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27th Annual Report 2008-09

RASHTRIYA ISPAT NIGAM LIMITED

BOARD OF DIRECTORS CHAIRMAN-CUM-MANAGING DIRECTOR Sri P. K. Bishnoi FUNCTIONAL DIRECTORS Personnel Sri Y. Manohar Commercial Sri C. G. Patil Finance Sri K. S. Shankar Operations Sri Umesh Chandra (w.e.f. 01.11.2008) Sri P. K. Misra (upto 31.10.2008) Projects Sri A. P. Choudhary (w.e.f. 1.6.2009) Sri P. K. Misra {holding additional charge of Director (Projects) upto 31.10.08} GOVERNMENT DIRECTORS Sri B. S. Meena Sri 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 SECRETARY Sri P. Mohan Rao

BANKERS
State Bank of India Bank of Baroda Canara Bank State Bank of Hyderabad Allahabad Bank UCO Bank HSBC Bank Ltd. IDBI Bank Ltd. Andhra Bank Indian Overseas Bank Indian Bank ICICI Bank Bank of India Central Bank of India Oriental Bank of Commerce State Bank of Bikaner & Jaipur State Bank of Indore State Bank of Mysore State Bank of Travancore Syndicate Bank HDFC Bank Karur Vysya Bank The Federal Bank Ltd. AUDITORS M/s. Rao & Kumar Chartered Accountants Visakhapatnam

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

Registered Office Administrative Building Visakhapatnam Steel Plant Visakhapatnam 530 031, Andhra Pradesh Website: www.vizagsteel.com

27th Annual Report 2008-09

FROM THE CHAIRMAN


Dear Stakeholders, My colleagues on the Board and I extend a warm welcome to you all at the 27th Annual General Meeting of your Company. The Directors' Report and the Audited Statement of Accounts for the year 2008-09 and the Notice to the Shareholders have already been circulated and with your permission, I take them as read. Year 2008-09 The financial year 2008-09 has been a year of two contrasting halves. The first half saw commodity markets booming like never before and steel value chain was no exception, with prices of raw materials and steel products scaling new peaks. The second half of 2008-09 was marked 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 impacted severely by the sudden slump in the market, resulting in huge inventory build up. Bottom line of the steel companies like RINL-VSP, which do not have captive mines for major raw materials, was further eroded by the 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 introspect and re-define strategies to combat the challenge. The Management took initiatives as follows: H H H H Regulating / correcting production in the second half of the year so as to restore balance between supply - demand. Reduction in the Inventory by appropriate market correction Rationalizing Administrative expenditure 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 RINL collective, to the changing environment. In our efforts to sustain and grow in the niche markets that the company has captured over the years, the production of value added steel remained the thrust area. As a result, value added steel recorded all time high production of 20,08,342 tonnes - a growth of 6% over previous year, and the company registered a total sales turnover of Rs 10,411 crs. Also, the company continued its thrust and widened its Rural Distribution Network to reach new customers across the country. On the Expansion front, Orders worth Rs. 9538 Crores have already been placed till March 09 and the Expansion project is slated to be completed by 2010-11. Industry Outlook According to a report of South East Asia Iron and Steel Institute published in April' 09, India's economy is largely domestic consumption led and accordingly it has been less affected by the deceleration in global economic growth when compared to other countries. Exports account for 14% of GDP, while much of its growth 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 to 6.7% for the year 2008-09 against a growth of 9.0% for the year 2007-08. Industry wise comparison growth rates achieved in 2008-09 and 2007-08 make it clear that major steel consuming sectors like construction 3

RASHTRIYA ISPAT NIGAM LIMITED

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 of 10.1% in 2007-08. However, initial signs of recovery have been sighted from the trend of IIP growth rates, which turned negative during 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 fiscal year 2009. IMF, in its World Economic Outlook, estimated India's GDP growth at 5.1%. Steel Demand & Production Despite the adverse impact of global economic meltdown, Indian steel industry has performed commendably when compared to other steel majors. As per WSA publication, World Steel in Figures 2009, India tops the list when 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 and construction, which, in turn, has hit the Indian steel industry hard, with the government's plans to boost up the economy by injecting funds in various industries like infrastructure, construction & power and the automotive sector 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 tonne in 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 normal operations 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 its 12 million tonne per year steel mill but there is neither cancellation nor scaling down of its plan. Raw Material Scenario India has large iron ore reserves and is a net exporter of iron ore, particularly to China. According to Steel Business Briefing, India's iron ore production which was 123 million tonnes in 2003-04, nearly doubled in volume to 204 million tonnes in the fiscal year 2008. About half of its production is exported and nearly 80% of which is to China. However, domestic supply for iron ore is expected to become increasingly tight, especially with 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 producers and the supply is mainly from domestic railways which supplied up to 1.1 million tonne of ferrous and non ferrous scrap in 2008-09. Recent trend of low ocean freight has caused ship owners to opt for decommissioning of old vessels, which leads 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 registered nearly 3 million tonne a year. Scrap supply in India remained healthy and is expected to be steady throughout year 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 that balance quantity of high cost coal supplies are staggered over next few years so as to minimize its impact on our profitability.

27th Annual Report 2008-09

RINL's Future Plans The Expansion Project for increase in capacity to 6.3 Mtpa Liquid Steel is under implementation. Capacity Augmentation would help the Company consolidate its Leadership in Bars and Structurals Market and help the 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 direction a separate Special Purpose Vehicle for overseas coal mines i.e International Coal Ventures Ltd (ICVL) has been formed . Further, JV for Ferro Alloys with M/s MOIL was entered into. Besides, various proposals for limestone and iron ore are under active consideration. Also, major equipment like Blast Furnaces and Converters have exceeded their normal life and are therefore due for major repairs, revamp and modernization. The schedules for the same have been drawn up till 2011-12. Our People Our people, the "RINL collective" are the key to our success and the Company has evolved suitable HR initiatives for multi-skilled training and constant learning. Many Awards and Merit Certificates were earned by the employees for the company. Conferring of Prime Minister's Trophy for the second time for Best Integrated Steel 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 continued its role as a responsible Corporate Citizen by focusing on community welfare schemes and rendering an helping hand to the needy. The Company, implemented various schemes and spent an amount of Rs.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 year 2008-09 for the first time @ 10% of PAT (Profit after tax). The Company would also be paying 7% dividend on Preference Capital. I, on behalf of the RINL collective, acknowledge the support extended by the Stakeholders of the Company and look forward to their continued support in the years to come. I take this opportunity to express my thanks to all the Stakeholders, Ministry of Steel, Government of India, Government of Andhra Pradesh and various other Departments of the Government and other Institutions. The Company acknowledges the unstinted commitment and collective efforts of its employees for their excellent performance in various activities. I am confident that the commitment, expertise, acumen and the trust built over the last 27 years will continue to be available and with your dedicated and innovative efforts, we can pave the way to building capacity up to 16 million tonnes by 2020, as enshrined in our Mission statement. Thanking you,

( P K Bishnoi ) Date : 01-08-2009 Chairman-cum-Managing Director

RASHTRIYA ISPAT NIGAM LIMITED

DIRECTORS' REPORT
Dear Members,
On behalf of the Board of Directors of the Company, I take great pleasure in presenting the 27th Annual Report of the Company for the financial year ended 31st March 2009, together with the Audited Statements of Accounts, the Auditors' Report and the review of the Accounts by the Comptroller and Auditor General of India.

Key financials (Rs Crores)


2008-09* Gross Turnover Total Income Total Expenditure Gross Margin Interest Charges Cash Profit Depreciation & DRE Profit Before Tax Provision for taxations Net Profit Accumulated Profit 10411 10105 7750 2355 88 2267 240 2027 691 1336 4988 2007-08 10433 9993 6478 3515 32 3483 488 2995 1052 1943 3653

BUSINESS PERFORMANCE:
The year gone by has been a historical one for the industry in general and the steel industry in particular. During the first half of 2008-09, markets boomed like never before, but the second half witnessed a slump, the magnitude of which left no steel player untouched. Because of the global meltdown we saw a drastic demand contraction from October 2008 onwards following which several steel producers including Public Sector steel producers resorted to production corrections during the period Oct-Mar '09 to restore balance in the supply demand scenario. RINL too had to throttle production in the second half of 2008-09 in view of diminished demand and accumulation of finished goods inventory. The year also witnessed an unprecedented rise in prices of raw materials like iron ore and coking coal and RINL had to battle the double impact of plunging steel prices and high contracted prices of raw materials. Definite shift in product mix towards value added steels, and continuous performance at above the rated capacities helped VSP in capitalizing on favourable markets during the first half of the year. VSP also gainfully utilized the slack market conditions in the second half initiated actions to rejuvenate health of Plant and Equipment . The Company could cross the landmark level of Rs.10,000 Cr turnover for the second time in a row and also recorded a net profit of Rs.1336 Cr in a year which saw unprecedented turmoil in the second half. The focus of fiscal measures in the company continued to be on optimizing expenditure on interest, bank charges and insurance while improving the earnings on surplus funds.

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

OPERATIONAL PERFORMANCE:
RINL has been surpassing the rated capacities of its production units since 2001 and continued the same trend for the year 2008-09. RINL recorded capacity utilization of 104%, 105% & 102% in Hot Metal, Liquid Steel and Saleable Steel respectively despite production curtailment in the second half of the year .
Unit : '000t % fulmt on DPR 85 104 58 105 105 103 116 114 88 106 102 ** ** Items DPR Capacity 300 3400 556 3000 2820 1857 710 850 850 2410 2656 (**) Actual 08-09(*) 256 3546 322 3145 2963 1904 825 972 748 2544 2701 2008 198.8 07-08 257 3913 495 3322 3129 1879 859 998 1015 2871 3074 1894 214.8

Ovens pushed (Nos./day) Hot Metal Pig Iron Liquid Steel CC Blooms Billets Bar products Wire Rods MMSM products Finished Steel Saleable Steel Value added prodn. Power Gen.(MW) @ avg/day basis

( * ) Production in the Second half of 2008-09 was curtailed due to unprecedented global meltdown. (**) The Plant was basically designed to produce Mild Steel.

27th Annual Report 2008-09

OTHER HIGHLIGHTS
F F F

Major Environmental projects completed during 2008-09.

Installation of combined blowing facilities in LD-3 in Feb' 09. Replacement of existing Gas Cutting Machine with a new machine in CCM-1 in Mar' 09. Commissioning of two units of Argon tanks in ASP for the supply of Argon gas for combined blowing facilities. Highest Value added production of 20,08,342 t with a growth of 6% over 07-08. Increase in Value Added Heats (15192 nos) with a growth of 15% over 07-08. Value added production w.r.t Saleable Steel is 74% and is the best since inception. Hot metal & Liquid Steel crossed 58 Mt & 47 Mt Landmark on 11.02.09.

F F F F

COST REDUCTION MEASURES


The company's commitment towards containing costs continued during the year towards the following measures: 1. Utilisation of LD slag in Sinter Plant (SP) and Blast Furnace(BF) to reduce consumption of Limestone 2. To uitilise Lime dust in SMS by way of Briquetting the lime. 3. Use of Metallurgical waste in place of Iron ore fines at Sinter Plant. 4. Reclamation of scrap from maintenance activities and use in SMS. 5. Improvement in tundish life from 4.72 to 4.93 Heats. 6. Conservation of power. 7. Usage of LPG in CCM-1 for bloom cutting, in place of Acetylene gas.

PRODUCTION PERFORMANCE AT PR ODUCTION PERF ORMANCE AT MINES:


Mine Madharam Dolomite Mine (lakh tonnes) Jaggayyapeta Limestone Mine (lakh tonnes) Garbham Manganese mines (tonnes) 2007-08 2008-09 200 7-08 5.27 4.32 12620 6.64 4.42 11432

Achievements:
4 18.4% excess Over-burden handled over last year in Madharam Dolomite Mine 4 Slow/Non-moving items were reduced by Rs 40 lakhs at Jaggayyapeta Limestone Mines stores. 4 Garbham Manganese Mine registered a growth of 23 % in dispatch as compared to 2007-08. 4 The dispatch of River Sand from Sarepalli Sand Mine is 26,615 Tonnes, a growth of 3.69% over that of 2007-08

ENVIRONMENT MANAGEMENT
In the year 2008-09, the company was audited by M/s BVCI for continuation of ISO 14001:2004 certificate, which is valid till 2010. The company, in its endeavour to move beyond adherence to stipulated norms, has identified projects worth Rs. 391.6 Crores to improve environmental performance out of which projects worth Rs.24.46 Crores are already implemented.

SALES PERFORMANCE
As a fall out of the economic crisis which enveloped the world, the year 2008-09 witnessed extreme variations in Sales Performance. Although the year started on a positive note with good demand and good realizations, the trend

RASHTRIYA ISPAT NIGAM LIMITED

did not continue for a long. From Aug. 2008 onwards sluggishness leading to slump in International and Domestic markets affected the volume of sales and realizations. As a result, prices dropped as much as 40% from peak in some products and on an average dipped by about 25% in the second half when compared to the first half. Despite the adverse market conditions in the second half, VSP achieved a Sales Turnover of Rs. 10,411 Cr. against the MOU target of Rs.10,500 Crs, registering a fulfillment of 99%, despite global meltdown and downtrend in demand. This excludes sale of power and Internal Consumption of Steel products for VSP's Expansion of Rs.90 Crores. Sales Performance w.r.t. MOU 2008-09 targets and 2007-08 is as follows: Volume: '000 Tonnes, Value: Rs Cr. Item Domestic Pig Iron Steel Export Pig Iron Steel Total Pig Iron Steel Sales Value Domestic Exports Sale of Power Internal Consumption of Steel Total 2008-09 Actual( *) 246 2617 23 0 269 2617 10330 78 3 2007-08 180 2879 255 62 434 2941 9874 555 5

19.81 lakh tonnes of Value Added Steel Products have been sold compared to 18.27 lakh tonnes in the year 2007-08, representing a growth of 8%. It may be mentioned that the sales volume of Value Added Finished Steel registered a growth of 9% and the sales of Semis declined by 10% over that of the previous year. The sales of Value added steel in the last three years are as under:

Value Added Steel Sales ('000t)


8% 64%

MOU Target 186 2822 200 200 386 3022 9733 767

Fulfillment 132% 93% 11% 0% 70% 87% 106% 10%

Project Sales
During the year 2008-09, 6.71 lakh tonnes (including Internal Consumption at VSP) have been sold to Project Customers compared to 7.21 lakh tonnes in the year 2007-08. Region-wise sales of steel products to Projects are given below : Unit : '000 Tonnes, % Share

2007-08

10500

87 10498

100%

89 10522

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

Exports
During the year 2008-09, 23,000 tonnes of Pig Iron was exported and there were no exports of Saleable Steel. During the first Half of the year 2008-09, although export realizations were better, VSP did not export Saleable Steel in line with the Govt initiatives or suggestions for increasing availability of steel in the domestic market. During the second half of the year, exports were not made due to unremunerative Export Realizations and adverse demand situation.

2008-09

Value Added Steels


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

27th Annual Report 2008-09

There has been a decline of 7% in Project sales during 2008-09 over that of the previous year. The decline in Project sales is primarily due to the slow down of the construction activity in the country.

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

Unit : '000 Tonnes

By-Products
Sales of By products for the year 2008-09 have been Rs. 214 Cr. compared to Rs. 217 Cr. in 2007-08. Lower sales value is the result of lower Sales Volume of Byproducts during the year and lower prices of Benzene compared to that of the previous year. The sales were adversely affected during the Second half of the year due to slump in the demand. The sales volume of Granulated BF Slag, due to efforts made, increased by 7% in 2008-09 over the previous year.

As can be seen from above, concerted efforts were made for reducing Inventory levels which yielded results . E-Marketing During 2008-09, 1,06,705 tonnes of Steel products were sold through 1975 e-auctions. In addition to these, 5 e-auctions were held for sale of 595 tonnes of Pig Iron and 365 e-auctions were held for sale of 14042 tonnes of By-products. The Value of e-auctions stood at Rs. 430.34 Cr. during 2008-09. It may be noted that CVC encourages e-commerce for transparency and our efforts have been in that line.

