 2293 8643 1989 8703 1186 8731 37 8710 531 8763 458 8832 917 8876 441 8901 1008 8972 1233 9474 (27) 29 197 192 191 (478) (478) 3506 3924 3720
90-91
91-92
92-93
93-94
94-95
95-96
Year
245
36
245
248 3472 14433 704 4327 16656 1026 5131 17454 1365 5961 17483 1747 6542 17369 2177 6215 17642 2819 5729 17478 3037 5555 17354 3148 5467 17400 3580 5055 17254 4012 4630 17131 4468 4235 17026 4903 3828 16894 5338 3372 16755 6322 2441 16613 6754 2078 16574 7085 1790 16401 7516 1385 16416 7750 1222 17225 8009 1465 17830
772
22
676
1185
148
1245
1751
156
1526
2209
50
2092 1059
3039
116
2810 1311
39
96-97
3135
78
2888 1385
97-98
3071
97
2751 1405
98-99
2761
197
2182 1220
99-00
2973
155
2636 1394
00-01
3436
180
3049 1444
01-02
4081
153
3396 1602
02-03
5058
168
4107 1806
03-04
6169
209
5398 2050
04-05
8181
286
7584 3020
05-06
8491
447
7413 3585
06-07
9151
661
8231 3889
07-08 10433
904
9918 4280
08-09 10411
924 10682 5896
09-10 10635
758
9839 5535
40
41 41
42 42
BALANCE SHEET AS AT 31st MARCH 2010

Rs Crs Schedule No. As at 31st March, 2010 As at 31st March, 2009
SOURCES OF FUNDS
SHAREHOLDERS FUNDS Share Capital Reserves and Surplus LOAN FUNDS Secured loans Unsecured loans Deferred Tax Liability (Net) Total APPLICATION OF FUNDS FIXED ASSETS Gross block Less: Depreciation Net block Held for disposal Capital work-in-progress INVESTMENTS CURRENT ASSETS, LOANS & ADVANCES Inventories Sundry debtors Cash & Bank balances Other Current assets Loans & Advances 1 2 3 4 7827.32 5057.68 407.28 825.27 97.82 14215.37 7827.32 4592.59 907.72 100.04 124.49 13552.16
6 7 9 10 11 12 13 14
9473.90 8008.55 1465.35 0.05 7506.90 8972.30 0.25 2451.52 181.18 5415.54 137.40 1365.02 9550.66
8971.80 7749.74 1222.06 0.05 4652.00 5874.11 0.05 3215.28 191.27 6624.17 258.91 1569.69 11859.32 2560.79 1620.53 4181.32 5242.82 14215.37 7678.00 13552.16
LESS: CURRENT LIABILITIES & PROVISIONS Liabilities Provisions Net Current assets Total Significant Accounting Policies & Notes to Accounts Schedules 1 to 28 annexed form part of the Accounts
For and on behalf of Board of Directors
15 16
2871.95 1435.89 4307.84
28
As per our report of even date For B.V. RAO & CO Chartered Accountants Regn. No (F.R.N) 003118S
Sd/(P .K.Bishnoi) Chairman-cum-Managing Director
Sd/(P Madhusudan) . Director (Finance)
Sd/(P Mohan Rao) Company Secretary Place : Visakhapatnam Date : 24th June 2010
Sd/(CA A.R. UNNI)

Partner M.No : 07447
43
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDING 31st March 2010
Rs Crs
Schedule No. INCOME Gross Sales Less: Excise duty recovered on sales Net Sales Internal consumption Interest earned Other revenue Total EXPENDITURE Raw materials consumed Depletion / (Accretion) to Stock of Semi-finished/Finished goods Employees' remuneration & benefits Stores & spares consumed Power & fuel Repairs & maintenance Freight outward Other expenses & provisions Interest & Finance Charges Depreciation Wealth tax Less: Inter account adjustments-raw material mining cost Net expenditure Profit for the year Prior period adjustments- Net credit Profit Before Tax Provision for Taxation Current Tax Fringe Benefit Tax Earlier years adjustments Deferred Tax Profit After Tax Balance of Profit brought forward from previous year Amount available for appropriation APPROPRIATIONS Interim Dividend Proposed Dividend (Final) Tax on Interim Dividend Tax on Proposed Dividend (Final) Reserve for Redeeming Preference Share Capital Balance carried to Balance Sheet Total appropriations Basic and Diluted Earnings Per Share (in Rupees)(Face Value Rs. 1000 per share) Significant Accounting Policies & Notes to Accounts Schedules 1 to 28 annexed form part of the accounts For and on behalf of Board of Directors 17 For the year ended 31st March, 2010 10634.63 825.48 9809.15 121.07 534.71 101.75 10566.68 5535.11 415.35 1399.74 466.48 408.27 142.13 312.65 334.63 77.55 277.17 0.45 9369.53 43.26 9326.27 1240.41 7.24 1247.65 463.08 (0.05) 14.62 (26.67) 796.67 1653.83 2450.50 100.01 185.28 16.61 30.77 0.00 2117.83 2450.50 113.89 28 As per our report of even date For B.V. RAO & CO Chartered Accountants Regn. No (F.R.N) 003118S For the year ended 31st March, 2009 10410.63 1282.25 9128.38 114.10 787.21 22.36 10052.05 5896.25 (916.65) 1157.35 501.23 340.31 149.81 286.53 324.46 87.47 240.46 0.89 8068.11 38.06 8030.05 2022.00 4.59 2026.59 746.38 4.66 (21.39) (38.63) 1335.57 3652.55 4988.12 0.00 339.18 0.00 57.64 2937.47 1653.83 4988.12 223.93
18 19
20 21 22 23 24 25 26
27
Sd/(CA A.R. UNNI)

44
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31st March 2010

Schedule 01 : Share Capital
As at 31st March, 2010 AUTHORISED 4,89,00,000 (Previous year 4,89,00,000) Equity Shares of Rs.1000 each 3,11,00,000 (Previous Year 3,11,00,000) Preference Shares of Rs.1000 each Total ISSUED, SUBSCRIBED & PAID-UP 4,88,98,462 (Previous year 4,88,98,462) Equity Shares of Rs.1000 each. 2,93,74,700 (Previous year 2,93,74,700) 7 % Non-Cumulative redeemable Preference Shares of Rs.1000 each redeemable at par, as under 10,00,000 during 2011-12 55,00,000 during 2014-15 1,38,05,000 during 2012-13 30,00,000 during 2015-16 60,69,700 during 2013-14 The earliest date of redemption is 31st March, 2012. Total 7827.32 Of the above, 21,80,612 Equity Shares of Rs.1000 each were allotted as fully paipup for consideration other than cash. Schedule 02 : Reserves and Surplus As at 31st March, 2010 Prime Minister's Trophy Award Fund As per last Balance Sheet Additions Reserve for Redeeming Preference Share Capital Surplus as per Profit and Loss Account Total Schedule 03 : Secured loans As at 31st March, 2010 Working Capital Borrowings from Banks (Secured by hypothecation of Current Assets) Loans from Banks against Term Deposits Total Schedule 04 : Unsecured loans As at 31st March, 2010 Short Term Loans from Banks Short Term Foreign currency facilities Short Term Loans from others Total 550.00 225.31 49.96 825.27 349.36 57.92 407.28 1.29 1.09 2.38 2937.47 2117.83 5057.68 Rs Crs As at 31st March, 2009 1.17 0.12 1.29 2937.47 1653.83 4592.59 Rs Crs As at 31st March, 2009 334.19 573.53 907.72 Rs Crs As at 31st March, 2009 100.04 0.00 0.00 100.04 7827.32 4890.00 3110.00 8000.00 4889.85 2937.47
Rs Crs
As at 31st March, 2009 4890.00 3110.00 8000.00 4889.85 2937.47
45
Schedule 05 : Fixed Assets

Gross Block As at 1st April, 2009 Additions & adjustments Sales & adjustments
Rs Crs
As at 31st March, 2010
A. Plant, Mines & Others : Land-Freehold (Including cost of development) Land-Leasehold Railway Lines & sidings Roads, Bridges & Culverts Buildings Plant & Machinery Furniture & Fittings Locomotives Vehicles Electrical Installations Water Supply & Sewerage systems Miscellaneous Assets Mining lease rights (Intangible Asset) Total (A) Figures for the previous year B. Social Facilities : Land-Freehold ( Including cost of development) Roads, Bridges & Culverts Buildings Plant & Machinery Furniture & Fittings Electrical Installations Water Supply & Sewerage systems Miscellaneous Assets Total (B) Figures for the previous year Total (A + B) Figures for the previous year 9.51 13.11 194.66 2.07 0.66 29.57 19.14 12.15 280.87 270.11 8971.80 8900.83 1.08 3.94 11.59 522.20 80.84 0.06 0.06 0.83 20.10 9.87 0.04 (0.11) 2.93 9.51 13.11 197.59 2.07 0.70 29.46 19.14 13.17 284.75 280.87 9473.90 8971.80 41.97 1.65 48.03 116.36 738.26 7012.16 17.81 66.56 12.76 274.90 252.61 102.03 5.83 8690.93 8630.72 518.26 69.25 20.04 9.04 3.35 4.49 426.50 0.73 31.88 0.20 21.81 17.14 12.16 0.31 19.72 0.01 41.97 1.65 48.03 119.71 742.75 7418.94 18.53 98.44 12.96 296.71 269.75 113.88 5.83 9189.15 8690.93
46
Schedule 05 : Fixed Assets (continued)

Depreciation As at 1st April, 2009 For the Year (incl. PPA) Sales & adjustments As at 31st March, 2010 Net Block As at 31st March, 2010
Rs Crs
41.97 0.58 44.50 19.33 428.65 6544.20 12.09 56.87 7.96 233.54 223.61 74.51 2.61 7648.45 7421.75 0.03 2.04 2.02 24.23 207.45 0.65 3.07 0.83 13.84 11.48 6.20 0.29 272.13 234.73 20.01 8.03 0.32 19.68 0.01 0.61 46.54 21.35 452.88 6731.97 12.73 59.94 8.79 247.38 235.09 80.39 2.90 7900.57 7648.45 1.04 1.49 98.36 289.87 686.97 5.80 38.50 4.17 49.33 34.66 33.49 2.93 1288.58 1042.48
41.97 1.07 3.53 97.03 309.61 467.96 5.72 9.69 4.80 41.36 29.00 27.52 3.22 1042.48 1208.97
9.51 3.58 55.77 1.67 0.26 16.30 16.36 7.35 101.29 94.44 7749.74 7516.19 0.23 3.38 0.10 0.01 1.39 0.84 0.76 6.71 6.86 278.84 241.59 0.02 0.02 0.01 20.03 8.04 3.81 59.15 1.77 0.27 17.69 17.20 8.09 107.98 101.29 8008.55 7749.74 9.30 138.44 0.30 0.43 11.77 1.94 5.08 176.77 179.58 1465.35 1222.06
9.51 9.53 138.89 0.40 0.40 13.27 2.78 4.80 179.58 175.67 1222.06 1384.64
47
ALLOCATION OF DEPRECIATION
As at 31st March, 2010 Current year Prior periods Total Note : Allocation of Depreciation not included above and charged to: Expenditure During Construction Schedule 06 : Assets Retired from active use and held for disposal As at 31st March, 2010 Value of Fixed Assets Less: Provision for loss Balance Schedule 07 : Capital Work-In-Progress As at 31st March, 2010 Work-in Progress (Including Material issued to contractors) Coke Oven Battery-4 6.3 MT Expansion Others Less: Provision for Shortages Provision for dropped SLTM Project Advances to Contractors Advances to Government departments Expenditure during construction awaiting allocation (Schedule : 08) Total Advances : Unsecured & Considered good Advances : Unsecured & Considered doubtful Schedule 08 : Expenditure During Construction As at 31st March, 2010 Opening Balance Expenditure during the year: Employees Remuneration & Benefits Power & fuel Repairs & Maintenance Technical Consultancy Other Expenses & Provisions Interest Depreciation Less Interest Receipts Other Revenue Total awaiting allocation carried to Schedule No.07 126.60 35.12 6.96 0.72 0.69 11.34 0.00 1.67 56.50 0.14 6.84 6.98 176.12 0.20 2.13 87.85 6378.14 396.61 6862.60 0.09 23.92 24.01 6838.59 485.60 6.59 492.19 176.12 7506.90 492.19 0.00 526.69 6.57 0.09 17.90 341.26 3419.18 249.69 4010.13 17.99 4.29 4.24 0.05 277.17 0.00 277.17
Rs Crs
As at 31st March, 2009 240.46 0.32 240.78
1.67
0.81 Rs Crs As at 31st March, 2009 4.29 4.24 0.05 Rs Crs As at 31st March, 2009
3992.14
533.26 126.60 4652.00 533.26 0.00 Rs Crs As at 31st March, 2009 67.59 44.55 4.60 4.13 0.05 7.17 0.03 0.81 61.34
2.33 126.60
48
Schedule 09 : Investments (At Cost) - Long Term

