1

(As on the date of 32nd Annual General Meeting held on 29th September, 2014)

BOARD OF DIRECTORS

Shri P. MadhusudanChairman-cum-Managing Director

Shri Lokesh Chandra, IAS

Jt. Secy (Steel), MoS. & Director

Shri V K Thakral, IAS

AS & FA, MoS. & Director

Shri T.V.S.Krishna KumarDirector (Finance)

Shri P.C.MohapatraDirector (Projects)

Dr.G.B.S.PrasadDirector (Personnel)

Shri D.N.RaoDirector (Operations)

Shri T K ChandDirector (Commercial)

Shri Ashhok Kumar JainFCA

Independent Director

Prof. SushilIndependent Director

Shri P Mohan RaoFCMA, FCS, LLB

Company Secretary

Shri V S JainFCA, FCMA

Independent Director

Prof. S.K. GargIndependent Director

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BOARD OF DIRECTORS

Chairman-cum-Managing Director

Shri P.Madhusudan (w.e.f 01/01/2014)

Shri A.P.Choudhary (Upto 31/12/2013)

FUNCTIONAL DIRECTORS

Commercial

Shri T K Chand

Projects

Shri P.C.Mohapatra (w.e.f 01/11/2013)

Shri N.S.Rao (Upto 31/10/2013)

Personnel

Dr.G.B.S.Prasad (w.e.f 01/05/2014)

Shri Y.R.Reddy (Upto 30/04/2014)

Operations

Shri D.N.Rao (w.e.f 01/08/2014)

Shri Umesh Chandra (Upto 31/07/2014)

Finance

Shri T.V.S. Krishna Kumar (w.e.f. 25/08/2014)

Shri P. Madhusudan (Upto 31/12/2013)

GOVERNMENT DIRECTORS

Shri Lokesh Chandra

Shri V K Thakral

INDEPENDENT DIRECTORS

Shri V S Jain

Shri Ashhok Kumar Jain

Professor Sushil

Professor Suresh Kumar Garg

Dr. Sheela Bhide, I.A.S. (Retd.) (Upto 24/09/2014)

Lt.Gen. Arvind Mahajan (Retd) (Upto 24/09/2014)

Shri Ajay Kumar Goyal (Upto 23/09/2014)

Shri Rajib Sekhar Sahoo (Upto 22/09/2014)

COMPANY SECRETARY & COMPLIANCE OFFICERShri P Mohan Rao

REGISTERED OFFICEAdministrative BuildingVisakhapatnam Steel PlantVisakhapatnam 530 031Andhra PradeshWebsite: www.vizagsteel.com

CONTENTS

1. Chairman’s Address 3-6

2. A Glance of Financial Results 7-10

3. Financial Highlights 11

4. Directors’ Report 12-32

- Management Discussion & Analysis Report 33-40

- Report on Corporate Governance 41-50

- CEO & CFO Certificate 51

- Certificate on Compliance of Guidelines on

Corporate Governance 52

- Secretarial Compliance Report 53-55

- Auditors’ Report 56-61

- Comments of C & AG 62-63

- Statement pursuant to Section 212 of the

Companies Act 1956 64

- Measures taken for Conservation of Energy

& Foreign exchange Earnings & Outgoings 65-66

- Power & Fuel Consumption (Form-A) 67

- Technology Absorption (Form - B) 68-70

5. Audited Annual Accounts (Stand alone) 71-99

6. AGM Notice & Supplementary Notice 100-115

7. Vision, Mission & Objectives 116

State Bank of India

Bank of Baroda

Canara Bank

State Bank of Hyderabad

Allahabad Bank

IDBI Bank Ltd

UCO Bank

Union Bank of India

Axis Bank

IndusInd Bank

HDFC Bank

Deutsche Bank

Bank of Tokyo - Mitsubishi(UFJ)

BANKERS

ICICI Bank

Citi Bank

Standard Chartered Bank

Andhra Bank

HSBC Ltd

Vijaya Bank

JP Morgan Chase Bank

Kotak Mahindra Bank

DBS Bank

SIDBI

Royal Bank of Scotland

EXIM Bank

Bank of India

COST AUDITOR

M/s. Narasimha

Murthy & Co

Cost Accountants

Hyderabad

AUDITORS

M/s Tej Raj & Pal &

M/s. Rao & Kumar

Chartered Accountants,

Visakhapatnam.

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Chairman’s AddressDear Shareholders,

I take great pleasure in welcoming you all for the 32nd Annual General Meeting of your Company.I take this opportunity to thank you all for making it convenient to attend the meeting and express mygratitude for your continuous support & patronage which gives confidence and motivation to strivefor improved performance. The Directors’ Report, the Audited Statement of Accounts for the year2013-14 and the Notice to the Shareholders have already been circulated and with your permission,I take them as read.

I am glad to inform that the production from almost all the units of Stage 1 Expansion hascommenced and will reach a significant level of capacity build-up by end of this financial year2014-15, including start of production from Stage-2 Units. The Company is further moving ahead incapacity building through Modernisation & Upgradation to achieve 7.3 Mtpa progressively within thenext 18-24 months. Several strategic initiatives have been taken with which the company is all set tobecome a multi-unit company, with new units coming up in UP & Rajasthan. The Company fully

3

4

recognises the unstinted support from a spectrum of agencies, dedicated RINL collective and helpfrom the Steel Ministry & other Govt. Departments.

Steel Scenario in 2013-14

India achieved a decent growth in 2013-14, the second best amongst the top ten steel producingcountries in the world and has emerged as a net exporter of steel, with the Crude steel productionrecording a growth of 4% over the previous year. India is likely to maintain the momentum of exportsin 2014-15 also and your company, which exported 1 lakh tonnes of steel last fiscal, aims to doublethat in the current fiscal.

Steel contributes to nearly 2% of the Gross Domestic Product (GDP) and employs over 500,000people. The total market value of the Indian steel sector is expected to touch US$ 95.3 billion by 2016.The infrastructure sector is the country’s largest steel consumer, attracting investments from severalglobal players and this has made the steel industry a high priority sector now. Also, steel demandfrom other sectors like automobiles, consumer durables and construction is on the rise making theindustry vibrant.

The liberalisation of the industrial policy and government initiatives have given a definite impetusto the steel industry. Foreign Direct Investment (FDI) has been another positive step, which willultimately lead to the country’s economic growth.

The Government has therefore drawn a Master Plan to reach 300 mtpa capacity by 2025 whichwill need an investment of US$ 210 billion over the next decade.

Government Initiatives

The initiative of the Government to allow 100 percent FDI through the automatic route in theIndian steel sector has significantly reduced the duty payable on finished steel products and hasstreamlined the associated approval process.

In order to provide thrust on Research and Development (R&D), the Ministry of Steel isencouraging R&D activities both in public and private steel sectors, by providing financial assistancefrom Steel Development Fund (SDF) and Plan Scheme of the Central Government. Under the SDFScheme, 82 R&D projects have been approved with total project cost of Rs 677 Crore(US$ 111.92 Million) wherein SDF assistance is Rs 370 Crore (US$ 61.17 million). Under the PlanScheme, eight projects have been approved with a total cost of Rs 123.27 Crore (US$ 20.38 Million)wherein Government assistance is Rs 87.28 Crore (US$ 14.43 Million).

To encourage beneficiation and pelletisation of iron ore fines in the country, basic customs dutyon the plant & equipment of pellet plants/ beneficiation plants has been reduced from 7.5 percent to2.5 percent. Import of critical raw materials for steel industry such as coking coal, non-coking coaland scrap are subjected to zero or very low levels of custom duty.

Road Ahead

The future of the Indian steel industry is bright. The government plans to increase infrastructurespending from the current 5 percent GDP to 10 percent by 2017 and the country is committed toinvesting US$ 1 trillion in infrastructure during the 12th Five-Year plan. Taking 15 percent as steelcomponent in the total investment, then it alone can generate additional demand worth US$ 75 billionof steel in the next few years or US$ 15 billion worth of additional demand a year and in terms ofquantity, an additional demand of 19 MT per annum.

With urban population increasing, there is a greater demand for steel to build public-transport

5

infrastructure. Emerging economies will also continue to be a major driver of demand as thesenecessitate a huge amount of steel for urbanisation and industrialisation.

Your Company’s performance

In the year 2013-14, your company has been able to achieve a Profit After Tax (PAT) ofRs. 366 Crs, with Turnover of Rs.13,489 Crs. The State of Andhra Pradesh, where RINL has thehighest market share, got severely affected by the acute power crisis forcing several industries tothrottle production. Competition in the Bars & Rods market increased due to higher production inthis category from other major competitors without commensurate increase in consumption. Inputcosts particularly basic raw materials like iron ore and Ferro alloys along with foreign exchangefluctuation has also impacted the bottom-line. The initiatives taken by the company such asoptimisation of coal blend, maximisation of captive power generation, prudent fund management,improvement in techno-economic parameters etc. could partially offset the impact of the above factors.

I am happy to inform that a Letter of Intent has been received for the first ever Iron Ore lease tothe Company in Bhilwara District of Rajasthan over an area of about 946 Hectares. The Governmentof Rajasthan has also recommended allotment of another adjacent block of Iron Ore over an area of4,500 Hectares which is under consideration of Ministry of Mines, Govt. of India. Your Company willbe setting up the state of art mining facilities at Bhilwara after all clearances are obtained.

The Company’s strategic initiative for laying a Slurry Pipeline from Nagarnar to Visakhapatnamand Setting up of Pellet Plant at Visakhapatnam in a Joint Venture with NMDC is also taking shape.

