30th Annual Report 2011-12
1
RASHTRIYA ISPAT NIGAM LIMITED
2
BOARD OF DIRECTORS
CHAIRMAN-CUM-MANAGING DIRECTORShri A P Choudhary (w.e.f. 1st August, 2011)Shri P K Bishnoi (upto 31st July, 2011)
FUNCTIONAL DIRECTORSOperationsShri Umesh Chandra
ProjectsShri N S Rao (w.e.f. 19th April, 2012)Shri A P Choudhary (upto 31st July 2011)
FinanceShri P Madhusudan
CommercialShri T K Chand
PersonnelShri Y R Reddy
GOVERNMENT DIRECTORSShri S. Machendra Nathan (upto 14th May, 2012)Dr. Dalip Singh
INDEPENDENT DIRECTORSShri A P V N SarmaShri H S ChaharShri Swashpawan SinghDr. U D ChoubeyShri V S Jain (w.e.f. 14th May, 2012)Shri Ashhok Kumar Jain (w.e.f. 14th May, 2012)Professor Sushil (w.e.f. 14th May,2012)
COMPANY SECRETARY & COMPLIANCE OFFICERShri P Mohan Rao
REGISTERED OFFICEAdministrative BuildingVisakhapatnam Steel PlantVisakhapatnam 530 031, Andhra PradeshWebsite: www.vizagsteel.com
BANKERSState Bank of IndiaBank of BarodaCanara BankState Bank of HyderabadIDBI Bank LtdUCO BankAxis BankIndusInd BankHDFC BankDeutsche BankBank of TokyoBank of AmericaCiti BankStandard Chartered BankHSBC BankAndhra BankVijaya BankRoyal Bank of ScotlandKotak Mahindra Bank Ltd.JP Morgan Chase Bank N.A.Union Bank of India
STATUTORY AUDITORSM/s B V Rao & Co.Chartered Accountants, Visakhapatnam
COST AUDITORShri Jugal Kishore PuriCost Accountant, New Delhi
CONTENTS P. No.
1. From the Chairman 3
2. A Glance of Financial Results 6
3. Directors’ Report 11
4. Management Discussion & Analysis Report 37
5. Corporate Governance Report 52
6. Certificate on Compliance of
Guidelines on Corporate Governance 67
7. Secretarial Compliance Report 68
8. Auditors’ Report 71
9. Comments of C&AG 78
10. Audited Accounts 89
11. Cash Flow Statement 91
12. AGM Notice 114
13. Vision, Mission & Objectives 118
30th Annual Report 2011-12
3
Chairman's AddressDear Shareholders,
I have great pleasure in welcoming you all to the 30th Annual General Meeting of yourCompany. At the outset, I am happy to inform that your company, in 2011-12, clocked arecord turnover of l4,462 Cr. with a growth of 26%. On the production front, besidessurpassing 100% capacity for the 11th consecutive year, improvement was achieved inimportant technical parameters such as Fuel Rate, Energy Consumption and WaterConsumption. These helped the company to register a Profit after Tax of 751 Cr for theyear, with a growth of 14%. Additionally, Stage-1 of 6.3 Mtpa Expansion was brought to thestage of hot commissioning. These achievements were possible only through consistent
efforts of all the stakeholders and the dedicated RINL collective.
The Directors' Report and the Audited Statement of Accounts for the year 2011-12 and the Notice to the Shareholders have already been circulated and with your permission, I take them as read.
Year 2011-12:
In 2011-12, your Company achieved 'good overall performance earning Excellent rating ' against the MOUsigned with the Ministry of Steel for the 3rd consecutive year.
While commissioning activities of various units under 6.3 Mtpa Expansion are continuing, significant progresshas been achieved in Modernisation and Upgradation of BF-1. Order has been placed for Revamp of Converters.Further, tenders are under finalization for installation of additional Converter and Caster. The implementation ofthese packages would take us to 7.3 Mtpa. To keep up the momentum of capital investment, Projects costingabout 6,000 Cr got approved which include the installation of Seamless Tube Mill and Coke Oven Battery-5and the project report for the next stage of expansion to 11/12 Mtpa is under active consideration.
Strategic initiatives for business development continued by entering into MOUs with potential stakeholders forexpansion and enhancement of existing capacity, stabilising its product portfolio and securing raw material availabilityglobally. Major of such initiatives include signing of MOUs with Indian Railways for an Axle Plant in New Jalpaiguri,West Bengal, with Power Grid Corporation of India Limited for Manufacture of Tower and Tower Parts and Productionof CRGO / CRNO Electrical Steel, with NMDC for Slurry Pipeline and Pelletisation Plant. Other strategic initiativesbeing pursued such as Captive Jetty, Fly Ash based Cement Plant and Steel Processing Units would stand theCompany in good stead.
As we move ahead to the next trajectory of growth and business excellence, I seek the support and encouragementof all our Stakeholders.
World Steel Scenario:
Despite a series of developments in 2011, including the European sovereign debt crisis, earthquakes in Japan, thepolitical/social unrest in some countries of the MENA region leading to a related surge in oil prices and thetightening of government monetary measures in many emerging economies, World steel demand achieved agrowth of 5.6% in 2011. According to the World Steel Association (WSA), Japan's demand for steel is expected todecline by 0.6% in 2012 due to the impact of exchange rate appreciation. In 2013, apparent steel consumptionin Japan is expected to further decline by 2.2%, reaching 77% of its 2007 level. On the other hand, Emergingeconomies are expected to continue to drive growth. According to the WSA, by 2013, Steel use in the emergingeconomies is forecast to be 45% above 2007 levels, and will account for 73% of world steel demand, as opposedto 61% in 2OO7. China is expected to witness a continual growth of 4.0% in 2012 and 4.0% in 2013. Morenotably, India is expected to increase its steel consumption by 6.9% in 2012 and 9.4% in 2013.
RASHTRIYA ISPAT NIGAM LIMITED
4
Indian steel demand:
During 11th Five Year Plan, Government of India had emphasized the need for massive expansion in investmentin infrastructure which includes construction of roads, railways, ports, airports, electricity, telecommunications,oil gas pipelines, irrigation etc. Total investment estimated to have increased from 5.7% of GDP in the base yearof the Eleventh Plan to around 8.0% in the last year of the Plan.
In Twelfth Plan as well, Gol is aiming continued thrust on accelerating the pace of investment in infrastructure,as this is critical for sustaining and accelerating growth. Infrastructure investment is aimed to increase fromabout 8.0% of GDP in the base year (2011-12) of the Plan to about 10.0% of GDP in 2016-17. The totalinvestment in infrastructure is aimed to be over 45 lakh Cr. or $ 1 trillion during the Twelfth Plan period, doublethe investment of 11th Plan.
These investments in infrastructure augur well for steel demand. The demand is projected to grow at a healthyrate of 10.3% in the 12th Plan Period.
Competition:
In this constantly changing world, the competition has become further intense particularly due to creation of veryhigh production capacities in China. Now, the competitors are identifying newer growth opportunities anddifferentiating their offerings to customers in the market place. Technology is going to be the KEY enabler toachieve this dual objective of growth and differentiation. Your company, as a well-established player in the LongProducts category, is well equipped and confident of facing the challenge of competition.
Corporate Social Responsibility (CSR):
In the year 2011-12 the emphasis of CSR activities undertaken by the Company was upon Education andHealth Care. Your Company has further strengthened the CSR activities in the State of AP and also in otherStates where business of RINL is getting diversified. A separate Section is provided in Director's report regardingCSR activities.
Corporate Governance:
Good Corporate Governance involves a commitment of a company to run its businesses in a legal, ethical andtransparent manner - a dedication that must come from the very Top and permeate throughout the organisation.Your company's commitment to transparency in Corporate Governance is reflected in its establishing systems forevery process. Your Company has complied with Corporate Governance norms as stipulated by the DPE Guidelines.A separate Report on Corporate Governance along with Certificate on Compliance of CG guidelines & SecretarialCompliance form part of the Director's Report.
Environment Management:
RINL is well known for its role in maintaining clean environment for future generations and has been a pioneer inthe Indian Steel Industry for many environmentally friendly initiatives. During 2011-12, the Company hascommissioned 14 MW Power Plant utilising waste heat from Coke Dry Quenching Process and is about tocommission another 14 MW Power Plant utilising Top Pressure of BF Gas. Additionally, 20.6 MW Power Plantutilizing waste heat from Sinter Cooler and 120 MW Power Plant utilizing waste heat of BF Gas are underimplementation. On completion of these projects, 323 MW out of total 515 MW installed capacity would be fromWaste Energy. Zero Water Discharge scheme to generate soft water of 2 mgd has been commissioned. Besidesthis, RINL has conducted Mass Plantation Melas to bring awareness and create responsibility. 31,000 treeswere planted during 2011-12 and More than 48 lakhs trees were already planted by the Company till end ofMarch 2012. RINL developed one of its kind, Arogyavanam, which contains various Medicinal Plants. A separatesection on the same forms part of the Director's report.
30th Annual Report 2011-12
5
Dividend for the Year 2011-12:
The Board of Directors recommended a 10% dividend on Profit after tax for the year 2011-12 for approval ofShareholders in the AGM, in line with previous year.
Contribution to the Exchequer:
Over the last 27 years, the cumulative accrual to the Government Exchequer in the form of taxes comprisingexcise duty, income tax, value added tax, entry tax, octroi and other State levies was 22,905 Crore. I amsure, with the increase in production capacity and turnover, the contribution to Government exchequer willimprove further.
Acknowledgement:
To conclude, I acknowledge the relentless and dedicated efforts made by RINL collective in achieving goodoverall performance including a new record in turnover. On behalf of the Shareholders and the Management ofthe Company, I thank the Ministry of Steel, the Government of India, the Government of AP, the Suppliers(Domestic & Overseas), Customers, Ancillary Units, Bankers, the People's Representatives, the DistrictAdministration and various other agencies for the confidence and trust bestowed upon the Company and theopportunity given for its continued growth and expansion.
I sincerely assure you that the Company will continue to grow in the years ahead.
Jai Hind.
Dated. 20th September, 2012 ( AP Choudhary)
Visakhapatnam Chairman
RASHTRIYA ISPAT NIGAM LIMITED
6
A G
lanc
e of
Fin
anci
al R
esul
ts s
ince
ince
ptio
n C
rs
Nos
Year
Turnover
Other Revenue
Gross Income
Raw Materialsconsumed
Stock (Accretion) /Decretion
Employee Benefits
Depreciation & DRE
Interest & Wealth Tax
Stores, R&M, Power& Other Expenses
Profit / (Loss)before tax
Profit / (Loss)after tax
Capital
Reserves & Surplus
Loans /Buyers Credit
Fixed AssetsGross Block
Total Depreciation
Fixed AssetsNet Block
Employees as on31st March
90-9
124
536
281
175
(27)
2919
719
219
1(4
78)
(478
)35
06(4
78)
3924
3720
248
3472
1443
3
91-9
277
222
795
402
(70)
5444
943
750
9(9
87)
(987
)35
06(1
464)
5476
5031
704
4327
1665
6
92-9
311
8514
813
3268
0(1
52)
7734
019
875
8(5
68)
(568
)37
06(2
033)
3495
6157
1026
5131
1745
4
93-9
417
5115
619
0787
516
010
334
034
765
5(5
73)
(573
)64
94(2
605)
3474
7326
1365
5961
1748
3
94-9
522
0950
2259
1059
(200
)12
841
536
685
5(3
64)
(364
)64
94(2
970)
3735
8289
1747
6542
1736
9
95-9
630
3911
631
5413
11(5
0)15
543
040
711
07(2
04)
(204
)64
94(3
174)
3831
8392
2177
6215
1764
2
96-9
731
3578
3214
1385
(115
)17
442
243
011
63(2
46)
(246
)64
94(3
420)
3735
8548
2819
5729
1747
8
97-9
830
7197
3168
1405
(118
)21
043
919
812
11(1
77)
(177
)64
94(3
597)
2205
8592
3037
5555
1735
4
98-9
927
6119
729
5812
2031
825
511
136
111
51(4
57)
(457
)64
94(4
054)
2243
8615
3148
5467
1740
0
99-0
029
7315
531
2713
94(9
5)27
243
238
213
03(5
62)
(562
)78
27(4
616)
2343
8635
3580
5055
1725
4
00-0
134
3618
036
1614
44(1
03)
408
445
351
1364
(291
)(2
91)
7827
(490
7)22
9386
4340
1246
3017
131
01-0
240
8115
342
3416
0262
375
475
291
1504
(75)
(75)
7827
(498
2)19
8987
0344
6842
3517
026
02-0
350
5816
852
2618
0628
140
645
512
316
3552
152
178
27(4
461)
1186
8731
4903
3828
1689
4
03-0
461
6920
963
7820
5026
481
476
4917
4815
4715
4778
27(2
914)
3787
1053
3833
7216
755
04-0
581
8128
684
6830
20(3
10)
490
1006
1119
9722
5420
0878
27(9
06)
531
8763
6322
2441
1661
3
05-0
684
9144
789
3835
8566
572
448
3123
4618
9012
5278
2734
645
888
3267
5420
7816
574
06-0
791
5166
198
1238
8924
741
362
4925
2522
2213
6378
2717
1191
788
7670
8517
9016
401
07-0
810
433
904
1133
742
80(3
43)
1031
488
3228
5429
9519
4378
2736
5444
189
0175
1613
8516
416
08-0
910
411
924
1133
458
96(9
17)
1157
240
8828
4220
2713
3678
2745
9310
0889
7277
5012
2217
225
09-1
010
635
758
1139
255
3541
514
0027
778
2439
1248
797
7827
5058
1233
9474
8009
1465
1783
0
10-1
111
517
526
1204
371
88(5
32)
1273
266
165
2701
982
658
7827
5402
1137
9795
8265
1530
1782
9
11-1
214
462
437
1489
98
47
24
51
46
734
519
13
26
81
11
075
17
72
75
93
22
57
510
394
86
07
17
87
1807
9
30th Annual Report 2011-12
7
Growth of Gross Income
11-1
2
Growth of Net Worth
11-1
2
RASHTRIYA ISPAT NIGAM LIMITED
8
Break up of Gross Income 2011-12
Sale of By Products & Others` 576 Crs (3.87%)
Interest Earned` 250 Crs (1.68%)
Other revenue` 87 Crs (0.58%)
Internal Consumption` 100 Crs (0.67%)
Sale of Iron & Steel`̀̀̀̀ 13886 Crs (93.2%)
Distribution of Gross Income 2011-12Stock Accretion` 45 Crs (0.3%)
Employees Benefits` 1467 Crs (9.85%)
Stores & Spares consumed` 518 Crs (3.48%)
Power and Fuel`462 Crs (3.1%)
R&M,Freight,Otherexpenses,Interest etc` 1160 Crs (7.79%)
Excise Duty` 1319 Crs (8.85%)
Depreciation` 345 Crs (2.32%)
Provision for Taxation` 359 Crs (2.41%)
Profit afterTax` 751 Crs (5.04%)
Raw Materials consumed`̀̀̀̀ 8472 Crs (56.87%)
30th Annual Report 2011-12
9
Gro
ss B
lock
& N
et B
lock
11-12
RASHTRIYA ISPAT NIGAM LIMITED
10
FINANCIAL HIGHLIGHTS
2011-12 2010-11
A OPERATING RESULTS (`̀̀̀̀ Crs)Turnover 14,462 11,517Gross Income 14,899 12,043Gross Expenditure 13,598 10,896Gross Profit 1,301 1,147Profit before Tax 1,110 982Net Profit After Tax 751 658
B YEAR END FINANCIAL POSITION (`̀̀̀̀ Crs)Share Capital 7,727 7,827Reserves and Surplus 5,932 5,402Capital Employed 5,266 4,548Net Worth 13,659 13,229Gross Block 10,394 9,795Cumulative Depreciation 8,607 8,265Net Block 1,787 1,530Inventory 3,403 3,255
C PROFITABILITY AND OTHER RATIOS(i) Percentage of
Gross Profit to Sales 9.0 10.0Net Profit to Sales 5.2 5.7Gross Profit to Net Worth 9.5 8.7Net Profit to Net Worth 5.5 5.0Gross Profit to Capital Employed 24.7 25.2Net Profit to Capital Employed 14.3 14.5Gross Profit to Share Capital 16.8 14.6Inventory to Sales 23.5 28.3
(ii) Ratio ofCurrent Assets to Current Liabilities 1.8 1.7Quick Assets to Current Liabilities 1.1 0.9Sales to Capital Employed 2.7 2.5
30th Annual Report 2011-12
11
Dear Members,
On behalf of the Board of Directors of the Company, Itake great pleasure in presenting the 30th AnnualReport of the Company for the financial year ended31st March 2012, together with the AuditedStatements of Accounts, the Auditors' Report andComments on the Accounts by the Comptroller andAuditor General of India.
Year 2011-12
In the year 2011-12, the company excelled on all frontssecuring "Excellent" rating as per MOU withGovernment of India. A record Turnover of ` 14,462Crore was achieved in the year with a growth of 26 %.The input raw material prices continued to be on therise compared to previous year. The prices of majorraw materials viz Coking coal and Iron ore haveincreased by about 26% and 6% respectively. A growthof 18% that could be achieved in the Net SalesRealization per tonne of Saleable Steel, in spite ofdifficult market conditions and its volatility and betterefficiencies achieved on the production front helpedthe Company to achieve a Profit After Tax of ` 751Crore with a growth of 14%.
The first phase of Expansion for almost doubling itscapacity to 6.3 Million tonnes of liquid steel was broughtto the stage of hot commissioning. With this expansion,RINL will be producing a higher volume of Rebars, Wirerods, Bars, Channels, Angles, Beams etc. and makethe products available for use by the common man. Inaddition to increase in capacity, the adoption of newtechnologies will also help improving environmentalmeasures, reduction in energy consumption,improvement in productivity and yield etc., therebycontributing for reducing cost of production.
The Company continued with many Strategic initiativesincluding an MOU with the Government of AndhraPradesh for an investment of ` 42,400 Crore by RINLand for facilitating allotment of mines by Government
DIRECTORS’ REPORTof Andhra Pradesh. Some of the mining applicationsfiled with various State governments are in advancedstage of consideration. The Company also took aninitiative for installation of Transmission Line Tower (TLT)Plant with Power Grid Corporation of India Limited(PGCIL) by signing an MOU with them while achievinggood progress in the initiatives for India's second biggestAxle Plant based on an MOU with Railways and FerroAlloy plant in Joint Venture with Manganese Ore IndiaLimited (MOIL). The pursuit for overseas assetscontinued as a part of Afghan Iron and Steel Consortiumand International Coal Ventures Pvt Ltd (ICVL).
Business Performance:
Production
The production has surpassed the rated capacity forthe 10th consecutive year. The newly commissionedunits are getting synchronized with existing units.
Best ever BF Coke production at 2.2 Mt with a growthof 4% over 2010-11.
Captive Power generation of 208 MW with a growth of5% over 2010-11. This helped to reduce the import ofpower from State Grid by 12%.
Met coke improved with the reduction of 1% 2010-11,saving 5 kg coke per tonne of Hot Metal production.
Specific Energy Consumption improved with reductionof 1% over 2010-11. Specific Water consumptionimproved with the reduction of 2% over 2010-11.
Items DPR 2011-12 % fulmton DPR
Hot Metal 3,400 3,778 111Liquid Steel 3,000 3,310 110Crude Steel 2,820 3,128 111Bar products 710 872 123Wire Rods 850 1,016 119MMSM products 850 943 111Finished Steel 2,410 2,831 117Saleable Steel 2,656 2,990 113Value added prodn. ** 2,323Value added heats (Nos.) ** 19,620
RASHTRIYA ISPAT NIGAM LIMITED
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Best Production and Technical Parameters Yearly peaks:
Items Previous bestUnit Actual -2011-12
i.Production Avg. pushings Nos/day 303 299 09-10
Crude Tar '000 t 113 109 10-11
ii.Technical parameters
SMS Avg. Converter Life Heats 5123 4022 10-11
Yield of Cast Blooms % 94.500 94.497 10-11
LMMM Billet mill rolling rate t/W.Hr 328.7 328.5 07-08
Heat Consumption Mcal/t blm.rld. 438 444 10-11
Bar mill rolling rate t/W.Hr 150 148 04-05
Bar mill Avg. production t/avl. day 2900 2876 06-07
Bar mill Power conspn. kWh/t blt.rld. 77.85 87.88 05-06
Heat Consumption Mcal/t blt.rld. 20.6 21.2 06-07
WRM Yield of Wire rods % 98.500 98.498 10-11
MMSM Yield of MMSM Products % 96.59 96.30 10-11
Power conspn. kWh/t blm.rld. 87.35 89.21 06-07
Lining Life of 7,715 Heats from Conv-B is theBest Achieved for any Converter since inception.
Dispatch of 2.14 Mt of Steel by Rail is the Bestfor any Year since inception with 1% growth overprevious best of 2.12 Mt in 2010-11.
Hot Metal & Liquid Steel crossed 71 Mt & 58.8Mt Landmark respectively since inception.
3, 82,642 t of Metallurgical Waste consumptionat Sinter Plant during the year is the best sinceinception.
Raw Material Security
An MOU has been signed with Government of AndhraPradesh for an investment of ` 42,400 crore in theState by RINL for which Government of Andhra Pradeshwill facilitate allotment of mines. Accordingly, thematter is being pursued at all levels and submitted 9more applications (ML/PL) and the total number ofapplications made were 29 for iron ore deposits duringthe year (Andhra Pradesh-2, Rajasthan-3, Jharkhand-2, Uttar Pradesh-1 & Karnataka-1). Further, the efforts
for acquisition of overseas assets continued as partof International Coal Ventures Private Limited andAfghan Iron and Steel Company.
To attain its above endeavor of growth in phases up to20 MTPA, RINL would need further support fromGovernment of India, Government of Andhra Pradeshand other State Governments towards of allotment ofsuitable Iron ore mines and coal mines. An MOU hasbeen signed in the month of May’ 12, with NMDC forJoint Venture to install 336 KM length slurry pipelinefrom Jagdalpur to Visakhapatnam and around 4 MTPAcapacity pellet plant at Visakhapatnam.
RINL has been pursuing for renewal mining leases ofOrissa Mineral Development Corporation (OMDC) whichhas become a subsidiary of RINL consequent toacquisition of 51% stake in Eastern InvestmentsLimited, which is the holding company of OMDC & BisraStone Lime Company (BSLC). OMDC has receivedEnvironmental Clearance (EC) from Ministry ofEnvironment and Forest on 23rd July, 2012 for one ofits six mines viz Kolha - Roida of 254.95 Hectare.
30th Annual Report 2011-12
13
Ferro alloy being a key consumable in Steel making, aFerro Alloy Plant is being set up at Bobbili, AndhraPradesh along with MOIL by the way of a Joint VentureCompany viz., RINMOIL Ferro Alloys Limited.
Madharam Dolomite Mine (MDM):
The percentage growth in respect of Production is 5.25lakh tonnes i.e. 1.5% and Dispatch is 5.29 lakh tonnesi.e. 5.5% as compared with that of last year 2010-11.Bagged 2nd prize in Waste Dump Management duringMines Environment and Mineral Conservation week(MEMC) 2011-12.
Jaggayyapeta Limestone Mine (JLM):
Highest ever dispatch during the year 4.70 lakhtonnes, Highest ever drilling (19664 M) during the yearhighest ever monthly (Jan '12) drilling (2720 M) sinceinception. The Production is 4.38 lakh tonnes andpercentage growth is 20.5% and Dispatch is 4.70 lakhtonnes and percentage growth is 14% as comparedwith that of last year 2010-11.
Garbham Manganese Mine (GMM):
The Dispatch during the year is 11,158 tonnes andpercentage growth in respect of Dispatch is 60% ascompared with that of last year 2010-11. Supplieswere made in line with requirement of plant.
Marketing :
Steady Pricing coupled with customer centricapproach, pre and post sales contact, enhanceddistribution network and product positioning havehelped in maintaining healthy balance between thesales and stock position. It also paid rich dividends inthe form of consistently growing sales and higherrealizations through out the year.
With a view to promoting customer loyalty, existingMOUs were renewed and also new MOUs were enteredinto with Actual Users, Project Customers and Retailersand the supplies were closely monitored. Higher degreeof customer satisfaction was obtained by focusing onsupply side management inter-alia consistent andtimely supply, meeting contingent material requirement
of customers and seeding new customers throughProduct Bank etc. Special attention was given to thesupplies to untapped rural market through RuralDealers.
Since the product volume of RINL is going to bedoubled in the coming years, RINL has adopted astrategy of reducing its excessive dependence onSouthern Market and focusing on new Marketssegments in East, West and North.
Highlights for FY11-12
Record Turnover: All time Record Sales Turnoverof ` 14,462 cr. was achieved, representing agrowth of 26% compared to the Sales Turnoverof ` 11,517 cr. during the 2010-11.
Target fulfillment of Sales Turnover against MOUtarget of ` 13,607 cr. was 106%.
Record sales turnover achieved during 8 monthsin the year and consistently every month fromSept. '11 to Mar. '12.
Sales volume: Sales volume of Iron & Steel35.39 lakh tonnes achieved compared to 33.22lakh tonnes in 2010-11, representing a growthof 7%.
RASHTRIYA ISPAT NIGAM LIMITED
14
Project Sales: Project Sales of 7.00 lakhtonnes achieved compared to 6.17 lakh tonnesin 2010-11, representing a growth of 13%.
Value Added Steel: Value Added Steel of24.60 lakh tonnes achieved against 23.73 lakhtonnes in 2010-11, representing a growth of4%, which constitutes 79% of saleable steelsales.
Pig Iron Exports: Export of ` 361 cr. achievedagainst ` 245 cr. in 2010-11, representing agrowth of 47%. During the year, RINL exportsconstituted 31% of the total export of pig ironfrom India.
Region-wise Sales:
During 2011-12, RINL registered growth in sales in allthe Regions. Double digit growth rates were registeredin Northern, Eastern & Western Regions.
New Grades Developed:
In line with the customer's requirements, the followingnew grades were developed and introduced in themarket.
ApplicationProduct/Grade
1. MMSM Billet, C-70 Tool Steel (Filing) grade
2. MMSM Round, SAE1019S Seamless tube grade
Sl. No.
Sale of Branded Products:
Rebars and Structurals of RINL are branded as "VIZAGTMT" and "VIZAG UKKU", respectively. Sales of theseproducts have been improving year after year as givenbelow:
30th Annual Report 2011-12
15
Sale of By-Products:
During 2011-12, ever highest sales value ofBy-Products of ` 533 Cr was achieved. This valuerepresents a growth of 47% compared to ` 363 Cr.achieved during the previous year.
E-Marketing:
In line with the company's objective to promotetransparency, a specified quantity of material is put one-auction sales. The auctions are conducted everymonth. This also helps for price discovery. During2011-12, total quantity put on e-auction amountedto ` 308 cr.
Further, 188 no. of reverse e-auctions, valuing ` 158cr. were conducted for finalization of road transportationcontracts for movement of materials from plant andstockyards.
Inventory:
Steady sales throughout the year helped inmaintaining steady inventory levels. During the year,the inventory of pig iron reduced by 7,000 tonnes andsaleable steel by 1.5 lakh tonnes.
Marketing Distribution Network
During the year 2011-12, four new Consignment SalesAgents were appointed at Guwahati, Agartala, Jabalpur
Rural Marketing:
The RINL-Rural Dealership scheme (RDS), which wasintroduced in 2011 helped in improving sales to theuntapped rural market.
During 2011-12, direct sales in Rural areas throughDistrict Level Dealers (DLDs) and Rural Dealers (RDs)registered a growth of 187%. At the end of Mar. '12,the number of Dealers stood at 318, consisting of 70DLDs and 248 RDs.
Growth in the sales to rural market through RuralDealership Scheme indirectly helps the socially weakersections i.e. SC, ST, OBC and Women by encouragingthe Dealers to improve their earnings.
Market Share:
RINL is the market leader in Long Products (Bars, Rods& Structurals) in the country. During the year 2011-12, the share of RINL stood at 8.4%.
& Bhopal. The rural marketing network was increasedby registering 137 new Rural Dealers during the year.The performance on widening Marketing DistributionNetwork helped RINL in achieving "Excellent" ratingon this parameter in the MOU 2011-12 with the MOS.
Total Marketing outlets of RINL in 2011-12, includingBranches, Stockyards, CSA, DLD, RD, Retailers, etc.,increased from 428 to 496, a rise of 16%.
RASHTRIYA ISPAT NIGAM LIMITED
16
Customer Relations Management - Initiatives
During 2011-12 several measures were undertakento improve the Customer service. Some of theseactions taken are as given below:
Booklet on Rural Marketing of RINL wasprepared, which was released by the Hon'bleUnion Minister for Steel during a conference heldin Lucknow in Nov'11.
With a view to focusing on the customer service,RINL Customer Policy was released by Secretary(Steel), Govt. of India, in October 2011.
Up-gradation of RINL stockyards was taken up
at Chennai, Mumbai, Hyderabad and Vizag.
Rail track was laid inside Nagulapalle stockyardat Hyderabad connecting the Public siding to
Release of Booklet on Rural Marketing of RINL byHon'ble Union Minister of Steel
facilitate faster handling of materials inside thestockyard.
A quality testing laboratory was approved by RINLat Mumbai for local analysis of the samples forquick settlement of the quality complaints of thecustomers.
Customer Meets are organized regularly at
Branches, Regions and Head Quarters. Partners'Summit was organized at Head Quarters for2011-12, during 25th and 26th April 2011. Theinputs from this Summit were utilized forformulating the Marketing Policy for the year.
Release of Customer Policy by Secretary
Partners' Summit held at Vizag on25th and 26th April 2011
30th Annual Report 2011-12
17
Materials Management Department
Materials Management Department (MM) isresponsible for timely procurement, receipts andsupply of raw materials, equipment, spares,consumables etc., at market competitive prices byfollowing the extant purchase policy, guidelines,procedures etc. Materials Management Departmentconsists of Purchase, Transport & Shipping, Stores &Vendor Development cell.
Materials Management - Purchase :
Materials Management -Purchase Dept. has handledapprox., ` 9,267 Crores worth of procurement. 6,312Nos. of orders were placed for spares, consumables,Refractories (` 1,241 Crores), Indigenous RawMaterials (` 3,239 Crores) and Imported RawMaterials (` 4,788 Crores).
