Madified report2008-09 Report 2008-09 (English).… · Central Bank of India Oriental Bank of...

27th Annual Report 2008-09

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RASHTRIYA ISPAT NIGAM LIMITED

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BANKERSState Bank of IndiaBank of BarodaCanara BankState Bank of HyderabadAllahabad BankUCO BankHSBC Bank Ltd.IDBI Bank Ltd.Andhra BankIndian Overseas BankIndian BankICICI BankBank of IndiaCentral Bank of IndiaOriental Bank of CommerceState Bank of Bikaner & JaipurState Bank of IndoreState Bank of MysoreState Bank of TravancoreSyndicate BankHDFC BankKarur Vysya BankThe Federal Bank Ltd.

AUDITORS

M/s. Rao & KumarChartered AccountantsVisakhapatnam

BOARD OF DIRECTORS

CHAIRMAN-CUM-MANAGING DIRECTOR

Sri P. K. Bishnoi

FUNCTIONAL DIRECTORS

PersonnelSri Y. Manohar

CommercialSri C. G. Patil

FinanceSri K. S. Shankar

OperationsSri Umesh Chandra (w.e.f. 01.11.2008)Sri P. K. Misra (upto 31.10.2008)

ProjectsSri A. P. Choudhary (w.e.f. 1.6.2009)Sri P. K. Misra {holding additional charge ofDirector (Projects) upto 31.10.08}

GOVERNMENT DIRECTORS

Sri B. S. MeenaSri G. Elias (upto 06.11.2008)Dr. Dalip Singh (w.e.f. 7.11.2008)

INDEPENDENT DIRECTORS

Sri R.S.S.L.N. Bhaskarudu (upto 25.4.2009)Dr. V. K. Bhalla (upto 28.6.2009)Dr. Jagat Pal

COMPANY SECRETARYSri P. Mohan Rao

Registered OfficeAdministrative BuildingVisakhapatnam Steel PlantVisakhapatnam 530 031, Andhra PradeshWebsite: www.vizagsteel.com

CONTENTSFrom the Chairman 3Directors’ Report 6Management Discussion & Analysis Report 18A Glance of Financial Results (year-wise) 27Annual Accounts 29Auditors’ Report 56Comments of C & AG 64Report on Corporate Governance 65Certificate on Compliance of Guidelines on Corporate Governance 74Secretarial Compliance Report 75Vision, Mission & Objectives 82


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FROM THE CHAIRMANDear Stakeholders,My colleagues on the Board and I extend a warm welcome to you all at the 27thAnnual General Meeting of your Company. The Directors' Report and the AuditedStatement of Accounts for the year 2008-09 and the Notice to the Shareholders havealready been circulated and with your permission, I take them as read.

Year 2008-09The financial year 2008-09 has been a year of two contrasting halves. The first halfsaw commodity markets booming like never before and steel value chain was noexception, with prices of raw materials and steel products scaling new peaks. The second half of 2008-09 wasmarked by the sudden and striking impact of the recessionary trends on developed and developing economies,as a result of the global meltdown. Indian steel industry was also among the sectors that were impactedseverely by the sudden slump in the market, resulting in huge inventory build up. Bottom line of the steelcompanies like RINL-VSP, which do not have captive mines for major raw materials, was further eroded bythe consumption of high cost raw materials contracted in the previous cycle of booming markets.

As industries continue to fight the global economic crisis, the Management took it as an opportunity to introspectand re-define strategies to combat the challenge.

The Management took initiatives as follows:

H Regulating / correcting production in the second half of the year so as to restore balance betweensupply - demand.

H Reduction in the Inventory by appropriate market correctionH Rationalizing Administrative expenditure

H Proactively carryout repair & maintenance activities and some upgradation.

In order to implement the above, the company banked on qualities like swift learning & adaptability of the RINLcollective, to the changing environment.

In our efforts to sustain and grow in the niche markets that the company has captured over the years, theproduction of value added steel remained the thrust area. As a result, value added steel recorded all time highproduction of 20,08,342 tonnes - a growth of 6% over previous year, and the company registered a total salesturnover of Rs 10,411 crs. Also, the company continued its thrust and widened its Rural Distribution Networkto reach new customers across the country.

On the Expansion front, Orders worth Rs. 9538 Crores have already been placed till March 09 and theExpansion project is slated to be completed by 2010-11.

Industry OutlookAccording to a report of South East Asia Iron and Steel Institute published in April' 09, India's economy islargely domestic consumption led and accordingly it has been less affected by the deceleration in globaleconomic growth when compared to other countries. Exports account for 14% of GDP, while much of itsgrowth is based on services, 54% of GDP.

The economic slowdown which hit the industry in the second half of 2008-09 had limited the GDP growth to6.7% for the year 2008-09 against a growth of 9.0% for the year 2007-08. Industry wise comparison growthrates achieved in 2008-09 and 2007-08 make it clear that major steel consuming sectors like construction


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and manufacturing sectors were hit badly during the year. Manufacturing sector registered a growth of 2.4%during 2008-09 against a growth of 8.2% in 2007-08 and construction sector grew at 7.1% against a growth of10.1% in 2007-08.

However, initial signs of recovery have been sighted from the trend of IIP growth rates, which turned negativeduring December 2008 and been positive in the first two months of 2009-10.

The economic growth forecast made by the Prime Minister's Economic Advisory Council was 7.1% for fiscalyear 2009. IMF, in its World Economic Outlook, estimated India's GDP growth at 5.1%.

Steel Demand & ProductionDespite the adverse impact of global economic meltdown, Indian steel industry has performed commendablywhen compared to other steel majors. As per WSA publication, World Steel in Figures 2009, India tops the listwhen it comes to growth during 2008 with a growth rate of 3.95%.

Though, the current market turmoil has dented the growth curve of various industries such as automobile andconstruction, which, in turn, has hit the Indian steel industry hard, with the government's plans to boost up theeconomy by injecting funds in various industries like infrastructure, construction & power and the automotivesector set to regain lost ground, domestic steel demand is going to recover soon.

According to the World Steel Association, India's apparent steel use is forecasted to reach 53.5 million tonnein 2009, a 1.7% increase from 2008 and is expected to reach 58 million tonne in 2010 an increase of 8% YoY.

Owing to the forecasted rise in demand in the country, steel producers are expected to return to normaloperations very soon after the correction in production levels in the second half of 2008-09.

Capacity expansion projects of various players are still on track. Although some projects have been delayed,there have been no announcements of cancellation of major projects. For example, POSCO has delayed its12 million tonne per year steel mill but there is neither cancellation nor scaling down of its plan.

Raw Material ScenarioIndia has large iron ore reserves and is a net exporter of iron ore, particularly to China. According to SteelBusiness Briefing, India's iron ore production which was 123 million tonnes in 2003-04, nearly doubled involume to 204 million tonnes in the fiscal year 2008. About half of its production is exported and nearly 80% ofwhich is to China. However, domestic supply for iron ore is expected to become increasingly tight, especiallywith foreign companies such as Arcelor Mittal and POSCO investing in the country to secure iron ore supply.

As for scrap, most of the demand comes from a large number of small induction furnace based producersand the supply is mainly from domestic railways which supplied up to 1.1 million tonne of ferrous and nonferrous scrap in 2008-09.

Recent trend of low ocean freight has caused ship owners to opt for decommissioning of old vessels, whichleads to higher availability of scrap from ship breaking for re-rolling industry as well as melting furnaces.Construction sector also supplies scrap to the domestic steel industry. India's imports of scrap registerednearly 3 million tonne a year. Scrap supply in India remained healthy and is expected to be steady throughoutyear 2009. This will substantially impact the steel prices and profitability during 2009-10.

Coking coal contracted at high market prevailing rates during 2008-09 also poses a challenge for the company,as part of the supplies are yet to be received by the company. We are putting in our best efforts to see thatbalance quantity of high cost coal supplies are staggered over next few years so as to minimize its impact onour profitability.


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RINL's Future PlansThe Expansion Project for increase in capacity to 6.3 Mtpa Liquid Steel is under implementation. CapacityAugmentation would help the Company consolidate its Leadership in Bars and Structurals Market and helpthe Country in bridging the Demand - Supply gap.

RINL is continuing its efforts to have Raw material security through the Joint Venture route and in this directiona separate Special Purpose Vehicle for overseas coal mines i.e International Coal Ventures Ltd (ICVL) hasbeen formed . Further, JV for Ferro Alloys with M/s MOIL was entered into. Besides, various proposals forlimestone and iron ore are under active consideration.

Also, major equipment like Blast Furnaces and Converters have exceeded their normal life and are thereforedue for major repairs, revamp and modernization. The schedules for the same have been drawn up till2011-12.

Our PeopleOur people, the "RINL collective" are the key to our success and the Company has evolved suitable HRinitiatives for multi-skilled training and constant learning. Many Awards and Merit Certificates were earned bythe employees for the company. Conferring of Prime Minister's Trophy for the second time for Best IntegratedSteel Plant in 2005-06 is a testimony to the Company's commitment to excellence in Steel Making.

Care for Society

While the Company earned Profits consecutively for the sixth successive year since 2002-03, it also continuedits role as a responsible Corporate Citizen by focusing on community welfare schemes and rendering anhelping hand to the needy. The Company, implemented various schemes and spent an amount ofRs.22.83 Crores, an increase of 66% over previous year.

It gives me a great pleasure to announce that the Board of Directors have recommended dividend for the year2008-09 for the first time @ 10% of PAT (Profit after tax). The Company would also be paying 7% dividend onPreference Capital.

I, on behalf of the RINL collective, acknowledge the support extended by the Stakeholders of the Companyand look forward to their continued support in the years to come.

I take this opportunity to express my thanks to all the Stakeholders, Ministry of Steel, Government of India,Government of Andhra Pradesh and various other Departments of the Government and other Institutions.

The Company acknowledges the unstinted commitment and collective efforts of its employees for their excellentperformance in various activities.

I am confident that the commitment, expertise, acumen and the trust built over the last 27 years will continueto be available and with your dedicated and innovative efforts, we can pave the way to building capacity up to16 million tonnes by 2020, as enshrined in our Mission statement.

Thanking you,

( P K Bishnoi )

Date : 01-08-2009 Chairman-cum-Managing Director


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DIRECTORS' REPORT

OPERATIONAL PERFORMANCE:

RINL has been surpassing the rated capacities of itsproduction units since 2001 and continued the same trendfor the year 2008-09. RINL recorded capacity utilization of104%, 105% & 102% in Hot Metal, Liquid Steel andSaleable Steel respectively despite production curtailmentin the second half of the year .

Dear Members,

On behalf of the Board of Directors of the Company, I takegreat pleasure in presenting the 27th Annual Report of theCompany for the financial year ended 31st March 2009,together with the Audited Statements of Accounts, theAuditors' Report and the review of the Accounts by theComptroller and Auditor General of India.

BUSINESS PERFORMANCE:

The year gone by has been a historical one for the industryin general and the steel industry in particular. During thefirst half of 2008-09, markets boomed like never before,but the second half witnessed a slump, the magnitude ofwhich left no steel player untouched. Because of the globalmeltdown we saw a drastic demand contraction fromOctober 2008 onwards following which several steelproducers including Public Sector steel producers resortedto production corrections during the period Oct-Mar '09 torestore balance in the supply demand scenario. RINL toohad to throttle production in the second half of 2008-09 inview of diminished demand and accumulation of finishedgoods inventory.

The year also witnessed an unprecedented rise in pricesof raw materials like iron ore and coking coal and RINLhad to battle the double impact of plunging steel pricesand high contracted prices of raw materials. Definite shiftin product mix towards value added steels, and continuousperformance at above the rated capacities helped VSP incapitalizing on favourable markets during the first half ofthe year. VSP also gainfully utilized the slack marketconditions in the second half initiated actions to rejuvenatehealth of Plant and Equipment .

The Company could cross the landmark level ofRs.10,000 Cr turnover for the second time in a row andalso recorded a net profit of Rs.1336 Cr in a year whichsaw unprecedented turmoil in the second half.

The focus of fiscal measures in the company continued tobe on optimizing expenditure on interest, bank chargesand insurance while improving the earnings on surplusfunds.

(*) Production in the Second half of 2008-09 wascurtailed due to unprecedented global meltdown.

Key financials (Rs Crores)2008-09* 2007-08

Gross Turnover 10411 10433Total Income 10105 9993Total Expenditure 7750 6478Gross Margin 2355 3515Interest Charges 88 32Cash Profit 2267 3483Depreciation & DRE 240 488Profit Before Tax 2027 2995Provision for taxations 691 1052Net Profit 1336 1943Accumulated Profit 4988 3653

(* )(* )(* )(* )(* ) Production in the Second half of 2008-09 was curtailedProduction in the Second half of 2008-09 was curtailedProduction in the Second half of 2008-09 was curtailedProduction in the Second half of 2008-09 was curtailedProduction in the Second half of 2008-09 was curtaileddue to unprecedented global meltdown.due to unprecedented global meltdown.due to unprecedented global meltdown.due to unprecedented global meltdown.due to unprecedented global meltdown.

(**)(**)(**)(**)(**) The Plant was basically designed to produce Mild Steel.The Plant was basically designed to produce Mild Steel.The Plant was basically designed to produce Mild Steel.The Plant was basically designed to produce Mild Steel.The Plant was basically designed to produce Mild Steel.

Items DPR Actual %Capacity fulmt on

08-09(*) 07-08 DPROvens pushed (Nos./day) 300 256 257 85Hot Metal 3400 3546 3913 104Pig Iron 556 322 495 58Liquid Steel 3000 3145 3322 105CC Blooms 2820 2963 3129 105Billets 1857 1904 1879 103Bar products 710 825 859 116Wire Rods 850 972 998 114MMSM products 850 748 1015 88Finished Steel 2410 2544 2871 106Saleable Steel 2656 2701 3074 102Value added prodn. (**) 2008 1894 **Power Gen.(MW)@ avg/day basis 198.8 214.8 **

Unit : '000t


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OTHER HIGHLIGHTS

F Installation of combined blowing facilities inLD-3 in Feb' 09.

F Replacement of existing Gas Cutting Machinewith a new machine in CCM-1 in Mar' 09.

F Commissioning of two units of Argon tanks inASP for the supply of Argon gas for combinedblowing facilities.

F Highest Value added production of 20,08,342 twith a growth of 6% over 07-08.

F Increase in Value Added Heats (15192 nos) witha growth of 15% over 07-08.

F Value added production w.r.t Saleable Steel is74% and is the best since inception.

F Hot metal & Liquid Steel crossed 58 Mt & 47 MtLandmark on 11.02.09.

COST REDUCTION MEASURES

The company's commitment towards containing costscontinued during the year towards the following measures:

1. Utilisation of LD slag in Sinter Plant (SP) andBlast Furnace(BF) to reduce consumption ofLimestone

2. To uitilise Lime dust in SMS by way of Briquettingthe lime.

3. Use of Metallurgical waste in place of Iron orefines at Sinter Plant.

4. Reclamation of scrap from maintenance activitiesand use in SMS.

5. Improvement in tundish life from 4.72 to 4.93Heats.

6. Conservation of power.

7. Usage of LPG in CCM-1 for bloom cutting, inplace of Acetylene gas.

ENVIRONMENT MANAGEMENT

In the year 2008-09, the company was audited byM/s BVCI for continuation of ISO 14001:2004 certificate,which is valid till 2010. The company, in its endeavour tomove beyond adherence to stipulated norms, has identifiedprojects worth Rs. 391.6 Crores to improve environmentalperformance out of which projects worth Rs.24.46 Croresare already implemented.

Major Environmental projects completedduring 2008-09.

PRPRPRPRPRODUCTION PERFODUCTION PERFODUCTION PERFODUCTION PERFODUCTION PERFORMANCE AORMANCE AORMANCE AORMANCE AORMANCE AT MINES:T MINES:T MINES:T MINES:T MINES:MineMineMineMineMine 2008-092008-092008-092008-092008-09 2002002002002007-087-087-087-087-08Madharam DolomiteMine (lakh tonnes) 5.27 6.64Jaggayyapeta LimestoneMine (lakh tonnes) 4.32 4.42Garbham Manganesemines (tonnes) 12620 11432

Achievements:

4 18.4% excess Over-burden handled over last year inMadharam Dolomite Mine

4 Slow/Non-moving items were reduced by Rs 40 lakhsat Jaggayyapeta Limestone Mines stores.

4 Garbham Manganese Mine registered a growth of23 % in dispatch as compared to 2007-08.

4 The dispatch of River Sand from Sarepalli Sand Mineis 26,615 Tonnes, a growth of 3.69% over that of2007-08

SALES PERFORMANCE

As a fall out of the economic crisis which enveloped theworld, the year 2008-09 witnessed extreme variations inSales Performance. Although the year started on a positivenote with good demand and good realizations, the trend


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( * ) Production in the second half of 2008-09 was curtaileddue to unprecedented global meltdown.Exports

During the year 2008-09, 23,000 tonnes of Pig Iron wasexported and there were no exports of Saleable Steel.During the first Half of the year 2008-09, although exportrealizations were better, VSP did not export Saleable Steelin line with the Govt initiatives or suggestions for increasingavailability of steel in the domestic market. During thesecond half of the year, exports were not made due to un-remunerative Export Realizations and adverse demandsituation.

Value Added SteelsDuring the year 2008-09, best ever sales volume of ValueAdded Steel Products has been achieved. In 2008-09,

2007-08

2008-09

Unit : '000 Tonnes, % Share

Project SalesDuring the year 2008-09, 6.71 lakh tonnes (includingInternal Consumption at VSP) have been sold to ProjectCustomers compared to 7.21 lakh tonnes in the year2007-08. Region-wise sales of steel products to Projectsare given below :

did not continue for a long. From Aug. 2008 onwardssluggishness leading to slump in International andDomestic markets affected the volume of sales andrealizations. As a result, prices dropped as much as40% from peak in some products and on an averagedipped by about 25% in the second half when comparedto the first half. Despite the adverse market conditionsin the second half, VSP achieved a Sales Turnoverof Rs. 10,411 Cr. against the MOU target of Rs.10,500Crs, registering a fulfillment of 99%, despite global meltdownand downtrend in demand. This excludes sale of powerand Internal Consumption of Steel products for VSP'sExpansion of Rs.90 Crores.