Type of Share (A) Unquoted Trade Investments Rinmoil Ferro Alloys Private Limited International Coal Ventures Pvt. Ltd No. of Shares held Value of each Share (Rs) As at 31st March, 2010
Rs Crs
Equity Equity
100000 100000
10 10
0.10 0.10 0.00 0.05 0.00 0.25
0.00
(B)
Non-Trade Investments # Free Press House Limited Equity 2280 1 Steelscape Consultancy Pvt. Ltd Equity 50000 10 Quoted * Bisra Lime Stone Company Ltd Eqiity 182927 10 Total * Investments amounted to Rs.1000/-, hence rounded off to zero. # Investments amounted to Rs.2380/-, hence rounded off to zero and include one fully paid-up Equity share of Rs.100/- each in Anakapalli Rural Electric Co-operative society Limited
0.00 0.05 0.00 0.05
Schedule 10 : Inventories (As taken and certified by the Management) As at 31st March, 2010 Semi Finished/ Finished goods Add : In-transit Raw materials Add : In-transit / Under inspection Less : Provision for shortages Stores & Spares Add : In-transit / Under inspection Less : Provision for obsolescence & Non-moving items Total Schedule 11 : Sundry debtors As at 31st March, 2010 Sundry debtors Debts over six months Other debts Less : Provision for doubtful debts Total -- Unsecured & Considered good Schedule 12 : Cash & Bank balances As at 31st March, 2010 Cash on hand Cheques on hand Current Accounts with Scheduled Banks Term deposits with Scheduled Banks Total 0.09 51.03 21.28 5343.14 5415.54 20.79 180.91 201.70 20.52 181.18 1213.10 79.91 1293.01 596.72 388.33 985.05 120.02 865.03 296.47 30.57 327.04 33.56 293.48 2451.52 307.21 45.69 352.90 40.30 1161.29 150.47 1311.76 117.44
Rs Crs As at 31st March, 2009 1688.31 20.05 1708.36
1194.32
312.60 3215.28 Rs Crs As at 31st March, 2009 21.04 191.27 212.31 21.04 191.27 Rs Crs As at 31st March, 2009 0.05 36.77 4.13 6583.22 6624.17
49
RASHTRIYA ISPAT NIGAM LIMITED Schedule 13 : Other Current assets

As at 31st March, 2010 Interest accrued on loans to employees Interest accrued -- others Less: Provision for Non recoverable interest Other income accrued Total Schedule 14 : Loans & Advances As at 31st March, 2010 Loans Employees Others Advances & other recoverables (Recoverable in cash or in kind or for value to be received) Government departments Less : Provision for doubtful advances Advance Income Tax & Fringe Benefit Tax Contractors Less : Provision for doubtful advances Suppliers Less : Provision for doubtful advances Employees Less : Provision for doubtful advances Others * Less : Provision for doubtful advances / recoverables 48.12 233.61 6.41 136.88 6.24 130.64 0.35 137.40 260.71 6.24
Rs Crs
As at 31st March, 2009 4.32 254.47 0.12 258.91 Rs Crs As at 31st March, 2009 43.33 240.00
281.73
283.33
17.44 0.62 16.82 432.73 18.34 0.54 17.80 46.84 6.30 40.54 6.94 0.16 409.78 29.73 380.05 894.72 3.70 49.80 6.26 43.54 141.33 1365.02 6.78
15.48 0.62 14.86 738.64 18.09 0.54 17.55 48.35 6.50 41.85 25.55 0.16 299.42 27.88 271.54 1109.83 1.66 37.93 5.55 32.38 142.49 1569.69 25.39
Prepaid expenses Claims recoverable Less : Provision for doubtful claims Deposits Total
(*) includes advances of Rs. 0.58 Crs and Rs. 0.07 Crs as contribution towards Share Capital and others respectively to Joint Ventures. Particulars of Loans & Advances Loans Secured & Considered good 233.61 240.00 Unsecured & Considered good 48.12 43.33 Advances Unsecured & Considered good 894.72 1109.83 Others Unsecured & Considered good 188.57 176.53 1365.02 1569.69 Advances Unsecured & Considered doubtful 37.35 35.70 Claims Unsecured & Considered doubtful 6.26 5.55 43.61 41.25 Total 1408.63 1610.94 Amounts due from Directors 0.03 0.01 Maximum amount due at any time during the year from Directors 0.04 0.01
50
Schedule 15 : Liabilities
As at 31st March, 2010 Sundry creditors Advances from customers Other advances Earnest money, security & other deposits Interest accrued but not due Other liabilities Total Particulars of Sundry Creditors Total outstanding dues of micro enterprises and small enterprises Total outstanding dues of creditors other than micro enterpries and small enterprises Total Schedule 16 : Provisions for As at 31st March, 2010 Current Income Tax Fringe Benefit Tax Wealth Tax Interim Dividend Proposed Dividend (Final) Tax on Interim Dividend Tax on proposed Dividend (Final) Gratuity to employees Compensated Absences Post-retirement Benefits Employee family Benefit Scheme Long Service Awards Leave Travel Concession Mines Closure Total 463.08 0.00 0.45 100.01 185.28 16.61 30.77 72.21 346.46 143.39 64.15 7.05 4.00 2.43 1435.89 0.08 1265.17 1265.25 1265.25 140.90 1.88 207.96 2.38 1253.58 2871.95
Rs Crs
As at 31st March, 2009 1149.44 137.46 1.43 137.87 0.14 1134.45 2560.79
0.00 1149.44 1149.44 Rs Crs As at 31st March, 2009 746.38 4.66 0.89 0.00 339.18 0.00 57.64 34.55 253.00 123.68 53.33 5.11 0.00 2.11 1620.53
51
SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31st March 2010
Schedule 17 : Gross Sales
Year ended 31st March, 2010 Domestic Export Total Schedule 18 : Interest earned Year ended 31st March, 2010 Loans to employees Banks Others Total Schedule 19 : Other revenues Year ended 31st March, 2010 Rent recoveries Profit on sale of fixed assets Provision no longer required written back Liquidated damages Claims for finished goods (Shortages & Missing Wagons) Export benefits Net income from other operations Exchange Differences (Net) Sundry receipts Total 3.93 1.02 8.26 12.11 1.44 9.70 0.92 20.72 43.65 101.75 2.53 506.74 25.44 534.71 10283.69 350.94 10634.63
Rs Crs
Year ended 31st March, 2009 10332.31 78.32 10410.63 Rs Crs Year ended 31st March, 2009 2.17 755.47 29.57 787.21 Rs Crs Year ended 31st March, 2009 3.36 0.47 15.02 10.83 1.89 3.05 0.84 (52.66) 39.56 22.36 Quantity: Tonnes Value : Rs Crs Year ended 31st March, 2010 Year ended 31st March, 2009 Quantity Value Quantity Value
Schedule 20 : Raw materials consumed
Coal Coke and Coke breeze Iron Ore Limestone Dolomite Silico Manganese Ferro Silicon Alluminium Manganese Ore Petroleum Coke Sea Water Magnesite Billets Others Total
3874581 0 5734901 889224 635360 45513 5150 3891 14728 6781 2800 0
3266.78 0.00 1779.38 102.89 63.77 212.34 32.61 38.28 1.88 12.11 10.19 0.00 14.88 5535.11 Year ended 31st March, 2010
3312835 201765 5201536 844907 662570 40681 5162 3435 20215 5353 3156 19735
3101.20 438.39 1725.37 110.46 64.01 276.10 27.44 39.27 2.10 12.08 9.35 75.23 15.25 5896.25
Schedule 21 : Depletion/(Accretion) to Stock of Semi-Finished / Finished goods
Rs Crs Year ended 31st March, 2009 791.71 1708.36 (916.65)
Opening stock Less: Closing stock Net Depletion/(Accretion)
1708.36 1293.01 415.35
52
Schedule 22 : Employees' remuneration & benefits

Year ended 31st March, 2010 Salaries, wages & allowances Company's contribution - provident fund & other funds Welfare expenses Gratuity Voluntary Retirement Benefits Total Note: Expenditure on Employees' remuneration & benefits not included above and charged to: Expenditure During Construction Salaries, wages & allowances Company's contribution - provident fund & other funds Welfare expenses Gratuity Total Capital Work in Progress Salaries, wages & allowances Company's contribution - provident fund & other funds Welfare expenses Gratuity Total Schedule 23 : Power & fuel Year ended 31st March, 2010 Purchased power Boiler coal Medium Coking Coal Furnace oil/ LSHS/ LDO Total Power & Fuel - Expansion Schedule 24 : Repairs & maintenance Year ended 31st March, 2010 Plant & Machinery Buildings Others Total Note: Repairs & maintenance not included above and charged to: Expenditure during construction Repairs & maintenances - Plant & Machinery and others 0.72 68.09 21.96 52.08 142.13 137.27 265.46 0.00 5.54 408.27 6.96 0.00 0.00 0.00 0.00 0.00 28.00 1.67 3.61 1.84 35.12 1013.42 55.15 245.74 85.42 0.01 1399.74
Rs Crs
Year ended 31st March, 2009 794.98 68.38 209.74 84.10 0.15 1157.35
38.86 2.39 1.73 1.56 44.54 1.78 0.02 0.22 0.12 2.14 Rs Crs Year ended 31st March, 2009 102.07 223.75 11.77 2.72 340.31 4.60 Rs Crs Year ended 31st March, 2009 75.59 18.58 55.64 149.81
4.13
53
Schedule 25 : Other expenses & provisions

Year ended 31st March, 2010 Technical services Rent Rates & taxes Excise Duty Export Duty Insurance Handling & scrap recovery Selling expenses Travelling expenses Printing & stationery Postage, telegrams & telephone Water charges Legal expenses Bank charges Community Development Welfare Donations CSR Foundation Others Security expenses Advertisement Demurrages & wharfages Remuneration to Auditors Statutory Audit Tax Audit Other Services Travelling & other expenses Provisions Shortage/damaged material/obsolescence/non-moving items of stores Doubtful advances and claims Doubtful debts Dropped SLTM Project Write-offs Shortage/damaged material/obsolescence/non-moving items of stores Sundries Total Note: Expenditure on Other expenses & provisions not included above and charged to: Expenditure During Construction Travelling Expenses Printing & Stationery Postage, telegrams & telephone Water Charges Advertisement Bank Charges Sundries Total Capital Work in Progress Travelling Expenses Total 3.15 3.76 31.04 (1.29) 0.00 5.20 102.00 17.53 41.72 2.13 2.74 25.63 1.12 2.90 0.47 1.82 6.09 9.09 1.57
Rs Crs
Year ended 31st March, 2009 2.17 3.72 35.79 (12.13) 10.92 4.34 93.02 8.18 42.35 2.37 2.75 32.03 0.98 1.62 0.48
7.91 28.20 12.90 1.01
10.66 21.15 15.53 3.32
0.06 0.01 0.00 0.05
0.12
0.05 0.01 0.01 0.13
0.20
0.46 2.68 0.04 6.01
9.19
3.04 3.12 2.31 1.61
10.08
0.20 37.00 334.63
0.20 34.73 324.46
2.18 0.01 0.29 6.61 1.53 0.47 0.25 11.34 0.00 0.00
2.02 0.02 0.26 2.63 1.36 0.14 0.74 7.17 0.07 0.07
54
Schedule 26 : Interest & Finance Charges

Year ended 31st March, 2010 Interest : Banks - Working capital borrowings and Loans - Loans against Term Deposits 55.71 8.13 63.84 Interest on Income Tax Finance Charges Others Total Note: Expenditure on Interest & finance charges not included above and charged to: Expenditure during construction Interest - Banks Schedule 27 : Prior period adjustments Year ended 31st March, 2010 Claims for finished goods Sale of products Raw Materials Depreciation Other Expenses Other Revenue Repairs & Maintenance Internal Consumption Total 0.00 0.63 0.00 0.00 (0.83) (0.06) (0.63) (6.35) 1.94 3.43 8.34 77.55
Rs Crs
Year ended 31st March, 2009 25.19 61.83 87.02 0.14 0.00 0.31 87.47
0.00
0.03 Rs Crs Year ended 31st March, 2009 (0.15) 0.00 (5.99) 0.32 0.28 (2.98) 3.93 0.00 CR CR DR DR CR DR
DR
CR CR CR CR
(7.24) CR
(4.59) CR
55
Schedule 28 : Accounting Policies & Notes to Accounts
A. SIGNIFICANT ACCOUNTING POLICIES