Raw Materials Securitization :
RINL is the only main steel producer having no captivesources of major raw materials like Iron Ore, Coal etc.With a view to securing consistent supply of major rawmaterials and other raw materials, the followingmeasures have been taken:
a) Long Term Agreement (LTA) has been signed withNMDC for supply of 10.5 million tonnes of IronOres (IOF, IOL, CLO etc.) to meet therequirements of the Company upto 6.3 milliontonne. Besides, efforts are also being made todevelop other sources of supply like supply fromOMDC. A standing EOI has been placed in theWebsite for developing other sources. Inresponse to the EOI, Seven parties haveresponded and their offers are under technicalexamination.
b) At present, requirement of Coking Coal is around4 million tonnes. For supply of Coking Coal, LTAhas been signed with Reputed Suppliers like BHP,Anglo and Peabody of Australia; Logan&Kanahwa and Alfa Coal of USA, Solid Energy ofNew Zealand. Supply of Coal through LTA wasnegotiated in Empowered Joint Committee ofSAIL and RINL. Global Open tenders are alsofloated for procurement of Coking Coal. Besides
this, one standing EOI has been kept in Websitefor developing of new sources of Coal supply. Atpresent, Five nos. of coals are under differentstages of tests like Laboratory, Pilot Oven etc.for taking trial shipments.
During 2011-12, critical situation arising out of failureof LTA supplier M/s. Anglo during 2nd and 3rd quarter of2011-12 owing to force majeure condition of mineroof collapse was handled by taking swift action inarranging alternate coal from other suppliers. Duringthis year around 3.7 million tonne of imported cokingcoal was shipped and received.
SMS Grade Lime Stone :
Leveraging coast based location, 5,25,000 Tonnes ofSMS grade Lime Stone has been sourced from UAEthrough Global Tender with reverse e-auction resultingin substantial savings vis-a-vis Landed Net of CenvatPrice (LNCP) of indigenous Lime Stone.
Medium Coking Coal :
Requirement of Medium Coking Coal of around 5 LakhTonnes p.a. and Boiler Coal of around 16 Lakh Tonneshave been tied up for long term supply through FuelSupply Agreement (FSA) with CIL.
Other minor raw materials like Ferro Alloys etc. havealso been procured at highly competitive prices throughopen tender and e-auction and timely supplies havebeen made.
Transport & Shipping (T&S) :
During the year 2011-12, a quantity of 4.096 milliontonnes of bulk materials have been transportedthrough 54 vessels. Due to initiatives like taking CapeVessels by combining requirements fixing disportsbased on cost economics on vessel to vessel basis,an amount of ` 55.29 Crore is the estimated savingto the company.
MM (T&S) - Smalls Section successfully completed theimport of complete NEDO project equipment fromJapan for waste heat recovery from sinter bed coolerunder EPCG license. Under Export PromotionCapital Goods (EPCG) Scheme RINL-VSP
RASHTRIYA ISPAT NIGAM LIMITED
18
obtained the custom duty benefit up to`̀̀̀̀ 28 Crore.
During the year 2011-12 MM (T&S) - Smalls Sectioncleared 47 project consignments (43 Equipmentconsignments + 4 D&E consignments) valuing about` 229.57 Crore.
MM (T&S)-Smalls Section made all necessary shippingarrangements in time and arranged timely customsclearance of all Imported Equipments, spares,consumables, minor raw material, refractories wellwith in time to meet the operation requirementswithout disruption in the Production schedule from timeto time.
Reverse E-auction
MM Department conducted e-Reverse auctions for avalue of ` 1211 Crore in 2011-12 against value of` 822 Crore in 2010-11 and thereby an increase of47.33%.
For the first time, reverse e-auction was conductedfor procurement of Low Silica Lime Stone whichresulted in savings of ` 2.51 Crores on Landed Net ofCenvat Price basis, in comparison with the lowest bidreceived in the Sealed Price Bids.
Savings & Negotiations :
A savings of ` 19.17 Crores was achieved throughnegotiations during the year 2011-12 as against` 5.15 Crores last year.
Vendor Development
Vendor Information System portal has been developedand placed in our VSP's Website for the benefit of all
Support to Local Micro & Small Enterprises :
RINL extends purchase preference to Local Micro &Small Enterprises for 60% quantity subject to theirmatching L1 price when the quoted prices is within15% of L1 price. It has also been provided in theguidelines that payment to Local Micro & SmallEnterprises will be paid within 15 days against 30 daysfor others. Details of no. of orders and values placedon Local Micro & Small Enterprises during 2011-12as against 2010-11 are as given under.
the Vendors to know the status of MM - ITTs / A/Ts.
VDC has enlisted/upgraded 112 Vendors during2011-12 wherein efforts made and expanded about48 Material Sub-Groups have been crossed morethan 8 Vendors as part of widening of Vendor base.
18th Plant Level Committee Meeting was held on22nd Sept. 2011 in RINL/VSP.
30th Annual Report 2011-12
19
Heavy Equipment Stores after 5-S
Heavy Equipment Stores before 5-S
Implementation of Integrity Pact :
RINL/VSP is one of the first organisations to implementIntegrity Pact w.e.f 01st Apr. 2007. Initially, thethreshold value for Integrity Pact was ` 5 Crore andsubsequently, it has been brought down to ` 1 Crorefrom March, 2009 onwards. Integrity Pact is beingimplemented successfully in Five TenderingDepartments viz. Projects, Works Contracts, Personnelcontracts, Material Management and Marketing.
Details of Cumulative Value of ContractsAwarded :
Materials Management - Stores :
During the year 2011-12 Non-Moving Inventory for theSpares and consumables was brought down by about4.51% from a level of ` 21.92 Crores in 2010-11 to` 20.93 Crores in 2011-12. Similarly, an increase of39.71% from earnings from disposals, CENVAT claims,Chartered Agency and Custom Agency from ` 80.91Crores in 2010-11 to ` 112.57 Crores in 2011-12registering a growth of 39.12%.
RIC has achieved the benefits ` 1.09 Crores, onaccount of outsourcing of Inspection and CapacityAssessment through Projects & Development IndiaLimited during 2011-12 (i.e. ̀ 0.59 Crore against Pre-dispatch Inspection and ̀ 0.50 Crore against CapacityAssessment).
5-S :
MM-Purchase received the 5-S certificate from QualityCircle Forum of India for successful implementation of5-S Work Place Management System. MM-Stores wasa First department in RINL, VSP to receive 5-S. Withthe Certification of MM-Purchase the implementationof 5-S in the entire MM Department is complete. MMDept. bagged a Silver Medal & Certificate in the interdepartment 5-S competition held by chapterconvention of Quality Circle .
Imported Coking CoalFerro Alloys+Refractories+Spares+ConsumablesMajor Indigenous Raw Material
RASHTRIYA ISPAT NIGAM LIMITED
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It may be observed from the above that during2010-11, MM Dept. awarded tenders worth of` 8,525 Crores and integrity pact was covered fortenders worth ` 5,244 Crores ( 61.5%). Similarly,during 2011-12, integrity pact was covered for tendersworth ` 5,863 Crores (61.8%) against total tendervalue of ` 9,481 Crores.
(`Crores)
Imported coking coal
Ferro alloys + refractories+ spares & consumables
Major indigenous rawmaterials
2011-12 2010-11
5001.16 5001.16 4514.57 4514.57
1240.68 861.80 1105.52 729.54
3238.69 -- 2905.35 --
9480.53 586.96 8525.44 5244.11
Total IP Total IPCovered Covered
Financial Management:
The focus on fiscal measures in the Company continuedfor improving operational efficiency and optimizingexpenditure on interest, bank charges and insurancewhile improving earnings on surplus funds.A comparative performance of major financialparameters is given as below:
`̀̀̀̀ In Crs2011-12 2010-11
Sales Turnover 14,462 11,517
Profit before Interest, depreciationand tax (EBIDTA) 1,645 1,412
Less: Interest and Finance charges 191 164
Less: Depreciation 345 266
Profit before Tax (PBT) 1,110 982
Less: Provision for Tax 359 324
Profit After Tax (PAT) 751 658
Net Worth 13,659 13,229
EBIDTA to Net Sales (%) 12.52 13.49
Return (PAT) on Net worth (%) 5.50 4.97
EBIDTA to average Capital employed (%) 33.53 25.09
Earnings per share (` 1000 each) 126.18 85.79
The profit for the year was impaired adversely byincreased input prices mainly that of Iron ore &imported coal. However, the adverse impact was offsetby increase in net sales realization of saleable steel,through better market mix and better efficiencies inproduction.
Projects
Expansion to 6.3 Mtpa Liquid Steel :
The first phase of Expansion to 6.3 Mtpa liquid steelhas been brought to the stage of hot commissioning.In addition to increase in capacity, the adaptation ofnewer technologies are likely to help in improvingenvironmental measures, reduction in energyconsumption, improvement in productivity and yield etc.
Status of Implementation of current expansion
Units already commissioned:
Blast Furnace (Commissioned in April 2012)Caster to produce billets & rounds- (Caster 2commissioned in May 2012)Oxygen plantRaw material handling plantChilled water plantLadle heating furnace-Caster shopReheating furnace of WRMCranes for production in SMS, WRM & BFWater plantElectrical System-34 Substation and connectingfacilities
Other utilities
Blast Furnace is likely to be ready shortly for startingHot Metal production. Heat is already taken in LHF &Caster. Converter is getting ready. (BF 3commissioned on 24th Apr. 2012 and Caster-2commissioned on 12th May 2012 and are understabilization).
Stage - II (Special Bar Mill & Structural Mill) :
Second stage of expansion includes installation ofSpecial Bar Mill and Structural Mill. Major Civil &Structural works are completed. Equipment supply anderection is in progress. Several dependent units viz.,water system, power system etc are gettingcommissioned matching the requirement.
30th Annual Report 2011-12
21
Other Projects :
In addition to Expansion, there are seven majorprojects each costing more than ` 150 Crore underimplementation which includes installation of Boiler -6 and TG-5 in power plant by BHEL, 600 TPD AirSeparation Plant by Air Liquide Engineering India,Pulverized Coal Injection system by Chinese firm CERIalong with Simplex, India, additional Iron Ore Storageyard by Bridge and Roof & others and By product plantand Coal Handling system of Coke Oven Battery - IVby MECON & others.
Most of the projects are in advance stage ofcompletion and balance projects are progressing asper requirement.
In addition to the above projects other major projectsapproved for implementation are:
1. 3rd Converter and 4th Caster
2. Coke-Oven Battery No.5
A new Coke Oven Battery (COB#5) along with ByProduct Plant is planned to be set up with a production
capacity of 0.8 Mtpa of Coke. The project wasapproved by RINL Board on 07.12.2011 at anestimated cost of ` 2,620 Cr. The appointment ofconsultant is under progress.
3. Seamless Tube Mill (SLTM)
RINL Board on 04.12.2011 approved the installationof SLTM of 0.4 Mtpa capacity at an estimated cost of` 2290 Cr. for producing 5½" - 18" Seamless tubeeither through joint venture or on its own. The plant islikely to be on stream in about 3 years period.
4. Axle Plant at New Jalpaiguri, West Bengal
In its endeavor for product diversification, RINL hasentered into an MoU with Indian Railways to establishan Axle Plant at New Jalpaiguri, West Bengal. MECONhas been entrusted with consultancy work for the plant.Tenders are floated for main Technological Packages.The project commencement works inaugurated byHon'ble Chief Minister of West Bengal, Ms MamtaBanerjee along with Union Cabinet Minister Shri ManiShankar Iyer in August 2012. The plant is likely to beoperational by 2014-15.
5. Water Storage Augmentation
To take care of future expansion needs, RINL hasproposed to have one more water reservoir in itspremises and the RINL Board has approved theproposal. The Basic Engineering is under progress byCDO, Hyderabad. The project is likely to be completedin about 3 years.
In addition, capital investment of additional` 7,000 Cr. is also being planned towards up gradationof existing facilities along with addition of Converter &Caster, thereby increasing capacity further to 7.3MTPA. This will include upgradation of BF-1 & 2,revamping and upgradation of SMS-1 Converters andSinter Machines-1&2 with latest technology.
Next phase of Expansion of RINL to 11/12 Million tonneper annum
The Board of Directors of RINL have accorded inprinciple approval for engaging a Consultant forpreparation of Project Report for 11/12 MT Expansionand it was awarded to Dastur & Company. The draftreport is under consideration of Board. In this phase,RINL would diversify its product mix to flat productscategory including special grade steel like CRGO &CRNO electrical steel.
Facility Technological feature Advantages
SP Circular cooler Energy efficiency(400 Sq.m) Multi slit burners Energy efficiency
BF Pulverised Coal Injection Reduced coke(3800 cum) consumption
Improved productivityCopper staves in high Better campaign lifeheat zonesHearth bottom cooling Better campaign lifewith waterProfilometer Improved process
controlSMS-2 Reduced(2x150t Combined blowing consumptionconverters) of Ferro Alloys(2x6 Str. Billet EMS, LHF, RH Cleaner steelcaster & Auto mould level control Reduction in1x6 str. Combi breakoutscaster) Contour & bath level Measurement of
measurement refractory lining
SBM 20-45mm size in straight Reduced wastage& coil form for end userFree size rolling Customized sizes
with tolerance+/-0.1mm
WRM High speed WRM Increased(105-110m/s) productivity
Superior Technological Features in 6.3 Mtpa Expansion
RASHTRIYA ISPAT NIGAM LIMITED
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Group GrandTotal Gen OBC SC ST Women Men Ex-Ser DPs PHY
*A 5516 3582 621 925 388 328 5188 5 296 12
*B 6881 5137 229 1167 348 87 6794 7 1727 28
*C 3276 1951 492 483 350 76 3200 103 1710 41
*D 2406 1722 194 371 119 38 2368 52 2020 24
GrandTotal 18079 12392 1536 2946 1205 529 17550 167 5753 105
10. Up gradation of UPS Battery Bank at CentralComputer Centre was completed.
11. Automated Mail was enabled for marketing fordaily flash summary in the morning before 6 AM.
Enterprise Resource Planning (ERP)
ERP implementation at RINL envisages seamlessintegration of all business processes, enable decisionmaking based on information that is visible andtransparent across all levels. With a single transactionbase that is shared, updated and drawn upon by theentire organization, standardization of all the masterdata across business functions is achieved. The to-beprocess realization has been completed and theintegrated testing is in progress. The activities likecutover data preparation and end user training whichare pre-requisites for a successful go-live are plannedto be completed by Apr' 2012. The Project is expectedto Go-Live during the financial year 2012-13.
Employees:
Manpower:
The manpower strength of the company stood at18,079 as on 31-03-2012. There is a net increase inthe manpower by 250 (i.e. from 17,829 as on 01-04-2011 to 18,079 as on 31-03-2012).
Group wise manpower as on 31-03-2012 wasas below:
Persons with disabilities (equal opportunities,protection of rights and full participation) Act, 1995.
Directional Plan :
RINL has made directional plan to invest additionalamount of ` 70,000 Cr. during coming decade forexpanding its capacity to 20 MT in phases.
Information Technology:
The various initiatives undertaken by IT Dept are
1. Implementation of Single Window BloomStorage Yard (BSY) Management System atBSY/ Steel Melting Shop from 17th Aug. 2011.
2. Reverse e-auction package for HandlingContract / Consignment Agent was implementedin Marketing.
3. Vendor Rating System was implemented inMaterials Management Department.
4. IT applications are implemented in the secondstockyard, which was recently established inBhubaneswar branch.
5. Development of software for Rail Despatch (fromrake planning to indent) for by product and Pigiron (involving Marketing, PPM & Trafficdepartments) was completed in Jan. '12.
6. Cylinder Management System for UtilitiesDepartment was developed and being deployed.
7. Implementation of eDAK in all the departmentsacross the plant was started.
8. Safety Training System was implemented.
9. Internal audit for all the processes wascompleted for CMMI Level-3.
*A Junior Officers and above.*B S-7 and above (Non executives)*C S3 to S-6 (Non executives)*D S1 and S-2 (Non executives)
30th Annual Report 2011-12
23
Workers' Participation
Issues pertaining to workers collective are beingdiscussed at various fora with Recognized Union andother unions. At present, 92 bipartite committees arefunctioning with equal participation from Managementand Workers representatives to discuss issues at theshop level & plant level on Welfare, Safety, Production,Productivity, Medical, Sports, Marketing and Finance,etc.
Industrial Relations
Industrial Relations by and large were peaceful duringthe year.
Welfare:
RINL fulfills all the statutory welfare measures and asa responsible care taker of its employees, itimplements various schemes for the benefits of itsemployees like RINL Superannuation Benefit scheme,Long Service Awards, fitting Farewell to RetiringEmployees, motivating employees through JawaharlalNehru Awards, Awards to the children of VSPEmployees and conducting Socio-Cultural Programmesat VSP Schools and township.
The "Promotion of Free Education" scheme wasintroduced in the year 2007 as a CSR initiative atVisakha Vimala Vidyalayam (Ukkunagaram & BC Road)for providing free education to the children from thepoor families. 1,382 students (844 girls & 538 boys)were provided free education under the scheme in theyear 2011-12. The total expenditure for both schoolsof Visakha Vimala Vidyalayam (Ukkunagaram & BCRoad) for the year 2011-12 was ` 3.70 Cr. Support isalso given to Arunodaya Special School for differentlyabled children. 20 employees had participated inNational Himalayan Trekking Expedition and NationalWestern Ghats Trekking Expedition during the year2011-12.
Training Programmes:
1,062 Training programmes were conducted forimproving the Skill and Knowledge of employees in theareas related to Technology, Computers, Safety andHealth covering 34,167 participants. RINL hasachieved 2,14,515 Training Man days and HumanCapital Development Index of 1.65 by conducting In-
Sl.No Objective Target Actual
1 No. of QC projects implementedin the organization 3,950 4,779
2 No. of Suggestions generatedacross the organization 17,600 21,479
3 No. of depts facilitated forobtaining 5S certification
During the year 2011-12 6 6
Cumulative up to 2011-12 70 70
Employee Involvement:
Employee involvement activities like Quality Circles,Suggestion scheme and 5S of VSP have shown animpressive growth in the overall performance of thecompany. VSP employees are suitably recognized andawarded for their active involvement and the detailsare given below:
1. Around 62% of VSP employees are involved inQuality Circles Projects being implementedduring 2011-12 with a growth of 10 % over thepreceding year.
2. There is an increase of 20% in implementationof accepted suggestions during 2011-12 inSrujan Vikas Management System.
3. 86 employees of VSP were aptly recognized &awarded for their outstanding performancethrough "Special Performance Awards Scheme"for the year 11-12.
house Training programmes. The Training Effectivenessindex achieved was 4.31 on a 5 point scale i.e., 86 %.105 employees were deputed abroad for undergoingtraining in advanced and new technologies which areenvisaged for the expansion units. Training facilitieswere extended to 8,687 students for undergoingindustrial awareness training and for doing projectworks.
Organisation Development:
Management Services Department has continued withvigor the 'Employee Involvement' process for inclusivegrowth with the schemes 'Quality Circle ManagementSystem' (QCMS), 'Srujan Vikas Management System'(SVMS) and '5 S' - the workplace management, tomotivate and encourage employees by involving them.
Following are the highlights of major achievements inemployee involvement activities during 11-12:
RASHTRIYA ISPAT NIGAM LIMITED
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To cater to the specialization services in differentfields of Medical Sciences, VSGH has enteredinto MOU with the following Hospitals in additionto engaging super specialists as visitingConsultants:
Local : Sevenhills, Care, Apollo, Apex, Indus,Rama Hospitals, Mahatma Gandhi CancerInstitute, Visakha Eye Hospital;
Non-Local : Apollo, Yashoda, NIMS, Kamineniand Indo American Cancer Institute at Hyderabad;Cancer Institute, Adayar, Christian MedicalCentre, Vellore;
The 33rd All India Steel Medical Officer'sConference (AISMOC-2012) which is aprestigious Conference was held at VSGH from3rd to 5th February, 2012 wherein about 250Doctors from different Steel Plants and nearbyIndustrial Hospital were attended thedeliberations.
Enhancing infrastructure like, 17 new OPD Roomswere added to the Hospital to ease thecongestion.
Under CSR activity two medical camps covering1,000 patients and four medical camps by SteelDoctors Trust covering 1,405 employees wereconducted;
Grievance Redressal Mechanism :
In RINL/VSP utmost importance is being given for bothemployee and public grievance handling system. A wellstructured grievance handling system is functioning forformal and informal grievances, which provides easilyaccessible machinery to ensure expeditious settlementof grievances leading to increased job satisfaction,productivity and efficiency. The performance in termsof handling grievances is being monitored regularly. AGeneral Manager level officer has been nominated asa Nodal officer for monitoring public grievances. Widepublicity has been given through internal circular tosensitize all concerned so that public grievances aredisposed off within the time limit prescribed underCitizen Client Charter (CCC). On-line public grievanceportal of Department of Administrative Reforms andPublic Grievances (CPGRAMS), Government of India isbeing monitored regularly to redress the grievancereceived from CPGRAMS. A link to the GOI's portal forpublic grievance has also been provided in the RINL-VSP's website.
4. 59 employees were recognized through"Employee Instantaneous Recognition Scheme"for their contribution, towards encouragementto employees for achieving outstandingperformance and showing individual initiativeduring 2011-12.
Medical & Health Services :
The Company has a well-equipped General Hospitaland 4 peripheral health Centers for taking care of thehealth needs of its employees and their families. It alsorenders services to CISF personnel and their families,staff and dependent members of schools (KV, DPS,DAV), Government audit Officers and retired employeesand also other non-entitled persons in the vicinity /neighbouring areas. It is a modern multi-speciality 160bed hospital with over 103 doctors and 208paramedical and other supporting staff.
The following are the initiatives taken up during theyear:
Regular and modified health awarenessprogrammes like safety awareness, yoga &meditation, life style changes and etc. have beenconducted as a part of man maintenanceprogramme.
In association with India Diabetes ResearchFederation, Chennai, massive DIABETESSCREENING programme to detect pre-diabetesorganized for all employees at the interval of halfyear/annual basis; around 9,603 employeeswere covered under risk of developing diabetes;
Complete Digitization of employee HealthRecords carried out - a UNIQUE and INNOVATIVEinitiative in Steel Industry;
Implementation of HIV/AIDS WorkplaceInterventions reaching the employees andcontract workers through Master Trainers andPeer Educators;
Health days like World Health Day, World AsthmaDay, World Diabetes Day, National Voluntary BloodDonation Day, World Sight Day, InternationalNurses Day, World AIDS Day, Thyroid AwarenessWeek, Pulse Polio Programme, and NationalTuberculosis Day etc. were observed. NationalAdolescent Education programme as a part ofAP Adolescent Education on changes in teenage,nutrition, hygiene goal setting etc. have also beentaken up in association with the schools.
30th Annual Report 2011-12
25
The information regarding the grievances for the year2011-12 is furnished below:
Women Empowerment:
Women employees have been associated inappropriate Committees providing them anopportunity for development. Special programmes forwomen employees have been organized by HRDdirectly and also through the Forum of Women In PublicSector (WIPS) which was formed in the Company in1997 under the aegis of SCOPE. Training andDevelopment programmes aimed at careeradvancement, women empowerment, personalitydevelopment, gender sensitization, safety awareness,occupational health, osteoporosis awareness,interpersonal skills, computer skills, communicationskills, capacity building, work life balance, leadershipand safe and healthy living etc. have been organizedduring the year, covering about 294 womenemployees.
SlNo
Type ofGrievances
Grievancesoutstanding
as on 1st April2011.
No ofGrievances
receivedduring
the year
No ofGrievancesdisposed offduring the
year
No ofGrievances
pendingas on
31st March2012
1 Public 6 14 19 1
2 Employees Nil 8 7 1
S. No.of No. ofNo. Details Programmes Participants
Conducted1. In-House Management
Development ProgrammesExclusive Woman Programmes a) Woman Development 1 programme 45 b) Gender Sensitivity 2 Programmes
2 External Nominations 59
In pursuance of the Hon'ble Supreme Court'sJudgement and keeping in view the Governmentinstructions/guidelines on sexual harassment of womenat work places, a Committee headed by a womanofficer was constituted to inquire into the complaintsof sexual harassment at work places. A provision inthis regard has also been incorporated in the Conduct,
Discipline and Appeal Rules / Standing Orders of theCompany. During the year, no incidence of sexualharassment of women or discrimination amongstwomen employees on the basis of gender has beenreported.
Progressive use of Hindi:
For effective implementation of Official Language Policy,various activities have been undertaken during the year2011-12 as under:
Committee of Parliament on Official Languageconducted inspections in New Delhi Regional Officeand RINL Headquarters on 9th May, 2011 and28th Sept., 2011 respectively. The committeeappreciated the activities undertaken at RINL towardsOfficial Language implementation. All the assuranceswere fulfilled within the specified time period. In linewith the directives received from Ministry, Unicode wasenabled for working in Hindi on computers and usedin Headquarters and various Subordinate Offices.Training towards the above has been furtherstrengthened and extended to outstation offices.
269 employees were trained in two batches underHindi Prabodh/Praveen courses. 127 employees weretrained in Hindi Workshops conducted atVisakhapatnam and Mines. Hindi classes wereconducted for housewives of Ukkunagaram underDakshina Bharat Hindi Prachar Sabha courses. Anintensive Translation course was also organized inRegional Office, Mumbai with the help of CentralTranslation Bureau, Govt. of India wherein therepresentatives of all the Branches of Western Regionhave participated. To create an environment andinterest towards Hindi amongst employees, a HindiHasya Kavi Sammelan was organized with the help ofpoets of National repute.
A National Level Hindi Seminar in Official Language wasorganized on 'Promoting Usage of Steel in Rural Areas'in which representatives from various Organizationsparticipated. On this occasion, a Special issue viz.'KHAPAT' consisting of articles from delegates wasreleased. 4 issues of quarterly Hindi Magazine'Sugandh' and Hindi version of in-house News Magazineof VSP 'Ukkuvani' were published during the year. Hindi
RASHTRIYA ISPAT NIGAM LIMITED
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Major Activities and Initiatives:
I. Safety Week Celebrations:
Safety Week was celebrated in variousdepartments of the Company by conductingsafety competitions like Safety Quiz, Essay writing,etc in which both regular employees andcontractor workers participated. Safety skits andother cultural activities were also organized toincrease the safety awareness.
II. Fire Safety:
1. More than 144 numbers of fire mock drillswere organized in several departments andall the deficiencies and other observations
Week, Hindi Implementation Day were conducted andvarious competitions were organized in differentDepartments at Visakhapatnam steel plant, Minesoffices and Regional/Branch Sales Offices. SixDepartments / Sections were inspected in eachquarter and necessary help was extended forprogressive use of Official Language.
In recognition to the efforts taken in effectiveimplementation of official language in the organizationFirst Prize of Prestigious Indira Gandhi RajbhashaShield was bestowed to the company by Her-Excellency President of India on 14th September, 2011at New Delhi.
Safety
RINL -VSP was awarded "Ispat Suraksha Puraskar -2012" (Integrated Steel Plant) for [(No Fatal Accidentoccurred during 2010 - 2011 at following Zone(s)]Blast Furnaces, Slag Granulation Plant, Sinter Plants& Raw Materials Department. Steel Melting Shops,Continuous Casting Shops. Wearing of crash helmetsby two wheeler riders has been made compulsory inVSP w.e.f. April 2011. As a result, there is significantreduction in the number of road/fatal accidents.
Reduction of Accident RateFrequency Rate of Accidents
(no. of accidents per million man hours worked)2010-11 2011-12 Change Remarks
0.67 0.50 25.37% AchievedReduction
made during the drills were complied with.
2. Training on 'Fire Safety' was imparted to allthe employees and workers as part of safetytraining.
3. A demo by CISF fire brigade on 'extinguishingdifferent fires, rescue of persons during fires'and also a skit on 'Cooking Gas Safety' werearranged at central fire Station as part ofFire Safety Week Celebrations. Hundreds ofemployees witnessed the program.
4. Fire Safety week was celebrated on the eveof National Fire Day on 14th April, 2011 andvarious competitions were conductedamongst the employees and familymembers. Fire demonstrations wereconducted in various shop floors and alsoat Township.
5. Regular joint inspections were conducted byteams consisting CISF, the concerneddepartment, Instrumentation Departmentand SED to check the status of all the firefighting facilities and their functioning.
III. Implementation of OHSAS 18001
1. 1st & 2nd Surveillance of QSHE audits wereconducted for OHSAS: 18001-2007 by M/s BVCI.
2. All the OHSMS Work Procedures, ApexManual, MRS procedures, HIRAs,documents, records were revised in line withQSHE Standards towards integration ofQuality, Health & Safety, and Environmentstandards. Updated QSHE E-issues of allthe OHSMS Procedures, HIRAs and otherdocuments, MSDS, On-site Emergency Planare made available in the QSHE and SafetyEngg. Department portals.
IV. Safety Audits:
1. Annual External Safety Audit has beenconducted by VEXIL Business Process Pvt.Ltd from 27th June '2011 to 1st July '2011and the reports were sent to A.P Factoriesdepartments.
2. Internal Safety Audits were conducted forthe periods, Jan-June/2011 and July-Dec/2011 periods in 16 identified majordepartments.
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27
pamphlets were distributed to theemployees and workers in May, 2011
4. Safety Caution/Sign Boards were providedat BF-GCP-1 level crossing area in May,2011
5. Speed limit campaigns conducted by SafetyOfficers at all level crossings & speed limitsstickers were pasted on LMVs on 23rd &25th Nov' 2011.
6. Heavy vehicle Road Safety pamphlets weredistributed covering more than 500 drivers.
7. Safety Talk was given to all the duty busdrivers on 10.06.2011 at CO&CCP dept.
8. A Rail & Road Safety awareness programwas conducted for Traffic departmentemployees and for heavy vehicle drivers ofMarketing Department.
9. Road Safety & Case studies alertness classwas conducted for ESF employees on 20th
July 2011.
10. OHSAS-18001, 2007 Standard InternalAuditors Course was conducted for 22 nosof executives during 5th to 7th September2011 by BVCI.