Inventory Control
The decline in the demand for Saleable Steel during Second Half of 2008-09 resulted in increase of Inventory levels. The inventory of Saleable Steel which was about 1.5 lakh tonnes in the beginning of the year i.e., as on 1st April 2008 went up to about 2.5 lakh tonnes by end June 2008. This Inventory level corresponding to about one month production is considered adequate. However due to lower sales from August 2008 onwards the Inventory levels steadily increased and reached a peak of 8.11 lakh tonnes as on 16th Dec. 2008. Strategies were devised to reduce the Inventory of Saleable Steel and implemented on war footing with an aim to bring down to acceptable levels by the end of the year. The movement of Inventory of Saleable Steel during 2008-09 is brought out graphically below :

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

Tonnes U nit : Tonnes

Inventory of Saleable Steel ('000t)

RASHTRIYA ISPAT NIGAM LIMITED

There has been a steady growth in the sales of steel products to DLDs over the years. During the year 2008-09, growth of 23% has been registered in the quantity of sales to DLDs compared to that of the previous year.

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

Iron Ore:
RINL/VSP had submitted 5 mining lease applications for iron ore deposits in the State of Orissa and two applications in the State of Chhattisgarh. Three applications in Orissa and two in Chhattisgarh were rejected by the respective States and the balance two applications in Orissa are under disposal. Efforts are on to get allocation of mines.

MATERIALS MANAGEMENT:
RINL/VSP entered into long term agreements for purchase of coking coal, soft coking coal and iron ore as per the procedure in vogue to get uninterrupted supply of major raw materials. RINL/VSP took initiative, to identify the alternate sources of supply of iron ore to deal with disruption of raw-material supplies on -- M/s SAIL & M/s OMDC were identified as potential sources. Iron ore procurement for part requirement has already been finalized with SAIL. Efforts are on for tying up certain quantities with M/s. OMDC. Due to the unprecedented global melt down, the prices of steel nosedived and demand was adversely affected therefore there were carry forward quantities from the existing contracts for imported coking coal and these were at high prices as per prevailing when contracted. With a view to mitigate the effect of the high cost of input raw materials, procured through long term contracts, RINL/VSP renegotiated the contract prices (wherever possible) and deferred delivery schedules to suit the revised production plans. In the international market, the freight rates also fell when compared to COA rates during the second half of 2008-09. The matter was taken up with COA holders through Transchart and negotiations held to defer shipments covered under COA, so that the impact of high freight COA' s could be reduced and / or deferred . During the year 2008-09 RINL started utilizing the services of M/s. Gangavaram Port Ltd.(GPL) wherever the cost of handling vessels was lower at GPL as compared to Visakhapatnam Port Trust. 15 vessels were handled at GPL resulting in a saving of about Rs.15.89 crores during 2008-09. The deep draft available at GPL was utilised to bring some shipments of coal from Australia in cape size vessels achieving a reduction in logistical costs. Further exploitation of deep draft in future is also being planned. Non-moving inventory of spares and consumables was reduced from Rs.35 crores in 2007- 08 to Rs.31 crores in 2008-09 i.e. a reduction of 11.4%. In house e-reverse auction engine has been developed and put in place and e-reverse auction activity commenced from October 2008 onwards in a progressive manner.

Coking Coal:
Two Coal Blocks for underground mining which have been allotted to RINL/VSP in the state of Jharkhand as per salient features given below :
Characteristics Location Area No. of seams Quality Reserves Mahal Jharia Coal Fields, Bokaro Dt, Jharkhand 5.2 Sq Kms 22 Steel Grade I to Washery Grade III 258.35 mt Tenughat-Jhirki W.Bokaro Coal Fields, Bokaro Dt. Jharkhand 2.5 Sq Kms 17 Steel Grade I to Washery Grade III 215.76 mt

Mahal:
A "Pre-feasibility Report" was prepared by Central Mine Planning & Design Institute Limited (CMPDIL). This report indicated 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 SE Railways. vi) Damodar River runs along the Northern boundary of the block. vii) Method of Underground mining "Jankowice Method", i.e. manpower intensive. viii) Extractable reserves only 9.199 Million mt as vis-a-vis proven reserves of 159.92 Million mt. ix) Production planned 0.276 Million mt per annum hence cost would be very high. x) The block would come into production stage in not less than 9(Nine) years.

RAW MATERIAL SECURITY


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

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27th Annual Report 2008-09

Tenughat-Jhirki:
A study on the preliminary data of the block indicated that: i) ii) iii) iv) v) vi) Economically extractable seams except one very deep. Dips of the seams about 05o to 35o. The presence of 6 no. of faults having a min: of 20m to a max: of 200m throw. Highly gaseous i.e. Degree 3 Konar Nala runs along the Northern boundary of the block. Method of Underground mining would be manpower intensive.

procurement, Consultancy and Spares, was Rs.11286 Crores till Mar.' 09. Expenditure on expansion project for the financial year 2008-09 was Rs.2641 Crores showing an improvement of 133.51% as compared to Rs.1131 Crores for the year 2007-08. As approved by the Board, Power Plant for Expansion has been initiated as Captive Power plant against BOO basis as envisaged earlier for which separate approval is being sought from Govt. of India at an estimated cost of Rs. 807 Crores. Number of options are under consideration. The most economical option shall be taken up for implementation.

Scope & Progress of Work:


During the year 08-09, 5,101 Nos., of piles, 3,15,297 CuM of Concreting, 80,137 MT of Structural Fabrication, 40,936 MT of Structural Erection, 25,267 MT of Equipment Supply and 5,906 MT of Equipment Erection have been done.

vii) Low quantum of production hence production cost would be very high viii) The block would come into production stage in not less than 9 (Nine) years.

Dolomite:
Forest Department advised to resubmit the proposal for forest clearance of Dharmapuram Mining Lease by reducing the Forest area falling under ML area. Submission of fresh proposal is in process.

Major Events during the year 08-09 :


v v v

Imported Equipment supply commenced. 25267 MT of Equipments have already been received at site by March 2009. Piling for Sinter Plant-3 and Kiln-2 for Calcining & Refractory Material Plant foundation works were completed in Jan '09. Blast Furnace-3 Furnace Proper/Hot Stoves Shell Erection work was commenced in June/July '08 Erection of Top cone for Blast Furnace shell/ Dome for Hot Stoves was completed in Mar/Feb '09. A single structure Lower Tower of Blast Furnace-3 weighing 260 MT was erected on 7th Nov '08. Structural Erection works commenced in Blast Furnace-3 Cast House/LD Converter-1 for Steel Melt Shop-2 areas in April/July '08. Technological Structures erection started for Electro Static Precipitator in Sinter Plant-3 in July '08. Erection of Double Girder priority crane started in Wire Rod Mill-2 in Oct '08. Equipment Erection started for Continuous Casting Machine of Steel Melt Shop-2, Calcined & Refractory Material Plant & Power Distribution System in Dec '08, Jan '09 & Feb '09 respectively. Special Bar Mill & Structural Mill agreements were signed in Dec '08 & Mar '09 respectively. 2 nos of Torpedo Ladle Cars arrived at site on 01.03.09 for Blast Furnace-3 and erection completed for 1 no of Torpedo Ladle Car on 23.03.09.

Quartzite:
An extent of 40.47 ha. In Pindrangi village, K.Kotapadu Mandal, Visakhapatnam District and an extent of 20.64 ha. in Marrivalasa village, K.Kotapadu Mandal, Visakhapatnam has been sanctioned in favour of RINL/VSP by Department of Industries & Commerce, Govt. of AP in January ' 09.

v v v v

OVERVIEW OF EXPANSION & OTHER PROJECTS


6.3 MTPA Expansion Plan The orders for all major packages under Expansion have already been placed. The Stage-1 of Expansion which includes installation of One Sinter Plant, One Blast Furnace, Steel Melting Shop and one finishing mill alongwith associated units are planned to be commissioned and stabilized during end March- end Sept ' 2010. In Stage- 2 , two mills i.e One Special Bar Mill is scheduled to be commissioned and stabilized during end January end July 2011 and Second Mill i.e Structural Mill will be commissioned and stabilized during end July 2011 - end December 2011 as per plan. Total no. of packages ordered during the year 2008-09 is 50 Nos. at a cost of Rs. 2496 Crores, aggregating the total no. of packages ordered till Mar. '09 to 158 nos. at a cost of Rs. 9538 Crores. Total Commitment, including Enabling works, Specifications ordered, Steel

v v

11

RASHTRIYA ISPAT NIGAM LIMITED


i

Other Projects and AMR Schemes: RINL/VSP is currently executing and further contemplating several Addition, Modification & Replacement (AMR) schemes to rejuvenate existing aging facilities for sustaining efficiency/ productivity and to imbibe latest energy efficient technologies. Coke Oven Battery-IV, integrated with Coke Dry Cooling Plant-4, was made ready in April' 09. Expenditure for the Year 2008-09 for Coke Oven Battery -IV is Rs. 22.08 Crores and cumulative expenditure since inception till Mar.'09 is Rs. 300.86 Crores. Major AMR Packages Ordered (other than 6.3 Mtpa Expansion packages) are Stacker-Cum-Reclaimer for coking coal in Raw Material Handling Plant, Pulverized Coal Injection for Blast Furnace 1 & 2, Modification & upgradation of Continuous Casting Machine-2 & Combined Blowing of LD Converters for existing Steel Melt Shop, Air Separation Unit-4 & 5, Turbo Generator-5 & Boiler-6. Major Packages in the process of being awarded are Coke Oven Battery-4 - Phase II packages (Coal handling side & By Product side) and Augmentation of Iron Ore Storage in Raw Material Handling Plant. Major constraints faced
i

Alternative schemes are being considered to meet eventualities due to delays in commissioning of some of the service units. RINL/VSP management followed up with the agencies for possible advancement of delivery of equipment. Subsequently, equipment supplies have improved.

EMPLOYEES:
The Industrial Relations situation at RINL during the year 2008-09 was by and large peaceful. The peaceful Industrial Relations climate was maintained in the organization to sustain the production and productivity levels. Despite hectic union activities and the agitations of unions on issues including the contract workers, a conducive environment prevailed. The proactive approach and measures taken enabled harmonious industrial relations.

Settlements / Achievements:
Two bipartite agreements (record note) were signed on 17.07.08 on Percentage based increment and to improve the facilities under House Building Advance Scheme between the Recognized Union and Management. A tripartite agreement was reached on Annual Performance Reward Scheme (Bonus) on 27.09.08 with the Recognized Union enabling payment of Rs.16,200/- to each employee. Conferring of Recognition to the newly elected union Visakha Steel Workers Union (VSWU) on 15.04.08 and ensuring smooth conduct of Elections without adverse effect on production. The manpower strength of the company stood at 17,225 as on 31.03.2009. Out of the total manpower 16.36% were Scheduled Castes (SC) and 7.31% were Scheduled Tribes (ST). During the year, out of the total recruitment of 1019 employees made by the company 96 (9%) belonged to SC and 220 (22 %) to ST. Out of the total of 103 vacancies filled through promotions 16 (16%) were SC and 23 (22 %) were ST. As on 31.3.2009 the number of Displaced Persons on the rolls of VSP was 5690.

Non-availability of timely feed back data from major equipment suppliers affecting release of construction drawings Inadequate mobilization of men, material and erection equipments like cranes by contractors Delay in customs clearance by the agencies causing delay in erection activities.

Initiatives taken
i

Issues pertaining to PSU for delays in execution of RINL projects were taken up through Ministry and help sought for necessary direction to the PSUs. A team from RINL/VSP visited Russia in October' 08 to assess the ground realities regarding Sinter Plant equipment supplies. The details of outcome of the visit have been sent to Ministry of Steel/Govt. of India and help was sought from Secretary (Steel), Ministry of Steel/Govt. of India and Embassy level for necessary interventions to bring down the delays. Secretary (Steel), Ministry of Steel/Govt. of India was kind enough to pursue with Indian Ambassador to Russia. Review meetings were held with the Chief Executives of the agencies highlighting RINL/VSP's concerns to resolve matters causing delays in execution of RINL projects and for necessary intervention to improve the site activities for overcoming the delays & to achieve planned quantities. Situation is improving there after.

Participative Management
1. The Company provides a wider scope for workers participation commencing from the lower cadres of the employees to Chairman Cum Managing Director. 2. 70 Samalochana sessions were held during 2008-09, to discuss various issues of organizational and issues related to employee interest. During these sessions, meaningful information of the company is provided to the employees and also the issues raised in the earlier sessions also discussed.

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27th Annual Report 2008-09

3.

Workers participation was given a boost with the introduction of 8 new plant level committees thereby increasing from 7 to 15 which includes the committees which are backed by legal enactments like Canteen Managing Committee, Safety Committee, Provident Fund Trust Committee with the structure of equal nomination from the employer and employees on these committees. 2 types of shop level committees called Shop Floor Safety Committees and Shop Floor Cooperation Committees exist in VSP. At present there are 27 Shop Floor Safety Committees and 25 Shop Floor Cooperative Committees across the company with a periodicity of meeting once in a month to discuss target production, productivity and shortfall issues. Adequate implementation reviews are made. To augment this, 513 Shoplevel meetings and 119 Plant level meetings were held during the year 2008-09. As a unique feature and first of its kind, all participative fora in VSP are covered under ISO 9001-2000 Quality Management System of Personnel Dept & Audited periodically by the auditors of BVCI. Members of the participative fora are sponsored for visit to other industries and to have exchange of views and practices with a view to improving their awareness and participative skills.

In addition, special need based training programmes, foreign training (covering 59 executives and 8 nonexecutives), junior officers training (for 186 employees), apprentice training (226 nos) etc were imparted. CSR initiatives in terms of giving training to ITI Principals in Andhra Pradesh, training to school children on MS office package, vocational training covering 4489 students of engineering colleges, project work facilities/project based training were also imparted to students of various institutes and colleges. Library services covering fresh procurement of 1393 books and 3790 journals were organized and as many as 13204 employees utilized the library.

4.

Employee Welfare
The importance of welfare activities as long term drivers of employee relations is well understood in the company and has always been an area of special attention. The company continues to pursue all initiatives relating to providing quality education and encouraging healthy competition to the employees' children through mechanisms like MOUs with reputed educational institutions, grant of scholarships to meritorious students, organizing programmes on "Competency & Personality Development" for students etc.

5.

Welfare Activities- SC/ST


In the company, Presidential Directives on Schedule Castes & Scheduled Tribes continued to be implemented and monitored regularly. Following is the list of highlights in this regard:
F Scholarships in SC/ST category for meritorious students

Employee involvement & process improvements


The imagination and creativity of employees have always been key success factors for the company. Employees of RINL have always been at the forefront in contributing ideas for process improvements. Voluntary involvement of employees in 4251 Quality Circle projects is a testimony of the interest exhibited by employees in process improvements.

was awarded for the year 2008-09 with the following details: 10 scholarships @ Rs 1500/- p.m. for professional courses. 6 scholarships @ Rs 750/- p.m. for other degree and diploma courses. 10 scholarships @ Rs 400/- p.m. for intermediate course.
F Bharat Ratna Dr. B.R. Ambedkar Annual Merit Cash

Employee training & development


Facilitating employees to excel in their professional, personal and social life is a key element of the company's HR objective. Emphasis of HR development during 2008-09, was on fulfilling position related training needs, emerging from the business needs of the company. The company has evolved and implemented 1022 employee development training programmes covering 20489 participants and nearly 330 Management Development programmes organized covering 8142 officers. Human capital development index achieved was 1.62 and training mandays per employee was 12.8 Freshers training covering 200 management trainees, 106 trainee khalasis, 591 junior trainees etc was imparted during the year.

Awards of Rs 500/- for the first rank holder and Rs 250/- for the second rank holder for each of the 10 schools in the township have been awarded. This award is given separately to students in General category and SC/ST category.
F Garlanding function and commemorative meeting on the

occasion of birthday of Bharat Ratna B.R. Ambedkar at Dr Ambedkar Park, Sector-6.


F Sports and cultural function on the occasion of

Dr B.R. Ambedkar Jayanthi.