RINL for the first time joined hands with Railways for setting up of a Forged Wheel Plant adjacentto the Rail Coach Factory in Raebareli, Uttar Pradesh. This plant would be the largest in the countryand would substitute import of Forged wheels by Railways. The orders are likely to be placed shortlyand the Unit is scheduled for completion by 2018.

Sustainability Initiatives:

The sustainable economic development of any country requires creating sustainable livelihoodbesides industrial development on large scale. Keeping its responsibility towards the ecosystem,your company has further strengthened its sustainability policy which focuses on Society, Energy andEnvironment and the Sustainability Policy stands to fulfil the same.

Corporate Social Responsibility (CSR)

CSR activities play a pivotal role with focus on Inclusive sustainable growth. In the year2013-14, the emphasis was on society care and provision of welfare measures to the needy. A separateSection is provided in Director’s report regarding CSR activities.

Corporate Governance

Your company’s commitment to transparency in Corporate Governance is reflected in itsestablishing appropriate systems & procedures for every process. A separate Report on CorporateGovernance along with Certificate on Compliances of CG guidelines and Secretarial Compliance formpart of the Directors’ Report.

Environment Management

As a manufacturing company, RINL is conscious of its role in maintaining clean environment forfuture generation. In recognition of its achievements on this front, the company received “GreenRating Award” from the Centre for Science and Environment (CSE). Your company has been conductingMass Plantation Melas to bring awareness and create responsibility. A separate section on the sameforms part of the Directors’ Report.

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Dividend for the year 2013-14

The Board of Directors have recommended a dividend of 10% of PAT for the year 13-14 forEquity Shareholders and 7% on Preference Shareholding for approval in the AGM.

Contribution to the Exchequer

Over the last 29 years, the cumulative accrual to the Government Exchequer in the form ofrevenue comprising of excise duty, income tax, value added tax, entry tax, octroi and other Statelevies was nearly Rs. 26,448 Crs. I am sure with the increase in production capacity and turnover, thecontribution to Govt exchequer would improve further.

Looking ahead

India is increasingly becoming an important part of the international steel market, based onvarious positive factors including strong demand for steel arising from strong economic growth, lowper capita steel consumption and abundant iron ore reserves.

The expansion to 6.3 mtpa will strengthen the position of the company as the market leader inBars & Structural market. The long product consumption in the country is poised for acceleratedgrowth with large scale infrastructural investment planned by the Government which should augurwell for your company. To tap the potential of exports to the neighbouring countries, RINL is openingits International Marketing Centre in Colombo, Sri Lanka. The company is also actively pursuingpartnership through Steel Processing Units for the end users to ensure ready/tailor made markets.

Acknowledgement

I acknowledge that the achievements have been possible only due to the relentless and dedicatedefforts of RINL collective. On behalf of the Shareholders and Management of the Company, I thank allthe Stakeholders, particularly the Ministry of Steel and other Ministries of GOI, the Government ofAP, the Suppliers (Domestic & Overseas), Customers, Ancillary Units, Bankers, the People’sRepresentatives, the District Administration and various other agencies for the confidence and trustbestowed upon the Company and the opportunity given for its continued growth and expansion forachieving various milestones.

Thank You,

Jai Hind,

Dtd.29th September’ 2014, (P Madhusudan)

Visakhapatnam. Chairman

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8

9

Sale of By Products & Others 719 Crs (5.23%)

Interest Earned 180 Crs (1.31%)

Other revenue 138 Crs (1%)

Internal Consumption 56 Crs (0.41%)

Sale of Iron & Steel Products 12645 Crs (92.04%)

Stock Accretion 19 Crs (0.14%)

Employees Benefits 1751 Crs (12.75%)

Stores & Spares consumed 557 Crs (4.05%)

Power and Fuel 671 Crs (4.88%)

R&M,Freight,Other expenses,Interest etc 1491 Crs (10.85%)

Excise Duty 1403 Crs (10.21%)

Depreciation 271 Crs (1.97%)

Provision for Taxation 183 Crs (1.33%)

Profit after Tax 366 Crs (2.66%)

Raw Materials consumed 7026 Crs (51.14%)

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FINANCIAL HIGHLIGHTSFINANCIAL HIGHLIGHTSFINANCIAL HIGHLIGHTSFINANCIAL HIGHLIGHTSFINANCIAL HIGHLIGHTS

2013-14 2012-13

A OPERATING RESULTS ( Cr) Turnover 13489 13553 Gross Income 13738 14021 Gross Expenditure 12851 13135 Gross Profit (PBIT) 887 886 Profit before Tax 549 526 Net Profit After Tax 366 353

B YEAR END FINANCIAL POSITION ( Crs) Share Capital 5740 6347 Reserves and Surplus 6401 6131 Capital Employed 2722 3583 Net Worth 12141 12477 Gross Block 13616 12588 Cumulative Depreciation 9083 8799 Net Block 4533 3790 Inventory 3863 3829

C PROFITABILITY AND OTHER RATIOS (i) Percentage of Gross Profit to Sales 6.6 6.5 Net Profit to Sales 2.7 2.6 Gross Profit to Net Worth 7.3 7.1 Net Profit to Net Worth 3.0 2.8 Gross Profit to Capital Employed 32.6 24.7 Net Profit to Capital Employed 13.5 9.8 Gross Profit to Share Capital 15.5 14.0 Inventory to Sales 28.6 28.2

(ii) Ratio of Current Assets to Current Liabilities 0.8 1.0 Quick Assets to Current Liabilities 0.4 0.6 Sales to Capital Employed 5.0 3.8

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DIRECTORS’ REPORTYour company paid an Interim Dividend of

55 Crs and 3 Crs on Preference Shares & EquityShares respectively to Govt. of India (GoI) andBoard has recommended a Final Dividend of 1Cr and 33.64 Crs on Preference Shares & EquityShares respectively. The total dividend pay-out is25.28 % (Previous FY 35.86 %) and includingdividend tax it is 29.58% (Previous FY 41.77%) ofPAT.

The 6.3 Mtpa Expansion Project of RINL isnearing completion with the commissioning of allmajor units of Stage-1 except Lime Kiln Plant.Production has already commenced from majorunits including Steel Melt Shop-2 and Wire RodMill-2. All attempts are being made to quicklystabilize the units and ramp up the production.All efforts are being put for commissioning ofSpecial Bar Mill (SBM) & Special Structural Mill(STM) under Stage-2 during this fiscal.

Production:

Production of Crude Steel, Finished Steeland Saleable Steel registered a growth of 4%, 3%and 4% over CPLY respectively for the year2013-14. Production exceeded 100% capacity forthe 13th consecutive year, achieving capacityutilization of 112%, 117% & 112% in Crude Steel,Finished Steel and Saleable Steel production fromexisting units. The production of value added steelproducts stood at 23.57 lakhs during the periodregistered a growth of 6% over CPLY which is about78% of saleable steel.

The overall captive power generationincreased by 4% over the previous year, withgeneration of 26.8 MW through waste heatrecovery.

Techno Economic Parameters improved overprevious year, salient among them being viz:• Reduction in Energy consumption by 2%• Reduction in Water consumption by 2%• Reduction in Specific Refractory consumption by 4%• Growth of 2% in Labour productivity• Growth of 5% in Blast Furnace Productivity• Growth of 3% in Converter Productivity

Dear Members,

On behalf of the Board of Directors of theCompany, I take great pleasure in presenting the32nd Annual Report of the Company for thefinancial year ended 31st March 2014, together withthe Audited Statements of Accounts, the Auditors’Report and Comments on the Accounts by theComptroller and Auditor General of India.

Business Performance

RINL excelled on all fronts in the year2013-14, in the year 2013-14 securing “Excellent”rating as per MOU with Government of India.

A Turnover of 13,489 Crs., was achievedduring the year despite a sluggish market. YourCompany earned Profit After Tax (PAT) of

366 Crs for the FY 2013-14 against 353 Crs ofprevious year. Lower growth in consumption ofsteel lead to lower sales realisation which in turnoffset the advantage of lower raw material pricesduring the year.

The Comparative position of major financialparameters is given as under :

( in Crs)Particulars 2013-14 2012-13 2011-12

Turnover (including Trial runproduction sale) 13489 13553 14462Turnover (excluding Trialrun production sale) 13364 13463 14462Less: Excise Duty 1403 1455 1319Net Sales 11961 12009 13143Profit before interest,Depreciation and Tax (EBIDTA) 1159 1073 1645Less: Interest & Finance Charges 338 359 191Less: Depreciation 271 187 344Profit Before Tax (PBT) 549 526 1110Less: Provision for Tax 183 174 359Profit After Tax (PAT) 366 353 751Net worth 12141 12477 13659EBIDTA to Net Sales (%) 9.69 8.93 12.52Return (PAT) onNet Worth (%) 3.02 2.83 5.50EBIDTA to Average capitalemployed (%) 36.76 15.59 —Earnings per share( 10 each) in 0.62 0.48 1.26

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Major Production ParametersUnit : 000t

Rated Actual Fulfill- GrowthItems capacity 2013-14 CPLY ment on over

DPR(%) CPLY(%)Hot Metal - Existing 3400 2177 2780 82 -26

- Expansion 2500 1593 1034 64 —- Total 3769 3814 73 (-)1

Liquid - Existing 3000 3335 3250 111 —Steel - Expansion 2800 56 0 **

- Total 3391 3250 ** 4Crude - Existing 2820 3151 3071 112 —Steel - Expansion 2730 50 0 ** —

- Total 3202 3071 ** 4Billets 1857 1957 1924 105 —Bar products 710 874 867 123 —Wire Rods - Existing 850 995 973 117 —

- Expansion 600 2 0 ** —- Total 998 973 ** —

MMSM products 850 939 878 110 —Finished - Existing 2410 2808 2717 117 —Steel - Expansion 2050 2 0 ** —