Sales Performance w.r.t. MOU 2008-09 targets and2007-08 is as follows:

Volume: '000 Tonnes, Value: Rs Cr.

19.81 lakh tonnes of Value Added Steel Products havebeen sold compared to 18.27 lakh tonnes in the year2007-08, representing a growth of 8%. It may be mentionedthat the sales volume of Value Added Finished Steelregistered a growth of 9% and the sales of Semis declinedby 10% over that of the previous year. The sales of Valueadded steel in the last three years are as under:

64%64%64%64%64%

8 %8 %8 %8 %8 %

Item 2008-09 2007-08MOU Target Actual( *) FulfillmentDomestic

Pig Iron 186 246 132% 180Steel 2822 2617 93% 2879

ExportPig Iron 200 23 11% 255Steel 200 0 0% 62

TotalPig Iron 386 269 70% 434

Steel 3022 2617 87% 2941Sales Value

Domestic 9733 10330 106% 9874Exports 767 78 10% 555

Sale of Power 3 5InternalConsumptionof Steel - 87 - 89Total 10500 10498 100% 10522

Value Added Steel Sales ('000t)


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The position of inventory of Pig iron, Semis, Finished steeland Saleable Steel as on beginning and end of the yearare presented below :

Unit : '000 Tonnes

There has been a decline of 7% in Project sales during2008-09 over that of the previous year. The decline inProject sales is primarily due to the slow down of theconstruction activity in the country.

By-Products

Sales of By products for the year 2008-09 have beenRs. 214 Cr. compared to Rs. 217 Cr. in 2007-08. Lowersales value is the result of lower Sales Volume of By-products during the year and lower prices of Benzenecompared to that of the previous year. The sales wereadversely affected during the Second half of the year dueto slump in the demand. The sales volume of GranulatedBF Slag, due to efforts made, increased by 7% in2008-09 over the previous year.

Inventory Control

The decline in the demand for Saleable Steel during SecondHalf of 2008-09 resulted in increase of Inventory levels.The inventory of Saleable Steel which was about1.5 lakh tonnes in the beginning of the year i.e., as on1st April 2008 went up to about 2.5 lakh tonnes by endJune 2008. This Inventory level corresponding to aboutone month production is considered adequate. Howeverdue to lower sales from August 2008 onwards the Inventorylevels steadily increased and reached a peak of 8.11 lakhtonnes as on 16th Dec. 2008. Strategies were devised toreduce the Inventory of Saleable Steel and implementedon war footing with an aim to bring down to acceptablelevels by the end of the year.

The movement of Inventory of Saleable Steel during2008-09 is brought out graphically below :

UUUUUnit : Tnit : Tnit : Tnit : Tnit : Tonnesonnesonnesonnesonnes

As can be seen from above, concerted efforts were madefor reducing Inventory levels which yielded results .

E-Marketing

During 2008-09, 1,06,705 tonnes of Steel products weresold through 1975 e-auctions. In addition to these,5 e-auctions were held for sale of 595 tonnes of Pig Ironand 365 e-auctions were held for sale of 14042 tonnesof By-products. The Value of e-auctions stood atRs. 430.34 Cr. during 2008-09. It may be noted that CVCencourages e-commerce for transparency and our effortshave been in that line.

Rural Marketing

As on 01-04-2009, 134 District level dealers (DLDs) werein position. Region-wise sales of Steel products to DLDsduring the years 2007-08 and 2008-09 are given below:

Inventory of Saleable Steel ('000t)


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Characteristics Mahal Tenughat-Jhirki

Location Jharia Coal Fields, W.Bokaro Coal Fields,Bokaro Dt, Jharkhand Bokaro Dt. Jharkhand

Area 5.2 Sq Kms 2.5 Sq Kms

No. of seams 22 17

Quality Steel Grade I to Steel Grade I toWashery Grade III Washery Grade III

Reserves 258.35 mt 215.76 mt

There has been a steady growth in the sales of steelproducts to DLDs over the years. During the year2008-09, growth of 23% has been registered in the quantityof sales to DLDs compared to that of the previous year.

MATERIALS MANAGEMENT:

RINL/VSP entered into long term agreements for purchaseof coking coal, soft coking coal and iron ore as per theprocedure in vogue to get uninterrupted supply of majorraw materials. RINL/VSP took initiative, to identify thealternate sources of supply of iron ore to deal withdisruption of raw-material supplies on -- M/s SAIL &M/s OMDC were identified as potential sources. Iron oreprocurement for part requirement has already been finalizedwith SAIL. Efforts are on for tying up certain quantitieswith M/s. OMDC.

Due to the unprecedented global melt down, the prices ofsteel nosedived and demand was adversely affectedtherefore there were carry forward quantities from theexisting contracts for imported coking coal and these wereat high prices as per prevailing when contracted. With aview to mitigate the effect of the high cost of input rawmaterials, procured through long term contracts, RINL/VSPrenegotiated the contract prices (wherever possible) anddeferred delivery schedules to suit the revised productionplans.

In the international market, the freight rates also fell whencompared to COA rates during the second half of 2008-09.The matter was taken up with COA holders throughTranschart and negotiations held to defer shipmentscovered under COA, so that the impact of high freightCOA' s could be reduced and / or deferred .

During the year 2008-09 RINL started utilizing the servicesof M/s. Gangavaram Port Ltd.(GPL) wherever the cost ofhandling vessels was lower at GPL as compared toVisakhapatnam Port Trust. 15 vessels were handled atGPL resulting in a saving of about Rs.15.89 crores during2008-09. The deep draft available at GPL was utilised tobring some shipments of coal from Australia in cape sizevessels achieving a reduction in logistical costs. Furtherexploitation of deep draft in future is also being planned.Non-moving inventory of spares and consumables wasreduced from Rs.35 crores in 2007- 08 to Rs.31 crores in2008-09 i.e. a reduction of 11.4%.

In house e-reverse auction engine has been developed andput in place and e-reverse auction activity commenced fromOctober 2008 onwards in a progressive manner.

RAW MATERIAL SECURITY

In it's constant pursuit to ensure raw material security forit's Plant, RINL-VSP has been on the look out for acquiring

raw material mines in India and also constantly taking upwith concerned State Governments for allocation of mines.

Iron Ore:RINL/VSP had submitted 5 mining lease applications foriron ore deposits in the State of Orissa and two applicationsin the State of Chhattisgarh. Three applications in Orissaand two in Chhattisgarh were rejected by the respectiveStates and the balance two applications in Orissa are underdisposal. Efforts are on to get allocation of mines.

Coking Coal:Two Coal Blocks for underground mining which have beenallotted to RINL/VSP in the state of Jharkhand as per salientfeatures given below :

Mahal:A "Pre-feasibility Report" was prepared by Central MinePlanning & Design Institute Limited (CMPDIL). This reportindicated that:

i) Economically extractable seams very deep i.e.-360 mtrs to 1050 mtrs.

ii) Dips of the seams 15o-20o.iii) The presence of 13 no. of Normal faults with a

min: of 20m to a max: of 200m throw.iv) Highly gaseous i.e. Degree 3.v) A railway line is running across the middle of

the block i.e. Adra-Gomoh section of SERailways.

vi) Damodar River runs along the Northern boundaryof the block.

vii) Method of Underground mining "JankowiceMethod", i.e. manpower intensive.

viii) Extractable reserves only 9.199 Million mt asvis-a-vis proven reserves of 159.92 Million mt.

ix) Production planned 0.276 Million mt per annumhence cost would be very high.

x) The block would come into production stage innot less than 9(Nine) years.


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Tenughat-Jhirki:A study on the preliminary data of the block indicated that:

i) Economically extractable seams except onevery deep.

ii) Dips of the seams about 05o to 35o.

iii) The presence of 6 no. of faults having a min: of20m to a max: of 200m throw.

iv) Highly gaseous i.e. Degree 3

v) Konar Nala runs along the Northern boundary ofthe block.

vi) Method of Underground mining would bemanpower intensive.

vii) Low quantum of production hence productioncost would be very high

viii) The block would come into production stage innot less than 9 (Nine) years.

Dolomite:Forest Department advised to resubmit the proposal forforest clearance of Dharmapuram Mining Lease by reducingthe Forest area falling under ML area. Submission of freshproposal is in process.

Quartzite:An extent of 40.47 ha. In Pindrangi village, K.KotapaduMandal, Visakhapatnam District and an extent of20.64 ha. in Marrivalasa village, K.Kotapadu Mandal,Visakhapatnam has been sanctioned in favour of RINL/VSPby Department of Industries & Commerce, Govt. of AP inJanuary ' 09.

OVERVIEW OF EXPANSION & OTHER PROJECTS 6.3 MTPA Expansion Plan

The orders for all major packages under Expansion havealready been placed. The Stage-1 of Expansion whichincludes installation of One Sinter Plant, One Blast Furnace,Steel Melting Shop and one finishing mill alongwithassociated units are planned to be commissioned andstabilized during end March- end Sept ' 2010.

In Stage- 2 , two mills i.e One Special Bar Mill is scheduledto be commissioned and stabilized during end January -end July 2011 and Second Mill i.e Structural Mill will becommissioned and stabilized during end July 2011 - endDecember 2011 as per plan.

Total no. of packages ordered during the year 2008-09 is50 Nos. at a cost of Rs. 2496 Crores, aggregating thetotal no. of packages ordered till Mar. '09 to 158 nos. ata cost of Rs. 9538 Crores. Total Commitment, includingEnabling works, Specif icat ions ordered, Steel

procurement, Consultancy and Spares, was Rs.11286Crores till Mar.' 09.

Expenditure on expansion project for the financial year2008-09 was Rs.2641 Crores showing an improvement of133.51% as compared to Rs.1131 Crores for the year2007-08.

As approved by the Board, Power Plant for Expansion hasbeen initiated as Captive Power plant against BOO basisas envisaged earlier for which separate approval is beingsought from Govt. of India at an estimated cost ofRs. 807 Crores. Number of options are under consideration.The most economical option shall be taken up forimplementation.

Scope & Progress of Work:During the year 08-09, 5,101 Nos., of piles, 3,15,297 CuMof Concreting, 80,137 MT of Structural Fabrication, 40,936MT of Structural Erection, 25,267 MT of Equipment Supplyand 5,906 MT of Equipment Erection have been done.

Major Events during the year 08-09 :v Imported Equipment supply commenced.

v 25267 MT of Equipments have already been receivedat site by March 2009.

v Piling for Sinter Plant-3 and Kiln-2 for Calcining &Refractory Material Plant foundation works werecompleted in Jan '09.

v Blast Furnace-3 Furnace Proper/Hot Stoves ShellErection work was commenced in June/July '08

v Erection of Top cone for Blast Furnace shell/ Domefor Hot Stoves was completed in Mar/Feb '09.

v A single structure Lower Tower of Blast Furnace-3weighing 260 MT was erected on 7th Nov '08.

v Structural Erection works commenced in BlastFurnace-3 Cast House/LD Converter-1 for Steel MeltShop-2 areas in April/July '08.

v Technological Structures erection started for ElectroStatic Precipitator in Sinter Plant-3 in July '08.Erection of Double Girder priority crane started inWire Rod Mill-2 in Oct '08.

v Equipment Erection started for Continuous CastingMachine of Steel Melt Shop-2, Calcined & RefractoryMaterial Plant & Power Distribution System inDec '08, Jan '09 & Feb '09 respectively.

v Special Bar Mill & Structural Mill agreements weresigned in Dec '08 & Mar '09 respectively.

v 2 nos of Torpedo Ladle Cars arrived at site on01.03.09 for Blast Furnace-3 and erection completedfor 1 no of Torpedo Ladle Car on 23.03.09.


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Other Projects and AMR Schemes: RINL/VSP iscurrently executing and further contemplating severalAddition, Modification & Replacement (AMR) schemes torejuvenate existing aging facilities for sustaining efficiency/productivity and to imbibe latest energy efficienttechnologies.

Coke Oven Battery-IV, integrated with Coke Dry CoolingPlant-4, was made ready in April' 09. Expenditure for theYear 2008-09 for Coke Oven Battery -IV is Rs. 22.08 Croresand cumulative expenditure since inception till Mar.'09 isRs. 300.86 Crores.

Major AMR Packages Ordered (other than 6.3 MtpaExpansion packages) are Stacker-Cum-Reclaimer forcoking coal in Raw Material Handling Plant, Pulverized CoalInjection for Blast Furnace 1 & 2, Modification & up-gradation of Continuous Casting Machine-2 & CombinedBlowing of LD Converters for existing Steel Melt Shop, AirSeparation Unit-4 & 5, Turbo Generator-5 & Boiler-6.

Major Packages in the process of being awarded are CokeOven Battery-4 - Phase II packages (Coal handling side &By Product side) and Augmentation of Iron Ore Storage inRaw Material Handling Plant.

Major constraints faced

� Non-availability of timely feed back data from majorequipment suppliers affecting release ofconstruction drawings

� Inadequate mobilization of men, material anderection equipments like cranes by contractorsDelay in customs clearance by the agenciescausing delay in erection activities.

Initiatives taken

� Issues pertaining to PSU for delays in execution ofRINL projects were taken up through Ministry andhelp sought for necessary direction to the PSUs.

� A team from RINL/VSP visited Russia inOctober' 08 to assess the ground realities regardingSinter Plant equipment supplies. The details ofoutcome of the visit have been sent to Ministry ofSteel/Govt. of India and help was sought fromSecretary (Steel), Ministry of Steel/Govt. of Indiaand Embassy level for necessary interventions tobring down the delays. Secretary (Steel), Ministryof Steel/Govt. of India was kind enough to pursuewith Indian Ambassador to Russia.

� Review meetings were held with the ChiefExecutives of the agencies highlighting RINL/VSP'sconcerns to resolve matters causing delays inexecution of RINL projects and for necessaryintervention to improve the site activities forovercoming the delays & to achieve plannedquantities. Situation is improving there after.

� Alternative schemes are being considered to meeteventualities due to delays in commissioning ofsome of the service units.

� RINL/VSP management followed up with theagencies for possible advancement of delivery ofequipment. Subsequently, equipment supplies haveimproved.

EMPLOYEES:The Industrial Relations situation at RINL during the year2008-09 was by and large peaceful. The peaceful IndustrialRelations climate was maintained in the organization tosustain the production and productivity levels. Despitehectic union activities and the agitations of unions on issuesincluding the contract workers, a conducive environmentprevailed. The proactive approach and measures takenenabled harmonious industrial relations.

Settlements / Achievements:Two bipartite agreements (record note) were signed on17.07.08 on Percentage based increment and to improvethe facilities under House Building Advance Schemebetween the Recognized Union and Management.

A tripartite agreement was reached on Annual PerformanceReward Scheme (Bonus) on 27.09.08 with the RecognizedUnion enabling payment of Rs.16,200/- to each employee.

Conferring of Recognition to the newly elected union VisakhaSteel Workers Union (VSWU) on 15.04.08 and ensuringsmooth conduct of Elections without adverse effect onproduction.

The manpower strength of the company stood at 17,225as on 31.03.2009. Out of the total manpower 16.36% wereScheduled Castes (SC) and 7.31% were Scheduled Tribes(ST). During the year, out of the total recruitment of 1019employees made by the company 96 (9%) belonged to SCand 220 (22 %) to ST. Out of the total of 103 vacanciesfilled through promotions 16 (16%) were SC and 23 (22 %)were ST. As on 31.3.2009 the number of Displaced Personson the rolls of VSP was 5690.

Participative Management

1. The Company provides a wider scope for workersparticipation commencing from the lower cadres ofthe employees to Chairman Cum Managing Director.

2. 70 Samalochana sessions were held during2008-09, to discuss various issues of organizationaland issues related to employee interest. Duringthese sessions, meaningful information of thecompany is provided to the employees and alsothe issues raised in the earlier sessions alsodiscussed.


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3. Workers participation was given a boost with theintroduction of 8 new plant level committees therebyincreasing from 7 to 15 which includes thecommittees which are backed by legal enactmentslike Canteen Managing Committee, SafetyCommittee, Provident Fund Trust Committee withthe structure of equal nomination from the employerand employees on these committees.

4. 2 types of shop level committees called Shop FloorSafety Committees and Shop Floor CooperationCommittees exist in VSP. At present there are27 Shop Floor Safety Committees and 25 ShopFloor Cooperative Committees across thecompany with a periodicity of meeting once in amonth to discuss target production, productivityand shortfall issues. Adequate implementationreviews are made. To augment this, 513 Shop-level meetings and 119 Plant level meetings wereheld during the year 2008-09.

5. As a unique feature and first of its kind, allparticipative fora in VSP are covered underISO 9001-2000 Quality Management System ofPersonnel Dept & Audited periodically by theauditors of BVCI. Members of the participative foraare sponsored for visit to other industries and tohave exchange of views and practices with a viewto improving their awareness and participative skills.

Employee involvement & process improvementsThe imagination and creativity of employees have alwaysbeen key success factors for the company. Employees ofRINL have always been at the forefront in contributing ideasfor process improvements. Voluntary involvement ofemployees in 4251 Quality Circle projects is a testimonyof the interest exhibited by employees in processimprovements.

Employee training & developmentFacilitating employees to excel in their professional,personal and social life is a key element of the company'sHR objective. Emphasis of HR development during2008-09, was on fulfilling position related training needs,emerging from the business needs of the company.

