VSP Annual Report 2009-10 - vizagsteel.com Report 2009-10.pdf · Operations IndusInd Bank Shri...
Transcript of VSP Annual Report 2009-10 - vizagsteel.com Report 2009-10.pdf · Operations IndusInd Bank Shri...
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RASHTRIYA ISPAT NIGAM LIMITED
BOARD OF DIRECTORS BANKERS
State Bank of India
CHAIRMAN-CUM-MANAGING DIRECTOR Bank of Baroda
Shri P K Bishnoi Canara Bank
State Bank of Hyderabad
FUNCTIONAL DIRECTORS Allahabad Bank
UCO Bank
Personnel State Bank of Mysore
Shri Y Manohar State Bank of Indore
HSBC Bank
Commercial IDBI Bank Ltd.
Shri C G Patil (upto 28th February, 2010) Andhra Bank
ICICI Bank
Finance HDFC Bank
Shri K S Shankar ( upto 31st October, 2009) Central Bank of India
Shri P Madhusudan ( w.e.f. 2nd November, 2009) Oriental Bank of Commerce
Punjab & Sind Bank
Operations IndusInd Bank
Shri Umesh Chandra Exim Bank
Projects AUDITORS
Shri A P Choudhary (w.e.f. 1st June, 2009) M/s B V Rao & Co.
Chartered Accountants
GOVERNMENT DIRECTORS Visakhapatnam
Shri BS Meena ( upto 30th March, 2010 ) CONTENTS
Shri S Machendra Nathan (w.e.f. 24th May, 2010) Chairman’s Address 3
Shri U P Singh ( 12.11.2009 to 19.1.2010) Directors’ Report 6
Dr. Dalip Singh (upto 11.11.2009 & w.e.f. 2.3.2010) Management Discussion & Analysis Report 30
A Glance of Financial Results 39
INDEPENDENT DIRECTORS Annual Accounts 41
Cash Flow Statement 68
Dr. Jagatpal (upto 1st March, 2010) CEO & CFO Certification 70
Prof. Ramesh Chandra (w.e.f. 3rd August, 2009) Auditors’ Report 71
Comments of C&AG 79
COMPANY SECRETARY Report on Corporate Governance 80
Shri P Mohan Rao Certificate on Compliance of 88
Guidelines on Corporate Governance
Secretarial Compliance Report 89
REGISTERED OFFICE Vision, Mission & Objectives 96
Administrative Building
Visakhapatnam Steel Plant
Visakhapatnam 530 031, Andhra Pradesh
Website: www.vizagsteel.com
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28th Annual Report 2009-10
Chairman’s AddressDear Shareholders,
My colleagues on the Board and I extend a warm welcome to you all at the 28th Annual
General Meeting of your Company. The Directors’ Report and the Audited Statement of
Accounts for the year 2009-10 and the Notice to the Shareholders have already been circulated
and with your permission, I take them as read.
Year 2009-10
The year 2009-10 has been an eventful year for the Company as because the impact of the
Global Financial crisis that started in the second half of the previous year has been gradually assimilated and the
Company withstood the crisis consequent to a strong recovery in the Indian economy, thanks to the timely and
proactive initiatives of the Govt of India to boost economic growth by enabling injecting funds in various industries
like construction, infrastructure, auto mobile and Power Sectors. Yet, 2009-10 was at best a year of cautious
recovery but encouraging year for the Company. The Steel Markets saw a growth in consumption but the prices
continued to be under pressure.
During the year, the Company has achieved some of the best ever yearly performances in respect of production of
value added steel (2.403 million tonnes), steel dispatches by rail of 2.07 million tonnes and best ever gross sales
of Rs.10635 Crores in addition to best techno-economic parameters achieved in terms of yields (Wire Rods and
MMSM Mills) and Specific Water Consumption of 2.16 Cub. Mtrs./tls. This could be possible despite certain constraints
like Power availability, etc.
Global Steel Industry
The Global Economy has showed signs of recovery with Global Steel Capacity utilization ratio showing improvement
at 75.1 % in Dec ’09 (as compared to 58.1 % in Dec ’08). The financial crisis in the previous year has effected
many Nations. However, the Indian Economy showed tremendous resilience and withstood the global volatility by
maintaining the GDP Growth relatively at a higher level as compared to the earlier period. The Indian steel industry
has also shown signs of improvement everywhere by a positive growth of 2.7% over the previous year, while other
developed countries showed a negative growth.
The consumption of Steel continues to be a major growth driver and the consumption growth projected at 7% based
on GDP Growth rate of 7% to 7.5% and production of 110 million tonnes much earlier than 2019 – 20 as was
projected in the National Steel Policy.
Global Crude Steel production reached 1220 million tonnes. Further, consolidation in the Industry has facilitated
the growth and investor confidence and the international prices have been high in the year helping the Companies
in India for improving their margins. The World Steel Association forecasts an increase in the apparent use of Steel
finished products during 2010 and 2011 by 10.7% and 5.3% respectively. World Steel Association also expects the
apparent steel use for the year 2010 to reach 1.241 billion tonnes compared to 1.121 billion tonnes for 2009 and
this is expected to rise to 1.306 billion tonnes in 2011. It is also predicted that Asia will lead in terms of Steel
demand with a share of 66.2% of the World Steel demand in 2010 and 65.5% in 2011. Emerging economies like
India will drive the growth and this augurs well for the industry.
Indian Steel Scenario
India has emerged as 5th largest producer and recorded a growth rate of 2.7% and emerged as the largest sponge
iron producer in the World. The Industry is looking forward for Expansion Plans of the Steel Companies including
PSUs and if implemented on schedule, India could become the second largest Crude steel producer in the world by
the year 2016. The growth in infrastructure and other developmental activities arising out of increased outlays in
these sectors by Govt of India have rejuvenated the Steel Market in the Country and the building of capacities to
cater to the diversified demands is the main thrust area now onwards.
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RASHTRIYA ISPAT NIGAM LIMITED
Outlook for the Company in 2010-11
On the back of strong commitment for infrastructure funding and revival and strong come back by the auto sector,
the Steel demand in the country is projected to go up by 10% giving an encouraging opportunity for the Company
to improve its overall performance. However, the raw material prices continue to be a major concern as they have
cut into the margins of the company for the year and shall continue to show a negative impact in the coming year
as well cutting into the bottom line of the company. The Iron ore prices have already been increased by 40% from
the price level of 2009-10 and are likely to go up further while the imported coking coal prices have gone up by 56%
in the First Quarter of 2010-11. The Company will continue to face stiff competition from steel producers in the
private sector who are making higher availability of long products in the market particularly in the Southern India
Region. Efforts are on for improvement of the net sales realization by value added production and better delivery
mechanisms to enhance consumption.
The company is looking at optimization of product and market mix and production at higher levels of efficiency and
productivity with a focus on cost reduction to partially neutralize the impact of cost escalations. All said and done,
steep increase in prices of key raw materials like coking coal and iron ore and the sluggish market and declining
selling prices is and further likely to put pressure on the margins. The Company, in the current year, is also focusing
on synchronization for commissioning of various units of the Expansion project (6.3 Mt stage) in logical sequence to
the extent possible so as to minimize logistical/operational over heads with increase of production.
RINL is continuing its efforts on strategic initiatives for acquiring overseas coal mines through the Joint Venture
Company, International Coal Venture Ltd., and long term contracts with the major coal suppliers and through the
joint venture company RINMOIL formed for setting up of ferro alloy plant with M/s MOIL. Further, to improve energy
efficiency of the Plant, the company entered into an MOU with NEDO for a 20.60 MW waste heat recovery system.
Our people, the RINL collective, continue to be the key to the success of the Company. The Steel Ministry’s Trophy,
which was given for the first time, was received by the Company in the year and this, alongwith many other
recognitions like “Energy efficient unit” conferred by CII, Rajbhasha Award, CMMI Level –3 Certification, Gold and
Bronze medals – ICQCC – Philippines, India’s “Best Companies to Work for 2009” etc., is a testimony to the
company’s commitment to Excellence in Steel making.
Steps towards a promising future
The Company embarked upon Expansion Plan for doubling the capacity from 3 million tonnes to 6.3 million tonnes
and it is estimated that Ist Phase Units will be commissioned in the 4th quarter of the year 2010-11. The Coke
Oven Battery No.4 has been commissioned during the year and was dedicated to the Nation by the Hon’ble Union
Minister for Steel in May 2010.
The Company during the year took upon Modernization & Upgradation of CCM-2 with EMS facility and TG-I Automation
along with Combined Blowing facility in SMS-1.
Care for Society
The Company has committed Rs.12.75 Crores for the year 2009-10, as against Rs. 38.83 Crores in the previous
year, towards Corporate Social Responsibility activities. The reduction is largely due to the reduced PAT for the year.
Corporate Governance
Your Company is committed to conforming to the highest standards of corporate governance by ensuring transparency,
disclosures, and reporting as required under the Corporate Governance Guidelines issued by the Department of
Public Enterprises.
Dividend for the year 2009-10
The Net Profit for the financial year 2009-10 has eroded by 40% as compared to that of the previous year due to
lower net sales realization. Considering the financial position of the Company and the need to have adequate
internal resources for the on going Expansion Project and to support modernization and key raw material securitisation
plans, there is a requirement to conserve funds.
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28th Annual Report 2009-10
It gives me a great pleasure to announce that the Board of Directors of your Company have since recommended a
total dividend of 10% of Profit After Tax (PAT) to Equity Shareholders (amounting to Rs.79.67 crores) and 7% on
Preference Share Capital to Preference Shareholders (amounting to Rs.205.62 crores) including the interim
dividend of Rs.100.01 crores already paid to Equity and Preference Shareholders for the financial year 2009-10
and the Shareholders, at the 28th AGM of the Company held on 24th July, 2010, have declared the dividend for the
year 2009-10 accordingly.
Acknowledgements
I, on behalf of the RINL collective, acknowledge the support extended by the Stakeholders of the Company and look
forward to their continued support in the years to come.
I take this opportunity to express my thanks to all the Stakeholders, Ministry of Steel, Government of India, Government
of Andhra Pradesh and various other Departments of the Government and other Institutions.
The Company acknowledges the unstinted commitment and collective efforts of its employees for their excellent
performance in various activities.
I am confident that the commitment, expertise, acumen and the trust built over the last 28 years will continue to be
available and with your dedicated and innovative efforts, we can pave the way to building capacity upto 16 million
tonnes by 2020, as enshrined in our Mission statement.
Thanking you,
Dt. 24th July, 2010 ( P.K. Bishnoi )
Visakhapatnam Chairman
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RASHTRIYA ISPAT NIGAM LIMITED
DIRECTORS’ REPORTDear Members,
On behalf of the Board of Directors of the Company, Itake great pleasure in presenting the 28th Annual Reportof the Company for the financial year ended 31st March2010, together with the Audited Statements ofAccounts, the Auditors’ Report and the Comments onthe Accounts by the Comptroller and Auditor Generalof India.
Year 2009-10
The year 2009-10 has been an eventful year for theCompany as because the impact of the Global Financialcrisis that started in the second half of the previousyear has been gradually assimilated and the Companywithstood the crisis consequent to a strong recoveryin the Indian economy, thanks to the timely andproactive initiatives of the Govt of India to boosteconomic growth by enabling injecting funds in variousindustries like construction, infrastructure, auto mobileand Power Sectors. Yet, 2009-10 was at best a yearof cautious recovery but encouraging year for theCompany. The Steel Markets saw a growth inconsumption but the prices continued to be underpressure.
During the year, the Company has achieved some ofthe best ever yearly performances in respect ofproduction of value added steel (2.403 million tonnes),steel dispatches by rail of 2.07 million tonnes andbest ever gross sales of Rs.10635 Crores in additionto best techno-economic parameters achieved in termsof yields (Wire Rods and MMSM Mills) and specificWater consumption of 2.16 Cub. Mtrs./tls. This couldbe possible despite certain constraints like Poweravailability, etc.
Global Steel Industry
The Global Economy has showed signs of recovery withGlobal Steel Capacity utilization ratio showingimprovement at 75.1% in Dec ’09 ( as compared to58.1% in Dec ’08). The financial crisis in the previousyear has effected many Nations. However, the IndianEconomy showed tremendous resilience and withstoodthe global volatility by maintaining the GDP Growthrelatively at a higher level as compared to the earlierperiod. The Indian steel industry has also shown signsof improvement everywhere by a positive growth of2.7% over the previous year, while other developedcountries showed a negative growth.
The consumption of Steel continues to be a majorgrowth driver and the consumption growth projectedat 7% based on GDP Growth rate of 7% to 7.5% andproduction of 110 million tonnes much earlier than2019 – 20 as was projected in the National Steel Policy.
Global Crude Steel production reached 1220 milliontonnes. Further, consolidation in the Industry hasfacilitated the growth and investor confidence and theinternational prices have been high in the year helpingthe Companies in India for improving their margins.The World Steel Association forecasts an increase inthe apparent use of Steel finished products during2010 and 2011 by 10.7% and 5.3% respectively.World Steel Association also expects the apparent steeluse for the year 2010 to reach 1.241 billion tonnescompared to 1.121 billion tonnes for 2009 and this isexpected to rise to 1.306 billion tonnes in 2011. It isalso predicted that Asia will lead in terms of Steeldemand with a share of 66.2% of the World Steeldemand in 2010 and 65.5% in 2011. Emergingeconomies like India will drive the growth and thisaugurs well for the industry.
Indian Steel Scenario
India has emerged as 5th largest producer and recordeda growth rate of 2.7% and emerged as the largestsponge iron producer in the World. The Industry islooking forward for Expansion Plans of the SteelCompanies including PSUs and if implemented onschedule, India could become the second largest Crudesteel producer in the world by the year 2016. Thegrowth in infrastructure and other developmentalactivities arising out of increased outlays in thesesectors by Govt of India have rejuvenated the SteelMarket in the Country and the building of capacities tocater to the diversified demands is the main thrustarea now onwards.
Outlook for the Company in 2010-11
On the back of strong commitment for infrastructurefunding and revival and strong come back by the autosector, the Steel demand in the country is projectedto go up by 10% giving an encouraging opportunity forthe Company to improve its overall performance.However, the raw material prices continue to be a majorconcern as they have cut into the margins of thecompany for the year and shall continue to show anegative impact in the coming year as well cuttinginto the bottom line of the company. The Iron ore priceshave already been increased by 40% from the pricelevel of 2009-10 and are likely to go up further whilethe imported coking coal prices have gone up by 56%in the First Quarter of 2010-11. The Company willcontinue to face stiff competition from steel producersin the private sector who are making higher availabilityof long products in the market particularly in theSouthern India Region. Efforts would continue forimprovement of the net sales realization in general
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28th Annual Report 2009-10
and by value added production and better deliverymechanisms to enhance consumption. But recentfinancial crisis in some European countries affectingSteel market sentiments including in India and reducedscrap prices etc. are putting considerable pressureon prices and the negative sentiments are leading tosluggish market.
The company is looking at optimization of product andmarket mix and production at higher levels of efficiencyand productivity with a focus on cost reduction topartially neutralize the impact of cost escalationsdespite Brown Field Expansion work at times comingin the way as also overdue repairs and maintenanceof key Units. All said and done, steep increase inprices of key raw materials like coking coal and ironore and the sluggish market and declining selling pricesis and further likely to put pressure on the margins.The Company, in the current year, is also focusing onsynchronization for commissioning of various units ofthe Expansion project (6.3 MT stage) in logicalsequence to the extent possible so as to minimizelogistical/operational over heads with increase ofproduction .
RINL is continuing its efforts on strategic initiativesfor acquiring overseas coal mines through the JointVenture Company, International Coal Venture Ltd., andlong term contracts with the major coal suppliers andthrough the joint venture company RINMOIL formedfor setting of Ferro Alloy Plant with M/s MOIL. Further,to improve energy efficiency of the Plant, the companyentered into an MOU with NEDO for a 20.60 MW wasteheat recovery system from the existing Sinter Plant –a first for an Integrated Steel Plant.
The RINL collective, continue to be the key to thesuccess of the Company. The Steel Ministry’s Trophy,which was given for the first time, was received by theCompany in the year and this, alongwith many otherrecognitions like “Energy efficient unit” conferred byCII, Rajbasha Award, CMMI Level –3 Certification, Goldand Bronze medals – ICQCC – Philippines, India’s “BestCompanies to Work for 2009” etc., is a testimony tothe company’s commitment to Excellence in Steelmaking.
Steps towards a promising future
RINL’s operation of its assets at VSP has been amongstthe most competitive in the steel industry and capacityexpansion has been one of the key strategies for theorganization. RINL draws its greatest strength and itscompetitive position from it’s productivity, quality andhighly skilled work force. RINL has an excellent layoutand associated infrastructure facilities to expand thecapacity many fold. Leveraging upon these strengths,RINL had drawn its long term directional plan –
“Corporate Plan 2020” to expand the capacity of liquidsteel to 16 million tonne in phases by the year 2020.In the midst of changing business dynamics and it’squest to maintain its dominant position in the Indiansteel market, the Corporate Plan is being revisited asper which VSP has the potential to expand to 20 milliontonne per annum at the existing location ; therebycould become the largest single location steel plant inthe country and enjoy economic benefits.
In the above endeavour, the Company has alreadyembarked upon it’s first phase of expansion for doublingit’s capacity from 3 million tonnes to 6.3 million tonnesof liquid steel per annum. In the current phase, RINLis focusing on further establishing it’s brand leadershipin long products category view of the projectedinfrastructure growth of the country and in the nextphase, VSP proposes to enter into flat productscategory with which product mix of RINL would getenriched. The implementation of the first phase ofexpansion is in advanced stage and the production isall set to commence by end of the financial year 2010-11. This phase of expansion consists of a new BlastFurnace with state of the art technology, Sinter Plantand Raw Material Handling System, new Steel MeltingShop along with latest technological facilities toproduce clean steel, Wire Rod Mill and associatedunits. The existing plant of RINL was installed mainlyutilising Russian technology. In the current expansionphase, RINL has sourced latest technology from allmajor countries, partnering with reputed technologysuppliers for supply, installation and commissioning ofthe units which includes M/s Paul Wurth, Italy, SMS,Germany, Siemens VAI, Austria, Danieli, Italy, TPE,Russia, along with reputed Indian partners viz., M/sMECON, BHEL, L&T, Bridge & Roof etc. To meet theadditional requirement of coke, a new Coke OvenBattery No.4 has already been commissioned whichwas dedicated to the Nation by the Hon’ble UnionMinister for Steel in May 2010. The Company duringthe year also took up a number of Modernization &Upgradation projects like CCM-2 with EMS facility andCombined Blowing facility in SMS-1 which have beenput into operation.
In Stage II of current phase of expansion, two newfinishing mills – Special Bar Mill and Structural Millalong with associated facilities are being installed whichwill be brought into operation progressively during nextfinancial year i.e 2011-12.
Apart from capacity enhancement, the expansion alsofocuses on reduction in energy efficiency, stepping upof productivity & yield, newer products with morestringent tolerance limits and above all moreenvironmental friendly technologies.
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RASHTRIYA ISPAT NIGAM LIMITED
To reduce energy consumption, several energy efficient technologies are being adopted in expansion such as multislit burners, waste heat recovery in sinter coolers, PCI in Blast Furnace, newer design of BF stoves, Top recoveryturbine for waste heat recovery, 100% continuous casting, efficient reheating furnaces in Mills, efficient electricaldrives, oscillating combustion in Rolling Mills, furnace control integrated with Mill control, side charging and dischargingof furnace, low temperature rolling, housing less stands, warm charging of billet, high speed rolling, single familyroll pass design and the like.
Measures for environmental protection and resource conservation, has always been the top priority of RINL thathas helped the company in maintaining lowest water consumption, one of the lowest in energy consumption,highest utilization of waste gas heat through generation of about 40 MW of power etc., The new systems / technologiesbeing introduced in expansion include zero discharge system, mechanical, biological & chemical treatment unit foreffluent treatment, Dry fog dust suppression system in RMHP, dog house (secondary fume extraction system) inSMS, several de-dusting facilities of efficient design etc.
The thought process for the next phase of expansion to a level of 11 to 12 million tonne per annum of liquid steelhas already commenced. In this phase, RINL intends to enter into flat products & high grade steels which arecurrently either not being manufactured in the country or partly getting imported.
CARE FOR SOCIETY
The Company has committed Rs.12.75 Crores for the year 2009-10, as against Rs.38.83 Crore in the previousyear, towards Corporate Social Responsibility activities. The reduction is largely due to the reduced PAT for the year.
CORPORATE GOVERNANCE
Your Company is committed to conforming to the highest standards of corporate governance by ensuring transparency,disclosures, and reporting as required under the Corporate Governance guidelines issued by the Department ofPublic Enterprises.
The Net Profit for the financial year 2009-10 has eroded by 40% as compared to that of the previous year due tolower net sales realization. Considering the financial position of the Company and the need to have adequateinternal resources for the on going Expansion Project and to support modernization and key raw material securitisationplans, there is a requirement to conserve funds.
BUSINESS PERFORMANCE:
The year gone by has been very eventful for the Company as much as it has surpassed the previous best achievedfor any year as detailed below:
PRODUCTION
Unit:’000t
Actual % fulmt % growth overItems DPR 2009-10 2008-09 on DPR 2008-09
Ovens pushed (Nos./day) 296 256 ** 16
Hot Metal 3400 3900 3546 115 10
Pig Iron 556 408 322 73 27
Liquid Steel 3000 3399 3145 113 8
Billets 1857 1983 1904 107 4
Bar products 710 870 825 123 6
Wire Rods 850 1016 972 119 5
MMSM Products 850 1073 748 126 44
Finished Steel 2410 2959 2544 123 16
Saleable Steel 2656 3167 2701 119 17
Value added production 2403 2008 ** 20
Value added heats (Nos.) 18327 15192 ** 21
Power Generation (MW) 203.1 198.8 ** 2
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28th Annual Report 2009-10
Best Production and Technical Parameters
Yearly Peaks
Production in all major units exceeded 100% of rated capacity for the 9th consecutive year ;
20.6 MW waste heat recovery system in Sinter Plant (with NEDO, Japan) is being installed which is First time in
India;
Other Highlights :
� Installation of Combined Blowing facilities in all the 3 LD converters done.
� Modernization & Automation of CCM-2 during Aug/Sep' 09.
� Commissioning of two units of Argon tanks in ASP for the supply of Argon gas for combined blowing facilities.
� Upgradation of control and instrumentation for TG-1 in Dec '09.
� Commissioning of Battery-4 in Apr '09.
� Reduction of chilled water temperature by commissioning of chillers of CWP-1.
� Receipt of Coal through Conveyor from Gangavaram Port.
� Usage of straight coking coal for coal blend optimization.
� Highest ever Value Added Steel production of 2.4 Mt
� 20% growth over the previous best in 2008-09;
� 76% of value added steel in total saleable steel production (best since inception)
� Hot metal & Liquid Steel crossed 62 Mt & 50 Mt Landmark on 21.01.10 & 07.03.10 respectively.
� Zero Net Demurrage was achieved for three consecutive months (Jan-Mar '10) in the year 2009-10.
� Despatch of 2.07 Mt of Steel by Rail is the Best for any Year since inception.
The Company has once again crossed the landmark Turnover of Rs.10,000 Cr for the third time in a row. The
focus of fiscal measures in the Company continued to be on optimizing expenditure on interest, bank charges and
insurance while improving the earnings on surplus funds.
Item Unit Actual Previous best
2009-10
Production
Value added production '000 t 2403 2008 2008-09
Value Added heats Nos. 18327 15192 2008-09
Met. waste consumption '000 t 375 360 2006-07
Technical Parameters
CO&CCP Nut coke yield % 6.16 6.12 2004-05
Sinter Plant Power consumption KWH/t GS 45.95 46.67 2006-07
BF Heat Consumption Mcal/t HM 470 482 2005-06
SMS Avg. Ladle Life Heats 96.38 88.00 2007-08
Avg. Tundish Life Heats 5.27 4.93 2008-09
Cast Blooms yield % 94.31 94.20 2008-09
Heat Consumption Mcal/t LS 33 33.9 2007-08
WRM Wire rods yield % 98.06 97.90 2006-07
Power Consumption kwh/t blt rld 118.94 119.31 2008-09
MMSM MMSM Products yield % 96.25 95.88 2007-08
Overall Sp. Water consumption Cum/t LS 2.18 2.29 2006-07
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RASHTRIYA ISPAT NIGAM LIMITED
ENVIRONMENT MANAGEMENT
The company was audited by M/s BVCI for continuationof ISO 14001:2004 certificate, which is valid till Aug2010. The company in its endeavor to move beyondadherence to stipulated norms, has identified thefollowing projects to improve the environmentalperformance:-
Major Environmental projects completed during 2009-10
COST REDUCTION MEASURES
The company’s commitment towards containing costscontinued during the year with the following measures :
1. Nut coke in partial replacement of metallurgicalcoke in Blast Furnace.
2. Use of Metallurgical waste to partially replace IronOre fines at Sinter plant.
3. Blending of different types of straight coking coalsto reduce Carbon Rate.
4. Usage of LPG for bloom cutting, in place of Acetylegas in CCM 1, 2 and 3.
5. Utilisation of LD slag in Sinter Plant (SP) and BlastFurnace (BF) to reduce consumption of Limestone.
6. Utilisation of Lime dust in SMS by way of Briquettingthe lime.
7. Reclamation of scrap from maintenance activitiesand use in SMS.
8. Improvement in tundish life from 4.93 to 5.27Heats.
9. Conservation of power10. Water conservation.11. Collection and processing of copper scrap from
electric motors, tuyeres, etc.