1.0 GENERAL 1.1 Financial Statements are prepared under the historical cost convention in accordance with fundamental accounting assumptions and Generally Accepted Accounting Principles (GAAP) in India and the relevant provisions of the Companies Act, 1956 including Accounting Standards notified thereunder.
2.0
FIXED ASSETS 2.1 2.2 Fixed assets are stated at historical cost less depreciation. Contributions made by the company towards the cost of fixed assets owned by the State / Central Government are grouped together with similar assets owned by the company with appropriate disclosure thereof. Expenditure attributable / relating to construction, to the extent not directly identifiable to any specific Plant Unit, is kept under Expenditure During Construction for allocation to Fixed Assets and is grouped under Capital Work-in- Progress.
2.3
3.0
INVESTMENTS 3.1 3.2 Current investments are carried at lower of cost and fair value. Long term investments are carried at cost. Diminution in value, other than temporary, is provided for.
4.0
INVENTORIES 4.1 4.2 Inventories are valued at lower of cost and net realizable value. The basis of determining cost is:
4.2.1 Finished / Semi-finished goods - Weighted Average cost 4.2.2 Raw material, Stores & Spares, Loose Tools - Monthly weighted average cost and those in transit at cost. 4.3 5.0 Obsolete / Surplus / Non-moving inventory are adequately provided for.
REVENUE RECOGNITION 5.1 5.2 Sales are recognized when all significant risks and rewards of ownership have been transferred to the buyer. Export incentives under various schemes are recognized as Income on certainty of realisation.
6.0
CLAIMS 6.1 Claims against outside agencies are accounted on certainty of realisation.
56
7.0
FOREIGN CURRENCY TRANSACTIONS 7.1 7.2 Foreign currency monetary items are recorded at the closing rate. Exchange differences arising on account of settlement / conversion of foreign currency monetary items are recognised as expense or income in the period in which they arise.
8.0
EMPLOYEE BENEFITS 8.1 Actuarial gains and losses on defined benefit plans are recognised during the year.
9.0
DEPRECIATION AND AMORTISATION 9.1 Depreciation is provided on straight line method (SLM), up to full value of the cost of asset over the specified period derived in accordance with the provisions of Schedule XIV of the Companies Act, 1956, except the following: 9.1.1 Assets costing up to Rs. 5000/- are fully depreciated in the year of capitalisation. 9.1.2 Depreciation on the following categories of assets is provided up to full value of the cost of asset on SLM over the period of their useful life based on the Managements estimate given in brackets. Photo Copiers & Fax Machines, Telecom Equipment (5 years); Cranes, Slag Pot Carriers, Audio & Visual Equipment (10 years); Other Office Equipment, Earth Moving Equipment, Forklift Trucks, Air Conditioners, Refrigerators, Water Coolers, Air Coolers, Freezers (7 years); Cars (6 years); Safety Equipment, Other light vehicles (8 years); Computers [including system Software] (4 years); Coke Ovens & Coal Chemical Plant (15 years). 9.1.3 Contributions made by the company towards the cost of fixed assets owned by the State / Central Government are depreciated over the estimated period of their utility or five years, whichever is less. 9.2 Mining lease rights are amortised over the period of lease.
10.0 BORROWING COSTS 10.1 Borrowing costs incurred for obtaining assets which take more than 12 months to get ready for its intended use are capitalised to the respective assets wherever the costs are directly attributable to such assets and in other cases by applying weighted average cost of borrowings to the expenditure on such assets. 10.2 Other borrowing costs are treated as expense for the year.
11.0 PRIOR PERIOD ADJUSTMENTS 11.1 Items of Income / Expenditure which arise in the current period as a result of errors or omissions in the preparation of Financial Statements of one or more prior periods, exceeding Rs. 5,00,000 /- in value, in each case are treated as prior period adjustments.
57
RASHTRIYA ISPAT NIGAM LIMITED Schedule 28 Contd...
B. NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31st March, 2010 1.0 BALANCE SHEET
1.1 1.1.1 FIXED ASSETS Land at a cost of Rs 39.99 Crs (Previous year Rs 39.99 Crs) is being held in the name of President of India. The Company is holding Power of Attorney issued by Govt. of India for utilisation of the land acquired for the Project and related purposes incidental thereto. Land includes 358.3042 acres (Previous year 358.0571 acres) allotted to various agencies on lease basis. Sale deeds in respect of the following assets are yet to be executed: a) b) c) d) e) f) 1.1.4 a) b) Stockyard at Chennai Office buildings at New Delhi Office buildings at Ahmedabad Residential buildings at Kolkata Stockyard at Hyderabad Office Building at Bangalore Rs. Rs. Rs. Rs. Rs. Rs. 2.37 Crs 1.19 Crs 0.18 Crs 0.95 Crs 1.00 Crs 3.60 Crs (Previous Year Rs. 2.37 Crs) (Previous Year Rs. 1.19 Crs) (Previous Year Rs. 0.18 Crs) (Previous Year Rs. 0.95 Cr) (Previous Year Rs.1.00Crs) (Previous Year Rs. NIL)
1.1.2 1.1.3
Fixed assets (Gross Block) include assets costing Rs. 10.05 Crs (Previous year Rs.10.05 Crs) not owned by the Company which were depreciated in full as per the accounting policy 9.1.3. Fixed Assets include Rs. 0.64 Crs (Credit) [ Previous year Rs.0.39 Crs (Debit) ] representing Net Exchange Rate Variation for the year in respect of foreign currency liabilities with regard to acquisition of fixed assets prior to 1st April 2004.
1.1.5 1.1.6
Main plant units, including Mills, constitute "Continuous process plant". Borrowing costs included in Capital Work in Progress (Schedule - 07) during the year Rs. NIL (Previous year Rs. 0.03 Crs) . INVESTMENTS Joint Venture Entities Details of Company's share of ownership interest, assets, liabilities, income, expenses, contingent liabilities and capital commitments in the joint venture entities, all incorporated in India, are given below : Rs Crs Name of the Joint Venture Entitity Percentage of Companys ownership Interest 50.00 14.29 Assets Liabilities Income Expenditure Contingent Liabilities Capital Commit -ments
1.2 1.2.1
1. RINMOIL Ferro Alloys Pvt Ltd 2. International Coal Ventures Pvt Ltd
* *
* *
* *
* *
* *
57.93 499.58
(*) The accounts of the respective joint ventures for the Financial Year 2009-10 are not yet prepared. 58
28th Annual Report 2009-10 1.3 CURRENT ASSETS, LOANS & ADVANCES, CURRENT LIABILITIES & PROVISIONS 1.3.1 1.3.1.1 INVENTORIES Quantities of Closing Stock of finished / semi-finished goods have been adopted as per physical verification except in the case of Calcined Lime, Liquid Oxygen, Liquid Nitrogen, Argon gas, Oxygen gas, Nitrogen gas, Magnesite Bricks, Calcium Carbide Sludge, Coke Sludge, Coke Dust and Stocks of Calcined Lime at open yard amounting to Rs. 8.68 Crs (Previous Year Rs. 8.13 Crs) which are as per book balances. 1.3.1.2 Stocks & Sales Quantity in Tonnes * Value Rupees Crores Pig Iron Blooms Saleable Steel 233181 (155456) 637.57 (349.64) 3006627 (2503337) 9210.20 (9226.38) 188688 (233181) 499.94 (637.57) Sundries * Coke & Coke Products 259190 (135365) 288.18 (80.49) ----401498 (259190) 431.35 (288.18) Others 328018 (310080) 177.59 (131.09) 1802271 (1668893) 350.01 --1708.36 (791.71) --10634.63 Total
Opening stock
Quantity
125267 (65052)
182790 (81864) 425.89 (133.18) 100735 (94495) 226.92 (253.54) 91116
Value
179.13 (97.31)
Sales
Quantity
504066 (245673)
Value
847.50 (614.28)
(316.43) (10410.63) 268686 (328018) 128.82 (177.59) --1293.01 (1708.36)
Closing stock
Quantity
14637
(125267) (182790) Value 26.84 (179.13) 206.06 (425.89)
(*) Quantity for Argon Gas, Oxygen Gas and Nitrogen Gas is in Thcum. Note: (i) (ii) (iii) (iv) Figures in brackets are for previous year. Closing stock includes 72381.883 tonnes (Previous year 84809.251 tonnes) in the custody of Consignment / Handling Agents. Figures of closing stock are after adjustment for internal consumption, transfers to capital works, shortages / excesses. Others include By-products, Sale of Power and Iron & Steel Scrap.
1.3.1.3 In line with industry practice, no credit is taken for the value of material in process except those lying at mills. 1.3.1.4 No credit is taken in the accounts for the stock of run of mines ore and rejects at Mines. 1.3.1.5 Since the Coke Breeze used for internal consumption, the same has been valued at 60% of the production cost of BF coke. 1.3.1.6 Coke and other By products are valued at net realisable value, wherever cost is not determinable and at cost, where net realisable value is not available, except in the case of Stock of BF Granulated slag at dump yard for which no value is assigned.
59
RASHTRIYA ISPAT NIGAM LIMITED 1.3.1.7 The stock of iron scrap and steel scrap has been considered in the accounts on the basis of visual survey / estimates and are valued at 75 % and 90 % respectively, at lower of the cost of Pig Iron and of the domestic net realisable value of Pig Iron. 1.3.2 CASH AND BANK BALANCES a) b) Term Deposits Receipts of value of Rs. 333.64 Crs. (Previous Year Rs. 1290 Crs) pledged with bankers as security against Loans availed by the company. Term Deposits Receipts of value of Rs. 3.81 Crs. (Previous Year Rs. 3.65Crs) pledged with bankers as security to extend Letter of Credit facility by banker to a supplier. 1.3.3 LOANS & ADVANCES
1.3.2.1 Term Deposits with scheduled banks disclosed under Cash and Bank balances (Schedule - 12) includes:
1.3.3.1 Housing / Vehicle Loans to employees are reckoned as unsecured and considered good. 1.3.3.2 Loans and advances, Sundry Debtors / Creditors, Stock with Contractors / Others, Cenvat Recoverable are subject to reconciliation / confirmation. 1.3.4 CURRENT LIABILITIES & PROVISIONS 2006 Particulars i) The amounts due thereon remaining unpaid to any supplier as at the end of the year Principal Interest ii) Payments made beyond the appointed day and interest thereon during the year iii) The amount of interest due and payable for the period of delay in making payments but with out adding the interest specified in the Act. iv) The amount of interest accrued and remaining unpaid at the end of the year v) The amount of further interest remaining due and payable in the suceeding year until the date such interest is actually paid 0.08 Nil Nil Nil Nil Nil Nil Nil Nil Nil Amount (Rs Crs) 2009-10 2008-09
1.3.4.1 Information relating to 'Supplier' under the provisions of Micro,Small and Medium Enterprise Development Act,
Not Not Applicable Applicable
1.3.4.2 Other liabilities (Schedule - 15) include net liability of Rs 388.90 Crs (Previous Year Rs. 342.81 Crs) towards provision on account of pay revision effective from 01.01.2007 to the Employees. 1.3.4.3 Disclosures of provisions required by Accounting Standard (AS) 29 ' Provisions, Contingent Liabilities and Contingent Assets': Particulars Opening Balance as on 01.04.2009 2.11 Additions during the year 0.32 Rs Crs Utilised during Closing Balance the year as on 31.03.2010 0.00 2.43
Provision for Mines Closure Expenditure
60
28th Annual Report 2009-10 1.4 1.4.1 CONTINGENT LIABILITIES Claims against the company not acknowledged as debt (net of advances paid): Particulars Contractors / Suppliers / Customers Local Authorities - State Govt. Sales Tax matters * Income Tax Customs / Excise duty R & D Cess Others As at 31st March, 2010 686.77 9.06 1187.53 2.04 86.43 3.38 6.38 Rs Crs As at 31st March, 2009 545.54 9.17 914.87 0.00 68.81 3.38 0.49
(*) No liability is expected to arise as the movement of goods were on stock transfer and Sales Tax has been paid on eventual sales. 1.4.2 1.4.3 1.4.4 1.4.5 Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 6433.39 Crs (Previous Year Rs 7412.47 Crs). Claims in Courts in connection with Land Acquisition : Liability towards reimbursement of excise duty on structural works wherever applicable. - Amount not ascertainable. - Amount not ascertainable.
Amounts paid towards disputed demands included under "Advance recoverable" for which no liability has been set up. Rs Crs Particulars Income Tax Income Tax on foreign suppliers & TDS Sales Tax Customs Dut Railways As at 31st March, 2010 56.36 23.85 87.59 5.67 0.71 As at 31st March, 2009 91.96 23.85 86.93 5.87 0.71
1.4.6 2.0
Show cause notices issued by various Government Authorities are not considered as obligations.
PROFIT & LOSS ACCOUNT 2.1.1 Power and fuel does not include the cost of generation of power and production of certain fuel elements in the plant which are internally consumed. The related expenses have been included under the primary heads of account. Earning Per Share (EPS) 2009-10 Net Profit as per P&L Account Preference Dividend and Tax thereon Net Profit attributable to Equity Shareholders Weighted average number of Equity Shares outstanding during the year v) Face value per share vi) Basic and diluted EPS 61 i) ii) iii) iv) (Rs Crs) (Rs Crs) (Rs Crs) 796.67 239.78 556.89 2008-09 1335.57 240.57 1095.00 48898462 1000 223.93
2.1.2
(No.of shares) 48898462 (Rupees) 1000 (Rupees) 113.89
RASHTRIYA ISPAT NIGAM LIMITED 2.1.3 The petition filed before Honourable Supreme Court, against the ruling of Honourable Authority for Advance Ruling, on the subject of Income Tax (MAT) liability under Section 115 JB of Income Tax Act, 1961, amounting to Rs.109.63 Crs which was provided during the year 2006-07, is not withdrawn with a veiw to approach Committee on Disputes again for their clearance in case of any developments on the subject. 2.1.4 In compliance with Accounting Standard (AS) 22 on 'Accounting for Taxes on Income' the Net Deferred tax liability of Rs. 97.82 Crs (Previous Year Rs.124.49 Crs) has been provided during the current year. Components of Deferred Tax Liabilities and Deferred Tax Assets are as under: Rs Crs Particulars Deferred Tax Liabilities Difference between book and tax depreciation Sub-Total Deferred Tax Assets Provision for Gratuity Provision for Doubtful Debts, Advances, Claims, Interest Other Deferred Tax Assets Sub-Total Net Deferred tax Liability 2.1.5 (B) (A) - (B) (A) As at 31st March, 2010 As at 31st March, 2009