The company has evolved and implemented 1022 employeedevelopment training programmes covering 20489participants and nearly 330 Management Developmentprogrammes organized covering 8142 officers. Humancapital development index achieved was 1.62 and trainingmandays per employee was 12.8 Freshers training covering200 management trainees, 106 trainee khalasis, 591 juniortrainees etc was imparted during the year.

In addition, special need based training programmes,foreign training (covering 59 executives and 8 non-executives), junior officers training (for 186 employees),apprentice training (226 nos) etc were imparted.

CSR initiatives in terms of giving training to ITI Principals inAndhra Pradesh, training to school children on MS officepackage, vocational training covering 4489 students ofengineering colleges, project work facilities/project basedtraining were also imparted to students of various institutesand colleges.

Library services covering fresh procurement of 1393 booksand 3790 journals were organized and as many as 13204employees utilized the library.

Employee WelfareThe importance of welfare activities as long term drivers ofemployee relations is well understood in the company andhas always been an area of special attention. The companycontinues to pursue all initiatives relating to providing qualityeducation and encouraging healthy competition to theemployees' children through mechanisms like MOUs withreputed educational institutions, grant of scholarships tomeritorious students, organizing programmes on"Competency & Personality Development" for students etc.

Welfare Activities- SC/STIn the company, Presidential Directives on Schedule Castes& Scheduled Tribes continued to be implemented andmonitored regularly. Following is the list of highlights inthis regard:

F Scholarships in SC/ST category for meritorious studentswas awarded for the year 2008-09 with the followingdetails:

10 scholarships @ Rs 1500/- p.m. for professionalcourses.

6 scholarships @ Rs 750/- p.m. for other degree anddiploma courses.

10 scholarships @ Rs 400/- p.m. for intermediatecourse.

F Bharat Ratna Dr. B.R. Ambedkar Annual Merit CashAwards of Rs 500/- for the first rank holder andRs 250/- for the second rank holder for each of the 10schools in the township have been awarded. This awardis given separately to students in General category andSC/ST category.

F Garlanding function and commemorative meeting on theoccasion of birthday of Bharat Ratna B.R. Ambedkar atDr Ambedkar Park, Sector-6.

F Sports and cultural function on the occasion ofDr B.R. Ambedkar Jayanthi.


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Ongole Districts by incurring an amount of Rs.20 crores onthe above activities.

The company also extended assistance to the poor childrenin the schools. 450 free school seats were provided besidesproviding 48 Scholarships to the meritorious students.Support to a number of activities for the benefit of physicallychallenged children was extended by way of providingtraining equipment and one Special Bus to ArunodayaSpecial School at Ukkunagaram. One exclusive SchoolBuilding costing Rs.2 crores is also sanctioned for the useof public in and around Ukkunagaram. RINL has also takencare of the physically challenged orphans by constructinga Dormitory for Mandala Vikalangula Sankshema Sangamat Achuthapuram. Through several Disability RehabilitationCamps at Ukkunagaram, a total of 1357 differently abledpersons were given Tri-cycles, Wheel Chairs, Crutches,Hearing Aids, Artificial Limbs and Walking Sticks to theBlind.

"Learning is a continuous process" and there is no bar onplace or age and keeping this in view, RINL introduced aScheme called "Ukku Akshara Jyothi" towards AdultLiteracy.

RINL has continued its efforts to contribute to the societyin prevention and control of HIV/AIDs through information,education and communication programmes (i.e throughplaylets in villages etc.). To encourage sporting activities,RINL has organized a National Senior Women's BoxingChampionship and a District Level Body BuildingChampionship at Ukkunagaram and extended support byway of infrastructure for UP Badminton Academy andsupported the organizing of the 70th Table TennisChampionship.

To take care of the poor farmers, 100 Nos. Steel BullockCarts specially designed by INSDAG, Kolkata (worthRs.15 lakhs) were handed over to the Collector and DistrictMagistrate, free-of-cost and were distributed to the poorand needy farmers. An off-set printing press was providedin Central Prison, Visakhapatnam for preparation ofstationery for Govt Organisations and to help generaterevenue for the prison inmates for their families.

For having a Blood Bank to cater to the needs of the region,a Foundation Stone was laid by His Excellence Governorof Andhra Pradesh, Hon'ble Shri N D Tiwari through IndianRed Cross Society at a cost of Rs.280 lakhs.

Towards publicity and promotion of steel usage in ruralareas, a Model Steel Village was constructed by RINL-VSP and handed over to the Tahsildar. The village containsnine rural houses, one Panchayat Hall, one school building,two toilet blocks and one open stage. An amount ofRs.43.00 lakhs was incurred on this CSR activity and aSteel House was also constructed at National Institute for

Grievance Addressing MechanismThe company has given top priority to the redressal ofgrievances of staff as well as public. In compliance with thedirectives of Ministry of Steel from time to time, the PublicGrievances appearing in media are being scrutinized andsettled by Corporate Communications Department.

Various fora have been put in place to capture and settlegrievances of employees at different levels, so as to enhanceoverall satisfaction levels of the employees. Apart from thestructured and formal grievance redressal mechanism thatexists in the company, informal channels for sensing thepulse of the employees and initiating proactive actions havealso been introduced e.g.

F Face-to-face interaction between employees andCMD.

F Chairman Online - an intranet based system whereemployees can post queries to CMD.

Safety & HealthSafety and health of employees has always been the primeconcern in the plant and all efforts have been made toleverage upon the safety initiatives to maximize employeemorale and satisfaction. These initiatives have yieldedpositive results with a 13.33% reduction in reportableaccidents when compared to the previous year, zeroaccidents in 20 departments and "One million lost timeinjury free man hours" in 6 departments.

The year 2008-09 saw the company adopting advancedmedical technology to improve the "health care" facilitiesin the Visakha Steel General Hospital.

The company also follows the Occupational Health & SafetyManagement System 18001:2007 standard for it'soccupational health and safety services and recertificationaudit was carried out during the month of April, 2009.

CORPORATE SOCIAL RESPONSIBILITYRINL continues to contribute in the area of Corporate SocialResponsibility (CSR). CSR activities in RINL focus mainlyon Environmental care, Education, Community Health care,People care, Peripheral Development, Culturalefflorescence, activities as a Responsible Corporate Citizenand Help during natural calamities.

Under Corporate Social Responsibility activities, RINLconstructed 30 school buildings in addition to providinginfrastructure to the schools, donating schools books,Mosquito Nets to the Tribal Welfare Ashram School studentsin Tribal Agency Areas, construction of Hostel Block "21stCentury Gurukulam", a novel project to help students fromvillages coming for studies in Andhra University, supply of542 tonnes of steel for 150 community halls in Guntur and


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Rural Development (NIRD), Campus, Hyderabad at a costof Rs.2.30 lakhs.

Project "Jaladhara" - Gravity Water Scheme was taken upunder the CSR initiatives of RINL in an Agency Area inVisakhapatnam Dist. to provide drinking water to the village.Earlier the village folk (especially ladies) had to walk5 to 6 km to bring head loads of mud-water or spring water.Because of this Project, now 4 villages in this area aregetting water through taps at their door-steps.

In the area of Cultural efflorescence, RINL supportedSPICMACAY (Society for Promotion of Indian ClassicalMusic and Culture Amongst Youth).

RINL also extended financial assistance of Rs.700 lakhsand Medical Services to the flood victims of Bihar State.

IMPLEMENTATION OF RIGHT TOINFORMATION ACT - 2005

As per the directives of the Govt of India, the RTI Act 2005is under implementation w.e.f. 12th October 2005 onwardsin the Company and the required infrastructure has beenput in place. An RTI portal in the Company's website isbeing maintained and regularly updated providing therequisite information. Periodical reports on the progress ofImplementation of the Act and performance w.r.t. the no. ofcases received and disposed etc. are being submitted tovarious authorities. Training programmes for betterawareness in the organization and discussion sessionswith appellate authorities etc. are also being carried out.FAQ on RTI, type of information etc. are put on RTI Portalfor facilitating information seekers to obtain informationalready available.

All necessary information as per the provisions of RTI Act2005 are being furnished to information seekers regularly.RTI request and Appeal Management Information System(RTI-MIS) is being implemented in accordance with thedirection of Central Information Commission.

HIGHLIGHTS OF OFFICIAL LANGUAGE IMPLEMENTATIONDuring the year, RINL continued its endeavour to increasethe usage of Hindi by way of Intensive training in Hindi. 56employees were trained in Hindi Workshops, 211 officersat DGM (E-7) and above grade were given training in thespecial workshop and 88 employees were trained oncomputers in Hindi etc.

RINL bagged the All India Rajbhasha Puraskar given byMinistry of Steel for the excellent work done in the field ofOfficial Language Implementation for the year 2007-08. HindiDynikee and Kaarya Shala Material were published.Quarterly issues of Hindi in - house magazine "Sugandh",were also published.

PROMOTING WORK ETHICS:The Vigilance department of the company has been takingup various initiatives to promote clean and transparent workethics, with special emphasis on preventive vigilance.Vigilance Awareness Week was observed as per CVCguidelines. Measures like review of procedures,identification of sensitive posts, conducting surprise / qualitychecks, mounting surveillance and rail/road weighmentsand re-weighments were also undertaken.

Integrity Pact has been made a part of the NIT/ Tender inmore than 260 tenders covering all areas.

In line with the direction of Ministry of Steel, Vigilancedepartment completed all the formalities of gettingISO 9001-2000 certification and was issued the Certificateof Compliance by the certifying agency M/s IntegratedQuality Certification Pvt. Ltd. Bangalore.

AWARDS & ACCOLADES:k RINL employees brought laurels to the Company

by winning several prizes at Indian NationalSuggestion Schemes' Association (INSSAN) heldat Kodaikanal in Tamil Nadu. VSP has baggedSilver Medal in Best Suggestors Contest, MeritAward in Best Suggestors Contest, Merit Award intechnical paper contest, Merit Award in Englishslogan contest at the convention.

k RINL has been awarded 'Enterprise ExcellenceAward-2007' for their financial and operationsstrength under five perspectives such as Financialstrength, Achievements, Internal Processes,Innovation & Learning and External CustomerOrientation by the Indian Institution of IndustrialEngineering (IIIE).

k VSP has added another feather in its cap by baggingGovt, of India Vishwakarma Rashtriya Puraskar(VRP) - 07 awards at national level for innovativesuggestions from Madharam DolomiteMines(MDM), SMS and BF departments whichbagged Class-A, Class-B & Class-C awardsrespectively. VSP has won this distinction fourthtime in row.

k Two Quality Circle teams from Visakhapatnam SteelPlant participated in International Convention onQuality Control Circles-2008 (ICQCC) at Dhaka,Bangladesh won highest category awards rated asexcellent from amongst 166 QC Teams consistingof 800 delegates.

k VSP won the QCFI-NMDC trophy for 'Best QualityCircles Implementing Organisation', under PSUcategory at the 2nd National Convention on QualityCircles at Vadodara.


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k Ukkuvani, the bi-monthly In-house journal of VSPwas adjudged the 'best house journal devoted towelfare of employees' in the competition of 'NationalAwards for House Journals', as part of 10th AndhraPradesh Public Relations Conference organized bythe Hyderabad chapter of Public Relations Societyof India.

AUDITORSM/s Rao and Kumar, Visakhapatnam have been appointedas the Statutory Auditors of the Company for the year2008-09 by the Comptroller and Auditor General of India.

MANAGEMENT DISCUSSION AND ANALYSISREPORTThe Management Discussion and Analysis Report, isannexed and forms part of the Directors' Report.

CORPORATE GOVERNANCE REPORTThe Company strives to attain high standards of corporategovernance. Hence, though not mandatory, a separatesection on Corporate Governance is annexed and formspart of the Directors' Report.

SECRETARIAL COMPLIANCE REPORTSecretarial Compliance Report confirming compliance tothe applicable provisions of Companies Act, 1956 andapplicable rules there under, though not mandatory, obtainedfrom a practicing Company Secretary, is annexed and formspart of the Directors' Report.

AUDITORS' REPORTThe Statutory Auditors' Report on the Accounts of theCompany for the Financial year ended 31st March, 2009 isenclosed to the Directors' Report at Annexure-I.

C&AG COMMENTSComments of the Comptroller and Auditor General of India(C&AG) on the accounts of the Company and Repliesthereto are enclosed at Annexure-II.

REPORT ON CONSERVATION OF ENERGY,TECHNOLOGY ABSORPTION, ETC.Information required under Section 217(1)(e) of theCompanies Act, 1956 read with the Companies (Disclosuresof Particulars in the Report of Board of Directors) Rules,1988 regarding Energy Conservation, Technology Absorptionand Foreign Exchange earnings and outgo during theFinancial year 2008-09 are furnished in the Annexure-A tothe report and also in Form-A and Form-B annexed to thisreport.

FOREIGN EXCHANGE EARNINGS AND OUTGOThe Foreign Exchange earnings during the year 2008-09were Rs.78.89 crores as against Rs.556.09 crores duringthe previous year. The Foreign Exchange Outgo during theyear 2008-09 was Rs.3910.30 crores (includingRs 309.53 Cr on Expansion) as against Rs.2358.61 crores(including Rs 100.26 Crores) during the previous year.

PARTICULARS OF EMPLOYEESThere was no employee of the company who receivedremuneration in excess of the limits prescribed underSection 217(2A) of the Companies Act 1956 read with theCompanies (Particulars of employees) Rules, 1975.

DIRECTORS RESPONSIBILITY STATEMENTPursuant to provisions of Section 217 (2AA) of theCompanies Act, 1956, the following statement relating toAnnual Accounts for the financial year ended 31st Mar.2009is made:

i) The applicable Accounting Standards had beenfollowed in the preparation of the Annual Accountsfor the financial year 2008-09.

ii) The Directors had selected such accountingpolicies and applied them consistently and madejudgement and estimates that are reasonable andprudent so as to give a true and fair view of thestate of affairs of the company at the end of thefinancial year and of the profit or loss of the companyfor that period.

iii) The Directors had taken proper and sufficient carefor the maintenance of adequate accounting recordsin accordance with the provisions of this Act forsafeguarding the assets of the Company and forpreventing and detecting fraud and otherirregularities.

iv) The Directors had prepared the Annual Accountson a "going concern" basis.

DIRECTORS (APPOINTMENT/CESSATION)The following changes took place in the Board of Directorsof the Company during the year:

Shri Umesh Chandra appointed as Director (Operations)w.e.f 1st Nov ' 08.

Dr. Dalip Singh, IAS appointed as Director w.e.f7th Nov ' 08.

Shri A. P. Choudhary appointed as Director (Projects) w.e.f.1st June' 09.

Shri P.K.Misra superannuated as Director (Operations) on31.10.08.


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Directors of the Company also appreciate the commitment,sincere efforts and hard work put in by all the employees ofthe company, Trade Unions and Steel ExecutiveAssociation. Their whole hearted contribution has been vitalin helping the company scale great heights.

For and on behalf of the Board of Directors

( P K Bishnoi )Chairman-cum-Managing Director

VisakhapatnamDate: 4th July' 09

Adopted at the 27th Annual General Meeting held on1st August 2009.

Shri G. Elias resigned as Director on 06.11.08.

Shri R.S.S.L.N. Bhaskarudu, Independent Directorcompleted his tenure on 25th Apr 09.

Dr.V.K.Bhalla, Independent Director completed his tenureon 28th June, 09.

ACKNOWLEDGEMENTSDirectors of the company acknowledge with deepappreciation the valuable guidance, assistance, cooperationand support extended by the Government of India, especiallythe Ministry of Steel and Govt. of Andhra Pradesh.

Directors of the Company also place on record theirappreciation for the cooperation extended by valuedcustomers, suppliers, Railways, bankers, auditors,solicitors and business associates, the local DistrictAdministration and Law and Order authorities.


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MANAGEMENT DISCUSSION AND ANALYSIS REPORT FOR 08-09A. INDUSTRY STRUCTURE AND DEVELOPMENTS

EconomyThe Indian as well as the global economy has witnessed a very high degree of uncertainty and volatility in 08-09. Globaleconomic crisis triggered in late 2007 in developed countries further deepened during second half of 2008, followinginsolvency petitions filed by large number of financial institutions in US and Europe. The impact of the crisis has beenunprecedented in its intensity and spread. The Indian economy, having achieved an annual growth rate of plus 9 percentduring the three fiscal years ending March 2008, showed signs of slowdown during the second half of 2008-09 andachieved a growth rate of 6.7% during the fiscal.

Steel ScenarioSteel industry was one among the most severely impacted industries world wide, due to the intensifying meltdown.Prices of steel (CIS export for billets) which grew at an average rate of 36% p.a during the period 2001 to 2007 hadwitnessed a fall of 70% in six months (July to December) period in the second half of 2008

In response to this slump in markets, steel producers world wide resorted to production cuts starting from second half2008 in order to restore balance in supply demand scenario.

As a result, world crude steel production, which grew at impressive rates for the last eight years took a nose dive fromJuly 2008 onwards, as monthly production levels recorded drastic decline. Production for December 2008 was 31.6%less than that of June 2008 and world steel production witnessed a decline of 1.2% for 2008 compared to 2007. Nearlyall the major steel producing countries registered negative growth in 2008 with the exception of China, South Korea andIndia where steel production grew by 2.6%, 3.8% and 3.7% respectively.

(Source : World Steel Association )

36% pa70%

6.8% CAGR31.6%


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The year also saw unprecedented rise in prices of raw materials like iron ore and coking coal. Escalation of prices ofcoking coal & iron ore was more than 3 & 1.6 times respectively between 2007 and 2008 alone. Falling steel pricescoupled with high contracted prices of raw materials continues to severely impact the profitability of steel producers nothaving captive mines.