SALES PERFORMANCE
1. Recap of 2009-10
The year 2009-10 witnessed improved demand for steelproducts compared to 2008-09. During 2009-10,Construction Sector and Automobile Sector registeredrecovery over that of the previous year. Constructionand Automobile Sectors registered estimated growthrates of about 10% and 25% respectively in 2009-10over 2008-09. Upto July 2009, the recovery indomestic market prices continued and margins turnedpositive. Subsequently, there was a dip in the marketprices, exerting pressure on the margins, whichcontinued till December 2009. Recovery of marketprices started by end of December 2009 and continuedtill the end of the financial year. Due to stableInternational prices, VSP exported Pig Iron as well asSteel especially during the above period of lull in thedomestic market.
Due to improvement in the growth of Automobile Sectorin 2009-10, the demand for Value Added Steels hasincreased during the year. Sales of Value Added Steelhave gone upto 2.36 Million Tonnes (Mt) representinga growth of 19% in 2009-10 over that of 2008-09.
2. Marketing Performance Highlights
� Registered best ever Sales Turnover of Rs.10635Cr. since inception. The Sales Turnovercorresponds to a target fulfillment of 108% againstMOU target of Rs. 9861 Cr.
� The sales volume of Saleable Steel during the yearstood at 3.131 Mt, registering a growth of 20%over 2008-09.
� The sales of Value Added Steels constituted 75%of Saleable Steel sales. Premium for Value AddedSteels over Mild Steels showed improvementduring the year.
� Exports value of Rs.351 Cr. has been achieved duringthe year 2009-10, against Rs.78 Cr. in 2008-09.
Sl. Projects Cost
No. completed (Rs. in Lakhs)
1 Installation of High temperature, 1256Membrane Bag filters inCRMP-1, 2, 3 and 4 arecompleted.
2 Installation of Electronic 120controllers in ESPs ofTPP Boilers – 1,2 & 5
3 Nitrification, De-nitrification of 4600MBC effluents for control ofAmmonical Nitrogen.
4 Replacement of compressors 650working on ‘ODS’ withnon-ODS / CWP chillers.
Total 6626
KEY FINANCIALS (Rs Crores)
2009-10 2008-09
Gross Turnover 10635 10411
Total Income 10567 10052
Total Expenditure 8964 7697
Gross Margin 1603 2355
Interest Charges 78 88
Cash Profit 1525 2267
Depreciation 277 240
Profit Before Tax 1248 2027
Provision for taxations 451 691
Net Profit 797 1336
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28th Annual Report 2009-10
� Achieved record sales value of By-products ofRs.266 Cr. during the year 2009-10 as comparedto Rs.214 Cr. during the year 2008-09, whichrepresents a growth of 24%.
� During 2009-10, not only the granulated slagproduced in the year could be sold but also theslag from Dump Yard was sold. The percentagedisposal of granulated slag produced during theyear 2009-10 stood at 117%.
� Appointed three new Consignment Sales Agenciesduring the year 2009-10 at Kadapa andVisakhapatnam in Andhra Pradesh and Damtal,Kangra District in Himachal Pradesh.
� 48 New DLDs have been appointed during theyear 2009-10.
3. Sales Performance
Gross sales of Rs 10,635 Crores has been achievedin 2009-10 against MOU target of Rs. 9861 Croresrepresenting target fulfillment of 108% and growth of2% over that of the previous year (2008-09). Further,the details of the break-up of actual performance w.r.t.targets for 2009-10 are indicated below :
Volume : '000 Tonnes, Value : Rs. Cr.
Sales Volume
Domestic
Pig Iron 186 382 205% 246 55%
Steel 2980 3073 103% 2617 17%
Export
Pig Iron 150 145 96% 23 542%
Steel 100 58 58% - -
Total
Pig Iron 336 527 157% 269 96%
Steel 3080 3131 102% 2617 20%
Sales Value
Domestic 9360 10284 110% 10333 -
Exports 501 351 70% 78 348%
Total 9861 10635 108% 10411 2%
ITEM2009-10
Target Actual FulfillmentGrowth
2008-09
During the year 2009-10, sales volume of Pig Iron andSaleable Steel represented target fulfillment of 157%and 102% respectively against MOU target andregistering a growth of 96% and 20% respectively over2008-09.
4. Exports
VSP exported both Pig Iron and Saleable Steel during
the year. In 2009-10, Export Sales of 145 thousand
tonnes of Pig Iron and 58 thousand tonnes of Saleable
Steel have been achieved. The Export Sales stood at
Rs.351 cr. during 2009-10.
5. Value Added Steels
In 2009-10, 2.36 Mt of Value Added Steel Products
have been sold compared to 1.98 Mt in the year
2008-09, representing a growth of 19%. Sales of Value
Added Steel as a percentage of Total Saleable Steel
stood at 75.3% during 2009-10. The details of sale of
Value Added Steel Products are given below :
Sales Turnover (Rs. Crs)
10433 10411
10635
07-08 08-09 09-10
07-08 08-09 09-10
Export Turnover (Rs.Crs)
555
78
351
Domestic Turnover (Rs. Crs)
9878
10333 10284
07-08 08-09 09-10
Sales Turnover (excluding Internal Consumption)during the last 3 years
Unit : ‘000 Tonnes
2008-09 2009-10 % Gr.
Value Added Steel 1981 2359 19
Total Saleable Steel 2617 3131 20
Value Added Steel % of
Total Steel 75.7 75.3
12
RASHTRIYA ISPAT NIGAM LIMITED
The graphical representation of sales of Value added
steel in the last four years are as under :
Unit : '000 Tonnes
6. Project Sales
During the year 2009-10, 6.59 lakh tonnes (including
Internal Consumption at VSP) of steel products have
been sold to Project Customers, compared to 6.71 lakh
tonnes in the year 2008-09. Region-wise sales of steel
products to Projects are given below :
Unit : ‘000 Tonnes
Region 2008-09 2009-10
East 71 77
North 128 202
West 98 93
South 172 137
Andhra 166 116
Internal Consumption 35 34
Grand Total 671 659
The Northern and Eastern Regions have recorded highest
yearly Project Sales of 202 thousand tonnes and 77
thousand tonnes in 2009-10, corresponding to 58%
and 8% growth respectively over that of 2008-09.
Graphical representation of Region-wise sales volume
('000 t) and share (%) of steel products to Projects is
brought out below :
unit : volume in ‘000 tonnes
7. By-Products Sales
The sales value of By products of Rs.266 Cr. achieved
during the year corresponds to MOU target fulfillment
of 159% and represents a growth of 24% over that of
2008-09. The sales of By products during the year
2009-10 and 2008-09 are given below :
By-Products 167 266 159 214 24
2009-10
ItemTarget Actual % Fulfillment
2008-
09
% Growth of
2009-10
over 2008-
09
Unit: Rs. Cr.
8. Inventory Control
While the inventory of Saleable Steel as on 31.3.2010remained almost at the same level as that of at thebeginning of the year, there was a substantial reductionin inventory of Pig Iron during the year 2009-10.
The position of inventory of Pig iron, Semis, FinishedSteel and Saleable Steel as on 1st Apr. 2009(beginning of the year) and as on 1st Apr. 2010 (endof the year) are as follows :
Iron 125 7 -118
Finished steel 171 175 4
Semis 23 *16 *-7
Saleable steel 194 191 -3
(*Meant for sale)
Unit : ‘000 Tonnes
ItemAs on
01/04/2009
As on
01/04/2010
Accr (+) /
Dec (-) over
01/04/2009
It may be observed that the total production of SaleableSteel during the year 2009-10 has been sold in theyear.
9. E-Marketing
During 2009-10, 92,008 tonnes of Steel products weree-auctioned through 1389 awarded e-auctions. Inaddition to these, 16,887 tonnes of Pig Iron and relatedproducts were e-auctioned through 14 awardede-auctions. About 71,322 tonnes of By-products weree-auctioned through 202 awarded e-auctions. TheValue of e-auctions stood at Rs. 278 Cr.
During the year, 72 e-reverse auctions were awardedfor transportation of 3.6 lakh tonnes of Iron and Steelproducts.
10. Rural Marketing
The District Level Dealership Scheme (DLDS) wasintroduced in RINL-VSP in 2004-05, with a view tomaking steel available to the rural customers at nearbylocations. The number of District Level Dealers (DLDs)has increased from 15 in 2004-05 to 136 by the endof 2008-09.
13
28th Annual Report 2009-10
During the year 2009-10, 84 DLDs ceased to be inthe list of DLDs at the end of the year due to thefollowing reasons.
� Registration of the some of the DLDs lapsed, asthe contractual period, including option forextension, completed.
� Registration of some of the DLDs lapsed, as theextension option was not exercised due to poorperformance.
Based on the experience gained and the inputs receivedlike vigilance suggestions, feedback from District LevelDealers, as a part of Corporate Governance, DLDs Policyhas been revised and new registration for DLDs startedfrom 2009-10 onwards.
During the year 2009-10, 48 new DLDs have beenappointed. At the end of the year, there were 100 DLDsin position.
MATERIALS MANAGEMENT :
For the production of Metallurgical Coke required inBlast Furnaces, the Indian Steel Industry is dependenton Imported Coking Coals due to lack of certain essentialparameters in Indigenous Coking Coals. Dependenceon Imported Coals is relatively higher in case of RINLdue to lack of captive mines and relatively large BlastFurnaces. The annual prices under Long TermAgreements for Imported Coking Coals are normallyfinalized at the beginning of the Financial Year fordeliveries from July to June. Thus prices were finalizedbefore the economic meltdown for the period from July'08 to June '09. The crash of Steel prices in themeantime, due to economic meltdown of Sep '08,meant erosion of profits for the Company. Under theseCircumstances, the Company successfully negotiatedwith the Coal Suppliers to change the procurement cycleto Apr '09 to Mar '10 and to defer the contract quantitiesoutstanding on 31.03.09 over the next 3 years. Thisinitiative of the Company has given some relief for theoperations of the Company in this difficult year, as theprices settled for Apr '09 to Mar '10 procurement cyclewere much lower than those settled for July '08 to June'09 procurement cycle.
The blend of various Imported and Indigenous CokingCoals for production of Metallurgical Coke is optimizedfrom time to time to achieve optimum properties atoptimum cost from the available Coals. The AustralianCoal suppliers were, hitherto supplying Coals blendedat their end. To increase the flexibility for blending atour end, the Company persuaded the suppliers to supplyCoals without any blending at their end. This initiativeis expected to help the Company especially during theperiods of uncertain receipts of one or more Coals owingto natural calamities or otherwise.
The Company utilized the services of Gangavaram Port,a mechanized deep draft port, being in the vicinity, tothe best advantage of the Company. The Companystarted availing Capesize vessels, which meant lowerfreights. For other smaller vessels, the choice betweenVisakhapatnam Port and Gangavaram Port was madebased on Vessel-to-Vessel calculation of economics.
The Company has been giving continuous thrust fore-initiatives. About 75% of the value of Spares andConsumables procured in the year were throughe-procurement. An online Vendor Registration Systemhas been implemented to facilitate the intendingVendor to apply Online and view the status of theirapplication Online.
TRAINING & DEVELOPMENT ACTIVITIES :
The Company has an exclusive Training andDevelopment Centre to take care of the Trainingrequirements of the Officers and workmen as well asthe newly recruited Management Trainees etc. TheTraining initiative includes Special need basedProgrammes, Trade Tests and Orientation programmescatering to the requirements of various Departmentsof the Company.
The Total number of employees trained during the yearwas 32850, the total number of programmesconducted was 1156. Freshers' Training was impartedto 766 and total Training Mandays was 12.9 peremployee/year with Training effectiveness of 85.4% witha Human Capital Development Index of 1.64.
Training programme was imparted to 14 engineers fromEssar Steel, Hazira for a period of 30 working days.Vocational Training/Project Work facilities were extendedto 5112 students from different Engineering Colleges.Total revenue generated from training activities wasRs.76.84 lakhs.
INFORMATION TECHNOLOGY :
RINL has taken the initiative to match with internationalsoftware development standards. The Companyunderwent 'Assessment by the International CertificationAuthority'. In the final CMMI assessment, the Companywas awarded prestigious CMMI Level-3 Certificate bySoftware Engineering Institute, USA, in August 2009.This certification is first of its kind in the IndianManufacturing and Steel Industry.
E-INITIATIVES TAKEN UP DURING THE YEAR :
Intranet portal (www.vspsite.org), Internet web site(www.vizagsteel.com) and Chairman On-Line Systemwere developed. The Reverse e-auction for Marketingtransport contracts for MRO's, Import Purchase casesand for Stores transport contracts were also developedand e-auctions worth Rs.722 Crores have beentransacted.
14
RASHTRIYA ISPAT NIGAM LIMITED
The internet web site, www.vizagsteel.com was rankedsecond in popularity amongst the websites of all steelproducing companies in the country. An ERM Portal forRisk Management was developed.
A drive towards Paperless office has been initiatedcovering various areas like, sending ITTs (along withdrawings) to suppliers through E-mail was implemented.Provision was made for new vendors to register throughweb. Online Leave Management System wasimplemented for Materials Management and PersonnelDepartments. Administrative Budget ManagementSystem (ABMS) was deployed in the web for use by allthe branches.
Intranet portals of Legal Affairs, Safety, TownAdministration, General Administration, Instrumentationand Environment Management were launched.
In addition, under Process control initiatives, NewSCADA (Supervisory Control and Data Acquisition)system was commissioned.
ENTERPRISE RESOURCE PLANNING
During the year 2009-10, the Company launched theimplementation process of "Enterprise ResourcePlanning". M/s Wipro Infotech Ltd are the ImplementationPartner & Consortium lead with M/s HKP, M/s SAP andM/s Tulip as other members of the consortium forimplementing ERP solution in the Company. ERP solutionwill facilitate the Company to achieve standardizationand seamless integration of all its business processesand improve internal efficiencies across the organization.ERP signifies single transaction data base that is shared,updated and drawn upon by the entire organisation andfacilitates visibility and transparency of information acrossall levels of stakeholders. The Project is likely to go liveduring financial year 2010-11.
MANAGEMENT SERVICES :
The Management Services Department took initiativefor implementation of Quality Circle Projects, Generationof Suggestions and 5S Certification and the majorachievements during the year are as follows :
S.No. Objective Target Actual
1 No. of QC projects implemented 3800 4277
in the organization during
2009-10
2 No. of Suggestions generated 35299 36021
across the organization during
2009-10
3 No. of depts. facilitated for 5S 11 18
certification during 2009-10 45 52
- Cumulative certified Depts.
The Company secured Gold and Bronze medals in theInternational Convention on Quality Control Circles-2009 (ICQCC) at Cebu, Philippines.
VSP has added another feather in its cap by baggingGovt. of India Vishwakarma Rashtriya Puraskar (VRP) -2008 awards at national level. VSP has won thisdistinction fifth time in a row.
STRATEGIC INITIATIVES DURING THE YEAR :
RINL has taken a number of initiatives for growth ofbusiness of the company in addition to its Expansionplan, which includes formation of Joint Ventures,acquisition of assets, mergers etc. both in India andabroad. VSP has been very actively exploring variousoptions to ensure its raw material security throughacquisition / JV route. Some of the major initiativespursued are given below :
JV with M/s MOIL : RINL-VSP has formed a joint venturecompany with M/s Manganese Ore India Ltd-RINMOILFerro Alloys Pvt Ltd. The company was incorporated on29.07.09. The JVC with one 27 MVA furnace and one9 MVA furnace is envisaged to produce 37,500 tonnesper annum of Silico Manganese and 20,000 tonnesper annum of Ferro Manganese. The JV will serve tomeet VSP's ferro alloy requirement besides opportunityto export. The JV will also help in beneficial use of lowgrade Manganese ore of the Company's existing minesand also Manganese from M/s OMDC etc.
BIRD Group of Companies : Union Cabinet in itsmeeting held on 10.09.09, has approved therestructuring proposal of BIRD Group of Companies. Inthe proposed restructuring, M/s OMDC and M/s BSLCwill be made subsidiaries of M/s EIL, which in turn willbe made a subsidiary of RINL, thus bringing M/s EIL,M/s OMDC and M/s BSLC under the umbrella of M/sRINL. The other two companies viz., M/s KDC & M/sSSL would be phased out. M/s OMDC have 6 Miningleases for Iron ore with reserves of 200 Mt & Manganesereserves of 45 Mt and M/s BSLC have 375 Mt of Limestone and 287 Mt of Dolomite reserves. This alliancewould be of mutual benefit.
Iron Ore Security : Applications for Mining Leases (ML)in two areas were filed in Bhilwara Iron Ore Mines,Rajasthan.
Pelletization Plant : RINL is getting its entire iron orerequirements from M/s NMDC's Bailadilla Mines sinceinception. There have earlier been major disruptions tothe railway line (KK line) transporting the iron ore, dueto disruptive activities. In order to ensure securetransportation of iron ore from Bailadilla and furthervalue addition, an EOI was invited for setting up
15
28th Annual Report 2009-10
Pelletization Plant at Visakhapatnam of capacity6-8 mtpa through SPV, with transportation of iron orein slurry form.
SMS grade limestone: Suitability of limestone inDubai(UAE), Philippines, etc are being explored.
PROCESS IMPROVEMENTS
The structure of formulation of annual plans in thecompany was revised with the introduction of theconcept of Roll-on plan and accordingly SustainabilityPlan 2009-10 & Roll-on Plan till 2013-14 werefinalized. This was done with a view to maintain thruston important aspects without compromising on the longterm goals and also to carry forward unfinished agendain the plan to subsequent year after due corrections.
AWARDS :
During the year 2009-10, VSP was declared as therecipient of the First Steel Minister's Trophy for the year2006-07.
As per the survey conducted by The Great Place to WorkInstitute (USA) in association with The Economic Timesfor "India's Best Companies to Work for - 2009," theCompany was adjudged among the:
• Top Fifty Indian companies to work for in India• Top Two PSUs• Top Four among the large organizations• Top Six in the manufacturing segment
RAW MATERIAL SECURITY
Madharam Dolomite Mine (MDM) :
Production & Despatch : The percentage growth inrespect of Production is 14.03% and Despatch is10.39% as compared with that of last year 2008-09.The current year performance of MDM is 96.10% inproduction & 92.31% in dispatch for meeting MOUtargets of Hot metal & Liquid steel.
Other Achievements :
• All time Day Record of drilling 567 Mtrs on 13thFeb, 2010 (previous 462 Mtrs on 22.10.09).
• MDM team bagged Par Excellence Award in NCQC-2009.
• Zero accident rate achieved.
Jaggayyapeta Limestone Mine :
Production & Despatch: The performance of
Jaggayyapeta Limestone Mine against targets for the
year 2009-10 is 103 % in production and 99 % in
dispatch for meeting MOU targets of Hot metal &
Liquid steel .
Other Achievements
• Reduction of Inventory by 3.17% over previous year.
• Demurrages paid to railways were brought down to
Rs.5.21/tonne from Rs.9.31/tonne during 2008-09.
• The consumption of Electricity, explosives, HSD,
Lubricants, Electrodes and spares showed
favourable against targets.
• Highest Month Drilling (2390 Mtrs.) performance
during July 2009.
• Zero accident rate achieved.
Garbham Manganese Mine :
Production & Despatch Performance : The % growth in
respect of production is 14.51% and dispatch is
(-)41.43% as compared with that of last year
2008-09. Shortfall against targets in this year is due
to transporters could not mobilize trucks as per
Company's needs.
Despatch Performance : The dispatch of River Sandfrom Sarepalli Sand Mine is 11277 Tonnes, a growthof -57.63% over that of last year. Shortfall againsttargets in this year is due to Contractors could notmobilize the trucks with the plant's requirement.
NEW INITIATIVES / NEW MINING LEASES
Iron Ore :
RINL/VSP has submitted 2 mining lease applicationsfor iron ore deposits in the State of Rajasthan for anarea of 2303.75 & 2948.50 hactares respectively.
Coking Coal :
Two Coal Blocks for underground mining have beenallotted to RINL/VSP in the State of Jharkhand. One atMahal vide Lr.No. 13016/64/2004-CA/CA-1, dt.09.12.2005 and the other at Tenughat Jhirki vide Lr.No. 38011/11/2006-CA-1, dt. 10.09.2008.
Both the blocks are difficult mines with deep seatedseams, steep inclinations, highly gaseous, number offaults, nallah/river blocking substantial reserves, lowrecovery etc. The Company has requested Ministry ofCoal / GOI to allot a good coking coal block with opencast mining so that the allotted blocks can be handedover.
Dolomite :
A fresh application was submitted in the office of ADMG,Kothagudem on 02.11.2009 for Dolomite Mining Leaseat Dharmapuram Village, Khammam District, AP. DistrictCollector, Khammam advised to make a joint survey byForest and Revenue Departments to take suitabledecision to give NOC to RINL/VSP.
16
RASHTRIYA ISPAT NIGAM LIMITED
Quartzite :
Over an extent of 40.47 ha. in survey No. 268 ofPindrangi village, K.Kotapadu Mandal, VisakhapatnamDistrict for a period of 30 years vide Memo No.9133/M.III(2)/2007-, dt. 27.01.2009 by Department ofIndustries & Commerce, Govt. of Andhra Pradesh hasbeen sanctioned in favour of RINL.
Over an extent of 20.64 ha. in survey no. 1 ofMarrivalasa village, K. Kotapadu Mandal, Visakha-patnam District for a period of 30 years vide MemoNo. 9132 / M.III (2) / 2007-3, dt. 27.01.2009 byDepartment of Industries & Commerce, Govt. of AndhraPradesh has been sanctioned in favour of RINL.
To obtain Environmental clearance, M/s Apitco Limited,Hyderabad (Recognised by MoEF/GoI) has beenappointed for preparation of (i) Environmentalmonitoring baseline data for one season and (ii)Environmental Impact Assessment & EnvironmentalManagement Plan.
PROJECTS DIVISION
RINL is at the forefront of the expansion drive in thecountry to raise its capacity to 6.3 Mtpa and would bethe first plant among PSUs to bring its expandedcapacity on stream commencing from 2010-11. Theentire expansion is under implementation in two stages.Under the stage-I, new Blast Furnace, Converters, BilletCasters and Wire Rod Mill will be commissionedprogressively during Financial Year 2010-11.Subsequently, the facilities under stage-II consisting oftwo major finishing mills - Special Bar Mill and StructuralMill will also be commissioned during 2011-12.
There has been significant progress in physical activitiesduring the year 2009-10. With this, the target of CapitalExpenditure for Expansion was also met; touching thetotal expenditure to a level of around Rs 6000 Crs.
Progress of Work :
In the area of Expansion and other projects, there hasbeen accelerated progress during the year 2009-10:
• Orders have already been placed
• Detailed engineering already completed forauxiliaries etc
• Civil work almost completed for Stage-1
• Major structural fabrication completed
The following facilities were commissioned and otherprojects brought to advanced stage of execution :
� Main Receiving Station:
• 220KV system to meet additional powerrequirement of about 150MW.
• 220KV transmission line from MRS to LBSS-6,LBSS-7, 1-LBDS-1, 2 & 3 test charged.
� Interconnections between existing and expansioncompleted for supply of Air, Nitrogen, Water andsteam partly.
� 5 Nos Cranes in Wire Rod Mill & Blast Furnacecommissioned and cold trials completed for 15nos cranes in SMS and Sinter Plant.
� Testing and trial run of conveyors in RMHP,equipment in SP-3 & BF-3, electrical installationin various packages commenced.
Some of the Major Modernization & upgradation
projects implemented are :
• New facility of Coke Oven Battery-4 wascommissioned in April 09
• Combined blowing facilities in all the three existingconverters was installed and commissioned
• Modernization and upgradation of ContinuousCasting Machine (CCM)-2 in existing Steel MeltShop was completed and commissioned
• Alba gas cutting machine was installed in CCM-1
• Conveyor for transportation of Imported CokingCoal from Gangavaram Port (new facility) wascommissioned
• Upgradation of ladle furnace PLC & MMI wascompleted in existing Steel Melt Shop
• Conversion of binding machine to automaticstrapping machine in Bar Mill of existing plant
• New Mechanical & Biological Chemical TreatmentPlant commissioned
Some Major Highlights :
• 100% MoU targets for the year 2009-10 havebeen achieved.
• New benchmarks (monthly performance) were seton the expansion front for VSP and in some areasfor the Indian Steel Industry itself.
• Highest ever structural erection - 15,133 Tachieved which is best achieved amongst Steelindustry in India
• Highest ever concreting - 36,320 Cu.M achieved.
• Highest ever equipment supply of 14,298Tachieved.
• Highest ever equipment erection of 10,075Tachieved.