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RASHTRIYA ISPAT NIGAM LIMITED


Ongole Districts by incurring an amount of Rs.20 crores on the above activities. The company also extended assistance to the poor children in the schools. 450 free school seats were provided besides providing 48 Scholarships to the meritorious students. Support to a number of activities for the benefit of physically challenged children was extended by way of providing training equipment and one Special Bus to Arunodaya Special School at Ukkunagaram. One exclusive School Building costing Rs.2 crores is also sanctioned for the use of public in and around Ukkunagaram. RINL has also taken care of the physically challenged orphans by constructing a Dormitory for Mandala Vikalangula Sankshema Sangam at Achuthapuram. Through several Disability Rehabilitation Camps at Ukkunagaram, a total of 1357 differently abled persons were given Tri-cycles, Wheel Chairs, Crutches, Hearing Aids, Artificial Limbs and Walking Sticks to the Blind. "Learning is a continuous process" and there is no bar on place or age and keeping this in view, RINL introduced a Scheme called "Ukku Akshara Jyothi" towards Adult Literacy. RINL has continued its efforts to contribute to the society in prevention and control of HIV/AIDs through information, education and communication programmes (i.e through playlets in villages etc.). To encourage sporting activities, RINL has organized a National Senior Women's Boxing Championship and a District Level Body Building Championship at Ukkunagaram and extended support by way of infrastructure for UP Badminton Academy and supported the organizing of the 70th Table Tennis Championship. To take care of the poor farmers, 100 Nos. Steel Bullock Carts specially designed by INSDAG, Kolkata (worth Rs.15 lakhs) were handed over to the Collector and District Magistrate, free-of-cost and were distributed to the poor and needy farmers. An off-set printing press was provided in Central Prison, Visakhapatnam for preparation of stationery for Govt Organisations and to help generate revenue 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 Governor of Andhra Pradesh, Hon'ble Shri N D Tiwari through Indian Red Cross Society at a cost of Rs.280 lakhs. Towards publicity and promotion of steel usage in rural areas, a Model Steel Village was constructed by RINLVSP and handed over to the Tahsildar. The village contains nine rural houses, one Panchayat Hall, one school building, two toilet blocks and one open stage. An amount of Rs.43.00 lakhs was incurred on this CSR activity and a Steel House was also constructed at National Institute for

Grievance Addressing Mechanism


The company has given top priority to the redressal of grievances of staff as well as public. In compliance with the directives of Ministry of Steel from time to time, the Public Grievances appearing in media are being scrutinized and settled by Corporate Communications Department. Various fora have been put in place to capture and settle grievances of employees at different levels, so as to enhance overall satisfaction levels of the employees. Apart from the structured and formal grievance redressal mechanism that exists in the company, informal channels for sensing the pulse of the employees and initiating proactive actions have also been introduced e.g.
F F

Face-to-face interaction between employees and CMD. Chairman Online - an intranet based system where employees can post queries to CMD.

Safety & Health


Safety and health of employees has always been the prime concern in the plant and all efforts have been made to leverage upon the safety initiatives to maximize employee morale and satisfaction. These initiatives have yielded positive results with a 13.33% reduction in reportable accidents when compared to the previous year, zero accidents in 20 departments and "One million lost time injury free man hours" in 6 departments. The year 2008-09 saw the company adopting advanced medical technology to improve the "health care" facilities in the Visakha Steel General Hospital. The company also follows the Occupational Health & Safety Management System 18001:2007 standard for it's occupational health and safety services and recertification audit was carried out during the month of April, 2009.

CORPORATE SOCIAL RESPONSIBILITY


RINL continues to contribute in the area of Corporate Social Responsibility (CSR). CSR activities in RINL focus mainly on Environmental care, Education, Community Health care, People care, Peripheral Development, Cultural efflorescence, activities as a Responsible Corporate Citizen and Help during natural calamities. Under Corporate Social Responsibility activities, RINL constructed 30 school buildings in addition to providing infrastructure to the schools, donating schools books, Mosquito Nets to the Tribal Welfare Ashram School students in Tribal Agency Areas, construction of Hostel Block "21st Century Gurukulam", a novel project to help students from villages coming for studies in Andhra University, supply of 542 tonnes of steel for 150 community halls in Guntur and

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27th Annual Report 2008-09

Rural Development (NIRD), Campus, Hyderabad at a cost of Rs.2.30 lakhs. Project "Jaladhara" - Gravity Water Scheme was taken up under the CSR initiatives of RINL in an Agency Area in Visakhapatnam Dist. to provide drinking water to the village. Earlier the village folk (especially ladies) had to walk 5 to 6 km to bring head loads of mud-water or spring water. Because of this Project, now 4 villages in this area are getting water through taps at their door-steps. In the area of Cultural efflorescence, RINL supported SPICMACAY (Society for Promotion of Indian Classical Music and Culture Amongst Youth). RINL also extended financial assistance of Rs.700 lakhs and Medical Services to the flood victims of Bihar State.

PROMOTING WORK ETHICS:


The Vigilance department of the company has been taking up various initiatives to promote clean and transparent work ethics, with special emphasis on preventive vigilance. Vigilance Awareness Week was observed as per CVC guidelines. Measures like review of procedures, identification of sensitive posts, conducting surprise / quality checks, mounting surveillance and rail/road weighments and re-weighments were also undertaken. Integrity Pact has been made a part of the NIT/ Tender in more than 260 tenders covering all areas. In line with the direction of Ministry of Steel, Vigilance department completed all the formalities of getting ISO 9001-2000 certification and was issued the Certificate of Compliance by the certifying agency M/s Integrated Quality Certification Pvt. Ltd. Bangalore.

IMPLEMENTATION OF RIGHT TO INFORMATION ACT - 2005


As per the directives of the Govt of India, the RTI Act 2005 is under implementation w.e.f. 12th October 2005 onwards in the Company and the required infrastructure has been put in place. An RTI portal in the Company's website is being maintained and regularly updated providing the requisite information. Periodical reports on the progress of Implementation of the Act and performance w.r.t. the no. of cases received and disposed etc. are being submitted to various authorities. Training programmes for better awareness in the organization and discussion sessions with appellate authorities etc. are also being carried out. FAQ on RTI, type of information etc. are put on RTI Portal for facilitating information seekers to obtain information already available. All necessary information as per the provisions of RTI Act 2005 are being furnished to information seekers regularly. RTI request and Appeal Management Information System (RTI-MIS) is being implemented in accordance with the direction of Central Information Commission.

AWARDS & ACCOLADES:


k

RINL employees brought laurels to the Company by winning several prizes at Indian National Suggestion Schemes' Association (INSSAN) held at Kodaikanal in Tamil Nadu. VSP has bagged Silver Medal in Best Suggestors Contest, Merit Award in Best Suggestors Contest, Merit Award in technical paper contest, Merit Award in English slogan contest at the convention. RINL has been awarded 'Enterprise Excellence Award-2007' for their financial and operations strength under five perspectives such as Financial strength, Achievements, Internal Processes, Innovation & Learning and External Customer Orientation by the Indian Institution of Industrial Engineering (IIIE). VSP has added another feather in its cap by bagging Govt, of India Vishwakarma Rashtriya Puraskar (VRP) - 07 awards at national level for innovative suggestions from Madharam Dolomite Mines(MDM), SMS and BF departments which bagged Class-A, Class-B & Class-C awards respectively. VSP has won this distinction fourth time in row. Two Quality Circle teams from Visakhapatnam Steel Plant participated in International Convention on Quality Control Circles-2008 (ICQCC) at Dhaka, Bangladesh won highest category awards rated as excellent from amongst 166 QC Teams consisting of 800 delegates. VSP won the QCFI-NMDC trophy for 'Best Quality Circles Implementing Organisation', under PSU category at the 2nd National Convention on Quality Circles at Vadodara.

HIGHLIGHTS OF OFFICIAL LANGUAGE IMPLEMENTATION


During the year, RINL continued its endeavour to increase the usage of Hindi by way of Intensive training in Hindi. 56 employees were trained in Hindi Workshops, 211 officers at DGM (E-7) and above grade were given training in the special workshop and 88 employees were trained on computers in Hindi etc. RINL bagged the All India Rajbhasha Puraskar given by Ministry of Steel for the excellent work done in the field of Official Language Implementation for the year 2007-08. Hindi Dynikee and Kaarya Shala Material were published. Quarterly issues of Hindi in - house magazine "Sugandh", were also published.

15

RASHTRIYA ISPAT NIGAM LIMITED

Ukkuvani, the bi-monthly In-house journal of VSP was adjudged the 'best house journal devoted to welfare of employees' in the competition of 'National Awards for House Journals', as part of 10th Andhra Pradesh Public Relations Conference organized by the Hyderabad chapter of Public Relations Society of India.

FOREIGN EXCHANGE EARNINGS AND OUTGO


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

AUDITORS
M/s Rao and Kumar, Visakhapatnam have been appointed as the Statutory Auditors of the Company for the year 2008-09 by the Comptroller and Auditor General of India.

PARTICULARS OF EMPLOYEES
There was no employee of the company who received remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act 1956 read with the Companies (Particulars of employees) Rules, 1975.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT


The Management Discussion and Analysis Report, is annexed and forms part of the Directors' Report.

DIRECTORS RESPONSIBILITY STATEMENT


Pursuant to provisions of Section 217 (2AA) of the Companies Act, 1956, the following statement relating to Annual Accounts for the financial year ended 31st Mar.2009 is made: i) The applicable Accounting Standards had been followed in the preparation of the Annual Accounts for the financial year 2008-09.

CORPORATE GOVERNANCE REPORT


The Company strives to attain high standards of corporate governance. Hence, though not mandatory, a separate section on Corporate Governance is annexed and forms part of the Directors' Report.

SECRETARIAL COMPLIANCE REPORT


Secretarial Compliance Report confirming compliance to the applicable provisions of Companies Act, 1956 and applicable rules there under, though not mandatory, obtained from a practicing Company Secretary, is annexed and forms part of the Directors' Report.

ii) The Directors had selected such accounting policies and applied them consistently and made judgement and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period. iii) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. iv) The Directors had prepared the Annual Accounts on a "going concern" basis.

AUDITORS' REPORT
The Statutory Auditors' Report on the Accounts of the Company for the Financial year ended 31st March, 2009 is enclosed to the Directors' Report at Annexure-I.

C&AG COMMENTS
Comments of the Comptroller and Auditor General of India (C&AG) on the accounts of the Company and Replies thereto are enclosed at Annexure-II.

REPORT ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, ETC.


Information required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988 regarding Energy Conservation, Technology Absorption and Foreign Exchange earnings and outgo during the Financial year 2008-09 are furnished in the Annexure-A to the report and also in Form-A and Form-B annexed to this report.

DIRECTORS (APPOINTMENT/CESSATION)
The following changes took place in the Board of Directors of 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.f 7th Nov ' 08. Shri A. P. Choudhary appointed as Director (Projects) w.e.f. 1st June' 09. Shri P.K.Misra superannuated as Director (Operations) on 31.10.08.

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27th Annual Report 2008-09

Shri G. Elias resigned as Director on 06.11.08. Shri R.S.S.L.N. Bhaskarudu, Independent Director completed his tenure on 25th Apr 09. Dr.V.K.Bhalla, Independent Director completed his tenure on 28th June, 09.

Directors of the Company also appreciate the commitment, sincere efforts and hard work put in by all the employees of the company, Trade Unions and Steel Executive Association. Their whole hearted contribution has been vital in helping the company scale great heights. For and on behalf of the Board of Directors

ACKNOWLEDGEMENTS
Directors of the company acknowledge with deep appreciation the valuable guidance, assistance, cooperation and support extended by the Government of India, especially the Ministry of Steel and Govt. of Andhra Pradesh. Directors of the Company also place on record their appreciation for the cooperation extended by valued customers, suppliers, Railways, bankers, auditors, solicitors and business associates, the local District Administration and Law and Order authorities. Visakhapatnam Date: 4th July' 09 ( P K Bishnoi ) Chairman-cum-Managing Director

Adopted at the 27th Annual General Meeting held on 1st August 2009.

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RASHTRIYA ISPAT NIGAM LIMITED

MANAGEMENT DISCUSSION AND ANALYSIS REPORT FOR 08-09


A. INDUSTRY STRUCTURE AND DEVELOPMENTS Economy
The Indian as well as the global economy has witnessed a very high degree of uncertainty and volatility in 08-09. Global economic crisis triggered in late 2007 in developed countries further deepened during second half of 2008, following insolvency petitions filed by large number of financial institutions in US and Europe. The impact of the crisis has been unprecedented in its intensity and spread. The Indian economy, having achieved an annual growth rate of plus 9 percent during the three fiscal years ending March 2008, showed signs of slowdown during the second half of 2008-09 and achieved a growth rate of 6.7% during the fiscal.

Steel Scenario
Steel 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 had witnessed a fall of 70% in six months (July to December) period in the second half of 2008

36% pa

70%

In response to this slump in markets, steel producers world wide resorted to production cuts starting from second half 2008 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 from July 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. Nearly all the major steel producing countries registered negative growth in 2008 with the exception of China, South Korea and India where steel production grew by 2.6%, 3.8% and 3.7% respectively.

6.8% CAGR 31.6%

(Source : World Steel Association ) 18

27th Annual Report 2008-09

The year also saw unprecedented rise in prices of raw materials like iron ore and coking coal. Escalation of prices of coking coal & iron ore was more than 3 & 1.6 times respectively between 2007 and 2008 alone. Falling steel prices coupled with high contracted prices of raw materials continues to severely impact the profitability of steel producers not having captive mines.

>3X

>1.6X

B. STRENGHTS AND WEAKNESSES

C. OPPORTUNITIES AND THREATS :

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RASHTRIYA ISPAT NIGAM LIMITED

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

(i) Short term & Medium Term


As a result of continuous operation of the plant at higher capacities and consistent increase in special steel production, many of the plant equipment warrant immediate revamp and capital repairs. RINL has taken several actions 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 judicious planning of projects targeting technological upgradation and the capital repairs of major equipment, VSP intends to strengthen its technological advantage. Company is focused on completion of expansion project as per the schedules in spite of constraints such as nonavailability of skilled manpower for deployment by contractors, rising aspirations of contract workers and disruption by local displaced persons. Simultaneous expansion plans of other major steel players in the country and increasing competition from existing players having captive raw material resources poses a serious threat in the medium term in the form of possible over supplies. The company proposes to counter this threat through shift to value added steel and also differentiate itself 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 the next 3 years was also taken up, so as to minimize impact on company profitability during the down trend that steel markets are witnessing in the country.

(ii) Long term


In 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 performance through out. To overcome this, RINL is exploring a collaborative approach with State Mineral Development Corporation for 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 ore mines outside the country. To address the coking coal situation in the long term, International Coal Ventures Ltd. with a paid up equity of Rs 3500 Cr by SAIL, CIL, RINL, NTPC and NMDC has been incorporated, to acquire coking coal and thermal coal assets overseas. An MoU has been entered with SAIL to explore Low Silica Limestone mines abroad. Joint Venture Agreement has been signed between RINL & MOIL for setting up a Ferro Alloy plant in Bobbili near Visakhapatnam.

(iii) Outlook
The World Steel Association forecasts that worldwide apparent steel use is expected to decline by -14.9% to 1,018.6 million tons (Mt) in 2009. However, steel demand is expected to stabilise in the latter part of 2009 leading to a mild recovery in 2010. The current market turmoil has dented the growth curve of various industries in India such as automobile and construction, which, in turn, has hit the Indian steel industry hard. But with the government's plans to boost up the economy by injecting funds in various industries like infrastructure, construction, automobile and power, near future is expected to see a further growth in India. Easing of raw material prices will also have a favourable 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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27th Annual Report 2008-09

E. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY :


The company is having an efficient system of Internal controls for achieving the objectives of the company by ensuring efficiency in operations, protection of resources, accuracy and promptness in financial reporting and compliance with the laid down policies and procedures alongwith relevant Laws and regulations. In RINL, there is a separate Internal Audit department and the Internal Audit is a multi disciplinary function which is conducted by a team of experienced Charted Accountants, Cost Accountants, Engineers and other employees. The Internal Audit reviews, evaluates and appraises the various systems, procedures and policies of the company suggest meaningful and useful improvements alongwith corrective measures wherever required. It also brings out a systematic and 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 by the Board to focus on transparency in the systems and internal control mechanisms. Annual Audit programmes are drawn up covering critical areas of various departments in order to bring overall improvements in the company. The internal control systems are commensurate with the size of the company and the reports containing significant Audit findings are submitted to the Audit Committee of the company and to the Board through the Audit Committee.