B. STRENGHTS AND WEAKNESSES

C. OPPORTUNITIES AND THREATS :

>3X >1.6X


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AREAS OF CONCERNFrom the above SWOT matrix, emerging issues / concerns are as follows:

(i) Short term & Medium TermAs a result of continuous operation of the plant at higher capacities and consistent increase in special steelproduction, many of the plant equipment warrant immediate revamp and capital repairs. RINL has taken severalactions to identify and take upgradation and rejuvenation activities to maintain the health of the plant.

Initiatives like Category-I capital repairs in both the Blast Furnaces, Pulverized Coal Dust Injection system in BF,Converter revamp in Steel Melt Shop and Combined blowing in LD converters etc are on the anvil. By judiciousplanning of projects targeting technological upgradation and the capital repairs of major equipment, VSP intends tostrengthen its technological advantage.

Company is focused on completion of expansion project as per the schedules in spite of constraints such as non-availability of skilled manpower for deployment by contractors, rising aspirations of contract workers and disruptionby local displaced persons.

Simultaneous expansion plans of other major steel players in the country and increasing competition from existingplayers having captive raw material resources poses a serious threat in the medium term in the form of possibleover supplies. The company proposes to counter this threat through shift to value added steel and also differentiateitself in terms of market place (geographic & user segment) and quality.

Bargaining /negotiation/Deliberations with coking coal suppliers for staggering of high cost coal contracted in thenext 3 years was also taken up, so as to minimize impact on company profitability during the down trend that steelmarkets are witnessing in the country.

(ii) Long termIn the long term, non availability of captive mines for iron ore and coking coal has been a handicap for the company.Inconsistencies in supplies - quantity and quality - along with rising prices have impacted the company's performancethrough out. To overcome this, RINL is exploring a collaborative approach with State Mineral Development Corporationfor acquiring Iron Ore Mines through Joint Ventures in Jharkhand, Orissa and Karnataka.

Also the company is contemplating exploring the possibility of acquiring controlling stake in existing / new iron oremines outside the country.

To address the coking coal situation in the long term, International Coal Ventures Ltd. with a paid up equity ofRs 3500 Cr by SAIL, CIL, RINL, NTPC and NMDC has been incorporated, to acquire coking coal and thermal coalassets overseas.

An MoU has been entered with SAIL to explore Low Silica Limestone mines abroad. Joint Venture Agreement hasbeen signed between RINL & MOIL for setting up a Ferro Alloy plant in Bobbili near Visakhapatnam.

(iii) OutlookThe World Steel Association forecasts that worldwide apparent steel use is expected to decline by -14.9% to1,018.6 million tons (Mt) in 2009. However, steel demand is expected to stabilise in the latter part of 2009 leadingto a mild recovery in 2010. The current market turmoil has dented the growth curve of various industries in Indiasuch as automobile and construction, which, in turn, has hit the Indian steel industry hard. But with the government'splans to boost up the economy by injecting funds in various industries like infrastructure, construction, automobileand power, near future is expected to see a further growth in India. Easing of raw material prices will also have afavourable impact on the profitability.

D. SEGMENTWISE OR PRODUCTWISE PERFORMANCE:Details in respect of the above item have been covered in the Directors' Report which may kindly be referred to.


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E. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY :The company is having an efficient system of Internal controls for achieving the objectives of the company by ensuringefficiency in operations, protection of resources, accuracy and promptness in financial reporting and compliance withthe laid down policies and procedures alongwith relevant Laws and regulations.

In RINL, there is a separate Internal Audit department and the Internal Audit is a multi disciplinary function which isconducted by a team of experienced Charted Accountants, Cost Accountants, Engineers and other employees. TheInternal Audit reviews, evaluates and appraises the various systems, procedures and policies of the company suggestmeaningful and useful improvements alongwith corrective measures wherever required. It also brings out a systematicand disciplined approach for implementing the risk management initiative aimed at good Corporate Governance.

The Internal Audit is subject to overall control environment under the supervision of the Audit Committee constituted bythe Board to focus on transparency in the systems and internal control mechanisms. Annual Audit programmes aredrawn up covering critical areas of various departments in order to bring overall improvements in the company.

The internal control systems are commensurate with the size of the company and the reports containing significantAudit findings are submitted to the Audit Committee of the company and to the Board through the Audit Committee.

F. Discussion on Financial performance with respect to Operational performance :G. Material developments in Human Resources, Industrial Relations front including number of people

employed ;H. Environmental protection and conservation, Technological conservation, Renewable energy

developments, Foreign exchange conservation;I. Corporate Social Responsibility

Details in respect of the above items ie., F,G,H and I have been covered in the Directors' Report which may kindly bereferred to.


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23


24


25


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FINANCIAL HIGHLIGHTS2008-09 2007-08

A OPERATING RESULTS (Rs Crs)Turnover 10411 10433Gross Income 11387 11337Gross Expenditure 9271 8310Gross Profit 2116 3027Gross Profit (excluding Interest on Term Deposits) 1360 2336Profit before Tax 2027 2995Net Profit After Tax 1336 1943

B YEAR END FINANCIAL POSITION (Rs Crs)Share Capital 7827 7827Reserves and Surplus 4593 3654Capital Employed 8869 9935Capital Employed (excluding Term Deposits) 2286 2249Net Worth 12420 11481Gross Block 9006 8901Depreciation 7750 7516Net Block 1256 1385Inventory 3215 1761

C PROFITABILITY AND OTHER RATIOS(i) Percentage of

Gross Profit to Sales 20.3 29.0Net Profit to Sales 12.8 18.6Gross Profit to Net Worth 17.0 26.4Net Profit to Net Worth 10.8 16.9

Gross Profit(excluding Interest on Term Deposits) to Capital Employed (excluding Term Deposits) 59.5 103.9Net Profit to Capital Employed 15.1 19.6Gross Profit to Share Capital 27.0 38.7Inventory to Sales 30.9 16.9Sales to Capital Employed 117.4 105.0

(ii)Ratio ofCurrent Assets to Current Liabilities 2.8 3.6Quick Assets to Current Liabilities 2.0 3.1


27


28


2929


30


31

Annual Accounts for 2008-09Annual Accounts for 2008-09Annual Accounts for 2008-09Annual Accounts for 2008-09Annual Accounts for 2008-09

BALANCE SHEET AS AT 31st March 2009Rs Crs

Schedule As at As atNo. 31st March, 2009 31st March, 2008

SOURCES OF FUNDS

SHAREHOLDERS’ FUNDSShare Capital 1 7 827.32 7 827.32Reserves and Surplus 2 4 592.59 3 653.72

LOAN FUNDSSecured loans 3 907.72 332.78Unsecured loans 4 100.04 107.95

Deferred Tax Liability ( Net ) 124.49 163.12

Total 13 552.16 12 084.89

APPLICATION OF FUNDSFIXED ASSETSGross block 5 9 005.99 8 900.83Less: Depreciation 7 749.74 7 516.19Net block 1 256.25 1 384.64Held for disposal 6 0.05 0.04Capital work-in-progress 7 4 617.81 2 087.19

5 874.11 3 471.87INVESTMENTS 9 0.05 0.05CURRENT ASSETS, LOANS & ADVANCESInventories 10 3 215.28 1 761.15Sundry debtors 11 191.27 93.41Cash & Bank balances 12 6 624.17 7 699.11Other Current assets 13 258.91 292.43Loans & Advances 14 1 569.69 1 958.49

11 859.32 11 804.59

LESS: CURRENT LIABILITIES & PROVISIONSLiabilities 15 2 560.79 1 610.15Provisions 16 1 620.53 1 581.47

4 181.32 3 191.62

Net Current assets 7 678.00 8 612.97

Total 13 552.16 12 084.89Accounting Policies & Notes to Accounts 29Schedules 1 to 29 annexed form part of the Accounts

For and on behalf of Board of Directors As per our report of even dateFor RAO & KUMAR

Chartered Accountants

Sd/- Sd/- Sd/-(P.K.Bishnoi) (K.S. Shankar) (CA Anirban Pal)

Chairman-cum-Managing Director Director (Finance) PartnerM.No: 214919

Sd/-(P Mohan Rao)

Company Secretary

Place : New DelhiDate : 04 July 2009


32

INCOMEGross Sales 18 10 410.63 10 433.07Less: Excise duty recovered on sales 1 282.25 1 344.70Net Sales 9 128.38 9 088.37Internal consumption 114.10 88.46Interest earned 19 787.21 724.64Other revenue 20 75.02 91.27Total 10104.71 9 992.74

EXPENDITURERaw materials consumed 21 5 896.25 4 280.22Depletion / (Accretion) to Stock of Semi-finished/Finished goods 22 (916.65) (343.17)Employees’ remuneration & benefits 23 1 156.68 1 030.72Stores & spares consumed 501.23 364.06Power & fuel 24 340.31 258.81Repairs & maintenance 25 149.81 125.79Freight outward 286.53 306.96Other expenses & provisions 26 377.12 509.93Interest 27 88.14 31.57Depreciation 240.46 471.55Wealth tax 0.89 0.48

8 120.77 7 036.92Less: Inter account adjustments-raw material mining cost 38.06 39.15Net expenditure 8 082.71 6 997.77Profit for the year 2 022.00 2 994.97Prior period adjustments- Net credit 28 4.59 0.39Profit Before Tax 2 026.59 2 995.36Provision for Taxation Current Tax 746.38 1 188.13 Fringe Benefit Tax 4.66 4.43 Earlier years adjustments (21.39) (11.77) Deferred Tax (38.63) (128.17)Profit After Tax 1 335.57 1 942.74Balance of Profit brought forward from previous year 3 652.55 1 709.81Amount available for appropriation 4 988.12 3 652.55APPROPRIATIONSProposed Dividend 339.18 0.00Tax on Proposed Dividend 57.64 0.00Reserve for Redeeming Preference Share Capital 2937.47 0.00Balance carried to Balance Sheet 1653.83 3652.55Total appropriations 4988.12 3652.55Basic and Diluted Earnings Per Share (in Rupees) 273.13 397.30 (Face Value Rs. 1000 per share)Accounting Policies & Notes to Accounts 29Schedules 1 to 29 annexed form part of the accounts

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDING 31st March 2009Rs Crs

Schedule For the year ended For the year endedNo. 31st March, 2009 31st March, 2008

For and on behalf of Board of Directors As per our report of even dateFor RAO & KUMAR

Chartered Accountants

Sd/- Sd/- Sd/-(P.K.Bishnoi) (K.S. Shankar) (CA Anirban Pal)

Chairman-cum-Managing Director Director (Finance) PartnerM.No: 214919

Sd/-(P Mohan Rao)

Company Secretary

Place : New DelhiDate : 04 July 2009


33

SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31st March 2009Schedule 01 : Share Capital Rs Crs

As at As at31st March, 2009 31st March, 2008

AUTHORISED4,89,00,000 (Previous year 4,89,00,000) Equity Shares of Rs.1000 each 4890.00 4890.00

3,11,00,000 (Previous Year 3,11,00,000) Preference Shares of Rs.1000 each 3110.00 3110.00

Total 8000.00 8000.00ISSUED, SUBSCRIBED & PAID-UP4,88,98,462 (Previous year 4,88,98,462) Equity Shares of Rs.1000 each. 4889.85 4889.852,93,74,700 (Previous year 2,93,74,700) 7 % Non-Cumulative redeemable Preference

Shares of Rs.1000 each redeemable at par, as under 2937.47 2937.47

10,00,000 during 2011-12 55,00,000 during 2014-151,38,05,000 during 2012-13 30,00,000 during 2015-16 60,69,700 during 2013-14

The earliest date of redemption is 31st March, 2012.

Total 7827.32 7827.32

Of the above, 21,80,612 Equity Shares of Rs.1000 each were allottedas fully paid-up for consideration other than cash.

Schedule 02 : Reserves and Surplus Rs CrsAs at As at

31st March, 2009 31st March, 2008

Prime Minister’s Trophy Award FundAs per last Balance Sheet 1.17 1.07Additions 0.12 0.10

1.29 1.17Reserve for Redeeming Preference Share Capital 2937.47 0.00Surplus as per Profit and Loss Account 1653.83 3652.55

Total 4592.59 3653.72

Schedule 03 : Secured Loans Rs CrsAs at As at


Working Capital Borrowings from Banks (Secured by hypothecation of Current Assets) 334.19 332.78Loans from Banks against Term Deposits 573.53 0.00

Total 907.72 332.78

Schedule 04 : Unsecured Loans Rs CrsAs at As at


Short Term Loans from Banks 100.04 0.00Short Term Foreign currency facilities 0.00 107.95

Total 100.04 107.95


34

A. Plant, Mines & Others :Land-Freehold (Including cost of development) 41.44 35.69 0.97 76.16Land-Leasehold 1.65 1.65Railway Lines & sidings 48.03 48.03Roads, Bridges & Culverts 105.64 10.72 116.36Buildings 737.47 0.79 738.26Plant & Machinery 6983.38 36.15 7.37 7012.16Furniture & Fittings 16.13 1.69 0.01 17.81Locomotives 64.90 1.90 0.24 66.56Vehicles 11.45 1.72 0.41 12.76Electrical Installations 272.41 2.49 274.90Water Supply & Sewerage systems 252.43 0.18 252.61Miscellaneous Articles 89.96 12.11 0.04 102.03Mining lease rights 5.83 5.83Total (A) 8630.72 103.44 9.04 8725.12Figures for the previous year 8613.83 59.37 42.48 8630.72

B. Social Facilities :Land-Freehold ( Including cost of development) 10.30 0.79 9.51Roads, Bridges & Culverts 11.94 1.17 13.11Buildings 193.97 0.69 194.66Plant & Machinery 2.07 2.07Furniture & Fittings 0.62 0.04 0.66Electrical Installations 22.13 7.44 29.57Water Supply & Sewerage systems 19.14 19.14Miscellaneous Articles 9.94 2.25 0.04 12.15Total (B) 270.11 11.59 0.83 280.87Figures for the previous year 261.79 8.32 0.00 270.11

Total (A + B) 8900.83 115.03 9.87 9005.99Figures for the previous year 8875.62 67.69 42.48 8900.83

Schedule 05 : Fixed Assets Rs Crs Gross Block

As at 1st Additions & Sales & As at 31stApril, 2008 adjustments adjustments March, 2009


35

76.16 41.440.55 0.03 0.58 1.07 1.10

42.11 2.39 44.50 3.53 5.9217.41 1.92 19.33 97.03 88.23

404.51 24.14 428.65 309.61 332.966383.07 168.50 7.37 6544.20 467.96 600.31

11.14 0.96 0.01 12.09 5.72 4.9953.82 3.26 0.21 56.87 9.69 11.087.65 0.72 0.41 7.96 4.80 3.80

219.96 13.58 233.54 41.36 52.45211.26 12.35 223.61 29.00 41.1767.95 6.59 0.03 74.51 27.52 22.012.32 0.29 2.61 3.22 3.51

7421.75 234.73 8.03 7648.45 1076.67 1208.977002.31 461.94 42.50 7421.75 1208.97 1611.52

9.51 10.303.36 0.22 3.58 9.53 8.58

52.43 3.34 55.77 138.89 141.541.57 0.10 1.67 0.40 0.500.25 0.01 0.26 0.40 0.37

14.90 1.40 16.30 13.27 7.2315.40 0.96 16.36 2.78 3.746.53 0.83 0.01 7.35 4.80 3.41

94.44 6.86 0.01 101.29 179.58 175.6782.85 11.58 (-) 0.01 94.44 175.67 178.94

7516.19 241.59 8.04 7749.74 1256.25 1384.647085.16 473.52 42.49 7516.19 1384.64 1790.46

Schedule 05 : Fixed Assets (continued) Rs CrsDepreciation Net Block

As at 1st For the Year Sales & As at 31st As at 31st As at 1stApril, 2008 (incl. PPA) adjustments March, 2009 March, 2009 April, 2008


36

Current year 240.46 471.55Prior periods 0.32 1.50Total 240.78 473.05

Note :Allocation of Depreciation not included above and charged to:Expenditure During Construction 0.81 0.47

Schedule 06 : Assets Retired from active use and held for disposal Rs CrsAs at As at

31st March, 2009 31st March, 2008Value of Fixed Assets 4.29 4.28Less: Provision for loss 4.24 4.24Balance 0.05 0.04

Schedule 07 : Capital Work-In-Progress Rs CrsAs at As at

31st March, 2009 31st March, 2008Work-in Progress (Including Material issued to contractors) Coke Oven Battery-4 341.26 259.04 6.3 MT Expansion 3384.99 1197.50 Others 249.69 107.61

3975.94 1564.15 Less : Provision for Shortages 0.09 2.22 Provision for dropped SLTM Project 17.90 17.99 24.79 27.01

3957.95 1537.14

Advances to Contractors 526.69 478.14Advances to Government departments 6.57 4.32

533.26 482.46

Expenditure during construction awaiting allocation (Schedule : 08) 126.60 67.59

Total 4617.81 2087.19Advances : Unsecured & Considered good 533.26 482.46Advances : Unsecured & Considered doubtful 0.00 0.00

Schedule 08 : Expenditure During Construction Rs CrsAs at As at

31st March, 2009 31st March, 2008Opening Balance 67.59 36.05Expenditure during the year:

Employees Remuneration & Benefits 44.55 20.66Power & fuel 4.60 3.25Repairs & Maintenance 4.13 0.01Technical Consultancy 0.05 0.12Other Expenses & Provisions 7.17 8.35Interest 0.03 0.00Depreciation 0.81 0.47

61.34 32.86LessInterest Receipts 0.20 0.17Other Revenue 2.13 2.33 1.15 1.32

Total awaiting allocation carried to Schedule No: 07 126.60 67.59

ALLOCATION OF DEPRECIATION Rs CrsAs at As at



37

Schedule 09 : Investments (At Cost) Rs CrsAs at As at

31st March, 2009 31st March, 2008Trade - Quoted

* 1,82,927 Equity Shares of Rs.10/- each in Bisra Stone Lime Company Limited 0.00 0.00