17
28th Annual Report 2009-10
Physical progress for structural erection, equipment supply and equipment erection is depicted below:
Yearly trend
EMPLOYEES :
During the period from 01-04-2009 to 31-03-2010, there was a net increase in the manpower by 605 i.e. from
17,225 as on 01-04-2009 to 17,830 as on 31-03-2010.
As on 31-03-2010, the number of Displaced Persons on the rolls of the Company was 5693.
18
RASHTRIYA ISPAT NIGAM LIMITED
* (Figures in brackets show no. of candidates selected on merit out of total appointed)
** (No direct recruitment in Group-B posts)
CATEGORY GENDER PWD EX-SERV DP
GroupGrand
TotalGEN OBC SC ST Women Men No. % No. %
A 5263 3490 527 864 382 292 4971 10 0.19 6 0.11 159
B 2370 1787 78 376 129 52 2318 11 0.46 1 0.04 885
C 7710 5396 565 1214 535 88 7622 56 0.73 94 1.22 2503
D 2487 1830 137 394 126 51 2436 18 0.72 43 1.73 2146
Grand Total 17830 12503 1307 2848 1172 483 17347 95 0.53 144 0.81 5693
GROUP TOTAL STRENGTH SC(No) S C (%) ST(No) S T (%)
A 5263 864 16.4 382 7.3
B 2370 376 15.9 129 5.4
C 7710 1214 15.7 535 7.0
D 2487 394 15.8 126 5.1
TOTAL 17830 2848 16.0 1172 6.6
Received during the Period
(1.4.2009 to 31.3.2010)
01
Redressed during the Period
(1.4.2009 to 31.3.2010)
01
Representation of Scheduled Castes (SC) and Scheduled Tribes (ST) :
The group-wise representation of SCs and STs in the Company as on 31-03-2010 is as follows:
(1) (2) (3) (4) (5)
A 122 29 9 25(3*) 7
B** - - - - -
C 599 75 33 105(6*) 45(1*)
D 100 30 14 18(2*) 4
Total 821 134 56 148(11*) 56(1*)
Class of
Posts
Total no. of vacancies
filled
No. of vacancies
reserved for
No. of candidates
appointed
SC ST SC ST
Posts Filled by Recruitment :
Group Distribution of Manpower as on 31.3.2010 :
GRIEVANCE REDRESSAL MECHANISM
Public Grievances
The system of redressal of Public Grievance has been streamlined, and its scope broadened to include complaints
of suppliers, customers, etc. and systematic recording of receipt and disposal of such grievances are being carried
out. To provide required thrust in this area, a senior executive in the rank of General Manager has been nominated
as Officer on Special Duty (OSD) to handle and monitor the public grievances centrally. All Heads of Departments
have been advised to accord due priority for redressal of public grievances as per time frame in each department.
The status on public grievances received vis-a-vis is given below :
19
28th Annual Report 2009-10
Employees' Grievances
RINL has a well laid down procedure for handling
employees' grievances through committee system viz.
Area Grievance Redressal Form (AGREF), Central
Grievance Redressal Form (CENGREF). The redressal
of employees' grievances are coordinated by the Zonal
Personnel Executives who send monthly progress report
on the number of employees' grievances received and
redressed etc. for compilation, computerization and
monitoring. The entire system of redressal of grievances
is monitored centrally by Personnel Coordination
Section. The status on employees' grievances received
vis-a-vis redressed/ disposed off is given below :
SAFETY & HEALTH
Safety is given due importance and the implementation
of OHSAS 18001 has ensured a safe work culture in
the organization. RINL-VSP was successfully certified
for the latest version of OHSAS 18001:2007 in May
'09. Continuous efforts on the implementation of safety
standards, monitoring of risk control and other proactive
measures have resulted in reduction / elimination of
potential hazards.
More than 2500 Nos. of Hazard Identification and Risk
Assessment sheets were prepared for fulfilling the OHSAS
18001:2007 certification criteria. Plant level mock drill
was conducted at Crude and Finished Products Storage
tanks of Benzol Plant in Jun '09 for testing the emergency
preparedness of the plant in the presence of Jt. Chief
Inspector of Factories and Inspector of Factories.
Comprehensive Risk Assessment (HAZOP, HAZAN,
Emergency Planning, Safety Audit, etc.) activity has been
awarded to an external agency and the work started in
Sep '09.
The following proactive measures were also undertaken
to inculcate safety awareness:
� Organization of interactive sessions between
contract workers, contract supervisors and
recognized trade union representatives on "working
at height".
� Safety training programme on "Site safety and Road
safety"
� Safety appliances exhibitions were organized.
� Campaign on "Hazards of using mobile phone while
driving" was conducted.
� A lecture on "Construction Safety" by Jt. Chief
Inspector of Factories was organized covering In-
charges of Projects and supervisors of contractors.
� A National Workshop on "Designing for Safety and
Change Management" was organized jointly by
Department of Factories and National Safety
Council-AP Chapter during Dec 2009.
CORPORATE SOCIAL RESPONSIBILITY
RINL in its own way is committed to social upliftment
and is aware of its obligations to the society and is in the
forefront of serving the society through its CSR initiatives.
2% of its net profit is earmarked for CSR activities. The
CSR initiatives cover Environmental care, Education,
Health care, People care, Peripheral development,
cultural Efflorescence, Help during Natural Calamities
and as a Responsible Corporate Citizen rendering an
helping hand to lead a meaningful life etc.
The year 2009-10 has been the year of CSR and
emphasis was upon all the thrust areas mentioned in
our CSR Policy. The company had committed an amount
of Rs 1275 lakhs towards CSR during 2009-10. The
emphasis was on creation of assets in the form of
infrastructure so that the future generations are
benefitted thereafter. With the same approach CSR
Projects were executed during this year, details of which
are as under:
Environmental Care :
(Value: Rs.18.80 Lakhs & beneficiaries : 1300 approx.)
Through CSR we have executed a unique project named
"Jaladhara" by which the acute problem of drinking
water in tribal areas of Visakhapatnam district has been
addressed. The flow of water from natural spring to
storage tank is due to gravity and does not require any
electrical power supply to operate. The supply is
Redressed/Disposed of
during the period
(1.4.2009 to
31.3.2010)
33
Received during the
Period (1.4.2009 to
31.3.2010)
34
20
RASHTRIYA ISPAT NIGAM LIMITED
King George Hospital, Visakhapatnam (Rs.8 Lakhs) and
Krushi Orthopaedic Welfare Society, Visakhapatnam
(Rs.7.35 Lakhs) were extended financial support for
procurement of medical equipments. The beficiaries
are 100/day & 20/day (approx.) respectively.
Items worth Rs.2.50 Lakhs, like Generators, Water filter,
benches and fans to Health Centres at Vadlapudi and
Aganampudi RH Colonies were provided to develop
primary health care infrastructure. About 200 people/
day are benefitted.
People Care :
(Value: Rs.53.17 Lakhs & beneficiaries : 26020
approx.)
Embarking to mitigate the hardships faced by the
residents of RHCs and tribal areas, the following
schemes were implemented:
� During the sweltering summer months, drinking
water was supplied through tankers to 4 RH Colonies
benefitting 15000 people per day, for a period of
64 days.
perennial so the water problem is solved permanently.
The scheme was implemented under trying conditions
in remote tribal areas of Paderu and Chintapalli. The
project cost was Rs.18.80 Lakhs & about 1300 people
were benefitted.
Education :
(Value: Rs.82.55 Lakhs & beneficiaries : 6090 approx.)
As stated, focus has been upon infrastructure
development in the field of education. 20 number of
school buildings have been constructed in 4 RH Colonies
and other resources like Desk-cum-Benches and play
equipment have been provided to schools. CSR
Department provided scholarships for 225 students
belonging to economically and socially marginalised
sections of society.
Health Care :
(Value: Rs.18.46 Lakhs & beneficiaries : 5320 approx.)
Medical Camps were continued to be organized as part
of CSR initiatives in all RH Colonies and Peripheral
Villages around the plant. These camps (35 in number)
covered about 5000 persons and 1253 persons
benefitted from Cataract Surgery.
21
28th Annual Report 2009-10
Sewing machines and wet grinders worth Rs. 0.85
lakhs have been distributed to 20 persons at lowest
economic strata to help them to start earning.
� Utensils, Glasses, Hearing Aids, Tricycles were
distributed to poor and needy children.
� Support was extended for conducting District level
Foot ball & hockey tournaments and other Sports
events amounting to Rs.23.55 Lakhs benefitting
about 6800 people.
� Towards empowerment for women and unemployed
youth, vocational training programmes were
organized through Jan Shikshan Samsthan at an
expenditure of Rs.6 Lakhs and 500 people have
been given training.
� Support given to Police Deptt. for procuring ALCO
meters with a cost of Rs.5.27 Lakhs, which is
used to test drunken drivers.
Peripheral Development :
(Value: Rs.16.50 Lakhs & beneficiaries : 350 approx.)
One of the CSR's primary objectives is peripheral
development. Number of projects like community
welfare centres in RH Colonies and peripheral villages,
Hostels for SC/ST students, School building for
differentially abled children, Mother Blood bank for IRCS
were taken up and are continuing. Anganwadi building,
Kitchen for mid-day meal program in school(with a cost
of Rs.6.5 Lakhs benefitting about 200 children), Kitchen
room & Toilet blocks for schools (with Rs.10 Lakhs
benefitting about 150 students) were constructed to
help the peripheral areas.
Cultural Efflorescence :
(Value: Rs.6.30 Lakhs & beneficiaries : 1200 approx.)
� A ballet on "Telugu Prasthanam" was organized
during " Vidyalaya Diwas" through AP State Official
Language Commission, bringing together the
children of Ukkunagaram on to a platform of cultural
efflorescence.
� Support given to World Music Day & SPICMACAY
programs
As a Responsible Corporate Citizen :
� CMD / RINL presenting a Cheque of Rs. 8 Lakhs to
Dermatology Department of King George Hospital,
Visakhapatnam.
22
RASHTRIYA ISPAT NIGAM LIMITED
� Community Welfare Centre wing at Durgavani Palem
Help during Natural Calamities :
(Value: Rs.500.00 Lakhs & beneficiaries : 7,00,000
approx.)
During the calamitous floods in Andhra Pradesh, RINL
came forward to mitigate the sufferings and Rs 500
lakhs was donated to the Chief Minister's Relief Fund
in addition to contribution from VSP employees. About
7 Lakh people are benefitted.
As a CSR initiative, Computer Training was given to 187
school children and Apprenticeship training was
imparted to 272 and Vocational & Industrial Training
was given to 5112 and 413 Plant Visits were organised
covering 2029 visitors during the year. Under CSR
initiative, 2 day Training Programme on "Towards
Teaching Excellence" was organized in association with
UGC Academic Staff College of Andhra University for
Teachers of GVMC High Schools on 2nd and 3rd March,
2010. 40 GVMC High School teachers have attended
this programme. 8 No. of Cultural Programmes were
organized at VSP Schools by SPICMACAY
Under "Promotion of Free Education" scheme which was
introduced in the year 2007 as a CSR initiative at
Visakha Vimala Vidyalayam (VVV) (Ukkunagaram & BC
Road), in total 225 students (i.e. 185 in VVV-
Ukkunagaram & 40 in VVV- BC Road) were admitted in
the year 2009-10. The expenditure towards school bus
including, road tax, insurance, fitness certificate was
provided to Arunodaya Special School for differentially
abled children.
TOWN ADMINISTRATION
The Company, for the benefit of its employees, is having
a Township with residential units with greenery all
around. The maintenance of the Township is done
professionally and 5 S Certificate was awarded for it
in March '10 by the external auditors. Other initiatives
include round the clock IVRS system for redressal of
complaints, separate portal on intranet for online status
and application of maintenance related activities etc.
MEDICAL AND HEALTH SERVICES
The Company has an in-house full fledged GeneralHospital extending medical facilities not only to its ownemployees residing in Ukkunagaram but also to othernon-entitled persons in the vicinity/neighbouring areas.The Company believes that all employees has the rightof access to health care. Some of the initiatives takenup in this direction are :
� Creating awareness of various preventable diseasesespecially during epidemic of "SWINE FLU". Anumber of awareness programmes were conductedduring the year including Mines at Jaggayyapetaand Madharam. A special clinic was also startedfor the same.
� Conducting various medical camps; De-addiction, Eyescreening, Child immunization, AIDS awareness etc.
� Awareness programmes on nutrition and hygiene,early detection of breast and cervical cancer andosteoporosis;
� An unique programme of immunization againstHepatitis-B for 1500 school children from the areasin and around Rehabilitation colonies;
� Medical Services were extended to far flung placeslike Araku, Tenang etc.
� Health days like World Health Day, World AsthmaDay, World Diabetes Day, National Voluntary BloodDonation Day etc. were observed.
The Hospital was augmented with new advanced andsophisticated equipment for improving the facilities andbetter health care; Training to medical and para-medical
23
28th Annual Report 2009-10
staff was given by the Specialists themselves whoupgraded their areas with new equipments.
An amount of Rs.28.63 lakhs could be earned by theHospital from Non-entitled cases (Non-VSP cases)reflecting the quality of services rendered;
Other initiatives include implementation of 5S in MedicalAdmn Wing and securing 2nd Best QC Team in 20thNational Convention etc.
IMPLEMENTATION OF RIGHT TO INFORMATION
ACT 2005:
During the year, out of 216 requests received, 179
have been disposed off by providing information to the
concerned, 4 were rejected as per the provisions of
the Act and 30 requests are pending as on 31.3.2010.
A one day Round Table meeting with local Central Public
Sector Enterprises employees was organised in
September 2009. A one day Training cum Workshop
for the officers of the Company was conducted in
January 2010 dealing with RTI matters.
All the requisite information has been updated on the
Company's website in accordance with the requirement
of Section 4 (1) of the Right to Information Act.
Statutory reports like Monthly Returns, Quarterly
Reports, Annual Returns, Annual Reports and any other
reports as and when asked for are compiled and
forwarded to the Ministry.
A Guide on implementation of RTI Act-2005, FAQ and
important CIC decisions has been placed in the
Company intranet for the benefit of the officers dealing
with RTI matters regularly in the organisation.
COMPLIANCE WITH LAW/LEGAL REQUIREMENTS :
The Company has put in a separate Intranet Portal on
the Legal Affairs of the Company. In terms of the
Guidelines issued by the Government, a Quarterly
Report on the progress of Arbitration cases is being put
up to the Board of Directors for Information. An Internal
Reporting System has been introduced indicating the
progress of the cases in various Courts indicating the
status of the cases as at the beginning of the year and
also at the end of the year for monitoring the progress
by the Management.
PROGRESSIVE USE OF HINDI
The Company continued its efforts to implement the
Official Language Policy of the Government. During the
year, Special Hindi Workshops were conducted for the
Sr. Officers in which 103 officers have been trained. A
National level Hindi Seminar was organised on the topic
viz. 'Importance of building good habits in Industrial
Employees' in which 54 delegates have participated
from the Company and other organisations. A special
issue viz. 'Sanskar' has been released on this occasion
containing the articles of the delegates. Hindi Week
celebrations were organised at Headquarters and
various Branches and Regional Offices. Various
competitions in Hindi have been organised for the
students, employees and their dependents. 4 issues
of Hindi In-House Magazine "Sugandh" were also
published. 4 Hindi Workshops were organised in which
117 employees were trained. 72 employees were
trained on computers in Hindi. 200 employees have
been trained in Hindi Prabodh/Praveen courses. Hindi
classes are also organised separately for the
housewives. A five day Hindi Translation Training
programme has been conducted in March, 2010 by
Central Translation Bureau, Ministry of Home Affairs in
which 30 employees of the Company and 3 employees
of CISF were trained. Hindi inspections were conducted
in various Units of the Company and necessary
assistance was extended.
Prestigious Indira Gandhi Rajbhasha Shield was
awarded to the Company. CMD, RINL received this
Shield from Hon'ble President of India on 14th
September, 2009.
WOMEN EMPOWERMENT
Women employees have been associated in appropriate
Committees to provide for an opportunity of exposure
and development. Special programmes for women
employees have been organized by HRD directly and
also through the Women in Public Sector Undertakings
(WIPS) which has been formed in the Company since
1997 under the aegis of SCOPE.
Training and Development programmes aimed at career
advancement, women empowerment, personality
development, gender sensitization, safety awareness,
occupational health, osteoporosis awareness,
interpersonal skills, computer skills, communication
skills, capacity building, work life balance leadership
and safe and healthy living etc. have been organized.
During the year, about 461 women employees were
covered in such programmes.
24
RASHTRIYA ISPAT NIGAM LIMITED
In addition to the above, the following programmes were also conducted exclusively for women :
� Safety awareness and Occuptional health programme for women contract workers covering 45 participants.
� Osteoporosis Awareness programme covering the ladies from all walks of life i.e. employees of VSP, PSUs and
Schools in the township, CISF and housewives, in association with Visakha Steel General Hospital was made
for about 300 nos. About 145 women underwent Bone Mineral Densitometry (BMD) tests in this program.
� As a part of National Adolescent programme, an education programme was conducted for 300 girls of
Kendriya Vidyalaya at Ukkunagaram;
In pursuance of the Hon’ble Supreme Court’s Judgement and keeping in view the Government instructions/guidelines
on sexual harassment of women at work places, a Committee headed by a woman officer was constituted to
inquire into the complaints of sexual harassment at work places. A provision in this regard has also been incorporated
in the Conduct, Discipline and Appeal Rules / Standing Orders of the company.
During the year under report, no incidence of sexual harassment of women or discrimination amongst women
employees on the basis of gender has been reported.
Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995.
The status of implementation of Persons with Disabilities (Equal Opportunities, Protection of Rights and Full
Participation) Act, 1995 during 2009-10 is furnished below:
The details are as follows :
Total
Number of employees
appointed after the Act
came into force
(i.e. 7-2-1996)
Direct recruitment
(during Fin. year 2009-10)
Promotion
(during Fin. Year 2009-10)
No. of vacancies
reserved
No. of appointments
made
No. of
vacanies
reserved
No. of
appointments
VH HH OH VH HH OH Total VH HH OH VH HH OH Total VH HH OH
Group A 130* 2 1 4 1 2 1 11* 1 - 2 NIL NIL NIL NIL NIL NIL NIL
Group B - - - - - - - - - - - NIL NIL NIL NIL NIL NIL NIL
Group C 1379 10 10 18 6+1# 5+2# 3+1# 599 2+1$ 1+ 1$ 7+3$ Nil - - - - - -
Group D 290 3 4 3 2# 2# 2# 100 1$ 1$ 1$ - - - - - - -
Total 1799 15 15 25 7+3# 7+4# 4+3# 710 3+2$ 1+2$ 9+4$ - - - - - - -
Group
I In house Management Development Programmes 134
Exclusive Women Programmes
a) Women Development 2
Programmes
b) Gender Sensitivity 2 144
Programmes
c) Outbound Programme 1
II External Nominations 49
Total 327
III Programmes conducted 4 105
for housewives
DetailsNo. of Programmes
conductedNo. of
participantsS.No.
25
28th Annual Report 2009-10
With a view to encourage and support physically challenged children of RINL employees, the following scholarships
are provided:
Further, the following actions have been taken in RINL/Visakhapatnam Steel Plant for the convenience of differentially
abled persons visiting different offices in Main Administrative Building i.e. the Corporate Office of RINL/VSP.
i) Ramp way
ii) Auditory signal in both the Lifts of the building.
iii) Provision of a wheel chair at the Reception Centre located at the entrance of the Main Administrative Building.
Applicable for
Children of employees with the following
disabilities who are pursuing studies in
any course in a Recognized School/
College/General or Vocational Institute:
Blindness
Hearing impairment
Locomotors disability
Mental retardation
Mental illness
Cerebral Palsy
Criteria for
Selection
Amount of
Scholarships
No. of
Scholarships
Nature and extent of
disability of the child and
the extent to which the
training/education would
help in rehabilitation of
the child, as assessed
by the Committee
consisting of 4 members
each from Medical,
Sports, F&A and
Personnel
Rs. 750/- per month
for a period as
recommended by
the Committee
6 (six) Per
annum
WELFARE ACTIVITIES :
The following National and Other Functions were organized :
S.No. Name of the Function Date
1 Independence Day Celebrations 15-08-2009
2 Republic Day Celebrations 26-01-2010
3 RINL Formation Day Celebrations 18-02-2010
* Posts identified for disabled
# Recruitment under process
$ Posts were notified prior to 1-4-2009 but joinings took place during 2009-10
Note :
(I) VH stands for Visually Handicapped (persons suffering from blindness or low vision)
(ii) HH stands for Hearing Handicapped (persons suffering from hearing impairment)
(iii) OH stands for Orthopaedically Handicapped (persons suffering from locomotor disability or cerebral palsy)
26
RASHTRIYA ISPAT NIGAM LIMITED
Other Scholarships :
Nature of Award Eligibility Criteria Award givenNo of
Awardees
Total
Amount
(Rs.)
Dr. B R Ambedkar Annual
Merit Cash Awards
Dr. Sarvepalli Radha
krishnan Merit Cash
Awards
Col. CK Nayudu Sports
Cash Awards
First or Second position in X exam among VSP
schools including those at Mines for the
academic year 2008-09
Admission in IITs, IIMs, IISc, ISI, AIIMS, AFMC -
Pune, JIPMER during the year 2009-10
International Participation or 1st Prize in Nationals
conducted by respective Federation of India or
National Schools Games and Sports etc. during
the year 2008-09
Rs. 500/- for
1st position
Rs. 250/- for
2nd position
Rs. 5000/-
Rs. 5000/-
54
27
22
20,250
1,35,000
1,10,000
The following Ceremonial Functions were organized :
An amount of Rs. 7.42 crores was released during 2009-10 towards Salaries & other Administrative expenditure toKendriya Vidyalaya, DAVC Public School and Visakha Vimala Vidyalayams at Ukkunagaram & BC Road.
Jawaharlal Nehru Awards - "Jawaharlal Nehru Awards" are being given every year on RINL Formation Day (18thFebruary of the year) Celebrations, to the VSP employees in recognition of their outstanding performance. 24Executives and 36 Non-Executives have been bestowed with 'Jawaharlal Nehru Awards' in the year 2009-10.
Under welfare measures, the Company is extending scholarships to the children of RINL's Employees. The detailsare as follows :
CategoryGroup-1
(Professional Courses)
Rs. 1,500/- p m
Group-II
(Degree/Diploma)
Rs. 750/- p m
Group-III(+2/
lntermediate)
Rs. 400/- p m
Total
General 11 3 11 25
SC 4 - 5 9
ST 2 - 2 4
Sub Total 17 3 18 38
6 scholarships @ Rs. 750/- p m each are provided to Physically Challenged children of RINL’s Employees’ for studying any
class/course.
Total No. of Scholarships 44
S.No. Name of the Function Date
1 Dr.Babu Jagjeevan Ram Jayanthi 05-04-2009
2 Bharat Ratna Dr.B.R.Ambedkar Jayanthi 14-04-2009
3 Alluri Seetha Rama Raju Jayanthi 04-07-2009
4 Dr. Tenneti Viswanadham Jayanthi 21-09-2009
5 Mahatma Gandhi Jayanthi 02-10-2009
6 T Amrutha Rao Jayanthi 21-10-2009
7 Garlanding of Telugu Thalli on AP Formation Day 01-11-2009
8 Jawaharlal Nehru Jayanthi 14-11-2009
9 Bharat Ratna Indira Gandhi Jayanthi 19-11-2009
10 Dr. B R Ambedkar Vardhanthi 06-12-2009
11 Mahatma Gandhi Vardhanthi 30-01-2010
12 Potti Sreeramulu Jayanthi 16-03-2010
27
28th Annual Report 2009-10
Management has released an amount of Rs.7.25 Lakhs as a matching grant to the Community Welfare Centres
(CWCs) for the year 2009-10 for the various social activities.
Special Casual Leave was sanctioned for 18 employees who had participated in National Desert Trekking Expedition
and in National Himalayan Trekking Expedition during the year 2009-10.
Sponsored 42 employee-artists who participated in various cultural programmes organized by Nandi Natakotsavam-
2009 (AP TV & Film Development Corporation, Govt, of A.P at Nizamabad) and other associations during the year
2009-10.
Employee Family Benefit Scheme (EFBS) : The Scheme was introduced on 1st August 1995 for the benefit of
dependents of deceased employees of the Company and medically unfit cases. The details of EFBS cases are given
below :
943 persons [(Couple-416*2=832 & Single-111) (Retired employees & their Spouses and spouses of Deceased
employees)] were covered under Group Mediclaim Insurance Scheme till the year 2009-10.
Employees Superannuation Benefit Fund
Employee Superannuation Benefit Fund has been created and in existence for more than a decade and the
beneficiaries were regularly paid the monthly amounts.
PROMOTING WORK ETHICS/ VIGILANCE ACTIVITIES :
Vigilance Department has taken various measures for promoting transparency, fairness and equity in RINL. As a
part of preventive vigilance, studies were undertaken on the procedures being followed in purchases, sales and
award of contracts, examination of contracts and purchase orders and surprise checks relating to quality and other
aspects, weighments of material moved by rail and road, scrutiny of bills, study of audit reports and surveillance at
sensitive areas etc. were carried out. Observations made alongwith suggestions for bringing about systemic
improvements were communicated to the concerned departments. Various activities intended to create vigilance
awareness were taken up among the various stake holders including the employees.