- Total 2810 2717 ** 3Saleable - Existing 2656 2976 2900 112 —Steel - Expansion 40 0 ** —

- Total 3016 2900 ** 4Value added production 2357 2228 ** 6

Item Unit 2013-14 Previous best

CO&CCP Avg. pushings Nos/day 309 305 12-13

Gross Coke ‘ 000 t 2654 2637 12-13

BF Coke ‘ 000 t 2209 2197 12-13

CRMP Gross Flux ‘ 000 t 330 318 12-13TPP COB-4 Power

generation MW 11.08 10.75 12-13

a) BF-1 was under Category-1 Capital repairs from20th Oct’13.

b) The newly commissioned SMS-2 and WRM-2 areunder stabilization

Best Production & Technical ParametersProduction:

Technical ParametersItem Unit 2013-14 Previous best

SMS-1 CC Bloom yield % 94.503 94.500 11-12LMMM Billet Mill

Rolling Rate t/W.Hr 329.2 329.0 12-13Billet mill Heat Mcal/tconspn. blm.rld. 421 425 12-13Bar mill Power kWh/tconspn. blt.rld. 69.47 70.56 12-13Bar mill Heat Mcal/tconspn. blt.rld. 19.6 20.5 12-13

MMSM Power kWh/tconsumption blm.rld. 74.32 80.11 12-13

Other Highlights:

• After achieving a throughput of 37.74 Milliontonnes of Hot Metal on Carbon lining in acampaign life of 23 years, BF-1 wassuccessfully blown out on 20.10.13 forCategory-1 Capital Repairs.

• Blast Furnace-3 achieved its rated capacity(7150 t /day) by producing 7155 t on 20.12.13.

• TG-5 achieved its rated capacity (67.5 MW) on30.12.13.

• In SMS-1, sequence casting of 124 heats inCCM-2 is the best since inception

• Total dispatch by rail (1073 rakes) is the bestfor any year.

• 1,43,885 t of Coke Breeze dispatch is the bestfor any year.

• 3,91,000 t of Metallurgical Waste consumptionin Sinter Plant during the year is the best sinceinception.

• Recovery of 479 MG water from Appikonda &Balacheruvu Waste Water Treatment Plants.

Cost Reduction Measures

The Company’s Commitment towardscontaining cost continued during the year2013-14 with focus on following measures:

• Improvement in Gross Coke yield.

• Improvement in yield of Ammonia Sulphate.

• Recycling of Tar sludge and Benzol Muck.

• Optimization of coal blend.

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• Utilization of Metallurgical Waste to replaceIron ore fines.

• Utilization of lime Briquette in SMS.

• Recycling of Maintenance Scrap.

• Conservation of Water.

• Conservation of Energy.

• Improvement in Hot metal ladle life & steelladle life.

• Reduction in consumption of lubricants.

• Substitution of sized iron ore with sinter in SMS.

• Generation of power from waste heat recovery.

Marketing

During 2013-14, growth was registered insales of saleable steel, by-products and exports.The performance in respect of major parametersrelated to Marketing is as follows:Parameter Unit 2012-13 2013-14 Gr. (%)

Saleable Steelsales volume Lakh tons 28.02 30.35 8

Sales Turnover cr. 13,550 13,489 -

Export Value cr. 598 747 25

The sales turnover has been lower primarily due todecline in realizations in sluggish market condition.

Performance HighlightsParameter Achievement

Sales of high end Value 9% growth atAdded Steel 4.25 Lakh Tons

Sales of Wire Rods Continued Leadership inSale of Wire Rods

Exports of Saleable Steel 95,400 t against 18,200 t inprevious year

Customer Satisfaction 83.25 against 80.8 ofIndex (CSI) Score previous year

Inventory of Saleable Steel

The year end inventory of saleable steel at84 thousand tonnes works out to an inventory levelof 10 days against the norm of 21 days. The Stockto sales ratio of 0.05, is the lowest amongst MainProducers.

Marketing Distribution Network

RINL has pan India presence to cater thematerial requirement in the domestic market. Duringthe year, focus was on expanding the marketingdistribution network to take care of additionalquantities available from expansion units. Themarketing distribution network comprises ofBranches, Stockyards, Consignments Sales Agents(CSAs), Marketing Contact Officers (MCOs), Retailers,District Level Dealers (DLDs) & Rural Dealers (RDs).The total marketing outlets of RINL increased from496 in 2011-12 to 767 in 2012-13 and further to 845 in2013-14.

Customer Satisfaction

There has been continuous focus onimproving customer satisfaction by takinginitiatives on improving performance on variousparameters like quality, availability, pre and postsales service, commercial terms, technicalspecifications, etc.

As per the latest Customer SatisfactionSurvey conducted by Business and IndustrialResearch Division (BIRD) of IMRB International,

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RINL obtained a Customer Satisfaction Index (CSI)of 83.25 against 80.8 achieved in the previousCustomer Satisfaction Survey. The CSI obtainedis above the industry average.

Marketing Initiatives

New Product Development : RINL has obtainedcertification from Indian Boiler Regulation and DetNorske Veritas (DNV) during the year, for supplyof its Special Steels. Power Grid Corporation ofIndia Ltd (PGCIL) accorded approval for supply ofCast Blooms from expansion i.e. 150 and 200 mmfor manufacturing TLT grade structurals. SAE1015 IBR and SAE 1019 IBR grades weredeveloped for manufacturing of Seamless Tubesfor Boilers.

Thrust on Exports : The Company focussed onexports to leverage its port based location. A Teamof officials from Marketing visited Srilanka,Ethiopia, Dubai and Kenya for exploring newmarkets. During the year, Iron & Steel productswere exported to Indonesia, Taiwan, South Korea,Nepal, Thailand, Ethiopia, Kenya and Tanzania.

All necessary formalities have beencompleted for opening of IMO at Colombo, SriLanka. The operation of Office is expected tocommence shortly.

Costal Shipping : Possibility of despatch ofproducts through Costal Shipping is beingexplored to ease the congestion in rail network.

Material Management

Purchase

Purchase Department has taken variousinitiatives in the direction of input cost reduction,reduction in ocean freight, securitization anddiversification of critical raw materials like cokingcoal, iron ore, boiler coal etc., and in containingthe inventory of coking coal well within theprescribed norms. Transparency in procurementactivity is promoted and maintained byimplementation of Integrity pact. Qualitymanagement systems are adopted throughcompliance of ISO standards. 5S standards areadopted for work place management.

The requirement of coking coal of around4 Million tonnes is met through Long TermAgreement (LTA) with 6 overseas suppliers fromdifferent geographical locations, Australia, USAand New Zealand. In order to obviate uncertaintiesin weather conditions, other force majeuresituations and to reduce the cost of procurementby increasing competition, continuous efforts aremade to increase the supplier base. In thisdirection, 2 new grades were found satisfactoryin Pilot Oven testing and 2 grades are foundsatisfactory in Industrial trial shipments also.

Transport & Shipping

Savings of 36.11 Crores and 10.70 Croreswere due to chartering of Capesize vessels againstPanamax vessels and Panamax in place ofHandymax vessels respectively.

Stores:

Warehousing based on scientific and moderntechniques is a continuous activity. The scale ofoperations in Central Stores Deptt. (CSD) is hugewith 22,194 nos. receipts and 1,23,850 issues in2013-14. Service level of Stock Control is 99.10%and the average time of inspection of Day Bookshas come down to 2.8 days from 3.8 days last year.

CSD Bagged “Par Excellence Award” atNational level at Kolkata and Achieved “Gold LevelAward”, “Best 5S Coordinator Award” from QCFI.

Work Place Management Practices - 5S havebeen implemented and CSD is complying with theISO standards for Quality, Environment andOccupational Health and Safety.

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Vendor Development

Finance:

Treasury Management Initiatives

Prudent fund management resulted in savingsin various fronts as given below:

- Lower average working capital interest rateat 8.54% , resulting in savings of 15 Crs.

- Lower average cost of 9.10% on domestic INRloans against SBI Cash Credit rates of 9.95%to 10.40% p.a. during the year.

- Lower weighted average interest rates ofCommercial Papers of 8.59% compared toSBI Cash Credit interest rates rangesbetween 9.95% to 10.40%, resulting insavings of 11.15 Crores.

- Also Treasury Management initiativesresulted in higher interest yield oninvestments at 10.22% compared to domesticINR loans raised at an average cost of 9.10%.

- Implementation of Channel / Dealer FinanceProgramme, with facility limits of 680 Crs,through MoUs with Banks provided financeto Dealers, for promoting the sales reducingstrain on working capital.

- Improved Electronic payment mode at 99%e-payments.

Savings on Borrowings during the year 2013-14

Description Weighted average SavingsRate of Interest ( Crs)

Foreign currencyborrowings (FCB) 8.25 47.32

Commercial Paper (CP) 8.59 11.15

Borrowings from Banks/Fin. Institutions 9.81 2.60

Total for all loans 8.54 61.07

Wt.Avg interest rate onCash Credit** 10.21

**Weighted Average Cash Credit interest rate iscalculated based on the secured Cash Creditlimits sanctioned with periodical interest rates

Major achievement for Capex

Obtained Sanction of 2500 Crs of CorporateLoan–II from State Bank of India for a period offour and half years for CAPEX purposes withflexible debit and credit option to enable to raisefunds through NCDs when the interest rates arelow.

As the Fixed deposit interest rates wereruling low in the range of 9% to 9.75%, thematurities were utilised to pay off Capex loans tothe extent of 965 Crs, to reduce the cost of funds,which would yield in Capex interest savings ofapproximately 6.75 Crs in the next financial year2014-15.