Non-trade - Unquoted # 2,280 Equity Shares of Re.1/- each in Free Press House Limited 0.00 0.00 50,000 Equity Shares of Rs.10/- each in Steelscape Consultancy Private Limited 0.05 0.05

Total 0.05 0.05* Investments amounted to Rs.1000/-, hence rounded off to zero.# Investments amounted to Rs.2380/-, hence rounded off to zero and include one fully paid-up Equity Share of Rs.100/- each in Anakapalli Rural Electric Co-operative society Limited

Schedule 10 : Inventories (As taken and certified by the Management) Rs CrsAs at As at

31st March, 2009 31st March, 2008Semi Finished/ Finished goods 1688.31 718.67

Add: In-transit 20.05 73.041708.36 791.71

Raw materials 1161.29 608.36Add: In-transit/ Under inspection 150.47 227.00

1311.76 835.36Less: Provision for shortages 117.44 149.26

1194.32 686.10Stores & Spares 307.21 292.17

Add: In-transit/ Under inspection 45.69 33.35352.90 325.52

Less: Provision for obsolescence & Non-moving items 40.30 42.18312.60 283.34

Total 3215.28 1761.15

Schedule 11 : Sundry Debtors Rs CrsAs at As at

31st March, 2009 31st March, 2008Sundry debtors Debts over six months 21.04 21.94 Other debts 191.27 90.84

212.31 112.78 Less : Provision for doubtful debts 21.04 19.37Total—Unsecured & Considered good 191.27 93.41

Schedule 12 : Cash & Bank balances Rs CrsAs at As at

31st March, 2009 31st March, 2008Cash on hand 0.05 0.10Cheques on hand 36.77 1.99Remittances in-transit 0.00 0.64Current Accounts with Scheduled Banks 4.13 10.65Term deposits with Scheduled Banks 6583.22 7685.73Total 6624.17 7699.11


38

Interest accrued on loans to employees 4.32 2.55Interest accrued — others 260.71 295.90 Less: Provision for Non recoverable interest 6.24 254.47 6.24 289.66Other income accrued 0.12 0.22Total 258.91 292.43

Schedule 14 : Loans & Advances Rs CrsAs at As at

31st March, 2009 31st March, 2008Loans Employees 43.33 32.79 Others 240.00 240.00 Material issued on loan 0.00 283.33 1.10 273.89Advances & other recoverables(Recoverable in cash or in kind or for value to be received)Government departments 15.48 10.02 Less:Provision for doubtful advances 0.62 0.62

14.86 9.40Advance Income Tax & Fringe Benefit Tax 738.64 1153.74Contractors 18.09 8.16 Less:Provision for doubtful advances 0.54 0.54

17.55 7.62Suppliers 48.35 60.26 Less:Provision for doubtful advances 6.50 7.63

41.85 52.63Employees 25.55 28.36 Less:Provision for doubtful advances 0.16 25.39 0.16 28.20

Others 299.42 284.17 Less:Provision for doubtful advances/ recoverables 27.88 28.27

271.54 255.901109.83 1507.49

Prepaid expenses 1.66 0.41Claims recoverable 37.93 37.29 Less: Provision for doubtful claims 5.55 5.47

32.38 31.82Deposits 142.49 144.88Total 1569.69 1958.49

Particulars of Loans & AdvancesLoans Secured & Considered good 240.00 240.00 Unsecured & Considered good 43.33 33.89Advances Unsecured & Considered good 1109.83 1507.49Others Unsecured & Considered good 176.53 177.11

1569.69 1958.49Advances Unsecured & Considered doubtful 35.70 37.22Claims Unsecured & Considered doubtful 5.55 5.47

41.25 42.69Total 1610.94 2001.18

Amounts due from Directors 0.00 0.00Maximum amount due at any time during the year from Directors 0.00 0.00

Schedule 13 : Other Current Assets Rs CrsAs at As at



39

Schedule 15 : Liabilities Rs CrsAs at As at


Sundry creditors 1149.44 501.31Advances from customers 137.46 136.97Other advances 1.43 1.57Earnest money, security & other deposits 137.87 99.32Interest accrued but not due 0.14 4.89Other liabilities 1134.45 866.09Total 2560.79 1610.15

Particulars of Sundry CreditorsTotal outstanding dues of micro enterprisesand small enterprises 0.00 0.00Total outstanding dues of creditors other than microenterpries and small enterprises 1149.44 501.31Total 1149.44 501.31

Schedule 16 : Provisions for Rs Crs

As at As at31st March, 2009 31st March, 2008

Current Income Tax 746.38 1188.13Fringe Benefit Tax 4.66 4.43Wealth Tax 0.89 0.48Proposed Dividend 339.18 0.00Tax on proposed Dividend 57.64 0.00Gratuity to employees 34.55 45.07Future leave encashment 253.00 184.61Post-retirement Benefits 123.68 106.68Employee family Benefit Scheme 53.33 45.90Long Service Awards 5.11 4.40Mines Closure 2.11 1.77Total 1620.53 1581.47

Schedule 17 : Miscellaneous expenditure (To the extent not written-off or adjusted) Rs Crs

As at 1st Additions Charged off As at 31stApril, during the during the March2008 period period 2009

Deferred Revenue Expenditure 0.00 0.00 0.00 0.00Total 0.00 0.00 0.00 0.00Previous Year 14.95 0.00 14.95 0.00


40

Schedule 18 : Gross Sales Rs CrsCurrent Previous

Year Year

Domestic 10332.31 9878.34Export 78.32 554.73Total 10410.63 10433.07

Schedule 19 : Interest Earned Rs CrsCurrent Previous

Year Year

Loans to employees 2.17 1.08Banks 755.47 691.26Others 29.57 32.30Total 787.21 724.64

Schedule 20 : Other Revenues Rs CrsCurrent Previous

Year Year

Rent recoveries 3.36 2.80Profit on sale of fixed assets 0.47 0.50Provision no longer required written back 15.02 2.24Liquidated damages 10.83 8.08Claims for finished goods (Shortages & Missing Wagons) 1.89 2.81Export benefits 3.05 9.84Net income from other operations 0.84 0.62Exchange Rate Variation 0.00 18.75Sundry receipts 39.56 45.63Total 75.02 91.27

Schedule 21 : Raw Materials Consumed Quantity: TonnesValue : Rs Crs

Current Year Previous YearQuantity Value Quantity Value

Coal 3312835 3101.20 3306163 1715.10Coke and Coke breeze 201765 438.39 278472 331.32Iron Ore 5201536 1725.37 5889700 1500.80Iron Ore Pellets 0 0.00 142096 87.28Limestone 844907 110.46 829300 86.53Dolomite 662570 64.01 655078 59.80Silico Manganese 40681 276.10 40533 165.22Ferro Silicon 5162 27.44 5794 24.57Alluminium 3435 39.27 3463 41.01Manganese Ore 20215 2.10 5852 0.68Petroleum Coke 5353 12.08 6274 7.90Sea Water Magnesite 3156 9.35 2831 8.02Billets 19735 75.23 98668 233.61Others 15.25 18.38Total 5896.25 4280.22

SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNTFOR THE YEAR ENDED 31st March 2009


41

Schedule 22 : Depletion/(Accretion) to Stock of Semi-Finished / Finished goodsRs Crs

Current PreviousYear Year

Opening stock 791.71 448.54Less: Closing stock 1708.36 791.71Net Depletion/(Accretion) (916.65) (343.17)

Schedule 23 : Employees’ remuneration & benefits Rs CrsCurrent Previous

Year YearSalaries, wages & allowances 794.31 715.30Company’s contribution - provident fund & other funds 68.38 75.27Staff welfare expenses 209.74 129.39Gratuity 84.10 110.34Voluntary Retirement Benefits 0.15 0.42Total 1156.68 1030.72

Note:Expenditure on Employees’ remuneration & benefits not included above and charged to:

Expenditure During ConstructionSalaries, wages & allowances 38.86 15.89Company’s contribution - provident fund & other funds 2.39 1.75Staff welfare expenses 1.73 1.28Gratuity 1.56 1.74Total 44.54 20.66

Capital Work in ProgressSalaries, wages & allowances 1.78 1.69Company’s contribution - provident fund & other funds 0.02 0.19Staff welfare expenses 0.22 0.11Gratuity 0.12 0.20Total 2.14 2.19

Schedule 24 : Power & Fuel Rs CrsCurrent Previous

Year YearPurchased power 102.07 67.83Boiler coal 223.75 178.52Medium Coking Coal 11.77 11.56Furnace oil/ LSHS/ LDO 2.72 0.90Total 340.31 258.81Power & Fuel - Expansion 4.60 3.25

Schedule 25 : Repairs & Maintenance Rs CrsCurrent Previous

Year YearPlant & Machinery 75.59 71.11Buildings 18.58 10.85Others 55.64 43.83Total 149.81 125.79

Note:Repairs & maintenance not included above and charged to:Expenditure during constructionRepairs & maintenances - Plant & Machinery and others 4.13 0.01


42

Schedule 26 : Other Expenses & Provisions Rs CrsCurrent Previous

Year YearTechnical services 2.17 1.15Rent 3.72 3.26Rates & taxes 35.79 30.70Excise Duty (12.13) 111.42Export Duty 10.92 0.00Insurance 4.34 1.31Handling & scrap recovery 93.02 93.11Selling expenses 8.18 15.36Travelling expenses 42.35 42.26Printing & stationery 2.37 2.15Postage, telegrams & telephone 2.75 2.93Water charges 32.03 22.99Legal expenses 0.98 0.88Bank charges 1.62 2.16Community Development Welfare 0.48 0.23Donations

CSR Foundation 9.09 1.41Others 1.57 10.66 6.50 7.91

Security expenses 21.15 33.80Advertisement 15.53 16.13Demurrages & wharfages 3.32 1.45Exchange Rate Variation 52.66 0.00Remuneration to Auditors

Statutory Audit 0.05 0.05Tax matters 0.03 0.01Other Services 0.01 0.01Travelling & other expenses 0.13 0.22 0.13 0.20

ProvisionsShortage/damaged material/obsolescence/non-moving items of stores 3.04 26.61Doubtful advances and claims 3.12 21.05Doubtful debts 2.31 1.16Dropped SLTM Project 1.61 24.79Non Recoverable Interest 0.00 6.24Loss on Fixed Assets Retired from active use and held for disposal 0.00 10.08 0.02 79.87

Write-offsShortage/damaged material/obsolescence/non-moving items of stores 0.20 0.24Doubtful advances and claims 0.00 0.01Doubtful Debts 0.00 0.01Miscellaneous/Deferred revenue expenditure 0.00 0.20 14.95 15.21

Sundries 34.71 25.45Total 377.12 509.93Note :Expenditure on Other expenses & provisions not included above and charged to :Expenditure During Construction

Travelling Expenses 2.02 2.34Printing & Stationery 0.02 0.03Postage, telegrams & telephone 0.26 0.52Water Charges 2.63 1.69Advertisement 1.36 3.50Legal charges 0.00 0.01Bank Charges 0.14 0.25Sundries 0.74 0.01

Total 7.17 8.35Capital Work in Progress

Travelling Expenses 0.07 0.11Total 0.07 0.11


43

Schedule 27 : Interest Rs CrsCurrent Previous

Year YearInterest :

Foreign currency facilities 0.00 2.30Banks - Working capital borrowings and Loans 25.19 13.39 - Loans against Term Deposits 61.83 10.51

87.02 23.90Interest on Income Tax 0.14 4.89Others 0.98 0.48

Total 88.14 31.57

Note :Expenditure on Interest & finance charges not included above and charged to:Expenditure during constructionInterest - Banks 0.03 0.00

Schedule 28 : Prior Period Adjustments Rs CrsCurrent Previous

Year Year

Stores & spares 0.00 ....... (1.92) CRClaims for finished goods (0.15) CR 0.33 DRSale of products 0.00........ (0.80) CRRaw Materials (5.99) CR (2.18) CRDepreciation 0.32 DR 1.50 DROther Expenses 0.28 DR 3.67 DROther Revenue (2.98) CR (0.99) CRRepairs & Maintenance 3.93 DR 0.00 cTotal (4.59) CR (0.39) CR


44

Schedule 29: Accounting Policies & Notes to Accounts

A. SIGNIFICANT ACCOUNTING POLICIES

1.0 GENERAL

1.1 Financial Statements are prepared under the historical cost convention in accordance with fundamental accountingassumptions and Generally Accepted Accounting Principles (GAAP) in India.

2.0 FIXED ASSETS

2.1 Fixed assets are stated at historical cost less depreciation.

2.2 Contributions made by the company towards the cost of fixed assets owned by the State / Central Governmentare grouped together with similar assets owned by the company with appropriate disclosure thereof.

2.3 Expenditure attributable / relating to construction, to the extent not directly identifiable to any specific PlantUnit, 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 recognized during the year.


45

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 Rs.5000/- are fully depreciated in the year of capitalisation.

9.1.2 Depreciation on the following categories of assets is provided up to full value of the cost of asset on SLM overthe period 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 & VisualEquipment (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 lightvehicles (8 years); Computers [including system Software] (4 years); Coke Ovens & Coal Chemical Plant(15 years).

9.1.3 Contributions made by the company towards the cost of fixed assets owned by the State/ Central Governmentare depreciated over the estimated period of their utility or five years, whichever is less.

9.2 Mining lease rights are amortised over the period of lease.

10.0 BORROWING COSTS

10.1 Borrowing costs incurred for obtaining assets which take more than 12 months to get ready for its intendeduse are capitalised to the respective assets wherever the costs are directly attributable to such assets and inother cases by applying weighted average cost of borrowings to the expenditure on such assets.

10.2 Other borrowing costs are treated as expense for the year.

11.0 PRIOR PERIOD ADJUSTMENTS

11.1 Items of Income / Expenditure which arise in the current period as a result of errors or omissions in thepreparation of Financial Statements of one or more prior periods, exceeding Rs. 5,00,000/- in value, in eachcase are treated as prior period adjustments.


46

Schedule 29 Contd...

B. NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31st March, 2009

1.0 BALANCE SHEET

1.1 FIXED ASSETS

1.1.1 Land at a cost of Rs 72.75 Crs (Previous year Rs 39.99 Crs) is being held in the name of President of India.The Company is holding Power of Attorney issued by Govt. of India for utilisation of the land acquired for theProject and related purposes incidental thereto.

1.1.2 Land includes 358.0571 acres (Previous year 358.0571 acres) allotted to various agencies on lease basis.

1.1.3 Sale deeds in respect of the following assets are yet to be executed:

a) Stockyard at Chennai Rs. 2.37 Crs (Previous Year Rs. 2.37 Crs)

b) Office buildings at New Delhi Rs. 1.19 Crs (Previous Year Rs. 1.19 Crs)

c) Office buildings at Ahmedabad Rs. 0.18 Crs (Previous Year Rs. 0.18 Crs)

d) Residential buildings at Kolkata Rs. 0.95 Crs (Previous Year Rs. 0.95 Cr)

e) Stockyard at Hyderabad Rs. 1.00 Crs (Previous Year Rs. NIL)

1.1.4 a) Fixed assets (Gross Block) include assets costing Rs.10.05 Crs (Previous year Rs.10.05 Crs) notowned by the Company which were depreciated in full as per the accounting policy 9.1.3.

b) Fixed Assets include Rs. 0.39 Crs (Debit) [ Previous year Rs.0.39 Crs (Debit) ] representing Net ExchangeRate Variation for the year in respect of foreign currency liabilities with regard to acquisition of fixed assetsprior to 1st April 2004.

1.1.5 Main plant units, including Mills, constitute "Continuous process plant".

1.1.6 Borrowing costs included in Capital Work in Progress (Schedule - 07) during the yearRs. 0.03 Crs (Previous year Rs.nil Crs) .

1.2 INVESTMENTS

1.2.1 Investments shown specifically as such represent permanent investments and investments in term depositsincluded in Current Assets are reckoned as Current Investments.

1.2.2 Interest amounting to Rs.755.47 Crs (Previous Year Rs.691.26 Crs) on Current Investments representingTerm Deposits with banks is shown under 'Interest earned' in Profit & Loss Account.

1.3 CURRENT ASSETS, LOANS & ADVANCES

1.3.1 INVENTORIES

1.3.1.1 Quantities of Closing Stock of finished / semi-finished goods have been adopted as per physical verificationexcept in the case of Calcined Lime, Liquid Oxygen, Liquid Nitrogen, Argon gas, Oxygen gas, Nitrogen gas,Magnesite Bricks, Calcium Carbide Sludge, Coke Sludge, Coke Dust and Stocks of Calcined Lime at openyard amounting to Rs. 8.13 Crs (Previous Year Rs. 44.02 Crs) which are as per book balances.


47

1.3.1.2 Stocks & Sales

Quantity in TonnesValue Rupees Crores

Pig Iron Blooms Saleable Sundries TotalSteel Coke & Coke Others

ProductsOpening stock Quantity 65052 81864 155456 135365 310080 --

(8449) (46074) (100806) (116550) (307610) --Value 97.31 133.18 349.64 80.49 131.09 791.71

(10.01) (75.29) (192.50) (71.75) (98.99) (448.54)

Sales Quantity 245673 94495 2503337 -- 1668893 --(411589) (71902) (2864212) -- (1716014) --

Value 614.28 253.54 9226.38 -- 316.43 10410.63(722.38) (190.46) (9246.17) -- (274.06) (10433.07)

Closing stock Quantity 125267 182790 233181 259190 328018 --(65052) (81864) (155456) (135365) (310080) --

Value 179.13 425.89 637.57 288.18 177.59 1708.36(97.31) (133.18) (349.64) (80.49) (131.09) (791.71)

Note:(i) Figures in brackets are for previous year.(ii) Closing stock includes 84809.251 tonnes (Previous year 33064 tonnes) in the custody of Consignment/

Handling Agents.(iii) Figures of closing stock are after adjustment for internal consumption, transfers to capital works,

shortage / excesses.(iv) Others include By-products, Sale of Power and Iron & Steel Scrap.