Through e-auction, e-reverse auction and e-payments, IT was leveraged in key areas for promoting fairness and
transparency and also for deriving advantage for the company. RINL website has been used for making relevant
information available to the stakeholders.
Quality Manual of Vigilance Department was reviewed and updated to bring it to the ISO 9001:2008 standard.
A seminar on “Implementation of Integrity Pact in Central Public Sector Undertakings” was organized by RINL for
sharing experience among the CPSUs which have adopted or are in the process of adopting IP Programme.
A host of activities were organized on the occasion of the Vigilance Awareness Week - 2009 which included
activities like slogan competition among employees and inviting suggestions from employees on leveraging of
Information Technology for promoting greater transparency, fairness and equity in all dealings. Interaction sessions
were also organized with contractors, vendors and customers of RINL. In order to extend the reach of the vigilance
awareness drive, the children and women were also covered in the activities organized during the Vigilance Awareness
Week. This was done by conducting various competitions among women and children. Essay writing competitions
were held among the students of Zilla Parishad Schools located in and around the Steel Plant and essay writing and
elocution competitions were held among the students of schools located in Jaggayyapeta and Madharam where
RINL has its captive mines.
No. of EFBS Beneficiaries joined during the year 2009-10 70
Total No. of EFBS Beneficiaries 719
Total no. of Exit (closed) Cases 81
Total No. of Existing EFBS Beneficiaries on 31st March 2010 638
28
RASHTRIYA ISPAT NIGAM LIMITED
AWARDS AND ACCOLADES :
� RINL was the first recipient of the prestigious Steel
Minister’s Trophy for best integrated steel plant for
2006-07.
� RINL won the “Energy efficient unit” conferred by CII
at the 10th National Award for Excellence in Energy
Management.
� Two Quality Circle (QC) teams of RINL participated
at ICQCC-2009 held at Cebu, Philippines during
October 2009 and won One Gold and One Bronze
medal.
� Twenty QC Teams participated in National Convention
on Quality Circles conducted by Quality Circle Forum
of India (QCFI) at Bengaluru during December 2009.
Seven QC teams won ‘Par Excellent’ and Thirteen
teams won ‘Excellent’ awards for the presentations.
� Two QC teams participated at CII State level QC
competitions held at Hyderabad during Nov ’09 and
the one team won 3rd prize.
� RINL has won “INSSAN Award for excellence in
Suggestion Scheme” (First prize) under Steel Units
category in the National level from Indian National
Suggestion Schemes’ Association (INSSAN),
Mumbai.
� 5S Teams from departments of RINL bagged ‘Par
Excellent’ awards during National Convention on
Quality Circles - 2009 held at Bengaluru.
� RINL was declared National Champions of “National
Management Quiz - 2009” conducted by All India
Management Association
AUDITORS
M/s B V Rao & Company, Visakhapatnam have been
appointed as the Statutory Auditors of the Company
for the year 2009-10 by the Comptroller and Auditor
General of India.
MANAGEMENT DISCUSSION AND ANALYSIS
REPORT
The Management Discussion and Analysis Report, is
annexed and forms part of the Directors’ Report.
CORPORATE GOVERNANCE REPORT
The Company strives to attain highest standards of
corporate governance. In line with the Guidelines issued
by Department of Public Enterprises, a separate section
on Corporate Governance is annexed and forms part of
the Directors’ Report.
Certificate attested by the CEO/CFO is also form part of
the Corporate Governance Report along with declaration
signed by CMD regarding Code of Conduct for Members
of the Board and Senior Management.
CERTIFICATE ON COMPLIANCE OF GUIDELINES ON
CORPORATE GOVERNANCE
The Certificate on Compliance of Guidelines on
Corporate Governance as issued by DPE in June 2007,
as obtained from a practicing Company Secretary is
annexed and forms part of the Directors’ Report.
SECRETARIAL COMPLIANCE REPORT FOR THE
FINANCIAL YEAR 2009 –10
The Secretarial Compliance Report confirming
compliance to the provisions of Companies Act, 1956,
Rules made thereunder and the provisions contained
in Articles of Association & Memorandum of Association
of the Company, as obtained from a practicing Company
Secretary is annexed and forms part of the Directors’
Report.
AUDITORS’ REPORT
The Statutory Auditors’ Report on the Accounts of the
Company for the Financial year ended 31st March, 2010
is enclosed to the Directors’ Report at Annexure-I
C & A G COMMENTS
Comments of the Comptroller and Auditor General of
India (C&AG) on the accounts of the Company are
enclosed at Annexure-II.
REPORT ON CONSERVATION OF ENERGY,
TECHNOLOGY ABSORPTION, ETC.
Information required under Section 217(1)(e) of the
Companies Act, 1956 read with the Companies
(Disclosures of Particulars in the Report of Board of
Directors) Rules, 1988 regarding Energy Conservation,
Technology Absorption and Foreign Exchange earnings
and outgo during the Financial year 2009-10 are
furnished in the Annexure-A to the report and also in
Form-A and Form-B annexed to this report.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The Foreign Exchange earnings during the year 2009-
10 were Rs.351.73 Crores as against Rs.78.89 Crores
during the previous year. The Foreign Exchange Outgo
during the year 2009-10 was Rs.3565.24 Crores
(including Rs.755.24 Cr on Expansion) as against Rs.
3910.30 Crores ( including Rs.309.53 Crores) during
the previous year.
PARTICULARS OF EMPLOYEES
There was no employee of the company who received
remuneration in excess of the limits prescribed under
29
28th Annual Report 2009-10
CESSATIONS :
Shri K S Shankar, superannuated as Director (Finance)
on 31st October, 2009.
Dr Dalip Singh, Director resigned w.e.f. 12th November,
2009.
Shri UP Singh, IAS resigned as Director w.e.f. 20th
January, 2010.
Shri CG Patil superannuated as Director (Commercial)
on 28th February, 2010.
Dr Jagatpal, IAS, Independent Director resigned w.e.f.
2nd March, 2010.
Shri B S Meena, IAS resigned as Director w.e.f. 31st
March, 2010.
The Board of Directors wish to place on record their
appreciation of the valuable services rendered and
contribution made by the outgoing Directors during
their tenure on the Board of RINL.
ACKNOWLEDGEMENTS
Directors of the company acknowledge with deep
appreciation the valuable guidance, assistance,
cooperation and support extended by the Government
of India, especially the Ministry of Steel and Govt. of
Andhra Pradesh.
Directors of the Company also place on record their
appreciation for the cooperation extended by valued
customers, suppliers, Railways, bankers, auditors,
solicitors and business associates, the local District
Administration and Law and Order authorities.
Directors of the Company also appreciate the
commitment, sincere efforts and hard work put in by
all the employees of the company, Trade Unions and
Steel Executive Association. Their whole hearted
contribution has been vital in helping the company scale
great heights.
For and on behalf of the Board of Directors
(P K Bishnoi )
Chairman-cum-Managing Director
Visakhapatnam
Date: 24th June 2010
Adopted at the 28th Annual General Meeting held on
24th July, 2010.
Section 217(2A) of the Companies Act 1956 read with
the Companies (Particulars of employees) Rules, 1975.
DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to provisions of Section 217 (2AA) of the
Companies Act, 1956, the following statement relating
to Annual Accounts for the financial year ended 31st
March, 2010 is made :
i) that in the preparation of the Annual Accounts,
applicable Accounting Standards had been followed
alongwith proper explanation relating to material
departures;
ii) that the Directors had selected such accounting
policies and applied them consistently and made
judgements and estimates that are reasonable and
prudent so as to give a true and fair view of the
state of affairs of the company at the end of the
financial year and of the profit or loss of the company
for that period;
iii) that the Directors had taken proper and sufficient
care for the maintenance of adequate accounting
records in accordance with the provisions of this
Act for safeguarding the assets of the Company
and for preventing and detecting fraud and other
irregularities;
iv) that the Directors had prepared the Annual Accounts
on a “going concern” basis.
DIRECTORS (APPOINTMENT/CESSATION)
The following changes took place in the Board of
Directors of the Company during the year:
APPOINTMENTS :
Shri A P Choudhary was appointed as Director (Projects)
w.e.f. 1st June, 2009.
Prof. Ramesh Chandra was appointed as part-time non-
official Director w.e.f. 3rd Aug. 2009.
Shri P Madhusudan, was appointed as Director
(Finance) w. e. f. 2nd November, 2009.
Shri U P Singh was appointed as Director w.e.f. 12th
November, 2009.
Dr. Dalip Singh, IAS was appointed as Director w.e.f
2nd March, 2010.
Shri S. Machendra Nathan, IAS , AS&FA, MoS was
appointed as Director on 24th May, 2010.
30
RASHTRIYA ISPAT NIGAM LIMITED
A. INDUSTRY STRUCTURE AND DEVELOPMENTS
Economy
Indian economy is tipped to grow in the range of 7.2 to
7.5 % during the year 2009-10, against a growth rate
of 6.2% during 2008-09, as per Annual Policy
Statement released by RBI in April 2010. RBI has
placed baseline projection of real GDP growth for
2010-11 at 8.0%. Favourable projections are based
on the impressive consumption demand growth in the
country. Double-digit growth rate posted by industrial
production every month since October 2009 (ranging
from 10% to 18%) with an overall growth of 10.3% for
2009-10 is an indication of commendable recovery by
the Indian economy.
Steel Scenario
As global steel markets struggled to recover from the
impact of global meltdown that started from second
half of 2008, developing economies led by China and
India emerged as the only major steel producing
countries to register positive year-on-year growth over
2008, as shown below :
MANAGEMENT DISCUSSION AND ANALYSIS REPORT FOR 2009-10
However, the year 2009-10 was marked by downwardpressure on steel prices in the country. Global steelcapacity utilization ratio at 75.1% in Dec '09 registeredan improvement from a low of 58.1% in Dec '08, butwas substantially below the peak seen in June 2008 at90.8%. International steel prices remained at lowerlevels, when compared to the domestic prices due tounutilized capacities in the world, which creates aconstant threat of cheaper imports.
Steel consumption in the country grew by 7.9% in2009-10, as per provisional data by JPC. Indiacontinued to be a net importer of total finished steel.Even as industry reports peg growth in consumption ofsteel in the country at around 10% during 2010-11,World Steel Association (WSA) in its short range outlookhas forecasted a growth rate of about 13.9% inapparent steel use in 2010 for India. The forecast for
India's growth in steel demand appears all the moreimposing when compared with the forecast for China'sgrowth in demand at about 6.8%.
On the flip side is the firming up of prices of major rawmaterials like coking coal and iron ore. Spot prices ofiron ore and coking coal have shot up by about 126%and 95% respectively during the period Apr-Mar2009-10, resulting in the increase in contract price ofcoking coal by about 56% over 2009-10 and that ofiron ore by 40% over Jan' 10 prices.
B. STRENGTHS AND WEAKNESSES
C. OPPORTUNITIES AND THREATS
• Availability of funds.
• Ability to raise funds.
• Availability of land and
layout for Expansion upto
20 Mt & proximity to port.
• Image as quality producer
& value for money
supplier.
• Superior basic technology
at inception time.
• Cutting edge technology
in Expansion to 6.3 Mt.
• Committed workforce.
Strengths Weaknesses
• Lack of level playing field
vis-à-vis others due to
lack of captive iron ore &
coking coal mines.
• Single location company -
Only long products,
exposed to cyclic markets.
• Due for Major capital
repairs and modernization.
• Consumption of coking
coal contracted at higher
cost being used in the
year 2009-10.
• High cost of servicing
huge equity.
• Large potential steeldemand awaiting to betapped.
• Investment ofRs.41,00,000 Cr ininfrastructure in 12th fiveyear plan (preliminaryassessment).
• As per WSA, projectedgrowth in apparent steeluse in India 13.9% in2010 & 13.7% in 2011.
• Ease of imports / exportswith adjacent deep draftGangavaram Port, VSPL &VPT (getting modernisedwith deep draft &mechanization).
• Addition of flat productsin the next phase ofExpansion.
Opportunities Threats
• Increasing raw material
prices & shift of value
chain towards raw
materials.
• Oligopolistic coal supply
side.
• Single iron ore supplier -
located in disturbance
prone areas.
• Predominant secondary
sector in long products.
• Expansion of capacities
by the competitors and
entry of International
players.
• Additional domestic
Capacity creation both in
public & private sectors.
Country 2009 (Mt) 2008 (Mt) % Growth
China 567.8 500.3 13.5
Japan 87.5 118.7 -26.3
Russia 59.9 68.5 -12.5
USA 58.1 91.4 -36.4
India 56.6 55.1 2.7
South Korea 48.6 53.6 -9.4
Germany 32.7 45.8 -28.7
World 1219.7 1326.5 -8.0
31
28th Annual Report 2009-10
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 athigher capacities in special steel production, manyof the plant equipment warrant immediate revampand capital repairs.Utmost attention onmaintenance related aspects is required so as toensure upkeep of these equipments till the timemajor revamps / capital repairs are carried out.
(a) Raw Material prices :
Profitability will be adversely impacted by steepescalation in prices of major raw materials:
• Iron ore prices by 40% over 1st Jan. 2010levels.
• Imported coking coal prices for the 1stquarter of 2010-11 by 56% over thecontract prices of 2009-10.
(b) Modernization & Capital Repairs
Dovetailing of revamping programme of SteelMelt Shop (SMS) and Sinter machines withthat of Category-I Capital repairs of BlastFurnaces is required, so as to minimize theloss in production on account of shutdownsin these units for carrying out major revamps/ Capital repairs.
(c) Expansion :
Commissioning of Phase-1 Expansion unitslike Sinter Plant -3, Blast Furnace-3, Boiler-6, Steel Melt Shop - 2 etc. as per logicalsequence of commissioning to the extentpossible, so as to minimize the logistical andoperational overheads during startup and initialperiod of stabilization.
(d) Sales :
Thrust on optimizing market and product mixto maximize sales realisations and steps toensure customer loyalty in view of:
• Entry of new players like JSW, JSPL andother secondary players in VSP's range ofproducts resulting in higher availability.
• Quantum increase in year on yearproduction in the next 3-4 years asExpansion units are progressively broughton stream.
(ii) Long term
In the long term, non availability of captive minesfor iron ore and coking coal is a handicap for thecompany. Inconsistencies in supplies - quantity
and quality - along with rising prices have impactedthe company's performance through out. Toovercome this, RINL is exploring a collaborativeapproach with State Mineral DevelopmentCorporation(s) for acquiring Iron Ore Mines through
Joint Ventures in Jharkhand, Orissa and Karnataka.
Also, RINL is pursuing various opportunities for JVs
/ Strategic partnerships with existing players in the
country and overseas for raw material security.
Some of the strategic initiatives are:
• Formation of RINMOIL Ferro Alloys Pvt Ltd, a Joint
Venture company with M/s MOIL to meet VSP's
future Ferro Alloys requirement & encash upon
export opportunities.
• Formalities for transfer of 51% stake in M/s EIL,
the holding company of M/s OMDC & M/s BSLC
to RINL are in the advanced stage of completion.
This would give RINL access to around 200 Mt
of Iron ore reserves.
• Application for Mining Lease in two areas was
filed in Bhilwara iron ore mines, Rajasthan.
• To ensure secured transportation of iron ore from
Bailadilla & further value addition, an EoI was
invited for setting up of Pelletisation plant at
Visakhapatnam through SPV.
RINL joined M/s ICVL, a Special Purpose Vehicle
formed for the purpose of acquisition of coal mining
assets overseas. The International Coal Ventures
Ltd (ICVL) was formed with equity participation by
M/s NMDC, M/s CIL, M/s NTPC, M/s SAIL & RINL
to acquire metallurgical and thermal coal assets
overseas and ICVL was incorporated on 20th May
2009. ICVL is considering several proposals to
acquire coal assets.
RINL is also closely engaged with various Experts /
Consultants in order to develop a Master plan for
establishing a 16/20 Mt steel plant at its current
location at Visakhapatnam.
(iii) Outlook
With Government's plans to boost economy by
injecting funds in various sectors like infrastructure,
construction, automobile and power, it is expected
to see steady and further growth in India. However,
high prices of coal and iron ore are likely to dent
the profitability. The European Sovereign debt woes
also may create some uncertainty in the global
economy in the short term. The projected
consumption growth of 13.9% and successful
32
RASHTRIYA ISPAT NIGAM LIMITED
commissioning of first phase Expansion units hold
promise and to a large extent are likely to mitigate
the adverse impact of input escalations and may
have favourable impact on profitability.
D. SEGMENTWISE OR PRODUCTWISE
PERFORMANCE :
Details in respect of the above item has already
been covered in the Directors' Report which may
kindly be referred to.
E. INTERNAL CONTROL SYSTEMS AND THEIR
ADEQUACY
The Company is having an efficient system of
Internal controls for achieving the objectives of the
Company by ensuring efficiency in operations,
protection of resources, accuracy and promptness
in financial reporting and compliance with the laid
down policies and procedures alongwith relevant
Laws and regulations.
In RINL, there is a separate Internal Audit
Department and the Internal Audit is a multi
disciplinary function which is conducted by a team
of experienced Chartered Accountants, Cost
Accountants, Engineers and other employees. The
Internal Audit Department carries out reviews,
evaluates and appraises the various systems,
procedures and policies of the Company and
suggests meaningful and useful improvements
alongwith corrective measures wherever required.
The Internal Audit is subject to overall control
environment under the supervision of the Audit
Committee constituted by the Board to focus on
transparency in the systems and internal control
mechanisms. Annual Audit Programmes are drawn
up covering critical areas of various departments
in order to bring overall improvements in the
Company.
The Internal control systems are commensurate
with the size of the Company and the reports
containing significant Audit findings are submitted
to the Audit Committee of the Company and to
the Board through the Audit Committee.
The Company has put in place an Enterprise Risk
Management (ERM) Policy and procedure duly
approved by the Board in the year and the same
has been put on Company's Website. ERM is being
implemented across the organization covering both
Works and Non Works Departments by an In-house
team.
F. DISCUSSION ON FINANCIAL PERFORMANCE
WITH RESPECT TO OPERATIONAL
PERFORMANCE :
G. MATERIAL DEVELOPMENTS IN HUMAN
RESOURCES, INDUSTRIAL RELATIONS FRONT,
INCLUDING NUMBER OF PEOPLE EMPLOYED :
H. ENVIRONMENTAL PROTECTION AND
CONSERVATION, TECHNOLOGICAL
CONSERVATION, RENEWABLE ENERGY
DEVELOPMENTS, FOREIGN EXCHANGE
CONSERVATION :
I. CORPORATE SOCIAL RESPONSIBILITY
Details in respect of the above items i.e. F, G, H
and I, have already been covered in the Directors'
Report which may kindly be referred to.
35
28th Annual Report 2009-10
BREAK UP OF INCOME 2009-10
Sale of By Products &
Others Rs. 350 Crs (3%)
Interest Earned
Rs. 535 Crs (5%)
Other revenue
Rs. 101.75 Crs (1%)
Internal Consumption
Rs.121 Crs (1%)
Sale of Iron & Steel
Rs. 10285 Crs (90%)
38
RASHTRIYA ISPAT NIGAM LIMITED
FINANCIAL HIGHLIGHTS
2009-10 2008-09
A OPERATING RESULTS (Rs Crs)
Turnover 10635 10411
Gross Income 11392 11334
Gross Expenditure 10067 9219
Gross Profit 1326 2115
Gross Profit (excluding Interest on Term Deposits) 819 1359
Profit before Tax 1248 2027
Net Profit After Tax 797 1336
B YEAR END FINANCIAL POSITION (Rs Crs)
Share Capital 7827 7827
Reserves and Surplus 5058 4593
Capital Employed 5476 7892
Capital Employed (excluding Term Deposits) 132 1309
Net Worth 12885 12420
Gross Block 9474 8972
Depreciation 8009 7750
Net Block 1465 1222
Inventory 2452 3215
C PROFITABILITY AND OTHER RATIOS
(i) Percentage of
Gross Profit to Sales 12.5 20.3
Net Profit to Sales 7.5 12.8
Gross Profit to Net Worth 10.3 17.0
Net Profit to Net Worth 6.2 10.8
Gross Profit (excluding Interest on Term Deposits)
to Capital Employed (excluding Term Deposits) 618.1 103.9
Net Profit to Capital Employed 14.5 16.9
Gross Profit to Share Capital 16.9 27.0
Inventory to Sales 23.1 30.9
Sales to Capital Employed 194.2 131.9
(ii) Ratio of
Current Assets to Current Liabilities 1.7 2.3
Quick Assets to Current Liabilities 1.3 1.7
39
28th Annual Report 2009-10A G
lance o
f Fin
ancia
l R
esult
s s
ince i
ncepti
on
Rs C
rsN
os
Year
Turnover
Other Revenue
Income
Raw Materials
consumed
Stock (Accretion) /
Depletion
Employee Benefits
Depreciation & DRE
Interest & Wealth Tax
Stores, R&M, Power &
Other Expenses
Profit / (Loss) before
tax
Profit / (Loss)
after tax
Capital
Reserves & Surplus
Loans / Buyers Credit
Fixed Assets
Gross Block
Total Depreciation
Fixed Assets
Net Block
Employees as on
31st March
90
-91
24
53
62
45
17
5(2
7)
29
19
71
92
19
1(4
78
)(4
78
)3
50
63
92
43
72
02
48
34
72
14
43
3
91
-92
77
22
26
76
40
2(7
0)
54
44
94
37
50
9(9
87
)(9
87
)3
50
65
47
65
03
17
04
43
27
16
65
6
92
-93
11
85
14
81
24
56
80
(15
2)
77
34
01
98
75
8(5
68
)(5
68
)3
70
63
49
56
15
71
02
65
13
11
74
54
93
-94
17
51
15
61
52
68
75
16
01
03
34
03
47
65
5(5
73
)(5
73
)6
49
43
47
47
32
61
36
55
96
11
74
83
94
-95
22
09
50
20
92
10
59
(20
0)
12
84
15
36
68
55
(36
4)
(36
4)
64
94
37
35
82
89
17
47
65
42
17
36
9
95
-96
30
39
11
62
81
01
31
1(5
0)
15
54
30
40
71
10
7(2
04
)(2
04
)6
49
43
83
18
39
22
17
76
21
51
76
42
96
-97
31
35
78
28
88
13
85
(11
5)
17
44
22
43
01
16
3(2
46
)(2
46
)6
49
43
73
58
54
82
81
95
72
91
74
78
97
-98
30
71
97
27
51
14
05
(11
8)
21
04
39
19
81
21
1(1
77
)(1
77
)6
49
42
20
58
59
23
03
75
55
51
73
54
98
-99
27
61
19
72
18
21
22
03
18
25
51
11
36
11
15
1(4
57
)(4
57
)6
49
42
24
38
61
53
14
85
46
71
74
00
99
-00
29
73
15
52
63
61
39
4(9
5)
27
24
32
38
21
30
3(5
62
)(5
62
)7
82
72
34
38
63
53
58
05
05
51
72
54
00
-01
34
36
18
03
04
91
44
4(1
03
)4
08
44
53
51
13
64
(29
1)
(29
1)
78
27
22
93
86
43
40
12
46
30
17
13
1
01
-02
40
81
15
33
39
61
60
26
23
75
47
52
91
15
04
(75
)(7
5)
78
27
19
89
87
03
44
68
42
35
17
02
6
02
-03
50
58
16
84
10
71
80
62
81
40
64
55
12
31
63
55
21
52
17
82
71
18
68
73
14
90
33
82
81
68
94
03
-04
61
69
20
95
39
82
05
02
64
81
47
64
91
74
81
54
71
54
77
82
73
78
71
05
33
83
37
21
67
55
04
-05
81
81
28
67
58
43
02
0(3
10
)4
90
10
06
11
19
97
22
54
20
08
78
27
53
18
76
36
32
22
44
11
66
13
05
-06
84
91
44
77
41
33
58
56
65
72
44
83
12
34
61
89
01
25
27
82
73
46
45
88
83
26
75
42
07
81
65
74
06
-07
91
51
66
18
23
13
88
92
47
41
36
24
92
52
52
22
21
36
37
82
71
71
19
17
88
76
70
85
17
90
16
40
1
07
-08
10
43
39
04
99
18
42
80
(34
3)
10
31
48
83
22
85
42
99
51
94
37
82
73
65
44
41
89
01
75
16
13
85
16
41
6
08
-09
10
41
19
24
10
68
25
89
6(9
17
)1
15
72
40
88
28
42
20
27
13
36
78
27
45
93
10
08
89
72
77
50
12
22
17
22
5
09
-10
10
63
57
58
98
39
55
35
41
51
40
02
77
78
24
39
12
48
79
77
82
75
05
81
23
39
47
48
00
91
46
51
78
30
43
28th Annual Report 2009-10
BALANCE SHEET AS AT 31st MARCH 2010
Rs Crs
Schedule As at As at
No. 31st March, 2010 31st March, 2009
SOURCES OF FUNDS
SHAREHOLDERS’ FUNDS
Share Capital 1 7827.32 7827.32
Reserves and Surplus 2 5057.68 4592.59
LOAN FUNDS
Secured loans 3 407.28 907.72
Unsecured loans 4 825.27 100.04
Deferred Tax Liability (Net) 97.82 124.49
Total 14215.37 13552.16
APPLICATION OF FUNDS
FIXED ASSETS
Gross block 5 9473.90 8971.80
Less: Depreciation 8008.55 7749.74
Net block 1465.35 1222.06
Held for disposal 6 0.05 0.05
Capital work-in-progress 7 7506.90 4652.00
8972.30 5874.11
INVESTMENTS 9 0.25 0.05
CURRENT ASSETS, LOANS & ADVANCES
Inventories 10 2451.52 3215.28
Sundry debtors 11 181.18 191.27
Cash & Bank balances 12 5415.54 6624.17
Other Current assets 13 137.40 258.91
Loans & Advances 14 1365.02 1569.69
9550.66 11859.32
LESS: CURRENT LIABILITIES & PROVISIONS
Liabilities 15 2871.95 2560.79
Provisions 16 1435.89 1620.53
4307.84 4181.32
Net Current assets 5242.82 7678.00
Total 14215.37 13552.16
Significant Accounting Policies & Notes to Accounts
Schedules 1 to 28 annexed form part of the Accounts 28
As per our report of even date
For B.V. RAO & CO
Chartered Accountants
Regn. No (F.R.N) 003118S
Sd/-
(CA A.R. UNNI)Partner
M.No : 07447
For and on behalf of Board of Directors
Sd/- Sd/-(P.K.Bishnoi) (P. Madhusudan)
Chairman-cum-Managing Director Director (Finance)
Sd/-(P Mohan Rao)
Company Secretary
Place : Visakhapatnam
Date : 24th June 2010
44
RASHTRIYA ISPAT NIGAM LIMITED
Schedule For the year ended For the year ended
No. 31st March, 2010 31st March, 2009
INCOME
Gross Sales 17 10634.63 10410.63Less: Excise duty recovered on sales 825.48 1282.25Net Sales 9809.15 9128.38Internal consumption 121.07 114.10Interest earned 18 534.71 787.21Other revenue 19 101.75 22.36
Total 10566.68 10052.05
EXPENDITURERaw materials consumed 20 5535.11 5896.25Depletion / (Accretion) to Stock of Semi-finished/Finished goods 21 415.35 (916.65)Employees' remuneration & benefits 22 1399.74 1157.35Stores & spares consumed 466.48 501.23Power & fuel 23 408.27 340.31Repairs & maintenance 24 142.13 149.81Freight outward 312.65 286.53Other expenses & provisions 25 334.63 324.46Interest & Finance Charges 26 77.55 87.47Depreciation 277.17 240.46Wealth tax 0.45 0.89
9369.53 8068.11Less: Inter account adjustments-raw material mining cost 43.26 38.06
Net expenditure 9326.27 8030.05
Profit for the year 1240.41 2022.00Prior period adjustments- Net credit 27 7.24 4.59
Profit Before Tax 1247.65 2026.59Provision for Taxation
Current Tax 463.08 746.38Fringe Benefit Tax (0.05) 4.66Earlier years adjustments 14.62 (21.39)Deferred Tax (26.67) (38.63)
Profit After Tax 796.67 1335.57Balance of Profit brought forward from previous year 1653.83 3652.55Amount available for appropriation 2450.50 4988.12
APPROPRIATIONSInterim Dividend 100.01 0.00Proposed Dividend (Final) 185.28 339.18Tax on Interim Dividend 16.61 0.00Tax on Proposed Dividend (Final) 30.77 57.64Reserve for Redeeming Preference Share Capital 0.00 2937.47Balance carried to Balance Sheet 2117.83 1653.83Total appropriations 2450.50 4988.12Basic and Diluted Earnings Per Share (in Rupees)(Face Value Rs. 1000 per share) 113.89 223.93Significant Accounting Policies & Notes to Accounts 28Schedules 1 to 28 annexed form part of the accounts
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDING 31st March 2010
Rs Crs
As per our report of even date
For B.V. RAO & CO
Chartered Accountants
Regn. No (F.R.N) 003118S
Sd/-
(CA A.R. UNNI)Partner
M.No : 07447
For and on behalf of Board of Directors
Sd/- Sd/-(P.K.Bishnoi) (P. Madhusudan)
Chairman-cum-Managing Director Director (Finance)
Sd/-(P Mohan Rao)
Company Secretary
Place : Visakhapatnam
Date : 24th June 2010
45
28th Annual Report 2009-10
As at As at
31st March, 2010 31st March, 2009
AUTHORISED
4,89,00,000 (Previous year 4,89,00,000) Equity Shares of Rs.1000 each 4890.00 4890.00
3,11,00,000 (Previous Year 3,11,00,000) Preference Shares of Rs.1000 each 3110.00 3110.00
Total 8000.00 8000.00
ISSUED, SUBSCRIBED & PAID-UP
4,88,98,462 (Previous year 4,88,98,462) Equity Shares of Rs.1000 each. 4889.85 4889.85
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 2937.47 2937.47
10,00,000 during 2011-12 55,00,000 during 2014-15
1,38,05,000 during 2012-13 30,00,000 during 2015-16
60,69,700 during 2013-14
The earliest date of redemption is 31st March, 2012.