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 be referred to.

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RASHTRIYA ISPAT NIGAM LIMITED

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27th Annual Report 2008-09

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RASHTRIYA ISPAT NIGAM LIMITED

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27th Annual Report 2008-09

25

RASHTRIYA ISPAT NIGAM LIMITED

FINANCIAL HIGHLIGHTS
2008-09 A OPERATING RESULTS (Rs Crs) Turnover Gross Income Gross Expenditure Gross Profit Gross Profit (excluding Interest on Term Deposits) Profit before Tax Net Profit After Tax YEAR END FINANCIAL POSITION (Rs Crs) Share Capital Reserves and Surplus Capital Employed Capital Employed (excluding Term Deposits) Net Worth Gross Block Depreciation Net Block Inventory PROFITABILITY AND OTHER RATIOS (i) Percentage of Gross Profit to Sales Net Profit to Sales Gross Profit to Net Worth Net Profit to Net Worth Gross Profit(excluding Interest on Term Deposits) to Capital Employed (excluding Term Deposits) Net Profit to Capital Employed Gross Profit to Share Capital Inventory to Sales Sales to Capital Employed (ii)Ratio of Current Assets to Current Liabilities Quick Assets to Current Liabilities 20.3 12.8 17.0 10.8 59.5 15.1 27.0 30.9 117.4 29.0 18.6 26.4 16.9 103.9 19.6 38.7 16.9 105.0 10411 11387 9271 2116 1360 2027 1336 2007-08 10433 11337 8310 3027 2336 2995 1943

7827 4593 8869 2286 12420 9006 7750 1256 3215

7827 3654 9935 2249 11481 8901 7516 1385 1761

2.8 2.0

3.6 3.1

26

27th Annual Report 2008-09

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RASHTRIYA ISPAT NIGAM LIMITED

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27th Annual Report 2008-09

29 29

RASHTRIYA ISPAT NIGAM LIMITED

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27th Annual Report 2008-09

Annual Accounts for 2008-09

BALANCE SHEET AS AT 31st March 2009


Schedule No. SOURCES OF FUNDS
SHAREHOLDERS FUNDS
Share Capital Reserves and Surplus 1 2 7 827.32 4 592.59 7 827.32 3 653.72

As at 31st March, 2009

Rs Crs As at 31st March, 2008

LOAN FUNDS
Secured loans Unsecured loans Deferred Tax Liability ( Net ) Total 3 4 907.72 100.04 124.49 13 552.16 332.78 107.95 163.12 12 084.89

APPLICATION OF FUNDS FIXED ASSETS


Gross block Less: Depreciation Net block Held for disposal Capital work-in-progress 5 9 005.99 7 749.74 1 256.25 0.05 4 617.81 5 874.11 0.05 3 215.28 191.27 6 624.17 258.91 1 569.69 11 859.32 1 761.15 93.41 7 699.11 292.43 1 958.49 11 804.59 1 610.15 1 581.47 3 191.62 7 678.00 13 552.16 8 612.97 12 084.89 8 900.83 7 516.19 1 384.64 0.04 2 087.19 3 471.87 0.05

6 7 9 10 11 12 13 14

INVESTMENTS CURRENT ASSETS, LOANS & ADVANCES


Inventories Sundry debtors Cash & Bank balances Other Current assets Loans & Advances

LESS: CURRENT LIABILITIES & PROVISIONS


Liabilities Provisions 15 16 2 560.79 1 620.53 4 181.32

Net Current assets


Total Accounting Policies & Notes to Accounts 29 Schedules 1 to 29 annexed form part of the Accounts For and on behalf of Board of Directors

As per our report of even date For RAO & KUMAR Chartered Accountants Sd/(K.S. Shankar) Director (Finance) Sd/(CA Anirban Pal) Partner M.No: 214919

Sd/(P.K.Bishnoi) Chairman-cum-Managing Director Sd/(P Mohan Rao) Company Secretary Place : New Delhi Date : 04 July 2009

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RASHTRIYA ISPAT NIGAM LIMITED

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDING 31st March 2009
Schedule No. INCOME
Gross Sales Less: Excise duty recovered on sales Net Sales Internal consumption Interest earned Other revenue Total EXPENDITURE Raw materials consumed Depletion / (Accretion) to Stock of Semi-finished/Finished goods Employees remuneration & benefits Stores & spares consumed Power & fuel Repairs & maintenance Freight outward Other expenses & provisions Interest Depreciation Wealth tax Less: Inter account adjustments-raw material mining cost Net expenditure Profit for the year Prior period adjustments- Net credit Profit Before Tax Provision for Taxation Current Tax Fringe Benefit Tax Earlier years adjustments Deferred Tax Profit After Tax Balance of Profit brought forward from previous year Amount available for appropriation APPROPRIATIONS Proposed Dividend Tax on Proposed Dividend Reserve for Redeeming Preference Share Capital Balance carried to Balance Sheet Total appropriations Basic and Diluted Earnings Per Share (in Rupees) (Face Value Rs. 1000 per share) Accounting Policies & Notes to Accounts Schedules 1 to 29 annexed form part of the accounts For and on behalf of Board of Directors 18 10 410.63 1 282.25 9 128.38 114.10 787.21 75.02 10104.71 10 433.07 1 344.70 9 088.37 88.46 724.64 91.27 9 992.74

For the year ended 31st March, 2009

Rs Crs For the year ended 31st March, 2008

19 20

21 22 23 24 25 26 27

28

5 896.25 (916.65) 1 156.68 501.23 340.31 149.81 286.53 377.12 88.14 240.46 0.89 8 120.77 38.06 8 082.71 2 022.00 4.59 2 026.59 746.38 4.66 (21.39) (38.63) 1 335.57 3 652.55 4 988.12 339.18 57.64 2937.47 1653.83 4988.12 273.13

4 280.22 (343.17) 1 030.72 364.06 258.81 125.79 306.96 509.93 31.57 471.55 0.48 7 036.92 39.15 6 997.77 2 994.97 0.39 2 995.36 1 188.13 4.43 (11.77) (128.17) 1 942.74 1 709.81 3 652.55 0.00 0.00 0.00 3652.55 3652.55 397.30

29

As per our report of even date For RAO & KUMAR Chartered Accountants Sd/(K.S. Shankar) Director (Finance) Sd/(CA Anirban Pal) Partner M.No: 214919

Sd/(P.K.Bishnoi) Chairman-cum-Managing Director

Sd/(P Mohan Rao) Company Secretary Place : New Delhi Date : 04 July 2009

32

27th Annual Report 2008-09

SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31st March 2009


Schedule 01 : Share Capital As at 31st March, 2009 AUTHORISED
4,89,00,000 (Previous year 4,89,00,000) Equity Shares of Rs.1000 each 3,11,00,000 (Previous Year 3,11,00,000) Preference Shares of Rs.1000 each Total ISSUED, SUBSCRIBED & PAID-UP 4,88,98,462 (Previous year 4,88,98,462) Equity Shares of Rs.1000 each. 2,93,74,700 (Previous year 2,93,74,700) 7 % Non-Cumulative redeemable Preference Shares of Rs.1000 each redeemable at par, as under 10,00,000 during 2011-12 55,00,000 during 2014-15 1,38,05,000 during 2012-13 30,00,000 during 2015-16 60,69,700 during 2013-14 The earliest date of redemption is 31st March, 2012. Total Of the above, 21,80,612 Equity Shares of Rs.1000 each were allotted as fully paid-up for consideration other than cash. 7827.32 7827.32 4890.00 3110.00 8000.00 4889.85 2937.47 4890.00 3110.00 8000.00 4889.85 2937.47

Rs Crs As at 31st March, 2008

Schedule 02 : Reserves and Surplus As at 31st March, 2009


Prime Ministers Trophy Award Fund As per last Balance Sheet Additions Reserve for Redeeming Preference Share Capital Surplus as per Profit and Loss Account Total 1.17 0.12 1.29 2937.47 1653.83 4592.59

Rs Crs As at 31st March, 2008


1.07 0.10 1.17 0.00 3652.55 3653.72

Schedule 03 : Secured Loans As at 31st March, 2009


Working Capital Borrowings from Banks (Secured by hypothecation of Current Assets) Loans from Banks against Term Deposits Total 334.19 573.53 907.72

Rs Crs As at 31st March, 2008


332.78 0.00 332.78

Schedule 04 : Unsecured Loans As at 31st March, 2009


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

Rs Crs As at 31st March, 2008


0.00 107.95 107.95

33

RASHTRIYA ISPAT NIGAM LIMITED

Schedule 05 : Fixed Assets As at 1st April, 2008 A. Plant, Mines & Others : Land-Freehold (Including cost of development) Land-Leasehold Railway Lines & sidings Roads, Bridges & Culverts Buildings Plant & Machinery Furniture & Fittings Locomotives Vehicles Electrical Installations Water Supply & Sewerage systems Miscellaneous Articles Mining lease rights Total (A) Figures for the previous year B. Social Facilities : Land-Freehold ( Including cost of development) Roads, Bridges & Culverts Buildings Plant & Machinery Furniture & Fittings Electrical Installations Water Supply & Sewerage systems Miscellaneous Articles Total (B) Figures for the previous year Total (A + B) Figures for the previous year 41.44 1.65 48.03 105.64 737.47 6983.38 16.13 64.90 11.45 272.41 252.43 89.96 5.83 8630.72 8613.83 Gross Block Additions & Sales & adjustments adjustments 35.69 0.97

Rs Crs As at 31st March, 2009 76.16 1.65 48.03 116.36 738.26 7012.16 17.81 66.56 12.76 274.90 252.61 102.03 5.83 8725.12 8630.72

10.72 0.79 36.15 1.69 1.90 1.72 2.49 0.18 12.11 103.44 59.37

7.37 0.01 0.24 0.41

0.04 9.04 42.48

10.30 11.94 193.97 2.07 0.62 22.13 19.14 9.94 270.11 261.79 8900.83 8875.62

0.79 1.17 0.69 0.04 7.44 2.25 11.59 8.32 115.03 67.69 0.04 0.83 0.00 9.87 42.48

9.51 13.11 194.66 2.07 0.66 29.57 19.14 12.15 280.87 270.11 9005.99 8900.83

34

27th Annual Report 2008-09

Schedule 05 : Fixed Assets (continued) Depreciation As at 1st For the Year Sales & April, 2008 (incl. PPA) adjustments

As at 31st March, 2009

Rs Crs Net Block As at 31st As at 1st March, 2009 April, 2008 76.16 1.07 3.53 97.03 309.61 467.96 5.72 9.69 4.80 41.36 29.00 27.52 3.22 1076.67 1208.97 41.44 1.10 5.92 88.23 332.96 600.31 4.99 11.08 3.80 52.45 41.17 22.01 3.51 1208.97 1611.52

0.55 42.11 17.41 404.51 6383.07 11.14 53.82 7.65 219.96 211.26 67.95 2.32 7421.75 7002.31

0.03 2.39 1.92 24.14 168.50 0.96 3.26 0.72 13.58 12.35 6.59 0.29 234.73 461.94

7.37 0.01 0.21 0.41

0.03 8.03 42.50

0.58 44.50 19.33 428.65 6544.20 12.09 56.87 7.96 233.54 223.61 74.51 2.61 7648.45 7421.75

3.36 52.43 1.57 0.25 14.90 15.40 6.53 94.44 82.85 7516.19 7085.16

0.22 3.34 0.10 0.01 1.40 0.96 0.83 6.86 11.58 241.59 473.52

0.01 0.01 (-) 0.01 8.04 42.49

3.58 55.77 1.67 0.26 16.30 16.36 7.35 101.29 94.44 7749.74 7516.19

9.51 9.53 138.89 0.40 0.40 13.27 2.78 4.80 179.58 175.67 1256.25 1384.64

10.30 8.58 141.54 0.50 0.37 7.23 3.74 3.41 175.67 178.94 1384.64 1790.46

35

RASHTRIYA ISPAT NIGAM LIMITED

ALLOCATION OF DEPRECIATION As at 31st March, 2009


Current year Prior periods Total Note : Allocation of Depreciation not included above and charged to: Expenditure During Construction Schedule 06 : Assets Retired from active use and held for disposal As at 31st March, 2009 4.29 4.24 0.05 240.46 0.32 240.78

Rs Crs As at 31st March, 2008


471.55 1.50 473.05

0.81

0.47 Rs Crs As at 31st March, 2008 4.28 4.24 0.04 Rs Crs As at 31st March, 2008 259.04 1197.50 107.61

Value of Fixed Assets Less: Provision for loss Balance Schedule 07 : Capital Work-In-Progress

As at 31st March, 2009 Work-in Progress (Including Material issued to contractors) Coke Oven Battery-4 341.26 6.3 MT Expansion 3384.99 Others 249.69 3975.94 Less : Provision for Shortages Provision for dropped SLTM Project 0.09 17.90 17.99 3957.95 Advances to Contractors Advances to Government departments 526.69 6.57 533.26 Expenditure during construction awaiting allocation (Schedule : 08) 126.60 478.14 4.32 2.22 24.79

1564.15 27.01 1537.14

482.46 67.59

Total Advances : Unsecured & Considered good Advances : Unsecured & Considered doubtful Schedule 08 : Expenditure During Construction

4617.81 533.26 0.00

2087.19 482.46 0.00 Rs Crs As at 31st March, 2008 36.05 20.66 3.25 0.01 0.12 8.35 0.00 0.47 32.86 0.17 1.32 67.59

Opening Balance Expenditure during the year: Employees Remuneration & Benefits Power & fuel Repairs & Maintenance Technical Consultancy Other Expenses & Provisions Interest Depreciation Less Interest Receipts Other Revenue Total awaiting allocation carried to Schedule No: 07

As at 31st March, 2009 67.59 44.55 4.60 4.13 0.05 7.17 0.03 0.81 61.34 0.20 2.33 126.60

2.13

1.15

36

27th Annual Report 2008-09

Schedule 09 : Investments (At Cost) As at 31st March, 2009 Trade - Quoted * 1,82,927 Equity Shares of Rs.10/- each in Bisra Stone Lime Company Limited Non-trade - Unquoted # 2,280 Equity Shares of Re.1/- each in Free Press House Limited 50,000 Equity Shares of Rs.10/- each in Steelscape Consultancy Private Limited Total * Investments amounted to Rs.1000/-, hence rounded off to zero. # Investments amounted to Rs.2380/-, hence rounded off to zero and include one fully paid-up Equity Share of Rs.100/- each in Anakapalli Rural Electric Co-operative society Limited Schedule 10 : Inventories (As taken and certified by the Management) As at 31st March, 2009 Semi Finished/ Finished goods Add: In-transit Raw materials Add: In-transit/ Under inspection Less: Provision for shortages Stores & Spares Add: In-transit/ Under inspection Less: Provision for obsolescence & Non-moving items Total Schedule 11 : Sundry Debtors As at 31st March, 2009 Sundry debtors Debts over six months Other debts Less : Provision for doubtful debts TotalUnsecured & Considered good Schedule 12 : Cash & Bank balances As at 31st March, 2009 Cash on hand Cheques on hand Remittances in-transit Current Accounts with Scheduled Banks Term deposits with Scheduled Banks Total 0.05 36.77 0.00 4.13 6583.22 6624.17 21.04 191.27 212.31 21.04 191.27 1688.31 20.05 1708.36 1161.29 150.47 1311.76 117.44 1194.32 307.21 45.69 352.90 40.30 312.60 3215.28

Rs Crs As at 31st March, 2008

0.00

0.00

0.00 0.05 0.05

0.00 0.05 0.05

Rs Crs As at 31st March, 2008 718.67 73.04 791.71 608.36 227.00 835.36 149.26 686.10 292.17 33.35 325.52 42.18 283.34 1761.15 Rs Crs As at 31st March, 2008 21.94 90.84 112.78 19.37 93.41 Rs Crs As at 31st March, 2008 0.10 1.99 0.64 10.65 7685.73 7699.11