1.3.1.3 In line with industry practice, no credit is taken for the value of material in process except those lying atmills.

1.3.1.4 No credit is taken in the accounts for the stock of run of mines ore and rejects at Mines.

1.3.1.5 Since the Coke Breeze used for internal consumption, the same has been valued at 60% of the productioncost of BF coke.

1.3.1.6 Coke and other By products are valued at net realisable value, wherever cost is not determinable and atcost, where net realisable value is not available, except in the case of Stock of BF Granulated slag at dumpyard for which no value is assigned.

1.3.1.7 The stock of iron scrap and steel scrap has been considered in the accounts on the basis of visualsurvey / estimates and are valued at 75% and 90% respectively, at lower of the cost of Pig Iron and of thedomestic net realisable value of Pig Iron.

1.3.2 CASH AND BANK BALANCES1.3.2.1 Term Deposits with scheduled banks disclosed under Cash and Bank balances (Schedule - 12) includes:

a) Term Deposits Receipts of value of Rs.1290 Crs. (Previous Year NIL) pledged with bankers as securityagainst Loans availed by the company.

b) Term Deposits Receipts of value of Rs.3.65 Crs. (Previous Year NIL) pledged with bankers as securityto fecilitate credit facilities by a supplier.


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1.3.3 LOANS & ADVANCES1.3.3.1 Housing / Vehicle Loans to employees are reckoned as unsecured and considered good.

1.3.3.2 Loans and advances, Sundry Debtors / Creditors, Stock with Contractors / Others are subject toreconciliation/ confirmation.

1.4 CURRENT LIABILITIES & PROVISIONS1.4.1 Information relating to 'Supplier' under the provisions of Micro,Small and Medium Enterprise Development

Act, 2006

Particulars Amount (Rs Crs)2008-09 2007-08

i) The amounts due thereon remaining unpaid to anysupplier as at the end of the yearPrincipal - Nil NilInterest - Nil Nil

ii) Payments made beyond the appointed day and interestthereon during the year - Nil Nil

iii) The amount of interest due and payable for the period ofdelay in making payments but with out adding theinterest specified in the Act. - Nil Nil

iv) The amount of interest accrued and remaining unpaid atthe end of the year - Nil Nil

v) The amount of further interest remaining due and payable in the suceeding year until the date such interest is actually paid - Not Applicable Not Applicable

1.4.2 Other liabilities (Schedule - 15) include net liability (adjusted for adhoc advance of Rs 68.57 Crs Paidduring the year 2007-08) of Rs 342.81 Crs (Previous Year Rs. 123.71 Crs) towards provision on account ofpay revision effective from 01.01.2007 to the Employees.

1.4.3 Disclosures of provisions required by Accounting Standard (AS) 29 ' Provisions, Contingent Liabilities andContingent Assets':

Rs CrsParticulars Opening Balance as Additions during Utilised during Closing Balance

on 01.04.2008 the year the year as on 31.03.2009

Provision for Mines 1.77 0.34 0.00 2.11Closure Expenditure

1.5 CONTINGENT LIABILITIES1.5.1 Claims against the company not acknowledged as debts:

Rs.Crs Particulars As at 31st As at 31st

March, 2009 March, 2008Contractors / Suppliers / Customers 545.54 431.94Local Authorities - State Govt. 9.17 9.14Sales Tax matters 914.87 1005.95Income Tax 0.00 12.06Customs / Excise duty 68.81 31.35R & D Cess 3.38 13.18Others 0.49 1.73

1.5.2 Estimated amount of contracts remaining to be executed on capital account and not provided for (net ofadvances) Rs. 7412.47 Crs (Previous Year Rs 7640.13 Crs).


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1.5.3 Claims in Courts in connection with Land Acquisition - Amount not ascertainable.

1.5.4 Liability towards reimbursement of excise duty on structural workswherever applicable. - Amount not ascertainable.

1.5.5 Amounts paid towards disputed demands included under "Advance recoverable" for which no liability hasbeen set up.

Rs.Crs Particulars As at 31st As at 31st

March, 2009 March, 2008

Income Tax 91.96 53.48Income Tax on foreign suppliers & TDS 23.85 23.85Sales Tax 86.93 91.95Excise Duty 0.00 0.58Customs Duty 5.87 3.84Railways 0.71 0.00

2.0 PROFIT & LOSS ACCOUNT2.1.1 Power and fuel does not include the cost of generation of power and production of certain fuel elements in

the plant which are internally consumed. The related expenses have been included under the primaryheads of account.

2.1.2 Earning Per Share (EPS)2008-09 2007-08

i) Net Profit (Rs Crs) 1335.57 1942.74

ii) Weighted average number of Equity (No.of shares) 48898462 48898462Shares outstanding during the year

iii) Face value per share (Rupees) 1000 1000

iv) Basic and diluted EPS (Rupees) 273.13 397.30

2.1.3 The petition filed before Honourable Supreme Court, against the ruling of Honourable Authority for AdvanceRuling, on the subject of Income Tax (MAT) liability under Section 115 JB of Income Tax Act, 1961, amountingto Rs.109.63 Crs which was provided during the year 2006-07, is not withdrawn with a veiw to approachCommittee on Disputes again for their clearance in case of any developments on the subject.

2.1.4 In compliance with Accounting Standard (AS) 22 on 'Accounting for Taxes on Income' the Net Deferred taxliability of Rs. 124.49 Crs (Previous Year Rs.163.12 Crs) has been provided during the current year.Components of Deferred Tax Liabilities and Deferred Tax Assets are as under:

Rs. Crs

Particulars As at 31st As at 31stMarch, 2009 March, 2008

Deferred Tax LiabilitiesDifference between book and tax depreciation 174.94 219.68

Sub-Total (A) 174.94 219.68

Deferred Tax AssetsProvision for Gratuity 11.74 15.32Provision for Doubtful Debts, Advances,Claims,Interest 23.29 23.20Other Deferred Tax Assets 15.42 18.04

Sub-Total (B) 50.45 56.56Net Deferred tax Liability (A) - (B) 124.49 163.12


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2.1.5 As per section 441A of the Companies Act 1956, cess on turnover is leviable. Government of India has notyet framed any rules / guidelines in this regard and hence no amount has been provided and / or paid.

2.1.6 Value of raw materials and stores & spares consumed

2008-09 2007-08Raw Materials Stores & Spares Raw Materials Stores & Spares

Rs Crs % Rs Crs % Rs Crs % Rs Crs %

(a) Indigenous 2647.62 44.90 430.92 85.97 2468.17 57.66 320.05 87.91(b) Imported 3248.63 55.10 70.31 14.03 1812.05 42.34 44.01 12.09

Total 5896.25 100.00 501.23 100.00 4280.22 100.00 364.06 100.00

2.1.7 Excise Duty of Rs. 12.13 Crs (Credit) [Previous year Rs. 111.42 Crs (Debit)] disclosed in Other Expenses& provisions (Schedule - 26) comprises of Excise Duty provided on Accretion / Depletion of Inventories ofSemi / Finished Goods, Excise Duty recovered on sale of Obsolete Stores & Spares scrap and OtherExcise duty payments / adjustments etc.

Rs.Crs.2008-09 2007-08

2.1.8 Expenditure in foreign currency(a) Technical consultation fee / know-how 0.58 0.72(b) Interest 0.00 6.91(c) Others 1.55 3.65

2.1.9 Earnings in foreign exchange(a) Export of goods (on FOB basis) 78.32 555.47(b) Others 0.23 0.62

2.1.10 Value of imports during the year calculated on CIF basis(a) Spares 101.05 65.66(b) Raw materials 3552.86 1812.78(c) Capital Goods 356.64 0.00

2.1.11 Particulars of Directors' remuneration(a) Salaries & allowances * 0.44 0.42(b) Company's contribution to provident fund * 0.05 0.03(c) Leave travel concession 0.02 0.01(d) Gratuity 0.04 0.04Total 0.55 0.50 * includes arrears of Rs.0 .04 Crs ( Previous year Rs.0.09 Cr).

2.1.12 Expenditure on public relations(a) Employees' remuneration & benefits 1.35 1.25(b) Expenditure on institutional publicity 2.19 4.25Total 3.54 5.50

2.1.13 Employee Benefits

2.1.13.1 An amount of Rs. 5.94 Crs (Previous Year Rs 5.22 Crs) recognised in the Profit and Loss Account andRs 0.22 Crs (Previous Year Rs 0.37 Crs) in Capital Work in Progress towards Superannuation BenefitScheme (Post Employment Benefit - Defined Contribution Plan)


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2.1.13.2 General Description of the Post Employment Benefits-Defined Benefit Plans

Provident Fund - Company pays fixed contribution to Provident Fund, at predeterminedrates, to a separate trust, which invests the Funds in permittedsecurities. On Contributions, the trust is required to pay a minimumrate of interest, to the members, as specified by Govt. of India. Theobligation of the Company is limited to the shortfall in the rate ofinterest on the Contribution based on its return on investments ascompared to the declared rate.

Gratuity - Payable to employees, who render continuous service of 5 years ormore, on separation, at 15 days of last drawn pay for each completedyear of service.

Compensated Absences - The accumulated earned leave and half pay leave is payable onseparation, subject to maximum permissible limit. During the serviceperiod, encashment of accumulated earned leave is also allowedupto 30 days once in a calander year .

Post Retirement Medical Benefits - Available to retired employees at Company's hospital and / or underthe Health Insurance Policy.

Retirement Settlement Benefits - The retired employees, their dependents, as also the dependents ofthe employees expired while in service are entitled for travel andtransport expenses to their place of permanent residence. At thetime of retirement, employees will be given 10 Gms. of gold.

Employee Family Benefit Scheme - Monthly payments, till the notional date of superannuation, toemployees separated upon disablement / legal heirs of deceasedemployees at their option who fulfill the criteria of prescribed amountof deposit.

Long Service Award - The employees who completes 25 years of service, will be given150 Gms of silver coin.

2.1.13.3 Reconciliation of present value of defined benefit obligations.Rs.Crs.

Particulars Gratuity Compensated Retirement Retirement Long EmployeeAbsences Medical Settlement Service Family

Benefits Benefits Award Benefit Scheme

Obligation as at the 314.44 184.61 83.59 23.08 4.40 45.90beginning (188.47) (107.46) (46.43) (21.62) (4.08) (40.56) of the periodService Cost 22.11 20.54 3.56 0.93 0.22 7.56

(17.11) (10.65) (5.27) (23.05) (4.40) (0.66)

Interest Cost 24.98 13.72 6.66 1.84 0.35 3.41(15.08) (8.60) (3.71) (1.73) (0.32) (3.24)

Actuarial gains 70.80 60.45 3.59 1.25 0.14 3.08(-) / losses (+) (97.59) (76.90) (28.48) (-23.11) (-4.40) (7.29)

Benefits paid -4.33 -26.32 -0.56 -0.26 0.00 -6.62(-3.81) (-19.00) (-0.30) (-0.21) (0.00) (-5.85)

Obligations as at 428.00 253.00 96.84 26.84 5.11 53.33the end of the (314.44) (184.61) (83.59) (23.08) (4.40) (45.90)periodNote : Figures in the brackets are for previous year


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2.1.13.4 Against present value of gratuity obligation as at 31st March 2009 of Rs. 428.00 Crs (Previous Year Rs 314.44Crs) , Company has funded a sum of Rs 393.45 Crs (Previous Year Rs 269.37 Crs) through a separate GratuityFund which are covered by the Trust's Plan Assets for equal amount. The other defined benefit obligations areunfunded.

2.1.13.5 Reconciliation of fair value of Plan Assets Rs.Crs. Particulars Gratuity

2008-09 2007-08Balance as at the opening of the period 269.37 190.71Expected Return 28.38 15.26Actuarial gains (+) / losses (-) 3.73 0.00Contributions by the Employer 96.30 67.21Benefits paid -4.33 -3.81Balance as at the end of the period 393.45 269.37

2.1.13.6 Reconciliation of Present Value of Defined Benefit Obligation and Fair value of Plan AssetsRs.Crs.

Particulars Gratuity2008-09 2007-08

Fair Value of Plan Assets 393.45 269.37Present Value of Defined Benefit Obligation 428.00 314.44Amount recognised in Balance Sheet (Schedule - 16)as at the end of the period 34.55 45.07

2.1.13.7 Expenses recognised in the statement of Profit and Loss Account. Rs.Crs.

Compensated Retirement Retirement Long EmployeeParticulars Gratuity Absences Medical Settlement Service Family Benefit

Benefits Benefits Award SchemeService Cost 22.11 20.54 3.56 0.93 0.22 7.56

(17.11) (10.65) (5.27) (23.05) (4.40) (0.66)Interest Cost 24.98 13.72 6.66 1.84 0.35 3.41

(15.08) (8.60) (3.71) (1.73) (0.32) (3.24)Actuarial gains (+) / 67.07 60.45 3.59 1.25 0.14 3.08losses (-) (97.59) (76.88) (28.48) (-23.11) (-4.40) (7.29)Expected Return -28.38 0.00 0.00 0.00 0.00 0.00on Plan Assets (-15.26) 0.00 0.00 0.00 0.00 0.00Accounting Estimate 0.00 0.00 0.00 0.00 0.00 0.00Change on Openingobligation (-2.24) (7.59) (-0.01) (-0.73) (0.00) (10.60)Total to be charged -EmployeesRemuneration 85.78 94.71 13.81 4.02 0.71 14.05& Benefits (112.28) (103.72) (37.45) (0.94) (0.32) (21.79)Amount charged to : Profit & Loss Account 84.10 92.64 13.39 3.71 0.70 14.05 (Schedule - 23) (110.34) (102.02) (36.87) (0.02) (0.32) (21.54)

Expenditure 1.56 1.92 0.24 0.07 0.01 0.00During Construction (1.74) (1.52) (0.52) (0.00) (0.00) (0.22)Capital Work in Progress 0.12 0.15 0.18 0.24 0.00 0.00

(0.20) (0.18) (0.06) (0.00) (0.00) (0.03)

Note: Figures in the brackets are for previous year.


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2.1.13.8 Effect of one percentage point change in the assumed inflation rate in case of valuation of benefits underpost retirement medical benefit scheme

Rs. Crs.Effect of one percentage Effect of one percentage

Particulars point increase in medical point decrease in medicalcost trend rate cost trend rate

2008-2009 2007-2008 2008-2009 2007-2008On aggregate service and interest costof post retirement medical benefits 0.17 1.77 (0.16) (1.41)On present value of defined benefitobligations as at end of the period 4.86 19.80 (4.84) (15.61)

2.1.13.9 Actuarial assumptions

Description As at 31st March 2009 As at 31st March 2008Discount Rate (per annum) 7% 8%Mortality rate LIC(1994-96) duly modified LIC (1994-96) duly modifiedWithdrawal rates (per annum) Upto 30 years of age 3%; Upto 30 years of age 3%;

Upto 44 years of age 2%; Upto 44 years of age 2%;Above 44 years of age 1%. Above 44 years of age 1%.

The estimate of future salary increases considered in actuarial valuation takes into account inflationrate, seniority, promotion and other relevant factors on long term basis.

3.0 GENERAL

3.1.1 The Company's business is construed as one business segment which comprises of mainly production ofSteel products, whose associated risks and returns are predominantly the same. Further, the Companyhas no geographical segments which are subject to different risks and returns. Hence no separate disclosurein terms of Accounting Standard (AS) 17 on 'Segment Reporting' is considered necessary.

3.1.2 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', arenot considered necessary.

3.1.3 The entire plant is considered as a Cash Generating Unit. As Recoverable amount of the Cash GeneratingUnit, being its value in use, is in excess of its carrying amount, there is no impairment loss in terms of theAccounting Standard (AS) 28 'Impairment of assets'.

3.1.4 Licensed capacity*, installed capacity & actual production(Tonnes in '000s)

2008-09 2007-08 Product Installed Actual Installed Actual

Capacity Production Capacity Production

(a) Wire Rods 850 972 850 998(b) Light&Medium Merchant Products-Bar Mill 710 825 710 859(c) Saleable Billets 246 75 246 102(d) Medium Merchant Structural Mill 850 748 850 1015

Total 2656 2620 2656 2974(e) Pig Iron 556 322 556 495(f) Granulated Slag 1440 1381 1440 1424(g) Coke ovens By-products 186 140 186 148

Note: * Licensed capacity not applicable in terms of Government of India notification No. S.O.477(E),dated 25th July, 1991.