Total 7827.32 7827.32
Of the above, 21,80,612 Equity Shares of Rs.1000 each were allotted as fully paipup for consideration other than cash.
Schedule 02 : Reserves and Surplus Rs Crs
As at As at
31st March, 2010 31st March, 2009
Prime Minister's Trophy Award Fund
As per last Balance Sheet 1.29 1.17
Additions 1.09 0.12
2.38 1.29
Reserve for Redeeming Preference Share Capital 2937.47 2937.47
Surplus as per Profit and Loss Account 2117.83 1653.83
Total 5057.68 4592.59
Schedule 03 : Secured loans Rs Crs
As at As at
31st March, 2010 31st March, 2009
Working Capital Borrowings from Banks
(Secured by hypothecation of Current Assets) 349.36 334.19
Loans from Banks against Term Deposits 57.92 573.53
Total 407.28 907.72
Schedule 04 : Unsecured loans Rs Crs
As at As at
31st March, 2010 31st March, 2009
Short Term Loans from Banks 550.00 100.04
Short Term Foreign currency facilities 225.31 0.00
Short Term Loans from others 49.96 0.00
Total 825.27 100.04
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31st March 2010
Rs CrsSchedule 01 : Share Capital
46
RASHTRIYA ISPAT NIGAM LIMITED
Gross Block
As at 1st Additions & Sales & As at 31st
April, 2009 adjustments adjustments March, 2010
A. Plant, Mines & Others :
Land-Freehold (Including cost of development) 41.97 41.97
Land-Leasehold 1.65 1.65
Railway Lines & sidings 48.03 48.03
Roads, Bridges & Culverts 116.36 3.35 119.71
Buildings 738.26 4.49 742.75
Plant & Machinery 7012.16 426.50 19.72 7418.94
Furniture & Fittings 17.81 0.73 0.01 18.53
Locomotives 66.56 31.88 98.44
Vehicles 12.76 0.20 12.96
Electrical Installations 274.90 21.81 296.71
Water Supply & Sewerage systems 252.61 17.14 269.75
Miscellaneous Assets 102.03 12.16 0.31 113.88
Mining lease rights (Intangible Asset) 5.83 5.83
Total (A) 8690.93 518.26 20.04 9189.15
Figures for the previous year 8630.72 69.25 9.04 8690.93
B. Social Facilities :
Land-Freehold ( Including cost of development) 9.51 9.51
Roads, Bridges & Culverts 13.11 13.11
Buildings 194.66 2.93 197.59
Plant & Machinery 2.07 2.07
Furniture & Fittings 0.66 0.04 0.70
Electrical Installations 29.57 (0.11) 29.46
Water Supply & Sewerage systems 19.14 19.14
Miscellaneous Assets 12.15 1.08 0.06 13.17
Total (B) 280.87 3.94 0.06 284.75
Figures for the previous year 270.11 11.59 0.83 280.87
Total (A + B) 8971.80 522.20 20.10 9473.90
Figures for the previous year 8900.83 80.84 9.87 8971.80
Rs CrsSchedule 05 : Fixed Assets
47
28th Annual Report 2009-10
Depreciation Net Block
As at 1st For the Year Sales & As at 31st As at 31st As at 31st
April, 2009 (incl. PPA) adjustments March, 2010 March, 2010 March, 2009
Rs CrsSchedule 05 : Fixed Assets (continued)
41.97 41.97
0.58 0.03 0.61 1.04 1.07
44.50 2.04 46.54 1.49 3.53
19.33 2.02 21.35 98.36 97.03
428.65 24.23 452.88 289.87 309.61
6544.20 207.45 19.68 6731.97 686.97 467.96
12.09 0.65 0.01 12.73 5.80 5.72
56.87 3.07 59.94 38.50 9.69
7.96 0.83 8.79 4.17 4.80
233.54 13.84 247.38 49.33 41.36
223.61 11.48 235.09 34.66 29.00
74.51 6.20 0.32 80.39 33.49 27.52
2.61 0.29 2.90 2.93 3.22
7648.45 272.13 20.01 7900.57 1288.58 1042.48
7421.75 234.73 8.03 7648.45 1042.48 1208.97
9.51 9.51
3.58 0.23 3.81 9.30 9.53
55.77 3.38 59.15 138.44 138.89
1.67 0.10 1.77 0.30 0.40
0.26 0.01 0.27 0.43 0.40
16.30 1.39 17.69 11.77 13.27
16.36 0.84 17.20 1.94 2.78
7.35 0.76 0.02 8.09 5.08 4.80
101.29 6.71 0.02 107.98 176.77 179.58
94.44 6.86 0.01 101.29 179.58 175.67
7749.74 278.84 20.03 8008.55 1465.35 1222.06
7516.19 241.59 8.04 7749.74 1222.06 1384.64
48
RASHTRIYA ISPAT NIGAM LIMITED
Rs CrsALLOCATION OF DEPRECIATIONAs at As at
31st March, 2010 31st March, 2009
Current year 277.17 240.46
Prior periods 0.00 0.32
Total 277.17 240.78
Note :
Allocation of Depreciation not included above and charged to:
Expenditure During Construction 1.67 0.81
Schedule 06 : Assets Retired from active use and held for disposal Rs Crs
As at As at
31st March, 2010 31st March, 2009
Value of Fixed Assets 4.29 4.29
Less: Provision for loss 4.24 4.24
Balance 0.05 0.05
Schedule 07 : Capital Work-In-Progress Rs Crs
As at As at
31st March, 2010 31st March, 2009
Work-in Progress (Including Material issued to contractors)
Coke Oven Battery-4 87.85 341.26
6.3 MT Expansion 6378.14 3419.18
Others 396.61 249.69
6862.60 4010.13
Less: Provision for Shortages 0.09 0.09
Provision for dropped SLTM Project 23.92 24.01 17.90 17.99
6838.59 3992.14
Advances to Contractors 485.60 526.69
Advances to Government departments 6.59 6.57
492.19 533.26
Expenditure during construction awaiting allocation (Schedule : 08) 176.12 126.60
Total 7506.90 4652.00
Advances : Unsecured & Considered good 492.19 533.26
Advances : Unsecured & Considered doubtful 0.00 0.00
Schedule 08 : Expenditure During Construction Rs Crs
As at As at
31st March, 2010 31st March, 2009
Opening Balance 126.60 67.59
Expenditure during the year:
Employees Remuneration & Benefits 35.12 44.55
Power & fuel 6.96 4.60
Repairs & Maintenance 0.72 4.13
Technical Consultancy 0.69 0.05
Other Expenses & Provisions 11.34 7.17
Interest 0.00 0.03
Depreciation 1.67 0.81
56.50 61.34Less
Interest Receipts 0.14 0.20
Other Revenue 6.84 2.13
6.98 2.33
Total awaiting allocation carried to Schedule No.07 176.12 126.60
49
28th Annual Report 2009-10
Rs CrsSchedule 09 : Investments (At Cost) - Long TermType of No. of Value of each As at As at
Share Shares held Share (Rs) 31st March, 2010 31st March, 2009
(A) Unquoted
Trade Investments
Rinmoil Ferro Alloys Private Limited Equity 100000 10 0.10 0.00
International Coal Ventures Pvt. Ltd Equity 100000 10 0.10
Non-Trade Investments
# Free Press House Limited Equity 2280 1 0.00 0.00
Steelscape Consultancy Pvt. Ltd Equity 50000 10 0.05 0.05
(B) Quoted
* Bisra Lime Stone Company Ltd Eqiity 182927 10 0.00 0.00
Total 0.25 0.05
* Investments amounted to Rs.1000/-, hence rounded off to zero.
# Investments amounted to Rs.2380/-, hence rounded off to zero and include one fully paid-up
Equity share of Rs.100/- each in Anakapalli Rural Electric Co-operative society Limited
Schedule 10 : Inventories (As taken and certified by the Management) Rs Crs
As at As at
31st March, 2010 31st March, 2009
Semi Finished/ Finished goods 1213.10 1688.31
Add : In-transit 79.91 20.05
1293.01 1708.36
Raw materials 596.72 1161.29
Add : In-transit / Under inspection 388.33 150.47
985.05 1311.76
Less : Provision for shortages 120.02 117.44
865.03 1194.32
Stores & Spares 296.47 307.21
Add : In-transit / Under inspection 30.57 45.69
327.04 352.90
Less : Provision for obsolescence & Non-moving items 33.56 40.30
293.48 312.60
Total 2451.52 3215.28
Schedule 11 : Sundry debtors Rs Crs
As at As at
31st March, 2010 31st March, 2009
Sundry debtors
Debts over six months 20.79 21.04
Other debts 180.91 191.27
201.70 212.31
Less : Provision for doubtful debts 20.52 21.04
Total -- Unsecured & Considered good 181.18 191.27
Schedule 12 : Cash & Bank balances Rs Crs
As at As at
31st March, 2010 31st March, 2009
Cash on hand 0.09 0.05
Cheques on hand 51.03 36.77
Current Accounts with Scheduled Banks 21.28 4.13
Term deposits with Scheduled Banks 5343.14 6583.22
Total 5415.54 6624.17
50
RASHTRIYA ISPAT NIGAM LIMITED
As at As at
31st March, 2010 31st March, 2009
Rs CrsSchedule 13 : Other Current assets
Interest accrued on loans to employees 6.41 4.32
Interest accrued -- others 136.88 260.71
Less: Provision for Non recoverable interest 6.24 130.64 6.24 254.47
Other income accrued 0.35 0.12
Total 137.40 258.91
Schedule 14 : Loans & Advances Rs Crs
As at As at
31st March, 2010 31st March, 2009
Loans
Employees 48.12 43.33
Others 233.61 281.73 240.00 283.33
Advances & other recoverables
(Recoverable in cash or in kind or for value to be received)
Government departments 17.44 15.48
Less : Provision for doubtful advances 0.62 0.62
16.82 14.86
Advance Income Tax & Fringe Benefit Tax 432.73 738.64
Contractors 18.34 18.09
Less : Provision for doubtful advances 0.54 0.54
17.80 17.55
Suppliers 46.84 48.35
Less : Provision for doubtful advances 6.30 6.50
40.54 41.85
Employees 6.94 25.55
Less : Provision for doubtful advances 0.16 6.78 0.16 25.39
Others * 409.78 299.42
Less : Provision for doubtful
advances / recoverables 29.73 27.88
380.05 271.54
894.72 1109.83
Prepaid expenses 3.70 1.66
Claims recoverable 49.80 37.93
Less : Provision for doubtful claims 6.26 5.55
43.54 32.38
Deposits 141.33 142.49
Total 1365.02 1569.69
(*) includes advances of Rs. 0.58 Crs and Rs. 0.07 Crs as contribution towards Share Capital and others respectively to Joint Ventures.
Particulars of Loans & Advances
Loans
Secured & Considered good 233.61 240.00Unsecured & Considered good 48.12 43.33
AdvancesUnsecured & Considered good 894.72 1109.83
OthersUnsecured & Considered good 188.57 176.53
1365.02 1569.69Advances
Unsecured & Considered doubtful 37.35 35.70Claims
Unsecured & Considered doubtful 6.26 5.5543.61 41.25
Total 1408.63 1610.94Amounts due from Directors 0.03 0.01
Maximum amount due at any time during the year from Directors 0.04 0.01
51
28th Annual Report 2009-10
Rs CrsSchedule 15 : LiabilitiesAs at As at
31st March, 2010 31st March, 2009
Sundry creditors 1265.25 1149.44
Advances from customers 140.90 137.46
Other advances 1.88 1.43
Earnest money, security & other deposits 207.96 137.87
Interest accrued but not due 2.38 0.14
Other liabilities 1253.58 1134.45
Total 2871.95 2560.79
Particulars of Sundry Creditors
Total outstanding dues of micro enterprises and small enterprises 0.08 0.00
Total outstanding dues of creditors other than micro enterpries and small enterprises 1265.17 1149.44
Total 1265.25 1149.44
Schedule 16 : Provisions for Rs Crs
As at As at
31st March, 2010 31st March, 2009
Current Income Tax 463.08 746.38
Fringe Benefit Tax 0.00 4.66
Wealth Tax 0.45 0.89
Interim Dividend 100.01 0.00
Proposed Dividend (Final) 185.28 339.18
Tax on Interim Dividend 16.61 0.00
Tax on proposed Dividend (Final) 30.77 57.64
Gratuity to employees 72.21 34.55
Compensated Absences 346.46 253.00
Post-retirement Benefits 143.39 123.68
Employee family Benefit Scheme 64.15 53.33
Long Service Awards 7.05 5.11
Leave Travel Concession 4.00 0.00
Mines Closure 2.43 2.11
Total 1435.89 1620.53
52
RASHTRIYA ISPAT NIGAM LIMITED
SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNTFOR THE YEAR ENDED 31st March 2010
Rs CrsSchedule 17 : Gross SalesYear ended Year ended
31st March, 2010 31st March, 2009
Domestic 10283.69 10332.31
Export 350.94 78.32
Total 10634.63 10410.63
Schedule 18 : Interest earned Rs Crs
Year ended Year ended
31st March, 2010 31st March, 2009
Loans to employees 2.53 2.17
Banks 506.74 755.47
Others 25.44 29.57
Total 534.71 787.21
Schedule 19 : Other revenues Rs Crs
Year ended Year ended
31st March, 2010 31st March, 2009
Rent recoveries 3.93 3.36
Profit on sale of fixed assets 1.02 0.47
Provision no longer required written back 8.26 15.02
Liquidated damages 12.11 10.83
Claims for finished goods (Shortages & Missing Wagons) 1.44 1.89
Export benefits 9.70 3.05
Net income from other operations 0.92 0.84
Exchange Differences (Net) 20.72 (52.66)
Sundry receipts 43.65 39.56
Total 101.75 22.36
Quantity: Tonnes
Schedule 20 : Raw materials consumed Value : Rs Crs
Year ended 31st March, 2010 Year ended 31st March, 2009
Quantity Value Quantity Value
Coal 3874581 3266.78 3312835 3101.20
Coke and Coke breeze 0 0.00 201765 438.39
Iron Ore 5734901 1779.38 5201536 1725.37
Limestone 889224 102.89 844907 110.46
Dolomite 635360 63.77 662570 64.01
Silico Manganese 45513 212.34 40681 276.10
Ferro Silicon 5150 32.61 5162 27.44
Alluminium 3891 38.28 3435 39.27
Manganese Ore 14728 1.88 20215 2.10
Petroleum Coke 6781 12.11 5353 12.08
Sea Water Magnesite 2800 10.19 3156 9.35
Billets 0 0.00 19735 75.23
Others 14.88 15.25
Total 5535.11 5896.25
Schedule 21 : Depletion/(Accretion) to Stock of Semi-Finished / Finished goods Rs Crs
Year ended Year ended
31st March, 2010 31st March, 2009
Opening stock 1708.36 791.71
Less: Closing stock 1293.01 1708.36
Net Depletion/(Accretion) 415.35 (916.65)
53
28th Annual Report 2009-10
Rs CrsSchedule 22 : Employees' remuneration & benefits
Year ended Year ended
31st March, 2010 31st March, 2009
Salaries, wages & allowances 1013.42 794.98
Company's contribution - provident fund & other funds 55.15 68.38
Welfare expenses 245.74 209.74
Gratuity 85.42 84.10
Voluntary Retirement Benefits 0.01 0.15
Total 1399.74 1157.35
Note:
Expenditure on Employees' remuneration & benefits not included above and charged to:
Expenditure During Construction
Salaries, wages & allowances 28.00 38.86
Company's contribution - provident fund & other funds 1.67 2.39
Welfare expenses 3.61 1.73
Gratuity 1.84 1.56
Total 35.12 44.54
Capital Work in Progress
Salaries, wages & allowances 0.00 1.78
Company's contribution - provident fund & other funds 0.00 0.02
Welfare expenses 0.00 0.22
Gratuity 0.00 0.12
Total 0.00 2.14
Schedule 23 : Power & fuel Rs Crs
Year ended Year ended
31st March, 2010 31st March, 2009
Purchased power 137.27 102.07
Boiler coal 265.46 223.75
Medium Coking Coal 0.00 11.77
Furnace oil/ LSHS/ LDO 5.54 2.72
Total 408.27 340.31
Power & Fuel - Expansion 6.96 4.60
Schedule 24 : Repairs & maintenance Rs Crs
Year ended Year ended
31st March, 2010 31st March, 2009
Plant & Machinery 68.09 75.59
Buildings 21.96 18.58
Others 52.08 55.64
Total 142.13 149.81
Note:
Repairs & maintenance not included above and charged to:
Expenditure during construction
Repairs & maintenances - Plant & Machinery and others 0.72 4.13
54
RASHTRIYA ISPAT NIGAM LIMITED
Rs CrsSchedule 25 : Other expenses & provisions
Year ended Year ended
31st March, 2010 31st March, 2009
Technical services 3.15 2.17
Rent 3.76 3.72
Rates & taxes 31.04 35.79
Excise Duty (1.29) (12.13)
Export Duty 0.00 10.92
Insurance 5.20 4.34
Handling & scrap recovery 102.00 93.02
Selling expenses 17.53 8.18
Travelling expenses 41.72 42.35
Printing & stationery 2.13 2.37
Postage, telegrams & telephone 2.74 2.75
Water charges 25.63 32.03
Legal expenses 1.12 0.98
Bank charges 2.90 1.62
Community Development Welfare 0.47 0.48
Donations
CSR Foundation 1.82 9.09
Others 6.09 7.91 1.57 10.66
Security expenses 28.20 21.15
Advertisement 12.90 15.53
Demurrages & wharfages 1.01 3.32
Remuneration to Auditors
Statutory Audit 0.06 0.05
Tax Audit 0.01 0.01
Other Services 0.00 0.01
Travelling & other expenses 0.05 0.12 0.13 0.20
Provisions
Shortage/damaged material/obsolescence/non-moving items of stores 0.46 3.04
Doubtful advances and claims 2.68 3.12
Doubtful debts 0.04 2.31
Dropped SLTM Project 6.01 9.19 1.61 10.08
Write-offs
Shortage/damaged material/obsolescence/non-moving items of stores 0.20 0.20
Sundries 37.00 34.73
Total 334.63 324.46
Note:
Expenditure on Other expenses & provisions not included above and charged to:
Expenditure During Construction
Travelling Expenses 2.18 2.02
Printing & Stationery 0.01 0.02
Postage, telegrams & telephone 0.29 0.26
Water Charges 6.61 2.63
Advertisement 1.53 1.36
Bank Charges 0.47 0.14
Sundries 0.25 0.74
Total 11.34 7.17
Capital Work in Progress
Travelling Expenses 0.00 0.07
Total 0.00 0.07
55
28th Annual Report 2009-10
Rs CrsSchedule 26 : Interest & Finance Charges
Year ended Year ended
31st March, 2010 31st March, 2009
Interest :
Banks - Working capital borrowings and Loans 55.71 25.19
- Loans against Term Deposits 8.13 61.83
63.84 87.02
Interest on Income Tax 1.94 0.14
Finance Charges 3.43 0.00
Others 8.34 0.31
Total 77.55 87.47
Note:
Expenditure on Interest & finance charges not included above and charged to:
Expenditure during construction
Interest - Banks 0.00 0.03
Schedule 27 : Prior period adjustments Rs Crs
Year ended Year ended
31st March, 2010 31st March, 2009
Claims for finished goods 0.00 (0.15) CR
Sale of products 0.63 DR 0.00
Raw Materials 0.00 (5.99) CR
Depreciation 0.00 0.32 DR
Other Expenses (0.83) CR 0.28 DR
Other Revenue (0.06) CR (2.98) CR
Repairs & Maintenance (0.63) CR 3.93 DR
Internal Consumption (6.35) CR 0.00
Total (7.24) CR (4.59) CR
56
RASHTRIYA ISPAT NIGAM LIMITED
Schedule 28 : Accounting Policies & Notes to Accounts
A. SIGNIFICANT ACCOUNTING POLICIES
1.0 GENERAL
1.1 Financial Statements are prepared under the historical cost convention in accordance with fundamental
accounting assumptions and Generally Accepted Accounting Principles (GAAP) in India and the relevant
provisions of the Companies Act, 1956 including Accounting Standards notified thereunder.