Direct Taxes

Due to proper presentation of the case beforethe Dispute Resolution Panel by quoting therelevant provisions of Austrian Income Tax Act andcontinuous follow-up with the Assessing Officeran amount of 12.43 Crs of Tax refund claims was

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received from Income Tax Department which werepending for a long period of more than 15 years.

An amount of 353.14 Crores was claimedin the Return of Income of the company for AY2013-14 by availing various tax incentives likeadditional depreciation, special depreciation onpollution control equipments, weighted deductionon R&D expenditures etc.

Indirect Taxes:

Proposed to the Central Excise departmentan agreeable procedure regarding availing ofCenvat Credit of service tax component involvedin railway freight based on copy of Railway Receipt(RR), which resulted in release of funds parkedprovisionally with the department to the tune of

13 to 15 Crs quarterly.

Railway Claims

Realisation of an amount of 8.60 Crs fromEast Coast Railways on account of settlement of122 Claims during the calendar year 2013 whichwere pending for more than 6 years.

Projects

6.3 Mtpa Expansion

The 6.3 Mtpa Expansion Project of RINL isnearing completion with the commissioning of allmajor units of Stage-1 except Lime Kiln Plant whichis likely to be commissioned by Sept/Oct ’14.

Production commenced from major units viz.Raw Material Handling Plant (RMHP), SinterPlant-3, Blast Furnace-3(BF-3), Turbo Blower-4,Steel Melt Shop-2(SMS-2), Wire Rod Mill-2 (WRM-2)etc. All attempts are being made to quicklystabilize the units and ramp up the production.

The Second stage of 6.3 Mtpa Expansionincludes installation of Special Bar Mill (SBM) andStructural Mill (STM). All out efforts are being putfor commissioning of SBM & STM Mills during2014-15.

Major Units Commissioned during 2013-14

• Boiler-6 commissioned on 20th June’13.• Sinter Plant-3 commissioned on 4th July’13.• New Oxygen PRS-3 in Steel Melt Shop-2

commissioned on 30th Oct’13.

• Converter-2 in Steel Melt Shop-2commissioned on 30th Oct’13.

• TG-5 - Unit commissioned and synchronizedwith Grid on 6th Nov’13.

• Caster-3 in Steel Melt Shop-2 commissionedon 28th Nov’ 13.

• 1st Line of WRM-2 commissioned on 31st Jan’14.• LF-2 in Steel Melt Shop-2 commissioned on

10th Feb’14.• Converter-1 in Steel Melt Shop-2

commissioned on 28th Mar’14.• 2nd Line of WRM-2 commissioned on

30th Mar’14.

Upgradation & Modernisation to 7.3 Mtpa

The Blowing-in of BF-1 was done on30.7.2014 after completion of category-1 capitalrepair.

Orders for the following major packageswere finalized, towards Modernisation andUpgradation .

• LD Converters Revamping in SMS-1 in Mar’13• Capital Repair of BF-2 in Aug’13• 3rd Converter in Mar’13• 4th Caster in Feb’14• Sinter Machines - 1 & 2 Revamping in Mar’14

Forged Wheel Plant

The Largest forged Wheel Plant in thecountry is being set up at Rae Bareli, UP with aninvestment of about 1000 Cr. This is a specializedunit catering to the need of special grade wheels,(1,00,000 wheels per annum), for High SpeedTrains of Indian Railways. The Foundation stonewas laid on 08/10/2013. Tenders are underfinalization and evaluation of technical bids isexpected shortly.

Axle Plant

The Second largest Axle Plant in India isplanned to be set up at New Jalpaiguri, WestBengal about 400 Cr for production of 50,000Axles per annum for Indian Railways. Draft landlease and off-take agreements with Railways areunder finalization.

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Capex – Cash Flow

Against the Capex Plan of RINL 1500 Cr anamount of 1512 Cr was spent in the financial year2013-14. The cumulative expenditure towards6.3 Mtpa Expansion Project was 10793 Cr uptoMar’14 and cum. Exp. under 12th plan period is

2799 Cr.

Raw Material Security

RINL has been continuously pursuing withmineral rich States for allocation of captive ironore Mines. In this direction, LOI has been receivedfor one Iron Ore Mine, from Govt. of Rajasthan,over an area of 945 Hectares.

The Govt. of Rajasthan has alsorecommended for another block of over an areaof 4866.20 Hectares and forwarded to Ministry ofMines, Govt. of India for approval.

Corporate Strategic Management (CSM)

Several strategic initiatives have been takenfor overall growth of the organization salientamong them being :

Iron ore Slurry Pipeline from Nagarnar andPellet Plant at Vizag.

Under RINL’s strategic initiative with NMDC,to lay 13 Mtpa slurry pipeline from Nagarnar,Chhattisgarh to Visakhapatnam and to set up a6 Mtpa Pellet plant at Visakhapatnam, routesurvey has been completed and Techno-EconomicFeasibility Report (TEFR) has been prepared.Financial Appraisal of the TEFR is nearingcompletion.

Transmission Line Tower project

The company also looks forward to settingup a 1,20,000 tonnes per annum TransmissionLine Tower project at Visakhapatnam through jointventure with POWERGRID. With completion ofTEFR and Financial Appraisal, the project is wellset to enter into execution stage, subject toclearance from respective Boards.

Revision of Corporate Plan

Vision 2027 is being developed throughM/s PwC to explore various options for growth andsustainability and the final report is expected

shortly, after which further course of action willbe chalked out.

Excellence through Project Utkarsh

Revival of Chairman’s Trophy for Excellence asan instrument for internalizing concepts ofExcellence in day-to-day work. Departments areevaluated based on various aspects such as overallperformance, leadership, planning and execution,rigour, resource management, processmanagement and customer and employeeorientation.

Initiatives based on feedback from Chairman’sTrophy for Excellence, PM’s Trophy and CII-EXIMBank Award:

• Introduction of Quality Improvement Projectsfor Production departments to drive majorprocess improvements in an annual time frameto address areas of immediate concern invarious departments. A total of 32 QIPs havebeen identified and are in progress.

• Introduction of initiative of “ImprovementGemba” so as to provide thrust on continuousimprovements through involvement of seniormanagement teams. As per the scheme, teamof senior officers visits all shop floors onmonthly basis to have a first-hand feedback onimprovement efforts and also helpimprovement team with their insights.

Knowledge Management

Thrust on Community of Practices (Expertforums) to ensure that experts in various domainsare engaged in facilitating problem solvingthrough interactive sharing of knowledge.Currently around 20 Expert forums are active.

Trans organizational learning platformthrough Knowledge Exchange Workshops hasbeen created. Knowledge Exchange Workshopswere conducted to gather critical knowledge forRINL prior to start of Category-1 Capital Repairof BF-1 and commissioning of PCI in BF-3 whereprocess experts from various SAIL plants, JSW,JSPL, Tata Steel had participated and contributedvaluable inputs.

Five patent applications were filed during2013-14.

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Sustainable Development

Sustainable Development has always beenan integral part of the Company’s strategy sincethe project conceptualization stage in 1980s. Thisis accentuated by the fact that RINL was the firstIndian steel plant to adopt green technologies inits manufacturing processes and to adopt EnergyManagement Standard BSEN 16001 andsubsequently ISO 50001.

Sustainability Planning exercise is carriedout annually to achieve desirable alignment acrossthe organization with multilayer action-plans andorganization objectives. This further results indevelopment of 5 year Roll-on-Plan with emphasison initiatives for the current year.

The Sustainability Report 2013 waspublished in February 2014 in line with GRIGuidelines 3.1 and compiled in accordance withGRI Application Level-A.

Research and Development

Research and Development at RINL hasshown growth, focusing on present and futurerequirements of the plant, with thrust in the areasof process improvement, environment protection,waste management, cost reduction, new productdevelopment, and new technology development.

In addition to the studies and projects takenup internally, RINL-R&D has joined hands withpremier educational institutes / researchlaboratories and research organizations for jointresearch initiatives. These projects are at variousstages of completion.

Highlights

• Preparation of R&D road map with the help ofan external expert for setting up of a state ofthe art R&D center with laboratory and pilotfacilities.

• Development of value added ceramic products,in association with Central Glass & CeramicResearch Institute, utilizing solid wastes (LDSlag, BF Slag, Fly Ash) generated at RINL.

• Development of Corrosion resistance paints.

• Prediction of transition bloom volume and

minimization of transition bloom productionduring casting of different grades of steel.

• MoUs signed with McMaster University,Ontario, Canada to collaborate and strengthenresearch and development cooperationbetween the respective institutions andpartners and with IC-IMPACTS, Canada in theareas of Infrastructure and water.

• MoU was signed between RINL and NationalInstitute of Ocean Technology, Chennai to takeup a new collaborative research project on CO2sequestration of BOF Slag.

• Investment of 136.00 Crores was approved byRINL Board for development of CRGO Steels incollaboration with Tata Steel, NML and MoS.

• Eleven projects have been taken up in 2012-13out of which two projects were successfullycompleted. Four new MoUs were signed in2013-14 in addition to the continuance ofprojects of 2012-13

R&D Expenditure:

Year Actual Expenditure Expenditure as %( Crores) of Turnover

2012-13 31.13 0.23

2013-14 50.27 0.37

An amount of 50.27 Cr was spent in theyear - a growth of 61% over CPLY. Thrust on R&Dis given with a clear road map through activitiesaimed at process, product and technologydevelopment with the number of Engineers /Scientists to increase up to 100 and R&D outlayto increase up to 100 Cr by 2016-17 per annumgradually.

Safety

RINL is the first among the Indian Steelplants to be certified for OHSAS: 18001 Standardfor Health and Safety Management Practices(Occupational Health and Safety AssessmentSpecification-OHSAS). Continuous efforts on theimplementation of safety standards, monitoringof risk control and other proactive measures haveresulted in reduction / elimination of potentialhazards.