3.1.5 Previous year's figures have been regrouped and reclassified wherever necessary.


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4.0 CASH FLOW STATEMENTRs Crs

2008-09 2007-08A. Cash flow from Operating activities

Net Profit before interest & tax 1327.53 2302.29Adjustments for:

Add : Depreciation ( including Prior Period Depreciation ) 240.78 473.05Add : Miscellaneous / Deferred revenue expenditure written off 0.00 14.95Less : Adjustments on accounts of discard / removal of assets 15.27 -0.46Less : Profit on sale of fixed assets 0.47 0.50

Operating Profit 1552.57 2790.25Adjustments for

Less: Inventories 1454.89 557.91Sundry debtors 97.86 -123.39Other Current assets -0.10 0.06Loans & Advances 26.30 212.04Liabilities -955.39 -612.14Provisions -62.38 -98.24

Cash generated from operating activities 991.39 2854.01Less: Income Tax paid including Fringe Benefit Tax 716.04 1017.96

Net cash from operating activities 275.35 1836.05

B. Cash flow to Investing activity

Increase in fixed assets ( including Capital Work-in-progress) 2645.65 1557.69Investments 0.00 0.00Less: Sale proceeds of Fixed Assets 0.47 0.54Less: Interest received 820.63 746.75Net cash used in Investing activity 1824.55 810.40

C. Cash flow to Financing Activity

Repayment of Secured loans -574.94 271.67Repayment of Unsecured loans 7.91 204.56Prime Minister's Trophy Award Fund -0.12 -0.10Interest and Finance charges 92.89 45.09Net cash used in financing activity -474.26 521.22

Net increase/decrease(-) in Cash & Cash equivalents (A-B-C) -1074.94 504.43

Opening Balance of Cash & Cash equivalents 7699.11 7194.68Closing Balance of Cash & Cash equivalents 6624.17 7699.11(Represented by Cash & Bank Balances - Schedule 12 )


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5.0 Balance Sheet Abstract and Company’s General Business Profile I. Registration Details

CIN U 2 7 1 0 9 A P 1 9 8 2 G O I 0 0 3 4 0 4

Registration No. 0 0 3 4 0 4 State Code 0 1

Balance Sheet Date 3 1 0 3 2 0 0 9

Date Month Year

II. Capital raised during the year (Amount in Rs. Lakhs)

N I L N I L

N I L N I L

III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Lakhs)

1 7 7 3 3 4 8 1 7 7 3 3 4 8

Sources of FundsPaid-up Capital

7 8 2 7 3 2 4 5 9 2 5 9

Secured Loans

9 0 7 7 2 1 0 0 0 4

Application of FundsNet Fixed Assets

5 8 7 4 1 1 5

Net Current Assets

7 6 7 8 0 0 -

Accumulated Loss

N I L

IV. Performance of Company (Amount in Rs. Lakhs)

Turnover Total Expenditure

1 0 1 0 4 7 1 8 0 7 8 1 2

Profit / Loss Before Tax Profit / Loss After Tax

2 0 2 6 5 9 1 3 3 5 5 7

Earnings per Share in Rs. Dividend (%)

2 7 3 Equity:2.73; Preference: 7.00

V. Generic Names of Three principal Products/Services of Company(As per Monetary Terms)

Item Code No. (ITC Code) 7 2 1 3 9 1 0 9

Product Description W I R E R O D


Product Description P I G I R O N


Product Description R E B A R S

Public Issue Rights Issue

Bonus Issue Private Placement

Total Liabilities Total Assets

Reserves & Surplus

Unsercured Loans

Investments

Miscellaneous Expenditure


56

RAO & KUMARCHARTERED ACCOUNTANTS

10-50-19/4, 'SOUDAMANI' Siripuram, Viskhapatnam - 530 003.E-Mail : [email protected] Ph. : 0891-2755327W.Site : raoandkumar.org Fax : 0891-2738554

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 31stMarch 2009, and also the Profit and Loss account and the Cash Flow Statement for the yearended on that date annexed thereto. These financial statements are the responsibility of theCompany's management. Our responsibility is to express an opinion on these financial statementsbased 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 assuranceabout whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's report) Order, 2003, issued by the Central Governmentof India in terms of Sub-section (4A) of Section 227 of the Companies Act, 1956, and on thebasis of such checks as we consider appropriate and according to the information and explanationsgiven to us, we enclose in the annexure a statement on the matters specified in paragraph 4 and5 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 ourknowledge 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 companyso far as appears from our examination of those books and proper returns adequate forthe 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 bythis report are in agreement with the books of account and with the returns from thebranches;

..continued..2..


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..Page..2..

(d) In our opinion, the Balance sheet, Profit and Loss Account and Cash Flow Statement dealt withby this report, read together with note 1.3.1 in Schedule 29 to Accounts, comply with accountingstandards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

(e) The provisions of section 274(1 )(g) are inapplicable to Government companies videNotification No. G.S.R. 829 (E) dated 21-10-2003 as declared by the Central Government;

(f) With regard to the Cess payable under section 441 A, the company, vide note 2.1.5 in Schedule29 to the Accounts, had neither provided nor paid any amount, as the Government of India hadnot framed any rules/guidelines in this regard.

(g) In our opinion and to the best of our information and according to the explanations given to us,the said accounts, subject to and read together with the Significant Accounting Policiesand Notes forming part of accounts given by way of Schedule 29 to theAccounts, give the information required by the Companies Act, 1956, in the manner sorequired and give a true and fair view inconformity with the accounting principles generallyaccepted in India;

(i.) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March2009;

(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.

For Rao & Kumar

CA Anirban Pal Partner

Place : New Delhi Chartered AccountantsDate : 04/07/2009 Membership Number: 214919


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ANNEXURE TO AUDITORS' REPORTReferred to in paragraph 3 of our Report of even date

1. Fixed Assets

(a) The Company has maintained proper records showing full particulars including quantitative detailsof fixed assets, except for historical cost figures in certain cases.

(b) All assets have not been physically verified by the management during the year but there is aregular programme of verification which in our opinion is reasonable having regard to the size ofthe company and the nature of its assets. No material discrepancies were noticed on suchverification.

(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 stockswith custodians referred to in Note No. 1.3.1.1 of the Notes to Accounts, which are adoptedbased on the book value amounting to Rs. 8.13 crores (previous year Rs.44.02 crores) out of thetotal reported stock of Rs. 3215.28 crores (previous year Rs. 1761.15 crores). In respect ofstores and spares, company has a regular programme of verification in a phased manner, whichin 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 are reasonableand adequate in relation to the size of the company and the nature of its business.

(c) The Company is maintaining proper records of inventory. We are informed that no materialdiscrepancies have been noticed on physical verification.

3. Loans and Advances to parties covered in register maintained under section 301 of the Act

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. In view ofthis clauses (b), (c) and (d) of paragraph 4(iii) are inapplicable.

...Caro Report continued..2..


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..Caro Report Page..2..

4. Internal Control Procedure

In our opinion and according to the information and explanations given to us, having regard to theexplanation that some of the items purchased are of special nature and suitable alternative sources donot exist for obtaining compatible quotations, there are adequate internal control procedurescommensurate with the size of the company and the nature of its business with regards to purchase ofinventory, fixed assets and with regard to the sale of goods.

5. Transactions to be entered into Register maintained under Section 301 of the Act

According to the information and explanations given to us, there are no transactions that need to beentered into the register maintained under section 301 of the Companies Act, 1956. As there are nosuch transactions, clause (b) of paragraph 4(v) is inapplicable.

6. Acceptance of Deposits from Public

The Company had not accepted any deposits from the public. As such, the directives issued by theReserve Bank of India and the provisions of Section 58A & 58AA of the Act and the rules framed thereunder are inapplicable.

7. Internal Audit System

In our opinion, the company has an Internal Audit system commensurate with the size and nature of itsbusiness.

8. Maintenance of Cost Records

We have broadly reviewed the books of accounts maintained by the company pursuant to the rulesmade by the Central Government for the maintenance of Cost Records under Section 209(1 )(d) of theCompanies Act, 1956 and we are of the opinion that prima-facie the prescribed accounts and recordshave been made and maintained in respect of the applicable products. With respect to Power Generation,Government of India notified Cost Audit for the year under audit. We are informed that compilation in theformats under Cost Accounting Records is in progress. As such we could not verify the relevant records.We have however not made a detailed examination of the records with a view to determine whether theyare accurate and complete.

................Caro Report continued..3..


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9. Payments and remittances to Statutory Authorities

(a) According to the records of the Company, the company has been regular in depositing withappropriate authorities, undisputed statutory dues including Provident Fund, Income Tax, SalesTax, Wealth Tax, Customs Duty, Excise Duty, Cess and other material Statutory dues applicableto it.

(b) According to the information and explanations given to us, no undisputed amounts payable inrespect of Income Tax, Wealth Tax. Sales Tax, Customs Duty, Excise Duty and Cess were inarrears as at 31st March 2009, for a period of more than six months from the date they becamepayable.

(c) According to the explanations given to us, Company is not required to make any contributionunder the Employees' State Insurance Act.

(d) According to the information and explanations given to us, as at the end of the financial year thedisputed dues of Income Tax, Sales Tax, Customs Duty, Excise Duty and Cess which have notbeen deposited is as follows :




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10. Accumulated Losses

The Company did not have any accumulated loss at the end of the financial year. The Company has not incurredcash losses in this financial year covered by our audit and in the immediately preceding financial year.

1 1. 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 itsdues to any Financial Institution or Bank during the year.

12. Loan and Advances on the basis of security by way of pledge of Shares etc.

In our opinion and according to the information and explanations given to us, the Company has not granted anyloans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. Chit Fund or Nidhi / Mutual Benefit Fund/ Society

In our opinion, the Company is not a chit fund or a nidhi /mutual benefit fund / society. Therefore, the provisionsof clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 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 clause 4(xiv) of the Companies (Auditor's Report) Order. 2003 are not applicableto the Company.

15. Guarantee for Loan taken by others

Except for pledge of Term Deposits of Rs. 3.65 crores (Previous year Nil) as security against credit facilitiesextended by a banker to a supplier as detailed in note 1.3.2.1 (b) of Schedule 29, we are informed that thecompany 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 had not availed any termloan, within the meaning of the paragraph 4(xvi).

...Caro Report continued..5..




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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 ofthe Company, we report that no funds raised on short-term basis have been used for long-term investment andvice versa.

18. Preferential Allotment of Shares

According to the information and explanations given to us, the company has not made any preferential allotmentof shares to parties and companies covered in the register maintained under Section 301 of the Act, during theyear.

19. Issue of Debentures

According to the information and explanations given to us, the Company had not issued debentures during theyear.

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 issuesduring the year.

21. Frauds

According to the information and explanations given to us, no fraud on or by the Company has been noticed orreported during the course of our audit.

For Rao & Kumar

CA Anirban Pal Partner

Place : New Delhi Chartered AccountantsDate : 04/07/2009 Membership Number: 214919


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COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIAUNDER SECTION 619(4) OF THE COMPANIES ACT, 1956 ON THE ACCOUNTSOF RASHTRIYA ISPAT NIGAM LIMITED, VISAKHAPATNAM FOR THE YEARENDED 31 MARCH 2009

The preparation of financial statements of Rashtriya Ispat Nigam Limited, Visakhapatnamfor the year ended 31 March 2009 in accordance with the financial reporting frameworkprescribed under the Companies Act, 1956 is the responsibility of the management ofthe Company. The statutory auditor appointed by the Comptroller and Auditor General ofIndia under Section 619(2) of the Companies Act 1956 is responsible for expressingopinion on these financial statements under Section 227 of the Companies Act 1956based on the independent audit in accordance with the auditing and assurance standardsprescribed by their professional body, the Institute of Chartered Accountants of India.This is stated to have been done by them vide their Audit Report dated 4 July 2009.

I on the behalf of the Comptroller and Auditor General of India have conducted asupplementary audit under Section 619(3) (b) of the Companies Act, 1956 of the financialstatements of Rashtriya Ispat Nigam Limited, Visakhapatnam for the year ended31 March 2009. This supplementary audit has been carried out independently and islimited primarily to enquiries of the statutory auditor and Company personnel and aselective examination of some of the accounting records. On the basis of my audit, nothingsignificant has come to my knowledge which would give rise to any comment upon orsupplement to Statutory Auditor’s report under Section 619(4) of the Companies Act,1956.

For and on the behalf of theComptroller and Auditor General of India

(ROY MATHRANI)Place: Hyderabad Principal Director of Commercial AuditDate: 22 July 2009 & Ex-Offlcio Member, Audit Board, Hyderabad


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REPORT ON CORPORATE GOVERNANCE

(A) Company's Philosophy

The philosophy of the company in relation to corporate governance is to ensure Transparency, Disclosures andReporting that conforms fully with laws, regulations, guidelines, etc. and to promote ethical conduct throughout theorganisation. RINL believes in conforming to the highest standards of corporate governance in the country. It recognizesthat each member of the Board owes his/her first duty for protecting and furthering the interest of the Company.

(B) Board of Directors

Composition of the Board

The Company is managed by the Board of Directors, which formulates strategies, policies and reviews its performanceperiodically. As per Articles of Association (AOA) of the Company, the number of Directors shall not be less than fiveand more than fourteen.

As on 31st March, 2009, the Board of Directors of the Company comprised a full time Chairman-cum-ManagingDirector, (i.e. Executive Chairman) holding additional charge of Director (Projects) (from 1st April 08 to 24th June08, 1st Nov. 08 to 11th Nov. 08 and from12th Feb. 09 onwards continues to hold the additional charge), four FunctionalDirectors i.e. Director (Operations), Director (Personnel), Director (Commercial) and Director (Finance) & AddlCharge of the post of Director (Projects) from 12th Nov. 08 to 11th Feb. 09, two Government Directors and three Part-time non-official Directors (i.e. Independent Directors).

Scheduling and selection of Agenda Items for Board/Committee Meetings

The Meetings are convened by giving appropriate advance notice after obtaining approval of the Chairman of theBoard/Committee. Detailed agenda, management reports and other explanatory statements are circulated in advancein the fixed agenda format amongst the members for facilitating meaningful, informed and focused decisions at theMeetings. To address specific urgent need, meetings are also being called at a shorter notice. In case of exigenciesresolutions are also sometimes passed by circulation.

The agenda papers are prepared by the concerned officials, sponsored by the concerned functional Directors and inmost cases concurred by Director (Finance) and submitted for obtaining approval of the Chairman-cum-ManagingDirector, well in advance. Duly approved agenda papers are circulated amongst the Board Members by the CompanySecretary.

The Members of the Board/Committee have complete access to all information of the Company. The Board is alsofree to recommend inclusion of any matter in agenda for discussion. If necessary, senior management officials arecalled to provide additional inputs to the items being discussed by the Board/Committee.

Recording minutes of proceedings at the Board/Committee Meeting

Minutes of the proceedings of each Board / Committee meeting are recorded. Minutes are approved by the Chairmanof the Board/Committee. The confirmed minutes of the proceedings of the meetings are consecutively filed inpermanent record form of Minutes Book.

Follow-up mechanism

The guidelines for the Board/Committee Meetings facilitate an effective post meeting follow-up, review and reportingprocess for the action taken on decisions of the Board and Committee. The follow-up Action Taken Report (ATR) onthe decisions/instructions/directions of the Board/ Committee is submitted to the Board/Committee regularly.


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Board Meetings

The Board meets regularly and is responsible for the proper direction and management of the Company. During thefinancial year ended March, 31, 2009, six Board Meetings were held on 22nd May 08, 1st August, 08, 24th Sept. 08,14th Nov.08, 2nd Feb. 09 and 3rd March 09.

Composition and Attendance

The composition of the Board, details of attendance etc. are as under :

Name of the Directors Category of No. of Board Attendance No. of otherDirectorship Meetings at last AGM directorship

attended held as onduring 2008-09 31.3.2009#

Shri P K Bishnoi CMD - holdingadditional charge ofDirector (Projects)from 1.4.08 to24.6.08, 1.11.08 to11.11.08 and againfrom 12.02.09 to31.3.09 6 Yes NIL

Shri Y Manohar WTD 6 Yes NIL

Shri C G Patil WTD 5 Yes NIL

Shri K S Shankar WTD 6 Yes NIL

Shri Umesh Chandra** WTD 3 -- NIL

Shri P K Misra* WTD 3 Yes NIL

Shri B S Meena Non-ED 5 -- 6

Dr Dalip Singh** Non-ED 3 -- 4

Shri G Elias* Non-ED 3 -- 1

Shri RSSLN Bhaskarudu* Non-ED 6 Yes 5

Dr V K Bhalla Non-ED 6 -- 3

Dr Jagat Pal Non-ED 6 -- --

CMD - Chairman-cum-Managing Director, WTD - Whole-time Director, Non-ED - Non-Executive Director#Does not include Memberships/Office Bearers i.e. Chairman etc. in Institutions / University / non-CorporateBodies like Societies etc.

Note *1. Shri P K Misra, Director (Operations) superannuated on 31st Oct. 2008. He was also holding additionalcharge of the post of Director (Projects) from 25.6.08 to 31.10.08.

2. Shri G Elias, Jt Secretary (Steel) resigned from the Board of RINL on 7.11.08.

3. The period of tenure (3 years) of Shri RSSLN Bhaskarudu, part-time non-official Director (IndependentDirector) was completed on 25th April, 2009.

** 1. Shri Umesh Chandra appointed as Director (Operations) from 1.11.2008.

2. Dr Dalip Singh appointed as Director from 7.11.2008.


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The Board has 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, majorsale contracts, employees remuneration and perquisites, manpower plans and long term plans for its review andapproval.

The details of remuneration to whole time Directors are given below :

(Value in Rupees)

Name of the Director Salaries & *Retirement and other TotalAllowances (Rs.) benefits (Rs.) (Rs.)

Shri P K Bishnoi, CMD 11,65,025.00 5,310.00 11,70,335.00Shri P K Misra, Director (Operations) 7,19,513.00 3,53,258.00 10,72,771.00upto 31.10.2008Shri Y Manohar, Director (Personnel) 10,23,428.00 5,292.00 10,28,720.00Shri C G Patil, Director (Commercial) 11,35,352.00 5,166.00 11,40,518.00Shri K S Shankar, Director (Finance) 12,45,745.00 5,184.00 12,50,929.00Shri Umesh Chandra, Director (Operations) 3,75,386.00

(from 1.11.2008to 31.3.09) 486.00 3,75,872.00

(*Retirement and other benefits include Canteen Subsidy and Gratuity paid)

The salary of the whole time directors is governed by pay scales and rules of the Government.

Terms and Conditions

The whole time directors are appointed as per Articles of Association of the Company by the President of India, inconsultation with the Chairman of the Company for a period of 5 years or till the age of Superannuation or untilfurther orders, whichever is earlier.

The appointment may, however, be terminated by either side on three months notice or on payment of three monthssalary in lieu thereof.