2.0 FIXED ASSETS
2.1 Fixed assets are stated at historical cost less depreciation.
2.2 Contributions made by the company towards the cost of fixed assets owned by the State / Central
Government are grouped together with similar assets owned by the company with appropriate disclosure
thereof.
2.3 Expenditure attributable / relating to construction, to the extent not directly identifiable to any specific
Plant Unit, is kept under ‘Expenditure During Construction’ for allocation to Fixed Assets and is grouped
under ‘Capital Work-in- Progress’.
3.0 INVESTMENTS
3.1 Current investments are carried at lower of cost and fair value.
3.2 Long term investments are carried at cost. Diminution in value, other than temporary, is provided for.
4.0 INVENTORIES
4.1 Inventories are valued at lower of cost and net realizable value.
4.2 The basis of determining cost is:
4.2.1 Finished / Semi-finished goods - Weighted Average cost
4.2.2 Raw material, Stores & Spares, Loose Tools - Monthly weighted average cost and those in transit at
cost.
4.3 Obsolete / Surplus / Non-moving inventory are adequately provided for.
5.0 REVENUE RECOGNITION
5.1 Sales are recognized when all significant risks and rewards of ownership have been transferred to the
buyer.
5.2 Export incentives under various schemes are recognized as Income on certainty of realisation.
6.0 CLAIMS
6.1 Claims against outside agencies are accounted on certainty of realisation.
57
28th Annual Report 2009-10
7.0 FOREIGN CURRENCY TRANSACTIONS
7.1 Foreign currency monetary items are recorded at the closing rate.
7.2 Exchange differences arising on account of settlement / conversion of foreign currency monetary
items are recognised as expense or income in the period in which they arise.
8.0 EMPLOYEE BENEFITS
8.1 Actuarial gains and losses on defined benefit plans are recognised during the year.
9.0 DEPRECIATION AND AMORTISATION
9.1 Depreciation is provided on straight line method (SLM), up to full value of the cost of asset over the
specified period derived in accordance with the provisions of Schedule XIV of the Companies Act,
1956, except the following:
9.1.1 Assets costing up to Rs. 5000/- are fully depreciated in the year of capitalisation.
9.1.2 Depreciation on the following categories of assets is provided up to full value of the cost of asset on
SLM over the period of their useful life based on the Management’s estimate given in brackets.
Photo Copiers & Fax Machines, Telecom Equipment (5 years); Cranes, Slag Pot Carriers, Audio &
Visual Equipment (10 years); Other Office Equipment, Earth Moving Equipment, Forklift Trucks, Air
Conditioners, Refrigerators, Water Coolers, Air Coolers, Freezers (7 years); Cars (6 years); Safety
Equipment, Other light vehicles (8 years); Computers [including system Software] (4 years); Coke
Ovens & Coal Chemical Plant (15 years).
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.
58
RASHTRIYA ISPAT NIGAM LIMITED
Schedule 28 Contd...
B. NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31st March, 2010
1.0 BALANCE SHEET
1.1 FIXED ASSETS
1.1.1 Land at a cost of Rs 39.99 Crs (Previous year Rs 39.99 Crs) is being held in the name of President of India. The
Company is holding Power of Attorney issued by Govt. of India for utilisation of the land acquired for the Project
and related purposes incidental thereto.
1.1.2 Land includes 358.3042 acres (Previous year 358.0571 acres) allotted to various agencies on lease basis.
1.1.3 Sale deeds in respect of the following assets are yet to be executed:
a) Stockyard at Chennai Rs. 2.37 Crs (Previous Year Rs. 2.37 Crs)
b) Office buildings at New Delhi Rs. 1.19 Crs (Previous Year Rs. 1.19 Crs)
c) Office buildings at Ahmedabad Rs. 0.18 Crs (Previous Year Rs. 0.18 Crs)
d) Residential buildings at Kolkata Rs. 0.95 Crs (Previous Year Rs. 0.95 Cr)
e) Stockyard at Hyderabad Rs. 1.00 Crs (Previous Year Rs.1.00Crs)
f) Office Building at Bangalore Rs. 3.60 Crs (Previous Year Rs. NIL)
1.1.4 a) Fixed assets (Gross Block) include assets costing Rs. 10.05 Crs (Previous year Rs.10.05
Crs) not owned by the Company which were depreciated in full as per the accounting policy 9.1.3.
b) Fixed Assets include Rs. 0.64 Crs (Credit) [ Previous year Rs.0.39 Crs (Debit) ] representing Net
Exchange Rate Variation for the year in respect of foreign currency liabilities with regard to acquisition
of fixed assets prior to 1st April 2004.
1.1.5 Main plant units, including Mills, constitute "Continuous process plant".
1.1.6 Borrowing costs included in Capital Work in Progress (Schedule - 07) during the year Rs. NIL (Previous year
Rs. 0.03 Crs) .
1.2 INVESTMENTS
1.2.1 Joint Venture Entities
Details of Company's share of ownership interest, assets, liabilities, income, expenses, contingent liabilities
and capital commitments in the joint venture entities, all incorporated in India, are given below :
Name of the Joint Venture Percentage Assets Liabilities Income Expenditure Contingent Capital
Entitity of Liabilities Commit
Company’s -ments
ownership
Interest
1. RINMOIL Ferro Alloys 50.00 * * * * * 57.93
Pvt Ltd
2. International Coal 14.29 * * * * * 499.58
Ventures Pvt Ltd
(*) The accounts of the respective joint ventures for the Financial Year 2009-10 are not yet prepared.
Rs Crs
59
28th Annual Report 2009-10
1.3 CURRENT ASSETS, LOANS & ADVANCES, CURRENT LIABILITIES & PROVISIONS
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. 8.68 Crs (Previous Year Rs. 8.13 Crs) which are as per book balances.
1.3.1.2 Stocks & Sales Quantity in Tonnes *
Value Rupees Crores
(*) Quantity for Argon Gas, Oxygen Gas and Nitrogen Gas is in Thcum.
Note: (i) Figures in brackets are for previous year.
(ii) Closing stock includes 72381.883 tonnes (Previous year 84809.251 tonnes) in the
custody of Consignment / Handling Agents.
(iii) Figures of closing stock are after adjustment for internal consumption, transfers to
capital works, shortages / excesses.
(iv) Others include By-products, Sale of Power and Iron & Steel Scrap.
1.3.1.3 In line with industry practice, no credit is taken for the value of material in process except those lying at mills.
1.3.1.4 No credit is taken in the accounts for the stock of run of mines ore and rejects at Mines.
1.3.1.5 Since the Coke Breeze used for internal consumption, the same has been valued at 60% of the production
cost of BF coke.
1.3.1.6 Coke and other By products are valued at net realisable value, wherever cost is not determinable and at cost,
where net realisable value is not available, except in the case of Stock of BF Granulated slag at dump yard for
which no value is assigned.
Pig Iron Blooms SaleableSteel
Sundries *
Others
TotalCoke & Coke
Products
Opening stock Quantity 125267 182790 233181 259190 328018 --
(65052) (81864) (155456) (135365) (310080) --
Value 179.13 425.89 637.57 288.18 177.59 1708.36
(97.31) (133.18) (349.64) (80.49) (131.09) (791.71)
Sales Quantity 504066 100735 3006627 -- 1802271 --
(245673) (94495) (2503337) -- (1668893) --
Value 847.50 226.92 9210.20 -- 350.01 10634.63
(614.28) (253.54) (9226.38) -- (316.43) (10410.63)
Closing stock Quantity 14637 91116 188688 401498 268686 --
(125267) (182790) (233181) (259190) (328018) --
Value 26.84 206.06 499.94 431.35 128.82 1293.01
(179.13) (425.89) (637.57) (288.18) (177.59) (1708.36)
60
RASHTRIYA ISPAT NIGAM LIMITED
1.3.1.7 The stock of iron scrap and steel scrap has been considered in the accounts on the basis of visual survey /
estimates and are valued at 75 % and 90 % respectively, at lower of the cost of Pig Iron and of the domestic
net realisable value of Pig Iron.
1.3.2 CASH AND BANK BALANCES
1.3.2.1 Term Deposits with scheduled banks disclosed under Cash and Bank balances (Schedule - 12) includes:
a) Term Deposits Receipts of value of Rs. 333.64 Crs. (Previous Year Rs. 1290 Crs) pledged with bankers
as security against Loans availed by the company.
b) Term Deposits Receipts of value of Rs. 3.81 Crs. (Previous Year Rs. 3.65Crs) pledged with bankers as
security to extend Letter of Credit facility by banker to a supplier.
1.3.3 LOANS & ADVANCES
1.3.3.1 Housing / Vehicle Loans to employees are reckoned as unsecured and considered good.
1.3.3.2 Loans and advances, Sundry Debtors / Creditors, Stock with Contractors / Others, Cenvat Recoverable are
subject to reconciliation / confirmation.
1.3.4 CURRENT LIABILITIES & PROVISIONS
1.3.4.1 Information relating to 'Supplier' under the provisions of Micro,Small and Medium Enterprise Development Act,
2006
ParticularsAmount (Rs Crs)
2009-10 2008-09
i) The amounts due thereon remaining unpaid to any supplier as at the end of the year
Principal - 0.08 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 - Nil Nil
making payments but with out adding the interest specified in the Act.
iv) The amount of interest accrued and remaining unpaid at the end of the year - Nil Nil
v) The amount of further interest remaining due and payable in the - Not Not
suceeding year until the date such interest is actually paid Applicable Applicable
1.3.4.2 Other liabilities (Schedule - 15) include net liability of Rs 388.90 Crs (Previous Year Rs. 342.81 Crs) towards
provision on account of pay revision effective from 01.01.2007 to the Employees.
1.3.4.3 Disclosures of provisions required by Accounting Standard (AS) 29 ' Provisions, Contingent Liabilities and
Contingent Assets':
Particulars Opening Balance Additions during Utilised during Closing Balance
as on 01.04.2009 the year the year as on 31.03.2010
Provision for Mines Closure 2.11 0.32 0.00 2.43
Expenditure
Rs Crs
61
28th Annual Report 2009-10
1.4 CONTINGENT LIABILITIES
1.4.1 Claims against the company not acknowledged as debt (net of advances paid):
Particulars As at 31st As at 31st
March, 2010 March, 2009
Contractors / Suppliers / Customers 686.77 545.54
Local Authorities - State Govt. 9.06 9.17
Sales Tax matters * 1187.53 914.87
Income Tax 2.04 0.00
Customs / Excise duty 86.43 68.81
R & D Cess 3.38 3.38
Others 6.38 0.49
(*) No liability is expected to arise as the movement of goods were on stock transfer and Sales Tax
has been paid on eventual sales.
1.4.2 Estimated amount of contracts remaining to be executed on capital account and not provided for (net of
advances) Rs. 6433.39 Crs (Previous Year Rs 7412.47 Crs).
1.4.3 Claims in Courts in connection with Land Acquisition : - Amount not ascertainable.
1.4.4 Liability towards reimbursement of excise duty on structural works - Amount not ascertainable.
wherever applicable.
1.4.5 Amounts paid towards disputed demands included under "Advance recoverable" for which no liability has been
set up.
Rs Crs
Particulars As at 31st As at 31st
March, 2010 March, 2009
Income Tax 56.36 91.96
Income Tax on foreign suppliers & TDS 23.85 23.85
Sales Tax 87.59 86.93
Customs Dut 5.67 5.87
Railways 0.71 0.71
1.4.6 Show cause notices issued by various Government Authorities are not considered as obligations.
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.
2.1.2 Earning Per Share (EPS)
2009-10 2008-09
i) Net Profit as per P&L Account (Rs Crs) 796.67 1335.57
ii) Preference Dividend and Tax thereon (Rs Crs) 239.78 240.57
iii) Net Profit attributable to Equity Shareholders (Rs Crs) 556.89 1095.00
iv) Weighted average number of Equity Shares outstanding
during the year (No.of shares) 48898462 48898462
v) Face value per share (Rupees) 1000 1000
vi) Basic and diluted EPS (Rupees) 113.89 223.93
Rs Crs
62
RASHTRIYA ISPAT NIGAM LIMITED
2.1.3 The petition filed before Honourable Supreme Court, against the ruling of Honourable Authority for Advance
Ruling, on the subject of Income Tax (MAT) liability under Section 115 JB of Income Tax Act, 1961, amounting
to Rs.109.63 Crs which was provided during the year 2006-07, is not withdrawn with a veiw to approach
Committee on Disputes again for their clearance in case of any developments on the subject.
2.1.4 In compliance with Accounting Standard (AS) 22 on 'Accounting for Taxes on Income' the Net Deferred tax
liability of Rs. 97.82 Crs (Previous Year Rs.124.49 Crs) has been provided during the current year. Components
of Deferred Tax Liabilities and Deferred Tax Assets are as under:
Rs Crs
ParticularsAs at 31st As at 31st
March, 2010 March, 2009
Deferred Tax Liabilities
Difference between book and tax depreciation 157.89 174.94
Sub-Total (A) 157.89 174.94
Deferred Tax Assets
Provision for Gratuity 23.99 11.74
Provision for Doubtful Debts, Advances, Claims, Interest 23.38 23.29
Other Deferred Tax Assets 12.70 15.42
Sub-Total (B) 60.07 50.45
Net Deferred tax Liability (A) - (B) 97.82 124.49
2.1.5 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.
2.1.6 Value of raw materials and stores & spares consumed
2009-10 2008-09
Raw Materials Stores & Spares Raw Materials Stores & Spares
Rs Crs % Rs Crs % Rs Crs % Rs Crs %
(a) Indigenous 2411.30 43.56 411.88 88.30 2647.62 44.90 430.92 85.97
(b) Imported 3123.81 56.44 54.60 11.70 3248.63 55.10 70.31 14.03
Total 5535.11 100.00 466.48 100.00 5896.25 100.00 501.23 100.00
2.1.7 Excise Duty of Rs. 2.72 Crs (Credit) [Previous year Rs. 12.13 Crs (Credit)] disclosed in Other Expenses &
provisions (Schedule - 25) comprises of Excise Duty provided on Accretion / Depletion of Inventories of
Semi / Finished Goods, Excise Duty recovered on sale of Obsolete Stores & Spares scrap and Other Excise duty
payments /adjustments etc.
Rs Crs
2009-10 2008-09
2.1.8 Expenditure in foreign currency
(a) Technical consultation fee / know-how 2.51 0.58
(b) Interest 3.33 0.00
(c) Others 1.80 1.55
63
28th Annual Report 2009-10
Rs Crs
2009-10 2008-09
2.1.9 Earnings in foreign exchange
(a) Export of goods (on FOB basis) 350.94 78.32
(b) Others 0.79 0.23
2.1.10 Value of imports during the year calculated on CIF basis
(a) Spares 112.19 101.05
(b) Raw materials 2689.88 3552.86
(c) Capital Goods 755.53 356.64
2.1.11 Particulars of Directors' remuneration
(a) Salaries & allowances * 1.13 0.44
(b) Company's contribution to provident fund * 0.08 0.05
(c) Leave travel concession 0.01 0.02
(d) Gratuity 0.00 0.04
Total 1.22 0.55
* Includes arrears of Rs. 0.21 Crs ( Previous year Rs. 0.04 Cr).
2.1.12 Expenditure on public relations
(a) Employees' remuneration & benefits 1.38 1.35
(b) Expenditure on institutional publicity 1.57 2.19
Total 2.95 3.54
2.1.13 Employee Benefits
2.1.13.1 An amount of Rs. 5.74 Crs (Previous Year Rs 5.94 Crs) recognised in the Profit and Loss Account and
Rs 0.16 Crs (Previous Year Rs 0.22 Crs) in Capital Work in Progress towards Superannuation Benefit Scheme
(Post Employment Benefit - Defined Contribution Plan).
2.1.13.2 General Description of the Post Employment Benefits-Defined Benefit Plans
Provident Fund - Company pays fixed contribution to Provident Fund, at
predetermined rates, to a separate trust, which invests the Funds
in permitted securities. On Contributions, the trust is required to
pay a minimum rate of interest, to the members, as specified by
Govt. of India. The obligation of the Company is limited to the shortfall
in the rate of interest on the Contribution based on its return on
investments as compared to the declared rate.
Gratuity - 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.
Compensated Absences - 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.
64
RASHTRIYA ISPAT NIGAM LIMITED
Particulars
Obligation as at the beginning 428.00 253.00 96.84 26.84 5.11 53.33
of the period (314.44) (184.61) (83.59) (23.08) (4.40) (45.90)
Service Cost 28.03 27.35 4.03 1.14 0.30 9.09
(22.11) (20.54) (3.56) (0.93) (0.22) (7.56)
Interest Cost 29.78 16.19 6.76 1.86 0.36 3.46
(24.98) (13.72) (6.66) (1.84) (0.35) (3.41)
Actuarial gains (-) / losses (+) 69.31 93.87 3.38 3.57 1.28 6.07
(70.80) (60.45) (3.59) (1.25) (0.14) (3.08)
Benefits paid -5.12 -43.41 -0.68 -0.35 0.00 -7.80
(-4.33) (-26.32) (-0.56) (-0.26) (0.00) (-6.62)
Obligations as at the end of 550.00 347.00 110.33 33.06 7.05 64.15
the period (428.00) (253.00) (96.84) (26.84) (5.11) (53.33)
Note: Figures in the brackets are for previous year.
Post Retirement Medical Benefits - Available to retired employees at Company's hospital and / or under
the Health Insurance Policy.
Retirement Settlement Benefits - 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.
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.
GratuityCompensated
Absences
Retirement
Medical
Benefits
Retirement
Settlement
Benefits
Long
Service
Award
Employee
Family Benefit
Scheme
2.1.13.4 Against present value of gratuity obligation as at 31st March 2010 of Rs. 550.00 Crs (Previous Year
Rs 428.00 Crs), Company has funded a sum of Rs 477.79 Crs (Previous Year Rs 393.45 Crs) through a
separate Gratuity Fund which are covered by the Trust's Plan Assets for equal amount. The other defined
benefit obligations are unfunded.
2.1.13.5 Reconciliation of fair value of Plan Assets
Rs Crs
Particulars
Gratuity
2009-10 2008-09
Balance as at the opening of the period 393.45 269.37
Expected Return 37.41 28.38
Actuarial gains (+) / losses (-) 2.45 3.73
Contributions by the Employer 49.60 96.30
Benefits paid (5.12) (4.33)
Balance as at the end of the period 477.79 393.45
2.1.13.3 Reconciliation of present value of defined benefit obligationsRs Crs
65
28th Annual Report 2009-10
2.1.13.6 Reconciliation of Present Value of Defined Benefit Obligation and Fair value of Plan Assets
Particulars Gratuity
2009-10 2008-09
Fair Value of Plan Assets 477.79 393.45
Present Value of Defined Benefit Obligation 550.00 428.00
Amount recognised in Balance Sheet (Schedule - 16) as at the end of the period 72.21 34.55
Particulars GratuityCompensated
Absences
Retirement
Medical
Benefits
Retirement
Settlement
Benefits
Long
Service
Award
Employee
Family Benefit
Scheme
Service Cost 28.03 27.35 4.03 1.14 0.30 9.09
(22.11) (20.54) (3.56) (0.93) (0.22) (7.56)
Interest Cost 29.78 16.19 6.76 1.86 0.36 3.46
(24.98) (13.72) (6.66) (1.84) (0.35) (3.41)
Actuarial gains (+) / losses (-) 66.86 93.87 3.38 3.57 1.28 6.07
(67.07) (60.45) (3.59) (1.25) (0.14) (3.08)
Expected Return on Plan Assets -37.41 0.00 0.00 0.00 0.00 0.00
(-28.38) (0.00) (0.00) (0.00) (0.00) (0.00)
Accounting Estimate Change 0.00 0.00 0.00 0.00 0.00 0.00
on Opening obligation (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)
Total to be charged - Employees 87.26 137.41 14.17 6.57 1.94 18.62
Remuneration & Benefits (85.78) (94.71) (13.81) (4.02) (0.71) (14.05)
Amount charged to :
Profit & Loss Account 85.42 134.51 13.87 6.43 1.90 18.22
(Schedule - 22) (84.10) (92.64) (13.39) (3.71) (0.70) (14.05)
Expenditure During Construction 1.84 2.90 0.30 0.14 0.04 0.40
(1.56) (1.92) (0.24) (0.07) (0.01) (0.00)
Capital Work in Progress 0.00 0.00 0.00 -- 0.00 0.00
(0.12) (0.15) (0.18) (0.24) (0.00) (0.00)
Note: Figures in the brackets are for previous year.
2.1.13.8 Effect of one percentage point change in the assumed inflation rate in case of valuation of benefits under post
retirement medical benefit scheme
Rs Crs
Effect of one percentage
point increase in medical
cost trend rateParticulars
Effect of one percentage
point decrease in medical
cost trend rate
On aggregate service and interest cost of post
retirement medical benefits 0.20 0.17 (0.18) (0.16)
On present value of defined benefit obligations
as at end of the period 5.58 4.86 (5.57) (4.84)
2009-10 2008-09 2009-10 2008-09
Rs. Crs
2.1.13.7 Expenses recognised in the statement of Profit and Loss Account.Rs Crs
66
RASHTRIYA ISPAT NIGAM LIMITED
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.
3.1.2 Disclosure regarding related parties for the year 2009-10
Nature of Relationship Name of the Related party
(a) Joint Ventures RINMOIL Ferro Alloys Pvt Ltd
International Coal Ventures Pvt Ltd
Nature of Relationship Name of the Related party
(b) Key Management Personnel Shri P.K.Bishnoi
Shri Y. Manohar
Shri C.G.Patil (upto 28.02.2010)
Shri K.S. Shankar (upto 31.10.2009)
Shri Umesh Chandra
Shri A.P. Choudhary (w.e.f 01.06.2009)
Shri P.Madhusudan (w.e.f 02.11.2009)
The details of transactions between the Company and the related parties, during the year, are given below:
2.1.13.9 Actuarial assumptions
Description As at 31st March 2010 As at 31st March 2009
Discount Rate (per annum) 7.5% 7%
Mortality rate LIC(1994-96) duly modified LIC (1994-96) duly modified
Withdrawal rates (per annum) Upto 30 years of age 3%; Upto 44 years Upto 30 years of age 3%; Upto 44 years of
of age 2%; Above 44 years of age 1%. age 2%; Above 44 years of age 1%.
Estimated Rate of Return on
Planned Assets 9% 9%
Medical Cost Trend Rates 6% of Hospital Cost and Medi-claim 6% of Hospital Cost and Medi-claim
(Per Annum) Premium Premium
The estimate of future salary increases considered in actuarial valuation takes into account inflation rate,
seniority, promotion and other relevant factors on long term basis.
Nature of Transaction
Joint venture Key Management PersonsSchedule No and/or Account
Head of the Financial
statements
As at 31st
March 2010
As at 31st
March 2009
As at 31st
March 2010
As at 31st
March 2009
1. Investments 0.20 0.00 -- -- 09 - Investments - Trade
2. Other Loans/advances 0.65 0.00 0.03 0.01 14 - Loans & Advances
For the Year ended For the Year ended
31st March 31st March 31st March 31st March
2010 2009 2010 2009
1. Remuneration -- -- 1.23 0.58 22 - Employee remuneration
& benefits
2. Miscellaneous Expenses 0.30 0.00 -- -- 25 - Other Expenses &
Provisions
Rs. Crs
67
28th Annual Report 2009-10
3.1.3 Since the Lease transactions of the Company, are incidental to the Company's main business of production &
sale of Iron & Steel products, specific disclosures as per Accounting Standard (AS) 19 on 'Leases', are not
considered necessary.
3.1.4 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'.
3.1.5 Licensed capacity, installed capacity & actual production
(Tonnes in '000s)
2009-10 2008-09
Product Installed Actual Installed Actual
Capacity Production Capacity Production
(a) Wire Rods 850 1016 850 972
(b) Light&Medium Merchant Products-Bar Mill 710 870 710 825
(c) Saleable Billets 246 100 246 75
(d) Medium Merchant Structural Mill 850 1073 850 748
Total 2656 3059 2656 2620
(e) Pig Iron 556 408 556 322
(f) Granulated Slag 1440 1334 1440 1381
(g) Coke ovens By-products 186 169 186 140
Note : Licensed capacity not applicable in terms of Government of India notification No. S.O.477(E), dated 25th July, 1991.
3.1.6 Previous year's figures have been rearranged / regrouped wherever necessary to confirm to current year's
classification.