157.89 157.89 23.99 23.38 12.70 60.07 97.82
174.94 174.94 11.74 23.29 15.42 50.45 124.49
As per section 441A of the Companies Act 1956, cess on turnover is leviable. Government of India has not yet framed any rules / guidelines in this regard and hence no amount has been provided and / or paid. Value of raw materials and stores & spares consumed 2009-10 Raw Materials Rs Crs % 43.56 56.44 100.00 Stores & Spares Rs Crs 411.88 54.60 466.48 % 88.30 11.70 100.00 Raw Materials Rs Crs 2647.62 3248.63 5896.25 % 44.90 55.10 100.00 2008-09 Stores & Spares Rs Crs 430.92 70.31 501.23 % 85.97 14.03 100.00
2.1.6
(a) Indigenous (b) Imported Total 2.1.7
2411.30 3123.81 5535.11
Excise Duty of Rs. 2.72 Crs (Credit) [Previous year Rs. 12.13 Crs (Credit)] disclosed in Other Expenses & provisions (Schedule - 25) comprises of Excise Duty provided on Accretion / Depletion of Inventories of Semi / Finished Goods, Excise Duty recovered on sale of Obsolete Stores & Spares scrap and Other Excise duty payments /adjustments etc. Rs Crs 2009-10 2008-09
2.1.8
Expenditure in foreign currency (a) Technical consultation fee / know-how (b) Interest (c) Others 62
2.51 3.33 1.80
0.58 0.00 1.55
28th Annual Report 2009-10 Rs Crs 2009-10 2008-09 2.1.9 Earnings in foreign exchange (a) Export of goods (on FOB basis) (b) Others Value of imports during the year calculated on CIF basis (a) Spares (b) Raw materials (c) Capital Goods Particulars of Directors' remuneration (a) Salaries & allowances * (b) Company's contribution to provident fund * (c) Leave travel concession (d) Gratuity Total * Includes arrears of Rs. 0.21 Crs ( Previous year Rs. 0.04 Cr). 2.1.12 Expenditure on public relations (a) Employees' remuneration & benefits (b) Expenditure on institutional publicity Total 2.1.13 Employee Benefits 350.94 0.79 78.32 0.23
2.1.10
112.19 101.05 2689.88 3552.86 755.53 356.64
2.1.11
1.13 0.08 0.01 0.00 1.22
0.44 0.05 0.02 0.04 0.55
1.38 1.57 2.95
1.35 2.19 3.54
2.1.13.1 An amount of Rs. 5.74 Crs (Previous Year Rs 5.94 Crs) recognised in the Profit and Loss Account and Rs 0.16 Crs (Previous Year Rs 0.22 Crs) in Capital Work in Progress towards Superannuation Benefit Scheme (Post Employment Benefit - Defined Contribution Plan). 2.1.13.2 General Description of the Post Employment Benefits-Defined Benefit Plans Provident Fund Company pays fixed contribution to Provident Fund, at predetermined rates, to a separate trust, which invests the Funds in permitted securities. On Contributions, the trust is required to pay a minimum rate of interest, to the members, as specified by Govt. of India. The obligation of the Company is limited to the shortfall in the rate of interest on the Contribution based on its return on investments as compared to the declared rate. Payable to employees, who render continuous service of 5 years or more, on separation, at 15 days of last drawn pay for each completed year of service. The accumulated earned leave and half pay leave is payable on separation, subject to maximum permissible limit. During the service period, encashment of accumulated earned leave is also allowed upto 30 days once in a calander year. 63
Gratuity
Compensated Absences
RASHTRIYA ISPAT NIGAM LIMITED Post Retirement Medical Benefits Retirement Settlement Benefits Available to retired employees at Company's hospital and / or under the Health Insurance Policy. The retired employees, their dependents, as also the dependents of the employees expired while in service are entitled for travel and transport expenses to their place of permanent residence. At the time of retirement, employees will be given 10 Gms. of gold. Monthly payments, till the notional date of superannuation, to employees separated upon disablement /legal heirs of deceased employees at their option who fulfill the criteria of prescribed amount of deposit. The employees who completes 25 years of service, will be given 150 Gms of silver coin. Rs Crs Long Employee Service Family Benefit Scheme Award 5.11 (4.40) 0.30 (0.22) 0.36 (0.35) 1.28 (0.14) 0.00 (0.00) 7.05 (5.11) 53.33 (45.90) 9.09 (7.56) 3.46 (3.41) 6.07 (3.08) -7.80 (-6.62) 64.15 (53.33)
Employee Family Benefit Scheme
Long Service Award
2.1.13.3 Reconciliation of present value of defined benefit obligations Compensated Retirement Gratuity Medical Absences Benefits 428.00 253.00 (184.61) 27.35 (20.54) 16.19 (13.72) 93.87 (60.45) -43.41 (-26.32) 347.00 (253.00) 96.84 (83.59) 4.03 (3.56) 6.76 (6.66) 3.38 (3.59) -0.68 (-0.56) 110.33 (96.84) Retirement Settlement Benefits 26.84 (23.08) 1.14 (0.93) 1.86 (1.84) 3.57 (1.25) -0.35 (-0.26) 33.06 (26.84)
Particulars Obligation as at the beginning of the period Service Cost
(314.44) 28.03 (22.11) Interest Cost 29.78 (24.98) Actuarial gains (-) / losses (+) 69.31 (70.80) Benefits paid -5.12 (-4.33) Obligations as at the end of 550.00 the period (428.00)
Note: Figures in the brackets are for previous year. 2.1.13.4 Against present value of gratuity obligation as at 31st March 2010 of Rs. 550.00 Crs (Previous Year Rs 428.00 Crs), Company has funded a sum of Rs 477.79 Crs (Previous Year Rs 393.45 Crs) through a separate Gratuity Fund which are covered by the Trust's Plan Assets for equal amount. The other defined benefit obligations are unfunded. 2.1.13.5 Reconciliation of fair value of Plan Assets Rs Crs Particulars Balance as at the opening of the period Expected Return Actuarial gains (+) / losses (-) Contributions by the Employer Benefits paid Balance as at the end of the period 64 Gratuity 2009-10 2008-09 393.45 37.41 2.45 49.60 (5.12) 477.79 269.37 28.38 3.73 96.30 (4.33) 393.45
28th Annual Report 2009-10 2.1.13.6 Reconciliation of Present Value of Defined Benefit Obligation and Fair value of Plan Assets Particulars 2009-10 2008-09 Fair Value of Plan Assets Present Value of Defined Benefit Obligation Amount recognised in Balance Sheet (Schedule - 16) as at the end of the period 2.1.13.7 Expenses recognised in the statement of Profit and Loss Account. Compensated Absences 27.35 (20.54) 16.19 (13.72) 93.87 (60.45) 0.00 (0.00) 0.00 (0.00) 137.41 (94.71) 134.51 (92.64) 2.90 (1.92) 0.00 (0.15) Retirement Medical Benefits 4.03 (3.56) 6.76 (6.66) 3.38 (3.59) 0.00 (0.00) 0.00 (0.00) 14.17 (13.81) 13.87 (13.39) 0.30 (0.24) 0.00 (0.18) Retirement Settlement Benefits 1.14 (0.93) 1.86 (1.84) 3.57 (1.25) 0.00 (0.00) 0.00 (0.00) 6.57 (4.02) 6.43 (3.71) 0.14 (0.07) -(0.24) Long Service Award 0.30 (0.22) 0.36 (0.35) 1.28 (0.14) 0.00 (0.00) 0.00 (0.00) 1.94 (0.71) 1.90 (0.70) 0.04 (0.01) 0.00 (0.00) 477.79 550.00 72.21 393.45 428.00 34.55 Rs Crs Employee Family Benefit Scheme 9.09 (7.56) 3.46 (3.41) 6.07 (3.08) 0.00 (0.00) 0.00 (0.00) 18.62 (14.05) 18.22 (14.05) 0.40 (0.00) 0.00 (0.00)
Rs. Crs Gratuity
Particulars Service Cost Interest Cost Actuarial gains (+) / losses (-) Expected Return on Plan Assets Accounting Estimate Change on Opening obligation Total to be charged - Employees Remuneration & Benefits Amount charged to : Profit & Loss Account (Schedule - 22) Expenditure During Construction Capital Work in Progress
Gratuity 28.03 (22.11) 29.78 (24.98) 66.86 (67.07) -37.41 (-28.38) 0.00 (0.00) 87.26 (85.78) 85.42 (84.10) 1.84 (1.56) 0.00 (0.12)
Note: Figures in the brackets are for previous year. 2.1.13.8 Effect of one percentage point change in the assumed inflation rate in case of valuation of benefits under post retirement medical benefit scheme Rs Crs Effect of one percentage Effect of one percentage point increase in medical point decrease in medical Particulars cost trend rate cost trend rate 2009-10 On aggregate service and interest cost of post retirement medical benefits On present value of defined benefit obligations as at end of the period 65 0.20 2008-09 0.17 2009-10 (0.18) 2008-09 (0.16)
5.58
4.86
(5.57)
(4.84)
RASHTRIYA ISPAT NIGAM LIMITED 2.1.13.9 Actuarial assumptions Description As at 31st March 2010 As at 31st March 2009
7% LIC (1994-96) duly modified Upto 30 years of age 3%; Upto 44 years of age 2%; Above 44 years of age 1%. 9%
Discount Rate (per annum) 7.5% Mortality rate LIC(1994-96) duly modified Withdrawal rates (per annum) Upto 30 years of age 3%; Upto 44 years of age 2%; Above 44 years of age 1%. Estimated Rate of Return on Planned Assets 9%
Medical Cost Trend Rates (Per Annum)
6% of Hospital Cost and Medi-claim Premium
6% of Hospital Cost and Medi-claim Premium
The estimate of future salary increases considered in actuarial valuation takes into account inflation rate, seniority, promotion and other relevant factors on long term basis.
3.0
GENERAL
3.1.1 The Company's business is construed as one business segment which comprises of mainly production of Steel products, whose associated risks and returns are predominantly the same. Further, the Company has no geographical segments which are subject to different risks and returns. Hence no separate disclosure in terms of Accounting Standard (AS) 17 on 'Segment Reporting' is considered necessary. Disclosure regarding related parties for the year 2009-10 Nature of Relationship (a) Joint Ventures Name of the Related party RINMOIL Ferro Alloys Pvt Ltd International Coal Ventures Pvt Ltd Name of the Related party Shri Shri Shri Shri Shri Shri Shri P .K.Bishnoi Y. Manohar C.G.Patil (upto 28.02.2010) K.S. Shankar (upto 31.10.2009) Umesh Chandra A.P Choudhary (w.e.f 01.06.2009) . P .Madhusudan (w.e.f 02.11.2009) Rs. Crs
3.1.2
Nature of Relationship (b) Key Management Personnel
The details of transactions between the Company and the related parties, during the year, are given below:
Joint venture Nature of Transaction 1. Investments 2. Other Loans/advances Key Management Persons
As at 31st As at 31st As at 31st As at 31st March 2010 March 2009 March 2010 March 2009 0.20 0.65 0.00 0.00 -0.03 -0.01
Schedule No and/or Account Head of the Financial statements 09 - Investments - Trade 14 - Loans & Advances
For the Year ended 31st March 2010 1. Remuneration 2. Miscellaneous Expenses -0.30 31st March 2009 -0.00
For the Year ended 31st March 2010 1.23 -31st March 2009 0.58 -22 - Employee remuneration & benefits 25 - Other Expenses & Provisions
66
28th Annual Report 2009-10 3.1.3 Since the Lease transactions of the Company, are incidental to the Company's main business of production & sale of Iron & Steel products, specific disclosures as per Accounting Standard (AS) 19 on 'Leases', are not considered necessary. The entire plant is considered as a Cash Generating Unit. As Recoverable amount of the Cash Generating Unit, being its value in use, is in excess of its carrying amount, there is no impairment loss in terms of the Accounting Standard (AS) 28 'Impairment of assets'. Licensed capacity, installed capacity & actual production (Tonnes in '000s) 2009-10 Product (a) (b) (c) (d) Wire Rods Light&Medium Merchant Products-Bar Mill Saleable Billets Medium Merchant Structural Mill Total (e) (f) (g) Pig Iron Granulated Slag Coke ovens By-products Installed Capacity 850 710 246 850 2656 556 1440 186 Actual Production 1016 870 100 1073 3059 408 1334 169 Installed Capacity 850 710 246 850 2656 556 1440 186 2008-09 Actual Production 972 825 75 748 2620 322 1381 140
3.1.4
3.1.5
Note : Licensed capacity not applicable in terms of Government of India notification No. S.O.477(E), dated 25th July, 1991.
3.1.6
Previous year's figures have been rearranged / regrouped wherever necessary to confirm to current year's classification.
67
RASHTRIYA ISPAT NIGAM LIMITED 4.0 CASH FLOW STATEMENT 2009-10 A. Cash flow from Operating activities Net Profit / (Loss) before taxation Add / (Less) Adjustments for: Depreciation Interest and Finance Charges Provisions Unrealised Foreign Exchange (Gain) /Loss (Profit)/Loss on sale of fixed assets Finished goods consumed for capital jobs Interest Income Operating Profit Before working capital changes Adjustments for (Increase) / Decrease in Inventories (Increase) / Decrease in Sundry debtors Decrease in Loans & Advances Increase in Liabilities Cash generated from operating activities Less: Income Tax paid including Fringe Benefit Tax Net cash from / (used in) operating activities B. Cash flow to Investing activity Purchase of Fixed Assets Investments Proceeds from sale of Fixed Assets Interest received Net cash from / (used in) investing activity C. Cash flow to Financing Activity Proceeds from/(Repayment of) Secured Loans Proceeds from/(Repayment of) unsecured Loans Interest and Finance charges Dividend Paid Dividend Tax Paid Net cash from / (used in) Financing Activity Net Increase / (decrease) in Cash & Cash equivalents (A+B+C) Opening Balance of Cash & Cash equivalents Closing Balance of Cash & Cash equivalents (Represented by Cash & Bank Balances - Schedule 12 ) Notes: 1 2 3 4 1247.65 277.17 77.55 (107.14) (11.21) (1.02) (94.90) (534.71) 853.39 763.76 10.09 204.67 281.99 2113.90 (491.00) 1622.90 Rs Crs 2008-09 2026.59 240.78 87.47 (371.37) 47.85 (0.47) (80.87) (787.21) 1162.77 (1454.13) (97.86) 388.80 382.23 381.81 (716.04) (334.23)
(3276.58) (0.20) 35.28 656.22 (2585.28) (500.44) 725.23 (74.22) (339.18) (57.64) (246.25) (1208.63) 6624.17 5415.54
(2038.63) 0.00 2.29 820.73 (1215.61) 574.94 (7.91) (92.13) 0.00 0.00 474.90 (1074.94) 7699.11 6624.17
This statement has been prepared under the "Indirect Method" as set out in the Accounting Standard 3. Significant Accounting Policies and Notes to Accounts (Schedule -28) form part of the Cash Flow Statement. Cash and Cash equivalent balances as referred at note 1.3.2.1 are not available for use. Previous year's figures have been rearranged / regrouped wherever necessary to confirm to current year's classification.
As per our report of even date For B.V. RAO & CO Chartered Accountants Regn. No (F.R.N) 003118S
For and on behalf of Board of Directors
Sd/(CA A.R. UNNI)