11. Two Special Training programmes wereconducted for FMD truck drivers.
VIII. Others:
1. Tripod with winch as EN-795 standard,Safety spectacles clear poly carbonate asper EN 166, Safety nets as per IS-standardswere ordered for the first time in VSP.
2. A presentation was arranged by DUPONTon "Road Map for Safety Excellence" atCMD's conference hall on 9th Sept' 2011.
3. A drive of Illumination level checking wasdone at all the level crossings inside theplant on 21st Oct. 2011.
4. Refresher and renewal safety trainingimparted for 8,790 of contractors' workersand 6,967 regular employees.
Implementation of Right to Information Act 2005:
A total of 1,027 requests have been received under theRTI Act-2005, during the year. Of these, 959 requests
V. Focus on Behavior Based SafetyManagement:
Behavior Based Safety Management (BBSM) isbeing imparted during the one-day trainingprograms held 4 times a week at SurakshaBhavan and monthly once at T&DC. Two, Oneday specialized training programmes wereconducted on "Behavioral Based Safety" atTraining & Development Centre by Dr. HL Kaila,Psychologist, ex-CLI, NSC Faculty from Mumbaifor the executives. A special safety trainingprogram was conducted on "Behavioral BasedSafety Management (BBSM) & Road Safety".
VI. Special Safety Training Programmes:
1. Various special safety classes including GasSafety Awareness, A 'Permit to Work'awareness, General Safety & AccidentPrevention, First Aid & personal protectiveequipment, Refresher safety programswere conducted for different departments.
2. A presentation on "Safety towards BusinessExcellence" was arranged at ED (W)conference hall on 01st July 2011 with JointChief Inspector of Factories, Govt of AP forDGMs, HODs & GMs
3. A "Legal awareness" training programmewas organized for E1-E3 executives by BVCIat HRD centre on 30th & 31st of August2011, 2nd, 3rd, 8th & 9th Sept. 2011 forCentral Safety Committee members.
4. Special Safety training Classes conductedas evening programmes.
VII. Road Safety:
1. Road Safety Awareness week wasobserved in the plant during the period 1st
to 7th Jan 2012 with the help of TrafficPolice authority, Visakhapatnam.
2. A safety campaign on wearing of crashhelmets was organized by the CSCmembers, DSC members and Safety Engg.Department on plant plaza road &Balacheruvu gate regularly.
3. A safety campaign on "Safety at Rail-RoadCrossings" was conducted at BFGCP-1 &LMMM level crossings and safety
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have been disposed off by furnishing information to theseekers, 12 requests were rejected as per theprovision of the Act and 68 requests were pending ason 31st March, 2012. In nine cases, appellants haveappealed to CIC.
A training cum workshop on "Right to InformationAct-2005" was organized for the officers (around50) dealing with RTI Matters in the organizationon 3rd October, 2012. The programme wasconducted by Shri K Ramarao, Director,Hindustan Academy of Law, Visakhapatnam.
A Training cum work shop on RTI Act -2005 wasorganized in association with Indian Society ofTraining & Development (ISTD) on 27th April2012, where public information officers of otherlocal public authorities had also participated inthe programme.
Information available in the 17 manuals of theRTI portal in Company website has been updatedin accordance with the requirement of section4(1) of RTI Act-2005.
Statutory reports like Monthly Returns, QuarterlyReports, Annual Returns, Annual Reports andother reports asked for were compiled andforwarded to the Ministry and Quarterly Returnswere submitted online to CIC.
Compliance with Law/ Legal Requirements:
The Company has put in a separate Intranet Portal onlegal affairs of the Company. In terms of the guidelinesissued by the Government, a Quarterly Report on theprogress of Arbitration cases is being put up to theBoard of Directors for information. An Internal Reportingsystem has been introduced indicating the progress ofthe cases in various Courts and the status of the casesas at the beginning of the year and also at the end ofthe year.
Promoting Work Ethics/ Vigilance Activities:
Continued efforts have been made by VigilanceDepartment to promote transparency, ethics andintegrity in RINL through special focus on preventivevigilance, by conducting system studies on theprocedures being followed in the company, intensiveexamination of works contracts and purchase orders,perusal of audit paras and internal audit reports,identification of sensitive posts, conducting surveillance,surprise checks, random scrutiny of bills etc. Theobservations / deviations and suggestions for
improvement have been communicated to theconcerned along with appropriate recommendations.Besides, attention is given for creating awarenessthrough publication of newsletters and brochures, toshare information on relevant topics amongst theemployees and other stake holders. Assistance hasbeen provided to the concerned in processing ofdisciplinary cases emanating from vigilancerecommendations. The department has beeninstrumental in identifying new areas/sections wherepotential of IT can be leveraged to improvetransparency and fairness.
Vigilance activities during the year have resulted insignificant savings to the company. Further, the systemimprovements suggested are expected to givesubstantial recurring benefits in future also.
Vigilance Awareness Week was observed from 31st
October to 3rd November 2011 on the theme'Participative Vigilance". Wide publicity to the themeand events organised was afforded through display ofhoardings, banners and posters at selected locations,intranet and telephone network, issue of circulars andbringing out brochure etc. In conformity to the theme,several programmes were organized involving theparticipation of school children, employees and theirdependents and other stake holders. Notable amongstthem were inter school skit and elocution competitionfor children and slogan competition for employees andtheir dependents. A guest lecture by Shri VenugopalK. Nair, IPS, Addl. DGP, Kerala was organised on04.11.2011 for the benefit of employees, on the 'topic"Vigilance & Corporate Governance - its relevancetoday".
The extent of implementation of Integrity Pact duringthe year was to the tune of 70% of total value oftenders floated. Three reviews of the progress ofimplementation of IP were held by the IndependentExternal Monitors along with the senior managementof RINL.
Vigilance department had obtained 5 S certificationfor its work place management and the departmenthas successfully completed its compliance audit.ISO-9001:2008 certification of the department hasalso been renewed upto 11th Oct. 2012.
Corporate Social Responsibility (CSR)
CSR foot print of the Company covers Environmentalcare, Education, Health, People care, peripheraldevelopment, cultural efflorescence, as a responsible
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corporate citizen & help during natural calamities.
To meet the above objectives, a budget of ` 12 crorewas approved for 2011-'12 for CSR activities to betaken up as per Policy and in compliance withGuidelines issued by DPE. It may be mentioned thatduring last 5 years, the total expenditure towards CSRhas been varying up to 1.5% approx. with a cumulativeapproved budget of 1.3%.
Enabling CSR activities:
The Company in its efforts to attain self-sufficiency inmajor raw material, has applied for acquiring iron oremines in the states of Odisha, Jharkhand, Chhattisgarh,Rajasthan & Uttar Pradesh. CSR activities in theseareas also contribute to the generation of goodwillamong the residents thereby creating a brand image.During 2011-'12, Company has taken up CSR activitiesin some of these areas also.
In compliance with DPE Guidelines, RINL has enteredinto MOU with TISS National CSR Hub which is a broadbased engagement objective in all areas of CSRactivities. The company has also entered into MOUwith Andhra University for conducting baseline survey& impact survey in RH Colonies and Peripheral villagesof VSP and with CPWD for execution of Engineeringprojects of VSP-CSR. CSR team is striving to hone thesystems & process of implementation & monitoring theprojects, through professional guidance from TISS etc.,Similar MoUs with Institutions and domain expertagencies of repute are also in the anvil.
Flagship programs:
'Green Visakha' : This program was launched witha view to reduce pollution in the area of GreaterVisakha Municipal Corporation (GVMC). The programhas been planned with a target of planting 5,00,000
trees in a period of 5 years(commencing 2011) in theGVMC area. This Project is recommended byParliamentary Committee on Environment, Forests,Science and Technology and in coordination withVisakhapatnam Urban Development Authority(VUDA),GVMC & AP State Pollution Control Board. The initiallaunching was held on 30th January 2012 in presenceof District Collector, CMD RINL & other Directors ofthe Company. Launching of 'Green Visakha' Project
'Sanjeevan' : The company has commissioned a stateof art mobile cancer detection van 'Sanjeevan ' anddonated it to 'Lions Cancer Hospital' Visakhapatnam,on 26th Dec. 2011 through the hands of Commissionerof Police, Visakhapatnam and in the presence of CMDRINL & other Directors of the Company. Lions CancerHospital will organize mobile camps in rural areasutilizing the Van, especially for detection of cancer atearly stages. The state of art mobile unit is equippedwith latest cancer detection facilities which enable earlydetection of cancer for permanent recovery.
During 2011-'12, 6 medical camps were organized &1,247 people were tested out of which 25 suspectedcases have been taken to Lions Cancer Hospital forfurther investigation & treatment.
Jaladhara : Environment friendly project 'Jaladhara'(3rd phase), for providing safe drinking water to 9 tribalvillages of Agency area of Vizag District have beenlaunched. This project provides filtered, perennialdrinking water by gravitation method from a rain fedsource which is at heights, without using electricalpower/energy. About 3,000 people in 9 villages will bebenefited. The Company has already executed theearlier 2 phases in 10 villages which has benefited
Dedication of 'Sanjeevan'Mobile cancer detection van
Launching of 'Green Visakha' Project
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Medical Camp
2,600 villagers. The project is being implementedthrough D. Sarada Trust.
Arunodaya Special School: Free education andtraining/therapy to differently abled children - RINL hasbeen giving overriding emphasis on imparting educationto differently abled children also. The company hasconstructed a school building at Ukkunagaram, fordifferently abled children, at its own cost, with allfacilities for providing education, vocational training,music therapy, yoga, speech therapy, physiotherapyfor differently abled children. The school is managedby the 'Arunodaya Educational Trust' which is ablyassisted by qualified teachers drawn from the residentsand local area.
Other important CSR initiatives during the year :
In Health Care area, the company has organizedgeneral medical camps & eye camp in association withSatya Sai Seva Samithi, doctors from VSGH, in RHcolonies & peripheral villages of VSP.
28nos. Eye camps were organized during the yearthrough M/s Sankar Foundation in Rehabilitationcolonies, Peripheral villages of VSP and rural areas of
Vizag, Vizianagaram and Srikakulam Districts. Duringthe year, 4,995 people were tested and 1,192cataract surgeries were carried out to bring light intheir lives. (cumulative 4,791 surgeries since 2007).Reciprocities arrangement with Sankar Foundation forconducting free eye camps & cataract surgeries underfinancial aid for setting up 8nos. Operation Theatresin their hospital near Simhachalam.
Distribution of Artificial limbs to 200 poor & needy tribalpeople in Srikakulam & West Godavari districts ofAndhra Pradesh, through M/s Gurudeva CharitableTrust.
Computer awareness program was organised at ZPHigh school, Islampet. CMD-RINL & D(F) were present.
Free education to economically poor students throughVisakha Vimala Vidyalaya Schools at Ukkunagaram &
Inauguration of 'Arunodaya Special School'
Jaladhara'-protected water to tribal people
Medical Camp
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Balacheruvu. About 1,500 students were given freeeducation.
Mosquito Nets 3,134 nos. were distributed in 20 TribalWelfare Ashram Schools in 9 Tribal mandals ofVisakhapatnam district, where people are beingaffected with malaria menace, under the aegis of
Integrated Tribal Development Authority (ITDA).
Jan Shiksha : A CSR initiative in the area of'Empowerment' of unemployed youth & women tobecome employable for their sustainable living. About
640 people in RH colonies, peripheral villages, andtribal areas of Vizag District, have been given trainingduring the year, in Light Motor Vehicle driving, Tailoring,Beautician , Electrician.
Flagging of 'Empowering' women - training in Tailoring
CSR in Mines area :
The Company has its captive mines for limestone,dolomite, manganese & sand. Activities were takenup in our mines areas of Jaggayyapet, madaram &Garbham. The mining activities are served byemployees residing in township area of Mines. CSRactivities in the Mines cover community & society livingin and around the mines area.
Flagging of Empowering women -training in Tailoring
LMV Driving training
Start of Computer awareness program
Distribution of Artificial Limbs
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Vocational training was given to 725 women atJaggayyapet & Garbham villages in courses like Dressmaking, Aarya works, hand embroidery, fabric paintingetc., for their sustainable living.
School Furniture, Library books, computer & othersports material were provided to the schools in Minesarea at Jaggayyapet & Garbham. Power supply wasgiven to Water supply scheme at Madaram village.
CSR in Marketing Branches :
The Company has 23 Marketing branches spread overalmost all States of the Country. The marketingactivities in States contribute to the State exchequerapart from serving the requirements of the localindustries. Marketing activities also cover the ruralareas in the States.
CSR activities in the outstation branches contributetowards brand building & goodwill.
Activities at Outstation branches include:
At Bengaluru: Distribution of School kits to 30students & adoption of 10 girl students of schools.
At Jaipur: Distribution of School kits to 30 students& adoption of 10 girl students of schools.
Mining areas: The Company in its efforts to attainself-sufficiency in major raw material, has applied foracquiring iron ore mines in the states of Odisha,Jharkhand, Chhattisgarh, Rajasthan & Uttar Pradesh.CSR activities in these areas also contribute to thegeneration of goodwill among the residents therebycreating a brand image.
In rural areas of Uttar Pradesh, the Company hastaken up CSR activities which include constructionof 10nos. additional class rooms, providing 200solar street lights, laying of road, providing 200nos.hand pumps.
In Rajasthan, survey was done to take up activities.
Visteel Mahila Samithi (VMS):
The ladies arm of RINL is executing several communitydevelopment & societal support as part of CSRinitiatives, on behalf of RINL. Some of the activities byVMS are :
Providing desk cum benches, fans & sports itemsfor students in RH colony
Women in training - Fabric painting
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Development of Cultural talent:
The company has given encouragement by contributingto organize cultural programs like Burra katha,classical dance, patriot and devotional songs, in thelocal communities where the local talent of the peopleis also showcased in the programs.
Awards and Accolades:
RINL-VSP bagged 'Excellent Energy EfficientUnit' Award of Confederation of Indian Industry(CII) at the 12th National Award for Excellence inEnergy Management in Hyderabad on 25th Aug.
Roll ing Mills Department won the ' IspatSuraksha Puraskar-2010' for the performanceyear 2009, for no fatal accident occurred during2008-09. Joint Committee on Safety, Health &Environment in the Steel Industry (JCSSI)organizes this 'Ispat Suraksha Puraskar-2010' forRolling Mills program 'Ispat Suraksha Puraskar'every year.
VSP received Sustainability Award-2011,presented by Sri PK Misra, Secretary Steel.
VSP bagged PM's Shram Awards for the year2008. Out of 5 Awards received, one is ShramBhushan and four are Shram Vir Awards.
VSP QC teams brought laurels to the Companyby winning "Excellent" and "Distinguished"awards at the International Convention on QualityControl Circles (ICQCC'11) held atYokohama,Japan from 11th to 14th September.The competition was organized by the Union ofYokohama,Japan from 11th to 14th September.The competition was organized by the Union ofJapanese Scientists and Engineers (JUSE).
RINL-VSP bagged 9 QCFI Awards during NationalConvention on Quality Concepts (NCQC), out of
Distribution of Plates & glasses to 370 studentsin schools in RH colonies towards Mid-day meals.
Distributing Uniforms to students in Govt.schools in RH colonies
Providing Cooler for Govt. Library
Organizing a medical camp in RH colony
Immediate response to the occasion, extended reliefand succor to the 16 fire accident victim families atDevada, a village nearby VSP area, through VMS, on27th Jan. 2012.
Engagement of Employees :
Employees of the Company are voluntarily involved invarious capacities in various non-profit serviceorganizations like Satya Sai Seva Samithi, Lions Club,Rotary Club, D.Sarada Trust etc., which are associatedwith societal & community development activities thusengaging in CSR related programs.
Environmental care by mass plantation
31,000 trees were planted during 2011-12 and Morethan 48 lakhs trees were planted by Afforestation depttill end of March 2012. RINL has developed one
Arogyavanam, which contains various Medicinal Plants.
Sports activities:
The company has supported sports events likeAP Shuttle Badminton Championship for Sr. Men& WomenAP Body Building Championship.
RASHTRIYA ISPAT NIGAM LIMITED
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which 3-Par excellence, 2-Excellence,2-Distinguished and 2-Consolation awards.
RINL-VSP bagged the award for OrganizationalExcellence - INSAAN - Jamshedpur - 11th Nov.2011.
VSP won the National level Best Enterprise Award(III) in the 'Navratna' category for the recognitionof the commendable work undertaken by thePSUs/PS Banks for the development of womenin their PSUs.
VSP QC & 5S Teams Excel at QCFI- NCQC 2011,Hyderabad.
The company secured 2 awards (i.e. 1-Excellent& 1- Distinguished categories) for their QualityCircle Case Study at the 'International Conventionon Quality Concept Circles' (ICQCC)-2011, heldat Yokohama, Japan, in Sept. 2011.
VSP employees received the prestigious Govt. ofIndia, Prime Minister's Shram Awards (5 awards),i.e. 1-Shram Bhushan Award and 4-Shram VirAwards during 2011-12 for its employees'outstanding overall performance in the respectiveareas for the performance year 2008 for the firsttime in the history of VSP.
VSP bagged the INSSAN (Indian NationalSuggestion Schemes Association) award for"Organization Excellence" in performance ofSuggestion Scheme for the Sixth time in a row.
The employees of VSP received 2 awards in theareas of innovative suggestions, and sloganwriting at the INSSAN convention held atJamshedpur.
VSP is the first integrated steel plant in the PublicSector domain to successfully implement 5 S -The Workplace Management. VSP bagged the CII-5S Excellence Award "Certificate of Merit toUtil it ies Department" for its effort in 5Simplementation from CII-Southern Region.
Management Discussion and Analysis Report:
The Management Discussion and Analysis Report, isannexed and forms part of the Directors' Report.(Placed at Annexure-I).
Corporate Governance Report:
The Company strives to attain highest standards ofCorporate Governance. In line with the Guidelinesissued by Department of Public Enterprises during the
year, which have become mandatory from May 2010,a separate section on Corporate Governance isannexed and forms part of the Directors' Report.(Placed at Annexure-II).
Certificate attested by the CEO/CFO is also enclosed,forming part of the Corporate Governance Reportalong with a declaration signed by CMD regarding Codeof Conduct for Members of the Board and SeniorManagement. (Placed at Annexure-III).
Certificate on Compliance of Guidelineson Corporate Governance:
The Certificate on Compliance of Guidelines onCorporate Governance issued by DPE in May 2010,was obtained from a practicing Company Secretaryand is annexed herewith and forms part of theDirectors' Report. (Placed at Annexure-IV.)
Secretarial Compliance Report for theFinancial Year 2011-12:
The Secretarial Compliance Report, confirmingcompliance to the provisions of Companies Act, 1956,Rules made there-under and the provisions containedin Articles of Association & Memorandum of Associationof the Company as obtained from a practicingCompany Secretary, is annexed and forms part of theDirectors' Report (Placed at Annexure-V.)
The Company's Subsidiaries:
During the year 2010-11(in Jan 2011), the Companyhas acquired a stake of 51% in Eastern InvestmentsLimited, which is a holding Company of OMDC andBSLC. OMDC is a mining Company having Iron Oremines in Odisha while BSLC is a mining Company havingLimestone Mines.
The Company's 100% subsidiary viz. Uttarbanga RINLRAIL Karkhana Limited (URRKL) was closed during theyear considering the decision taken for establishingthe Axle Plant at New Jalpaiguri (West Bengal) as aunit of RINL.
Subsidiary Monitoring Framework :
All the subsidiary companies are managed by theirrespective Boards in the best interest of theirstakeholders. RINL functional Directors are in the boardof Subsidiaries. The Company monitors performanceof subsidiary companies, inter alia, by placing Minutesof Board meetings of the subsidiary companies beforethe Company's Board regularly.
Subsidiary annual report is enclosed as a separate
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35
volume with this annual report of the company.
The Company's Joint Ventures:
The Company is one of the PSU's as a joint venturepartner in ICVL which was incorporated for acquiringOverseas Coal assets.
The Company has also formed a Joint Venture withMOIL (another PSU) with 50:50 shares for the purposeof setting up of a Ferro Alloys Unit at Bobbili in AndhraPradesh.
Implementation of Revised Schedule VI
Ministry of Corporate Affairs vide their Notification No.S.O. 447 (E) dt. 28th Feb. 2011 and as amended byNotification No. F.NO 2/6/2008- CL-V, dt. 30th March,2011 has replaced the existing Schedule VI with anew Schedule VI, effective for the financial statementsto be prepared for the financial years commencing oron after 1st April, 2011. Accordingly, the AnnualAccounts for the Financial Year 2011-12 wereprepared and presented as per the new Schedule VI.The Change between Old Schedule VI is basically achange in the presentation and disclosurerequirements. However, the application of AccountingStandards and adopted Accounting Policies remain thesame.
Auditors:
B V Rao & Co, Visakhapatnam has been appointed asthe Statutory Auditors of the Company for the year2011-12 by the Comptroller and Auditor General ofIndia.
Auditors' Report :
The Statutory Auditors' Report on the Accounts of theCompany for the financial year ended 31st March,2011 is enclosed to the Directors' Report atAnnexure-VI.
C & A G Comments:
The Comptroller and Auditor General of India (C&AG)vide its letter No. PDCA/ACDesk/AA-RINL/2011-12/1.01/190 Dt. 6th July, 2012 has given ‘NIL’ commentson the accounts of the Company for the year 2011-12 under Section 619(4) of Company’s Act 1956. Acopy of the above letter of C&AG is enclosed atAnnexure-VII.
Consolidated Financial Statements:
As the Company is a fully owned Government of Indiaundertaking and is an unlisted Company, the
requirements in this regard as stipulated under theguidelines of SEBI for consolidation of accounts arenot applicable.
However, a statement pursuant to section 212 of theCompanies Act 1956, relating to Subsidiary Companyi.e. EIL is placed at Annexure -VIII
Cost Audit:
Ministry of Corporate Affairs, Govt. of India vide OrderNo.52/124/CAB-2005 dt. 07-07-2006 notified RINL,for conduct of Audit of cost records as maintainedunder Cost Accounting Records (Electricity Industry)Rules, 2001 for the financial year ending 31th March2006 and thereafter every year. Further, Ministry ofCorporate Affairs, Govt. of India, vide their order no52/26/CAB-2010 dt. 30th June, 2011 prescribed CostAudit for Iron & Steel industries w.e.f. 1st April, 2012.As prescribed, the Cost Accounting Records are beingmaintained by the Company and Cost Audit reportsare being submitted by the Cost Auditor.
Report on Conservation of Energy,Technology Absorption, etc.
Information required under Section 217(1)(e) of theCompanies Act, 1956 read with the Companies(Disclosures of Particulars in the Report of Board ofDirectors) Rules, 1988 regarding Energy Conservation,Technology Absorption and Foreign Exchange earningsand outgo during the Financial year 2011-12 arefurnished in the Annexure-A to the report and also inForm-A and Form-B annexed to this report.
Foreign Exchange Earnings and Outgo:
The Foreign Exchange Earnings during the year2011-12 is ` 544.51 Crore and the Foreign ExchangeOutgo during the year was ̀ 5,569.86 Crore (Includes`193.40 Crore on Expansion activities)
Particulars of Employees:
There was no employee of the Company who receivedremuneration in excess of the limits prescribed underSection 217(2A) of the Companies Act 1956 read withthe Companies (Particulars of employees) Rules, 1975,as amended from time to time.
Directors' Responsibility Statement:
Statements / Data which do not relate to RINLand are used / made in this report are from sourceswhich are considered reliable and Company cannotbe held for its authenticity. Further, statementdescribing the Company's projections, estimates,
RASHTRIYA ISPAT NIGAM LIMITED
36
expectations are "forward looking statements" withinthe meaning of applicable securities laws andregulations. Actual results may differ materially fromthose expressed depending on the circumstances /situations.
Pursuant to provisions of Section 217 (2AA) of theCompanies Act, 1956, the following statementrelating to Annual Accounts for the financial year ended31st March, 2012 is made that:
i) in the preparation of the Annual Accounts,applicable Accounting Standards had beenfollowed along with proper explanation relatingto material departures;
ii) the Directors had selected such accountingpolicies and applied them consistently and madejudgments and estimates that are reasonableand prudent so as to give a true and fair view ofthe state of affairs of the Company at the end ofthe financial year and of the profit or loss of theCompany for that period;
iii) the Directors had taken proper and sufficient carefor the maintenance of adequate accountingrecords in accordance with the provisions of thisAct for safeguarding the assets of the Companyand for preventing and detecting fraud and otherirregularities;
iv) the Directors had prepared the Annual Accountson a "going concern" basis.
Directors (Appointment/Cessation)
Appointments:
Functional Directors:
Shri A P Choudhary w.e.f 01st Aug. 2011
(As Chairman CumManaging Director)
Shri N S Rao w.e.f 19th Apr. 2012
Independent Directors
Shri VS Jain w.e.f 14th May 2012
Shri Ashok Jain w.e.f 14th May 2012
Professor Sushil w.e.f. 14th May 2012
Cessation
Functional Directors:
Shri P K Bishnoi w.e.f. 31st July, 2011.
Shri A P Choudhary w.e.f. 31st July, 2011.
(as Director(Projects)subsequent to hiselevation asChairman Cummanaging Director)
Govt Directors
Shri S Machendranathan w.e.f 14th May, 2012.
The Board of directors wishes to place on record theirappreciation of the valuable services rendered andcontribution made by the outgoing Directors duringtheir tenure on the Board of RINL.
Acknowledgements:
Directors of the Company acknowledge with deepappreciation the valuable guidance, assistance,cooperation and support extended by the Governmentof India, especially the Ministry of Steel and Govt. ofAndhra Pradesh. Directors of the Company also placeon record their appreciation for the cooperationextended by Valued customers, Suppliers, Railways,Bankers, Auditors, Solicitors and Business Associates,the local District Administration and Law and Orderauthorities.
Directors of the Company also appreciate thecommitment, sincere efforts and hard work put in byall the employees of the Company, Trade Unions andSteel Executive Association. Their whole heartedcontribution has been vital in helping the Company toscale greater heights.
For and on behalf of the Board of Directors
(A P Choudhary)
Chairman-cum-Managing Director
Visakhapatnam
Dated: 12th July 2012
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Adopted at the 30th Annual General Meeting held on20th September, 2012.
30th Annual Report 2011-12
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Annexure - I
MANAGEMENT DISCUSSION AND ANALYSISREPORT FOR 2011-12
1. INDUSTRY STRUCTURE AND DEVELOPMENTS
1.1. Global Economic Environment:
As per International Monetary Fund (IMF) report on world economic outlook - April 2012, after sufferinga major setback during 2011, global prospects are gradually strengthening again, but downside risksremain elevated. IMF report further states that Global growth is projected to drop from about 4% in2011 to about 3.5% in 2012 because of weak activity during the second half of 2011 and the first halfof 2012. Policies directed at real estate markets can accelerate the improvement of household balancesheets and thus support otherwise anaemic consumption. Emerging and developing economies continueto reap the benefits of strong macroeconomic and structural policies, but domestic vulnerabilities havebeen gradually building up. Many of these economies have had an unusually good run over the pastdecade, supported by rapid credit growth or high commodity prices.
1.2. Global Steel industry:
As per World Steel Association, Steel Industry directly employs more than two million people worldwide,with a further two million contractors and four million people in the supporting industries. Consideringsteel's position as the key product supplier to industries such as automotive, construction, transport,power and machine goods, and using a multiplier of 25:1, the steel industry is at the source ofemployment for more than 50 million people. World crude steel production has increased from 851 Mtin 2001 to 1,527 Mt in 2011. (It was 28.3 Mt in 1900). World average steel use per capita hassteadily increased from 150 kg in 2001 to 220 kg in 2010. India, Brazil, South Korea and Turkey haveall entered the top 10 steel producers list in the last 40 years.
Global production capacity, trade policies of countries and the regional demand-supply scenario alsostrongly influence the industry. Steel producers may attempt to reduce the impact of cyclicality throughvarious measures, such as diversification of manufacturing operations to various geographies (preferablyemerging markets with low-cost operations), vertical integration into raw material production,diversification of customer base and focus on value-added products etc.
1.2.1. Global Steel Production:
Global crude steel production (of the 64 countries reported) in 2011 was approximately 1,490 Mt accordingto the World Steel Association Crude Steel Production 2011 ("WSA"), while global apparent steelconsumption (which reflects the deliveries of steel to the marketplace from domestic steel producersand imported steel) of finished steel was 1,373 Mt (WSA Short Range Outlook, Apr. 2012).
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Region Increase in production Remarksover the previous year (according to the WSA)
Asia 5.6% 9.0% increase in China5.7% increase in India14.7% increase in Taiwan1.8% decrease in Japan
North America 6.8% 7.1% increase in the United StatesCIS Countries 3.9% 2.7% increase in Russia and
5.7% increase in UkraineEU of 27 countries 2.8% 1.0% increase in Germany and("EU27") 11.3% increase in ItalyOther Europe countries 10.7% 17.0% increase in TurkeyOverall global crude steel 1490 Mtproduction (based on the64 countries reporting)
According to the WSA, global steel production grew on average by 2.4% per year from 1995 to 2000 and6.1% per year from 2000 to 2005. Over the period from 2005 to 2011, global steel production increasedby approximately 8.0% per year. Individual rates for these years ranged from a 14.9% growth in 2010 toa 7.9% reduction in 2009.
Over the past decade, steel production continued to shift from its traditional base in heavily industrialisedcountries to fast-growing emerging markets such as China and India. The recent production shift to Asiahas largely been the result of proximity to the major growth markets for steel consumption and thegreater availability of key raw materials. Moreover, while production in Europe, Japan and the UnitedStates has improved after the economic slowdown in 2008 and 2009, steel producers in those regionsface continued challenges due to slowing demand. The recent shift to Asia is also evident in the numberof Asia based steel producers who are ranked among the top ten in crude steel production. In 2001,there were four European companies in the top ten steelmakers. While, in 2010, the only steelmaker inthe top ten with headquarters in Europe was Arcelor Mittal.