68
RASHTRIYA ISPAT NIGAM LIMITED
As per our report of even date
For B.V. RAO & CO
Chartered Accountants
Regn. No (F.R.N) 003118S
Sd/-
(CA A.R. UNNI)Partner
M.No : 07447
For and on behalf of Board of Directors
Sd/- Sd/-(P.K.Bishnoi) (P. Madhusudan)
Chairman-cum-Managing Director Director (Finance)
Sd/-(P Mohan Rao)
Company Secretary
Place : Visakhapatnam
Date : 24th June 2010
4.0 CASH FLOW STATEMENT Rs Crs
2009-10 2008-09
A. Cash flow from Operating activities
Net Profit / (Loss) before taxation 1247.65 2026.59
Add / (Less) Adjustments for:
Depreciation 277.17 240.78
Interest and Finance Charges 77.55 87.47
Provisions (107.14) (371.37)
Unrealised Foreign Exchange (Gain) /Loss (11.21) 47.85
(Profit)/Loss on sale of fixed assets (1.02) (0.47)
Finished goods consumed for capital jobs (94.90) (80.87)
Interest Income (534.71) (787.21)
Operating Profit Before working capital changes 853.39 1162.77
Adjustments for
(Increase) / Decrease in Inventories 763.76 (1454.13)
(Increase) / Decrease in Sundry debtors 10.09 (97.86)
Decrease in Loans & Advances 204.67 388.80
Increase in Liabilities 281.99 382.23
Cash generated from operating activities 2113.90 381.81
Less: Income Tax paid including Fringe Benefit Tax (491.00) (716.04)
Net cash from / (used in) operating activities 1622.90 (334.23)
B. Cash flow to Investing activity
Purchase of Fixed Assets (3276.58) (2038.63)
Investments (0.20) 0.00
Proceeds from sale of Fixed Assets 35.28 2.29
Interest received 656.22 820.73
Net cash from / (used in) investing activity (2585.28) (1215.61)
C. Cash flow to Financing Activity
Proceeds from/(Repayment of) Secured Loans (500.44) 574.94
Proceeds from/(Repayment of) unsecured Loans 725.23 (7.91)
Interest and Finance charges (74.22) (92.13)
Dividend Paid (339.18) 0.00
Dividend Tax Paid (57.64) 0.00
Net cash from / (used in) Financing Activity (246.25) 474.90
Net Increase / (decrease) in Cash & Cash equivalents (A+B+C) (1208.63) (1074.94)
Opening Balance of Cash & Cash equivalents 6624.17 7699.11
Closing Balance of Cash & Cash equivalents 5415.54 6624.17
(Represented by Cash & Bank Balances - Schedule 12 )
Notes: 1 This statement has been prepared under the "Indirect Method" as set out in the Accounting Standard 3.
2 Significant Accounting Policies and Notes to Accounts (Schedule -28) form part of the Cash Flow Statement.
3 Cash and Cash equivalent balances as referred at note 1.3.2.1 are not available for use.
4 Previous year's figures have been rearranged / regrouped wherever necessary to confirm to current year's
classification.
69
28th Annual Report 2009-10
5.0 Balance Sheet Abstract and Company’s General Business Profile
I. Registration Details
CIN U 2 7 1 0 9 A P 1 9 8 2 G O I 0 0 3 4 0 4
Registration No. 3 4 0 4 State Code 0 1
Balance Sheet Dale 3 1 0 3 2 0 1 0
Date Month Year
II. Capital raised during the year (Amount in Rs. Lakhs)
Public Issue Rights Issue
N I L N I L
Bonus Issue Private Placement
N I L N I L
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Lakhs)
Total Liabilities Total Assets
1 8 5 2 3 2 1 1 8 5 2 3 2 1
Sources of Funds
Paid-up Capital Reserves & Surplus
7 8 2 7 3 2 5 0 5 7 6 8
Secured Loans Unsercured Loans
4 0 7 2 8 8 2 5 2 7
Application of Funds
Net Fixed Assets Investments
8 9 7 2 3 0 2 5
Net Current Assets Miscellaneous Expenditure
5 2 4 2 8 2 N I L
Accumulated Loss
N I L
IV. Performance of Company (Amount in Rs. Lakhs)
Turnover Total Expenditure
1 0 6 3 4 6 3 9 3 1 9 0 3
Profit Before Tax Profit After Tax
1 2 4 7 6 5 7 9 6 6 7
Earnings per Share in Rs. Dividend (%)
1 1 4 Equity: 1.63 Preference: 7
V. Generic Names of Three principal Products/Services of Company(As per Monetary Terms)
Item Code No. (ITC Code) 7 2 1 3 9 1 0 9
Product Description W I R E R O D
Item Code No. (ITC Code) 7 2 0 1 1 0 0 0
Product Description P I G I R O N
Item Code No. (ITC Code) 7 2 1 4 2 0 0 9
Product Description R E B A R S
70
RASHTRIYA ISPAT NIGAM LIMITED
Chief Executive Officer (CEO) and
Chief Financial Officer (CFO) Certification
We, P.K. Bishnoi, Chief Executive Officer and Chairman-cum-Managing Director and P. Madhusudan, Chief Financial
Officer and Director (Finance) of RINL, to the best of our knowledge and belief, certify that:
1. We have reviewed the Balance Sheet and Profit and Loss Account and all its Schedules and Notes on Accounts, as well
as the cash flow statements and the Directors' Report;
2. Based on our knowledge and information, these statements do not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the statements made;
3. Based on our knowledge and information, the financial statements, and other financial information included in this
Report, present in all material respects, a true and fair view of the Company's affairs, the financial condition, results of
operations and cash flows of the Company as of, and for, the periods presented in this report, and are in compliance with
the existing Accounting Standards and / or applicable Laws and Regulations;
4. To the best of our knowledge and belief, no transactions entered into by the Company during the year are fraudulent,
illegal or violative of the Company's Code of Conduct;
5. We have disclosed based on our most recent evaluation, wherever applicable, to the Company's Auditors and the Audit
Committee of the Company's Board of Directors (and persons performing the equivalent functions):
(a) All deficiencies in the design or operation of internal controls, which could adversely affect the company's ability to
record, process, summarize and report financial data, and have identified for the Company's Auditors, any
material weaknesses in internal controls over financial reporting including any corrective actions with regard to
deficiencies;
(b) Significant changes in internal controls during the year covered by this Report;
(c) All significant changes in Accounting Policies during the year, if any, and that the same have been disclosed in the
notes to the financial statements;
6. We further declare that all Board Members and Senior Managerial personnel have affirmed compliance with the Code of
Conduct for the current year.
(P. Madhusudan) ( P. K. Bishnoi)
CFO & Director (Finance) CEO & Chairman-cum-Managing Director
Place : Visakhapatnam
Date : 08-06-2010
71
28th Annual Report 2009-10
AUDITORS' REPORT
To the Members of Rashtriya Ispat Nigam Limited
1. We have audited the attached Balance Sheet of Rashtriya Ispat Nigam Limited, as at 31st March 2010, and
also the Profit and Loss account and the Cash Flow Statement for the year ended on that date annexed thereto.
These financial statements are the responsibility of the Company's Management. Our responsibility is to express an
opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor's report) Order, 2003, issued by the Central Government of India in terms of
Sub-section (4A) of Section 227 of the Companies Act 1956, and on the basis of such checks as we consider
appropriate and according to the information and explanations given to us, we enclose in the annexure a statement
on the matters specified in paragraph 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that :
(a) We have obtained all the information and the explanations, which to the best of our knowledge and belief
were necessary for the purpose of our audit;
(b) In our opinion, proper books of Accounts as required by law have been kept by the company so far as appears
from our examination of those books and proper returns adequate for the purposes of our audit have been
received from the branches not visited by us;
(c) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in
agreement with the books of account and with the returns from branches;
FF 1, 49-28-12, Satyalakshml Vinayaka Towers, Madhuranagar, Visakhapatnam - 530 016
Phone : Off : 0891 2549707 / 2549561, Res : 0891 2799234 / 25518297, Mobile : 93931 03175, 93931 00103
Branch Office at Hyderabad
B.V. RAO & Co.Chartered Accountants
72
RASHTRIYA ISPAT NIGAM LIMITED
FF 1, 49-28-12, Satyalakshml Vinayaka Towers, Madhuranagar, Visakhapatnam - 530 016
Phone : Off : 0891 2549707 / 2549561, Res : 0891 2799234 / 25518297, Mobile : 93931 03175, 93931 00103
Branch Office at Hyderabad
B.V. RAO & Co.Chartered Accountants
(d) In our opinion, the Balance Sheet, Profit and Loss Account and cash Flow Statement dealt with by this report,
read together with note 1.3.1 in schedule 28 to accounts, comply with Accounting Standards referred to in
Sub-Section (3C) of Section 211 of the Companies Act, 1956;
(e) The Provisions of section 274(1) (g) are not applicable to Government Companies vide Notification No.
G.S.R. 829 (E) dated 21-10-2003 as declared by the Central Government;
(f) With regard to the Cess payable under Section 441 A, the company, vide note 2.1.5 in Schedule 28 to the
Accounts, had neither provided nor paid any amount, as the Government of India had not framed
any rules/guidelines in this regard.
(g) In our opinion and to the best of our information and according to the explanations given to us, the said
accounts, subject to and read together with the significant Accounting Policies and Notes forming
part of accounts given by way of Schedule 28 to the Accounts, give the information required by the
companies Act 1956, in the manner so required and give a true and fair view inconformity with the accounting
principles generally accepted in India;
(i) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March 2010;
(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.
Place : Visakhapatnam FOR B.V. RAO & Co.
Date : 24th June 2010 Chartered Accountants
Regd. No. (F.R.N) 003118S
Sd/-
(CA A.R. UNNI)
Partner
M.No : 07447
73
28th Annual Report 2009-10
ANNEXURE TO AUDITORS' REPORT
Referred to in paragraph 3 of our Report of even date
1. Fixed Assets
(a) The Company has maintained proper records showing full particulars including quantative details of fixed
assets.
(b) All assets have not been physically verified by the management during the year but there is a regular
programme of verification which in our opinion is reasonable having regard to the size of the
company and the nature of its assets. No material discrepancies were noticed on such verification.
(c) No substantial part of fixed assets of the company has been disposed off during the year.
2. Physical verification and reconciliation of Inventories
(a) Inventories have been physically verified during the year by the management, except stocks with custodians
referred to in Note No. 1.3.1.1 of the Notes to Accounts, which are adopted based on the book value
amounting to Rs. 8.68 crores (previous year Rs.8.13 crores) out of the total reported stock of Rs. 2451.52
crores (previous year Rs.3215.28 crores). In respect of stores and spares, company has a regular programme
of verification in a phased manner, which in our opinion, is adequate and reasonable having regard to the
nature and location of stocks.
(b) The procedure for physical verification of inventory followed by the management is reasonable and adequate
in relation to the size of the company and the nature of its business.
(c) The Company is maintaining proper records of inventory. It is observed that no material discrepancies have
been noticed on physical verification.
3. Loans and Advances to parties covered in register maintained under section 301 of the
Companies Act, 1956.
The Company had neither granted nor taken any loans, secured or unsecured, to / from companies / firms or other
parties covered in the register maintained under Section 301 of the Act ibid. In view of this, clauses (b), (c), (d)
and (e) of paragraph 4(iii) of the order are not applicable.
.. .Caro Report continued..2..
FF 1, 49-28-12, Satyalakshml Vinayaka Towers, Madhuranagar, Visakhapatnam - 530 016
Phone : Off : 0891 2549707 / 2549561, Res : 0891 2799234 / 25518297, Mobile : 93931 03175, 93931 00103
Branch Office at Hyderabad
B.V. RAO & Co.Chartered Accountants
74
RASHTRIYA ISPAT NIGAM LIMITED
..Caro Report Page..2..
4. Internal Control Procedure
In our opinion and according to the information and explanations given to us, having regard to the explanation
that some of the items purchased are of special nature and suitable alternative sources do not exist for obtaining
comparable quotations, there are adequate internal control procedures commensurate with the size of the company
and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of
goods. During the course of our audit, we have not noticed continuing failure to correct any major weaknesses in
the internal control system.
5. Transactions to be entered into Register maintained under Section 301 of the Act, ibid.
In our opinion and according to the information and explanations given to us, the transactions that need to be
entered in the Register maintained under section 301 of the companies Act, 1956 have been so entered.
6. Acceptance of Deposits from Public
The Company had not accepted any deposits from the public. Therefore, the directives issued by the Reserve
Bank of India and the provisions of Section 58A & 58AA of the Companies Act, 1956 and the rules framed there
under are not applicable.
7. Internal Audit System
In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.
8. Maintenance of Cost Records
We have broadly reviewed the books of accounts maintained by the Company pursuant to the Rules made by the
Central Government for the maintenance of Cost Records under Section 209(1) (d) of the Companies Act, 1956
and we are of the opinion that prima-facie the prescribed accounts and records have been made and maintained
in respect of the applicable products. With respect to Power Generation, Government of India has notified Cost
Audit for the year under audit. We are informed that compilation of cost accounting records is in progress. Hence,
we have not examined the cost records relating to power generation. We have not carried out a detailed examination
of the records with a view to determine whether they are accurate and complete.
.. .Caro Report continued..3..
FF 1, 49-28-12, Satyalakshml Vinayaka Towers, Madhuranagar, Visakhapatnam - 530 016
Phone : Off : 0891 2549707 / 2549561, Res : 0891 2799234 / 25518297, Mobile : 93931 03175, 93931 00103
Branch Office at Hyderabad
B.V. RAO & Co.Chartered Accountants
75
28th Annual Report 2009-10
FF 1, 49-28-12, Satyalakshml Vinayaka Towers, Madhuranagar, Visakhapatnam - 530 016
Phone : Off : 0891 2549707 / 2549561, Res : 0891 2799234 / 25518297, Mobile : 93931 03175, 93931 00103
Branch Office at Hyderabad
9. Payments and remittances to Statutory Authorities
(a) According to the records of the Company, undisputed statutory dues including Provident Fund, Income Tax,
Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material Statutory dues
applicable to it have been generally deposited regularly with the concerned authorities. On a broad examination
and according to the information and explanations given to us, we have not come across any undisputed
amounts payable in respect of the aforesaid dues that were in arrears as at 31st March 2010, for a period
of more than six months from the date they became payable.
(b) According to the explanations given to us, Company is not required to make any contribution under the
Employees' State Insurance Act.
(c) According to the information and explanations given to us, the disputed dues of Income Tax, Sales Tax,
Customs Duty, Excise Duty and Cess which have not been deposited as at 31.03.2010 are as follows :
Name of the Statute Nature of dues Forum where dispute is Amount
pending (Rs Crs)
B.V. RAO & Co.Chartered Accountants
Customs & Excise Act Excise duty and Cenvat CESTAT 68.33
-do- -do- Honorable High Court of
Andhra Pradesh 8.61
-do- Customs CESTAT 7.16
The Andhra Pradesh
General Sales Tax Act Sales Tax STAT 5.18
& C S T Act
-do- -do- Honorable High Court of
Andhra Pradesh 1181.97
UP Trade Tax Act ST Appeal (Kanpur Branch) Tribunal Bench, Agra 0.10
Orissa Sales Tax Act Sales Tax Addl. Commissioner,
Sales Tax, Orissa 0.28
R&D Cess Act R&D Cess High Court of Kolkata 3.38
.. .Caro Report continued..4..
76
RASHTRIYA ISPAT NIGAM LIMITED
10. Accumulated Losses
The Company did not have any accumulated losses at the end of the financial year. The Company has not incurred
cash losses in this financial year covered by our audit and also in the immediately preceding financial year.
11. Repayment of dues to Banks or Financial Institutions
In our opinion and according to the records produced to us, the Company has not defaulted in repayment of its
dues to any Financial Institution or Bank during the year.
12. Loan and Advances on the basis of security by way of pledge of Shares etc.
In our opinion and according to the information and explanations given to us, the Company has not granted any
loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
13. Chit Fund or Nidhi / Mutual Benefit Fund / Society
In our opinion, the Company is not a chit fund or a nidhi /mutual benefit fund / society. Therefore, the provisions
of paragraph 4(xiii) of the order are not applicable to the Company.
14. Trading in Shares etc.
In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments.
Accordingly, the provisions of paragraph 4(xiv) of the order are not applicable to the Company.
15. Guarantee for Loan taken by others
We are informed that the Company has not given any guarantee for loans taken by others from banks or financial
institutions.
16. Application of Term Loans
According to information and explanations given to us, during the year the Company has not availed of any term
loan, within the meaning of the paragraph 4(xvi) of the order.
.. .Caro Report continued..5..
FF 1, 49-28-12, Satyalakshml Vinayaka Towers, Madhuranagar, Visakhapatnam - 530 016
Phone : Off : 0891 2549707 / 2549561, Res : 0891 2799234 / 25518297, Mobile : 93931 03175, 93931 00103
Branch Office at Hyderabad
B.V. RAO & Co.Chartered Accountants
77
28th Annual Report 2009-10
FF 1, 49-28-12, Satyalakshml Vinayaka Towers, Madhuranagar, Visakhapatnam - 530 016
Phone : Off : 0891 2549707 / 2549561, Res : 0891 2799234 / 25518297, Mobile : 93931 03175, 93931 00103
Branch Office at Hyderabad
17. Usage of Short Term and Long Term Funds
According to the information and explanations given to us and on an overall examination of the Balance Sheet of
the Company, we report that no funds raised on short-term basis have been used for long-term investment and
vice versa,
18. Preferential Allotment of Shares
According to the information and explanations given to us, the Company has not made any preferential allotment
of shares to parties and companies covered in the register maintained under Section 301 of the Act ibid, during
the year.
19. Issue of Debentures
According to the information and as per records, the Company has not issued debentures during the year.
20. End use of money raised by Public Issue
According to the information and explanations given to us, the Company has not raised money by public issues
during the year.
21. Frauds
According to the information and explanations given to us, no fraud on or by the Company has come to our notice
or reported to us during the course of our audit.
Place : Visakhapatnam
Date : 24th June 2010
For B.V. RAO & CO
Chartered Accountants
Regn. No (F.R.N) 003118S
Sd/-
(CA.A.R. UNNI)
Partner
M.No : 07447
B.V. RAO & Co.Chartered Accountants
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RASHTRIYA ISPAT NIGAM LIMITED
REPORT ON CORPORATE GOVERNANCE
(A) Company's Philosophy
The philosophy of the company in relation to corporate governance is to ensure Transparency, Disclosures and Reporting
that conforms fully with laws, regulations, guidelines, etc. and to promote ethical conduct throughout the organization.
RINL believes in conforming to the highest standards of corporate governance in the country. It recognizes that each
member of the Board owes his/her first duty for protecting and furthering the interest of the Company.
(B) Board of Directors
Composition of the Board
The Company is managed by the Board of Directors, which formulates strategies, policies and reviews its performance
periodically. As per Articles of Association (AOA) of the Company, the number of Directors shall not be less than five and
more than fourteen.
As on 31st March, 2010, the Board of Directors of the Company comprised a full time Chairman-cum-Managing
Director, (i.e. Executive Chairman) holding additional charge of Director(Projects) from 1st April ’09 to 31st May '09 and
that of Director (Commercial) (from 1st March 2010 to 31st March 2010 and continues to hold charge till the new
incumbent joins), four Functional Directors i.e. Director (Operations), Director (Personnel), Director (Projects) and Director
(Finance), one Government nominee Director and one Part-time non-official Director (i.e. Independent Director).
Scheduling and selection of Agenda Items for Board/Committee Meetings
The Meetings are convened by giving appropriate advance notice after obtaining approval of the Chairman of the Board
/ Committee. Detailed agenda, management reports and other explanatory statements are circulated in advance in the
fixed agenda format amongst the members for facilitating meaningful, informed and focused decisions at the Meetings.
To address specific urgent need, meetings are also being called at a shorter notice. In case of exigencies resolutions are
also sometimes passed by circulation.
The agenda papers are prepared by the concerned officials, sponsored by the concerned functional Directors and in
most cases concurred by Director (Finance) and submitted for obtaining approval of the Managing Director, well in
advance. Duly approved agenda papers are circulated amongst the Board Members by the Company Secretary.
The Members of the Board/Committee have complete access to all information of the Company. The Board is also free
to recommend inclusion of any matter in agenda for discussion. If necessary, senior management officials are called to
provide additional inputs to the items being discussed by the Board/Committee.
Recording minutes of proceedings at the Board/Committee Meeting
Minutes of the proceedings of each Board / Committee meeting are recorded. Minutes are approved by the Chairman of
the Board / Committee. The confirmed minutes of the proceedings of the meetings are consecutively filed in permanent
record form of Minutes Book.
Follow-up mechanism
The guidelines for the Board/Committee Meetings facilitate an effective post meeting follow-up, review and reporting
process for the action taken on decisions of the Board and Committee. The follow-up Action Taken Report (ATR) on the
decisions / instructions / directions of the Board / Committee is submitted to the Board/Committee regularly.
Board Meetings
The Board meets regularly and is responsible for the proper direction and management of the Company. During the
financial year ended March, 31, 2010, six Board Meetings were held on 4th May '09,4th July '09, 28th July '09,
15th Sept '09, 18th Dec '09 and 9th March '10 respectively.
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28th Annual Report 2009-10
Composition and Attendance
The composition of the Board, details of attendance etc. are as under :
Name of the Category of No. of Board Attendance at No. of other
Directors Directorship Meetings attended last AGM directorship
during 2009-10 held as on
31.3.2010 #
Shri P K Bishnoi CMD - holding addi-tional 6 Yes 2
charge of Director
(Projects) from 01.04.09
to 31.5.09 and charge of
Director (Commercial) from
1.3.10 to 31.3.10(continuing)
Shri Y Manohar WTD 6 Yes NIL
Shri K S Shankar** WTD 4 Yes NIL
Shri C G Patil** WTD 5 Yes 5
Shri Umesh Chandra WTD 6 Yes NIL
Shri A P Choudhury* WTD 5 Yes NIL
Shri P.Madhusudan* WTD 2 -- NIL
Shri U P Singh * & ** Non-ED 1 2
Shri B S Meena** Non-ED 6 -- 4
Dr Dalip Singh* & ** Non-ED 5 -- 4
Prof Ramesh Chandra* Non-ED 3 NIL
Shri RSSLN Bhaskarudu** Non-ED -- -- --
Dr V K Bhalla** Non-ED 1 -- --
Dr Jagat Pal** Non-ED 5 -- --
CMD - Chairman-cum-Managing Director, WTD - Whole-time Director, Non-ED - Non-Executive Director
# Does not include Memberships / Office Bearers i.e. Chairman etc. in Institutions / University /
Non-Corporate Bodies like Societies etc.
Note (*)
1. Shri A P Choudhary, Director (Projects) appointed w.e.f.1st June, 2009
2. Shri P Madhusudan, Director (Finance) appointed w.e.f. 2nd Nov., 2009
3. Shri U P Singh, Jt Secretary (Steel) appointed as Director from 12th Nov. 2009
4. Dr Dalip Singh, Jt Secretary (Steel) appointed as Director w.e.f. 2nd March, 2010
5. Prof. Ramesh Chandra , Independent Director, appointed w.e.f. 3rd August, 2009.
(**)
1. The period of tenure (3 years) of Shri RSSLN Bhaskarudu, part-time non-Official
Director (Independent Director) was completed on 25th April 2009.
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RASHTRIYA ISPAT NIGAM LIMITED
2. The period of tenure (3 years) of Dr V K Bhalla, part-time non-Official Director
(Independent Director) was completed on 28th June, 2009.
3. Shri K S Shankar, Director (Finance) superannuated on 31st Oct. 2009.
4. Dr Dalip Singh, Jt Secretary (Steel) resigned w.e.f. 12th Nov. 2009.
5. Shri U P Singh, Jt Secretary (Steel) resigned w.e.f. 20th Jan. 2010
6. Shri C G Patil, Director (Commercial) superannuated on 28th Feb 2010.
7. Dr Jagat Pal, Independent Director resigned w.e.f. 2nd March, 2010.
8. Shri B S Meena, Spl Secretary and Financial Adviser resigned w.e.f. 31st March 2010.
The Board has reserved certain items of governance for its review, including the approval of annual and interim financial
results, disposals and joint ventures, as well as material agreements, major capital expenditure, major sale contracts,
employees remuneration and perquisites, manpower plans and long term plans for its review and approval.
The details of remuneration to whole time Directors are given below :
(Value in Rupees)
Name of the Director Salaries & *Retirement and other Total
Allowances benefits (Rs.) (Rs.)
(Rs.)
Shri P K Bishnoi, CMD 2041438.00 5870.00 2047308.00
Shri Y Manohar, Director (Personnel) 1963757.00 5988.00 1969745.00
Shri C G Patil, Director (Comml)
(upto 28.02.2010) 1701045.00 5121.00 1706166.00
Shri K S Shankar, Director (Fin.)
(upto 31.10.2009) 709015.00 353042.00 1062057.00
Shri Umesh Chandra, Director (Oprns) 1249442.00 6143.00 1255585.00
Shri A P Choudhary, Director (Proj.) 1050653.00 5266.00 1055919.00
Shri P Madhusudan, Director (Fin) 531713.00 2540.00 534253.00
(*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 Part-time
official Directors by the Company.
Part-time non-official Directors (Independent Directors)
The part- time non-official directors (i.e. independent Directors) are appointed by Government of India as Director for a
period of 3 years from the date of assumption of charge or until further orders, whichever is earlier.