68

5.0 Balance Sheet Abstract and Companys General Business Profile I. Registration Details CIN Registration No. Balance Sheet Dale 3 1 0 U 2 7 1 0 9 A P 3 4 0 3 2 4 0 1 0 Year 1 9 8 2 G O I 0 0 3 4 0 4
State Code
0 1
Date II.
Month
Capital raised during the year (Amount in Rs. Lakhs) Public Issue N I Bonus Issue N I L L Rights Issue N I L
Private Placement N I L
III.
Position of Mobilisation and Deployment of Funds (Amount in Rs. Lakhs) Total Liabilities 1 8 5 2 3 2 1 Total Assets 1 8 5 2 3 2 1
Sources of Funds Paid-up Capital 7 8 2 7 3 2 Reserves & Surplus 5 0 5 7 6 8
Secured Loans 4 0 7 2 8
Unsercured Loans 8 2 5 2 7
Application of Funds Net Fixed Assets 8 9 7 2 3 0 Investments 2 5 Miscellaneous Expenditure 2 N I L
Net Current Assets 5 2 4 2 8
Accumulated Loss N IV. I L
Performance of Company (Amount in Rs. Lakhs) Turnover 1 0 6 3 4 6 3 Total Expenditure 9 3 1 9 0 3
Profit Before Tax 1 2 4 7 6 5
Profit After Tax 7 9 6 6 7
Earnings per Share in Rs. 1 V. 1 4
Dividend (%) Equity: 1.63 Preference: 7
Generic Names of Three principal Products/Services of Company (As per Monetary Terms) Item Code No. (ITC Code) Product Description Item Code No. (ITC Code) Product Description Item Code No. (ITC Code) Product Description 7 2 W I 7 2 P I 7 2 1 3 9 1 0 9
R E 0 G 1 1 1 I 4 2
R O D 0 0 0
R O N 0 0 9
R E B A R S
69
Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Certification
We, P Bishnoi, Chief Executive Officer and Chairman-cum-Managing Director and P Madhusudan, Chief Financial .K. . Officer and Director (Finance) of RINL, to the best of our knowledge and belief, certify that: 1. We have reviewed the Balance Sheet and Profit and Loss Account and all its Schedules and Notes on Accounts, as well as the cash flow statements and the Directors' Report; 2. Based on our knowledge and information, these statements do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the statements made; Based on our knowledge and information, the financial statements, and other financial information included in this Report, present in all material respects, a true and fair view of the Company's affairs, the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report, and are in compliance with the existing Accounting Standards and / or applicable Laws and Regulations; To the best of our knowledge and belief, no transactions entered into by the Company during the year are fraudulent, illegal or violative of the Company's Code of Conduct; 5. We have disclosed based on our most recent evaluation, wherever applicable, to the Company's Auditors and the Audit Committee of the Company's Board of Directors (and persons performing the equivalent functions): (a) All deficiencies in the design or operation of internal controls, which could adversely affect the company's ability to record, process, summarize and report financial data, and have identified for the Company's Auditors, any material weaknesses in internal controls over financial reporting including any corrective actions with regard to deficiencies; (b) Significant changes in internal controls during the year covered by this Report; (c) All significant changes in Accounting Policies during the year, if any, and that the same have been disclosed in the notes to the financial statements; 6. We further declare that all Board Members and Senior Managerial personnel have affirmed compliance with the Code of Conduct for the current year.
3.
4.
(P. Madhusudan)
CFO & Director (Finance)
( P. K. Bishnoi)
CEO & Chairman-cum-Managing Director
Place : Visakhapatnam Date : 08-06-2010 70
B.V. RAO & Co.

Chartered Accountants
AUDITORS' REPORT
To the Members of Rashtriya Ispat Nigam Limited

1. We have audited the attached Balance Sheet of Rashtriya Ispat Nigam Limited, as at 31st March 2010, and also the Profit and Loss account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditor's report) Order, 2003, issued by the Central Government of India in terms of Sub-section (4A) of Section 227 of the Companies Act 1956, and on the basis of such checks as we consider appropriate and according to the information and explanations given to us, we enclose in the annexure a statement on the matters specified in paragraph 4 and 5 of the said Order. 4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that : (a) We have obtained all the information and the explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit; (b) In our opinion, proper books of Accounts as required by law have been kept by the company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us; (c) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account and with the returns from branches; FF 1, 49-28-12, Satyalakshml Vinayaka Towers, Madhuranagar, Visakhapatnam - 530 016 Phone : Off : 0891 2549707 / 2549561, Res : 0891 2799234 / 25518297, Mobile : 93931 03175, 93931 00103 Branch Office at Hyderabad 71
B.V. RAO & Co.

(d) In our opinion, the Balance Sheet, Profit and Loss Account and cash Flow Statement dealt with by this report, read together with note 1.3.1 in schedule 28 to accounts, comply with Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956; (e) The Provisions of section 274(1) (g) are not applicable to Government Companies vide Notification No. G.S.R. 829 (E) dated 21-10-2003 as declared by the Central Government; (f) With regard to the Cess payable under Section 441 A, the company, vide note 2.1.5 in Schedule 28 to the Accounts, had neither provided nor paid any amount, as the Government of India had not framed any rules/guidelines in this regard. (g) In our opinion and to the best of our information and according to the explanations given to us, the said accounts, subject to and read together with the significant Accounting Policies and Notes forming part of accounts given by way of Schedule 28 to the Accounts, give the information required by the companies Act 1956, in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India; (i) (ii) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March 2010; In the case of the Profit and Loss Account of the PROFIT for the year ended on that date; and
(iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
Place : Visakhapatnam Date : 24th June 2010
FOR B.V. RAO & Co. Chartered Accountants Regd. No. (F.R.N) 003118S Sd/(CA A.R. UNNI) Partner M.No : 07447
FF 1, 49-28-12, Satyalakshml Vinayaka Towers, Madhuranagar, Visakhapatnam - 530 016 Phone : Off : 0891 2549707 / 2549561, Res : 0891 2799234 / 25518297, Mobile : 93931 03175, 93931 00103 Branch Office at Hyderabad 72
B.V. RAO & Co.

ANNEXURE TO AUDITORS' REPORT

Referred to in paragraph 3 of our Report of even date 1. Fixed Assets (a) The Company has maintained proper records showing full particulars including quantative details of fixed assets. (b) All assets have not been physically verified by the management during the year but there is a regular programme of verification which in our opinion is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification. (c) 2. No substantial part of fixed assets of the company has been disposed off during the year.
Physical verification and reconciliation of Inventories (a) Inventories have been physically verified during the year by the management, except stocks with custodians referred to in Note No. 1.3.1.1 of the Notes to Accounts, which are adopted based on the book value amounting to Rs. 8.68 crores (previous year Rs.8.13 crores) out of the total reported stock of Rs. 2451.52 crores (previous year Rs.3215.28 crores). In respect of stores and spares, company has a regular programme of verification in a phased manner, which in our opinion, is adequate and reasonable having regard to the nature and location of stocks. (b) The procedure for physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business. (c) The Company is maintaining proper records of inventory. It is observed that no material discrepancies have been noticed on physical verification.
3.
Loans and Advances to parties covered in register maintained under section 301 of the Companies Act, 1956. The Company had neither granted nor taken any loans, secured or unsecured, to / from companies / firms or other parties covered in the register maintained under Section 301 of the Act ibid. In view of this, clauses (b), (c), (d) and (e) of paragraph 4(iii) of the order are not applicable. .. .Caro Report continued..2..
B.V. RAO & Co.

..Caro Report Page..2.. 4. Internal Control Procedure In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items purchased are of special nature and suitable alternative sources do not exist for obtaining comparable quotations, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not noticed continuing failure to correct any major weaknesses in the internal control system. 5. Transactions to be entered into Register maintained under Section 301 of the Act, ibid. In our opinion and according to the information and explanations given to us, the transactions that need to be entered in the Register maintained under section 301 of the companies Act, 1956 have been so entered. 6. Acceptance of Deposits from Public The Company had not accepted any deposits from the public. Therefore, the directives issued by the Reserve Bank of India and the provisions of Section 58A & 58AA of the Companies Act, 1956 and the rules framed there under are not applicable. 7. Internal Audit System In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. 8. Maintenance of Cost Records We have broadly reviewed the books of accounts maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of Cost Records under Section 209(1) (d) of the Companies Act, 1956 and we are of the opinion that prima-facie the prescribed accounts and records have been made and maintained in respect of the applicable products. With respect to Power Generation, Government of India has notified Cost Audit for the year under audit. We are informed that compilation of cost accounting records is in progress. Hence, we have not examined the cost records relating to power generation. We have not carried out a detailed examination of the records with a view to determine whether they are accurate and complete. .. .Caro Report continued..3..
B.V. RAO & Co.