37

RASHTRIYA ISPAT NIGAM LIMITED

Schedule 13 : Other Current Assets As at 31st March, 2009


Interest accrued on loans to employees Interest accrued others Less: Provision for Non recoverable interest Other income accrued Total 4.32 260.71 6.24 254.47 0.12 258.91

Rs Crs As at 31st March, 2008


2.55 295.90 6.24 289.66 0.22 292.43

Schedule 14 : Loans & Advances As at 31st March, 2009


Loans Employees Others Material issued on loan Advances & other recoverables (Recoverable in cash or in kind or for value to be received) Government departments Less:Provision for doubtful advances Advance Income Tax & Fringe Benefit Tax Contractors Less:Provision for doubtful advances Suppliers Less:Provision for doubtful advances Employees Less:Provision for doubtful advances Others Less:Provision for doubtful advances/ recoverables 43.33 240.00 0.00

Rs Crs As at 31st March, 2008


32.79 240.00 1.10

283.33

273.89

15.48 0.62 14.86 738.64 18.09 0.54 17.55 48.35 6.50 41.85 25.55 0.16 299.42 27.88 271.54 1109.83 1.66 37.93 5.55 32.38 142.49 1569.69 25.39

10.02 0.62 9.40 1153.74 8.16 0.54 7.62 60.26 7.63 52.63 28.36 0.16 284.17 28.27 255.90 1507.49 0.41 37.29 5.47 31.82 144.88 1958.49 28.20

Prepaid expenses Claims recoverable Less: Provision for doubtful claims Deposits Total Particulars of Loans & Advances Loans Secured & Considered good Unsecured & Considered good Advances Unsecured & Considered good Others Unsecured & Considered good Advances Unsecured & Considered doubtful Claims Unsecured & Considered doubtful Total Amounts due from Directors Maximum amount due at any time during the year from Directors

240.00 43.33 1109.83 176.53 1569.69 35.70 5.55 41.25 1610.94 0.00 0.00

240.00 33.89 1507.49 177.11 1958.49 37.22 5.47 42.69 2001.18 0.00 0.00

38

27th Annual Report 2008-09

Schedule 15 : Liabilities As at 31st March, 2009


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

Rs Crs As at 31st March, 2008


501.31 136.97 1.57 99.32 4.89 866.09 1610.15

Particulars of Sundry Creditors Total outstanding dues of micro enterprises and small enterprises Total outstanding dues of creditors other than micro enterpries and small enterprises Total

0.00 1149.44 1149.44

0.00 501.31 501.31

Schedule 16 : Provisions for


As at 31st March, 2009 Current Income Tax Fringe Benefit Tax Wealth Tax Proposed Dividend Tax on proposed Dividend Gratuity to employees Future leave encashment Post-retirement Benefits Employee family Benefit Scheme Long Service Awards Mines Closure Total 746.38 4.66 0.89 339.18 57.64 34.55 253.00 123.68 53.33 5.11 2.11 1620.53

Rs Crs As at 31st March, 2008 1188.13 4.43 0.48 0.00 0.00 45.07 184.61 106.68 45.90 4.40 1.77 1581.47 Rs Crs Charged off during the period 0.00 0.00 14.95 As at 31st March 2009 0.00 0.00 0.00

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


As at 1st April, 2008 Deferred Revenue Expenditure Total Previous Year 0.00 0.00 14.95 Additions during the period 0.00 0.00 0.00

39

RASHTRIYA ISPAT NIGAM LIMITED

SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31st March 2009
Schedule 18 : Gross Sales Current Year
Domestic Export Total 10332.31 78.32 10410.63 Rs Crs

Previous Year
9878.34 554.73 10433.07

Schedule 19 : Interest Earned Current Year


Loans to employees Banks Others Total 2.17 755.47 29.57 787.21

Rs Crs

Previous Year
1.08 691.26 32.30 724.64

Schedule 20 : Other Revenues Current Year


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

Rs Crs

Previous Year
2.80 0.50 2.24 8.08 2.81 9.84 0.62 18.75 45.63 91.27

Schedule 21 : Raw Materials Consumed Current Year Quantity


Coal Coke and Coke breeze Iron Ore Iron Ore Pellets Limestone Dolomite Silico Manganese Ferro Silicon Alluminium Manganese Ore Petroleum Coke Sea Water Magnesite Billets Others Total 3312835 201765 5201536 0 844907 662570 40681 5162 3435 20215 5353 3156 19735

Quantity: Tonnes Value : Rs Crs Previous Year Value


3101.20 438.39 1725.37 0.00 110.46 64.01 276.10 27.44 39.27 2.10 12.08 9.35 75.23 15.25 5896.25

Quantity
3306163 278472 5889700 142096 829300 655078 40533 5794 3463 5852 6274 2831 98668

Value
1715.10 331.32 1500.80 87.28 86.53 59.80 165.22 24.57 41.01 0.68 7.90 8.02 233.61 18.38 4280.22

40

27th Annual Report 2008-09

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


Rs Crs

Current Year
Opening stock Less: Closing stock Net Depletion/(Accretion) 791.71 1708.36 (916.65)

Previous Year
448.54 791.71 (343.17) Rs Crs

Schedule 23 : Employees remuneration & benefits Current Year


Salaries, wages & allowances Companys contribution - provident fund & other funds Staff welfare expenses Gratuity Voluntary Retirement Benefits Total 794.31 68.38 209.74 84.10 0.15 1156.68

Previous Year
715.30 75.27 129.39 110.34 0.42 1030.72

Note: Expenditure on Employees remuneration & benefits not included above and charged to:
Expenditure During Construction Salaries, wages & allowances Companys contribution - provident fund & other funds Staff welfare expenses Gratuity Total Capital Work in Progress Salaries, wages & allowances Companys contribution - provident fund & other funds Staff welfare expenses Gratuity Total 38.86 2.39 1.73 1.56 44.54 1.78 0.02 0.22 0.12 2.14 15.89 1.75 1.28 1.74 20.66 1.69 0.19 0.11 0.20 2.19

Schedule 24 : Power & Fuel Current Year


Purchased power Boiler coal Medium Coking Coal Furnace oil/ LSHS/ LDO Total Power & Fuel - Expansion 102.07 223.75 11.77 2.72 340.31 4.60

Rs Crs Previous Year


67.83 178.52 11.56 0.90 258.81 3.25

Schedule 25 : Repairs & Maintenance Current Year


Plant & Machinery Buildings Others Total Note: Repairs & maintenance not included above and charged to: Expenditure during construction Repairs & maintenances - Plant & Machinery and others 75.59 18.58 55.64 149.81

Rs Crs Previous Year


71.11 10.85 43.83 125.79

4.13

0.01

41

RASHTRIYA ISPAT NIGAM LIMITED

Schedule 26 : Other Expenses & Provisions Current Year


Technical services Rent Rates & taxes Excise Duty Export Duty Insurance Handling & scrap recovery Selling expenses Travelling expenses Printing & stationery Postage, telegrams & telephone Water charges Legal expenses Bank charges Community Development Welfare Donations CSR Foundation Others Security expenses Advertisement Demurrages & wharfages Exchange Rate Variation Remuneration to Auditors Statutory Audit Tax matters Other Services Travelling & other expenses Provisions Shortage/damaged material/obsolescence/non-moving items of stores Doubtful advances and claims Doubtful debts Dropped SLTM Project Non Recoverable Interest Loss on Fixed Assets Retired from active use and held for disposal Write-offs Shortage/damaged material/obsolescence/non-moving items of stores Doubtful advances and claims Doubtful Debts Miscellaneous/Deferred revenue expenditure Sundries Total Note : Expenditure on Other expenses & provisions not included above and charged to : Expenditure During Construction Travelling Expenses Printing & Stationery Postage, telegrams & telephone Water Charges Advertisement Legal charges Bank Charges Sundries Total Capital Work in Progress Travelling Expenses Total 2.02 0.02 0.26 2.63 1.36 0.00 0.14 0.74 7.17 0.07 0.07 2.17 3.72 35.79 (12.13) 10.92 4.34 93.02 8.18 42.35 2.37 2.75 32.03 0.98 1.62 0.48 9.09 1.57 1.41 6.50

Rs Crs

Previous Year
1.15 3.26 30.70 111.42 0.00 1.31 93.11 15.36 42.26 2.15 2.93 22.99 0.88 2.16 0.23

10.66 21.15 15.53 3.32 52.66

7.91 33.80 16.13 1.45 0.00

0.05 0.03 0.01 0.13

0.22

0.05 0.01 0.01 0.13

0.20

3.04 3.12 2.31 1.61 0.00 0.00 0.20 0.00 0.00 0.00

10.08

26.61 21.05 1.16 24.79 6.24 0.02 0.24 0.01 0.01 14.95

79.87

0.20 34.71 377.12

15.21 25.45 509.93

2.34 0.03 0.52 1.69 3.50 0.01 0.25 0.01 8.35 0.11 0.11

42

27th Annual Report 2008-09

Schedule 27 : Interest Current Year


Interest : Foreign currency facilities Banks - Working capital borrowings and Loans - Loans against Term Deposits Interest on Income Tax Others Total 0.00 25.19 61.83 87.02 0.14 0.98 88.14 13.39 10.51

Rs Crs

Previous Year
2.30

23.90 4.89 0.48 31.57

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

0.00

Schedule 28 : Prior Period Adjustments Current Year


Stores & spares Claims for finished goods Sale of products Raw Materials Depreciation Other Expenses Other Revenue Repairs & Maintenance Total 0.00 ....... (0.15) CR 0.00........ (5.99) CR 0.32 DR 0.28 DR (2.98) CR 3.93 DR (4.59) CR

Rs Crs

Previous Year
(1.92) 0.33 (0.80) (2.18) 1.50 3.67 (0.99) 0.00 (0.39) CR DR CR CR DR DR CR c CR

43

RASHTRIYA ISPAT NIGAM LIMITED

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 accounting assumptions and Generally Accepted Accounting Principles (GAAP) in India.

2.0

FIXED ASSETS
2.1 2.2 2.3 Fixed assets are stated at historical cost less depreciation. Contributions made by the company towards the cost of fixed assets owned by the State / Central Government are grouped together with similar assets owned by the company with appropriate disclosure thereof. Expenditure attributable / relating to construction, to the extent not directly identifiable to any specific Plant Unit, is kept under Expenditure During Construction for allocation to Fixed Assets and is grouped under Capital Work-in- Progress.

3.0

INVESTMENTS
3.1 3.2 Current investments are carried at lower of cost and fair value. Long term investments are carried at cost. Diminution in value, other than temporary, is provided for.

4.0

INVENTORIES
4.1 4.2 Inventories are valued at lower of cost and net realizable value. The basis of determining cost is:

4.2.1 Finished / Semi-finished goods - Weighted Average cost 4.2.2 Raw material, Stores & Spares, Loose Tools - Monthly weighted average cost and those in transit at cost. 4.3 Obsolete / Surplus / Non-moving inventory are adequately provided for.

5.0

REVENUE RECOGNITION
5.1 5.2 Sales are recognized when all significant risks and rewards of ownership have been transferred to the buyer. Export incentives under various schemes are recognized as Income on certainty of realisation.

6.0

CLAIMS
6.1 Claims against outside agencies are accounted on certainty of realisation.

7.0

FOREIGN CURRENCY TRANSACTIONS


7.1 7.2 Foreign currency monetary items are recorded at the closing rate. Exchange differences arising on account of settlement / conversion of foreign currency monetary items are recognised as expense or income in the period in which they arise.

8.0

EMPLOYEE BENEFITS
8.1 Actuarial gains and losses on defined benefit plans recognized during the year.

44

27th Annual Report 2008-09

9.0

DEPRECIATION AND AMORTISATION


9.1 Depreciation is provided on straight line method (SLM), up to full value of the cost of asset over the specified period derived in accordance with the provisions of Schedule XIV of the Companies Act, 1956, except the following:

9.1.1 Assets costing up to Rs.5000/- are fully depreciated in the year of capitalisation. 9.1.2 Depreciation on the following categories of assets is provided up to full value of the cost of asset on SLM over the period of their useful life based on the Managements estimate given in brackets. Photo Copiers & Fax Machines, Telecom Equipment (5 years); Cranes, Slag Pot Carriers, Audio & Visual Equipment (10 years); Other Office Equipment, Earth Moving Equipment, Forklift Trucks, Air Conditioners, Refrigerators, Water Coolers, Air Coolers, Freezers (7 years); Cars (6 years); Safety Equipment, Other light vehicles (8 years); Computers [including system Software] (4 years); Coke Ovens & Coal Chemical Plant (15 years). 9.1.3 Contributions made by the company towards the cost of fixed assets owned by the State/ Central Government are depreciated over the estimated period of their utility or five years, whichever is less. 9.2 Mining lease rights are amortised over the period of lease.

10.0 BORROWING COSTS


10.1 Borrowing costs incurred for obtaining assets which take more than 12 months to get ready for its intended use are capitalised to the respective assets wherever the costs are directly attributable to such assets and in other cases by applying weighted average cost of borrowings to the expenditure on such assets. 10.2 Other borrowing costs are treated as expense for the year.

11.0 PRIOR PERIOD ADJUSTMENTS


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

45

RASHTRIYA ISPAT NIGAM LIMITED

Schedule 29 Contd...

B. NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31st March, 2009 1.0 1.1 BALANCE SHEET 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 the Project and related purposes incidental thereto. Land includes 358.0571 acres (Previous year 358.0571 acres) allotted to various agencies on lease basis. Sale deeds in respect of the following assets are yet to be executed: a) Stockyard at Chennai b) Office buildings at New Delhi c) Office buildings at Ahmedabad d) Residential buildings at Kolkata e) Stockyard at Hyderabad 1.1.4 Rs. Rs. Rs. Rs. Rs. 2.37 Crs 1.19 Crs 0.18 Crs 0.95 Crs 1.00 Crs (Previous Year Rs. 2.37 Crs) (Previous Year Rs. 1.19 Crs) (Previous Year Rs. 0.18 Crs) (Previous Year Rs. 0.95 Cr) (Previous Year Rs. NIL)

1.1.2 1.1.3

a) Fixed assets (Gross Block) include assets costing Rs.10.05 Crs (Previous year Rs.10.05 Crs) not owned by the Company which were depreciated in full as per the accounting policy 9.1.3. b) Fixed Assets include Rs. 0.39 Crs (Debit) [ Previous year Rs.0.39 Crs (Debit) ] representing Net Exchange Rate Variation for the year in respect of foreign currency liabilities with regard to acquisition of fixed assets prior to 1st April 2004.

1.1.5 1.1.6

Main plant units, including Mills, constitute "Continuous process plant". Borrowing costs included in Capital Work in Progress (Schedule - 07) during the year Rs. 0.03 Crs (Previous year Rs.nil Crs) .

1.2

INVESTMENTS
1.2.1 1.2.2 Investments shown specifically as such represent permanent investments and investments in term deposits included in Current Assets are reckoned as Current Investments. Interest amounting to Rs.755.47 Crs (Previous Year Rs.691.26 Crs) on Current Investments representing Term 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 verification except in the case of Calcined Lime, Liquid Oxygen, Liquid Nitrogen, Argon gas, Oxygen gas, Nitrogen gas, Magnesite Bricks, Calcium Carbide Sludge, Coke Sludge, Coke Dust and Stocks of Calcined Lime at open yard amounting to Rs. 8.13 Crs (Previous Year Rs. 44.02 Crs) which are as per book balances.