Year ended 31st DecemberCountry/Region 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
(in mt)
China 182.4 222.3 282.9 353.2 419.1 489.3 500.3 573.6 626.7 683.3EU 27 188.2 192.5 202.3 195.5 206.9 210.2 198.2 139.4 172.6 177.4Japan 107.7 110.5 112.7 112.5 116.2 120.2 118.7 87.5 109.6 107.6India 28.8 31.8 32.6 45.8 49.5 53.5 57.8 63.5 68.3 72.2
Russia 59.8 61.5 65.6 66.1 70.8 72.4 68.5 60 66.9 68.7United States 91.6 93.7 99.7 94.9 98.6 98.1 91.4 58.2 80.5 86.2South Korea 45.4 46.3 47.5 47.8 48.5 51.5 53.6 48.6 58.4 68.5
South America 40.9 43 45.9 45.3 45.3 48.2 47.4 37.8 43.9 48.4Middle East 12.5 13.4 14.3 15.3 15.4 16.5 16.6 17.7 19.6 20.3
Rest of World 146.9 154.9 167.9 167.6 176.9 186.7 176.7 146.2 170.8 157.5World 904.2 969.9 1071.4 1144.0 1247.2 1346.6 1329.2 1232.5 1417.3 1490.1
Source: WSA Steel Statistical Yearbook 2011
(1) 2011 figures taken from WSA Crude Steel Production Data 2011, pending publication of the WSA Steel Statistical Yearbook 2012,which only lists production data of 64 countries. Note that the Rest of World and World entries therefore only make reference to these 64countries.
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1.2.2. Global Steel Consumption:
According to the WSA, overall apparent steel consumption in 2011 was 1373 Mt, representing a 6.2%increase over the previous year. The following table sets forth apparent steel consumption data by countryor region wise for the periods indicated:
1.2.3. Global Steel Prices:
Steel prices are volatile and fluctuate in response to changes in global supply and demand, raw materialcosts and general economic conditions. After a downturn in demand beginning in 1998, global steelprices reached a historic low in the third quarter of 2001. Since then, global steel prices have generallyincreased, reflecting stronger global demand, notably led by China. The steel industry also fluctuates inresponse to a combination of factors, including the availability and cost of raw materials, global productioncapacity, the existence of, and changes in steel imports, exchange rates, transportation and labour costsand protective trade measures.
In recent years, global steel prices have also been increasingly volatile due to an increase in suppliersacross global markets and levels of steel trading as a percentage of total steel production.
1.2.4. Market Trends:
The emergence of China as a significant producer and consumer of steel has been, and will continue tobe, a significant factor affecting the global steel industry. Several additional trends have emerged: viz
i. Higher raw material costs. The cost of procuring key raw materials used in the production of steel,including iron ore and coking coal, has steadily increased due to the robust growth in global crude steelproduction levels. During the Calendar Years 2009-11, average iron ore prices increased at a CAGR of46.7% and coking coal prices increased by 30.2%. In addition, many of these materials are concentratedin a limited number of locations, which add to the costs associated with transportation and logistics ofsourcing such raw materials. Consequently, many major iron ore and coal producers are investing in newmines to increase production capacity.
Year ended 31st DecemberCountry/Region 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
(in mt)China 191.3 240.5 275.8 347.5 377.7 422.5 434.7 548.1 576 623.9EU 27 162.4 164.2 172.4 166.1 189.5 200.6 182.5 118.9 147.3 152.8Japan 71.7 73.4 76.8 76.7 79.0 81.2 77.9 52.8 63.5India 30.7 33.1 35.3 39.9 45.6 51.5 51.4 57.9 64.5 67.8
Russia 24.9 25.3 26.3 29.3 34.9 40.4 35.4 24.9 35.7United States 107.3 105.7 120.9 110.3 122.4 111.2 101.1 59.3 82.9South Korea 43.7 45.4 47.2 47.1 50.2 55.2 58.6 45.4 52.4
South America 25.0 25.3 30.8 29.8 34.7 38.7 41.5 31.4 42.7Middle East 25.3 30.2 31 34.6 36.2 41.5 44.7 40.7 43.2 48.1
Rest of World 145.8 149.7 163.3 167.9 174.9 184.7 182.6 159.1 185.3
World 828.1 892.8 979.8 1049.2 1145.1 1227.5 1210.4 1138.5 1293.5 1373.3
Source:- WSA Steel Statistical Yearbook 2011(1) 2011 figures taken from WSA short range outlook (Apr. 2012) pending publication of the WSA Statistical Yearbook 2011Note that many countries were not reported in the Short Range Outlook.
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ii. Increased bargaining power of raw material suppliers. Continuous expansion of the steel industryhas resulted in a greater level of competition for raw materials, including iron ore and coal. Shortages ofsupplies in the market have allowed suppliers of iron ore and coal to restructure their pricing mechanisms,shifting from annual to shorter-term price contracts. These changes expose steel producers to additionalvolatility and price risk. While firmness in steel prices has given iron ore producers opportunities to increaseprices in the contracts, steel companies do not always have the option to pass on such increase in inputprices to end consumers due to the fragmented market. Thus, many leading steel companies are lookingto pursue investments in mines as a safeguard measure against rising raw material costs. Steel producershave responded to these industry trends in past through vertical integration. Chinese steel producers arealso consolidating to become major market participants.
Despite recent consolidations, the global steel market continuous to be highly fragmented. According tothe WSA, the five largest global steel producers in 2010 accounted for approximately 16.7% of totalworldwide steel production, and the fifteen largest steel producers accounted for approximately 30.5%of total global steel production.
iii. Shift to emerging markets. Steel production and trade have become increasingly globalised, withproduction shifting from mature to emerging economies. Developed countries have experienced increasedcosts associated with labour, freight and raw materials, which in turn have reduced the economic viabilityof basic steel production. In contrast, emerging markets, such as India, have become targets for globalsteel producers because of their relatively low steel penetration alongside relatively strong GDP growthoutlook. Global steel producers are still looking to grow and are developing new capacity closer to theChinese and Indian markets, including forming joint ventures and setting up green field operations. Leadingsteel producers such as Arcelor Mittal, Nippon Steel, POSCO and Severstal are setting up, or haveannounced plans to set up, steel operations in India, either through joint ventures or independently.
1.2.5. Global Steel Outlook:
Despite a series of developments in 2011, including the European sovereign debt crisis, earthquakes inJapan, the political/social unrest in some countries of the Middle East and North African (MENA) regionleading to a related surge in oil prices and the tightening of government monetary measures in manyemerging economies, world steel demand achieved a growth of 5.6% in 2011.
Apparent steel consumption in the United States is forecast to rebound by 5.7% in 2012 and 5.6% in2013. Consumption in the EU27, however, is expected to decrease by 1.2% in 2012, with a modestrecovery of 3.3% in 2013, bringing it back to 77.0% of its 2007 level. Japan's demand for steel is expectedto decline by 0.6% in 2012 due to the impact of exchange rate appreciation. In 2013, apparent steelconsumption in Japan is expected to further decline by 2.2%, reaching 77.0% of its 2007 level. China, onthe other hand, is expected to witness a continual growth of 4.0% in 2012 and 4.0% in 2013. India isalso expected to increase its steel consumption by 6.9% in 2012 and 9.4% in 2013.
Emerging economies are expected to continue to drive growth. By 2013, steel use in the emergingeconomies is forecast to be 45.0% above 2007 levels, and will account for 73.0% of world steel demand;as opposed to 61.0% in 2007 (the above are as per WSA Report).
1.3. The Indian Economic Environment :
The Indian economy is one of the largest economies in the world, with a GDP at current prices estimatedat US$1.7 trillion ( 52.8 trillion) for 2010, according to the World Bank. Its economy is better insulatedfrom the global economy than several other Asian countries due to the fact that it does not rely heavily on
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exports to developed markets. This is supported by strong economic fundamentals, which include highsavings and investment rates and a rapidly growing middle class, helping to ensure a relatively stableeconomic performance for the country. India's economy has grown significantly in recent years with aGDP growth rate estimated at 7.2% in 2011, 6.9% in 2012 and 7.3% in 2013 according to the IMF.
The Union Budget for 2012-13 has identified five objectives to be addressed effectively in the ensuingfiscal year. They include focus on domestic demand driven growth recovery; create conditions for rapidrevival of high growth in private investment; address supply bottlenecks in agriculture, energy and transportsectors particularly in coal, power, national highways, railways and civil aviation.
As per union budget estimates, India's GDP growth in 2012-13 is expected to be 7.6 per cent +/-0.25per cent. India's GDP is estimated to grow at 6.9 per cent in 2011-12 after having grown at the rate of8.4 per cent in each of the two preceding years. Even though the global crisis had affected India, Indiastill remains among the front runners in economic growth.
1.3.1. Indian Steel Production
India is currently the fourth largest crude steel producer in the world, according to the Ministry of Steel,Government of India, and it is likely to become the second largest steel producer by 2016, according tothe Ernst and Young Global Steel: 2010 trends, 2011 outlook report ("E&Y"). Unlike China, where thereis significant excess steelmaking capacity, (Chinese crude steel capacity is expected to be 840.0 Mt in2012, which would be 22% in excess of the expected 688.0 Mt of consumption), India remains a netimporter of steel, which should allow for more growth in steelmaking capacity for domestic Indian steelcompanies. Indian crude steel production increased by a CAGR of 10.5% from 27.3 Mt in 2001 to 66.8Mt in 2010, according to the WSA. In 2011, production increased by 5.7%. Production is expected tofurther increase by 15.3% in 2012 and by 13.4% in 2013, according to E&Y.
1.3.2. Indian Steel Consumption
India is about to enter the first year of the Twelfth "Five Year Plan" which aims at "faster, sustainable andmore inclusive growth." Also aforesaid objectives of the Union Budget 2012-13 are likely to stimulateconsumption of steel in 2012-13.
Demand in India has been driven by the expanding oil and gas and power sectors and spending oninfrastructural facilities, coupled with growth in the housing, consumer durables and automobile sectors.Apparent steel consumption in India is projected to grow by 6.9% in 2012 and 9.4% in 2013 afterrecording a growth of 4.3% in 2011, according to the WSA.
The chart sets out the domestic steelconsumption:
Among end-user sectors, the infrastructure andindustrial construction sectors accounted foraround one-third of total steel consumption inIndia in 2010-11, followed by the pipes and tubesindustry, which accounted for 10% of total steelconsumption and the automobile sector, whichaccounted for 12% of total steel consumption inthe same period, according to CRISIL Research.(Source: CRISIL Research, Steel Products, Dec.2011)
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The following chart sets out the long steel consumption pattern in India during the 2010-11 period:
While there is currently a strong demand for steel,according to the WSA, India's per capita consumptionof finished steel is still relatively low at 56.3 kg ascompared to China at 445.2 kg, Japan at 538.6 kg,the United States at 291.6 kg and a world average at220.8 kg in 2010. Consequently, the Indian steelindustry still has room to grow substantially, and theIndian steel sector has been targeted as a key sectorfor support by Government of India, which hasencouraged further growth with its increased approvalrate of green field projects. Furthermore, according toEarnest & Young 2010, an additional US$1 trillion ofinvestment is expected to be made in the constructionand infrastructure sectors during the 2012-17 period.Most infrastructure projects consume large amounts of long steel products, and hence there should bea corresponding increase in long steel demand.
The following chart sets the demand outlook for steel products in India for the periodsindicated:
Indian steel producers have a number ofcompetitive advantages, the most important ofwhich is an abundant supply of iron ore resourcesand surplus iron ore production, predominantly inthe east of India. India is the world's fourth-largestiron ore producer, with sufficient iron ore reservesto meet expected demand. Of particular interestis Orissa State, which contains 25% of India's ironore reserves and 20% of India's coal reserves,according to Corporate Catalyst India. Thus, eventhough iron ore prices have been steadilyincreasing towards the end of 2011, domesticIndian steel companies, with their access to excessiron ore, have not faced similar increases in raw material prices as those companies outside of India.Another advantage India has is its unexplored rural market, which has been fairly unexposed to the varieduses of steel. Steps are being taken by companies to penetrate this market, including our Company'ssetting up of its district level dealership and rural dealership schemes.
1.3.3. Indian Steel Prices
Similar to global steel prices, steel prices in India are volatile and fluctuate in response to changes inglobal supply and demand, raw material costs and general economic conditions. The Indian steel industryis linked to global steel prices which fluctuate as aforesaid in response to a combination of factors,including the availability and cost of raw materials, global production capacity, the existence of and changesin, steel imports, exchange rates, transportation and labour costs and protective trade measures.
(Source: CRISIL Research, Steel, Dec. 2011)
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1.3.4. Market Trends
Expansion in the domestic market. India has increasingly become an important part of the internationalsteel market, and a key growth area for steel production, based on factors including its strong demandfor steel arising from strong economic growth, low per capita steel consumption and abundant iron orereserves. Increase in demand for steel in India has led to a corresponding increase in steel production inIndia, which includes the simultaneous commissioning of the brown field expansion of a number of domesticsteel companies, including our Company, SAIL, Tata Steel and JSW Steel. In addition, internationalsteelmakers are looking to enter the market either through green field expansion or by forming jointventures. For example, POSCO obtained permission to set up a steel mill in the Odisha State. JFE Steel,Japan's second largest steelmaker, signed a collaborative pact with JSW that allows JSW to produceautomotive steel products with the technological expertise of JFE. Japanese steelmaker Kobe Steel isalso planning to sign a joint venture agreement with SAIL to build a 500,000 tonne mill in West Bengalstate to manufacture special-grade steel, which will require an investment of US$400 million, accordingto E&Y 2011. The implementation of these plans may be difficult, however, due to Indian regulationsdealing with land acquisition, mining leases and forest clearances. While crude steel capacity additions of55-60 Mt were announced from the 2011-12 period to the 2015-16 period, domestic steel manufacturersare only expected to add 40-45 Mt of capacity expansion (Source: CRISIL Research, Steel Products,Dec. 2011).
2. STRENGTHS AND WEAKNESSES:
Summary - Price Summary
International Unit 2009 2010 2011 2012P
Steel Prices $/tonne 469 614 695 600-640
Iron ore contract Price $/tonne 61 108 148 120-140
Coking coal contract Price $/tonne 130 191 289 220-240
Domestic 2009-10 2010-11 2011-12E 2012-13P
Steel prices /tonne 32,792 36,812 39,575 37,000-39,500
Iron ore contract Price $/tonne 61 126 150 120-140
Coking coal contract Price $/tonne 130 215 290 220-240
The following table sets out the prices of steel and the key raw materials involved in the production ofsteel, iron ore and coking coal, for the periods indicated:
Strengths
Strong Position in a High Growth Market.
Strategic advantage of Shore based locations.
Operational Efficiency.
Diverse Customer Base Served through an ExtensiveMarketing Network.
Experienced Management Team.
Availability of land and layout for Expansion up to20 Mt.
Image as quality producer & value for money supplier.
Committed workforce.
Weaknesses
Lack of level playing field vis-à-vis others due to lackof captive iron ore & coking coal mines.
Single location company - Only long products,exposed to cyclic markets.
Due for Major capital repairs and modernization
Steep rise in Cost of production and fall in margins.
High cost of servicing huge equity.
Subdued international & sluggish domestic Markets.
(P-Projections, E-Estimated)
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4. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE :
Details in respect of the above item have already been covered in the Directors' Report which may kindlybe referred to.
5. OUTLOOK FOR THE COMPANY IN 2012-13 :
The year 2012-13 is very crucial for the Company since it set its targets for the year considering theproduction from the Expansion Units which are likely to be commissioned during the year. The MOUsigned with the Government of India envisaged a turnover of ` 15,000 Crores, Production of SaleableSteel of 3.55 million tonnes with a gross margin of ` 1,300 Crores for "Excellent" MoU rating.
The Company looks forward for a stable and sustainable growth in FY 2012-13 despite the risk of slowdownin the growth of domestic steel demand having a high correlation with growth in GDP which is showingsigns of slower growth in the range of 7.5% for FY 12-13 given the likelihood of India's Economy beingweighed down by higher domestic interest rates and a weaker global economy.
The profitability margin in the first half year of 2012-13 is likely to be impacted due to increase in inputscosts (coking coal prices) and reduced steel demand thereby putting pressure on margins for the fullyear.
The rising interest costs and the over capacity are the concerns that are likely to be there in 2012-13resulting in pressure on the bottom-line. In case, the domestic steel demand does not grow as expectedthen there is a need to shift the focus to exports which again is a challenging proposition given thecurrent slowdown in the developed world. While exports would be beneficial with depreciating rupeevalue vis-à-vis dollar, the imported raw materials are likely to be costlier.
3. OPPORTUNITIES AND THREATS
Opportunities
Huge demand potential in view of theprojected growth.
Encouraging signs due to huge infrastructurespend planned in 12th Five Year Plan.
Projected growth in Steel consumption.
Improved availability of Ports & logistics.
Diversifying to new product mix like Axles andTransmission line towers etc.,
Threats
Stiff competition further compounded bycapacity expansion by competitors and entryof International players.
Single type of product may adversely affectour Company's profitability.
Price cut by Competitors.
Increasing raw material prices & shift of valuechain towards raw materials.
Oligopolistic coal supply side.
Single iron ore supplier - located indisturbance prone areas.
Predominant secondary sector in longproducts.
New materials, products or technologiescould reduce the demand for our steelproducts
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A sharp decrease in global steel prices due to a global recession and a greater than expected slowdownin China, leading to a surge in imports due to better Indian demand, could adversely affect the profitabilityof domestic steel producers and might result in a negative outlook. In the process, the Company need totrade off among the influencing factors to achieve an optical profit margin.
The Key Issues for 2012-13:
The demand is likely to grow at 6% to 7% only in 2012-13 consequent to growth in constructionsector and deferral of corporate capital expenditure.
The prices of input materials like coal etc., may be stabilized around $ 235 while the depreciatingIndian Rupee may eat away the advantage of stabilized prices.
The Steel prices are likely to remain under pressure in 2012-13 due to subdued domestic demand& global nature of the market coupled with oversupply and weak demand in the international market.
Sovereign concerns in Europe may also cap global steel prices as troubled nations in Europe cutspending to contain their fiscal deficits, thus hitting demand and resulting in the profitability to havea muted growth.
While the depreciating rupee has discouraged Steel imports, it has also made imported raw materialsmore expensive.
The capacity addition in 2012-13 is expected to be around 30 million tonnes due to completion ofbrown field sites which may put pressure on steel prices resulting in reduced profitability.
Considering the above key issues in a dynamic environment, the Company has taken few initiatives asdetailed below:
Initiatives taken by the Company :
Pursuing for Iron ore assets with various State Governments (viz AP, Jharkhand, Odisha, Karnataka,Rajasthan and Uttar Pradesh)
MOU with Andhra Pradesh State government for Mining assets and establishing partnership withState Mineral Development Corporations for Iron ore assets.
Pursuing the JV route for setting up of Steel Plants with SAIL, NMDC & BHEL
MOU with Power Grid Corporation of India for joint venture to produce TLT.
Containing / Reducing Manpower Cost per Tonne of Steel produced by (a) increasing the capacity ofPlant to 6.3 Mt; (b) adding further 1 Mt with revamping, (c) adding further capacity of 4 Mtsubsequently; (d) next phase of Expansion to include Bigger size Blast Furnaces and other downstreamunits, and (e) taking full advantage of Automation etc.,
To enter into Flat products business while adding more capacities and making suitable changes inproduct mix.
Wider range of products like Special steel products, CRNO,CRGO, Electrical Steels, Axles for Railwaysetc.,
MOU with NMDC.
6. RISKS & CONCERNS:
Demand for our products is affected by global and national economic conditions. Any developmentwhich decelerates the demand for steel products would have an adverse impact on our Company.
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The steel industry is highly cyclical and a decrease in steel prices may have an adverse effect on ourCompany's results of operations and financial condition
Significant increases in prices of key raw materials or our inability to continue to procure raw materialsat favourable terms could have an adverse effect on our Company's results of operations and financialposition.
We currently obtain most of our iron ore required for producing steel from NMDC ("National MineralDevelopment Corporation Limited"). Any decrease in supply of iron ore by NMDC would have amaterial adverse effect on our business, results of operations and financial condition.
Our Subsidiary has incurred losses.
Our expansion plans may not result in expected benefits
Overcapacity and oversupply in the Indian steel industry may adversely affect our Company'sprofitability
We purchase raw materials from foreign suppliers with foreign currencies and therefore face foreignexchange risks.
Any disruption to our supply of coking coal would have material adverse effect on our Company'sbusiness, results of operations and financial condition.
Our Company does not own the land on which Visakhapatnam Steel Plant ("VSP") and our Registeredand Corporate Office are located.
New materials, products or technologies could reduce the demand for our steel products
7. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company is having an efficient system of Internal controls for achieving the objectives of the Companyby ensuring efficiency in operations, protection of resources, accuracy and promptness in financial reportingand compliance with the laid down policies and procedures along with relevant Laws and regulations.
In RINL, there is a separate Internal Audit Department and the Internal Audit is conducted by a team ofexperienced Chartered Accountants, Cost Accountants, Engineers including a system analyst withdiversified experience. The Internal Audit Department carries out reviews, evaluates and appraises thevarious systems, procedures and policies of the Company and suggests meaningful and usefulimprovements along with corrective measures wherever required.
The Internal Audit department focuses on transparency in the systems and proper and adequate internalcontrol mechanisms. Annual Audit Programmes are drawn up covering critical areas of various departmentsin order to bring overall improvements in the Company. From time to time, the Audit Committee is beingapprised on status of audit paras.
The Internal control systems are commensurate with the size of the Company and the reports containingsignificant Audit findings are submitted to the Audit Committee of the Company.
The Company has put in place an Enterprise Risk Management (ERM) Policy and procedure duly approvedby the Board in the year and the same has been put on Company's Website. ERM is being implementedacross the organization covering both Works and Non Works Departments by an In-house team. InternalAudit team is also conducting audit under ERM.
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Particulars F.Y 2011-12 F.Y 2010-11 % Inc/(Dec) over (`̀̀̀̀ Crs) (`̀̀̀̀ Crs) previous year
Sales Turnover 1,4461.87 11,516.99 26PBDIT 1,645.47 1,412.43 16Profit before Tax (PBT) 1,110.01 981.66 13Profit After Tax (PAT) 751.46 658.49 14
8. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:
8.1. Financial Overview :
For the first time, in the history of RINL sales turnover has surpassed `14,000 Crs mark. RINL hasclocked `14,462 Crs sales turnover during F.Y 2011-12, an increase of over 26% compared to previousyear figures despite subdued domestic demand and unending increase in raw material costs. RINL wasable to achieve this feat mainly due to higher sales realisation and has thus ended the 4 year down trendstreak in profit levels. RINL Profit after Tax (PAT) rose to ` 751 Crs, an increase of ` 93 Crs i.e., over 14%increase when compared to previous year PAT.
Ministry of Corporate Affairs (MCA) has notified revised schedule VI of the Companies Act, 1956 witheffect from April 1, 2011. As a result, the comparative figures for the previous financial year have beenappropriately restated.
8.2. Financial Performance :
Profit before tax of ` 1,110 Crs was higher by` 138 Crs (13%) over previous year figures of` 982 Crs. The increase in Sales turnover(26%) could not be fully converted into profitsbecause of increase in raw material pricesespecially basic raw materials Coal & iron ore.
8.3. Analysis of the financial performance of the company8.3.1. Sales Turnover
Particulars F.Y 2011-12 F.Y 2010-11 % Inc/(Dec)over (`̀̀̀̀ Crs) (`̀̀̀̀ Crs) previous year
Sale of Saleable steel products 12,407.00 10,202.62 22Sale of Other Products 2,054.87 1,314.37 56Total Sales Turnover 14,461.87 11,516.99 26Less: Excise Duty 1,319.15 1,045.81 26Net Sales Turnover 13,142.72 10,471.18 26
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8.3.2. Other Revenues
Particulars F.Y 2011-12 F.Y 2010-11 % Inc/(Dec) over (`̀̀̀̀ Crs) (`̀̀̀̀ Crs) previous year
Interest Earned 249.56 347.54 (28)Other Non-operating Income 78.35 78.41 0Dividend 0.48 -- --
The average term deposits during the period have declined as they were used to meet the paymentsobligations for the on-going expansion; this resulted in a decrease of Interest earned on term deposits by28% over previous year. The investment made in Eastern Investments India Limited (EIL) during theprevious year has yielded a dividend of ` 0.48 Crs for the F.Y 2011-12.
8.3.3. Expenditure (Net of Inter Account Adjustments)
Particulars F.Y 2011-12 % of Total F.Y 2010-11 % of Total % Inc/(Dec) (`̀̀̀̀ Crs) Expen- (`̀̀̀̀ Crs) Expen- over previous
diture diture year
Cost of materials consumed 8,422.19 67.76 7,139.26 67.47 18(net of Inter acc Adj)Employees' benefits 1,466.67 11.80 1,273.00 12.03 15Finance Costs 190.6 1.53 164.49 1.55 16Depreciation & Amortisation 344.86 2.77 265.94 2.51 30Other Expenses 2,005.97 16.14 1,739.37 16.44 15Total 12,430.29 100.00 10,582.06 100.00 17
The increase in Raw material cost was mainly onaccount of increase in average cost per tonne ofcoal by 26% over previous year and increase inaverage cost per tonne of Iron ore by 6% overthe previous year.Additions made to completely depreciated assetsduring the year have resulted in increase ofdepreciation for the year by 30% over previousyear.
The Share of Saleable steel as a percentage of total sales turnover remained the same at 86% withother products at 14%. Increase in Sale of other products was mainly due to increased sales realisationin Pig Iron and By-products. The company's main business arena continued to be the domestic market,which provided about 97% of the total sales turnover.The proportion of saleable steel and other sales turnover during 2011-12 was as follows:
Products Category % of Sales ValueSaleable Steel 86Secondary Products 14Total 100
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8.3.7. Non-Current Assets & Non-Current Liabilities
Particulars F.Y 2011-12 F.Y 2010-11 % Inc/(Dec) (`̀̀̀̀ Crs) (`̀̀̀̀ Crs) over
previous year
Non-Current LiabilitiesOther Long term Liabilities 83.23 48.59 71Long term Provisions 479.73 577.82 (17)Non-Current AssetsNon-current Investments 362.58 361.60 0Long term Loans & Advances 241.89 297.30 (19)Other Non-Current Assets 10.33 7.97 30
8.3.6. Fixed Assets
Particulars F.Y 2011-12 F.Y 2010-11 % Inc/(Dec) (`̀̀̀̀ Crs) (`̀̀̀̀ Crs) over
previous year
Net Block - Tangible 1,783.65 1,526.89 17 - Intangible 3.19 3.00 6Capital Work-in-Progress 10,596.08 9,455.01 12Intangible Assets under 15.01 -- --development
8.3.4. Contribution to ExchequerRINL contributed ` 2,600 Crs to the national exchequer in the form of redemption of preference sharecapital, dividend, taxes and duties to various government agencies as against ` 2,092 Crs during theprevious year.
8.3.5. Short term Borrowings
Particulars F.Y 2011-12 F.Y 2010-11 % Inc/(Dec) (`̀̀̀̀ Crs) (`̀̀̀̀ Crs) over
previous year
Secured Loans 1,002.40 274.89 265Unsecured Loans 1,572.74 860.99 83Total 2,575.14 1,135.88 127
Payments to project expansion are met from internal accruals; loans are taken on short term basismainly to meet the working capital requirements.
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8.3.8. Current Assets, Current Liabilities
Particulars F.Y 2011-12 F.Y 2010-11 % Inc/(Dec) (`̀̀̀̀ Crs) (`̀̀̀̀ Crs) over
previous year
CURRENT ASSETS
Inventories
Semi Finished/ Finished goods 1,779.96 1,825.33 (2)
Raw materials 1,225.76 1,137.66 8
Stores & Spares 397.39 291.72 36
Total Inventories 3,403.11 3,254.71 5
Trade Receivables
Gross receivables 447.52 350.71 28
Less: Provision for Trade receivables 20.37 20.44 0
Net Receivables 427.15 330.27 29
Cash & Bank balances 2,068.34 1,998.89 3
Short term Loans & Advances 2,366.54 1,633.89 45
Other Current Assets 226.97 183.92 23
Total Current Assets 8,492.11 7,401.68 15
CURRENT LIABILITIES
Short term Borrowings 2,575.14 1,135.88 127
Trade payables 390.19 540.95 (28)
Current Liabilities 3,645.84 2,750.25 33
Short Term Provisions 610.44 690.77 (12)
Total Current Liabilities & Provisions 7,221.61 5,117.85 41
Increase in credit sales resulted in rise of trade receivables but the quality of the same remained intactas no further provisions for doubtful trade receivables were required to be provided during the year.
Short term Loans & Advances increased by 45% mainly due to increase in forward contracts receivableswhich proved to be very effective in checking the forex loss during the year.
8.4. Initiatives taken by RINL:
8.4.1. Funds Management
During the year, the company continued its thrust on better fund management. Treasury Managementinitiatives exploited the interest rates scenario by maintaining the investment yield @ 10.67% and at thesame time raised loans at an average cost (Both Domestic & Foreign currency Borrowings) @ 8.45%against much higher market rate of borrowing. During the year, the company has raised loans worth` 1,200 Crs by way of Commercial Papers (CP) at attractive rates (weighted average cost of 9.32%).
FITCH and CRISIL (Credit rating Agencies) have maintained highest rating for short term loans 'F A1+' &'Crisil A1+' respectively and a very good rating of 'Fitch AA (Ind)' for long term loans by FITCH.
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To ensure faster and timely payment to suppliers, contractors, employees, etc. E-payments were increasedsubstantially and it covered 92% of total payments.
8.4.2. Cost Control Measures
A saving of about ` 402 Crs was achieved during the year by improvement in Techno Economic & Qualityparameters, recovery of waste materials and recycling.
Emphasis on Standardization, improvement in processes, technological up-gradation and innovativemaintenance has resulted in improvement of techno-economic parameters.
Few Quality parameters are also taken as target to bring down cost & to create awareness on cost ofquality.
Substitution of materials for cost advantages: Many innovations have been carried out for utilizing alternativecheaper materials without compromising on quality of output and the same is being pursued vigorously.
The waste materials generated in the plant are identified continuously and are gainfully utilized for improvingthe environmental condition as well as cost saving.
9. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES, INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED;
(Already covered in the Directors' Report which may kindly be referred to)
10. ENVIRONMENTAL PROTECTION AND CONSERVATION, TECHNOLOGICAL CONSERVATION, RENEWABLE ENERGY DEVELOPMENTS, FOREIGN EXCHANGE CONSERVATION;
(Already covered in the Directors' Report which may kindly be referred to)
11. CORPORATE SOCIAL RESPONSIBILITY
(Already covered in the Directors' Report which may kindly be referred to)
Funds Management
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REPORT ON CORPORATE GOVERNANCE FOR THE YEAR 2011-12
1. Company's Philosophy
A strong reputation for Integrity and Ethical conduct is an important Corporate Asset. It assures the Employees,Customers, Vendors, Regulators, Community neighbours and Shareholders that the Company will deal withthem honestly and fairly. Everyone would benefit from being a part of the Company, which has built reputationfor honourable and principled actions. The philosophy of the Company in relation to Corporate Governance isto ensure Accountability, Transparency, Integrity, Disclosures and Reporting that conforms fully with laws,regulations, guidelines, etc. and to promote ethical conduct throughout the organization. RINL believes inconforming to the highest standards of corporate governance in the country. It recognizes that each memberof the Board owes his/her first duty for protecting and furthering the interests of the Company.
2. Board of Directors
i. Composition and category of Directors
The Company has an executive Chairman and the number of Independent Directors is one third of thetotal number of Directors as per DPE Guidelines. As on 31st March, 2012, the Board of Directors of theCompany comprised one full time Chairman-cum-Managing Director, (i.e. Executive Chairman); FourFunctional Directors i.e. Director (Operations), Director (Finance), Director (Commercial) and Director(Personnel); Two Government nominee Directors and Four Part time non-official Directors (i.e. IndependentDirectors) totalling to 11. The position of Director (Projects) which was vacant on 31st March 2012, wasfilled on 19th April, 2012. Three more Part time non-official Directors (i.e. Independent Directors) havejoined the Board respectively, while one Govt nominee Director was withdrawn w.e.f. 14th May, 2012.Accordingly, with this addition the strength of the Board of Directors of RINL became 14 Directors, viz..One full time Chairman-cum-Managing Director, (i.e. Executive Chairman); Five Functional Directors i.e.Director (Operations), Director (Finance), Director (Commercial), Director (Personnel) andDirector(Projects) ; One Government nominee Director and Seven Part time non-official Directors (i.e.Independent Directors).
ii&iii. Attendance of each Director at the Board Meetings during 2011-12 and the last AGM &Number of other Board or Board Sub-Committees in which he is a Member or Chairman:
Annexure - II
30th Annual Report 2011-12
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CMD - Chairman-cum-Managing Director,
(#) Does not include Memberships/Office Bearers i.e. Chairman etc. in Institutions / University / non-Corporate Bodies like Societies etc.
Note
* Shri A P Choudhary, was appointed as CMD w.e.f. 1st Aug, 2011.
** Shri P K Bishnoi, CMD superannuated on 31st July 2011.
*** Shri A P Choudhary, Director (Projects) subsequent to elevation as CMD relinquished his office asDirector (Projects) w.e.f. 31st July 2011.
iv. Number of Board Meetings held and dates on which they were held.
The Company Secretary in consultation with the Chairman and Managing Director, sends a written noticeof each Board meeting to each Director. The Board agenda is invariably circulated to the Directors inadvance.
The members of the Board have access to relevant information of the Company and are free to recommendinclusion of any matter in the agenda for discussion. In case of need, the senior management is invited toattend the Board Meetings to provide additional inputs relating to the items being discussed and / or togive Presentation on each item to the Board.
The Board meets regularly and is responsible for the proper direction and management of the Company.During the financial year ended 31st March, 2012, Eight Board Meetings were held on 13th June, 2011,18th July, 2011, 26th July, 2011, 25th Aug, 2011, 12th Sep. 2011, 4th Dec. 2011, 11th Jan, 2012 and19th March, 2012 respectively.
Name Designation Educational Experience Other Membership Qualification Directorships: in BSCs of RINL
S/ShriA P Choudhary(from 1st Aug.2011)
Chairman cumManaging Director
Post Graduate inDesign Engg.
Over all 36 years ofexperience out ofwhich1. 19 years in variouspositions at RSP, SAIL;2. 13 years worked inCorporate office ofSAIL.3.Director (Projects)RINL since Aug 2009to 31st July, 2011;4. CMD RINL from 1stAug, 2011 onwards.
1. International CoalVentures Pvt Ltd -Member of the Board2. RINMOIL FerroAlloys Pvt. Ltd. -Non-Exe Chairman3. Eastern InvestmentLtd - Non-Exe.Chairman4. Orissa MineralDevelopmentCompany Ltd. - Non-Exe. Chairman5. Bisra Stone LimeCompany Ltd. - Non-Exe. Chairman6. Uttarbanga RINLRail Karkhana Ltd. -Non-Exe. Chairman
Chairman of1. HPSC2. CACEP3. CAC4. COM5. S C6 Share Transfer
P K Bishnoi,(Superannuatedon 31st July ,2011)
Chairman cumManaging Director
1.B Tech from IndianSchool of Mines2.MBA from IIMAhmadabad
27 years atvarious positionsat Managementlevel.11 years at Boardlevel as Directorand CMD from1.5.2007onwards (both inPublic andPrivate Sectors).
Not Applicable Not Applicable
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Name Designation Educational Experience Other Membership Qualification Directorships: in BSCs of RINL
Umesh Chandra Director(Operations)
Graduate inMechanical Engg
12 years in variouspositions at RSP, SAIL;20 years in variouspositions at RINLDirector (Operations)RINL since 1st Nov2008.
1. Orissa MineralDevelopmentCompany Ltd. -Member of the Board2. RINLMOIL FerroAlloys Limited-Member of the Board3. Uttarbanga RINLRail Karkhana Ltd. -Member of the Board
Member in1. COM2. HRC3. FABCPC4 CACEP5 CAC6 SC7. Share transfer
P Madhusudan Director(Finance)
ACA, AICWA and ACS 24 years in variouspositions in BSP/SAIL3 years as GeneralMgr (Finance) inIISCO,Burnpur.Director (Finance)RINL since 2nd Nov2009.
1. Eastern InvestmentLtd - Member of theBoard2. RINLMOIL FerroAlloys Limited- Memberof the Board3. Uttarbanga RINLRail Karkhana Ltd. -Member of the Board
Member in1.COM2.RMSC3.BSCOM4.FABCPC5.HPSC6.CACEP7.CAC8.SC9.CSR10.Grievance11.Share transfer12.CGP
T K Chand Director(Commercial)
BA (Hons),MA (History),MA (Public Admn),BL,Certificate onAdvanced Mgmt,CorporateGovernance &International HRProspective
24 years of experiencein Steel Industry indifferent capacities inRINL/VSP,more than 3 years as aBoard Member inCentral Coalfields Ltd, aSubsidiary Company ofCoal India Ltd.Director (Commercial)RINL since 22nd Sep2010.
1. Bisra Stone LimeCompany Ltd. -Member of the Board
Member in1.COM2.RMSC3.BSCOM4.FABCPC5.SC6.CSR7.Grievance8.Share transfer9.CGP
Y R Reddy Director(Personnel)
¨MA (IRPM) with GoldMedalMBA, AndhraUniversityDiploma in GermanLanguage
33 years ofexperience in SteelIndustry in differentcapacities in RINL/VSP.Director (Personnel)RINL since 22nd Dec2010.
Nil Member in1.COM2.HRC3.SC4.Share transfer
N S Rao Director( Projects)
Bachelor's degree inMetallurgicalEngineering withHonors and Master'sDegree in MetallurgicalEngineering fromRegional EngineeringCollege, Rourkela.
1.He has 32 years ofexperience in the steelindustry.2.lecturer at RegionalEngineering College,Sri Nagar3.Research Scholar atRegional ResearchLaboratory,Bhubaneswar.4.GM (O) I/c, ED(Projects andCommissioning)5.Director (Projects)from April 19, 2012
Member in1.COM2.HRC3.FABCPC4. HPSC5.CACEP6.CAC7.SC8. Share transfer
Andhra PradeshHeavy Machinary &Engg. Ltd.Member of the Board
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55
Name Designation Educational Experience Other Membership Qualification Directorships: in BSCs of RINL
S MachendraNathan IAS(till 14th May2012)
Part time OfficialDirector RINL
Post Graduate inBusiness Admn
31 years in variouspositions in differentMinistries, Govt ofIndia
Board Members of1. NMDC2. SAIL3.KIOCL4. MECON5. Air India Ltd6. Pawan HansHelicopter Ltd7. Airports Authority ofIndia Ltd8. Hotel Corporationof India Ltd
Nil
Dr Dalip Singh,IAS
Part time OfficialDirector RINL
Doctorate inManagementPost Graduate &M Phil in Psychology
29 years in variouspositions in differentMinistries, Govt ofIndia , Director RINLfrom 2nd March 2010.
Board Member of1. MOIL2. HSCL
1. HPSC2. CAC3. CACEP
Dr UpendraDutta ChoubeyDirector General(SCOPE)
Part time Non-officialDirector (IndependentDirector) RINL
M.Sc.,MBA,LLBPh. D from IndianInstitute of MinesIndian Institute ofBusinessManagement
Ex CMD GAILMore than 37 years ofexperience in PublicSector Enterprises.Director, RINL since11th Oct 2010
Nil Chairman of1. BSCOM2. FABCPC3. COIDMember in1. AC2. IEC3. RC4. CSR
A P V N Sarma,(IAS Retd)
Part time Non-officialDirector (IndependentDirector) RINL
B.E. from NITWarangal & LawDegree from OU
More than 35 years ofexperience in the topechelons of Govt ofIndia and the StateGovt in leadershippositions; Director,RINL since 30th Sep2010.
Board Member of1. Neyveli LigniteCorporation Ltd2. GATI Ltd3. SEW Vizag PortTerminal Ltd,4. APGAS PowerCorporation Ltd,5. Seaways Shippingand Logistics Ltd6. Allahabad Bank
Chairman of1. AC2. HRCMember in1. COID2. HPSC3. RC
SwashpawanSingh,(IFS Retd)
Part time Non-officialDirector (IndependentDirector) RINL
BA (Hons) English;MA English Lit;Certificate Course inDiplomacy;M.Phil in DefenceStudies
More than 30 years ofexperience in IndianForeign Service.Director, RINL since1st Oct 2010
1. Board Member inKSP Sound DesignsSolutions (P) Ltd &Share Holder
Chairman of1. RMSC2. RC3. CSRMember in1. COID2. CACEP3. BSCOM4. IEC
H S Chahar,(IAS Retd)
Part time Non-officialDirector (IndependentDirector) RINL
MA (Economics) 18 years ofexperience asSecretary in the Depttsof Agriculture,Transport &Commerce, Housingand Urban Dev. Steel& Mines, Forest &Environment. Director,RINL since 30th Sep2010
1. Board Member inS.E.C.Ltd
Chairman of1. IEC2. GRC3. CGPMember in1. COID2. AC3. CACEP4. CAC
RASHTRIYA ISPAT NIGAM LIMITED
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Name Designation Educational Experience Other Membership Qualification Directorships: in BSCs of RINL
Virendra SinghJain(w.e.f. 16th May2012)
Part time Non-officialDirector (IndependentDirector) RINL
Graduate degree incommerce from DelhiUniversityFellow member of theInstitute of CharteredAccountants of Indiaand the Institute of CostAccountants of India.
1.He was thechairman of SAIL fromSep, 2002 to July2006.2.Served at I OC Ltdfor 26 years in variouscapacities.3.Member of PublicEnterprises SelectionBoard from Mar 08 toJuly 2011.
1.Dalmia BharatEnterprises Limited
Nil
Ashhok KumarJain(w.e.f. 16th May 2012)
Part time Non-officialDirector (IndependentDirector) RINL
Fellow associate of theInstitute of CharteredAccountants of India
34 years ofexperience as anincome tax practitioner
Nil Nil
Prof. Sushil(w.e.f. 16th May2012)
Part time Non-officialDirector (IndependentDirector) RINL
BE mechanicalengineering andM Tech in industrialengineering from IITDelhi. Phd from IITDelhi in systemsmodelling of wastemanagement innational planning.
24 years ofexperience as aprofessor.Authored on topicslike core competenceand flexibility instrategic formulationand flexible enterprisefor global business
Nil Nil
Note: AC - Audit Committee; RC - Remuneration Committee; HPSC - High Power Steering Committee;CACEP - Committee for Award of Contracts relating to Project Expansion Proposals; CAC - Committee forAward of Contracts; COM - Committee of Management; BSCOM- Committee on Marketing; RMSC - RawMaterial Security Committee; IEC - Independent Ethics Committee; HRC- Human Resources Committee;FABCPC - Fly Ash Based Cement Plant Committee; SC - Steering Committee, COID- Committee ofIndependent Directors; GRC- Grievance Redressal Committee; CGP-Committee on Gangavaram Port;Share transfer- Committee on Share Transfer; CSR- Board sub-committee on Corporate SocialResponsibility.
vi. Board's Responsibilities
The mandate the Board is to oversee the Company's strategic direction, review and monitor Corporateperformance, ensure regulatory compliance and safeguard the interests of the shareholders. The Boardhas reserved certain items of governance for its review, including the approval of annual and interimfinancial 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 forits review and approval.
vii. Information placed before the Board of Directors:
The information under the following heads are usually presented to the Board of Directors of the Companyeither as part of the agenda papers or are tabled / presented during the course of Board meeting:
Annual operating plans and budgets and any updates.Capital budgets and any updates.Quarterly results for the company and its operating divisions or business segments.Minutes of meetings of Audit Committee and other Sub-Committees of the Board.Minutes of Board Meetings of subsidiary companies.
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Details of any Joint Venture or R&D project or technical collaboration agreement requiring approvalof Board of Directors.Sale of material, nature of investments, subsidiaries, assets, which is not in normal course ofbusiness.Action Taken Report on matters desired by the Board.Disclosure of Interest by Directors about directorships and Committee positions occupied bythem in other companies.Quarterly report on Statutory Compliance.Information relating to major legal disputes.Arbitration cases.Short term Investment of surplus funds.Significant Capital Investment proposals.Changes in significant accounting policies and practices and reasons for the same.Any other information required to be presented to the Board either for information or approval.
viii. Role of Independent Directors
The Independent Directors play an important role in deliberations of the Board and Board Sub-Committeemeetings and bring to the Company their expertise in various fields viz engineering, finance, management,law and public policy. The Board has established various Sub-Committees such as Audit Committee andCSR Committee etc having adequate representation of Independent Directors in line with the requirementsof DPE Guidelines on Corporate Governance for CPSEs. The company has also constituted a RemunerationCommittee on Performance Related Pay headed by an Independent Director.
Consequent upon adoption of the DPE Guidelines on Corporate Social Responsibility for CPSEs as CSRPolicy, the Board constituted the Board Level Apex Committee for Corporate Social Responsibility forproper and periodic monitoring of CSR activities. The minutes of CSR Committee meetings are put up forinformation of the Board meetings.
ix. Selection of New Directors
As per Articles of Association of RINL, the President of India through Ministry of Steel, appoints theChairman & Managing Director, Functional Directors and Part-time Official Directors on the Board of RINL[Part-time Non-official Directors (Independent Directors)]. The Independent Directors are selected/approved by the Ministry of Steel in consultation with the Search Committee of the Department of PublicEnterprises which maintains a panel of IAS(retd), Ex CMD, Professors etc.. having wide experience in thefields of Management, Finance, Engineering, Administration and Industry etc.
x. Terms & Conditions of Board Members & retirement policy.
The appointment of Chairman & Managing Director and Functional Directors of the company are on suchterms and conditions, remuneration and tenure as the President of India may from time to time determine.
Two Part-time Official Directors i.e Govt Directors viz. Joint Secretary (Steel), Ministry of Steel and AdditionalSecretary & Financial Advisor, Ministry of Steel were nominated by the Government of India on the Boardof RINL. They continue to be on the Board of RINL at the discretion of the Government of India. Thenomination of one of the Government directors was withdrawn w.e.f. 14th May 2012.
Normally, an Independent Director is appointed for a period of three years or as decided by the Ministryof Steel.
xi. Code of Conduct
As part of RINL's persisting endeavour to set a high standard of conduct for its employees, a 'Code ofBusiness Conduct and Ethics' has been laid down for all Board Members and Senior Managementpersonnel.
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The Code encompasses:
General Moral Imperatives;
Specific Professional Responsibilities; and
Additional Duties / Imperatives for Board Members and Senior Management Personnel.
xii. Board Charter
For the purpose of clearly defining the roles and responsibilities of the Board members, the Board haslaid down a Board Charter for the Board of Directors of the Company. The Charter also articulates ourcorporate governance objectives and approach.
xiii. The details of remuneration & sitting fee to Directors are given below: (Value in `̀̀̀̀)
S. Basic Salary Allowances and Sitting benefitsNo. Name in `̀̀̀̀ Perquisites & Fees in `̀̀̀̀ in `̀̀̀̀
Total in `̀̀̀̀ other retirement1. Shri A.P. Choudhary * 9,53,028 15,77,504 - 25,30,5322 Shri P K Bishnoi* 3,57,610 57,65,853 61,23,4633. Shri Umesh Chandra * 9,58,858 19,77,573 - 29,36,4324 Shri P. Madhusudan * 9,38,702 13,63,007 - 23,01,7095. Shri T.K. Chand * 9,00,000 10,52,002 - 19,52,0026. Shri Y.R. Reddy * 9,00,000 15,85,807 - 24,85,8077 Shri S. Machendranathan** Nil Nil Nil Nil8. Dr. Dalip Singh** Nil Nil Nil Nil9 Shri. A.P.V.N. Sarma*** - - 3,80,000 3,80,00010 Shri. H.S. Chahar*** - - 5,80,000 5,80,00011 Shri Swashpawan Singh*** - - 6,20,000 6,20,00012 Dr. Upendra Dutta Choubey*** - - 4,20,000 4,20,000
* Whole Time Directors (WTD)/ Functional Directors:
The whole time directors / functional directors are appointed in terms of the Articles of Association of theCompany by the President of India, in consultation with the Chairman of the Company for a period of 5years 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 inlieu thereof.
** Part-time official Directors/ Govt Directors
Part-time official Directors/ Government 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 asDirector for a period of 3 years from the date of assumption of charge or until further orders, whicheveris earlier. Sitting fees is only paid by the Company to the part-time non-official Directors. An amount of` 20,000/- is paid to the Part-time non-official Directors as sitting fee for each Board/Board Sub- CommitteeMeetings attended to by them.
3. Audit Committee
I. Brief description of the terms of reference:
The Audit Committee was initially constituted during the year 2006-07 in line with the OM No.18(8)/
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2005 - GM, dated 16th June, 2005 issued by Department of Public Enterprises, Govt. of India. Later interms of the CG guidelines issued by DPE in May 2010, the Audit Committee thus constituted, continuesto discharge its functions.
II. 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 informationto ensure that the financial statement is correct, sufficient and credible.
2. Recommending to the Board the fixation of Audit Fees.
3. Approval of payment to Statutory Auditors for any other services rendered by the Statutory Auditors.
4. Reviewing, with the management, the annual financial statements before submission to the Boardfor approval, with particular reference to :
a) Matters required to be included in the Directors' Responsibility Statement to be included in theBoard's Report in terms of Clause (2AA) of Section 217 of the Companies Act, 1956;
b) Changes, if any, in accounting policies and practices and reasons for the same;
c) Major accounting entries involving estimates based on the exercise of judgement byManagement;
d) Significant adjustments made in the financial statements arising out of audit findings;
e) Compliance with legal requirements relating to financial statements;
f) Disclosure of any related party transactions;
g) Qualifications in the Draft Audit Report;
5. Reviewing, with the management, the quarterly financial statements before submission to the Boardfor approval.
6. Reviewing, with the management, performance of Statutory and Internal Auditors, adequacy of theinternal control systems.
7. Reviewing the adequacy of the Internal Audit function, if any, including the structure of the InternalAudit Department, staffing and seniority of the official heading the Department, reporting structurecoverage and frequency of Internal Audit.
8. Discussion with Internal Auditors any significant findings and follow up thereon.
9. Reviewing the findings of any internal investigations by the Internal Auditors into matters wherethere is suspected fraud or irregularity or a failure of internal control systems of a material natureand reporting the matter to the Board.
10. Discussion with Statutory Auditors before the Audit commences about the nature and scope ofaudit 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 theCompany.
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.
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16. Provide an open avenue of communication between the independent auditor, internal auditor andthe Board of Directors.
17. Review and pre-approve all related party transactions in the Company. For this purpose, the AuditCommittee may designate a member who shall be responsible for pre-approving related partytransactions.
18. Review with the independent auditor the co-ordination of audit efforts to assure completeness ofcoverage, 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, togetherwith 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 oraccess to required information.
(The above are as per the CG Guidelines).
In addition to the above, the Audit Committee shall also look into the following areas:
1. Recommendations on Working Capital arrangements and term loans.
2. Recommendations on Investment of Surplus Funds.
Explanation: (i) The term "related party transactions" shall have the same meaning as containing in theAccounting Standard 18, Related Party Transactions, issued by the Institute of Chartered Accountants ofIndia.
Explanation: (ii) If the company has set up an Audit Committee pursuant to provision of the CompaniesAct, 1956 the said Audit Committee shall have such additional functions / features as contained in theseguidelines.
III. Review of information by Audit Committee
1. Management Discussion and Analysis of financial condition and results of operations;
2. Statement of significant related party transactions (as defined by the Audit Committee), submitted byManagement;
3. Management letters / letters of internal control weaknesses issued by the statutory auditors;
4. Internal Audit Reports relating to internal control weaknesses;
5. The appointment and removal of the Chief Internal Auditor shall be placed before the Audit Committee;and
6. Certification/declaration of financial statements by the Chief Executive i.e. CMD / Director (Finance).
The primary function of the Audit Committee is to assist the Board of Directors in fulfilling its oversightresponsibilities by reviewing the financial reports; the Company's systems of internal controls regardingfinance, accounting and legal compliance that management and the Board have established; and theCompany's auditing, accounting and financial reporting process generally.
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IV. 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.
V. Composition of the Audit Committee as on 31.3.2012 is as follows:
1. Shri A P V N Sarma, Independent Director - Chairman
2. Dr U D Choubey, Independent Director - Member
3. Shri H S Chahar, Independent Director - Member
VI. Meetings and attendance of Audit Committee during the year:
During the year, Six Meetings of the Audit Committee were held on 12th June 2011, 18th July 2011,25th August 2011, 02nd December 2011, 10th January 2012, 19th March 2012 respectively and all theMeetings were attended by Shri APVN Sarma, Chairman of Audit Committee and Shri HS Chahar, Memberof Audit Committee, while Dr. UD Choubey, Member of Audit Committee, attended only four meetings ofthe Committee. The Company Secretary is also the Secretary to the Audit Committee.
The Minutes of all the Audit Committee Meetings were put up to Board in their subsequent Meetings asan Item of information. The Chairman of the Audit Committee also appraises the Board about theobservations, if any, of the Audit Committee during the Board Meeting.
4. Remuneration Committee
i. Brief description of terms of reference
The Board of Directors at its 248th Meeting held on 15th October, 2010 vide Item No.3.06, approved aconstitution of a Remuneration Committee to decide the annual bonus / variable pay and pool andpolicy for its distribution across the executives and non unionized supervisors, within the prescribedlimits and would oversee the implementation of new directives concerning implementation of latest payand perks on a continuous basis.
ii. Composition, names of Members and Chairman as on 31.3.2012
1. Shri Swashpawan Singh : Independent Director - Chairman2. Shri A P V N Sarma : Independent Director - Member3. Dr U D Choubey : Independent Director - Member
Director (Personnel) - ConvenerDirector (Finance) - Invitee
iii. Meetings and attendance during the year
During the year, three Meetings were held and all the Members have attended the same.
iv. Remuneration Policy / Details of remuneration to all the Directors
The Company, being a 100% owned Govt. of India Undertaking, adopts the pay scales/remuneration toDirectors as determined by Govt. of India.
5. High Power Steering Committee (HPSC)
In line with the directions of the Govt. of India given, while approving the Expansion Project, the Board of RINLconstituted a High Power Steering Committee for overseeing the implementation of Expansion of VSP to 6.3Mt per year Liquid Steel and the composition of the Committee as on 31.3.2012 is as follows :
RASHTRIYA ISPAT NIGAM LIMITED
62
1. Chairman-cum-Managing Director - Chairman
2. Joint Secretary, Ministry of Steel - Member
3. Shri A P V N Sarma - Member(Part-time non-official Director)
4. Director (Finance) - Member
5. Director (Projects) - MemberCompany Secretary - Convener
ED (Finance)/GM (Finance) will be an alternate Member in the absence of Director (Finance). HOD of theProjects Division in the rank of ED or GM will be a permanent invitee.
During the year, Four Meetings of the HPSC were held on 13th June 2011, 18th July 2011, 04th December2011 and 19th March 2012.
6. General Body Meetings
i. Date, time and venue of the last three AGMs:
ii. Whether any special resolutions passed in the previous three AGMs:
There were no Special Resolutions passed in the previous three AGMs
iii. AGM of the current year;
Financial Year Date Time Venue
2011-12 20.09.2012 5.00 pm Admn Building ,Visakhapatnam
7. Disclosures
i. Disclosures on materially significant related party transactions that may have potentialconflict with the interests of Company at large:
There were no transactions by the company of material nature with Promoters, Directors or theManagement, their subsidiaries or relatives etc. that may have potential conflict with the interest ofCompany at large.
ii. Details of non-compliance by the Company, penalties, strictures imposed on the companyby any statutory authority, on any matter related to any guidelines issued by Government,during the last three years:
There were no instances of non-compliance by the Company, Penalties, Strictures imposed on theCompany by any Statutory Authority, on any matter related to any guidelines issued by Government,during last three years.
Financial Year Date Time Venue
2008-09 01.08.2009 3.00 pm Admn Building ,Visakhapatnam
2009-10 24.07.2010 4.30 pm Admn Building ,Visakhapatnam
2010-11 27.09.2011 10.30 am Admn Building ,Visakhapatnam
There was no EGM convened during the last three financial years.
30th Annual Report 2011-12
63
iii. Whistle Blower Policy and affirmation that no personnel has been denied access to theAudit Committee:
In this connection, it is understood that as per the Hon'ble Supreme Court orders and Governmentof India Resolution on "Public Interest Disclosure & Protection of Informer", only CVC can act as thedesignated agency to receive Whistle Blower Complaint. No other agency is empowered/can benominated to deal with the matter and in light of the same; the Company has not adopted anyWhistle Blower Policy yet. However, the Company has not denied access to approach to any personnelto the Management.
iv. Details of compliance with the requirements of these guidelines:
The Company has complied with the requirement of DPE Guidelines on Corporate Governance.
v. Details of Presidential Directives issued by the Central Government and their complianceduring the year and also in the last three years:
No Presidential Directives were issued by the Central Government during the last three years.
vi. Items of expenditure debited in books of accounts, which are not for the purposes ofthe business:
There were no items of expenditure debited in books of accounts, which are not for the purposes ofthe business.
vii. Expenses incurred which are personal in nature and incurred for the Board of Directorsand Top Management:
There were no expenses incurred which are personal in nature and incurred for the Board of Directorsand Top Management.
viii. Details of Administrative and office expenses as a percentage of total expenses vis-à-vis financial expenses and reasons for increase:
Details of Administrative and Office Expenses as a percentage of total expenses:
Increase/Detail 2011-12 2010-11 Decrease
over 2010-11
Total expenses (as per P&L A/c) 12,469.42 10,014.78Administrative and Office Expenses 64.52 57.07Financing Expenses 188.71 163.42Administrative Expenses as a % of Total Expenses 0.52 0.57 DecreaseFinancial Expenses as a % of Total Expenses 1.51 1.63 Decrease
8. Means of communication
i. Quarterly Results
RINL is an unlisted company and hence Quarterly results of the Company are not published in Newspapers. However, the same are being put up to the Administrative Ministry (MoS) and Audit Committeerespectively.
ii. Newspapers wherein results normally published
A Brief on Annual Results are covered by News papers viz The Hindu, Eenadu (local Telugu paper) etc.
iii. Any website, where displayed
Annual results as part of the Annual Reports for the last three years are made available on the websiteof the Company (www.vizagsteel.com). Website is designed to open the documents easily andquickly. Hindi version of the Annual report is also placed on the website along with English version.
RASHTRIYA ISPAT NIGAM LIMITED
64
iv. Whether it also displays official news releases.
The Company also displays official news releases on its website (www.vizagsteel.com).
9. Share holder's information:
i. Annual General Meeting Date : 20th September, 2012 Time : 05.00 p.m.
Venue : Admn Building ,Visakhapatnam
ii. Financial Year : The Company follows the period of 1st April to 31st March, as the financial year
iii. Payment of Dividend : The record date for the payment of Dividend is AGM Date i.e. 20th September,2012. Dividend for the financial year was recommended by the Board of Directors of the Company intheir 260th Meeting held on 18th June, 2012 @ 10% of Profit after tax for the equity share holders as onthe date of AGM and as per terms to preference share holders.
iv. Stock Code : ISIN -INE508F01013
v. Registrar and Share Transfer Agent
KARVY COMPUTERSHARE PRIVATE LIMITEDPlot No. 17 to 24, Vittal Rao Nagar, Madhapur, Hyderabad -500 081, Andhra Pradesh, IndiaTelephone: +91 40 4465 5000, Facsimile: +91 40 2343 1551, Email: [email protected]: www. karisma.karvy.com, Contact Person: Shri M. Muralikrishna,SEBI Registration Number: INR000000221
vi. Share Transfer System
Entire share transfer activities under physical segment are being carried out by Karvy ComputersharePrivate Limited. The share transfer system consists of activities like receipt of shares along with transferdeed from transferees, its verification, preparation of Memorandum of transfers, etc. Shares transfersare approved by Sub-Committee of the Board for Allotment and Post-Allotment activities of RINL'sSecurities.
vii. Number of Shares held by the Directors as on March 31st, 2012
S. No. Name of the Director Number of Equity Shares
1. Shri A.P. Choudhary* 32. Shri P. Madhusudan* 13. Dr. Dalip Singh* 14. Shri S. Machendra Nathan* 1
* As a nominee of the President of India* Shares of Face value 1000 were sub-divided into 100 shares of 10 Each on 21st April, 2012 pursuant to EGM resolution.
viii. Equity Share holding pattern on AGM date i.e. 20th September, 2012
S. No. Name of Shareholder Number of Equity Shares
1. The President of India, acting through the MoS 4,88,98,45,4002. Shri A.P. Choudhary* 3003. Shri P. Madhusudan* 1004. Shri S. Machendra Nathan* 1005. Dr. Dalip Singh* 1006. Shri T.K. Chand* 1007. Shri Umesh Chandra* 100
*As a nominee of the President of India
30th Annual Report 2011-12
65
ix. Address for correspondence:Shri P Mohan Rao,Company Secretary & Compliance Officer,D 12, D Block, Administrative Building, Rashtriya Ispat Nigam Limited,Visakhapatnam Steel Plant, Visakhapatnam, 530 031,E mail: [email protected], Website: www.vizagsteel.com
10 Code of Conduct
The Company has in place a Code of Conduct applicable to the Board Members as well as the SeniorManagement Personnel and that the same has been hosted on the Company’s website. All the BoardMembers and the Sr. Management Personnel have affirmed compliance with the Code of Conduct as on31st Mar. 2012.