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Safety is a prime concern for RINL andaccomplishes its objectives with a motto “Weproduce steel with safety & zeal”. SafetyEngineering Department under Executive Director(Works)I/c regularly scrutinizes, supervises andensures implementation of safe working practicesin all departments of the company. Severalmeasures are being taken up to achieve zeroaccidents and to meet the safety requirements ofthe company.

Safety Training and Awareness Campaigns

6500 No. of regular employees were coveredin regular safety training programmes and12500 No. of contract workers were given safetyinduction training and refresher trainingprogrammes. In addition to the General Safety &Accident Prevention programmes, the followingproactive measures were undertaken to inculcatesafety culture:

• 348 fire mock drills were organized in severaldepartments to make emergency action planmore perfect.

• Two plant level mock drills were conducted atSMS-2 converter shop and CO&CCP Benzolplant which were witnessed by Joint ChiefInspector of Factories, Visakhapatnam, andGovt. of Andhra Pradesh.

• Special emphasis was given on Behavior BasedSafety Management (BBSM) and training on thesame is being imparted to all employees tobring attitudinal change towards safety and toinculcate improved safety culture.

• Auditor training course on OHSAS-18001:2007Standard and “Legal Awareness” wereconducted by M/s. BVCI.

• Various Road Safety awareness programmeswere organized for employees / contractworkers/ Bus drivers / School / collegestudents with external faculty from A.P RoadTransport Authorities and VSGH doctors.

• Seminars and exhibitions on safety appliances,Lectures by eminent personalities wereorganized regularly to bring awareness amongthe employees on safe practices and the typeof appliances available for use.

Safety promotion

Large scale of visual communication hasbeen taken up and Safety slogans Boards andSafety hoardings with eye-catching safetymessages at different important locations areinstalled inside the plant.

Achievements:

• Frequency Rate of accidents brought down to0.29 from 0.75 of previous year

• Incident Rate has been brought down to 0.70from 1.80 of previous year

• Severity Rate has been brought down to 171.66from 2099.20 of previous year.

• No. of Reportable accidents brought down to22 from 59 of previous year

• Capital Repairs have been done in the plantwithout any reportable incident.

• More than 65 OH&S Objectives andProgrammes were taken up by differentdepartments

• Zero Fatal Accident achieved in works areaduring the period Jan,13 to Jan,14

• Ispat Suraksha Puraskar – 2013 (IntegratedSteel Plant) for achieving Nil Fatal Accidentduring 2011 & 2012 at Rolling Mills, SteelMelting Shops, Continuous Casting shops

Environment Management

Environment Management at Vizag Steelcommenced at the design-board-stage when itsplanners and designers planned for providingextensive environmental facilities both during theStage-I and Stage-II of the plant.

During Stage-I, a massive investment ofabout 468 Crore has been made to provide a widearray of pollution control equipment to containdust emissions and for treatment of waste waterand effluents.

A number of new features aimed atenvironmental improvement in the areas of AirPollution, Water Systems, Energy efficiency andWaste Management are integrated in theExpansion units by investing an amount of

1238 Crore.

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In addition to the above, large-scaleAfforestation has been done and as on date about50.10 lakh trees, have been planted in an area of2720 Ha.

A number of clean technologies based onutilisation of waste heat, waste gas, pressureenergy, solid wastes and sludge have beenadopted in RINL.

Environmental Compliance

During the year 2013-14, VSP complied withall environment related statutory requirementsand hence no show cause notices have beenissued to VSP either by APPCB or CPCB

Environmental Management System (EMS)

Environmental Management System ISO14001 is implemented throughout the plantcovering 47 departments. To ensure that“Continual Improvement” is propagated throughEMS, a number of Environmental ManagementProgrammes (EMPs) are taken up every year.About 75 nos of EMPs were taken up by differentdepartments during the year 2013-14.

Waste Management:

LD Slag consumption in Sinter Plant isincreased to 24.0 Kg / tonne of charge sinteragainst the norm of 16.0 Kg/ tonne of chargesinter.

More than 1 lakh tonnes (1.1) of LD slagconsumed in Sinter plant for the year 2013-14, thebest utilization in the last 10 years(after 2003-04).

13.74 lakhs tonnes of BF Slag was generatedand 15.59 lakhs tonnes was utilized, achievingutilization of 114.77%.

3,91,000 tonnes of metallurgical wasteconsumption in Sinter Plant during the year. Thisis the best ever since inception.

Waste water Treatment

Recovery of 479 MG water by treating inAppikonda & Balacheruvu Waste Water TreatmentPlants and the Ultra Filtration Unit.

2 (Two) sets of New Ammonia columns werecommissioned in series for stabilizing the inputload on MBC. This resulted in:-

• Bringing down the Ammonical Nitrogen belowthe norm of 50 mg/l.

• Bringing down the COD (Chemical OxygenDemand) below the norm of 250mg/l.

Environment Projects

• Doghouse was installed in SMS-2 as part ofExpansion and it was commissioned during theyear 2013.

• Waste Heat Recovery system (NEDO project) togenerate power by recovering waste heat fromSinter coolers of Machine 1 & 2 is made readyfor synchronization in Mar’14.

• Replacement of Electrostatic Precipitator ofBurden Handling System and Cast HouseExhaust Gas system of Blast Furnace - 1, weretaken up to reduce the stack emissions from115mg/Nm3 to 50mg/Nm3. Both the projectsare under progress and are scheduled to becompleted in 2014-15.

• Providing Dry fly Ash handling, storage anddelivery system for boilers-2, 3, 4 & 5 is takenup. Project is scheduled to be completed byDec’14.

• Providing dog houses in convertor 1 to 3 isunder implementation. Installation of the doghouses will prevent roof top emissions fromconvertor shop.

• Rain water harvesting schemes, to conserve3.3MGD of water, are taken up and are at anadvanced stage of implementation.

New Initiatives

An online reporting system called‘ENVISION’ has been developed to report various

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environmental aspects like real time emissionsfrom on-line stack monitors installed at all twenty(20) major chimneys and four (4) continuousAmbient Air Quality Monitoring stations. Real timeweather data being broadcasted through intranetof VSP.

Green Visakha Program

VSP is participating in the ambitious “GreenVisakha- Plantation Program”, where it is targetedto plant 40 lakh trees in Visakhapatnam in 5 years,@ 8 lakh trees per year. The program is initiatedby the Parliamentary Committee on Environment,Forests, Science and Technology. VSP has alreadyplanted 25000 avenue plantation and 75000 blockplantation under Green Visakha Programme.

Information Technology

RINL leverages Information Technology asthe vital enabler in improving the customer-satisfaction, organizational efficiency, productivity,decision-making, transparency and cost-effectiveness.

To match with International SoftwareDevelopment Standards, RINL chose CMMILevel 3 certification, the first of its kind in IndianManufacturing Industry. The certificate is issuedby CMMI Institute, Carnegie Mellon University,USA and recertified in the month of Nov’13.

“Mobile Version” of corporate website(www.vizagsteel.com) is in place. All the esteemedstakeholders including employees, vendors,customers and career seekers can access thewebsite from their mobile devices conveniently.Mobile Appstore for mobile applications was alsodeveloped in-house.

Enterprise Document Management Systemwas deployed for online approval of ISOdocuments. DOP online, first of its kind for onlinesearch of Delegation of Powers and EnterpriseMaintenance, a unique portal with Dashboard, 360degree view of equipment, Forum, etc. weredeployed. Enterprise Resource Planning (ERP) isin pipeline.

Web Applications

Development of several portal / web

applications took place during the year whichincludes:

• R & D Portal which was launched to serve asan information tool within RINL regarding theinitiatives, facilities, research output details andall other activities of R&D.

• VIGIL, the on-line application for VigilanceDepartment was launched. The objective of thesystem is to monitor vigilance complaints in asystematic and transparent way for betterhandling, archival, retrieval and reporting.

• Portal for Cost Monitoring Group Departmentwas also launched during the year.

• SWASTH for Mines, the computerized onlineMedical and Healthcare Management Systemfor employees working in the Mines atMadharam & Jaggayyapeta.

• Web site of Arunodaya Special School wasinaugurated.

• Retired Employee Information System was alsolaunched for the use of retired employees ofRINL. Online Payment System for retired andseparated employees using Payment Gatewaywas also deployed. This facility will facilitate topay Mediclaim Insurance enrolment amountonline.

Awards

The projects ‘ROMANS’ (Integrated Rings,Chocks and Roll Management System) and‘KUSHAL’ (Data Center Consolidation thru ServerVirtualization & VDI) were selected among thetop 5 at the national level in the Annual Conventionof Computer Society of India.

Human Resources

Manpower

The manpower strength of the companystood at 18,371 as on 31st March, 2014 (against18,072 as on 31st March, 2013). Out of this totalmanpower, 3026 (16.47%) were Scheduled Castes(SC) and 1323 (7.2%) were Scheduled Tribes (ST).

During the year, out of the total recruitmentof 646 employees made by the company, 104(16.10%) belonged to SC and 24 (3.71%) to ST. Out

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of the total of 494 vacancies filled throughpromotions, 95 (19.23%) were SC and 74 (14.98%)were ST.

Group-wise manpower as on 31st March, 2014Group Total Gen OBC SC ST Women Men Ex-Ser DPs PHY

A 6294 3973 804 1062 455 378 5916 4 439 18

B 6278 4747 92 1095 344 56 6222 6 1563 25

C 3526 1821 814 512 379 69 3457 149 1878 61

D 2273 1568 203 357 145 45 2228 52 1852 27

Total 18371 12109 1913 3026 1323 548 17823 211 5732 131

Group A - Executives (JO & above)

Group B, C, D - Non Executives

The Persons with Disabilities (EqualOpportunities, Protection of Rights and FullParticipation) Act, 1995

After the Act came into force on 7th February,1996, RINL has employed 94 persons with variousdisabilities (including 7 persons selected onmerit).