46

27th Annual Report 2008-09

1.3.1.2

Stocks & Sales Quantity in Tonnes Value Rupees Crores Pig Iron Blooms Saleable Steel 155456 (100806) 349.64 (192.50) Sundries Coke & Coke Others Products 135365 310080 (116550) (307610) 80.49 131.09 (71.75) (98.99) ----259190 (135365) 288.18 (80.49) 1668893 (1716014) 316.43 (274.06) 328018 (310080) 177.59 (131.09) Total

Opening stock

Quantity Value

65052 (8449) 97.31 (10.01) 245673 (411589) 614.28 (722.38) 125267 (65052) 179.13 (97.31)

81864 (46074) 133.18 (75.29)

--791.71 (448.54) --10410.63 (10433.07) --1708.36 (791.71)

Sales

Quantity Value

94495 2503337 (71902) (2864212) 253.54 9226.38 (190.46) (9246.17) 182790 (81864) 425.89 (133.18) 233181 (155456) 637.57 (349.64)

Closing stock

Quantity Value

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 1.3.1.4 1.3.1.5 1.3.1.6 In line with industry practice, no credit is taken for the value of material in process except those lying at mills. No credit is taken in the accounts for the stock of run of mines ore and rejects at Mines. Since the Coke Breeze used for internal consumption, the same has been valued at 60% of the production cost of BF coke. Coke and other By products are valued at net realisable value, wherever cost is not determinable and at cost, where net realisable value is not available, except in the case of Stock of BF Granulated slag at dump yard for which no value is assigned. The stock of iron scrap and steel scrap has been considered in the accounts on the basis of visual survey / estimates and are valued at 75% and 90% respectively, at lower of the cost of Pig Iron and of the domestic net realisable value of Pig Iron.

1.3.1.7

1.3.2
1.3.2.1

CASH AND BANK BALANCES


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 security against Loans availed by the company. b) Term Deposits Receipts of value of Rs.3.65 Crs. (Previous Year NIL) pledged with bankers as security to fecilitate credit facilities by a supplier.

47

RASHTRIYA ISPAT NIGAM LIMITED

1.3.3
1.3.3.1 1.3.3.2

LOANS & ADVANCES


Housing / Vehicle Loans to employees are reckoned as unsecured and considered good. Loans and advances, Sundry Debtors / Creditors, Stock with Contractors / Others are subject to reconciliation/ confirmation.

1.4

CURRENT LIABILITIES & PROVISIONS


1.4.1 Information relating to 'Supplier' under the provisions of Micro,Small and Medium Enterprise Development Act, 2006 Amount (Rs Crs) Particulars 2008-09 2007-08 i) The amounts due thereon remaining unpaid to any supplier as at the end of the year Principal Nil Nil Interest Nil Nil ii) Payments made beyond the appointed day and interest thereon during the year Nil Nil iii) The amount of interest due and payable for the period of delay in making payments but with out adding the interest specified in the Act. Nil Nil iv) The amount of interest accrued and remaining unpaid at the 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 Other liabilities (Schedule - 15) include net liability (adjusted for adhoc advance of Rs 68.57 Crs Paid during the year 2007-08) of Rs 342.81 Crs (Previous Year Rs. 123.71 Crs) towards provision on account of pay revision effective from 01.01.2007 to the Employees. Disclosures of provisions required by Accounting Standard (AS) 29 ' Provisions, Contingent Liabilities and Contingent Assets': Rs Crs Particulars 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 Closure Expenditure 1.77 0.34 0.00 2.11

1.4.2

1.4.3

1.5

CONTINGENT LIABILITIES
1.5.1 Claims against the company not acknowledged as debts: Particulars Contractors / Suppliers / Customers Local Authorities - State Govt. Sales Tax matters Income Tax Customs / Excise duty R & D Cess Others 1.5.2 As at 31st March, 2009 545.54 9.17 914.87 0.00 68.81 3.38 0.49 Rs.Crs As at 31st March, 2008 431.94 9.14 1005.95 12.06 31.35 13.18 1.73

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

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27th Annual Report 2008-09

1.5.3 1.5.4 1.5.5

Claims in Courts in connection with Land Acquisition Liability towards reimbursement of excise duty on structural works wherever applicable.

- Amount not ascertainable. - Amount not ascertainable.

Amounts paid towards disputed demands included under "Advance recoverable" for which no liability has been set up. Rs.Crs As at 31st As at 31st Particulars March, 2009 March, 2008 Income Tax Income Tax on foreign suppliers & TDS Sales Tax Excise Duty Customs Duty Railways 91.96 23.85 86.93 0.00 5.87 0.71 53.48 23.85 91.95 0.58 3.84 0.00

2.0

PROFIT & LOSS ACCOUNT


2.1.1 Power and fuel does not include the cost of generation of power and production of certain fuel elements in the plant which are internally consumed. The related expenses have been included under the primary heads of account. Earning Per Share (EPS) 2008-09 i) Net Profit ii) Weighted average number of Equity Shares outstanding during the year iii) Face value per share iv) Basic and diluted EPS 2.1.3 (Rs Crs) (No.of shares) (Rupees) (Rupees) 1335.57 48898462 1000 273.13 2007-08 1942.74 48898462 1000 397.30

2.1.2

The petition filed before Honourable Supreme Court, against the ruling of Honourable Authority for Advance Ruling, on the subject of Income Tax (MAT) liability under Section 115 JB of Income Tax Act, 1961, amounting to Rs.109.63 Crs which was provided during the year 2006-07, is not withdrawn with a veiw to approach Committee on Disputes again for their clearance in case of any developments on the subject. In compliance with Accounting Standard (AS) 22 on 'Accounting for Taxes on Income' the Net Deferred tax liability 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 Deferred Tax Liabilities Difference between book and tax depreciation Sub-Total Deferred Tax Assets Provision for Gratuity Provision for Doubtful Debts, Advances,Claims,Interest Other Deferred Tax Assets Sub-Total Net Deferred tax Liability (A) As at 31st March, 2009 174.94 174.94 As at 31st March, 2008 219.68 219.68

2.1.4

(B) (A) - (B)

11.74 23.29 15.42 50.45 124.49

15.32 23.20 18.04 56.56 163.12

49

RASHTRIYA ISPAT NIGAM LIMITED

2.1.5 2.1.6

As per section 441A of the Companies Act 1956, cess on turnover is leviable. Government of India has not yet framed any rules / guidelines in this regard and hence no amount has been provided and / or paid. Value of raw materials and stores & spares consumed 2008-09 Raw Materials Stores & Spares Rs Crs % Rs Crs % (a) Indigenous (b) Imported Total 2647.62 3248.63 5896.25 44.90 55.10 100.00 430.92 70.31 501.23 85.97 14.03 100.00 Raw Materials Rs Crs % 2468.17 1812.05 4280.22 2007-08 Stores & Spares Rs Crs % 320.05 44.01 364.06 87.91 12.09 100.00

57.66 42.34 100.00

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 of Semi / Finished Goods, Excise Duty recovered on sale of Obsolete Stores & Spares scrap and Other Excise duty payments / adjustments etc. 2008-09 Rs.Crs. 2007-08 0.72 6.91 3.65

2.1.8

Expenditure in foreign currency (a) Technical consultation fee / know-how (b) Interest (c) Others Earnings in foreign exchange (a) Export of goods (on FOB basis) (b) Others Value of imports during the year calculated on CIF basis (a) Spares (b) Raw materials (c) Capital Goods Particulars of Directors' remuneration (a) Salaries & allowances * (b) Company's contribution to provident fund * (c) Leave travel concession (d) Gratuity Total * includes arrears of Rs.0 .04 Crs ( Previous year Rs.0.09 Cr). Expenditure on public relations (a) Employees' remuneration & benefits (b) Expenditure on institutional publicity Total Employee Benefits

0.58 0.00 1.55

2.1.9

78.32 0.23

555.47 0.62

2.1.10

101.05 3552.86 356.64

65.66 1812.78 0.00

2.1.11

0.44 0.05 0.02 0.04 0.55

0.42 0.03 0.01 0.04 0.50

2.1.12

1.35 2.19 3.54

1.25 4.25 5.50

2.1.13

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

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27th Annual Report 2008-09

2.1.13.2 General Description of the Post Employment Benefits-Defined Benefit Plans Provident Fund - Company pays fixed contribution to Provident Fund, at predetermined rates, to a separate trust, which invests the Funds in permitted securities. On Contributions, the trust is required to pay a minimum rate of interest, to the members, as specified by Govt. of India. The obligation of the Company is limited to the shortfall in the rate of interest on the Contribution based on its return on investments as compared to the declared rate. - Payable to employees, who render continuous service of 5 years or more, on separation, at 15 days of last drawn pay for each completed year of service. - The accumulated earned leave and half pay leave is payable on separation, subject to maximum permissible limit. During the service period, encashment of accumulated earned leave is also allowed upto 30 days once in a calander year . - Available to retired employees at Company's hospital and / or under the Health Insurance Policy. - The retired employees, their dependents, as also the dependents of the employees expired while in service are entitled for travel and transport expenses to their place of permanent residence. At the time of retirement, employees will be given 10 Gms. of gold.

Gratuity

Compensated Absences

Post Retirement Medical Benefits Retirement Settlement Benefits

Employee Family Benefit Scheme - Monthly payments, till the notional date of superannuation, to employees separated upon disablement / legal heirs of deceased employees at their option who fulfill the criteria of prescribed amount of deposit. Long Service Award - The employees who completes 25 years of service, will be given 150 Gms of silver coin. Rs.Crs. Particulars Gratuity Compensated Absences 184.61 (107.46) 20.54 (10.65) 13.72 (8.60) 60.45 (76.90) -26.32 (-19.00) 253.00 (184.61) Retirement Medical Benefits 83.59 (46.43) 3.56 (5.27) 6.66 (3.71) 3.59 (28.48) -0.56 (-0.30) 96.84 (83.59) Retirement Long Employee Settlement Service Family Benefits Award Benefit Scheme 23.08 (21.62) 0.93 (23.05) 1.84 (1.73) 1.25 (-23.11) -0.26 (-0.21) 26.84 (23.08) 4.40 (4.08) 0.22 (4.40) 0.35 (0.32) 0.14 (-4.40) 0.00 (0.00) 5.11 (4.40) 45.90 (40.56) 7.56 (0.66) 3.41 (3.24) 3.08 (7.29) -6.62 (-5.85) 53.33 (45.90)

2.1.13.3 Reconciliation of present value of defined benefit obligations.

Obligation as at the beginning of the period Service Cost Interest Cost Actuarial gains (-) / losses (+) Benefits paid Obligations as at the end of the period

314.44 (188.47) 22.11 (17.11) 24.98 (15.08) 70.80 (97.59) -4.33 (-3.81) 428.00 (314.44)

Note : Figures in the brackets are for previous year

51

RASHTRIYA ISPAT NIGAM LIMITED

2.1.13.4

2.1.13.5

Against present value of gratuity obligation as at 31st March 2009 of Rs. 428.00 Crs (Previous Year Rs 314.44 Crs) , Company has funded a sum of Rs 393.45 Crs (Previous Year Rs 269.37 Crs) through a separate Gratuity Fund which are covered by the Trust's Plan Assets for equal amount. The other defined benefit obligations are unfunded. Reconciliation of fair value of Plan Assets Rs.Crs. Gratuity Particulars 2008-09 2007-08 Balance as at the opening of the period 269.37 190.71 Expected Return 28.38 15.26 Actuarial gains (+) / losses (-) 3.73 0.00 Contributions by the Employer 96.30 67.21 Benefits paid -4.33 -3.81 Balance as at the end of the period 393.45 269.37 Reconciliation of Present Value of Defined Benefit Obligation and Fair value of Plan Assets Rs.Crs. Particulars Fair Value of Plan Assets Present Value of Defined Benefit Obligation Amount recognised in Balance Sheet (Schedule - 16) as at the end of the period Gratuity 2008-09 2007-08 393.45 269.37 428.00 314.44 34.55 45.07 Rs.Crs. Retirement Settlement Benefits 0.93 (23.05) 1.84 (1.73) 1.25 (-23.11) 0.00 0.00 0.00 (-0.73) Long Service Award 0.22 (4.40) 0.35 (0.32) 0.14 (-4.40) 0.00 0.00 0.00 (0.00) Employee Family Benefit Scheme 7.56 (0.66) 3.41 (3.24) 3.08 (7.29) 0.00 0.00 0.00 (10.60)

2.1.13.6

2.1.13.7

Expenses recognised in the statement of Profit and Loss Account. Particulars Service Cost Interest Cost Gratuity 22.11 (17.11) 24.98 (15.08) 67.07 (97.59) -28.38 (-15.26) 0.00 Compensated Absences 20.54 (10.65) 13.72 (8.60) 60.45 (76.88) 0.00 0.00 0.00 (7.59) Retirement Medical Benefits 3.56 (5.27) 6.66 (3.71) 3.59 (28.48) 0.00 0.00 0.00 (-0.01)

Actuarial gains (+) / losses (-) Expected Return on Plan Assets Accounting Estimate Change on Opening obligation (-2.24) Total to be charged Employees Remuneration 85.78 & Benefits (112.28) Amount charged to : Profit & Loss Account 84.10 (Schedule - 23) (110.34) Expenditure During Construction Capital Work in Progress 1.56 (1.74) 0.12 (0.20)

94.71 (103.72) 92.64 (102.02) 1.92 (1.52) 0.15 (0.18)

13.81 (37.45) 13.39 (36.87) 0.24 (0.52) 0.18 (0.06)

4.02 (0.94) 3.71 (0.02) 0.07 (0.00) 0.24 (0.00)

0.71 (0.32) 0.70 (0.32) 0.01 (0.00) 0.00 (0.00)

14.05 (21.79) 14.05 (21.54) 0.00 (0.22) 0.00 (0.03)

Note: Figures in the brackets are for previous year.

52

27th Annual Report 2008-09

2.1.13.8 Effect of one percentage point change in the assumed inflation rate in case of valuation of benefits under post retirement medical benefit scheme Rs. Crs. Effect of one percentage Effect of one percentage Particulars point increase in medical point decrease in medical cost trend rate cost trend rate 2008-2009 On aggregate service and interest cost of post retirement medical benefits On present value of defined benefit obligations as at end of the period 2.1.13.9 Actuarial assumptions Description Discount Rate (per annum) Mortality rate Withdrawal rates (per annum) As at 31st March 2009 As at 31st March 2008 7% 8% LIC(1994-96) duly modified LIC (1994-96) duly modified 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 inflation rate, seniority, promotion and other relevant factors on long term basis. 0.17 4.86 2007-2008 1.77 19.80 2008-2009 (0.16) (4.84) 2007-2008 (1.41) (15.61)

3.0 GENERAL 3.1.1 The Company's business is construed as one business segment which comprises of mainly production of Steel products, whose associated risks and returns are predominantly the same. Further, the Company has no geographical segments which are subject to different risks and returns. Hence no separate disclosure in terms of Accounting Standard (AS) 17 on 'Segment Reporting' is considered necessary. Since the Lease transactions of the Company, are incidental to the Company's main business of production & sale of Iron & Steel products, specific disclosures as per Accounting Standard (AS) 19 on 'Leases', are not considered necessary. The entire plant is considered as a Cash Generating Unit. As Recoverable amount of the Cash Generating Unit, being its value in use, is in excess of its carrying amount, there is no impairment loss in terms of the Accounting Standard (AS) 28 'Impairment of assets'. Licensed capacity*, installed capacity & actual production 2008-09 Actual Production 972 825 75 748 2620 322 1381 140 (Tonnes in '000s) 2007-08 Installed Actual Capacity Production 850 710 246 850 2656 556 1440 186 998 859 102 1015 2974 495 1424 148

3.1.2

3.1.3

3.1.4

Product

Installed Capacity 850 710 246 850 2656 556 1440 186

(a) Wire Rods (b) Light&Medium Merchant Products-Bar Mill (c) Saleable Billets (d) Medium Merchant Structural Mill Total (e) Pig Iron (f) Granulated Slag (g) Coke ovens By-products

3.1.5

Note: * Licensed capacity not applicable in terms of Government of India notification No. S.O.477(E), dated 25th July, 1991. Previous year's figures have been regrouped and reclassified wherever necessary.