11. Audit Qualifications
The Company is glad to mention that it secured 'NIL' Comments from CAG for the last six consecutiveyears i.e. 2006-07, 2007-08, 2008-09, 2009-10,2010-11 and 2011-12.
12. Training of Board Members
The Company has been sponsoring the independent Directors/ Newly inducted Directors for trainingprograms conducted by SCOPE/ DPE/IPE etc.. Further, during the Board / Sub-Committee Meetings, detailedpresentations are also made by Senior executives / Professionals / Consultants facilitating the BoardMembers to know the details of the agenda, company performance, expansion plans, projects etc..
13. Whistle Blower Policy
The Company has since prepared a draft Whistle Blower Policy and the same was put up to its AuditCommittee, which had suggested to await a Common Whistle Blower Policy that is being evolved bySCOPE to be adopted uniformly by all CPSEs.
14. Certification of financial statements by the CEO and CFO of the Company
The CEO / CMD of the Company and CFO / Director (Finance) have provided the Certificationregarding the financial statements for the year 2011-12, as reviewed by Audit Committee.(Copy enclosed) (Annexure-III).
15. The names of other Board Sub-Committees are given below:
1. Committee of Management (COM)2. Committee for Award of Contracts (CAC)3. Committee for Award of Contracts relating to Expansion Project (CACEP)4. Independent Ethics Committee (IEC)5. Committee on Corporate Social Responsibility.6. Grievance Redressal Committee.7. Human Resources Committee.8. Fly Ash Based Cement Plant Committee.9. Raw Material Security Committee.10. Committee on Gangavaram Port11. Committee on Marketing.12. Steering Committee.13. Committee of Independent Directors.14. Share Transfer Committee.
RASHTRIYA ISPAT NIGAM LIMITED
66
Annexure - III
30th Annual Report 2011-12
67
Annexure - IV
P.N. Rao & Co.,Company Secretaries
Phone : 0891-2751934e-mail: [email protected]
Flat No. 102, I Floor, Door No. 9-42 19 1, Swamy Prasad Vinayagar, Balajinagar, Siripuram,Adjacent to State Bank of India Administrative Office Main Entrance, Visakhapatnam-530 003
ToThe Members,Rashtriya Ispat Nigam Ltd.,Visakhapatnam Steel Plant,Administrative Building,Visakhapatnam - 530 031
CERTIFICATE ON COMPLIANCE OF GUIDELINES ONCORPORATE GOVERNANCE
1. We have examined the compliance of conditions of Corporate Governance by RashtriyaIspat Nigam Limited, a Govt. of India Undertaking (unlisted company) for the financial yearended 31st March 2012 pursuant to the Guidelines on Corporate Governance issued bythe Ministry of Heavy Industries and Public Enterprises, Department of Public Enterprisesvide their O.M. No. 18(8)/2005-GM, dated 14th May, 2010 which have become mandatoryfor all CPSEs. We have obtained all the information and explanations which to the best ofour knowledge and belief were necessary for the purposes of certification.
2. The Compliance of Guidelines on Corporate Governance is the responsibility of theManagement. Our examination was limited to the procedures and implementation thereof,adopted by the Company for ensuring the compliance of the Guidelines on CorporateGovernance. It is neither an audit nor an expression of opinion on financial statements ofthe company. Further, this certificate is neither an assurance as to the future viability of theCompany nor the efficiency or effectiveness with which the management has conductedthe affairs of the Company.
3. In our opinion and to the best of our information and according to the explanations given tous and the disclosures made in the Directors' Report, we hereby certify that the Companyhas complied with the conditions of Corporate Governance as stipulated in the abovementioned OM..
For P.N. Rao & Co.Company Secretaries
(P. NARASINGA RAO)Proprietor CPNo. 2552
Visakhapatnam16th July 2012
RASHTRIYA ISPAT NIGAM LIMITED
68
Annexure - V
P.N. Rao & Co.,Company Secretaries
Phone : 0891-2751934e-mail: [email protected]
Flat No. 102, I Floor, Door No. 9-42 19 1, Swamy Prasad Vinayagar, Balajinagar, Siripuram,Adjacent to State Bank of India Administrative Office Main Entrance, Visakhapatnam-530 003
ToThe Members,Rashtriya Ispat Nigam Ltd.,Visakhapatnam Steel Plant,Administrative Building,Visakhapatnam - 530 031
SECRETARIAL COMPLIANCE REPORT FOR THEFINANCIAL YEAR ENDED 31ST MARCH 2012
We have examined the registers, records, books and papers of Rashtriya Ispat Nigam Limited, aGovt. 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 Memorandumand Articles of Association of the Company for the financial year ended on 31st March 2012. Inour opinion and to the best of our information and according to the examinations carried out byus and explanations furnished to us by the Company, its Officers, we certify that in respect of theaforesaid financial year:
1. Category of Company
The Company is a "Government Company" as defined under Section 617 of the Act. It was anunlisted private company, as on 31st March, 2012.
2. Maintenance of Statutory Records
The Company has kept and maintained all registers as required to be maintained under theprovisions 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
The Company is having a full time Chairman-cum-Managing Director and the number ofIndependent Directors are required to be at least one third of the Board, as per the DPEguidelines on Corporate Governance. The Board of Directors comprise of the required numberof 4 (four) Independent Directors as on 31st March 2012.
30th Annual Report 2011-12
69
P.N. Rao & Co.,Company Secretaries
Phone : 0891-2751934e-mail: [email protected]
Flat No. 102, I Floor, Door No. 9-42 19 1, Swamy Prasad Vinayagar, Balajinagar, Siripuram,Adjacent to State Bank of India Administrative Office Main Entrance, Visakhapatnam-530 003
5. Board Meetings
The Board of Directors duly met eight (8) times on 13th June 2011, 18th July 2011, 26th July,2011, 25th August 2011, 12th September 2011, 4th December 2011, 11th January 2012and 19th March 2012 respectively in respect of which meetings, proper notices were givenand the proceedings were properly recorded and signed in the minutes book maintained forthe purpose.
6. Audit Committee
The Board has constituted an Audit Committee as required under Corporate GovernanceGuidelines. The Audit Committee met six (6) times on 12th June 2011, 18th July 2011,25th August 2011, 2nd December 2011, 10th January 2012 and 19th March 2012 respectivelyin respect of which meetings, notices were given and the proceedings were properly recordedand 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 Directorspursuant to the provisions of the Act and the rules made there under.
8. Annual General Meeting
The Annual General Meeting of the Company for the financial year ended on 31st March,2012 was held on 27th September 2011. The Resolutions passed thereat were duly recordedin minutes book maintained for the purpose.
9. Extraordinary General Meeting
No Extraordinary General Meeting was held during the financial year.
10. Appointment and changes amongst Directors
The Board of Directors of the Company is duly constituted and the appointment of Directorsincluding Managing Director and whole time Directors have been duly made in accordancewith the provisions of Articles of Association of the Company read with relevant provisions ofthe Act.
11. Directors' Report
The Company has duly complied with the provisions of Section 217 of the Act.
12. Acceptance of Public Deposits
The Company has not invited/accepted any deposits falling within the purview of Section 58Aof the Act during the financial year.
RASHTRIYA ISPAT NIGAM LIMITED
70
13. Appointment of Cost Auditors
The Company has appointed Cost Auditors under Section 233B of the Act, for its PowerPlant operations and duly complied with the provisions of the Act.
14. Provident Fund
The Company has deposited both employees' and employer's contribution with the VSPEmployees Contributory Provident Fund Trust within the prescribed time pursuant to Section418 of the Act.
15. Loans to Directors
The Company being a "Private Company" and also a "Government Company" as on31st March, 2012, 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 Companyand no fines or penalties or any other punishment was imposed on the Company, its Directorsand Officers during the financial year for offences under the Act.
P.N. Rao & Co.,Company Secretaries
Phone : 0891-2751934e-mail: [email protected]
Flat No. 102, I Floor, Door No. 9-42 19 1, Swamy Prasad Vinayagar, Balajinagar, Siripuram,Adjacent to State Bank of India Administrative Office Main Entrance, Visakhapatnam-530 003
For P.N. Rao & Co.Company Secretaries
(P. NARASINGA RAO)Proprietor CPNo. 2552
Visakhapatnam16th July 2012
30th Annual Report 2011-12
71
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 2012, 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 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, ‘Satyalakshmi Vinayaka Towers’, D.No. 49-28-12, Madhuranagar, Visakhapatnam - 530 016.Phone : Off : 0891-2549707 / 2549561 Res. : 0891-2799234 / 2551827 Mobile : 9391 03175 / 93931 00103
e-mail:[email protected] Branch Office at Bengaluru
Annexure - VI
RASHTRIYA ISPAT NIGAM LIMITED
72
(d) In our opinion, the Balance Sheet, Profit and Loss Account and cash Flow Statement dealt with by this report,
read together with notes, 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 20.01, had neither provided nor
paid any amount, as the Government of India had not framed any rules/guidelines in this regard.
(g) We draw attention to note 30.01, regarding the status of confirmations of balances.
(h) In our opinion and to the best of our information and according to the explanations given to us, the said
accounts read together with the significant Accounting Policies and Notes forming part of accounts, give
the information required by the Companies Act 1956, in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India.
(i) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March 2012;
(ii) 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.
B.V. RAO & Co.Chartered Accountants
Place : Visakhapatnam FOR B.V. RAO & Co.Date : 18-06-2012 Chartered Accountants
Regd. No. (F.R.N) 003118S
Sd/-(CA. A V SUBRAHMANYAM)
Partner
FF-1, ‘Satyalakshmi Vinayaka Towers’, D.No. 49-28-12, Madhuranagar, Visakhapatnam - 530 016.Phone : Off : 0891-2549707 / 2549561 Res. : 0891-2799234 / 2551827 Mobile : 9391 03175 / 93931 00103
e-mail:[email protected] Branch Office at Bengaluru
30th Annual Report 2011-12
73
B.V. RAO & Co.Chartered Accountants
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) No substantial part of fixed assets of the company has been disposed off during the year.
2. Physical verification and reconciliation of Inventories
( a) Inventories have been physically verified during the year by the management, except stocks referred to in note
15.01, which are adopted based on the book value amounting to ̀ 87.95 Crs (previous year ̀ 14.89 Crs) out
of the total finished/ semi- finished stock of ` 1779.96 Crs (previous year l ` 825.33 Crs). 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.
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
FF-1, ‘Satyalakshmi Vinayaka Towers’, D.No. 49-28-12, Madhuranagar, Visakhapatnam - 530 016.Phone : Off : 0891-2549707 / 2549561 Res. : 0891-2799234 / 2551827 Mobile : 9391 03175 / 93931 00103
e-mail:[email protected] Branch Office at Bengaluru
RASHTRIYA ISPAT NIGAM LIMITED
74
B.V. RAO & Co.Chartered Accountants
FF-1, ‘Satyalakshmi Vinayaka Towers’, D.No. 49-28-12, Madhuranagar, Visakhapatnam - 530 016.Phone : Off : 0891-2549707 / 2549561 Res. : 0891-2799234 / 2551827 Mobile : 9391 03175 / 93931 00103
e-mail:[email protected] Branch Office at Bengaluru
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 for the current year 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.
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 2012, 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.
30th Annual Report 2011-12
75
B.V. RAO & Co.Chartered Accountants
(c) According to the information and explanations given to us, the disputed dues of Income Tax, Sales Tax,
Customs Duty, Excise Duty and other Statutory dues which have not been deposited as at 31.03.2012 are as
follows:
Name of the Statute Nature of duesForum where dispute
is pendingAmount
( in Crs)
FF-1, ‘Satyalakshmi Vinayaka Towers’, D.No. 49-28-12, Madhuranagar, Visakhapatnam - 530 016.Phone : Off : 0891-2549707 / 2549561 Res. : 0891-2799234 / 2551827 Mobile : 9391 03175 / 93931 00103
e-mail:[email protected] Branch Office at Bengaluru
Customs & Excise Act Excise duty and Cenvat Commissioner(Appeals) 0.91
-do- -do- CESTAT 137.17
-do- -do- Honorable High Court ofAndhra Pradesh 9.28
-do- Customs CESTAT 24.03
-do- Customs Honorable High Court ofAndhra Pradesh 0.36
The Andhra Pradesh Sales Tax ADC 0.43General Sales Tax Act
&CST Act
-do- -do- STAT 4.66
-do- -do- Honorable High Court ofAndhra Pradesh 1403.44
UP Trade Tax Act ST Appeal (Kanpur Branch) Tribunal Bench, Agra 0.10
Bihar VAT Act VAT Joint CommissionerTaxes (JCT) 0.05
Orissa Sales Tax Act Sales Tax Addl. Commissioner,Sales Tax, Odisha 0.25
R&D Cess Act R&D Cess High Court of Kolkata 3.38
Other Statutes Other Statutory Dues AP High Court andconcerned department 161.74
RASHTRIYA ISPAT NIGAM LIMITED
76
B.V. RAO & Co.Chartered Accountants
FF-1, ‘Satyalakshmi Vinayaka Towers’, D.No. 49-28-12, Madhuranagar, Visakhapatnam - 530 016.Phone : Off : 0891-2549707 / 2549561 Res. : 0891-2799234 / 2551827 Mobile : 9391 03175 / 93931 00103
e-mail:[email protected] Branch Office at Bengaluru
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. Loans 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 I 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.
30th Annual Report 2011-12
77
B.V. RAO & Co.Chartered Accountants
FF-1, ‘Satyalakshmi Vinayaka Towers’, D.No. 49-28-12, Madhuranagar, Visakhapatnam - 530 016.Phone : Off : 0891-2549707 / 2549561 Res. : 0891-2799234 / 2551827 Mobile : 9391 03175 / 93931 00103
e-mail:[email protected] Branch Office at Bengaluru
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: 18.06.2012
FOR B.V.RAO & Co.CHARTERED ACCOUNTANTS
No. (F.R.N) 003118S
Sd/-Partner
M. No: 210724
RASHTRIYA ISPAT NIGAM LIMITED
78
Annexure - VII
30th Annual Report 2011-12
79
RASHTRIYA ISPAT NIGAM LIMITED
80
STATEMENT PURSUANT TO SECTION 212 (1) (e) OFTHE COMPANIES ACT 1956,
RELATING TO SUBSIDIARY COMPANIES FOR THE YEAR 2011-12
PARTICULARS
EasternInvestmentsLimited (EIL)
OrissaMineral
DevelopmentCorporation
(Subsidiary ofEIL)*
Bisra StoneLime
CompanyLimited
(Subsidiaryof EIL)*
Financial year of the subsidiary ended on
The extent of holding company's interest in the subsidiaryat the end of 31st March 2012
a) Number of Fully Paid up Equity shares of ` 10 each(Nos)
b) Extent of Holding (%)
The Net aggregate amount of the profit / (loss) of thesubsidiary company not dealt with in the Company'saccounts so far as it concerns the members of the holdingcompany: (` Crs)
a) For the financial year ended on 31st March 2012
b) For all the previous financial years of the subsidiary sinceit became subsidiary
The Net aggregate amount of the profit/(loss) of thesubsidiary company so far as its profits are dealt with inholding company's accounts: (` Crs)
a) For the financial year ended on 31st March 2012
b) For all the previous financial years of the subsidiary sinceit became subsidiary
31st March2012
7,36,638
51.00
0.87
0.76
0.48
NIL
1.
2.
3
4
31st March2012
3,00,089
50.01
1.72
0.91
NIL
NIL
31st March2012
4,38,34,782#
50.22 @
(3.45) $
(0.64) $
NIL
NIL
Notes:
* As per Section 4(1)( c) of companies Act 1956 a subsidiary of a subsidiary of holding company is a subsidiary of holding company.
# Out of the above 4,36,51,855 equity shares are held by EIL and 1,82,927 are held by RINL.
@ Extent of holding through EIL is 50.01% and directly is 0.21%.
$ Net aggregate amount of profit/loss includes the proportionate profit relating to direct holding of RINL for and on behalf of Board
of Directors Sd/- Sd/-
(P. Madhusudan) (A.P. Choudhary)
Director (Finance) Chairman-Cum-Managing Director
Sd/-
(P. Mohan Rao)
Company Secretary
Place: Visakhapatnam
Date: 19th September 2012
30th Annual Report 2011-12
81
Annexure - A
Energy Conservation measures taken during the Year 2011-12A) Specific Energy Consumption and CO2 emissions for the year 2011-12 are 6.06 G.cal/tCS & 2.61 CO2 /tCS respectively.
i. Reduction of coke rate from 532.7 kgs/tHM to 527.6 kg/tHM by increasing hot blast temperature andensuring proper coking coal blend coupled with techno economics
ii. Reduction of BF gas bleeding from 4.1 % to 3.74% by taking up proactive measures and optimizing distributionthrough Supervisory Control and Data Acquisition system(SCADA)
iii. Replacement of Tubular air heater in Boiler-3 in thermal power plant
iv. Installation of refractory less Gas Pre heater in Gas Expansion Turbine of Blast Furnace 1
v. Replacement of Air Recuperartors in F/C-1& F/C-2 of LMMM
vi. Replacement of gas recuperator at the reheating furnace of WRM during capital repairs
vii. Reduction of Stelmor conveyor blowers by standardized operation for different sections of rolling
viii. Commissioned Energy Efficient Air separation plant no 4
ix. Replaced existing 2100 Fluorescent Tube lights with Energy Efficient Tube lights(T5)
x. Installed 329 Translucent sheets to utilize natural lighting
xi. Replaced 33nos of low capacity motor and reduced RPM of fans in Air Handling Units
Other Initiatives
1. RINL signed Memorandum of Understanding with M/s NEDO of Japan in May, 2009 for installing 20.6 MWwaste heat recovery system on sinter cooler under Green Aid plan. The erection work is under progress.
2. Clean Development Mechanism
RINL developed Project Design Documents for 6 CDM projects during the year 2011-12. Host Countryapproval from Ministry of Environment and forests is obtained for 4 No of Projects and HCA is expectedshortly for remaining projects. Two CDM projects namely Waste Heat recovery from Stoves of Blast Furnace-3 and Power Generation using Waste pressure Energy of BF gas from BF-3 is under Validation. The status ofCDM projects is given below.
The following measures have been taken during the year 2011-12 for conservation of energy:
RASHTRIYA ISPAT NIGAM LIMITED
82
No of PDD prepared 9
No of PDDs Submitted to DesignatedNational Authority for Host Country Approval 9
No of projects for DNA meeting held 8
No of Projects-Approved by DNA 6
No of projects under validation 2
RINL organized stakeholder meeting for following CDM projects on 7th Dec' 2011 at Ukkunagaram in thepresence of Union representatives, employees, NGOs and State Government officials to elicit comments.
i) 2x60 MW Waste BF gas based captive power plant
ii) Installation of Energy Efficient Air separation unit
iii) Pulverized Coal Injection in Blast Furnaces 1,2
iv) Waste Heat Recovery from Special Bar Mill #2
v) Waste Heat Recovery from Wire Rod Mill #2
vi) Billet Caster in Steel Melting Shop#2
These comments will be incorporated in Project Design Documents of respective projects. PDD for theseprojects will be submitted to Designated National Authority for Host Country Approval shortly.
3. RINL is planning to migrate from BS EN: 16000 Energy Management System to ISO: 50001. Necessarydocumentation has been completed
4. RINL has been adjudged as Excellent Energy Efficient Unit by Confederation of Indian Industry Green Businesscenter National Award for Excellence in Energy Management-2011
B) Other achievements
LD gas recovery plant
Total volume of LD gas recovered 311.85 MNcum
2. Waste heat recovery at:
a. Back pressure turbine station
Total power generated 105390 MWH
b. Gas Expansion Turbine Station
Total power generated 85824 MWH
***MNCum = Million Normal Cubic meters *
**MWH = Mega Watt Hours
C) Foreign Exchange Earnings & Outgo
a) Foreign Exchange inflow ` 544.51 crores
b) Foreign Exchange outflow ` 5569.86 crores
(includes ` 193.40 crores on Expansion activities)
30th Annual Report 2011-12
83
FORM "A"
A. Power and fuel consumption 2011-12
1) Electricity
a) Purchased (Net Import from AP TRANSCO) 298558 MWHb)Gross exported 298558 MWHc)Imported 1524 MWHd)Own generation 300082 MWH
- Through steam turbine / generator 1634127 MWH- Through BPTs 105390 MWH- Through GETS 85824 MWH
2*) Coal Consumption 1245592 t
Boiler Coal(Indigenous) used in TPP 959 tBoiler Coal(Imported) used in TPP 95112 tMedium Coking Coal used in TPP 2374645 tImported Coking coal 585345 tImported Soft Coking coal 495192 tUS Coal 410430 tIndigenous Medium coking coal
3) Furnace oil Consumption 461.5 Kl
4) HSD Consumption 2251.7 Kl
B. Consumption per unit of production
Item Unit Per tonne of Crude Steel production
Imported electricity kwh 95.9
Furnace oil It 0.15
HSD It 0.72
Coking coal
Imported Coking coal kg 759.2
Imported Soft Coking coal kg 187.1
US Coal kg 158.3
Indigenous Medium coking coal kg 131.2
Boiler coal
Boiler Coal(Indigenous) used in TPP kg 398.2
Boiler Coal(Imported) used in TPP kg 0.3
Medium Coking Coal used in TPP kg 30.4
Crude steel production 3127958 t
RASHTRIYA ISPAT NIGAM LIMITED
84
Form - B
Form for disclosure of particulars with respect to Technology Absorption
1. Specific areas in which R&D Process improvement, Cost reduction, waste utilization & Environment was carried out by the company. protection. Apart from the running projects from last year, the
following new projects were taken up during 2011-12 in the abovementioned areas. Revision of IS: 2879:1998 with respect toAlluminium Content from 0.012% to 0.020% in the core wire,Utilization of VSP's BF slag for foundry application, Prediction oftransition bloom volume and minimization of transition bloomproduction, Development of value added ceramic products utilizingsolid wastes generated at VSP, Optimization of design & operatingparameters on Calcium recovery & its efficacy for inclusionmodification, Effect of micro-fines on iron ore sintering process,Pilot oven tests, Development of new grades etc,.
2. Benefits derived as a result of the R & D A brief note on R&D activities taken up duringApr' 11- March' 12 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 ` 20.29 crores
(b) Total R&D expenditure as a % of Turnover 0.1404 %
(Based on Turnover figure of ` 14,462 Crs.)
30th Annual Report 2011-12
85
Annexure -1
Benefits derived/expected from R&D Projects
1. From Internal projects:
SI.No. Name of the Project Tangible Benefits Intangible Benefits /Expected Benefit
Utilization of VSP's BF slag forfoundry application
Prediction of transitionbloom volume andminimization of transitionbloom production
Development of value addedceramic products utilizingsolid wastes generated atVSP
Optimization of design &operating parameters onCalcium recovery & itsefficacy for inclusionmodification
Effect of micro-fines on ironore sintering process
Improved customersatisfaction
Better utilization of RINLslag. This project serves as ameasure for waste utilizationand environment protection.
Minimization of transitionbloom production andthereby enhancing primebloom production & yieldimprovement.
To develop value addedceramic products viz.,vitrified ceramic tiles,pavement blocks, abrasionresistance tiles etc.,
Optimum design andoperating parameters foreffective Calcium recovery,inclusion modification andproduction of ultra lowAluminium steel
Know how to maximize ironore micro-fines usagewithout affecting sinterproductivity and quality.
1
2
3
4
5
2. From Joint Research Projects:
SI.No. Name of the Project Tangible Benefits Intangible Benefits
Carbonization tests ofdifferent coal blends (Pilotoven tests)
Development of new grades/ section
Increased market share
Optimization of Coal blend byPilot Oven test with differentsources / type of coals
Improved customersatisfaction
1
2
RASHTRIYA ISPAT NIGAM LIMITED
86
Annexure - 2
R&D PROJECTS PLANNED FOR NEXT 3 YEARS
1. Development of technology for iron making through Hydrogen Flash Smelting
2. To achieve 100% FeO in finished wire rod for mechanical de-scalability.
3. Process improvement to restrict Martensite formation to 30% in Rebar
4. Reduction of cyanide and COD in MBC
5. Removal of N2 and CO2 from BF Gas
6. Development of High performance steels for construction
7. Development of wires for CO2 welding
30th Annual Report 2011-12
87
RASHTRIYA ISPAT NIGAM LIMITED
88
30th Annual Report 2011-12
89
BALANCE SHEET AS AT 31st MARCH 2012 Crs
EQUITY AND LIABILITIESSHAREHOLDERS' FUNDS
Share CapitalReserves and Surplus
NON CURRENT LIABILITIESDeferred Tax Liabilities ( Net )Other Long term LiabilitiesLong term provisions
CURRENT LIABILITIESShort term borrowingsTrade payablesOther current liabilitiesShort term provisions
Total
ASSETSNON CURRENT ASSETS
Fixed AssetsTangible assetsIntangible assetsCapital work-in-progressIntangible assets under development
Non Current InvestmentsLong term Loans and AdvancesOther Non Current assets
CURRENT ASSETSInventoriesTrade receivablesCash and Bank balancesShort term Loans and AdvancesOther Current assets
TotalSignificant Accounting Policies [A] andNotes to Accounts [B 01.00 to B 30.00] annexedform part of the Accounts
As per our report of even dateFor B.V. RAO & CO
Chartered AccountantsRegn. No (F.R.N) 003118S
For and on behalf of Board of Directors
Sd/-(A.P. Choudhary)
Chairman-cum-Managing Director
Sd/-(P. Madhusudan)Director (Finance)
Sd/-(P Mohan Rao)
Company Secretary
Place : VisakhapatnamDate : 18th June 2012
Sd/-(A.V. Subrahmanyam)
PartnerM.No: 210724
NoteNo.
B 01.00B 02.00
B 03.00B 04.00B 05.00
B 06.00B 07.00B 08.00B 09.00
B 10.00B 10.00B 11.00
B 12.00B 13.00B 14.00
B 15.00B 16.00B 17.00B 18.00B 19.00
1783.653.19
10 596.08 15.01
As at31st March,
2012
7 727.32 5 931.97
60.98 83.23
479.73
2 575.14390.19
3 645.84 610.44
21 504.84
12 397.93
362.58 241.89 10.33
3 403.11427.15
2 068.34 2 366.54
226.97
21 504.84
1 526.89 3.00
9 455.01 0.00
As at31st March,
2011
7 827.32 5 401.90
79.97 48.59577.82
1 135.88 540.95
2 750.25 690.77
19 053.45
10 984.90
361.60 297.30
7.97
3 254.71 330.27
1 998.89 1 633.89 183.92
19 053.45
RASHTRIYA ISPAT NIGAM LIMITED
90
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31st MARCH 2012 Crs
INCOMERevenue From Operations
Less: Excise dutyOther IncomeTotal Revenue
EXPENSESCost of materials consumedChanges in Inventories of Semi-finished/Finished goodsEmployees' benefitsFinance CostsDepreciation and AmortisationOther expenses
Total ExpensesLess: Inter account adjustments-raw material mining cost
Net ExpensesProfit for the year before Prior period Items (PPI)Prior period items - Net creditProfit after PPI and Before Exceptional & Extraordinary Items and TaxExceptional ItemsProfit Before Extraordinary Items and TaxExtraordinary itemsProfit Before TaxTax Expense Current Tax Earlier years adjustments Deferred TaxProfit /(loss) for the period from Continuing OperationsProfit /(loss) for the period from Discontinuing OperationsTax Expense of discontinuing OperationsProfit /(loss) for the period from Discontinuing Operations (after Tax)
Profit / (loss) for the period
Basic and Diluted Earnings Per Share (in )(Face Value 1000 per share)Significant Accounting Policies [A] andNotes to Accounts [B 01.00 to B 30.00] annexed form part of the Accounts
As per our report of even dateFor B.V. RAO & CO
Chartered AccountantsRegn. No (F.R.N) 003118S
For and on behalf of Board of Directors
Sd/-(A.P. Choudhary)
Chairman-cum-Managing Director
Sd/-(P. Madhusudan)Director (Finance)
Sd/-(P Mohan Rao)
Company Secretary
Place : VisakhapatnamDate : 18th June 2012
Sd/-(A.V. Subrahmanyam)
PartnerM.No: 210724
14570.19 1 319.15
0.000.00
For the yearended
31st March, 2012
13251.04328.39
13 579.43
8 472.22 45.37
1 466.67 190.60 344.86
2 005.97 12 525.69
50.03 12 475.66 1 103.77
6.24 1 110.01
0.00 1 110.01
0.00 1 110.01
388.20(10.66)(18.99)
751.46
0.00
751.46
126.18
11 616.30 1 045.81
0.00 0.00
For the yearended
31st March, 2011
10570.49425.95
10 996.44
7 188.36(532.32)
1 273.00 164.49 265.94
1 739.37 10 098.84
49.10 10 049.74
946.70 34.96
981.66 0.00
981.66 0.00
981.66
369.10(28.08)(17.85)658.49
0.00
658.49
85.79
NoteNo.