83
28th Annual Report 2009-10
An amount of Rs.10,000/- is paid to the Part-time non-official Directors as sitting fee which was enhanced to
Rs 20,000/- with effect from 18th Dec' 09 for each Board / Board Sub-Committee Meetings attended by them. During the
year, the total amount paid to them is as follows :
1. Shri RSSLN Bhaskarudu Rs. 80,000/-
2. Dr V K Bhalla Rs. 1,00,000/-
3. Dr Jagat Pal Rs. 3,40,000/-
4. Prof. Ramesh Chandra Rs. 3,70,000/-
Sitting fees is the only remuneration paid by the Company to the part-time non-official Directors.
Board constituted the following Committees with specific responsibilities assigned to each of these Committees.
AUDIT COMMITTEE
Composition
The Audit Committee was constituted during the year 2006-07 in line with the OM No.18(8)/2005-GM, dated 16th June
2005 issued by Department of Public Enterprises, Govt. of India. The composition of Audit Committee as on 1.3.2010
was as follows :
Dr Jagat Pal Chairman Independent Director
Prof. Ramesh Chandra Member Independent Director
Shri Y Manohar Member Director (Personnel) - Functional Director
The main functions of the Audit Committee are as follows :
1. Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure
that the financial statement is correct, sufficient and credible.
2. Recommending to the Board the fixation of Audit Fees.
3. Approval of payment to Statutory Auditors for any other services rendered by the Statutory Auditors.
4. Reviewing, with the management, the annual financial statements before submission to the Board for approval,
with particular reference to :
a) Matters required to be included in the Directors' Responsibility Statement to be included in the Board's Report
in terms of Clause (2AA) of Section 217 of the Companies Act, 1956;
b) Changes, if any, in accounting policies and practices and reasons for the same;
c) Major accounting entries involving estimates based on the exercise of judgement by Management;
d) Significant adjustments made in the financial statements arising out of audit findings;
e) Compliance with legal requirements relating to financial statements;
f) Disclosure of any related party transactions;
g) Qualifications in the Draft Audit Report;
5. Reviewing, with the management, the quarterly financial statements before submission to the Board for approval.
6. Reviewing, with the management, performance of Statutory and Internal Auditors, adequacy of the internal control
systems.
7. 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.
84
RASHTRIYA ISPAT NIGAM LIMITED
8. Discussion with Internal Auditors any significant findings and follow up thereon.
9. Reviewing the findings of any internal investigations by the Internal Auditors into matters where there is suspected
fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the
Board.
10. Discussion with Statutory Auditors before the Audit commences about the nature and scope of audit as well as
post-audit discussion to ascertain any area of concern.
11. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders
(in case of non-payment of declared dividends) and creditors.
12. To review the functioning of the Whistle Blower Mechanism, in case the same is existing in the Company.
13. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
14. To review the follow up action on the audit observations of the C&AG audit.
15. To review the follow up action taken on the recommendations of Committee on Public Undertakings (COPU) of the
Parliament.
16. Provide an open avenue of communication between the independent auditor, internal auditor and the Board of
Directors.
17. Review and pre-approve all related party transactions in the Company. For this purpose, the Audit Committee may
designate a member who shall be responsible for pre-approving related party transactions.
18. Review with the independent auditor the co-ordination of audit efforts to assure completeness of coverage, reduction
of redundant efforts, and the effective use of all audit resources.
19. Consider and review the following with the independent auditor and the management :
- The adequacy of internal controls including computerized information system controls and security, and
- Related findings and recommendations of the independent auditor and internal auditor, together with the
management responses.
20. Consider and review the following with the management, internal auditor and the independent auditor:
- Significant findings during the year, including the status of previous audit recommendations;
- Any difficulties encountered during audit work including any restrictions on the scope of activities or access
to required information.
Explanation : (i) The term "related party transactions" shall have the same meaning as containing in the
Accounting Standard 18, Related Party Transactions, issued by the Institute of Chartered
Accountants of India.
Explanation : (ii) If the company has set up an Audit Committee pursuant to provision of the Companies Act, the
said Audit Committee shall have such additional functions / features as contained in these
guidelines.
REVIEW OF INFORMATION BY AUDIT COMMITTEE
1. Management Discussion and Analysis of financial condition and results of operations;
2. Statement of significant related party transactions (as defined by the Audit Committee), submitted by Management;
3. Management letters / letters of internal control weaknesses issued by the statutory auditors;
4. Internal Audit Reports relating to internal control weaknesses;
5. The appointment and removal of the Chief Internal Auditor shall be placed before the Audit Committee; and
6. Certification/declaration of financial statements by the Chief Executive i.e. CMD / Director (Finance).
85
28th Annual Report 2009-10
The primary function of the Audit Committee is to assist the Board of Directors in fulfilling its oversight responsibilities by
reviewing the financial reports; the Company's systems of internal controls regarding finance, accounting and legal
compliance that management and the Board have established; and the Company's auditing, accounting and financial
reporting process generally.
The powers of the Committee include the following :
1) To investigate any activity within its terms of reference.
2) To seek information from any employee.
3) To obtain outside legal or other professional advice.
4) To secure attendance of outsiders with relevant expertise, if it considers necessary.
Meetings of Audit Committee
During the year, five Meetings of the Audit Committee were held on 25th April, 22nd June, 15th Sept., 17th December,
2009 and 23rd February, 2010 and all the Meetings were attended by all the Members of the Committee. The Company
Secretary is also the Secretary to the Audit Committee. The Minutes of the Audit Committee Meetings are also put up to
Board in their subsequent Meetings as an Item for information. The Chairman of the Audit Committee apprises the Board
about the observations of the Audit Committee during the Board Meeting and also attends the Annual General Meeting of
the Company.
High Power Steering Committee (HPSC)
In line with the directions of the Govt of India given, while approving the Expansion Project, the Board of RINL constituted
a High Power Steering Committee for overseeing the implementation of Expansion of VSP to 6.3 MT per year Liquid Steel
and the composition of the Committee as on 31.3.2010 is as follows :
a) Chairman-cum-Managing Director : Chairman
b) Joint Secretary, Ministry of Steel : Member
c) Prof Ramesh Chandra : Member
(Part-time non-official Director)
d) Director (Finance) : Member
e) Functional Director (In-charge of Projects) : Member
f) Company Secretary : Convener
ED (Finance)/GM (Finance) will be an alternate Member in the absence of Director (Finance).
HOD of the Projects Division in the rank of ED or GM will be a permanent invitee.
During the year, two Meetings of the HPSC were held on 15th Sept. 2009 and 10th March, 2010
Committee for Award of Contracts relating to Project Expansion Contracts
In respect of Expansion Project, to approve award of Contracts / Orders valuing upto Rs.500 Crores, the Board has
constituted a Committee called Committee for Award of Contracts relating to Project Expansion Contracts. The composition
of the Committee as on 31.3.2010 is as follows :
1. Chairman-cum-Managing Director : Chairman
2. Director (Finance) : Member
3. Director (In-charge of the Projects Division) / Director (Projects) : Member
4. Part-time non-official Director, RINL : Member
(Independent Director)
5. Part-time non-official Director, RINL : Member
(Independent Director)
6. Company Secretary : Convener
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RASHTRIYA ISPAT NIGAM LIMITED
Committee for Award of Contracts (CAC)
The composition of the Committee for Award of Contracts as on 31.3.2010 is as follows :
1. Chairman-cum-Managing Director : Chairman
2. Independent Director : Member
3. Prof. Ramesh Chandra, Independent Director : Member
4. Director (Finance) : Member
5. The concerned Functional Director : Member
6. Company Secretary : Convenor
The above Committee is empowered to approve the proposals relating to AMR Schemes and other Contracts of Revenue
and Capital Nature under Operational and other requirements for the existing plant and functioning of the Company
upto Rs.250 crores.
The above Committee is also empowered to approve all Capital expenditure including Additions/Modifications/Replacement
of the existing facilities or Expansion of existing facilities in each case (not included in the approved capital budget for the
year subject to overall budgetary limit) as per the above limit upto Rs.250 crores.
During the year, one Meeting was held on 18th December, 2009.
Committee of Management
With a view to have more flexibility in Operations, a Committee called Committee of Management has been constituted
with all the Functional Directors.
The composition of the Committee as on 31.3.2010 is as follows :
1. CMD : Chairman
2. Director (Personnel) : Member
3. Director (Operations) : Member
4. Director (Finance) : Member
5. Director (Projects) : Member
The Quorum for the Meeting is Chairman, Director (Finance) and the concerned Functional Director.
The above Committee is empowered to approve proposals upto Rs 100 Crores and have full powers for purchase of coal
materials like Medium Coking Coal, Boiler Coal, Iron Ore, etc. from Public Sector Undertakings/Government Agencies.
During the year Twenty Meetings of COM were held.
(C) Statutory Auditors
M/s B V Rao & Co, Visakhapatnam have been appointed as Statutory Auditors of the Company for the financial year 2009-
10 by the C&AG as per Section 619(2) of the Companies Act, 1956.
(D) Fees to Statutory Auditors
The fee payable to the Statutory Auditors for the year was Rs. 6 lakhs.
(E) General Body Meetings
Particulars of the Annual General Meetings of the Company held during last 3 years :
Year Date Time Location
2006-07 03.09.2007 3.00 PM Admn Building , Vizag
2007-08 27.08.2008 3.00 PM Admn Building , Vizag
2008-09 01.08.2009 3.00 PM Admn Building , Vizag
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28th Annual Report 2009-10
(F) Disclosures
As per the disclosures given by the Directors of the Company, there were no materially related party transactions that
have potential conflicts with the interests of the Company at large.
(G) Means of Communication
Communication is the key to a transparent and fair organization .
At VSP, all possible means of communication are brought into the system. Various in-house magazines bear testimony
to this. To list a few:
l Ukkuvani
l KM News
l Vikas Dhara
l Sugandh
l Green Leaf
l Annual Report of the Company.
l Spandana
l Sehat
Besides the above, the Company uploads the required information on its website i.e. www.vizagsteel.com.
(H) Training of Board members
One of the part time non official director attended a training program arranged by the Department of Public Enterprises
during the year. In addition, at the Board / Committee Meetings, detailed presentations are made by Senior executives/
Professionals/ Consultants on business related issues, risk assessment etc. facilitating the Board Members to know the
details of the same.
(I) Whistle Blower Policy
The Company has not yet established a Whistle Blower Policy for the employees, Nonetheless, no employee has been
denied access to the Audit Committee.
(J) Certification/declaration of financial statements by the Chief Executive i.e. CMD / Director (Finance).
The CMD and Director (Finance) have provided the certification regarding the financial statements for the year
2009-10.
(K) Code of Conduct for Members of the Board and Senior Management
The Company is committed to conduct its business in accordance with the highest standards of business ethics and
comply with applicable laws, rules and regulations. A code of conduct, evolved and was adopted by the Board applicable
to all Members of the Board and Senior Management who have confirmed compliance with the Code of Conduct for the
year under review. A copy of the Code has been placed on the Company's website www.vizagsteel.com in addition to
intranet portal of the Company Affairs Deptt.
A declaration signed by Chairman is given below :
"I hereby confirm that:
The Company has obtained from the Members of the Board and Senior Management, affirmation that they have complied
with the Code of Conduct for Directors and Senior Management in respect of the Financial year 2009-10".
P K Bishnoi
Chairman
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RASHTRIYA ISPAT NIGAM LIMITED
P.N.Rao & Co.,COMPANY SECRETARIES
D.No. 30-11-11/2, Dabagardens, Opp. Income Tax Office, Visakhapatnam - 530 020. & : 2751934
CERTIFICATE ON COMPLIANCE OF GUIDELINES ONCORPORATE GOVERNANCE
To
The Members,
Rashtriya Ispat Nigam Ltd., Visakhapatnam
1. We have examined all relevant records of Rashtriya Ispat Nigam Limited, a Govt. of India Undertaking (unlisted
company), for the purpose of certifying compliance of conditions of Corporate Governance for the financial
year ended 31st March 2010 pursuant to the Guidelines on Corporate Governance issued by the Ministry of
Heavy Industries and Public Enterprises, Department of Public Enterprises vide their O.M. No.l8(8)/2005-GM,
dated 22nd June, 2007, We have obtained all the information and explanations which to the best of our
knowledge and belief were necessary for the purposes of certification.
2. The Compliance of Guidelines on Corporate Governance is the responsibility of the Management. Our
examination was limited to the procedures and implementation thereof, adopted by the Company for ensuring
the compliance of the Guidelines on Corporate Governance. It is neither an audit nor an expression of opinion
on financial statements of the company. Further, this certificate is neither an assurance as to the future
viability of the Company nor the efficiency or effectiveness with which the management has conducted the
affairs of the Company.
3. As per the DPE Guidelines on Corporate Governance referred to above, as the Company is having a full
time Chairman-cum-Managing Director, the number of Independent Directors are required to be at
least one third of the Board of Directors. However, the Board of Directors did not comprise of the required
number of Independent Directors during the financial year 2009-10.
4. In our opinion and to the best of our information and according to the explanations given to us and the
disclosures made in the Director's Report, we hereby certify that the Company, subject to the above, has
complied with the conditions of Corporate Governance as stipulated in the above mentioned OM.
For P.N. Rao & Co.
Company Secretaries
(P. NARASINGA RAO)
Proprietor
CP 2552
Visakhapatnam
4th June 2010
89
28th Annual Report 2009-10
P.N.Rao & Co.,COMPANY SECRETARIES
D.No. 30-11-11/2, Dabagardens, Opp. Income Tax Office, Visakhapatnam - 530 020. & : 2751934
SECRETARIAL COMPLIANCE REPORT FOR THEFINANCIAL YEAR ENDED 31st MARCH 2010
To
The Members,
Rashtriya Ispat Nigam Ltd., Visakhapatnam
We have examined the registers, records, books and papers of Rashtriya Ispat Nigam Limited, a Govt. of India Undertaking
(unlisted Company) as required to be maintained under the Companies, Act, 1956 and the rules made there under, and
also the provisions contained in the Memorandum and Articles of Association of the Company for the financial year
ended on 31st March 2010. In our opinion and to the best of our information and according to the examinations carried
out by us and explanations furnished to us by the Company, its Officers, we certify that in respect of the aforesaid
financial year :
1. Category of Company
The Company is a "Government Company" as defined under Section 617 of the Act. It is an unlisted private company.
2. Maintenance of Statutory Records
The Company has kept and maintained all registers as required to be maintained under the provisions of the Act and the
rules made there under and all entries have been duly recorded.
3. Filing of Statutory Returns / Forms
The Company has duly filed the requisite forms and returns with the Registrar of Companies, Hyderabad, under the Act
and the rules made there under.
4. Composition of Board
As per the DPE Guidelines on Corporate Governance referred to above, as the Company is having a full time Chairman-
cum-Managing Director, the number of Independent Directors are required to be at least one third of the Board of
Directors. However, the Board of Directors did not comprise of the required number of Independent Directors as on
31.3.2010.
5. Board Meetings
The Board of Directors duly met six (6) times on 4th May '09, 4th July '09, 28th July '09, 15th Sept '09, 18th Dec '09 and
9th Mar '10 respectively in respect of which meetings, proper notices were given and the proceedings were properly
recorded and signed in the minutes book maintained for the purpose.
Contd...2/-
90
RASHTRIYA ISPAT NIGAM LIMITED
Visakhapatnam
4th June 2010
6. Audit Committee
The Board has constituted an Audit Committee as required under Corporate Governance Guidelines. The Audit Committee
met five (5) times on 25th April '09, 22nd June '09, 15th Sept '09, 17th Dec '09 and 23rd Feb '10 respectively in respect of
which meetings, notices were given and the proceedings wrere properly recorded and signed in the minutes book
maintained for the purpose.
7. Disclosure of Interest
The Directors have disclosed their interest in other firms/companies to the Board of Directors pursuant to the provisions
of the Act and the rules made thereunder.
8. Annual General Meeting
The Annual General Meeting of the Company for the financial year ended on 31st March, 2009 was held on lsl August
2009. The Resolutions passed thereat were duly recorded in minutes book maintained for the purpose.
9. Extraordinary General Meeting
No Extraordinary General Meeting was held during the financial year.
10. Appointment and changes amongst Directors
The Board of Directors of the Company is duly constituted and the appointments of Directors including Managing
Director and whole time Directors have been duly made in accordance with the provisions of Articles of Association of
the Company read with relevant provisions of the Act.
11. Directors' Report
The Company has duly complied with the provisions of Section 217 of the Act relating to Directors' Report.
12. Acceptance of Public Deposits
The Company has not invited/accepted any deposits falling within the purview of Section 58A of the Act during the
financial year.
13. Appointment of Cost Auditors
The Company has appointed Cost Auditors under Section 233B of the Act, for its Power Plant operations and duly
complied with the provisions of the Act.
14. Provident Fund
The Company has deposited both employees' and employer's contribution with the VSP Employees Contributory Provident
Fund Trust within the prescribed time pursuant to Section 418 of the Act.
15. Loans to Directors
The Company being a "Private Company" and also a "Government Company", the provisions of Section 295 of the Act are
not applicable.
16. Prosecution / Penalties
There was no prosecution initiated against or show cause notice received by the Company and no fines or penalties or
any other punishment was imposed on the Company, its Directors and Officers during the financial year for offences
under the Act.
For P.N. Rao & Co.
Company Secretaries
(P. NARASINGA RAO)
Proprietor
CP 2552
91
28th Annual Report 2009-10
Annexure-A
Measures taken for conservation of energy during the year 2009-10
A. Specific Energy Consumption for the year 2009-10 was 6.44 G.cal/tLS.
The following measures have been taken during the year 2009-10 for conservation of energy.
1 Installation of VFDs (Variable Frequency Drives) in CDCP -2 lifters and all oven machines of Battery-1, 2 & 3.
2. Replacement of existing chillers with eco friendly and energy efficient chillers (6 Nos.) in Chilled Water
Plant 3 & 4.
3 Replacement of existing chillers with eco friendly and energy efficient chillers (5 Nos.) in Chilled Water Plant-1.
4 Replacement of Boiler-1 Tubular Air Heater resulting in increased BF Gas utilization.
5 Installation of HEA igniters in place of conventional IFM igniters in Boiler-5.
6 Installation of VVF drives for wagon tipplers (5 Nos.).
7 Replacement of 2 Nos. of Air Recuperators at furnace-2 in LMMM.
8 Replacement of incandescent/Fluorescent lamps with energy efficient tube lights all over the plant.
9 Installed energy savers, timer controls for reducing electrical energy consumption.
10 Installation of Polycarbonate sheets (translucent sheet) to utilize day lighting at various places to reduce electricity
load.
B. (i) Other Initiatives
1 RINL signed MoU with M/s. NEDO of Japan in May'2009 for installing 20.6 MW Waste Heat recovery system on
Sinter Cooler under Green Aid plan. This project is expected to be commissioned within 34 months from the date
of signing of MoU. The work on this project has been started and total scope of work has been divided in to several
packages and NIT for various packages is underway.
2 RINL identified CDM opportunities during expansion stage as well as existing units up-gradation for claiming carbon
credits and NIT has been issued for appointing consultants. The tendering is under process.
3 RINL is working towards implementing BS EN:16000 Energy Management System for improving energy efficiency
in the Plant.
B. (ii) Other Achievements
1. LD gas recovery plant
Total Volume of LD gas recovered 323.42 MNCum
2. Waste Heat recovery at
a. Back Pressure Turbine Station 113992 MWH
Total Power recovered
b. Gas Expansion Turbine Station
Total Power recovered 88578 MWH
C. Foreign Exchange Earnings & Outgo:
Foreign Exchange Inflow Rs. 351.73 crores
Foreign Exchange Outflow Rs. 3565.24 crores *
(* includes Rs.755.24 crores on expansion activities)
92
RASHTRIYA ISPAT NIGAM LIMITED
FORM "A"
A. Power and fuel consumption for 2009-10
1) Electricity
a) Purchased ( Net Import from AP TRANSCO) 285430 MWH
b) Gross exported 3166 MWH
c) Imported 288596 MWH
d) Own generation
- Through steam turbine / generator 1576607 MWH
- Through BPTs 113992 MWH
- Through GETS 88578 MWH
2) Coal Consumption
Boiler Coal (Indigenous) used in TPP 1284290 t
Boiler coal (Imported) used in TPP 151910 t
Imported Coking Coal 2593508 t
Imported Soft Coking coal 449253 t
US Coal 398714 t
Primary Coking Coal 2648 t
Indigenous Medium coking coal 361238 t
3) Furnace oil Consumption 1556.2 Kl
4) HSD Consumption 2244.1 Kl
B. Consumption per unit of production
Item Unit Per tonne of liquid steel production
Imported electricity kwh 84.9
Furnace oil lt 0.46
HSD lt 0.66
Coking coal
Imported Coking coal kg 763.1
Imported Soft Coking coal kg 132.2
US Coal 117.3
Primary coking coal kg 0.78
Indigenous Medium coking coal kg 106.3
Boiler coal
Boiler Coal (Indigenous) used in TPP kg 377.9
Boiler coal (Imported) used in TPP kg 44.7
Liquid Steel Production 3398564 t
93
28th Annual Report 2009-10
FORM "B"
Form for disclosure of particulars with respect to Technology Absorption
1. Specific areas in which R&D was carried out by
the company. Development of protective coatings on refractories based
on nano-materials, Noise Mapping in Rolling mills & Thermal
Power plant of VSP, Development of Lance tip design,
Technical analysis and optimization of continuous casting at
VSP using existing plant facilities, Removal of CO2 from flue
gases of VSP using algae, Pilot oven tests, Development of
new grades etc,.
2. Benefits derived as a result of the above R&D. A brief note on R&D activities taken up during Apr' 09-
March' 10 with highlights is given at Annexure-1.
3. Future plan of action. R&D projects planned for next 3 years are given at
Annexure-2
4. Expenditure on R&D
(a) Expenditure : Rs. 12.66 Crores
(b) Total R & D expenditure as a % of Turnover : 0.12 %
(Based on Turn over fig. of Rs. 10,614 Cr)
94
RASHTRIYA ISPAT NIGAM LIMITED
Sl. No. Name of the Project Tangible Benefits Intangible Benefits
1 Carbonization tests of different Optimization of Coal blend by
coal blends Pilot Oven test withdifferent
sources / type of coals
2 Development of Coke Dry Better coke quality Lesser pollution
Cooling facilities in Pilot coke oven.
2. From Joint Research Projects:
Sl. No. Name of the Project Tangible Benefits Intangible Benefits
1 Development of protective coatings Longer life of refractories with
on refractories based on nano- nano-coating.
materials
2 Technical Analysis and Optimization Identifying the Break out as the Initiation for development of
of continuous casting at VSP using main reason for Low productivity. Break out prediction system for
existing plant facilities Bloom caster.
3 Removal of CO2 from flue gases Lesser Co2 emission to Better environment
by sequestration environment
4 A feasibility study on Noise abate- Better working conditions
ment in Rolling mills & Thermal
Power plant of VSP - IISc,
Bangalore
5 Development of Lance tip design Increased productivity of converter Better blowing conditions
and better steel quality
Annexure - 1 to Form 'B'
BENEFITS DERIVED / EXPECTED FROM R&D PROJECTS
1. From Internal Projects:
95
28th Annual Report 2009-10
Annexure - 2 to Form 'B'
R&D PROJECTS PLANNED FOR NEXT 3 YEARS
1. Mathematical modeling of sintering process.
2. Under ground water resources in Steel Township - a comprehensive study.
3. Cut length optimization of Blooms at CCS.
4. Improvement of MgO - C brick quality to enhance the Converter life.
5. Study of coal flow problems in RMHP, TPP of VSP.
6. Development of new grades of steel especially for Forging, Automobile, Electrode industries
etc.
7. Prevention of Corrosion in Benzol tanks.
8. Preparation of metallized nuggets using Iron ore fines & metallurgical wastes.
9. Break-out prediction system for CCM.
10. Optimizing the design and operating parameters of BOF Vessel through simulations as well
as cold model experiments.
11. Improvement of Snorkel refractory (Castable) life and TLC spout castable life.
12. Logistics Management for integration of BOF, secondary metallurgy and Continuous casting.
96
RASHTRIYA ISPAT NIGAM LIMITED
VISION
To be a continuously growing world class company we shall:
H Harness our growth potential and sustain profitable growth.
H Deliver high quality and cost competitive products and be the first choice of
customers.
H Create an inspiring work environment to unleash the creative energy of people.
H Achieve excellence in enterprise management.
H Be respected corporate citizen, ensure clean and green environment and develop
vibrant communities around us.
MISSION
H To attain 16 (MT) million tonnes liquid steel capacity through technological up-
gradation, operational efficiency and expansion; to produce steel at international
standards of cost and quality; and to meet the aspirations of the stakeholders.
OBJECTIVES
H Expand plant capacity to 6.3 Mt by 2011-12 with the mission to expand further
in subsequent phases as per Corporate Plan.
H Revamping existing Blast Furnaces to make them energy efficient to contemporary
levels and in the process increase their capacity by 1 Mt, thus total hot metal
capacity to 7.5 Mt.
H Be amongst top five lowest cost liquid steel producers in the world.
H Achieve higher levels of customer satisfaction.
H Vibrant work culture in the organization.
H Be proactive in conserving environment, maintaining high levels of safety &
addressing social concerns .
Vision , Mission and Objectives