53

RASHTRIYA ISPAT NIGAM LIMITED

4.0 CASH FLOW STATEMENT


2008-09 A. Cash flow from Operating activities Net Profit before interest & tax Adjustments for: Add : Depreciation ( including Prior Period Depreciation ) Add : Miscellaneous / Deferred revenue expenditure written off Less : Adjustments on accounts of discard / removal of assets Less : Profit on sale of fixed assets Operating Profit Adjustments for Less: Inventories Sundry debtors Other Current assets Loans & Advances Liabilities Provisions Cash generated from operating activities Less: Income Tax paid including Fringe Benefit Tax Net cash from operating activities B. Cash flow to Investing activity Increase in fixed assets ( including Capital Work-in-progress) Investments Less: Sale proceeds of Fixed Assets Less: Interest received Net cash used in Investing activity C. Cash flow to Financing Activity Repayment of Secured loans Repayment of Unsecured loans Prime Minister's Trophy Award Fund Interest and Finance charges Net cash used in financing activity Net increase/decrease(-) in Cash & Cash equivalents (A-B-C) Opening Balance of Cash & Cash equivalents Closing Balance of Cash & Cash equivalents (Represented by Cash & Bank Balances - Schedule 12 ) -574.94 7.91 -0.12 92.89 -474.26 -1074.94 7699.11 6624.17 271.67 204.56 -0.10 45.09 521.22 504.43 7194.68 7699.11 2645.65 0.00 0.47 820.63 1824.55 1557.69 0.00 0.54 746.75 810.40 1327.53 240.78 0.00 15.27 0.47 1552.57 1454.89 97.86 -0.10 26.30 -955.39 -62.38 991.39 716.04 275.35 2302.29 473.05 14.95 -0.46 0.50 2790.25 557.91 -123.39 0.06 212.04 -612.14 -98.24 2854.01 1017.96 1836.05 Rs Crs 2007-08

54

27th Annual Report 2008-09

5.0 Balance Sheet Abstract and Companys General Business Profile I. Registration Details CIN Registration No. Balance Sheet Date 3 1 Date II. U 2 7 1 0 9 A P 4 0 4 2 0 0 9 Year 1 9 8 2 G O I State Code 0 0 3 4 0 0 1 4

0 0 3 0 3

Month

Capital raised during the year (Amount in Rs. Lakhs) Public Issue N I Bonus Issue N I L L Rights Issue N I L Private Placement N I L

III.

Position of Mobilisation and Deployment of Funds (Amount in Rs. Lakhs) Total Liabilities 1 7 7 3 3 4 8 Total Assets 1 7 7 3 3 4 8

Sources of Funds Paid-up Capital 7 8 2 9 0 7 3 7 7 2 2 Secured Loans

Reserves & Surplus 4 5 1 9 0 2 0 5 9 0 4 Unsercured Loans

Application of Funds Net Fixed Assets 5 8 7 7 6 7 4 1 8 0 N I IV. Turnover 1 0 1 0 2 0 2 4 7 6 5 2 7 V. 1 9 3 Profit / Loss Before Tax Earnings per Share in Rs. 1 0 L Net Current Assets Accumulated Loss Performance of Company (Amount in Rs. Lakhs)

Investments 5 Miscellaneous Expenditure -

Total Expenditure 8 1 0 3 7 3 8 5 1 2 5 7 Profit / Loss After Tax Dividend (%) Equity:2.73; Preference: 7.00

Generic Names of Three principal Products/Services of Company (As per Monetary Terms) Item Code No. (ITC Code) Product Description Item Code No. (ITC Code) Product Description Item Code No. (ITC Code) Product Description 7 2 W I 7 2 P I 7 2 R E 1 3 9 1 0 9

R E 0 G 1 1 1 I 4 2

R O D 0 0 0

R O N 0 0 9

B A R S

55

RASHTRIYA ISPAT NIGAM LIMITED

RAO & KUMAR


CHARTERED ACCOUNTANTS

AUDITORS' REPORT
To the Members of Rashtriya Ispat Nigam Limited
1. We have audited the attached Balance Sheet of Rashtriya Ispat Nigam Limited, as at 31st March 2009, and also the Profit and Loss account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditor's report) Order, 2003, issued by the Central Government of India in terms of Sub-section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks as we consider appropriate and according to the information and explanations given to us, we enclose in the annexure a statement on the matters specified in paragraph 4 and 5 of the said Order. Further to our comments in the Annexure referred to in paragraph 3 above, we report that: (a) We have obtained all the information and the explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit; In our opinion, proper books of accounts as required by law have been kept by the company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us; The Balance sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account and with the returns from the branches;

2.

3.

4.

(b)

(c)

..continued..2..

10-50-19/4, 'SOUDAMANI' Siripuram, Viskhapatnam - 530 003. E-Mail : contact@raoandkumar.org W.Site : raoandkumar.org

Ph. : 0891-2755327 Fax : 0891-2738554

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27th Annual Report 2008-09

RAO & KUMAR


CHARTERED ACCOUNTANTS

..Page..2..

(d)

In our opinion, the Balance sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report, read together with note 1.3.1 in Schedule 29 to Accounts, comply with accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956; The provisions of section 274(1 )(g) are inapplicable to Government companies vide Notification No. G.S.R. 829 (E) dated 21-10-2003 as declared by the Central Government; With regard to the Cess payable under section 441 A, the company, vide note 2.1.5 in Schedule 29 to the Accounts, had neither provided nor paid any amount, as the Government of India had not framed any rules/guidelines in this regard. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, subject to and read together with the Significant Accounting Policies and Notes forming part of accounts given by way of Schedule 29 to the Accounts, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India; (i.) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March 2009; (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.

(e) (f)

(g)

For Rao & Kumar

Place : New Delhi Date : 04/07/2009

CA Anirban Pal Partner Chartered Accountants Membership Number: 214919

10-50-19/4, 'SOUDAMANI' Siripuram, Viskhapatnam - 530 003. E-Mail : contact@raoandkumar.org W.Site : raoandkumar.org

Ph. : 0891-2755327 Fax : 0891-2738554

57

RASHTRIYA ISPAT NIGAM LIMITED

RAO & KUMAR


CHARTERED ACCOUNTANTS

ANNEXURE TO AUDITORS' REPORT


Referred to in paragraph 3 of our Report of even date
1. Fixed Assets (a) (b) The Company has maintained proper records showing full particulars including quantitative details of fixed assets, except for historical cost figures in certain cases. All assets have not been physically verified by the management during the year but there is a regular programme of verification which in our opinion is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification. No substantial part of fixed assets of the company has been disposed off during the year.

(c)

2. Physical verification and reconciliation of Inventories (a) Inventories have been physically verified during the year by the management, except stocks with custodians referred to in Note No. 1.3.1.1 of the Notes to Accounts, which are adopted based on the book value amounting to Rs. 8.13 crores (previous year Rs.44.02 crores) out of the total reported stock of Rs. 3215.28 crores (previous year Rs. 1761.15 crores). In respect of stores and spares, company has a regular programme of verification in a phased manner, which in our opinion, is adequate and reasonable having regard to the nature and location of stocks. The procedure for physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. The Company is maintaining proper records of inventory. We are informed that no material discrepancies have been noticed on physical verification.

(b) (c)

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 of this clauses (b), (c) and (d) of paragraph 4(iii) are inapplicable.

...Caro Report continued..2..

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27th Annual Report 2008-09

RAO & KUMAR


CHARTERED ACCOUNTANTS ..Caro Report Page..2..

4. Internal Control Procedure In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items purchased are of special nature and suitable alternative sources do not exist for obtaining compatible quotations, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regards to purchase of inventory, 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 be entered into the register maintained under section 301 of the Companies Act, 1956. As there are no such 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 the Reserve Bank of India and the provisions of Section 58A & 58AA of the Act and the rules framed there under are inapplicable. 7. Internal Audit System In our opinion, the company has an Internal Audit system commensurate with the size and nature of its business. 8. Maintenance of Cost Records We have broadly reviewed the books of accounts maintained by the company pursuant to the rules made by the Central Government for the maintenance of Cost Records under Section 209(1 )(d) of the Companies Act, 1956 and we are of the opinion that prima-facie the prescribed accounts and records have been made and maintained in respect of the applicable products. With respect to Power Generation, Government of India notified Cost Audit for the year under audit. We are informed that compilation in the formats 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 they are accurate and complete.

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

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Ph. : 0891-2755327 Fax : 0891-2738554

59

RASHTRIYA ISPAT NIGAM LIMITED

RAO & KUMAR


CHARTERED ACCOUNTANTS ..Caro Report Page..3.. 9. Payments and remittances to Statutory Authorities (a) According to the records of the Company, the company has been regular in depositing with appropriate authorities, undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and other material Statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax. Sales Tax, Customs Duty, Excise Duty and Cess were in arrears as at 31st March 2009, for a period of more than six months from the date they became payable. According to the explanations given to us, Company is not required to make any contribution under the Employees' State Insurance Act. According to the information and explanations given to us, as at the end of the financial year the disputed dues of Income Tax, Sales Tax, Customs Duty, Excise Duty and Cess which have not been deposited is as follows :

(b)

(c) (d)

10-50-19/4, 'SOUDAMANI' Siripuram, Viskhapatnam - 530 003. E-Mail : contact@raoandkumar.org W.Site : raoandkumar.org

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27th Annual Report 2008-09

RAO & KUMAR


CHARTERED ACCOUNTANTS ..Caro Report Page..4.. 10. Accumulated Losses The Company did not have any accumulated loss at the end of the financial year. The Company has not incurred cash 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 its dues to any Financial Institution or Bank during the year. 12. Loan and Advances on the basis of security by way of pledge of Shares etc. In our opinion and according to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 13. Chit Fund or Nidhi / Mutual Benefit Fund/ Society In our opinion, the Company is not a chit fund or a nidhi /mutual benefit fund / society. Therefore, the provisions of 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 applicable to 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 facilities extended by a banker to a supplier as detailed in note 1.3.2.1 (b) of Schedule 29, we are informed that the company has not given any guarantee for loans taken by others from banks or financial institutions. 16. Application of Term Loans According to information and explanations given to us, during the year the Company had not availed any term loan, within the meaning of the paragraph 4(xvi).

...Caro Report continued..5..

10-50-19/4, 'SOUDAMANI' Siripuram, Viskhapatnam - 530 003. E-Mail : contact@raoandkumar.org W.Site : raoandkumar.org

Ph. : 0891-2755327 Fax : 0891-2738554

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RAO & KUMAR


CHARTERED ACCOUNTANTS ..Caro Report Page..5..

17. Usage of Short Term and Long Term Funds According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment and vice versa. 18. Preferential Allotment of Shares According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act, during the year. 19. Issue of Debentures According to the information and explanations given to us, the Company had not issued debentures during the year. 20. End use of money raised by Public Issue According to the information and explanations given to us, the company has not raised money by public issues during the year. 21. Frauds According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For Rao & Kumar

Place : New Delhi Date : 04/07/2009

CA Anirban Pal Partner Chartered Accountants Membership Number: 214919

10-50-19/4, 'SOUDAMANI' Siripuram, Viskhapatnam - 530 003. E-Mail : contact@raoandkumar.org W.Site : raoandkumar.org

Ph. : 0891-2755327 Fax : 0891-2738554

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COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 619(4) OF THE COMPANIES ACT, 1956 ON THE ACCOUNTS OF RASHTRIYA ISPAT NIGAM LIMITED, VISAKHAPATNAM FOR THE YEAR ENDED 31 MARCH 2009 The preparation of financial statements of Rashtriya Ispat Nigam Limited, Visakhapatnam for the year ended 31 March 2009 in accordance with the financial reporting framework prescribed under the Companies Act, 1956 is the responsibility of the management of the Company. The statutory auditor appointed by the Comptroller and Auditor General of India under Section 619(2) of the Companies Act 1956 is responsible for expressing opinion on these financial statements under Section 227 of the Companies Act 1956 based on the independent audit in accordance with the auditing and assurance standards prescribed 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 a supplementary audit under Section 619(3) (b) of the Companies Act, 1956 of the financial statements of Rashtriya Ispat Nigam Limited, Visakhapatnam for the year ended 31 March 2009. This supplementary audit has been carried out independently and is limited primarily to enquiries of the statutory auditor and Company personnel and a selective examination of some of the accounting records. On the basis of my audit, nothing significant has come to my knowledge which would give rise to any comment upon or supplement to Statutory Auditors report under Section 619(4) of the Companies Act, 1956.

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

Place: Hyderabad Date: 22 July 2009

(ROY MATHRANI) Principal Director of Commercial Audit & Ex-Offlcio Member, Audit Board, Hyderabad

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27th Annual Report 2008-09

REPORT ON CORPORATE GOVERNANCE (A) Company's Philosophy


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

(B)

Board of Directors
Composition of the Board
The Company is managed by the Board of Directors, which formulates strategies, policies and reviews its performance periodically. As per Articles of Association (AOA) of the Company, the number of Directors shall not be less than five and more than fourteen. As on 31st March, 2009, the Board of Directors of the Company comprised a full time Chairman-cum-Managing Director, (i.e. Executive Chairman) holding additional charge of Director (Projects) (from 1st April 08 to 24th June 08, 1st Nov. 08 to 11th Nov. 08 and from12th Feb. 09 onwards continues to hold the additional charge), four Functional Directors i.e. Director (Operations), Director (Personnel), Director (Commercial) and Director (Finance) & Addl Charge of the post of Director (Projects) from 12th Nov. 08 to 11th Feb. 09, two Government Directors and three Parttime 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 the Board/Committee. Detailed agenda, management reports and other explanatory statements are circulated in advance in the fixed agenda format amongst the members for facilitating meaningful, informed and focused decisions at the Meetings. To address specific urgent need, meetings are also being called at a shorter notice. In case of exigencies resolutions are also sometimes passed by circulation. The agenda papers are prepared by the concerned officials, sponsored by the concerned functional Directors and in most cases concurred by Director (Finance) and submitted for obtaining approval of the Chairman-cum-Managing Director, well in advance. Duly approved agenda papers are circulated amongst the Board Members by the Company Secretary. The Members of the Board/Committee have complete access to all information of the Company. The Board is also free to recommend inclusion of any matter in agenda for discussion. If necessary, senior management officials are called to provide additional inputs to the items being discussed by the Board/Committee.

Recording minutes of proceedings at the Board/Committee Meeting


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

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

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RASHTRIYA ISPAT NIGAM LIMITED

Board Meetings
The Board meets regularly and is responsible for the proper direction and management of the Company. During the financial year ended March, 31, 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 Directorship No. of Board Meetings attended during 2008-09 Attendance at last AGM No. of other directorship held as on 31.3.2009#

Shri P K Bishnoi

CMD - holding additional charge of Director (Projects) from 1.4.08 to 24.6.08, 1.11.08 to 11.11.08 and again from 12.02.09 to 31.3.09 WTD WTD WTD WTD WTD Non-ED Non-ED Non-ED

6 6 5 6 3 3 5 3 3 6 6 6

Yes Yes Yes Yes -Yes ---Yes ---

NIL NIL NIL NIL NIL NIL 6 4 1 5 3 --

Shri Y Manohar Shri C G Patil Shri K S Shankar Shri Umesh Chandra** Shri P K Misra* Shri B S Meena Dr Dalip Singh** Shri G Elias*

Shri RSSLN Bhaskarudu* Non-ED Dr V K Bhalla Dr Jagat Pal Non-ED Non-ED

CMD - Chairman-cum-Managing Director, WTD - Whole-time Director, Non-ED - Non-Executive Director #Does not include Memberships/Office Bearers i.e. Chairman etc. in Institutions / University / non-Corporate Bodies like Societies etc. Note *1. Shri P K Misra, Director (Operations) superannuated on 31st Oct. 2008. He was also holding additional charge 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 (Independent Director) 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 interim financial results, disposals and joint ventures, as well as material agreements, major capital expenditure, major sale contracts, employees remuneration and perquisites, manpower plans and long term plans for its review and approval. The details of remuneration to whole time Directors are given below : (Value in Rupees) Name of the Director Shri P K Bishnoi, CMD Shri P K Misra, Director (Operations) upto 31.10.2008 Shri Y Manohar, Director (Personnel) Shri C G Patil, Director (Commercial) Shri K S Shankar, Director (Finance) Shri Umesh Chandra, Director (Operations) Salaries & Allowances (Rs.) 11,65,025.00 7,19,513.00 10,23,428.00 11,35,352.00 12,45,745.00 3,75,386.00 (from 1.11.2008 to 31.3.09) *Retirement and other benefits (Rs.) 5,310.00 3,53,258.00 5,292.00 5,166.00 5,184.00 Total (Rs.) 11,70,335.00 10,72,771.00 10,28,720.00 11,40,518.00 12,50,929.00

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, in consultation with the Chairman of the Company for a period of 5 years or till the age of Superannuation or until further orders, whichever is earlier. The appointment may, however, be terminated by either side on three months notice or on payment of three months salary in lieu thereof.