B 20.00
B 21.00
B 22.00B 23.00B 24.00B 25.00B 10.01B 26.00
B 27.00
B 28.00
30th Annual Report 2011-12
91
CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH 2012 Crs
A. Cash flow from Operating activitiesNet Profit / (Loss) before taxation
Add / (Less) Adjustments for:DepreciationInterest and Finance ChargesProvisionsUnrealised Foreign Exchange (Gain) /Loss(Profit)/Loss on sale of fixed assetsFinished goods consumed for capital jobsInterest IncomeDividend Income
Operating Profit Before working capital changesAdjustments for
(Increase) / Decrease in Inventories(Increase) / Decrease in Trade Receivables(Increase) / Decrease in Loans & Advances(Increase) / Decrease in Other Non-current assets(Increase) / Decrease in Other current assetsIncrease / (Decrease) in Liabilities
Cash generated from OperationsLess: Income Tax paid
Net cash from / (used in) Operating activities
B. Cash flow from Investing activitiesPurchase of Fixed AssetsInvestmentsDividend receivedProceeds from sale of Fixed AssetsInterest receivedNet cash from / (used in) Investing activities
C. Cash flow from Financing activitiesProceeds from / (Repayment of) Short term loansProceeds from Prime Minister's Trophy FundProceeds from / (Repayment of) Share capitalInterest and Finance chargesDividend PaidDividend Tax PaidNet proceeds from other Bank balancesNet cash from / (used in) Financing activities
Net Increase / (decrease) in Cash and Cashequivalents (A+B+C)
Opening Balance of Cash and Cash equivalentsClosing Balance of Cash and Cash equivalents(Represented by Cash and Bank Balances - Note B 17.00 )
As per our report of even dateFor B.V. RAO & CO
Chartered AccountantsRegn. No (F.R.N) 003118S
For and on behalf of Board of Directors
Sd/-(A.P. Choudhary)
Chairman-cum-Managing Director
Sd/-(P. Madhusudan)Director (Finance)
Sd/-(P Mohan Rao)
Company SecretaryPlace : VisakhapatnamDate : 18th June 2012
Sd/-(A.V. Subrahmanyam)
PartnerM.No: 210724
For the year ended31st March, 2011
981.66
268.61164.4911.28(5.30)(3.26)(6.65)
(307.72)0.00
1103.11
(803.19)(150.11)
119.12(1.82)
(89.07)(125.10)
(421.25)(368.31)
(2480.04)(363.59)
0.003.55
371.03(2469.04)
(96.53)1.240.00
(151.34)(285.29)(47.38)
50.00(529.30)
(3366.65)
5360.541993.89
For the year ended31st March, 2012
1110.01
347.66190.60
9.951.10
(1.75)(5.48)
(198.92)(0.48)
1452.69
(148.40)(96.88)
(102.76)(2.36)
(36.46)262.46
(495.85)832.44
(1786.74)(1.03)
0.482.95
193.97(1590.37)
1439.260.39
(100.00)(196.76)(271.47)(44.04)
0.00827.38
69.45
1993.892063.34
1. This statement has been prepared under the "Indirect Method" as set out in the Accounting Standard 3.2. Significant Accounting Policies and Notes to Accounts form part of the Cash Flow Statement.3. Previous year's figures have been rearranged / regrouped wherever necessary to confirm to current year's classification.
RASHTRIYA ISPAT NIGAM LIMITED
92
A. SIGNIFICANT ACCOUNTING POLICIES
1.0 GENERAL
1.1 Financial Statements are prepared under the historical cost convention in accordance with fundamental accountingassumptions and Generally Accepted Accounting Principles (GAAP) in India and the relevant provisions of theCompanies Act, 1956 including Accounting Standards notified thereunder.
2.0 FIXED ASSETS
2.1 Fixed assets are stated at historical cost less depreciation.
2.2 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’.
3.0 INVESTMENTS
3.1 Current investments are carried at lower of cost and fair value.
3.2 Long term investments are carried at cost. Diminution in value, other than temporary, is provided for.
4.0 INVENTORIES
4.1 Inventories are valued at lower of cost and net realizable value.
4.2 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 Obsolete / Surplus / Non-moving inventory are adequately provided for.
5.0 REVENUE RECOGNITION
5.1 Sales are recognized when all significant risks and rewards of ownership have been transferred to the buyer.
5.2 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.
7.0 FOREIGN CURRENCY TRANSACTIONS
7.1 Foreign currency monetary items are recorded at the closing rate.
7.2 Exchange differences arising on account of settlement / conversion of foreign currency monetary items arerecognised 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 specifiedperiod derived in accordance with the provisions of Schedule XIV of the Companies Act, 1956, except thefollowing:
9.1.1 Assets costing up to 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 theperiod of their useful life based on the Management’s 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).
30th Annual Report 2011-12
93
9.2 Amortisation of "Intangible Assets" is accounted as follows:
9.2.1 Mining lease rights are amortised over the period of lease.
9.2.2 Software which is not an integral part of related hardware, is treated as intangible asset and amortised over aperiod of 4 years or its licence period, whichever is less.
10.0 BORROWING COSTS
10.1 Borrowing costs incurred for obtaining assets which take more than 12 months to get ready for its intended useare capitalised to the respective assets wherever the costs are directly attributable to such assets and in othercases 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 ITEMS
11.1 Items of Income / Expenditure which arise in the current period as a result of errors or omissions in the preparationof Financial Statements of one or more prior periods, exceeding 5, 00,000/- in value, in each case are treatedas prior period items.
RASHTRIYA ISPAT NIGAM LIMITED
94
B. NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31st March, 2012 Crs
Particulars
AUTHORISED4,89,00,000 (Previous year 4,89,00,000) Equity Shares of 1000 each
3,11,00,000 (Previous Year 3,11,00,000) Preference Shares of 1000 each
TotalISSUED, SUBSCRIBED AND FULLY PAID-UP4,88,98,462 (Previous year 4,88,98,462) Equity Shares of 1000 each.2,83,74,700 (Previous year 2,93,74,700) 7 % Non-Cumulative redeemable PreferenceShares of 1000 each redeemable at par, as under
1,38,05,000 during 2012-13 55,00,000 during 2014-15 60,69,700 during 2013-14 30,00,000 during 2015-16
Total
Note 01.00 : Share CapitalAs at
31st March,2012
4890.00
3110.00
8000.00
4889.85
2837.47
7727.32
As at31st March,
2011
4890.00
3110.00
8000.00
4889.85
2937.47
7827.32
01.01 : STATEMENT OF RECONCILIATION OF ISSUED, SUBSCRIBED AND FULLY PAID-UP SHARE CAPITAL
Particulars
Shares outstanding as at the beginning of the year
Add : Issue of Shares
Less : Reduction of shares On Redemption
Shares outstanding as at the end of the year
Number Face Value ( ) Crs Number Face Value ( `̀̀̀̀) `̀̀̀̀ Crs 4,88,98,462 1000 4889.85 2,93,74,700 1000 2937.47(4,88,98,462) (1000) (4889.85) (2,93,74,700) (1000) (2937.47)
-- --- -- -- -- --
-- -- -- 10,00,000 1000 100.00(0) (0.00)
4,88,98,462 1000 4889.85 2,83,74,700 1000 2837.47(4,88,98,462) (1000) (4889.85) (2,93,74,700) (1000) (2937.47)
Equity Shares 7% Non-Cumulative RedeemablePreference Shares
Note: Figures in the brackets are for previous year.
01.02 : DETAILS OF SHAREHOLDERS HOLDING MORE THAN 5% OF SHARE HOLDING AS AT 31.03.2012
Type of Shares Name of the Shareholder % of Shares held No of Shares Held
Equity President of India 100% 4,88,98,462(100%) (4,88,98,462)
Preference President of India 100% 2,83,74,700(100%) (2,93,74,700)
Note: Figures in the brackets are for previous year.
01.03 : Company does not have any Holding Company as at 31.03.2012
30th Annual Report 2011-12
95
Crs
Particulars
Capital Redemption ReserveAmount as per last Balance SheetAdd: Amount transferred during the year
Other ReservesReserve for Redeeming Preference Share Capital
Amount as per last Balance SheetLess: Transfer to Capital Redemption Reserve
Prime Minister's Trophy Award FundAmount as per last Balance SheetAdd: Amounts received / Interest accrued during the year
SurplusAmount as per last Balance SheetAdd: Surplus as per Statement of Profit and LossLess: Appropriations
Proposed Dividend (Final)Tax on Proposed Dividend (Final)
Total
Note 02.00 : Reserves and Surplus
Note 02.01 : Proposed Dividend and Dividend per Share
Particulars
Preference DividendProposed DividendNumber of Preference Shares *Dividend per share
Equity DividendProposed DividendNumber of Equity SharesDividend per share
* Preference shares outstanding as at adoption of accounts by the Board.
CrsNo.of shares
CrsNo.of shares
2011-12
115.671,65,24,700
70.00
75.154,88,98,462
15.37
2010-11
205.622,93,74,700
70.00
65.854,88,98,462
13.47
Note 03.00 : Deferred Tax liabilities (Net) Crs
Particulars
Deferred Tax LiabilitiesDifference between book and tax depreciation
Deferred Tax AssetsProvision for GratuityProvision for Doubtful Debts, Advances,Claims,InterestOther Deferred Tax Assets
Net Deferred tax Liability
Sub-Total
Sub-Total
(A)
(B)
(A) - (B)
As at31st March,
2012
116.30116.30
0.0028.7226.6055.32
60.98
As at31st March,
2011
133.81133.81
1.8424.2527.7553.84
79.97
0.00100.00
2937.47100.00
3.620.39
2460.81751.46
190.8230.96
As at31st March,
2012
100.00
2837.47
4.01
2990.49
5931.97
0.000.00
2937.470.00
2.381.24
2117.83658.49
271.4744.04
As at31st March,
2011
0.00
2937.47
3.62
2460.81
5401.90
RASHTRIYA ISPAT NIGAM LIMITED
96
Crs
Particulars
Security depositsOther Liabilities
Total
As at31st March,
201254.2628.97
83.23
As at31st March,
201148.590.00
48.59
Note 04.00 : Other Long Term liabilities
Crs
Particulars
Provision for Employee BenefitsCompensated AbsencesPost-retirement BenefitsEmployee Family Benefit SchemeLong Service AwardsLeave Travel Concession
OthersMines Closure
Total
As at31st March,
2012
202.59177.2385.0211.260.80
2.83
479.73
As at31st March,
2011
337.43163.1964.349.750.50
2.61
577.82
Note 05.00 : Long Term Provisions
Crs
Particulars
Provision for Mines Closure Expenditure
Note 05.01 : Disclosures of Provisions required by Accounting Standard (AS) 29 ‘ Provisions, ContingentLiabilities and Contingent Assets':
Opening Balanceas at 01.04.2011
2.61
Additions during theyear
0.22
Utilised duringthe year
0.00
Closing Balance as at31.03.2012
2.83
CrsNote 06.00 : Short term Borrowings
Particulars
Loans repayable on demand From BanksSecured Loans
Working Capital Borrowings(Secured by hypothecation of Current Assets)
Short Term Loans(Secured by Term Deposits)
Unsecured LoansWorking Capital BorrowingsShort Term LoansShort Term Foreign currency facilities
Other Loans and AdvancesUnsecured
Commercial Papers
Total
755.22
247.18
85.25223.12
1116.16
148.21
As at31st March,
2012
1002.40
1424.53
148.21
2575.14
196.61
78.28
0.00185.12675.87
0.00
As at31st March,
2011
274.89
860.99
0.00
1135.88
Note 06.01 : Loans guaranteed by Directors and Others
Note 06.02 : Default in repayment of loans and interest
0.00
0.00
0.00
0.00
30th Annual Report 2011-12
97
Crs
Particulars
MSMEOthers
Total
Note 07.00 : Trade PayablesAs at
31st March,20126.51
383.68
390.19
As at31st March,
20111.54
539.41
540.95
Crs
Particulars
i) The amounts due thereon remaining unpaid to any supplier as at the end of the yearPrincipalInterest
ii) Payments made beyond the appointed day and interest thereon during the yeariii) 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 yearv) The amount of further interest remaining due and payable in the succeeding year until the
date such interest is actually paid
Note 07.01 : Information relating to 'Supplier' under the provisions of Micro,Small and Medium EnterpriseDevelopment Act, 2006.
As at31st March,
2012
As at31st March,
2011
Crs
Particulars
Interest accrued but not dueShort term borrowingsIncome Tax
Other payablesAdvances from customersOther advancesEarnest money, security & other depositsCurrent Liabilities of Long Term Employee Benefits
Compensated AbsencesPost-retirement BenefitsEmployee family Benefit SchemeLong Service AwardsLeave Travel Concession
Other liabilities
Total
Note 08.00 : Other Current liabilities
3.411.89
148.2912.4612.820.347.27
As at31st March,
2012
5.30547.80172.87
0.04271.62
181.182467.03
3645.84
0.921.07
45.802.78
13.980.404.52
As at31st March,
2011
1.99603.60137.80
0.26239.22
67.481699.90
2750.25
Note 08.01 : Other liabilities include net liability of ` 355.46 Crs (Previous Year ` 301.13 Crs) towards provision on account of pay revisioneffective from 01.01.2007 to the Employees and ̀ 25.34 Crs (Previous Year Nil) towards adhoc provision on account of wagerevision due w.e.f 01.01.2012 to Non-executive employees.
Note 09.00 : Short Term Provisions Crs
Particulars
Provision for Employee BenefitsGratuity to employees
OthersCurrent Income TaxWealth TaxProposed Dividend (Final)Tax on proposed Dividend (Final)
Total
As at31st March,
2012
0.00
388.200.46
190.8230.96
610.44
As at31st March,
2011
5.66
369.100.49
271.4744.04
690.77
NilNilNil
NilNil
Not Applicable
NilNilNil
NilNil
Not Applicable
RASHTRIYA ISPAT NIGAM LIMITED
98
Crs
A.TANGIBLE ASSETS
Land
- Freehold (Including cost of development)
- Leasehold
Railway Lines & sidings
Roads, Bridges & Culverts
Buildings
Plant & Equipments
Furniture & Fixtures
Locomotives
Vehicles
Electrical Installations
Water Supply & Sewerage systems
Miscellaneous Assets
Total (A)
Figures for the previous year
B. INTANGIBLE ASSETS
Computer software
Mining rights
Total (B)
Figures for the previous year
Total (A+B)
Figures for the previous year
Note 10.00 : Fixed Assets
51.16
1.65
47.88
149.45
1024.67
7598.18
19.67
130.86
13.24
347.42
272.58
125.17
9781.93
9461.38
6.84
5.83
12.67
12.52
9794.60
9473.90
4.36
--
5.80
2.92
32.37
339.45
0.83
1.73
0.15
209.51
0.28
17.54
614.93
335.24
0.71
--
0.71
0.15
615.64
335.39
--
--
--
--
--
14.83
0.07
--
0.13
0.01
--
1.35
16.38
14.69
--
--
0.00
0.00
16.38
14.69
55.52
1.65
53.68
152.37
1057.04
7922.80
20.43
132.59
13.26
556.92
272.86
141.36
10380.49
9781.93
7.55
5.83
13.38
12.67
10393.87
9794.60
As at 1st
April, 2011Additions &
adjustmentsSales &
adjustmentsAs at 31st
March, 2012
Gross Block
30th Annual Report 2011-12
99
CrsNote 10.00 : Fixed Assets (Continued)
0.64
46.82
27.58
540.35
6943.78
13.76
64.03
9.54
274.78
244.93
88.83
8255.04
7999.33
6.48
3.19
9.67
9.22
8264.71
8008.55
0.03
0.90
2.61
30.77
290.44
0.70
4.76
0.88
12.38
3.75
10.81
358.03
270.13
0.23
0.29
0.52
0.45
358.55
270.58
--
--
--
--
14.83
0.05
--
0.13
0.00
--
1.23
16.24
14.42
--
--
0.00
--
16.24
14.42
0.67
47.72
30.19
571.12
7219.39
14.41
68.79
10.29
287.16
248.68
98.41
8596.83
8255.04
6.71
3.48
10.19
9.67
8607.02
8264.71
As at 1st
April, 2011For the Year ( incl. PPA)
Sales &adjustments
As at 31st
March, 2012
Depreciation
55.52
0.98
5.96
122.18
485.92
703.41
6.02
63.80
2.97
269.76
24.18
42.95
1783.65
1526.89
0.84
2.35
3.19
3.00
1786.84
1529.89
51.16
1.01
1.06
121.87
484.32
650.07
5.91
66.83
3.70
72.64
31.98
36.34
1526.89
1285.28
0.36
2.64
3.00
3.30
1529.89
1288.58
As at 31st
March, 2012As at 31st
March, 2011
Net Block
RASHTRIYA ISPAT NIGAM LIMITED
100
Crs
Particulars
Current yearPrior periods
Total
Note 10.01 : ALLOCATION OF DEPRECIATIONAs at
31st March,2012
344.862.80
347.66
As at31st March,
2011265.94
2.67
268.61
10.02 : Allocation of Depreciation not included above and charged to:Expenditure During Construction 10.89 1.97
10.03 : Land at a cost of ̀ 39.99 Crs (Previous year ` 39.99 Crs) is being held in the name of President of India. The Company is holdingPower of Attorney issued by Govt. of India for utilisation of the land acquired for the Project and related purposes incidental thereto.
10.04 : Land includes 367.072 acres (Previous year 367.072 acres) allotted to various agencies on lease basis.
10.05 : Sale deeds in respect of the following assets are yet to be executed:
a) Stockyard at Chennai ` 2.37 Crs (Previous Year ` 2.37 Crs)
b) i) Office building at New Delhi ` 1.09 Crs (Previous Year ` 1.09 Crs)ii) Office building at New Delhi ` 24.23 Crs (Previous Year ` 21.91 Crs)
c) Office buildings at Ahmedabad ` 0.18 Crs (Previous Year ` 0.18 Crs)
d) Residential buildings at Kolkata ` 0.95 Crs (Previous Year ` 0.95 Crs)
e) i) Stockyard at Hyderabad ` 1.00 Crs (Previous Year ` 1.00 Crs)
ii) Site for Liaison Office ` 1.30 Crs (Previous Year Nil)
10.06 : Fixed Assets include ` 0.38 Crs (Debit) [ Previous year ` 0.20 Crs (Debit) ] representing Net Exchange Rate Variation for the yearin respect of foreign currency liabilities with regard to acquisition of fixed assets prior to 1st April 2004.
10.07 : Pending the opinion of ICAI on the issues raised by the Company regarding 'expenditure incurred' on "Assets not owned by anEnterprise", the Company has charged to Profit and Loss Account an amount of ` 48.24 Crs paid to APTRANSCO, towardsinstalments, for development of necessary infrastructure to meet additional power load requirements after expansion of capacity, asagainst the charging of the assessed expenditure based on work completed in the previous year. Consequently, profit for the yearending 31st Mach 2012 is decreased by ` 48.24 Crs.
10.08 : Main plant units, including Mills, constitute "Continuous process plant".
Crs
Particulars
Work-in-Progress (Including Material issued tocontractors)
Coke Oven Battery-46.3 MT ExpansionOthers
Less: Provision for dropped SLTM Project
Expenditure during construction awaiting allocation(Note : 11.01)
Total
Note 11.00 : Capital Work-In-Progress
10264.60
22.76
As at31st March,
2012
10241.84
354.24
10596.08
122.718704.29392.69
As at31st March,
2011
9197.13
257.88
9455.01
187.179628.82448.61 9219.69
22.56
30th Annual Report 2011-12
101
Crs
Particulars
Opening Balance
Expenditure during the year:Employees' Remuneration & BenefitsOther Expenses & ProvisionsInterestDepreciation
Less :Interest ReceiptsOther RevenueNet expenditure during the year
TotalLess: Amount allocated to Fixed AssetsBalance carried forward to Note 11.00
11.01 : Expenditure During Construction
45.8445.850.08
10.89
0.000.05
As at31st March,
2012257.88
102.66
0.05102.61360.49
6.25354.24
As at31st March,
2011176.12
82.83
0.4682.37
258.490.61
257.88
(A)
(B)(A+B)
39.6941.170.001.97
0.020.44
Crs
Particulars
TradedInvestment In Equity InstrumentsQuoted (A)
Subsidiary Eastern Investments Ltd Others Bisra Stone Lime Company Ltd *
Total (A)
Unquoted (B) Joint Ventures Rinmoil Ferro Alloys Private Limited International Coal Ventures Pvt. Ltd Others Free Press House Limited # Steelscape Consultancy Pvt. Ltd
Total (B)
Total (A+B)
12.00 : Non Current Investments
0.101.40
0.000.05
As at31st March,
2012
361.02
0.00361.02
1.50
0.05
1.55
362.58
As at31st March,
2011
361.02
0.00361.02
0.53
0.05
0.58
361.60
Face Valueof each
Share (`)
0.100.43
0.000.05
No. of fullypaid-up Equity
Shares
736638
182927
1000001400000
228050000
10
10
1010
110
@
@ Aggregate Market Value as at 31st March 2012 & 31st March 2011 is not ascertainable due to non-availability of Quotes in StockExchange.
* Investments amounted to ` 1000/-, hence rounded off to zero.# Investments amounted to ` 2380/-, hence rounded off to zero and include one fully paid-up
Equity share of ` 100/- each in Anakapalli Rural Electric Co-operative society Limited12.01 : Joint Venture Entities
Details of Company's share of ownership interest, assets, liabilities, income, expenses, contingent liabilities and capital commitmentsin the joint venture entities, all incorporated in India, are given below:
CrsName of the Joint
Venture EntityPercentage of Company's
ownership InterestAssets Liabilities Income Expenditure Contingent
LiabilitiesCapital
Commitments
1. RINMOIL Ferro Alloys Pvt Ltd 50.00 * * * * * 51.55
2. International Coal 14.29 * * * * * 500.00 Ventures Pvt Ltd
* The accounts of the respective joint ventures for the Financial Year 2011-12 are not yet prepared.
RASHTRIYA ISPAT NIGAM LIMITED
102
Crs
Particulars
Capital advancesAdvances & other recoverables
(Recoverable in cash or in kind or for value to be received)
Government departmentsLess:Provision for doubtful advances
ContractorsLess:Provision for doubtful advances
SuppliersLess:Provision for doubtful advances
OthersLess:Provision for doubtful advances
Security DepositsLoans and Advances to Related parties
DirectorsJoint venture Companies
Other Loans and AdvancesLoans
EmployeesOthers
Total
Note 13.00 : Long Term Loans and Advances
5.110.00
71.980.00
4.610.00
0.450.00
As at31st March,
2011
82.15
23.14
2.24
189.77
297.30
5.11
71.98
4.61
0.45
0.002.24
43.45146.32
12.440.00
43.650.00
0.000.00
0.580.00
12.44
43.65
0.00
0.58
0.002.29
45.43112.02
As at31st March,
2012
56.67
25.48
2.29
157.45
241.8913.01 : Particulars of Long Term Loans & AdvancesCapital Advances
Secured & Considered goodUnsecured & Considered goodDoubtful
Security DepositsSecured & Considered goodUnsecured & Considered goodDoubtful
Loans and Advances to Related partiesSecured & Considered goodUnsecured & Considered goodDoubtful
Other Loans and AdvancesSecured & Considered goodUnsecured & Considered goodDoubtful
Total
13.02 : Loans and advances due by Directors/officers
13.03 : Loans and advances due by Private Companies inwhich Director of the Company is a director
0.0056.670.00
25.480.000.00
0.002.290.00
0.00157.45
0.00
56.67
25.48
2.29
157.45
241.89
0.0037
2.29
0.0082.150.00
23.140.000.00
0.002.240.00
0.00189.77
0.00
82.15
23.14
2.24
189.77
297.30
0.0087
2.24
Crs
Particulars
Interest Accrued on Loans to EmployeesTotal
Note 14.00 : Other Non Current AssetsAs at
31st March,20117.977.97
As at31st March,
201210.3310.33
30th Annual Report 2011-12
103
Crs
Particulars
Semi Finished/ Finished goodsAdd: In-transit
Raw materialsAdd: In-transit/ Under inspection
Less: Provision for shortages
Stores & SparesAdd: In-transit/ Under inspection
Less: Provision for obsolescence & Non-moving items
Total
Note 15.00 : Inventories (As taken and certified by the Management)As at
31st March, 2011
1825.33
1137.66
291.72
3254.71
1682.81142.52
938.21359.60
1297.81160.15
293.0835.10
328.1836.46
1741.7538.21
1204.75112.31
1317.0691.30
385.4843.04
428.5231.13
As at31st March,
2012
1779.96
1225.76
397.39
3403.11
15.01 : Quantities of Closing Stock of finished / semi-finished goods have been adopted as per physical verification except in the case ofCalcined Lime, Liquid Oxygen, Liquid Nitrogen, Argon gas, Oxygen gas, Nitrogen gas, Magnesite Bricks, Calcium Carbide Sludge,Coke Sludge, Coke Dust amounting to ` 13.63 Crs (Previous Year ` 14.89 Crs) and Saleable steel at BCSY and NSY amounting to` 74.32 Crs (Previous year Nil) which are as per book balances.
15.02 : In line with industry practice, no credit is taken for the value of material in process except those lying at mills.
15.03 : No credit is taken in the accounts for the stock of run of mines ore and rejects at Mines.
15.04 : Since the Coke Breeze is used for internal consumption, the same has been valued at 60% of the production cost of BF coke.
15.05 : Coke and other By products are valued at net realisable value, wherever cost is not determinable and at cost, where net realisablevalue is not available, except in the case of Stock of BF Granulated slag at dump yard for which no value is assigned.
15.06 : The stock of production related iron scrap and steel scrap has been considered in the accounts on the basis of visual survey / estimatesand 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.
Crs
Particulars
Trade ReceivablesDebts over six monthsOther debts
Less : Provision for doubtful debts
Total
16.01: Particulars of Trade ReceivablesSecured and considered goodUnsecured and considered goodDoubtful
16.02:Debts due by Directors/Officers
16.03:Debts due by Private Companies in which Director of the company is a Director
Note 16.00 : Trade ReceivablesAs at
31st March, 2011
20.41330.30350.7120.44
330.27
221.86108.4120.44
0.00
0.00
As at31st March,
2012
20.34427.18447.5220.37
427.15
255.70171.4520.37
0.00
0.00
RASHTRIYA ISPAT NIGAM LIMITED
104
Crs
Particulars
Cash and cash equivalentsBalances with BanksCheques, Drafts on handCash on HandTerm deposits with BanksEarmarked Balances with Banks
Prime Ministers Trophy FundOther bank balances
Term deposits pledged with BanksMargin Money with Banks
Total
Note 17.00 : Cash and Bank balancesAs at
31st March, 2011
1090.89
903.005.00
1998.89
8.2235.160.04
1047.47
0.00
4.4739.150.03
1742.68
4.01
As at31st March,
2012
1790.34
273.005.00
2068.34
Crs
Particulars
Loans and Advances to Related PartiesDirectorsJoint venture Companies
OthersMaterial issued on loanAdvances & other recoverables(Recoverable in cash or in kind or for value to be received)Government departments
Less:Provision for doubtful advances
Contractors Less:Provision for doubtful advances
Suppliers Less:Provision for doubtful advances
Employees Less:Provision for doubtful advances
Others Less:Provision for doubtful advances
Advance Income Tax
Prepaid expensesClaims recoverable
Less: Provision for doubtful claims
Deposits
Total
Note 18.00 : Short Term Loans and AdvancesAs at
31st March, 2011
0.21
0.00
1492.19
5.48
41.77
94.24
1633.89
0.000.21
7.48
46.38
41.01
15.34
1001.97
380.00
50.328.55
0.00156.05
8.89
15.21
39.36
8.03
1570.07
435.00
48.4516.51
As at31st March,
2012
156.05
7.89
2076.56
1.81
31.94
92.29
2366.54
9.510.62
18.963.75
46.397.03
8.190.16
1603.9233.85
8.100.62
48.982.60
47.356.34
15.500.16
1031.8029.83
30th Annual Report 2011-12
105
Crs
Particulars
Particulars of Loans & AdvancesLoans
Secured & Considered goodUnsecured & Considered goodDoubtful
AdvancesSecured & Considered goodUnsecured & Considered goodDoubtful
Other RecoverablesSecured & Considered goodUnsecured & Considered goodDoubtful
Total
As at31st March,
2011
0.21
1531.95
150.04
1682.20
0.000.210.00
0.001492.40
39.55
0.00141.49
8.55
As at31st March,
2012
163.94
2278.02
142.55
2584.51
0.00163.94
0.00
0.002232.61
45.41
0.00126.0416.51
18.01 : Loans and advances due by Directors/Officers 0.00 0.00
18.02 : Loans and advances due by Private Companies in which Director of the Company is a Director 156.05 0.21
18.03 : Short term loans and advances include ` 154.89 Crs (Previous Year ` 147.96 Crs) pertaining to deposits / advances madeagainst disputed taxes.
Crs
Particulars
Current maturities of Long term LoansEmployeesOthers
Interest accrued on loans to employeesInterest accrued -- others
Less: Provision for Non recoverable interestOther income accruedAssets Retired from active use and held for disposal
Value of Fixed AssetsLess: Provision for loss
Deferred Premium on Forward contracts
Total
19.01 : Loans due by Directors
As at31st March,
2011
99.570.51
67.680.13
0.0316.00
183.92
0.01
12.2787.30
73.926.24
4.254.22
As at31st March,
2012
135.830.72
72.630.03
0.1217.64
226.97
0.01
14.24121.59
78.876.24
3.693.57
Note 19.00 : Other Current Assets
Crs
Particulars
Sale of ProductsDomesticExport
Other Operating RevenuesInternal consumptionExport benefits
Total
Year ended31st March,
2011
11516.99
87.7011.61
11616.30
11093.83423.16
Year ended31st March,
2012
14461.87
100.308.02
14570.19
14046.61415.26
Note 20.00 : Revenue from Operations
Note 18.00 : Short Term Loans and Advances (Contd....)
RASHTRIYA ISPAT NIGAM LIMITED
106
20.01 : 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.