The following actions have been taken up atRINL-Visakhapatnam Steel Plant for theconvenience of the differently-abled persons atdifferent offices at main administrative building /corporate office of RINL-VSP.

• Providing Ramp Way

• Auditory Signal in both the lifts of the building

• Provision of a wheel-chair at the ReceptionCentre located at the entrance of the MainAdministrative Building

Industrial Relations

Industrial Relations by and large werepeaceful.

Issues pertaining to workers collective arediscussed at various forums includingparticipative fora with Recognised Union and otherUnions and the following Memorandum ofSettlement (MOS) / Record note of discussionswere entered into with Steel Plant EmployeesUnion (Recognised):

• On change of designations of Khalasis on6th February, 2014

• On grant of Annual Performance Reward(Bonus) for the year 2013-14 for 18,270/- on1st October, 2013.

• On extension of Mobile Communicationfacilities to all employees from S-9 Grade &above.

Welfare

RINL fulfils all the statutory welfaremeasures and beyond that it implements variousschemes for the benefit of its employees likeproviding vehicle advances and interest subsidyon housing loans; Long Service Awards;motivating employees through Jawaharlal NehruAwards; motivating their children through Dr BRAmbedkar Merit Recognition Scheme, DrSarvepalli Radhakrishnan Merit Cash Awards andCol. CK Nayudu Sports Cash Awards; conductingSocio-cultural Programs at RINL schools andtownship through Community Welfare Centers;fitting farewell to retired employees etc. To meetthe social security requirements, schemes likeEmployees’ Family Benefit Scheme,Superannuation Benefit Scheme and GroupMediclaim Insurance Scheme are in place for thesuperannuated employees.

The Company has a well laid out township –Ukkunagaram, with all modern amenities likewater supply, underground sewerage, schooling,recreation facilities, parks, shopping complexesetc. for its employees, the housing satisfactionworks out to about 55%.

RINL’s philosophy towards educationalfacilities is not only to benefit the children ofemployees but also to extend educational facilitiesto the wards of the people dwelling in and aroundthe plant and also to act as a catalyst in promotingquality. The “Promotion of Free Education”scheme was introduced in the year 2007 as a CSRinitiative at Visakha Vimala Vidyalaya(Ukkunagaram and BC Road) for promoting freeeducation for the poor families. 1366 studentswere provided free education under the schemein the year 2013-14. Support is also given toArunodaya Special School for differently abledchildren.

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Welfare of SCs/STs

A Death Fund Scheme for employeesbelonging to SC/ST categories was introduced inJanuary 2009, wherein 50/- is being deductedfrom the salary of the members of the associationin the event of death of any member and theamount so collected would be given to thedependent of the deceased member. 107 familieshave been benefited under the scheme so far and18 families during the financial year 2013-14. Onan average each family has received a sum of littlemore than 2 lakhs.

Grant under Dr. B R Ambedkar Merit RecognitionScheme – SC and ST Categories: These awardsare meant exclusively for the children ofemployees belonging to Scheduled Castes andScheduled Tribes.

Qualifying Course in which Amount of No. of AwardsExamination admission Award SC ST

is sought

12th Class / Degree courses in 1500/- perIntermediate Engineering / month for theExam Architecture / Medical / duration of 8 4

Veterinary / Dentistry / the course (Eight) (Four)Agricultural Sciences /Pharmacy / Law

Grievance Redressal Mechanism

In RINL utmost importance is being given forboth employee and pubic grievance handling system.A well-structured grievance handling system isfunctioning for formal and informal grievances, whichprovides easily accessible machinery to ensureexpeditious settlement of grievances leading toincreased job satisfaction, productivity and efficiency.On-line Public Grievance Portal of Department ofAdministrative Reforms and Public Grievances(CPGRAMS), Government of India is being monitoredregularly to redress the grievance received fromCPGRAMS. A link to the GOIS Portal for publicgrievance has also been provided in the RINL website.The details of formal grievances for the year 2013-14are as below:Sl Types of Grievances No of No of No ofNo Grievan- outstanding Grievances Grievances Grievances

ces as on received disposed pending as1st Apr’13 during off during on

the year the year 31st Mar ’14

1 Public Nil 8 7 1

2 Emplo- Nil 1 Nil 1yees

Women Empowerment

Recognizing the special needs and attentionthat is required for women employees, RINL-VSPfacilitates the women workforce to be closely knitthrough the local cell of Forum of Women in PublicSector (WIPS) formed under the aegis of SCOPE.A total of 551 Women employees, whichconstitutes about 3% of the total work force areworking in the company.

The WIPS Cell of VSP was presented theJury’s Special Award for 2012-13 instituted byWIPS (under the aegis of SCOPE) in recognitionof the commendable work done by RINL-VSP forthe development of its women employees and theaward was presented at the 24th Annual NationalMeet of WIPS held on 11th February 2014.

Some of the salient points relating toempowerment /development of women in placein RINL-VSP are as under:

• In line with its image as a benevolent employer,the Board of RINL-VSP, in Feb 2014 hasapproved enhancement of maternity leave fromthe existing 84 days to 180 days - one of thefew PSUs in the country to extend the benefit.

• Two workshops on “women development”exclusively for women employees wereorganized by WIPS Cell in association withManagement Development Group. Womenemployees are sent for external trainingincluding foreign training.

• A high level committee is in place since 2006for examining the complaints against sexualharassment at the workplace. No complainton the subject was received by the committeein 2013-14.

• The WIPS Cell has also associated with CSRdepartment for organising two literacyprogrammes (under the aegis of PRATHAM, anNGO) & Courses on Tailoring & BeauticianCourse (under the aegis of Jan ShikshanSansthan) for women residing in Aganampudi& Gangavaram - Rehabilitation Colonies ofVisakhapatnam.

• The WIPS cell also runs a crèche in theUkkunagaram Township for the benefit of

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working women. The management hasprovided support by way of provision of airconditioners, water purifier, cement benchesetc for the benefit of the children in the crèche.

Vigilance

Vigilance Department of RINL took variousmeasures to promote transparency and integrityin RINL with specific focus on preventive vigilance.In this direction, system studies were conductedon the procedures being followed inprocurements, sales and award of contractsincluding expansion area for improving existingprocedure and systems, wherever required andintensive examination of contracts / purchaseorders were conducted. Identification of sensitiveposts, tracking rotational transfers, surveillance,conducting regular/surprise checks to verifysystem compliance, etc., were also undertaken.Besides, special vigilance awareness drives werealso organised to create awareness amongst theemployees and other stakeholders on relevantaspects of vigilance. Assistance was provided tothe concerned for expeditious processing ofdisciplinary cases relating to vigilance.

The following activities were undertaken topromote transparency and integrity in RINL duringthe year 2013-14:

• Conducted 289 system checks including39 quality checks and 70 rake/roadreweighments.

• Conducted 18 Vigilance awareness sessions onpreventive vigilance, ethics, etc.

• VIGIL- an online application has been developedfor tracking complaints and generating reports.

• Spandana - in-house magazine of RINL hasalso made an impact to bring in Awarenessamong stakeholders.

RINL bagged National Vigilance ExcellenceAward-2013, Corporate Vigilance ExcellenceAward 2013-14 and four Officers receivedVigilance Excellence Awards in individual category.

Integrity Pact

RINL/VSP is one of the first organizations toimplement Integrity Pact (IP) w.e.f April’2007, on

procurement activities. During 2013-14 about 95%of contract values are covered with IP, which is inline with Standard Operating Procedure (SOP) ofCentral Vigilance Commission.

Right to Information

Right to Information Act, 2005 (RTA) has beenimplemented in true spirit across the company.Information available in the 17 manuals of the RTIportal in company website has been updated inaccordance with the requirement of section 4(1)(b)of Right to Information Act-2005.

A total of 529 requests have been receivedunder the Right to Information Act, by RINL duringthe period 1st April, 2013 to 31st March, 2014. Outof the same, 412 requests have been disposed offby furnishing information to the seekers.

90 cases appealed to First AppellateAuthorities, out of which 52 appeals have beendisposed off as on date.

Two cases were appealed to CIC by theappellant and both the cases have been disposedoff by the CIC. In one case, CIC has upheld thedecision of CPIO / 1st Appellate Authority and inone case CIC had directed to furnish certainadditional details to the Appellant.

Citizen Charter

RINL demonstrates its ability to consistentlyprovide quality products and efficient andresponsive services that meet requirements of ourCitizens with applicable legal, statutory andregulatory requirements. It aims to enhanceCitizens’ satisfaction and to continually improveour products and service delivery process.

The Management of RINL is totallycommitted to excellence in public service deliverythrough good governance by a laid down processof identifying Citizens, commitment to them inmeeting their expectations, and communicationto them of key policies in order to make the servicedelivery process more effective.

Progressive use of Hindi

Implementation of Official Language Policyand compliance of specified rules has always beengiven its due importance at RINL. In this regard

26

training and various other activities have beenundertaken as outlined in the approved roadmapof the company.

Initiatives taken towards progressive use ofHindi during 2013-14 are as follows:

• 167 employees were trained in two batchesunder Hindi Prabodh / Praveen coursesconducted by Hindi Teaching Scheme, Ministryof Home Affairs, Govt. of India.

• 606 employees were trained in HindiWorkshops conducted at HQ, Mines andRegional/Branch Offices.

• 141 employees were trained to work oncomputers in Hindi through Unicode.