Part-time official Directors


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

Part-time non-official Directors (Independent Directors)


The part- time non-official directors (i.e. independent Directors) are appointed by Government of India as Director for a period of 3 years from the date of assumption of charge or until further orders, whichever is earlier. An amount of Rs.10000/- is paid to the Part-time non-official Directors as sitting fee for each Board/Board SubCommittee Meetings attended by them. During the year, the total amount paid to them is as follows : 1. 2. 3. Shri RSSLN Bhaskarudu Dr V K Bhalla Dr Jagat Pal Rs.2,70,000/Rs.1,80,000/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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RASHTRIYA ISPAT NIGAM LIMITED

Audit Committee Composition


The Audit Committee was constituted during the year 2006-07 in line with the OM No.18(8)/2005-GM, dated 16th June 2005 issued by Department of Public Enterprises, Govt. of India. The composition of Audit Committee as on 31.3.2009 was as follows : Shri R S S L N Bhaskarudu Dr V K Bhalla Dr Jagat Pal Chairman Member Member Independent Director Independent Director Independent Director

The main functions of the Audit Committee are as follows : 1. 2. 3. 4. Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. Recommending to the Board the fixation of Audit Fees. Approval of payment to Statutory Auditors for any other services rendered by the Statutory Auditors. Reviewing, with the management, the annual financial statements before submission to the Board for approval, with particular reference to : a) b) c) d) e) f) g) 5. 6. 7. Matters required to be included in the Directors' Responsibility Statement to be included in the Board's Report in terms of Clause (2AA) of Section 217 of the Companies Act, 1956; Changes, if any, in accounting policies and practices and reasons for the same; Major accounting entries involving estimates based on the exercise of judgement by Management; Significant adjustments made in the financial statements arising out of audit findings; Compliance with legal requirements relating to financial statements; Disclosure of any related party transactions; Qualifications in the Draft Audit Report;

Reviewing, with the management, the quarterly financial statements before submission to the Board for approval. Reviewing, with the management, performance of Statutory and Internal Auditors, adequacy of the internal control systems. Reviewing the adequacy of the Internal Audit function, if any, including the structure of the Internal Audit Department, staffing and seniority of the official heading the Department, reporting structure coverage and frequency of Internal Audit. Discussion with Internal Auditors any significant findings and follow up thereon. Reviewing the findings of any internal investigations by the Internal Auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board. Discussion with Statutory Auditors before the Audit commences about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern. 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.

8. 9.

10. 11.

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27th Annual Report 2008-09

12. 13. 14. 15. 16. 17. 18. 19.

To review the functioning of the Whistle Blower Mechanism, in case the same is existing in the Company. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee. To review the follow up action on the audit observations of the C&AG audit. To review the follow up action taken on the recommendations of Committee on Public Undertakings (COPU) of the Parliament. Provide an open avenue of communication between the independent auditor, internal auditor and the Board of Directors. Review and pre-approve all related party transactions in the Company. For this purpose, the Audit Committee may designate a member who shall be responsible for pre-approving related party transactions. 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. Consider and review the following with the independent auditor and the management : The adequacy of internal controls including computerized information system controls and security, and Related findings and recommendations of the independent auditor and internal auditor, together with the management responses.

20.

Consider and review the following with the management, internal auditor and the independent auditor: Significant findings during the year, including the status of previous audit recommendations; Any difficulties encountered during audit work including any restrictions on the scope of activities or access to required information. The term "related party transactions" shall have the same meaning as containing in the Accounting Standard 18, Related Party Transactions, issued by the Institute of Chartered Accountants of India.

Explanation: (i)

Explanation: (ii) If the company has set up an Audit Committee pursuant to provision of the Companies Act, the said Audit Committee shall have such additional functions / features as contained in these guidelines. REVIEW OF INFORMATION BY AUDIT COMMITTEE 1. 2. 3. 4. 5. 6. Management Discussion and Analysis of financial condition and results of operations; Statement of significant related party transactions (as defined by the Audit Committee), submitted by Management; Management letters / letters of internal control weaknesses issued by the statutory auditors; Internal Audit Reports relating to internal control weaknesses; The appointment and removal of the Chief Internal Auditor shall be placed before the Audit Committee; and Certification/declaration of financial statements by the Chief Executive i.e. CMD / Director (Finance).

The primary function of the Audit Committee is to assist the Board of Directors in fulfilling its oversight responsibilities by reviewing the financial reports; the Company's systems of internal controls regarding finance, accounting and legal compliance that management and the Board have established; and the Company's auditing, accounting and financial reporting process generally.

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RASHTRIYA ISPAT NIGAM LIMITED

The powers of the Committee include the following : 1) 2) 3) 4) To investigate any activity within its terms of reference. To seek information from any employee. To obtain outside legal or other professional advice. 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 the Members of the Committee. The Company Secretary is also the Secretary to the Audit Committee. The Minutes of the Audit Committee Meetings are also put up to Board in their subsequent Meetings as an Item for information. The Chairman of the Audit Committee apprises the Board about the observations of the Audit Committee during the Board Meeting and also attends the Annual General Meeting of the Company. Technology Improvement and Bench Marking Committee: The Board has constituted a Technology Improvement and Bench Marking Committee and the composition of the Committee as on 31.3.2009 is as follows : 1. 2. 3. 4. 4. 6. Shri RSSLN Bhaskarudu Director (Operations) ED (Works) GM (CO & Logistics) GM (D&E) DGM (R&D), R Srinivasulu : : : : : : Chairman Member Member Member Member Convenor of the Committee Independent Director Wholetime Director Sr Executive of the Company Sr Executive of the Company Sr Executive of the Company 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 and maintaining sustained strength in the technological field. During the year, three Meetings of the Committee were held 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 RINL constituted a High Power Steering Committee for overseeing the implementation of Expansion of VSP to 6.3 MT per year Liquid Steel and the composition of the Committee as on 31.3.2009 is as follows: a) Chairman-cum-Managing Director b) Joint Secretary, Ministry of Steel c) Shri RSSLN Bhaskarudu (Part-time non-official Director) d) Director (Finance) e) Functional Director (In-charge of Projects) f) Company Secretary : : : : : : Chairman Member Member Member Member Convener

ED (Finance)/GM (Finance) will be an alternate Member in the absence of Director (Finance). HOD of the Projects Division in the rank of ED or GM will be a permanent invitee. During the year, Four Meetings of the HPSC were held on 22nd May 08, 11th August, 08, 14th Nov. 08 and 25th March 2009 and the proceedings of the Meetings were placed before the Board for its information.

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27th Annual Report 2008-09

Committee for Award of Contracts relating to Project Expansion Contracts In respect of Expansion Project, to approve award of Contracts/Orders valuing upto Rs.500 crores, the Board has constituted a Committee called Committee for Award of Contracts relating to Project Expansion Contracts. The composition of the Committee as on 31.3.2009 is as follows: 1. 2. 3. 4. Chairman-cum-Managing Director Director (Finance) Director (In-charge of the Projects Division)/Director (Projects) Dr V K Bhalla, Part-time non-official Director, RINL (Independent Director) 5. Dr Jagat Pal, Part-time non-official Director, RINL (Independent Director) 6. Company Secretary Chairman Member Member Member Member 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. 2. 3. 4. 5. 6. Chairman-cum-Managing Director Dr V K Bhalla, Independent Director Dr Jagat Pal, Independent Director Director (Finance) The concerned Functional Director Company Secretary Chairman Member Member Member Member Convenor

The above Committee is empowered to approve the proposals relating to AMR Schemes and other Contracts of Revenue and Capital Nature under Operational and other requirements for the existing plant and functioning of the Company upto Rs.250 crores. The above Committee is also empowered to approve all Capital expenditure including Additions/Modifications/ Replacement of the existing facilities or Expansion of existing facilities in each case (not included in the approved capital budget for the year subject to overall budgetary limit) as per the above limit upto Rs.250 crores. During the year, 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 constituted with all the Functional Directors. The composition of the Committee as on 31.3.2009 is as follows : 1. 2. 3. 4. 5. CMD Director (Operations) Director (Personnel) Director (Commercial) Director (Finance) : : : : : Chairman Member Member Member Member

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

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RASHTRIYA ISPAT NIGAM LIMITED

The above Committee is empowered to approve proposals upto Rs 100 Crores and have full powers for purchase of coal materials like Medium Coking Coal, Boiler Coal, Iron Ore, etc. from Public Sector Undertakings/Government Agencies. During the year Twenty 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 year 2008-09 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 2005-06 2006-07 2007-08 Date 25.09.2006 03.09.2007 27.08.2008 Time 3.00 PM 3.00 PM 3.00 PM Location Admn Building , Vizag Admn Building , Vizag Admn Building , Vizag

(F)

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

(G)

Means of Communication
Communication is the key to a transparent and fair organization . At VSP, all possible means of communication are brought into the system. Various in-house magazines bear testimony to this. To list a few: F F F F F F F F Ukkuvani KM News Vikas Dhara Sugandh Green Leaf Annual Report of the Company. Spandana Sehat

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

(H)

Training of Board members


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, risk assessment etc.

(I)

Whistle Blower Policy


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

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27th Annual Report 2008-09

(J)

Certification/declaration of financial statements by the Chief Executive i.e. CMD / Director (Finance).
The CMD and Director (Finance) have provided the certification regarding the financial statements for the year 2008-09.

(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 ethics and comply with applicable laws, rules and regulations. A code of conduct, evolved and was adopted by the Board applicable to all Members of the Board and Senior Management who have confirmed compliance with the Code of Conduct for the year under review. A copy of the Code of conduct has been placed on the Company's website www.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 have complied 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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27th Annual Report 2008-09

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27th Annual Report 2008-09

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. Heat consumption. 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 at various places to reduce electricity load.

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

B.

Other Achievements
1. 2. LD gas recovery plant Total Volume of LD gas recovered Waste Heat recovery at a. Back Pressure Turbine Station Total Power recovered b. Gas Expansion Turbine Station Total Power recovered 97114 82472 MWH MWH 289.76 MNCum

C.

Foreign Exchange Earnings & Outgoing Foreign Exchange Inflow Foreign Exchange Outflow Rs. 78.89 Crores

Rs. 3600.77 Crores

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RASHTRIYA ISPAT NIGAM LIMITED

Form "A"

A. Power and fuel consumption for 2008-09


1) Electricity a) Purchased ( Net Import from AP TRANSCO) b) Gross exported c) Imported d) Own generation - Through steam turbine / generator - Through BPTs -Through GETS 2) Coal Consumption Boiler Coal(Indigenous) used in TPP Boiler Coal(Imported) used in TPP Boiler Coal(Imported) used in Coke Ovens Imported Coking coal US Coal Imported Soft Coking coal Indigenous Medium coking coal used in Coke Ovens Indigenous Medium coking coal used in TPP Indigenous Prime coking coal used in Coke Ovens 3) Furnace oil Consumption 4) HSD Consumption 5) BF Coke purchased 6) Coke Breeze purchased 1249992 95188 0 2022147 296172 326216 420288 21049 185824 t t t t t t t t t 202358 MWH 15585 MWH 217943 MWH 1561537 MWH 97114 MWH 82472 MWH

1204.6 kl 2371.8 kl 202432 t 0 t

B. Consumption per unit of production


Item Imported electricity Furnace oil HSD Coking coal Imported Coking coal US Coal Imported Soft Coking coal Indigenous Medium coking coal used in Coke Ovens Indigenous Medium coking coal used in TPP Indigenous Prime coking coal used in Coke Ovens Boiler coal Boiler Coal(Indigenous) used in TPP Boiler Coal(Imported) used in TPP Boiler Coal(Imported) used in Coke Ovens BF Coke purchased Coke Breeze purchased Liquid steel production Unit kwh It It kg kg kg kg kg kg kg kg kg kg kg Per tonne of Liquid Steel production 69.3 0.4 0.8 642.9 94 103.7 133.6 6.7 59.1 397.4 30.3 0 64.4 0 3145373 t

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27th Annual Report 2008-09

Form - B

Form for disclosure of particulars with respect to Technology Absorption


1. Specific areas in which R&D was carried out by the company. Modelling and simulation of LMMM reheating furnaces, Microbial Phosphorus removal from LD Slag, Effect of Aluminium in EQ Grade wire rod coils, Technical analysis and optimisation of continuous casting at VSP using existing plant facilities, Improving the yield and metallurgical performance of Vizag steel's 4-strand bloom casting tundish through water modelling, Removal of CO2 from flue gases of VSP using algae, Pot sintering tests, Pilot oven tests, development of new grade etc,. A brief note on R&D activities taken up during Apr' 08-March' 09 with highlights is given at Annexure-1 R&D projects planned for next 3 years are given at Annexure-2

2. 3. 4.

Benefits derived as a result of the above R&D Future plan of action. Expenditure on R&D (a) Expenditure (b) Total R & D expenditure as a % of Turnover : :

Rs. 17.35 crores 0.167 %

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RASHTRIYA ISPAT NIGAM LIMITED

Annexure - 1 to Form B

Benefits derived/expected from R&D Projects


1. From Internal projects: Sl. No. 1 Name of the Project Development of pilot coke oven and carbonization test of coal blends Tangible Benefits Intangible Benefits Optimization of Coal blend by Pilot Oven test with different sources/type of coals

2. From Joint Research Projects: Sl. No. 1 Name of the Project Modeling & Simulation of LMMM. Reheating furnace of VSP with IICT, Hyderabad Tangible Benefits Intangible Benefits Expected to increase the efficiency of the furnace

Microbial removal of phosphorus from LD Slag with IMMT, Bhubaneswar

Lowering of Phosphorus content of LD slag.

Increased recycling of LD Slag

Study the effect of Al Content in EQ Grade WR Coils with the help of WRI, Trichy

Reduction in grade diversion.

Increased market share in electrode market

Technical Analysis and Optimization of continuous casting at VSP using existing plant facilities with NIT. Trichy

To be worked out after completion of the project

--

Improving the yield of VSP tundish by reducing skull loss through water modeling with IIT, Kanpur.

About 20,000 t of skull loss can be reduced/year

About 0.5 % of Improved yield through reduction of skull loss.

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27th Annual Report 2008-09

Annexure - 2 to Form B

R&D Projects Planned for next 3 years


1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. Utilization of metallurgical waste through briquetting techniques (Industrial Trials) Study of noise pollution at Rolling Mills & TPP and development of techniques to control the noise (with IISc, Bangalore). Development of new grades of steel especially for Forging, Automobile, Electrode industries etc. Development of Coke Dry Cooling in Pilot coke oven. Pilot plant studies for Benzol Muck separation in Benzol Plant. Studies on solid waste utilization especially LD slag, etc., Corrosion studies in LD Gas and BF Gas Pipe lines. Removal of CO2 from flue gases by sequestration (with Andhra University, Visakhapatnam ) To study Factors influencing bottom build up in LD Converters and to suggest remedial measures. Logistic Management of SMS Heats Distribution System In-house development of Lance tip design Utilization of BOF sludge by Micro-Pelletization Reduction in ladle balance. Break-out prediction system for CCM Granulation of LD Slag Treatment in torpedo ladle car

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RASHTRIYA ISPAT NIGAM LIMITED

Vision, Mission and Objectives


Vision:
To be a continuously growing world-class company

We shall
v v v v v Harness our growth potential and sustain profitable growth. Deliver high quality and cost competitive products and be the first choice of customers. Create an inspiring work environment to unleash the creative energy of people. Achieve excellence in enterprise management. Be a respected corporate citizen, ensure clean and green environment and develop vibrant communities around us.

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

Objectives:
v 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. Revamp existing blast furnaces to make them energy efficient to contemporary levels and in the process increase their capacity by 1.0 million tonnes, thus total hot metal capacity to 7.5 million tonnes. Be amongst top five lowest cost liquid steel producers in the world. Achieve higher levels of customer satisfaction. Vibrant Work Culture in the Organisation. Be proactive in conserving environment, maintaining high levels of safety and addressing social concerns.

v v v v

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