20.02 : Stocks & Sales Quantity in Tonnes *Value in ` Crs
Opening stock Quantity 23456 80394 225850 499922 316445 --(14637) (91116) (188688) (401498) (268686) --
Value 54.12 220.25 717.40 654.63 178.93 1825.33(26.84) (206.06) (499.94) (431.35) (128.82) (1293.01)
Sales Quantity 407812 142515 2970710 130361 1224403 --(301622) (102186) (2903265) (64068) (1479881) --
Value 1019.01 459.78 12407.45 217.40 358.23 14461.87(649.62) (274.80) (10202.62) (54.25) (335.71) (11516.99)
Closing stock Quantity 4667 55773 84517 686698 274288 --(23456) (80394) (225850) (499922) (316445) --
Value 12.40 174.52 304.68 1062.92 225.43 1779.96(54.12) (220.25) (717.40) (654.63) (178.93) (1825.33)
Pig Iron Blooms Saleable Sundries * TotalSteel Coke & Coke Others
Products
(*) Quantity for Argon Gas, Oxygen Gas and Nitrogen Gas is in Thcum. Note: (i) Figures in brackets are for previous year.
(ii) Closing stock includes 15996.935 tonnes (Previous year 80128.520 tonnes) in the custody of Consignment / Handling Agents.(iii) Figures of closing stock are after adjustment for internal consumption, transfers to capital works, shortages / excesses.(iv) Others include By-products and Iron & Steel Scrap.
Crs
Particulars
Interest IncomeBanksLoans to employeesOthers
Dividend IncomeOther Non-Operating Income
Claims for finished goods (Shortages & Missing Wagons)Rent recoveriesLiquidated damagesProfit on sale of fixed assetsOther IncomeProvision no longer required written backSundry receipts
Total
Note 21.00 : Other IncomeYear ended
31st March, 2011
347.540.00
78.41425.95
307.722.77
37.05
1.244.307.173.260.934.37
57.14
198.923.32
47.32
1.825.76
11.511.750.907.73
48.88
Year ended31st March,
2012
249.560.48
78.35328.39
Quantity in TonnesValue Crs
Particulars
CoalIron OreLimestoneDolomiteSilico ManganeseFerro SiliconAluminiumManganese OrePetroleum CokeSea Water MagnesiteBilletsOthers
Total
Note 22.00 : Cost of Raw materials consumed
Quantity
380472556465409746285902834791950973861709166621891
0
Quantity391471655725879774605580324679857963437
110230
17942427
Value5053.442839.47127.2477.25
244.7841.7642.621.860.006.828.60
28.37
8472.22
Year ended 31st March, 2012Value
3909.132718.52110.8968.95
265.4333.3342.861.02
12.457.570.00
18.21
7188.36
Year ended 31st March, 2011
30th Annual Report 2011-12
107
Particulars
Salaries and wagesCompany's contribution - provident fund & other fundsStaff Welfare expenses
Total
Note 24.00 : Employee BenefitsYear ended31st March,
20121292.86
73.23100.58
1466.67
Year ended31st March,
20111081.32105.4386.25
1273.00
Crs
Particulars
Salaries and wagesCompany's contribution - provident fund & other fundsStaff Welfare expenses
Total
24.01 : Expenditure on Employee benefits not included above and charged to:Year ended31st March,
201237.212.885.75
45.84
Year ended31st March,
201131.473.424.77
39.66
Crs
24.02 : Details of Employee Benefits
24.02.01: An amount of ̀ 6.04 Crs (Previous Year ̀ 6.18 Crs) recognised in the Statement of Profit and Loss and ̀ 0.21 Crs (PreviousYear ` 0.21 Crs) in Capital Work in Progress, ` 0.03 (Previous Year ` 0.00 Crs) in Intangible Assets under Developmenttowards Superannuation Benefit Scheme (Post Employment Benefit - Defined Contribution Plan).
24.02.02: General Description of the Post Employment Benefits - Defined Benefit Plans:
Provident Fund - Company pays fixed contribution to Provident Fund, at predetermined rates, to aseparate 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 specifiedby Govt. of India. The obligation of the Company is limited to the shortfall in the rateof interest on the Contribution based on its return on investments as compared tothe declared rate.
Gratuity - Payable to employees, who render continuous service of 5 years or more, onseparation, at 15 days of last drawn pay for each completed year of service.
Post Retirement Medical Benefits - Available to retired employees at Company's hospital and / or under the HealthInsurance Policy.
Retirement Settlement Benefits - The retired employees, their dependents, as also the dependents of the employeesexpired while in service are entitled for travel and transport expenses to their placeof permanent residence. At the time of retirement, employees will be given 10 Gms.of gold.
Employee Family Benefit Scheme - Monthly payments, till the notional date of superannuation, to employees separatedupon disablement / legal heirs of deceased employees at their option who fulfill thecriteria of prescribed amount of deposit.
Crs
Particulars
IndigenousImported
Total
22.01 : Value of Indigenous and Imported Raw materials consumed
` Crs
3442.343746.02
7188.36
`̀̀̀̀ Crs3650.734821.49
8472.22
%43.0956.91
100.00
Year ended 31st March, 2012%
47.8952.11
100.00
Year ended 31st March, 2011
Crs
Particulars
Opening stockLess: Closing stock
Net Depletion / (Accretion)
Note 23.00 : Changes in Inventories of Semi-Finished / Finished goodsYear ended31st March,
20121825.331779.96
45.37
Year ended31st March,
20111293.011825.33
(532.32)
RASHTRIYA ISPAT NIGAM LIMITED
108
24.02.03: Reconciliation of present value of defined benefit obligations: Crs
Obligation as at the beginning of the period 605.00 127.44 38.53 78.32(550.00) (110.32) (33.06) (64.15)
Service Cost 17.67 5.32 1.53 13.86(30.83) (4.66) (1.34) (11.10)
Interest Cost 47.78 9.95 3.05 5.70(40.51) (8.23) (2.45) (4.41)
Actuarial gains (-) / losses (+) -25.16 9.10 1.74 14.02(3.35) (5.47) (2.32) (9.13)
Benefits paid -15.40 -6.18 -0.79 -14.07(-19.69) (-1.24) (-0.64) (-10.47)
Obligations as at the end of the period 629.89 145.63 44.06 97.83(605.00) (127.44) (38.53) (78.32)
Particulars GratuityRetirement
MedicalBenefits
RetirementSettlement
Benefits
EmployeeFamily Benefit
Scheme
Note: Figures in the brackets are for previous year.
24.02.04: Against present value of gratuity obligation as at 31st March 2012 of ` 629.90 Crs (Previous Year ` 605.00 Crs) , Companyhas funded a sum of ` 630.39 Crs (Previous Year ` 599.34 Crs) through a separate Gratuity Fund which are covered by theTrust's Plan Assets for equal amount. The other post-retirement defined benefit obligations are unfunded.
24.02.05: Reconciliation of fair value of Plan Assets: Crs
Balance as at the opening of the period 599.34 477.79Expected Return 52.75 46.24Actuarial gains (+) / losses (-) 4.84 3.34Contributions by the Employer (11.14) 91.66Benefits paid (15.40) (19.69)Balance as at the end of the period 630.39 599.34
Particulars2011-12
Gratuity2010-11
24.02.06: Reconciliation of Present Value of Defined Benefit Obligation and Fair value of Plan Assets: Crs
Fair Value of Plan Assets 630.39 599.34Present Value of Defined Benefit Obligation 629.89 605.00Amount recognised in Balance Sheet as at the end of the period (0.50) 5.66
Particulars2011-12
Gratuity2010-11
24.02.07: Expenses recognised in the statement of Profit and Loss . Crs
Service Cost 17.67 5.32 1.53 13.86(30.83) (4.66) (1.34) (11.10)
Interest Cost 47.78 9.95 3.05 5.70(40.51) (8.23) (2.45) (4.41)
Actuarial gains (-) / losses (+) -30.00 9.10 1.74 14.02(0.02) (5.47) (2.32) (9.13)
Expected Return on Plan Assets -52.75 0.00 0.00 0.00(-46.24) (0.00) (0.00) (0.00)
Accounting Estimate Change on Opening obligation 0.00 0.00 0.00 0.00(0.00) (0.00) (0.00) (0.00)
Total to be charged - Employees Benefits -17.30 24.37 6.32 33.58(25.12) (18.36) (6.11) (24.64)
Amount charged to : Statement of Profit & Loss (Note -B 24.00) -16.95 23.87 6.19 32.89
(24.64) (18.01) (5.99) (24.17) Expenditure During Construction -0.32 0.45 0.12 0.62
(0.48) (0.35) (0.12) (0.47) Capital Work in Progress 0.00 0.00 0.00 0.00
(0.00) (0.00) (0.00) (0.00) Intangible Assets under Development -0.03 0.05 0.01 0.07
(0.00) (0.00) (0.00) (0.00)
Particulars GratuityRetirement
MedicalBenefits
RetirementSettlement
Benefits
EmployeeFamily Benefit
Scheme
Note : Figures in the brackets are for previous year.
30th Annual Report 2011-12
109
24.02.08: Effect of one percentage point change in the assumed inflation rate in case of valuation of benefits under postretirement medical benefit scheme: Crs
On aggregate current service and interest cost of postretirement medical benefits
On present value of defined benefit obligations as at endof the period
ParticularsEffect of one percentagepoint increase in medical
cost trend rate
Effect of one percentagepoint decrease in medical
cost trend rate2011-12 2010-11 2011-12 2010-11
4.40 0.19 (3.42) (0.19)
36.08 3.25 (27.99) (3.18)
24.02.09: Actuarial assumptions
Description
Discount Rate (per annum)Mortality rateWithdrawal rates (per annum)
Estimated Rate of Return on Planned AssetsMedical Cost Trend Rates (Per Annum)
Salary Escalation (per annum)
As at 31st March 2012
8%LIC(1994-96) duly modifiedUpto 30 years of age 3%; Upto44 years of age 2%; Above 44years of age 1%.9%4.5% of Hospital Cost and Medi-claim Premium7%The estimate of future salary increase considered in actuarial valuation takesinto account inflation rate, seniority,industrial practices, promotion and otherrelevant factors on long term basis.
As at 31st March 2011
8%LIC (1994-96) duly modifiedUpto 30 years of age 3%; Upto 44years of age 2%; Above 44 years ofage 1%.9%6% of Hospital Cost and Medi-claimPremium7%
Note 25.00: Finance Costs
Particulars
Interest :Foreign currency facilitiesBanks - Working capital borrowings and Loans
- Loans against Term Deposits
Others
Other Borrowing costs
Loss/(Gain) on Foreign currency transactions and translation
Total
25.01:Expenditure on Finance Costs not included above and charged to:Expenditure during constructionInterest - Banks
Year ended31st March,
2011
31.78
130.95
1.59
0.17
0.00
164.49
0.00
48.2882.67
95.7220.28
Year ended31st March,
2012
70.49
116.00
3.98
0.16
(0.03)
190.60
0.08
Crs
RASHTRIYA ISPAT NIGAM LIMITED
110
Note 26.00: Other expenses
Particulars
Consumption of Stores and Spare partsPower and FuelRepairs and MaintenanceRemuneration to AuditorsMiscellaneous ExpensesRentRates and taxesInsuranceHandling and scrap recoveryFreight outwardProvisions
Shortage/damaged material/obsolescence/non-moving items of storesDoubtful advances and claimsDoubtful debtsDropped SLTM Project
Write-offsShortage/damaged material/obsolescence/non-moving items of storesDoubtful advances and claims
Sundries
Total
Year ended31st March,
2011 471.22 425.03
145.180.15
191.462.17
31.306.36
113.68 300.72
9.84
0.20
42.06
1739.37
4.994.830.020.00
0.200.00
1.4915.090.000.20
0.120.01
Year ended31st March,
2012 518.30 462.36
168.480.20
228.221.89
30.458.79
129.79 356.35
16.78
0.13
84.24
2005.97
Crs
Note No:26.0226.0326.0426.0526.06
26.01: Expenditure on Other expenses not included above and charged to:
Particulars
Expenditure During ConstructionPower and FuelRepairs and maintenance - Plant and Equipment and othersSecurity ExpensesTravelling ExpensesPrinting and StationeryPostage, telegrams and telephoneWater ChargesAdvertisementBank ChargesTechnical consultancyLegal chargesSundries
Total
Year ended31st March,
2011
6.650.53
19.026.160.020.277.560.770.010.080.000.11
41.17
Year ended31st March,
2012
5.460.10
12.686.440.040.00
20.140.610.000.370.000.01
45.85
Crs
Crs
Particulars
IndigenousImported
Total
26.02 : Value of Indigenous and Imported Stores and Spares consumed
` Crs
421.8649.36
471.22
`̀̀̀̀ Crs
462.1956.11
518.30
%
89.1710.83
100.00
Year ended 31st March, 2012%
89.5310.47
100.00
Year ended 31st March, 2011
30th Annual Report 2011-12
111
Crs
Particulars
Purchased powerBoiler coalFurnace oil/ LSHS/ LDOMedium Coking Coal
Total
26.03 : Power and FuelYear ended31st March,
2012160.33233.42
1.8266.79
462.36
Year ended31st March,
2011189.66229.95
5.420.00
425.03
26.03.01 : Power and fuel does not include the cost of generation of power and production of certain fuel elements in the plant which areinternally consumed. The related expenses have been included under the primary heads of account.
26.04 : Repairs and Maintenance Crs
Particulars
Plant and EquipmentBuildingsOthers
Total
Year ended31st March,
201270.2833.6564.55
168.48
Year ended31st March,
201165.3021.2358.65
145.18
26.05 : Remuneration to Auditors Crs
Particulars
As AuditorFor taxation mattersOther ServicesFor reimbursement of expenses
Total
Year ended31st March,
20120.100.010.010.08
0.20
Year ended31st March,
20110.080.010.000.06
0.15
26.06 : Miscellaneous Expenses Crs
Particulars
Technical servicesTravelling expensesPrinting and stationeryPostage, telegrams and telephoneWater chargesLegal expensesBank chargesCommunity Development WelfareDonations
CSR FoundationOthers
Security expensesEntertainment expensesAdvertisementDemurrages and wharfagesISO Audit ExpensesSelling expensesExchange Differences (Net)Wealth taxConsumption of Trial run ProductionExcise Duty
Total
Year ended31st March,
20124.50
58.092.592.80
72.361.002.151.22
2.7429.591.83
14.4812.420.14
22.587.25
0.5218.79
(26.81)
228.22
Year ended31st March,
20112.40
58.222.252.43
17.761.282.503.39
0.8121.351.53
16.465.110.19
18.017.32
0.490.00
29.96
191.46
1.930.81
0.570.24
RASHTRIYA ISPAT NIGAM LIMITED
112
26.06.01 : Excise Duty of ̀ 26.81 Crs (Credit) [Previous year ̀ 29.96 Crs (Debit)] disclosed in Other expenses comprise of Excise Dutycomponent on stock at branches, Goods in transit and shortage at branches, Accretion / Depletion of Inventories of Semi /Finished Goods and By products at Plant.
Crs
Particulars
Claims for finished goodsSale of productsOther RevenueRaw MaterialsRemuneration & benefitsStores and sparesRepairs and MaintenanceOther ExpensesDepreciationInternal Consumption
TotalNote: Figures in brackets represent credit amounts.
Note 27.00 : Prior period itemsYear ended31st March,
20120.00
(1.57)(0.66)(0.20)(3.55)
0.00(3.56)
0.502.800.00
(6.24)
Year ended31st March,
20110.07
(2.27)(5.22)(8.20)
0.00(12.64)
2.69(7.61)
2.67(4.45)
(34.96)
Particulars
Net Profit as per P&L AccountPreference Dividend and Tax thereonNet Profit attributable to Equity ShareholdersWeighted average number of Equity Shares outstanding during the yearFace value per shareBasic and diluted EPS
Note 28.00 : Earning Per Share (EPS)
` Crs` Crs` Crs
No.of shares``
2010-11
658.49238.98419.51
488984621000
85.79
2011-12
751.46134.44617.02
488984621000
126.18
Note 29.00 : Contingent Liabilities and Commitments (to the extent not provided for)
29.01 : Contingent Liabilities
29.01.01: Claims against the company not acknowledged as debt Crs
Particulars
Contractors / Suppliers / CustomersLocal Authorities - State Govt.Sales Tax matters *Income TaxCustoms / Excise dutyR & D CessOthers
As at31st March,
2012535.1437.27
1495.83193.98177.90
3.38362.88
As at31st March,
2011475.2923.20
1468.32151.33169.53
3.38326.12
(*) No liability is expected to arise as the movement of goods were on stock transfer and Sales Tax has been paid on eventual sales.
29.01.02 : Claims in Courts in connection with Land Acquisition: - Amount not ascertainable.
29.01.03 : Liability towards reimbursement of excise duty on structural works wherever applicable. - Amount not ascertainable.
29.01.04 : Show cause notices issued by various Government Authorities are not considered as contingent liabilities.
29.02 : Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for ` 4269.53 Crs (Previous Year` 4692.21 Crs).
Note 30.00 : Notes to accounts - Others
30.01 For a substantial portion of Loans and Advances, Trade payables/ Trade receivables / Other payables, letters seeking confirmation ofbalances were sent and no material discrepancies were found in respect of balances confirmed.
30th Annual Report 2011-12
113
30.02 Details of Foreign Exchange Transactions
30.02.01: Expenditure in foreign currency
(a) Technical consultation fee / know-how(b) Interest(c) Others
30.02.02 Earnings in foreign exchange
(a) Export of goods (on FOB basis)(b) Others
30.02.03 Value of imports during the year calculated on CIF basis
(a) Raw materials(b) Components and Spare parts(c) Capital Goods
2011-125.80
70.495.52
2011-12420.05124.46
2011-125218.73
76.72192.60
` Crs
2010-11
4.3131.794.12
` Crs2010-11
420.9861.37
` Crs2010-11
3966.7840.56
442.84
30.03 Disclosure regarding related parties for the year 2011-12
Nature of Relationship Name of the Related party(a) Joint Ventures
(b) Key Management Personnel
RINMOIL Ferro Alloys Pvt LtdInternational Coal Ventures Pvt Ltd
Shri A.P. Choudhary
Shri Umesh Chandra
Shri P.Madhusudan
Shri T.K.Chand
Shri Y.R.Reddy
Shri P.K.Bishnoi (upto 31.07.2011)
The details of transactions between the Company and the related parties, during the year, are given below
InvestmentsLong Term Loans and AdvancesShort term loans and advancesInterest AccruedCurrent maturity of Long term Loans and advances
Remuneration
1.50 0.53 -- -- B 12.002.29 2.24 0.0037 0.0087 B 13.00
156.05 0.21 -- -- B 16.0010.04 0.00 -- -- B 19.000.00 0.00 0.0052 0.0142 B 19.00
Joint Venture Key Management Personnel
Note No:As at 31st
March 2012As at 31st
March 2011As at 31st
March 2012As at 31st
March 2011Nature of Transaction
For theYear Ended For theYear Ended2011-12 2010-11 2011-12 2010-11
0.00 0.00 1.32 1.55 B 24.01
30.04 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 whichare subject to different risks and returns. Hence no separate disclosure in terms of Accounting Standard (AS) 17 on'Segment Reporting' is considered necessary.
30.05 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.
30.06 The entire plant is considered as a Cash Generating Unit. As Recoverable amount of the Cash Generating Unit, being its valuein use, is in excess of its carrying amount, there is no impairment loss in terms of the Accounting Standard (AS) 28'Impairment of assets'.
30.07 Previous year's figures have been rearranged / regrouped wherever necessary to confirm to current year's classification.
Crs
RASHTRIYA ISPAT NIGAM LIMITED
114
N O T I C E
NOTICE is hereby given to all the Shareholders of Rashtriya Ispat Nigam Limited that the 30th Annual GeneralMeeting of the Company will be held at Board Room on Thursday, the 20th September, 2012 at 5.00 PMat the Registered Office of the Company, Administrative Building, Visakhapatnam Steel Plant,Visakhapatnam-530 031 to transact the following business:
(A) AS ORDINARY BUSINESS:
RESOLVED THAT
1. To receive and adopt the Report of the Board of Directors for the year ending with 31st March, 2012.
2. To receive and adopt the Audited Balance Sheet as at 31st March, 2012 and Profit & Loss Account for theyear ending 31st March, 2012 along with the Auditors' Report thereon.
3. Remuneration of the Statutory Auditors
To consider and if thought fit, to pass with or without modification, the following Resolution as an OrdinaryResolution.
"RESOLVED THAT
The Board of Directors of the Company be and are hereby authorized to fix the Auditors' Remuneration,out of pocket expenses, Travelling expenses and other living expenses appropriately for the StatutoryAuditors, who will be appointed by the C&AG for the financial year 2012-13.
4. Declaration of dividend for the financial year 2011-12
To declare dividend for the financial year 2011-12 as per the recommendations of the Board of Directors.
5. To appoint Shri A.P.V.N. Sarma, Independent Director who retires by Rotation and being eligible offershimself for reappointment.
6. To appoint Shri H.S. Chahar, Independent Director who retires by Rotation and being eligible offers himselffor reappointment.
(B) SPECIAL BUSINESS
1. To consider and if thought fit to pass with or without modification, the following Resolution as an OrdinaryResolution.
RESOLVED THAT
Shri N.S. Rao, who was appointed with effect from 19th April 2012 as Director (Projects) pursuant topowers vested under the Article No.37 of AOA of RINL (when RINL was a Private Ltd Company) and inrespect of whom, the Company has received a notice in writing from a Member proposing his candidaturefor the office of the Director under Section 257 of the Companies Act, 1956, be and is hereby appointedas a Director of the Company.
2. To consider and if thought fit to pass with or without modification, the following Resolution as an OrdinaryResolution.
30th Annual Report 2011-12
115
RESOLVED THAT
Shri V.S. Jain, who was appointed with effect from 14th May 2012 as part-time non-official Director pursuantto powers vested under the Article No.75 of AOA of RINL (After RINL converted as a Public Limited Company),and in respect of whom, the Company has received a notice in writing from a Member, pursuant to theprovisions of Section 257 of the Companies Act, 1956, be and is hereby appointed as a Director of theCompany, liable to retire by Rotation.
3. To consider and if thought fit to pass with or without modification, the following Resolution as an OrdinaryResolution.
RESOLVED THAT
Shri Ashhok Kumar Jain, who was appointed with effect from 14th May 2012 as part-time non-officialDirector pursuant to powers vested under the Article No.75 of AOA of RINL (After RINL converted as aPublic Limited Company), and in respect of whom, the Company has received a notice in writing from aMember pursuant to the provisions of Section 257 of the Companies Act, 1956, be and is hereby appointedas a Director of the Company, liable to retire by Rotation.
4. To consider and if thought fit to pass with or without modification, the following Resolution as an OrdinaryResolution.
"RESOLVED THAT
Professor Sushil, who was appointed with effect from 14th May 2012 as part-time non-official Directorpursuant to powers vested under the article No.75 of AOA of RINL (After RINL converted as a PublicLimited Company), and in respect of whom, the Company has received a notice in writing from a Memberpursuant to the provisions of Section 257 of the Companies Act, 1956, be and is hereby appointed asa Director of the Company, liable to retire by Rotation.
REGISTERED OFFICE BY ORDER OF THE BOARDAdministrative Building Sd/-Visakhapatnam Steel Plant P. Mohan RaoVisakhapatnam - 530 031 Dy General Manager (CA) &Date : 29th August, 2012 Company Secretary
NOTE:
1. A Member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and voteinstead of himself and the proxy need not be a Member.
2. The President of India may appoint one or more person(s) to represent at the Meeting.
3. The relevant explanatory statement pursuant to Section 173(2) of the Companies Act, 1956, in respectof Special Business, as set out above is annexed hereto.
RASHTRIYA ISPAT NIGAM LIMITED
116
ANNEXURE TO NOTICE
Explanatory Statement : (As required under Section 173 of the Companies Act, 1956)
1. Shri N.S. Rao was appointed as Director (Projects) on the Board of RINL, with effect from 19th Apr. 2012by the President of India vide Order No. 1(9)/2011-VSP, dt. 19th Apr. 2012 issued by Ministry of Steel.However, on his appointment date as Director (Projects), RINL was a Private Ltd Company.
The Company has received a notice in writing from a Member pursuant to the provisions Section 257 ofthe Companies Act, 1956, signifying intention to propose Shri N.S. Rao for the office of Director (Projects)of the Company.
Shri N.S. Rao, aged 58 years, is a Graduate in Metallurgical engineering with honors and master'sdegree in metallurgical engineering from Regional Engineering College, Rourkela. He has 32 years ofexperience in the steel industry. He started his career in the steel industry by joining SAIL's Durgapursteel plant as a Management Trainee (Technical) in November, 1979. He joined in RINL on May 20,1981 as a Junior Manager on transfer terms and in the course of his career he has held key positionssuch as Assistant General Manager (Operations), Assistant General Manager (Blast Furnace), DeputyGeneral Manager (Blast Furnace) in-charge, Deputy General Manager (Blast Furnace and Sinter Plant)in-charge, General Manager (Iron), General Manager (Operations) in-charge, General Manager (Projectsand Commissioning) and Executive Director (Projects and Commissioning). He has worked in differentcapacities in the projects implementation, operations and also contributed significantly in strategicbusiness and management.
None of the Directors except Shri N.S. Rao is interested or concerned in the Resolution. Directorshipheld in other Companies ( Andhra Pradesh Heavy Machinery & Engineering Ltd. (APHMEL) as Member).
The Board of Directors considers that in view of the background and experience of Shri N.S. Rao, itwould be in the interest of the Company to appoint him as Director (Projects) of the Company. TheBoard recommends the Resolution for your approval.
2. Shri V.S. Jain, who was appointed as part-time non-official Director on the Board of RINL with effect from16th May 2012 by the President of India vide Order No. 1(1)/2009-VSP, dt. 19th Apr. 2012 issued byMinistry of Steel. He joined in the Company as additional Director on 16th May 2012 .
The Company has received a notice in writing from a Member pursuant to the provisions Section 257 ofthe Companies Act, 1956, signifying intention to propose Shri V.S. Jain part-time non-official Director ofthe Company.
Shri V.S. Jain, aged 65 years, is a Graduate Degree in Commerce from Delhi University and is a FellowMember of the Institute of Chartered Accountants of India and the Institute of Cost Accountants ofIndia. He joined in Indian Oil Corporation Limited in October 1969 and worked there for 26 years invarious capacities. He was the Chairman of SAIL from 30th Sept. 2002 to 31st July 2006.Shri Virendra Singh Jain was also the Member of Public Enterprises Selection Board from March 2008to July 2011.
None of the Directors except Shri V.S. Jain is interested or concerned in the Resolution. Directorshipheld in other Companies (Dalmia Bharat Enterprises Ltd, as Ind. Director).
The Board of Directors considers that in view of the background and experience of Shri V.S. Jain, it wouldbe in the interest of the Company to appoint him as part-time non-official Director of the Company. TheBoard recommends the Resolution for your approval.
30th Annual Report 2011-12
117
3. Shri Ashhok Kumar Jain, who was appointed as part-time non-official Director on the Board of RINL witheffect from 14th May 2012 by the President of India vide Order No. 1(1)/2009-VSP, dt.14th May 2012issued by Ministry of Steel. He joined in the Company as additional Director on 14th May 2012
The Company has received a notice in writing from a Member pursuant to the provisions Section 257 ofthe Companies Act, 1956, signifying intention to propose Shri Ashhok Kumar Jain part-time non-officialDirector of the Company.
Shri Ashhok Kumar Jain, aged 60 years, is a Fellow Associate of the Institute of Chartered Accountantsof India since 1976. He has more than 34 years of experience as an Income Tax practitioner. He is asenior partner in the Chartered Accountant firm of Jain Kapila Associates, Chartered Accountants.
None of the Directors except Shri Ashhok Kumar Jain is interested or concerned in the Resolution.
The Board of Directors considers that in view of the background and experience of Shri Ashhok KumarJain, it would be in the interest of the Company to appoint him as part-time non-official Director of theCompany. The Board recommends the Resolution for your approval.
4. Professor Sushil, who was appointed as part-time non-official Director on the Board of RINL with effectfrom 14th May 2012 by the President of India vide Order No. 1(1)/2009-VSP, dt.14th May 2012 issued byMinistry of Steel. He joined in the Company as additional Director on 14th May 2012.
The Company has received a notice in writing from a Member pursuant to the provisions Section 257 ofthe Companies Act, 1956, signifying intention to propose Prof. Sushil part-time non-official Director ofthe Company.
Prof. Sushil, aged 55 years, is a Bachelor of Engineering Degree in Mechanical Engineering from MadhavInstitute of Technology and Sciences, Jiwaji University, Gwalior and a Master in Technology Degree inIndustrial Engineering from Indian Institute of Technology, Delhi. He has a Doctor of Philosophy Degreefrom Indian Institute of Technology, Delhi in Systems Modelling of Waste Management in National Planning.He has 24 years of experience as a professor. Prof. Sushil is currently a professor in Indian Institute ofTechnology, New Delhi and is also a visiting/adjunct professor in various other institutions. He has authoredpublications on topics like core competence and flexibility in strategic formulation and flexible enterprisefor global business. He became the Director of our Company from May 14th. 2012.
None of the Directors except Prof. Sushil is interested or concerned in the Resolution.
The Board of Directors considers that in view of the background and experience of Prof. Sushil, it wouldbe in the interest of the Company to appoint him as part-time non-official Director of the Company. TheBoard recommends the Resolution for your approval.
RASHTRIYA ISPAT NIGAM LIMITED
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Vision, Mission and Objectives
Vision
To be a continuously growing world-class company
We shall:
Harness our growth potential and sustain profitable growth.
Deliver high quality and cost competitive products and be the first choice of customers
Create an inspiring work environment to unleash the creative energy of people.
Achieve excellence in enterprise management.
Be a respected corporate citizen, ensure clean and green environment and develop vibrant
communities around us.
MISSIONTo attain 20 Mt liquid steel capacity through technological up-gradation, operationalefficiency and expansion; augmentation of assured supply of raw materials; to producesteel at international Standards of Cost & Quality; and to meet the aspirations ofstakeholders.
OBJECTIVESStabilise 6.3Mt by 2012-13 with the mission to expand further in subsequent phases asper Corporate PlanRevamping existing Blast Furnaces to make them energy efficient to contemporary levelsand in the process increase their capacity by 0.5 Mt each, thus total hot metal capacityto 7.5 MtBe amongst top five lowest cost liquid steel producers in the worldAchieve higher levels of customer satisfactionVibrant work culture in the organizationBe proactive in conserving environment, maintaining high levels of safety & addressingsocial concerns
CORE VALUESCommitment Customer Satisfaction
Continuous Improvement Concern for Environment
Creativity & Innovation