Part-time official Directors

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

Part-time non-official Directors (Independent Directors)

The part- time non-official directors (i.e. independent Directors) are appointed by Government of India as Director fora period of 3 years from the date of assumption of charge or until further orders, whichever is earlier.

An amount of Rs.10000/- is paid to the Part-time non-official Directors as sitting fee for each Board/Board Sub-Committee Meetings attended by them. During the year, the total amount paid to them is as follows :

1. Shri RSSLN Bhaskarudu Rs.2,70,000/-2. Dr V K Bhalla Rs.1,80,000/-3. Dr Jagat Pal Rs.2,50,000/-

Sitting fees is the only remuneration paid by the Company to the part-time non-official Directors.

Board constituted the following Committees with specific responsibilities assigned to each of these Committees.


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Audit Committee

Composition

The Audit Committee was constituted during the year 2006-07 in line with the OM No.18(8)/2005-GM, dated 16thJune 2005 issued by Department of Public Enterprises, Govt. of India. The composition of Audit Committee as on31.3.2009 was as follows :

Shri R S S L N Bhaskarudu Chairman Independent DirectorDr V K Bhalla Member Independent DirectorDr Jagat Pal Member Independent Director

The main functions of the Audit Committee are as follows :

1. Oversight of the Company's financial reporting process and the disclosure of its financial information to ensurethat 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 Board for approval,with particular reference to :

a) Matters required to be included in the Directors' Responsibility Statement to be included in the Board'sReport 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 by Management;

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 Board forapproval.

6. Reviewing, with the management, performance of Statutory and Internal Auditors, adequacy of the internalcontrol systems.

7. Reviewing the adequacy of the Internal Audit function, if any, including the structure of the Internal AuditDepartment, staffing and seniority of the official heading the Department, reporting structure coverage andfrequency 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 where there issuspected fraud or irregularity or a failure of internal control systems of a material nature and reporting thematter to the Board.

10. Discussion with Statutory Auditors before the Audit commences about the nature and scope of audit as wellas 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.


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12. To review the functioning of the Whistle Blower Mechanism, in case the same is existing in the Company.

13. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

14. To review the follow up action on the audit observations of the C&AG audit.

15. To review the follow up action taken on the recommendations of Committee on Public Undertakings (COPU)of the Parliament.

16. Provide an open avenue of communication between the independent auditor, internal auditor and the Board ofDirectors.

17. Review and pre-approve all related party transactions in the Company. For this purpose, the Audit Committeemay designate a member who shall be responsible for pre-approving related party transactions.

18. Review with the independent auditor the co-ordination of audit efforts to assure completeness of coverage,reduction of redundant efforts, and the effective use of all audit resources.

19. Consider and review the following with the independent auditor and the management :

- The adequacy of internal controls including computerized information system controls and security, and

- Related findings and recommendations of the independent auditor and internal auditor, together with themanagement 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.

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 CharteredAccountants of India.

Explanation: (ii) If the company has set up an Audit Committee pursuant to provision of the Companies Act,the said Audit Committee shall have such additional functions / features as contained inthese guidelines.

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 oversight responsibilitiesby reviewing the financial reports; the Company's systems of internal controls regarding finance, accounting andlegal compliance that management and the Board have established; and the Company's auditing, accounting andfinancial reporting process generally.


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The powers of the Committee include the following :

1) To investigate any activity within its terms of reference.2) To seek information from any employee.3) To obtain outside legal or other professional advice.4) To secure attendance of outsiders with relevant expertise, if it considers necessary.

Meetings of Audit Committee

During the year, Seven Meetings of the Audit Committee were held on 18th April, 21st May, 1st August, 13th Sept.,13th November, 2008, 2nd Feb. 2009 and 28th February, 2009 and all the Meetings were attended by all theMembers of the Committee. The Company Secretary is also the Secretary to the Audit Committee. The Minutes ofthe Audit Committee Meetings are also put up to Board in their subsequent Meetings as an Item for information. TheChairman of the Audit Committee apprises the Board about the observations of the Audit Committee during theBoard Meeting and also attends the Annual General Meeting of the Company.

Technology Improvement and Bench Marking Committee:

The Board has constituted a Technology Improvement and Bench Marking Committee and the composition of theCommittee as on 31.3.2009 is as follows :

1. Shri RSSLN Bhaskarudu : Chairman Independent Director2. Director (Operations) : Member Wholetime Director3. ED (Works) : Member Sr Executive of the Company4. GM (CO & Logistics) : Member Sr Executive of the Company4. GM (D&E) : Member Sr Executive of the Company6. DGM (R&D), R Srinivasulu : Convenor of the Committee Executive of the Company

This Committee monitors and pays special attention, to the assessment of status of the Company's own technology,acquiring and assimilating new technologies necessary to make it competitive and to its own R&D efforts andmaintaining sustained strength in the technological field. During the year, three Meetings of the Committee wereheld on 21st May 08, 27th August, 08 and 28th February, 09.

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 6.3 MT peryear Liquid Steel and the composition of the Committee as on 31.3.2009 is as follows:

a) Chairman-cum-Managing Director : Chairmanb) Joint Secretary, Ministry of Steel : Memberc) Shri RSSLN Bhaskarudu : Member

(Part-time non-official Director)d) Director (Finance) : Membere) Functional Director (In-charge of Projects) : Memberf) Company Secretary : Convener

ED (Finance)/GM (Finance) will be an alternate Member in the absence of Director (Finance).

HOD of the Projects Division in the rank of ED or GM will be a permanent invitee.

During the year, Four Meetings of the HPSC were held on 22nd May 08, 11th August, 08, 14th Nov. 08 and 25thMarch 2009 and the proceedings of the Meetings were placed before the Board for its information.


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Committee for Award of Contracts relating to Project Expansion Contracts

In respect of Expansion Project, to approve award of Contracts/Orders valuing upto Rs.500 crores, the Board hasconstituted a Committee called Committee for Award of Contracts relating to Project Expansion Contracts. Thecomposition of the Committee as on 31.3.2009 is as follows:

1. Chairman-cum-Managing Director Chairman2. Director (Finance) Member3. Director (In-charge of the Projects Division)/Director (Projects) Member4. Dr V K Bhalla, Part-time non-official Director, RINL Member

(Independent Director)5. Dr Jagat Pal, Part-time non-official Director, RINL Member

(Independent Director)6. Company Secretary Convener

During the year, One Meeting of the Committee was held on 18th April, 2008.

Committee for Award of Contracts (CAC)

The composition of the Committee for Award of Contracts as on 31.3.09 is as follows :

1. Chairman-cum-Managing Director Chairman2. Dr V K Bhalla, Independent Director Member3. Dr Jagat Pal, Independent Director Member4. Director (Finance) Member5. The concerned Functional Director Member6. Company Secretary Convenor

The above Committee is empowered to approve the proposals relating to AMR Schemes and other Contracts ofRevenue and Capital Nature under Operational and other requirements for the existing plant and functioning of theCompany upto Rs.250 crores.

The above Committee is also empowered to approve all Capital expenditure including Additions/Modifications/Replacement of the existing facilities or Expansion of existing facilities in each case (not included in the approvedcapital budget for the year subject to overall budgetary limit) as per the above limit upto Rs.250 crores.

During the year, Three Meetings were held on 22nd May 08, 12th June 08 and 13th Sept. 08.

Committee of Management

With a view to have more flexibility in Operations, a Committee called Committee of Management has been constitutedwith all the Functional Directors.

The composition of the Committee as on 31.3.2009 is as follows :

1. CMD : Chairman2. Director (Operations) : Member3. Director (Personnel) : Member4. Director (Commercial) : Member5. Director (Finance) : Member

The Quorum for the Meeting is Chairman, Director (Finance) and the concerned Functional Director.


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The above Committee is empowered to approve proposals upto Rs 100 Crores and have full powers for purchaseof coal materials like Medium Coking Coal, Boiler Coal, Iron Ore, etc. from Public Sector Undertakings/GovernmentAgencies. During the year Twenty six Meetings of COM were held.

(C) Statutory Auditors

M/s Rao & Kumar, Visakhapatnam have been appointed as Statutory Auditors of the Company for the financial year2008-09 by the C&AG as per Section 619(2) of the Companies Act, 1956.

(D) Fees to Statutory Auditors

The fee payable to the Statutory Auditors for the year was Rs. 4,75,000/- (previous year Rs.4,50,000/-)

(E) General Body Meetings

Particulars of the Annual General Meetings of the Company held during last 3 years :

Year Date Time Location2005-06 25.09.2006 3.00 PM Admn Building , Vizag2006-07 03.09.2007 3.00 PM Admn Building , Vizag2007-08 27.08.2008 3.00 PM Admn Building , Vizag

(F) Disclosures

As per the disclosures given by the Directors of the Company, there were no materially related party transactionsthat have potential conflicts with the interests of the Company at large.

(G) Means of Communication

Communication is the key to a transparent and fair organization .

At VSP, all possible means of communication are brought into the system. Various in-house magazines beartestimony to this. To list a few:

F UkkuvaniF KM NewsF Vikas DharaF SugandhF Green LeafF Annual Report of the Company.F SpandanaF Sehat

Besides the above, the Company uploads the required information on its website i.e. www.vizagsteel.com.

(H) Training of Board members

No specific training programmes were arranged for Board Members. However, at the Board / Committee Meetings,detailed presentations are made by senior executives/ professionals/ consultants on business related issues, riskassessment etc.

(I) Whistle Blower Policy

The Company has not yet established a Whistle Blower Policy for the employees. Nonetheless, no employee hasbeen denied access to the Audit Committee.


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(J) Certification/declaration of financial statements by the Chief Executive i.e. CMD / Director(Finance).

The CMD and Director (Finance) have provided the certification regarding the financial statements for the year2008-09.

(K) Code of Conduct for Members of the Board and Senior Management

The Company is committed to conduct its business in accordance with the highest standards of business ethicsand comply with applicable laws, rules and regulations. A code of conduct, evolved and was adopted by the Boardapplicable to all Members of the Board and Senior Management who have confirmed compliance with the Code ofConduct for the year under review. A copy of the Code of conduct has been placed on the Company's websitewww.vizagsteelcom. in addition to intranet portal of the Company Affairs Deptt.

A declaration signed by Chairman is given below :

"I hereby confirm that:

The Company has obtained from the Members of the Board and Senior Management, affirmation that they havecomplied with the Code of Conduct for Directors and Senior Management in respect of the Financial year 2008-09".

P. K . Bishnoi

Chairman


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Annexure - A

Measures taken for conservation of energy during the year 2008-09

A. Specific Energy Consumption for the year 2008-09 was 6.45 G.cal per Tonne of Liquid Steel.

The following measures have been taken during the year 2008-09 for conservation of energy.

1 Installation of VFDs(Variable Frequency Drives) for DE system of CDCP 1, 2 & 3, Vibro feeders in SP &BF to reduce electrical energy consumption.

2 Replacement of existing chiller with eco friendly and energy efficient chillers in Chilled Water Plant #3.

3 Level #2 automation of MMSM furnaces.

4 Gas Recuperator and Air Recuperator of reheating furnace #2 are replaced in MMSM to improve Sp. Heatconsumption.

5 Optimization of Cooling Tower Fans running at CT-13, 14, 15.

6 Replacement of incandescent / Fluorescent lamps with energy efficient tube lights all over the plant

7 Installed energy savers, timer control and Poly carbonate(translucent sheet) to utilize day lighting atvarious places to reduce electricity load.

8 Identification of CDM opportunities in Steel plant and working towards carbon credits.

B. Other Achievements

1. LD gas recovery plantTotal Volume of LD gas recovered 289.76 MNCum

2. Waste Heat recovery at

a. Back Pressure Turbine StationTotal Power recovered 97114 MWH

b. Gas Expansion Turbine StationTotal Power recovered 82472 MWH

C. Foreign Exchange Earnings & Outgoing

Foreign Exchange Inflow Rs. 78.89 Crores

Foreign Exchange Outflow Rs. 3600.77 Crores


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Form "A"

A. Power and fuel consumption for 2008-09

1) Electricitya) Purchased ( Net Import from AP TRANSCO) 202358 MWHb) Gross exported 15585 MWHc) Imported 217943 MWHd) Own generation

- Through steam turbine / generator 1561537 MWH- Through BPTs 97114 MWH-Through GETS 82472 MWH

2) Coal Consumption

Boiler Coal(Indigenous) used in TPP 1249992 tBoiler Coal(Imported) used in TPP 95188 tBoiler Coal(Imported) used in Coke Ovens 0 tImported Coking coal 2022147 tUS Coal 296172 tImported Soft Coking coal 326216 tIndigenous Medium coking coal used in Coke Ovens 420288 tIndigenous Medium coking coal used in TPP 21049 tIndigenous Prime coking coal used in Coke Ovens 185824 t

3) Furnace oil Consumption 1204.6 kl

4) HSD Consumption 2371.8 kl

5) BF Coke purchased 202432 t

6) Coke Breeze purchased 0 t

B. Consumption per unit of production

Item Unit Per tonne of Liquid Steel productionImported electricity kwh 69.3Furnace oil It 0.4HSD It 0.8Coking coalImported Coking coal kg 642.9US Coal kg 94Imported Soft Coking coal kg 103.7Indigenous Medium coking coal used in Coke Ovens kg 133.6Indigenous Medium coking coal used in TPP kg 6.7Indigenous Prime coking coal used in Coke Ovens kg 59.1Boiler coalBoiler Coal(Indigenous) used in TPP kg 397.4Boiler Coal(Imported) used in TPP kg 30.3Boiler Coal(Imported) used in Coke Ovens kg 0BF Coke purchased kg 64.4Coke Breeze purchased kg 0

Liquid steel production 3145373 t


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Form - B

Form for disclosure of particulars with respect to Technology Absorption

1. Specific areas in which R&D was Modelling and simulation of LMMM reheating furnaces,carried out by the company. Microbial Phosphorus removal from LD Slag, Effect of Aluminium

in EQ Grade wire rod coils, Technical analysis and optimisationof continuous casting at VSP using existing plant facilities,Improving the yield and metallurgical performance of Vizag steel's4-strand bloom casting tundish through water modelling, Removalof CO2 from flue gases of VSP using algae, Pot sintering tests,Pilot oven tests, development of new grade etc,.

2. Benefits derived as a result of A brief note on R&D activities taken up during Apr' 08-March' 09the above R&D 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 : Rs. 17.35 crores

(b) Total R & D expenditure as a % of Turnover : 0.167 %


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Annexure - 1 to Form B

Benefits derived/expected from R&D Projects

1. From Internal projects:

Sl. No. Name of the Project Tangible Benefits Intangible Benefits

1 Development of pilot coke Optimization of Coal

oven and carbonization blend by Pilot Oven test with

test of coal blends different sources/type of coals

2. From Joint Research Projects:

Sl. No. Name of the Project Tangible Benefits Intangible Benefits

1 Modeling & Simulation of LMMM. Expected to increase the efficiency

Reheating furnace of VSP with of the furnace

IICT, Hyderabad

2 Microbial removal of phosphorus Lowering of Phosphorus Increased recycling of LD Slag

from LD Slag with IMMT, content of LD slag.

Bhubaneswar

3 Study the effect of Al Content in Reduction in grade Increased market share

EQ Grade WR Coils with the diversion. in electrode market

help of WRI, Trichy

4 Technical Analysis and To be worked out after --

Optimization of continuous completion of the project

casting at VSP using existing

plant facilities with NIT. Trichy

5 Improving the yield of VSP tundish About 20,000 t of skull About 0.5 % of Improved yield

by reducing skull loss through loss can be reduced/year through reduction of skull loss.

water modeling with IIT, Kanpur.


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Annexure - 2 to Form B

R&D Projects Planned for next 3 years

1. Utilization of metallurgical waste through briquetting techniques (Industrial Trials)

2. Study of noise pollution at Rolling Mills & TPP and development of techniques to control the noise (withIISc, Bangalore).

3. Development of new grades of steel especially for Forging, Automobile, Electrode industries etc.

4. Development of Coke Dry Cooling in Pilot coke oven.

5. Pilot plant studies for Benzol Muck separation in Benzol Plant.

6. Studies on solid waste utilization especially LD slag, etc.,

7. Corrosion studies in LD Gas and BF Gas Pipe lines.

8. Removal of CO2 from flue gases by sequestration (with Andhra University, Visakhapatnam )

9. To study Factors influencing bottom build up in LD Converters and to suggest remedial measures.

10. Logistic Management of SMS Heats Distribution System

11. In-house development of Lance tip design

12. Utilization of BOF sludge by Micro-Pelletization

13. Reduction in ladle balance.

14. Break-out prediction system for CCM

15. Granulation of LD Slag

16. Treatment in torpedo ladle car


82

Vision, Mission and ObjectivesVision:

To be a continuously growing world-class company

We shallv Harness our growth potential and sustain profitable growth.

v Deliver high quality and cost competitive products and be the first choice ofcustomers.

v Create an inspiring work environment to unleash the creative energy ofpeople.

v Achieve excellence in enterprise management.

v Be a respected corporate citizen, ensure clean and green environment anddevelop vibrant communities around us.

Mission:To attain 16 million tonne (Mt) liquid steel capacity through technologicalup-gradation, operational efficiency and expansion; augmentation ofassured supply of raw materials; to produce steel at International Standardsof Cost and Quality; and to meet the aspirations of the stakeholders

Objectives:v Expand plant capacity to 6.3 million tonnes by 2011-12, with the mission to

expand further in subsequent phases as per the Corporate Plan.

v Revamp existing blast furnaces to make them energy efficient tocontemporary levels and in the process increase their capacity by 1.0 milliontonnes, thus total hot metal capacity to 7.5 million tonnes.

v Be amongst top five lowest cost liquid steel producers in the world.

v Achieve higher levels of customer satisfaction.

v Vibrant Work Culture in the Organisation.

v Be proactive in conserving environment, maintaining high levels of safetyand addressing social concerns.

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