• Hindi classes were also conducted forhousewives of Rehabilitation Colonies underDakshina Bharat Hindi Prachar Sabha courses.

• Six Departments/Sections were inspected ineach quarter and necessary help was extendedfor progressive use of Official Language.

• Hindi Hasya Kavi Sammelan was also organizedto popularize Hindi.

• Seminar on Steel & Engineering Terminologywas conducted in Hindi at RINL in associationwith Commission for Scientific & TechnicalTerminology, New Delhi. National LevelTechnical Seminar was also organized on‘Adoption of Eco-friendly Green Technology andVarious measures for Reduction of CarbonEmission in Indian Steel Industry’

In recognition to the efforts taken foreffective implementation of Official Language inthe organization, RINL won several awards andaccolades:

• Second Prize of prestigious Indira GandhiRajbhasha Shield- 5th time in a row.

• Ispat Rajbhasha Shield.

• Quarterly Hindi Magazine Sugandh – selectedfor National level by Department of OfficialLanguage, Ministry of Home Affairs, Govt. ofIndia.

• 2nd prize of National level for the best articlepublished in Hindi House magazine Sugandh.

Corporate Social Responsibility

In line with the credo of RINLs Vision, “to bea respected Corporate Citizen, ensure clean andgreen environment and develop vibrantcommunities around VSP”, RINL has beenrelentlessly taking up several communitydevelopment projects.

As per DPE Guidelines, the CSR Budget wasallocated and about 20.31 Cr was spent on CSRactivities during 2013-14. The focus areas for CSRin VSP include: Peripheral Development, PeopleCare, Health care, Education, Environmental care,Sports & Cultural efflorescence, etc.

Further, in terms of Section 135 of theCompanies Act, 2013, a Board Sub-committee onCSR & SD has also been reconstituted in May 2014(with an Independent Director as its Chairman, twoIndependent Directors and three FunctionalDirectors as its Members) for necessarycompliance with the provisions of the CompaniesAct, 2013 and Rules made thereunder.

CSR activities are carried out with thepartnership of various NGOs and Govt.organizations like State Govt., MunicipalCorporation, CPWD, etc. The majority of theactivities have been taken up in Rehabilitationcolonies and peripheral villages for the peoplewho are instrumental in sparing their land forconstructing the steel plant. Welfare activities inthe areas populated by Tribal / SCs /STs / WeakerSections of the Society, have been taken uptowards education, health and communitydevelopment etc. RINL- CSR activities areextended to other states as well depending on the

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requirement.

RINL-CSR was conferred with “ABP NewsGlobal CSR Excellence & Leadership Award” inthe category of “Community Development” foraddressing the social needs of rural communities.

Prominent activities during 2013-14:

Environment care:

• Plantation of 75000 trees in Parawada village,Visakhapatnam under project ‘Green Visakha’

• Providing solar power system to St. Joseph’sHome for the aged, Visakhapatnam, underproject ‘Surya’

Health care:

• Providing the state-of-the-art mobile cancerdetection van ‘Sanjeevan’ to reach out to peoplein the interior villages for early detection andenable speedy recovery from the dreadfuldisease. 1823 patients have been tested &28 suspected cases were referred for furthertreatment.

• Conducting medical camps, Childimmunization programmes, AIDS awareness

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campaigns, De-addiction programmes etc. –benefitting 17540 patients.

• Extending Financial assistance for developmentof infrastructure for establishing Multi StoriedHospital complex in King George HospitalPremises, Visakhapatnam

• Providing additional facilities / renovationworks at Mortuary, King George Govt. Hospital,Visakhapatnam, thus making it the first Air-conditioned & well ventilated Mortuary inAndhra Pradesh

• Providing “Netra Jyothi” a Mobile eye clinicequipped with latest technologies – 24 eye

camps were organized and 1786 patients havebeen tested.

Education:

• Extending free education to children of BelowPoverty Line (BPL) families – benefitting about2000 BPL children.

• Free education to differently abled childrenthrough Arunodaya Special School,Ukkunagaram

• Organizing adult women literacy programsthrough M/s. Pratham Education Foundation inthe surrounding and Tribal areas ofVisakhapatnam – 375 women benefitted

• Distributing school furniture, computers, playequipment, library books, shoes, school bags,plates, glasses etc to 6 schools.

People care:

• Supplying drinking water to Rehabilitation

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colonies of VSP reaching about 13,000beneficiaries per day, for a period of 4 monthsduring summer.

• Conducting vocational skill developmentprograms viz; Security Guards, Driving,Automobile mechanism, Electrical works, DTP,Dress designing, Embroidery, Beauticiancourse, etc, towards self – reliance of youth inperipheral villages of VSP and Mines areas –about 1035 unemployed youth were benefitted.

Help during Natural calamities:

• Extending financial assistance of 475 Lakhfor Chief Minister’s Relief fund, for taking uprelief measures in flood affected areas in theStates of Odisha and Uttarakhand.

Projects under progress:

• Construction of Multi-purpose halls

• Provision of community drinking water systemat Chepalapalem

• Repairs & re-carpeting of Road from Karepallito Madaram (Madaram Mines)

• Construction of a Dormitory for HIV/AIDSaffected children at Prathipadu, EG Dist., AP

Awards and Accolades:

Excellence of RINL’s performance during theyear got recognized by leading National andInternational institutions, major of which are:

Organizational

• Significant Achievement Award of CII-EXIMBank for Business Excellence 2013.

• ICC Corporate Governance and SustainabilityVision Award 2013

• Prestigious Indira Gandhi Rajbhasha Shield foreffective implementation of official language inthe organization

• Ispat Rajbhasha Shield for excellent effortstowards usage of Hindi at RINL

• 2nd position in the 10th National Award forExcellence in Cost Management

• Corporate Vigilance Excellence Award 2013-14for outstanding initiatives in vigilance arena

Individual and Team Excellence

• Prime Minister’s Shram Award SHRAM VIR byMinistry of Labour.

• Greatest Corporate Leaders of India Award toCMD- RINL

• Vishwakarma Rashtriya Puraskar for12 employees

• All the 3 QC teams bagged Excellence Awardsat the International Convention on QualityControl Circles-2013 (ICQCC-2013) held atTaipei, Taiwan

Management Discussion and Analysis Report

The Management Discussion and Analysis Reportis annexed and forms part of the Directors’ Reportvide Annexure-I.

Corporate Governance Report

The Company strives to attain highest standardsof Corporate Governance. In line with theGuidelines issued by Department of PublicEnterprises, which have become mandatory fromMay 2010, a separate section on CorporateGovernance is annexed and forms part of theDirectors’ Report vide Annexure-II.

Certification by the CEO & CFO

Certificate attested by the CEO & CFO is enclosed,forming part of the Corporate Governance Reportalong with a declaration signed by CMD regardingCode of Conduct for Members of the Board andSenior Management vide Annexure-III.

Certificate on Compliance of Guidelines onCorporate Governance

A Certificate on Compliance of Guidelines onCorporate Governance issued by DPE in May 2010,

30

for the year 2013-14 given by a practicing CompanySecretary is annexed herewith and forms part ofthe Directors’ Report vide Annexure-IV.

Secretarial Compliance Report for the FinancialYear 2013-14

The Secretarial Compliance Report, confirmingcompliance to the provisions of Companies Act,1956, Rules made there-under and the provisionscontained in Articles of Association &Memorandum of Association of the Company forthe year 2013-14 by a practicing CompanySecretary, is annexed and forms part of theDirectors’ Report vide Annexure-V.

Monitoring Mechanism for Subsidiary Companies

The Subsidiary companies of RINL are managedby their respective Boards in the best interests oftheir stakeholders. RINL’s Functional Directorsare nominated on the Boards of the Subsidiaries.The Company monitors performance of Subsidiarycompanies, inter alia, by placing Minutes of Boardmeetings of the subsidiary companies before theCompany’s Board periodically. The Annual Reportsof the Subsidiary Companies are enclosed as aseparate volume with this Annual Report of thecompany in terms of Section 212 of theCompanies’ Act-1956.

Joint Venture Mechanism

The Company is one of the PSU’s as a jointventure partner in ICVL which was incorporatedfor acquiring Overseas Coal assets.

The Company has also formed a JointVenture with MOIL (another PSU) with 50:50shares for the purpose of setting up of a FerroAlloys Unit at Bobbili in Andhra Pradesh.

Schedule VI

The Annual Accounts for the Financial Year2013- 14 were prepared and presented as per thenew Schedule VI. The Change between the OldSchedule VI & New Schedule VI is basically achange in the presentation and disclosurerequirements. However, the application ofAccounting Standards and adopted AccountingPolicies remain the same.

Statutory Auditors

M/s. Rao & Kumar and M/s. Tej Raj & Pal,Visakhapatnam were appointed as StatutoryAuditors of the Company for the year 2013-14 bythe Comptroller and Auditor General of India(C&AG). The Statutory Auditors’ Report on theAccounts of the Company for the financial yearended 31st March, 2014 is enclosed to theDirectors’ Report at Annexure-VI.

C&AG Audit

The Comptroller and Auditor General of India(C&AG) vide its letter No. PDCA/A/c/Desk/2013-14/RINL/1.01/188 Dt. 22nd July, 2014 given ‘NIL’Comments on the accounts of the Company forthe year 2013-14 under Section 619(4) ofCompanies’ Act 1956 and the extant provisions ofthe Companies Act ‘2013. A copy of the above letterof C&AG is enclosed at Annexure-VII.

Consolidation of Accounts

As the Company is a fully owned Government ofIndia undertaking and is an unlisted Company, therequirements in this regard as stipulated underthe guidelines of SEBI for consolidation ofaccounts are not applicable. However, a statementpursuant to Section 212 of the Companies Act1956, relating to Subsidiary Company i.e. EIL isplaced at Annexure –VIII.