9. Payments and remittances to Statutory Authorities (a) According to the records of the Company, undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material Statutory dues applicable to it have been generally deposited regularly with the concerned authorities. On a broad examination and according to the information and explanations given to us, we have not come across any undisputed amounts payable in respect of the aforesaid dues that were in arrears as at 31st March 2010, for a period of more than six months from the date they became payable. (b) According to the explanations given to us, Company is not required to make any contribution under the Employees' State Insurance Act. (c) According to the information and explanations given to us, the disputed dues of Income Tax, Sales Tax, Customs Duty, Excise Duty and Cess which have not been deposited as at 31.03.2010 are as follows : Name of the Statute Nature of dues Forum where dispute is pending CESTAT Honorable High Court of Andhra Pradesh CESTAT Amount (Rs Crs) 68.33
Customs & Excise Act -do-
Excise duty and Cenvat -do-
8.61 7.16
-doThe Andhra Pradesh General Sales Tax Act & C S T Act -do-
Customs
Sales Tax
STAT
5.18
-do-
Honorable High Court of Andhra Pradesh Tribunal Bench, Agra Addl. Commissioner, Sales Tax, Orissa High Court of Kolkata
1181.97 0.10
UP Trade Tax Act Orissa Sales Tax Act
ST Appeal (Kanpur Branch) Sales Tax
0.28 3.38
R&D Cess Act
R&D Cess
.. .Caro Report continued..4.. FF 1, 49-28-12, Satyalakshml Vinayaka Towers, Madhuranagar, Visakhapatnam - 530 016 Phone : Off : 0891 2549707 / 2549561, Res : 0891 2799234 / 25518297, Mobile : 93931 03175, 93931 00103 Branch Office at Hyderabad 75
B.V. RAO & Co.

10. Accumulated Losses The Company did not have any accumulated losses at the end of the financial year. The Company has not incurred cash losses in this financial year covered by our audit and also in the immediately preceding financial year. 11. Repayment of dues to Banks or Financial Institutions In our opinion and according to the records produced to us, the Company has not defaulted in repayment of its dues to any Financial Institution or Bank during the year. 12. Loan and Advances on the basis of security by way of pledge of Shares etc. In our opinion and according to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 13. Chit Fund or Nidhi / Mutual Benefit Fund / Society In our opinion, the Company is not a chit fund or a nidhi /mutual benefit fund / society. Therefore, the provisions of paragraph 4(xiii) of the order are not applicable to the Company. 14. Trading in Shares etc. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of paragraph 4(xiv) of the order are not applicable to the Company. 15. Guarantee for Loan taken by others We are informed that the Company has not given any guarantee for loans taken by others from banks or financial institutions. 16. Application of Term Loans According to information and explanations given to us, during the year the Company has not availed of any term loan, within the meaning of the paragraph 4(xvi) of the order.
.. .Caro Report continued..5..
B.V. RAO & Co.

17. Usage of Short Term and Long Term Funds According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment and vice versa, 18. Preferential Allotment of Shares According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act ibid, during the year. 19. Issue of Debentures According to the information and as per records, the Company has not issued debentures during the year. 20. End use of money raised by Public Issue According to the information and explanations given to us, the Company has not raised money by public issues during the year. 21. Frauds According to the information and explanations given to us, no fraud on or by the Company has come to our notice or reported to us during the course of our audit.
Place : Visakhapatnam Date : 24th June 2010 For B.V. RAO & CO Chartered Accountants Regn. No (F.R.N) 003118S
Sd/(CA.A.R. UNNI) Partner M.No : 07447 FF 1, 49-28-12, Satyalakshml Vinayaka Towers, Madhuranagar, Visakhapatnam - 530 016 Phone : Off : 0891 2549707 / 2549561, Res : 0891 2799234 / 25518297, Mobile : 93931 03175, 93931 00103 Branch Office at Hyderabad 77
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REPORT ON CORPORATE GOVERNANCE

(A) Company's Philosophy
The philosophy of the company in relation to corporate governance is to ensure Transparency, Disclosures and Reporting that conforms fully with laws, regulations, guidelines, etc. and to promote ethical conduct throughout the organization. RINL believes in conforming to the highest standards of corporate governance in the country. It recognizes that each member of the Board owes his/her first duty for protecting and furthering the interest of the Company.
(B)
Board of Directors Composition of the Board

The Company is managed by the Board of Directors, which formulates strategies, policies and reviews its performance periodically. As per Articles of Association (AOA) of the Company, the number of Directors shall not be less than five and more than fourteen. As on 31st March, 2010, the Board of Directors of the Company comprised a full time Chairman-cum-Managing Director, (i.e. Executive Chairman) holding additional charge of Director(Projects) from 1st April 09 to 31st May '09 and that of Director (Commercial) (from 1st March 2010 to 31st March 2010 and continues to hold charge till the new incumbent joins), four Functional Directors i.e. Director (Operations), Director (Personnel), Director (Projects) and Director (Finance), one Government nominee Director and one Part-time non-official Director (i.e. Independent Director).
Scheduling and selection of Agenda Items for Board/Committee Meetings

The Meetings are convened by giving appropriate advance notice after obtaining approval of the Chairman of the Board / Committee. Detailed agenda, management reports and other explanatory statements are circulated in advance in the fixed agenda format amongst the members for facilitating meaningful, informed and focused decisions at the Meetings. To address specific urgent need, meetings are also being called at a shorter notice. In case of exigencies resolutions are also sometimes passed by circulation. The agenda papers are prepared by the concerned officials, sponsored by the concerned functional Directors and in most cases concurred by Director (Finance) and submitted for obtaining approval of the Managing Director, well in advance. Duly approved agenda papers are circulated amongst the Board Members by the Company Secretary. The Members of the Board/Committee have complete access to all information of the Company. The Board is also free to recommend inclusion of any matter in agenda for discussion. If necessary, senior management officials are called to provide additional inputs to the items being discussed by the Board/Committee.
Recording minutes of proceedings at the Board/Committee Meeting

Minutes of the proceedings of each Board / Committee meeting are recorded. Minutes are approved by the Chairman of the Board / Committee. The confirmed minutes of the proceedings of the meetings are consecutively filed in permanent record form of Minutes Book.
Follow-up mechanism
The guidelines for the Board/Committee Meetings facilitate an effective post meeting follow-up, review and reporting process for the action taken on decisions of the Board and Committee. The follow-up Action Taken Report (ATR) on the decisions / instructions / directions of the Board / Committee is submitted to the Board/Committee regularly.
Board Meetings
The Board meets regularly and is responsible for the proper direction and management of the Company. During the financial year ended March, 31, 2010, six Board Meetings were held on 4th May '09,4th July '09, 28th July '09, 15th Sept '09, 18th Dec '09 and 9th March '10 respectively.
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Composition and Attendance

The composition of the Board, details of attendance etc. are as under : Name of the Directors Category of Directorship No. of Board Meetings attended during 2009-10 Attendance at last AGM No. of other directorship held as on 31.3.2010 # 2
Shri P K Bishnoi
CMD - holding addi-tional charge of Director (Projects) from 01.04.09 to 31.5.09 and charge of Director (Commercial) from 1.3.10 to 31.3.10(continuing)
Yes
Shri Y Manohar Shri K S Shankar** Shri C G Patil** Shri Umesh Chandra Shri A P Choudhury* Shri P .Madhusudan* Shri U P Singh * & ** Shri B S Meena** Dr Dalip Singh* & ** Prof Ramesh Chandra* Shri RSSLN Bhaskarudu** Dr V K Bhalla** Dr Jagat Pal**
WTD WTD WTD WTD WTD WTD Non-ED Non-ED Non-ED Non-ED Non-ED Non-ED Non-ED
6 4 5 6 5 2 1 6 5 3 -1 5
Yes Yes Yes Yes Yes --
NIL NIL 5 NIL NIL NIL 2
---
4 4 NIL
----
----
CMD - Chairman-cum-Managing Director, WTD - Whole-time Director, Non-ED - Non-Executive Director # Does not include Memberships / Office Bearers i.e. Chairman etc. in Institutions / University / Non-Corporate Bodies like Societies etc. Note (*) 1. Shri A P Choudhary, Director (Projects) appointed w.e.f.1st June, 2009 2. Shri P Madhusudan, Director (Finance) appointed w.e.f. 2nd Nov., 2009 3. Shri U P Singh, Jt Secretary (Steel) appointed as Director from 12th Nov. 2009 4. Dr Dalip Singh, Jt Secretary (Steel) appointed as Director w.e.f. 2nd March, 2010 5. Prof. Ramesh Chandra , Independent Director, appointed w.e.f. 3rd August, 2009. (**) 1. The period of tenure (3 years) of Shri RSSLN Bhaskarudu, part-time non-Official Director (Independent Director) was completed on 25th April 2009.
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RASHTRIYA ISPAT NIGAM LIMITED 2. The period of tenure (3 years) of Dr V K Bhalla, part-time non-Official Director (Independent Director) was completed on 28th June, 2009. 3. Shri K S Shankar, Director (Finance) superannuated on 31st Oct. 2009. 4. Dr Dalip Singh, Jt Secretary (Steel) resigned w.e.f. 12th Nov. 2009. 5. Shri U P Singh, Jt Secretary (Steel) resigned w.e.f. 20th Jan. 2010 6. Shri C G Patil, Director (Commercial) superannuated on 28th Feb 2010. 7. Dr Jagat Pal, Independent Director resigned w.e.f. 2nd March, 2010. 8. Shri B S Meena, Spl Secretary and Financial Adviser resigned w.e.f. 31st March 2010. The Board has reserved certain items of governance for its review, including the approval of annual and interim financial results, disposals and joint ventures, as well as material agreements, major capital expenditure, major sale contracts, employees remuneration and perquisites, manpower plans and long term plans for its review and approval. The details of remuneration to whole time Directors are given below : (Value in Rupees) Name of the Director Salaries & Allowances (Rs.) 2041438.00 1963757.00 1701045.00 709015.00 1249442.00 1050653.00 531713.00 *Retirement and other benefits (Rs.) 5870.00 5988.00 5121.00 353042.00 6143.00 5266.00 2540.00 Total (Rs.) 2047308.00 1969745.00 1706166.00 1062057.00 1255585.00 1055919.00 534253.00
Shri P K Bishnoi, CMD Shri Y Manohar, Director (Personnel) Shri C G Patil, Director (Comml) (upto 28.02.2010) Shri K S Shankar, Director (Fin.) (upto 31.10.2009) Shri Umesh Chandra, Director (Oprns) Shri A P Choudhary, Director (Proj.) Shri P Madhusudan, Director (Fin)
(*Retirement and other benefits include Canteen Subsidy and Gratuity paid) The salary of the whole time directors is governed by pay scales and rules of the Government.
Terms and Conditions

The whole time directors are appointed as per Articles of Association of the Company by the President of India, in consultation with the Chairman of the Company for a period of 5 years or till the age of Superannuation or until further orders, whichever is earlier. The appointment may, however, be terminated by either side on three months notice or on payment of three months salary in lieu thereof.
Part-time official Directors

Part-time official Directors are nominated by Government of India as Directors. No remuneration is paid to the Part-time official Directors by the Company.
Part-time non-official Directors (Independent Directors)

The part- time non-official directors (i.e. independent Directors) are appointed by Government of India as Director for a period of 3 years from the date of assumption of charge or until further orders, whichever is earlier. 82
28th Annual Report 2009-10 An amount of Rs.10,000/- is paid to the Part-time non-official Directors as sitting fee which was enhanced to Rs 20,000/- with effect from 18th Dec' 09 for each Board / Board Sub-Committee Meetings attended by them. During the year, the total amount paid to them is as follows : 1. 2. 3. 4. Shri RSSLN Bhaskarudu Dr V K Bhalla Dr Jagat Pal Prof. Ramesh Chandra Rs. Rs. Rs. Rs. 80,000/1,00,000/3,40,000/3,70,000/-
Sitting fees is the only remuneration paid by the Company to the part-time non-official Directors. Board constituted the following Committees with specific responsibilities assigned to each of these Committees.
AUDIT COMMITTEE Composition

The Audit Committee was constituted during the year 2006-07 in line with the OM No.18(8)/2005-GM, dated 16th June 2005 issued by Department of Public Enterprises, Govt. of India. The composition of Audit Committee as on 1.3.2010 was as follows : Dr Jagat Pal Prof. Ramesh Chandra Shri Y Manohar Chairman Member Member Independent Director Independent Director Director (Personnel) - Functional Director
The main functions of the Audit Committee are as follows :

1. Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. Recommending to the Board the fixation of Audit Fees. Approval of payment to Statutory Auditors for any other services rendered by the Statutory Auditors. Reviewing, with the management, the annual financial statements before submission to the Board for approval, with particular reference to : a) b) c) d) e) f) g) 5. 6. Matters required to be included in the Directors' Responsibility Statement to be included in the Board's Report in terms of Clause (2AA) of Section 217 of the Companies Act, 1956; Changes, if any, in accounting policies and practices and reasons for the same; Major accounting entries involving estimates based on the exercise of judgement by Management; Significant adjustments made in the financial statements arising out of audit findings; Compliance with legal requirements relating to financial statements; Disclosure of any related party transactions; Qualifications in the Draft Audit Report;
2. 3. 4.
Reviewing, with the management, the quarterly financial statements before submission to the Board for approval. Reviewing, with the management, performance of Statutory and Internal Auditors, adequacy of the internal control systems. Reviewing the adequacy of the Internal Audit function, if any, including the structure of the Internal Audit Department, staffing and seniority of the official heading the Department, reporting structure coverage and frequency of Internal Audit. 83
7.
RASHTRIYA ISPAT NIGAM LIMITED 8. 9. Discussion with Internal Auditors any significant findings and follow up thereon. Reviewing the findings of any internal investigations by the Internal Auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.
10. Discussion with Statutory Auditors before the Audit commences about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern. 11. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors. 12. To review the functioning of the Whistle Blower Mechanism, in case the same is existing in the Company. 13. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee. 14. To review the follow up action on the audit observations of the C&AG audit. 15. To review the follow up action taken on the recommendations of Committee on Public Undertakings (COPU) of the Parliament. 16. Provide an open avenue of communication between the independent auditor, internal auditor and the Board of Directors. 17. Review and pre-approve all related party transactions in the Company. For this purpose, the Audit Committee may designate a member who shall be responsible for pre-approving related party transactions. 18. Review with the independent auditor the co-ordination of audit efforts to assure completeness of coverage, reduction of redundant efforts, and the effective use of all audit resources. 19. Consider and review the following with the independent auditor and the management : The adequacy of internal controls including computerized information system controls and security, and Related findings and recommendations of the independent auditor and internal auditor, together with the management responses.
20. Consider and review the following with the management, internal auditor and the independent auditor: Significant findings during the year, including the status of previous audit recommendations; Any difficulties encountered during audit work including any restrictions on the scope of activities or access to required information.
Explanation : (i) The term "related party transactions" shall have the same meaning as containing in the Accounting Standard 18, Related Party Transactions, issued by the Institute of Chartered Accountants of India. Explanation : (ii) If the company has set up an Audit Committee pursuant to provision of the Companies Act, the said Audit Committee shall have such additional functions / features as contained in these guidelines. REVIEW OF INFORMATION BY AUDIT COMMITTEE 1. 2. 3. 4. 5. 6. Management Discussion and Analysis of financial condition and results of operations; Statement of significant related party transactions (as defined by the Audit Committee), submitted by Management; Management letters / letters of internal control weaknesses issued by the statutory auditors; Internal Audit Reports relating to internal control weaknesses; The appointment and removal of the Chief Internal Auditor shall be placed before the Audit Committee; and Certification/declaration of financial statements by the Chief Executive i.e. CMD / Director (Finance). 84
28th Annual Report 2009-10 The primary function of the Audit Committee is to assist the Board of Directors in fulfilling its oversight responsibilities by reviewing the financial reports; the Company's systems of internal controls regarding finance, accounting and legal compliance that management and the Board have established; and the Company's auditing, accounting and financial reporting process generally. The powers of the Committee include the following : 1) To investigate any activity within its terms of reference. 2) To seek information from any employee. 3) To obtain outside legal or other professional advice. 4) To secure attendance of outsiders with relevant expertise, if it considers necessary.
Meetings of Audit Committee

During the year, five Meetings of the Audit Committee were held on 25th April, 22nd June, 15th Sept., 17th December, 2009 and 23rd February, 2010 and all the Meetings were attended by all the Members of the Committee. The Company Secretary is also the Secretary to the Audit Committee. The Minutes of the Audit Committee Meetings are also put up to Board in their subsequent Meetings as an Item for information. The Chairman of the Audit Committee apprises the Board about the observations of the Audit Committee during the Board Meeting and also attends the Annual General Meeting of the Company.
High Power Steering Committee (HPSC)

In line with the directions of the Govt of India given, while approving the Expansion Project, the Board of RINL constituted a High Power Steering Committee for overseeing the implementation of Expansion of VSP to 6.3 MT per year Liquid Steel and the composition of the Committee as on 31.3.2010 is as follows : a) b) c) d) e) f) Chairman-cum-Managing Director Joint Secretary, Ministry of Steel Prof Ramesh Chandra (Part-time non-official Director) Director (Finance) Functional Director (In-charge of Projects) Company Secretary : : : : : : Chairman Member Member Member Member Convener
ED (Finance)/GM (Finance) will be an alternate Member in the absence of Director (Finance). HOD of the Projects Division in the rank of ED or GM will be a permanent invitee. During the year, two Meetings of the HPSC were held on 15th Sept. 2009 and 10th March, 2010
Committee for Award of Contracts relating to Project Expansion Contracts

In respect of Expansion Project, to approve award of Contracts / Orders valuing upto Rs.500 Crores, the Board has constituted a Committee called Committee for Award of Contracts relating to Project Expansion Contracts. The composition of the Committee as on 31.3.2010 is as follows : 1. 2. 3. 4. 5. 6. Chairman-cum-Managing Director Director (Finance) Director (In-charge of the Projects Division) / Director (Projects) Part-time non-official Director, RINL (Independent Director) Part-time non-official Director, RINL (Independent Director) Company Secretary : : : : : : Chairman Member Member Member Member Convener
85
Committee for Award of Contracts (CAC)

The composition of the Committee for Award of Contracts as on 31.3.2010 is as follows : 1. 2. 3. 4. 5. 6. Chairman-cum-Managing Director Independent Director Prof. Ramesh Chandra, Independent Director Director (Finance) The concerned Functional Director Company Secretary : : : : : : Chairman Member Member Member Member Convenor
The above Committee is empowered to approve the proposals relating to AMR Schemes and other Contracts of Revenue and Capital Nature under Operational and other requirements for the existing plant and functioning of the Company upto Rs.250 crores. The above Committee is also empowered to approve all Capital expenditure including Additions/Modifications/Replacement of the existing facilities or Expansion of existing facilities in each case (not included in the approved capital budget for the year subject to overall budgetary limit) as per the above limit upto Rs.250 crores. During the year, one Meeting was held on 18th December, 2009.
Committee of Management
With a view to have more flexibility in Operations, a Committee called Committee of Management has been constituted with all the Functional Directors. The composition of the Committee as on 31.3.2010 is as follows : 1. 2. 3. 4. 5. CMD : Director Director Director Director (Personnel) (Operations) (Finance) (Projects) Chairman : Member : Member : Member : Member
The Quorum for the Meeting is Chairman, Director (Finance) and the concerned Functional Director. The above Committee is empowered to approve proposals upto Rs 100 Crores and have full powers for purchase of coal materials like Medium Coking Coal, Boiler Coal, Iron Ore, etc. from Public Sector Undertakings/Government Agencies. During the year Twenty Meetings of COM were held.
(C) Statutory Auditors

M/s B V Rao & Co, Visakhapatnam have been appointed as Statutory Auditors of the Company for the financial year 200910 by the C&AG as per Section 619(2) of the Companies Act, 1956.
(D) Fees to Statutory Auditors

The fee payable to the Statutory Auditors for the year was Rs. 6 lakhs.
(E) General Body Meetings

Particulars of the Annual General Meetings of the Company held during last 3 years : Year 2006-07 2007-08 2008-09 Date 03.09.2007 27.08.2008 01.08.2009 Time 3.00 PM 3.00 PM 3.00 PM 86 Location Admn Building , Vizag Admn Building , Vizag Admn Building , Vizag
(F)
Disclosures
As per the disclosures given by the Directors of the Company, there were no materially related party transactions that have potential conflicts with the interests of the Company at large.
(G)
Means of Communication
Communication is the key to a transparent and fair organization . At VSP all possible means of communication are brought into the system. Various in-house magazines bear testimony , to this. To list a few:
l l l l l l l l
Ukkuvani KM News Vikas Dhara Sugandh Green Leaf Annual Report of the Company. Spandana Sehat
Besides the above, the Company uploads the required information on its website i.e. www.vizagsteel.com.
(H)
Training of Board members

One of the part time non official director attended a training program arranged by the Department of Public Enterprises during the year. In addition, at the Board / Committee Meetings, detailed presentations are made by Senior executives/ Professionals/ Consultants on business related issues, risk assessment etc. facilitating the Board Members to know the details of the same.
(I)
Whistle Blower Policy

The Company has not yet established a Whistle Blower Policy for the employees, Nonetheless, no employee has been denied access to the Audit Committee.
(J)
Certification/declaration of financial statements by the Chief Executive i.e. CMD / Director (Finance).
The CMD and Director (Finance) have provided the certification regarding the financial statements for the year 2009-10.
(K)
Code of Conduct for Members of the Board and Senior Management

The Company is committed to conduct its business in accordance with the highest standards of business ethics and comply with applicable laws, rules and regulations. A code of conduct, evolved and was adopted by the Board applicable to all Members of the Board and Senior Management who have confirmed compliance with the Code of Conduct for the year under review. A copy of the Code has been placed on the Company's website www.vizagsteel.com in addition to intranet portal of the Company Affairs Deptt. A declaration signed by Chairman is given below : "I hereby confirm that: The Company has obtained from the Members of the Board and Senior Management, affirmation that they have complied with the Code of Conduct for Directors and Senior Management in respect of the Financial year 2009-10".
P K Bishnoi
Chairman 87
P.N.Rao & Co.,

COMPANY SECRETARIES
D.No. 30-11-11/2, Dabagardens, Opp. Income Tax Office, Visakhapatnam - 530 020.
& : 2751934
CERTIFICATE ON COMPLIANCE OF GUIDELINES ON CORPORATE GOVERNANCE

To The Members, Rashtriya Ispat Nigam Ltd., Visakhapatnam 1. We have examined all relevant records of Rashtriya Ispat Nigam Limited, a Govt. of India Undertaking (unlisted company), for the purpose of certifying compliance of conditions of Corporate Governance for the financial year ended 31st March 2010 pursuant to the Guidelines on Corporate Governance issued by the Ministry of Heavy Industries and Public Enterprises, Department of Public Enterprises vide their O.M. No.l8(8)/2005-GM, dated 22nd June, 2007, We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of certification. The Compliance of Guidelines on Corporate Governance is the responsibility of the Management. Our examination was limited to the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the Guidelines on Corporate Governance. It is neither an audit nor an expression of opinion on financial statements of the company. Further, this certificate is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. As per the DPE Guidelines on Corporate Governance referred to above, as the Company is having a full time Chairman-cum-Managing Director, the number of Independent Directors are required to be at least one third of the Board of Directors. However, the Board of Directors did not comprise of the required number of Independent Directors during the financial year 2009-10. In our opinion and to the best of our information and according to the explanations given to us and the disclosures made in the Director's Report, we hereby certify that the Company, subject to the above, has complied with the conditions of Corporate Governance as stipulated in the above mentioned OM.
2.
3.
4.
For P.N. Rao & Co. Company Secretaries
Visakhapatnam 4th June 2010

88
(P. NARASINGA RAO) Proprietor CP 2552
P.N.Rao & Co.,

COMPANY SECRETARIES
D.No. 30-11-11/2, Dabagardens, Opp. Income Tax Office, Visakhapatnam - 530 020.
& : 2751934
SECRETARIAL COMPLIANCE REPORT FOR THE FINANCIAL YEAR ENDED 31st MARCH 2010
To The Members, Rashtriya Ispat Nigam Ltd., Visakhapatnam We have examined the registers, records, books and papers of Rashtriya Ispat Nigam Limited, a Govt. of India Undertaking (unlisted Company) as required to be maintained under the Companies, Act, 1956 and the rules made there under, and also the provisions contained in the Memorandum and Articles of Association of the Company for the financial year ended on 31st March 2010. In our opinion and to the best of our information and according to the examinations carried out by us and explanations furnished to us by the Company, its Officers, we certify that in respect of the aforesaid financial year : 1. Category of Company The Company is a "Government Company" as defined under Section 617 of the Act. It is an unlisted private company. 2. Maintenance of Statutory Records The Company has kept and maintained all registers as required to be maintained under the provisions of the Act and the rules made there under and all entries have been duly recorded. 3. Filing of Statutory Returns / Forms The Company has duly filed the requisite forms and returns with the Registrar of Companies, Hyderabad, under the Act and the rules made there under. 4. Composition of Board As per the DPE Guidelines on Corporate Governance referred to above, as the Company is having a full time Chairmancum-Managing Director, the number of Independent Directors are required to be at least one third of the Board of Directors. However, the Board of Directors did not comprise of the required number of Independent Directors as on 31.3.2010. 5. Board Meetings The Board of Directors duly met six (6) times on 4th May '09, 4th July '09, 28th July '09, 15th Sept '09, 18th Dec '09 and 9th Mar '10 respectively in respect of which meetings, proper notices were given and the proceedings were properly recorded and signed in the minutes book maintained for the purpose. Contd...2/89
RASHTRIYA ISPAT NIGAM LIMITED 6. Audit Committee The Board has constituted an Audit Committee as required under Corporate Governance Guidelines. The Audit Committee met five (5) times on 25th April '09, 22nd June '09, 15th Sept '09, 17th Dec '09 and 23rd Feb '10 respectively in respect of which meetings, notices were given and the proceedings wrere properly recorded and signed in the minutes book maintained for the purpose. 7. Disclosure of Interest The Directors have disclosed their interest in other firms/companies to the Board of Directors pursuant to the provisions of the Act and the rules made thereunder. 8. Annual General Meeting The Annual General Meeting of the Company for the financial year ended on 31st March, 2009 was held on lsl August 2009. The Resolutions passed thereat were duly recorded in minutes book maintained for the purpose. Extraordinary General Meeting No Extraordinary General Meeting was held during the financial year. Appointment and changes amongst Directors The Board of Directors of the Company is duly constituted and the appointments of Directors including Managing Director and whole time Directors have been duly made in accordance with the provisions of Articles of Association of the Company read with relevant provisions of the Act. 11. Directors' Report The Company has duly complied with the provisions of Section 217 of the Act relating to Directors' Report. 12. Acceptance of Public Deposits The Company has not invited/accepted any deposits falling within the purview of Section 58A of the Act during the financial year. Appointment of Cost Auditors The Company has appointed Cost Auditors under Section 233B of the Act, for its Power Plant operations and duly complied with the provisions of the Act. Provident Fund The Company has deposited both employees' and employer's contribution with the VSP Employees Contributory Provident Fund Trust within the prescribed time pursuant to Section 418 of the Act. Loans to Directors The Company being a "Private Company" and also a "Government Company", the provisions of Section 295 of the Act are not applicable. 16. Prosecution / Penalties There was no prosecution initiated against or show cause notice received by the Company and no fines or penalties or any other punishment was imposed on the Company, its Directors and Officers during the financial year for offences under the Act. For P.N. Rao & Co. Company Secretaries (P. NARASINGA RAO) Proprietor CP 2552 90
9.
10.
13.
14.
15.
Visakhapatnam 4th June 2010
Annexure-A
Measures taken for conservation of energy during the year 2009-10

A. Specific Energy Consumption for the year 2009-10 was 6.44 G.cal/tLS. The following measures have been taken during the year 2009-10 for conservation of energy. 1 2. 3 4 5 6 7 8 9 10 Installation of VFDs (Variable Frequency Drives) in CDCP -2 lifters and all oven machines of Battery-1, 2 & 3. Replacement of existing chillers with eco friendly and energy efficient chillers (6 Nos.) in Chilled Water Plant 3 & 4. Replacement of existing chillers with eco friendly and energy efficient chillers (5 Nos.) in Chilled Water Plant-1. Replacement of Boiler-1 Tubular Air Heater resulting in increased BF Gas utilization. Installation of HEA igniters in place of conventional IFM igniters in Boiler-5. Installation of VVF drives for wagon tipplers (5 Nos.). Replacement of 2 Nos. of Air Recuperators at furnace-2 in LMMM. Replacement of incandescent/Fluorescent lamps with energy efficient tube lights all over the plant. Installed energy savers, timer controls for reducing electrical energy consumption. Installation of Polycarbonate sheets (translucent sheet) to utilize day lighting at various places to reduce electricity load.
B.
(i) Other Initiatives

1 RINL signed MoU with M/s. NEDO of Japan in May'2009 for installing 20.6 MW Waste Heat recovery system on Sinter Cooler under Green Aid plan. This project is expected to be commissioned within 34 months from the date of signing of MoU. The work on this project has been started and total scope of work has been divided in to several packages and NIT for various packages is underway. RINL identified CDM opportunities during expansion stage as well as existing units up-gradation for claiming carbon credits and NIT has been issued for appointing consultants. The tendering is under process. RINL is working towards implementing BS EN:16000 Energy Management System for improving energy efficiency in the Plant.
2 3
B.
(ii) Other Achievements

1. 2. a. LD gas recovery plant Total Volume of LD gas recovered Waste Heat recovery at Back Pressure Turbine Station Total Power recovered b. Gas Expansion Turbine Station Total Power recovered 88578 MWH 113992 MWH 323.42 MNCum
C.
Foreign Exchange Earnings & Outgo:

Foreign Exchange Inflow Foreign Exchange Outflow (* includes Rs.755.24 crores on expansion activities) 91 Rs. 351.73 crores crores *
Rs. 3565.24
FORM "A"
A.
1)
Power and fuel consumption for 2009-10

Electricity
a) b) c) d) Purchased ( Net Import from AP TRANSCO) Gross exported Imported Own generation - Through steam turbine / generator - Through BPTs - Through GETS 285430 3166 288596 1576607 113992 88578 MWH MWH MWH MWH MWH MWH
2)
Coal Consumption
Boiler Coal (Indigenous) used in TPP Boiler coal (Imported) used in TPP Imported Coking Coal Imported Soft Coking coal US Coal Primary Coking Coal Indigenous Medium coking coal 1284290 151910 2593508 449253 398714 2648 361238 1556.2 2244.1 t t t t t t t Kl Kl
3) 4)
Furnace oil Consumption HSD Consumption
B.
Consumption per unit of production

Item Imported electricity Furnace oil HSD Coking coal Imported Coking coal Imported Soft Coking coal US Coal Primary coking coal Indigenous Medium coking coal Boiler coal Boiler Coal (Indigenous) used in TPP Boiler coal (Imported) used in TPP Liquid Steel Production 92 kg kg 377.9 44.7 3398564 t kg kg kg kg 763.1 132.2 117.3 0.78 106.3 Unit kwh lt lt Per tonne of liquid steel production 84.9 0.46 0.66
FORM "B"
Form for disclosure of particulars with respect to Technology Absorption
1. Specific areas in which R&D was carried out by the company. Development of protective coatings on refractories based on nano-materials, Noise Mapping in Rolling mills & Thermal Power plant of VSP Development of Lance tip design, , Technical analysis and optimization of continuous casting at VSP using existing plant facilities, Removal of CO2 from flue gases of VSP using algae, Pilot oven tests, Development of new grades etc,. 2. Benefits derived as a result of the above R&D. A brief note on R&D activities taken up during Apr' 09March' 10 with highlights is given at Annexure-1. 3. Future plan of action. R&D projects planned for next 3 years are given at Annexure-2 4. Expenditure on R&D (a) Expenditure (b) Total R & D expenditure as a % of Turnover : : Rs. 12.66 Crores 0.12 % (Based on Turn over fig. of Rs. 10,614 Cr)
93
Annexure - 1 to Form 'B'
BENEFITS DERIVED / EXPECTED FROM R&D PROJECTS

1. From Internal Projects:
Sl. No. 1 Name of the Project Carbonization tests of different coal blends Tangible Benefits Intangible Benefits Optimization of Coal blend by Pilot Oven test withdifferent sources / type of coals Better coke quality Lesser pollution
Development of Coke Dry Cooling facilities in Pilot coke oven.
2. From Joint Research Projects:

Sl. No. 1 Name of the Project Development of protective coatings on refractories based on nanomaterials Technical Analysis and Optimization of continuous casting at VSP using existing plant facilities Removal of CO2 from flue gases by sequestration A feasibility study on Noise abatement in Rolling mills & Thermal Power plant of VSP - IISc, Bangalore Development of Lance tip design Increased productivity of converter and better steel quality Tangible Benefits Longer life of refractories with nano-coating. Identifying the Break out as the main reason for Low productivity. Lesser Co2 emission to environment Initiation for development of Break out prediction system for Bloom caster. Better environment Better working conditions Intangible Benefits
3 4
Better blowing conditions
94
Annexure - 2 to Form 'B'
R&D PROJECTS PLANNED FOR NEXT 3 YEARS

1. 2. 3. 4. 5. 6. Mathematical modeling of sintering process. Under ground water resources in Steel Township - a comprehensive study. Cut length optimization of Blooms at CCS. Improvement of MgO - C brick quality to enhance the Converter life. Study of coal flow problems in RMHP TPP of VSP , . Development of new grades of steel especially for Forging, Automobile, Electrode industries etc. 7. 8. 9. Prevention of Corrosion in Benzol tanks. Preparation of metallized nuggets using Iron ore fines & metallurgical wastes. Break-out prediction system for CCM.
10. Optimizing the design and operating parameters of BOF Vessel through simulations as well as cold model experiments. 11. Improvement of Snorkel refractory (Castable) life and TLC spout castable life. 12. Logistics Management for integration of BOF, secondary metallurgy and Continuous casting.
95
Vision , Mission
VISION
and Objectives
To be a continuously growing world class company we shall:

H H
Harness our growth potential and sustain profitable growth. Deliver high quality and cost competitive products and be the first choice of customers.
H H H
Create an inspiring work environment to unleash the creative energy of people. Achieve excellence in enterprise management. Be respected corporate citizen, ensure clean and green environment and develop vibrant communities around us.
MISSION
H
To attain 16 (MT) million tonnes liquid steel capacity through technological upgradation, operational efficiency and expansion; to produce steel at international standards of cost and quality; and to meet the aspirations of the stakeholders.
OBJECTIVES
H
Expand plant capacity to 6.3 Mt by 2011-12 with the mission to expand further in subsequent phases as per Corporate Plan.
Revamping existing Blast Furnaces to make them energy efficient to contemporary levels and in the process increase their capacity by 1 Mt, thus total hot metal capacity to 7.5 Mt.
H H H H
Be amongst top five lowest cost liquid steel producers in the world. Achieve higher levels of customer satisfaction. Vibrant work culture in the organization. Be proactive in conserving environment, maintaining high levels of safety & addressing social concerns .
96

28 Annual Report 2009-10

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28th Annual Report 2009-10

28th Annual Report 2009-10

RASHTRIYA ISPAT NIGAM LIMITED

28th Annual Report 2009-10

Dt. 24th July, 2010 Visakhapatnam

( P.K. Bishnoi ) Chairman

RASHTRIYA ISPAT NIGAM LIMITED

28th Annual Report 2009-10

RASHTRIYA ISPAT NIGAM LIMITED

% growth over 2008-09 16 10 27 8 4 6 5 44 16 17 20 21 2

3400 556 3000 1857 710 850 850 2410 2656

** 115 73 113 107 123 119 126 123 119 ** ** **

28th Annual Report 2009-10

Best Production and Technical Parameters Yearly Peaks

RASHTRIYA ISPAT NIGAM LIMITED

28th Annual Report 2009-10

Sales Turnover (excluding Internal Consumption) during the last 3 years

Export Turnover (Rs.Crs)

Sales Turnover (Rs. Crs)

RASHTRIYA ISPAT NIGAM LIMITED

Iron Finished steel Semis Saleable steel (*Meant for sale)

125 171 23 194

7 175 *16 191

28th Annual Report 2009-10

RASHTRIYA ISPAT NIGAM LIMITED

28th Annual Report 2009-10

RASHTRIYA ISPAT NIGAM LIMITED

Some Major Highlights :

28th Annual Report 2009-10

RASHTRIYA ISPAT NIGAM LIMITED

Posts Filled by Recruitment :

56 0.73 94 18 0.72 43 95 0.53 144

Received during the Period (1.4.2009 to 31.3.2010) 01

Redressed during the Period (1.4.2009 to 31.3.2010) 01

28th Annual Report 2009-10

Received during the Period (1.4.2009 to 31.3.2010) 34

Redressed/Disposed of during the period (1.4.2009 to 31.3.2010) 33

RASHTRIYA ISPAT NIGAM LIMITED

28th Annual Report 2009-10

RASHTRIYA ISPAT NIGAM LIMITED

28th Annual Report 2009-10

RASHTRIYA ISPAT NIGAM LIMITED

The details are as follows :

2 2 1 49 327 105 144

VH HH OH Total VH HH OH NIL NIL NIL NIL NIL NIL NIL NIL -

Group Group Group Group Total

A 130* B C 1379 D 290 1799

4 1 2 1 18 6+1# 5+2# 3+1# 3 2# 2# 2# 25 7+3# 7+4# 4+3#

11* 1 2 599 2+1$ 1+ 1$ 7+3$ 100 1$ 1$ 1$ 710 3+2$ 1+2$ 9+4$ 24

28th Annual Report 2009-10

Date 15-08-2009 26-01-2010 18-02-2010

RASHTRIYA ISPAT NIGAM LIMITED

The following Ceremonial Functions were organized :

28th Annual Report 2009-10

RASHTRIYA ISPAT NIGAM LIMITED

28th Annual Report 2009-10

RASHTRIYA ISPAT NIGAM LIMITED

MANAGEMENT DISCUSSION AND ANALYSIS REPORT FOR 2009-10

28th Annual Report 2009-10

RASHTRIYA ISPAT NIGAM LIMITED

28th Annual Report 2009-10

RASHTRIYA ISPAT NIGAM LIMITED

115 73 113 107 123 119 126 123 119