Cost Audit

Ministry of Corporate Affairs, Govt. of Indiavide Order No.52/124/CAB-2005 dt. 07-07-2006notified RINL, for conduct of Audit of cost recordsas maintained under Cost Accounting Records(Electricity Industry) Rules, 2001 for the financialyear ending 31st March 2006 and thereafter everyyear. Further, Ministry of Corporate Affairs, Govt.of India, vide their Order no 52/26/CAB-2010dt. 30th June, 2011 prescribed Cost Audit for Iron& Steel Industry w.e.f. 1st April, 2012. Asprescribed, the Cost Accounting Records are beingmaintained by the Company and Cost Audit reportsare being submitted by the Cost Auditor.

Cost Auditor

RINL had appointed the Cost AuditorM/s Narasimha Murthy & Co, Cost Accountants,

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Hyderabad, under Section 233B of the CompaniesAct, 1956 for the Financial Year 2013-14. The CostAudit Reports for the financial year 2013-14 arefiled with the Cost Audit Branch within thestipulated time.

Report on Conservation of Energy, TechnologyAbsorption etc.

Information required under Section 217(1)(e)of the Companies Act, 1956 read with theCompanies (Disclosures of Particulars in theReport of Board of Directors) Rules, 1988regarding Energy Conservation, TechnologyAbsorption and Foreign Exchange earnings andoutgo during the Financial year 2013-14 arefurnished in the Annexure-A to the report and alsoin Form-A and Form-B annexed to this report.

Foreign Exchange Earnings and Outgo

The Foreign Exchange Earnings during theyear 2013-14 is 741.45 Crore and the ForeignExchange Outgo during the year was

4027.51Crore (Includes 131.94 Crore onExpansion activities/ Capital Goods).

Particulars of Employees

There was no employee of the Company whoreceived remuneration in excess of the limitsprescribed under Section 217(2A) of theCompanies Act 1956 read with the Companies(Particulars of employees) Rules, 1975, asamended from time to time.

Payment of Dividend

The record date for payment of Dividend isthe AGM Date. Dividend for the financial year wasrecommended by the Board of Directors of theCompany in their 281st Meeting held on July 03,2014 for the Equity Shareholders as on the dateof AGM and as per terms to preferenceshareholders.

Deposits

The Company has not invited/accepted anydeposits falling within the purview of Section 58of the Companies Act, 1956 during the year2013-14.

Directors’ Responsibility Statement:

Statements / Data which do not relate toRINL and are used / made in this report are fromsources which are considered reliable andCompany cannot be held responsible for itsauthenticity. Further, statements describing theCompany’s projections, estimates andexpectations are “forward looking statements”within the meaning of applicable securities lawsand regulations. Actual results may differmaterially from those expressed depending on thecircumstances/ situations.

Pursuant to provisions of Section 217 (2AA)of the Companies Act, 1956, the followingstatement relating to Annual Accounts for thefinancial year ended 31st March, 2014 is made that:

i) in the preparation of the Annual Accounts,applicable Accounting Standards had beenfollowed along with proper explanationrelating to material departures;

ii) the Directors had selected such accountingpolicies and applied them consistently andmade judgments and estimates that arereasonable and prudent so as to give a trueand fair view of the state of affairs of theCompany at the end of the financial year andof the profit or loss of the Company for thatperiod;

iii) the Directors had taken proper and sufficientcare for the maintenance of adequateaccounting records in accordance with theprovisions of this Act for safeguarding theassets of the Company and for preventing anddetecting fraud and other irregularities;

iv) the Directors had prepared the AnnualAccounts on a “going concern” basis.

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Directors’ appointments and cessations

Appointments

Name of the Director Appointed w.e.fShri V.K. Thakral, IAS 31.05.2013Shri P.C. Mohapatra 01.11.2013Shri P.Madhusudan* 01.01.2014Shri Rajib Sekhar Sahoo 20.02.2014Shri Ajay Kumar Goyal 20.02.2014Lt Gen. Arvind Mahajan (Retd.) 20.02.2014Dr Sheela Bhide, IAS (Retd.) 20.02.2014Dr G.B.S. Prasad 01.05.2014Shri D N Rao 01.08.2014Shri TVS Krishna Kumar 25.08.2014

*elevated from Director (Finance) to Chairman-Cum-Managing Director.

Cessations:

Name of the Director Cessation w.e.f.Shri APVN Sarma, IAS (Retd.) 29.09.2013Shri H S Chahar, IAS (Retd.) 29.09.2013Shri Swashpawan Singh, IFS (Retd.) 30.09.2013Dr U D Choubey, DG (SCOPE) 10.10.2013Shri N S Rao 31.10.2013Shri A P Choudhary 31.12.2013Shri Y R Reddy 30.04.2014Shri Umesh Chandra 31.07.2014Shri Rajib Sekhar Sahoo* 22.09.2014Shri Ajay Kumar Goyal* 23.09.2014Dr. Sheela Bhide*, IAS (Retd.) 24.09.2014Lt.Gen. Arvind Mahajan* (Retd.) 24.09.2014

The Board of Directors wishes to place onrecord their appreciation of the valuable servicesrendered and contribution made by the outgoingDirectors during their tenure on the Board of RINL.

The Board of Directors of the Companyacknowledge with deep appreciation the valuableguidance, assistance, cooperation and supportextended by the Government of India, especiallythe Ministry of Steel and Govt. of Andhra Pradeshand wish to place on record their appreciation forthe cooperation extended by its Valued Customers,Suppliers, Railways, Bankers, Auditors,Contracting agencies, Business Associates,Consultants, Other officials of Ministries of variousother States, the local District Administration andLaw and Order authorities. The Board of Directors

also appreciate the commitment, sincere effortsand hard work put in by all the employees of theCompany, Trade Unions and Steel ExecutiveAssociation whose whole hearted contribution hasbeen vital in helping the Company to scale greaterheights.

For and on behalf of the Board of Directors

(P Madhusudan)Chairman-cum-Managing Director

VisakhapatnamDated: 8th Sept. 2014

* Cessations that have taken place subsequent toDirectors’ Report dtd. 08-09-2014, which were putup for approval of AGM, are now incorporated/updated.

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1.0 Industry Structure and Developments

1.1 World Steel Scenario

Challenges are being faced by the steelindustry world wide with slowdown inglobal economies. However, as per WorldEconomic Outlook released by IMF, theGlobal Growth is expected to reboundfrom second quarter of 2014. The GlobalGrowth projections are 3.4% and 4.0% for2014 and 2015 respectively against 3.2%in 2013. During the same period, India isprojected to grow at 5.4% and 6.4%respectively against 5.0% in 2013. On theother hand, China is expected to slowdown to 7.4% and 7.1% from 7.7% in 2013.

World Steel Association forecasts thatglobal apparent steel use will increase by3.1% only to 1,527 Mt in 2014 followinggrowth of 3.6% in 2013. However, in 2015,it is forecast that world steel demand willgrow further by 3.3% and will reach1,576 Mt. In 2015, growth in most parts ofthe world is expected to accelerate dueto a continuing steady recovery in thedeveloped economies and animprovement in the situation for theemerging economies. But China’s steeldemand will further decelerate and thiswill prevent the broad recoverymomentum from registering a higherglobal growth rate for 2015. On the otherhand, in India, steel demand is expectedto grow by 3.3% in 2014, against 1.8%growth in 2013. The growth is expected tofurther accelerate to 4.5% in 2015.

Thus, India is slowly emerging as the nextgrowth driver of Steel Demand in theworld.

1.2 Macro-economic Indicators of India

During 2013-14, the overall growth of GDPwas 4.9% as compared to 4.5% for2012-13. This growth was mainlycontributed by Agriculture (4.6%) andService Sectors (6.9%). Industry growthwas only 0.7%. The Index for IndustrialProduction (IIP) registered a negativegrowth of (- 0.1%) during 2013-14, againstgrowth of 1.1% in the CPLY, representinga continued sluggish industrial growthduring the year. Steel Industry being coresector also followed almost same trend.

However, as mentioned earlier, the growthis set to pick up further in the comingyears.

1.3 Indian Steel Industry

During 2013-14, while the production offinished steel in India registered a growthof 4.1%, Steel consumption registered agrowth of only 0.6%, resulting in Indiabecoming a net exporter of Steel, areversal from the earlier status of netimporter since 2006-07. The performanceof Indian steel industry in 2013-14 was asfollows:

Management Discussion andAnalysis Report for 2013-14

Annexure – 1

Unit : Mt

Item 2012-13 2013-14 %Growth

Finished Steel productionfor sale 81.68 85.01 4.1%

Import 7.93 5.45 (-)31.3%

Export 5.37 5.59 4.1%

Total availability 84.24 84.87 0.7%

Steel consumption 73.48 73.93 0.6%

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The future of the Indian steel industry isbright. The government plans to increaseinfrastructure spending from the current5 percent GDP to 10 percent by 2017, andthe country is committed to investingUS$ 1 trillion in infrastructure during the12th Five-Year plan. As per the Industryinsiders even if 15 percent is taken assteel component in the total investment,then it means additional demand worthUS$ 75 billion of steel in the next fiveyears.

India is envisaging to achieve steelproduction capacity of 300 million tonnesper annum (MTPA) by 2025 from thecurrent 90 Mt. However, this calls for aninvestment of US$ 210 billion over thenext decade

1.4 Steel Prices

The decline in International prices of steelproducts continued in 2013-14 as well,with slowdown in consumption.

In the domestic market, Steel prices hadshown a declining trend duringJun-Dec’13. RINL has also suffered fromthis trend. However, during the 4thQuarter of the year, the prices firmed updue to improvement in Marketsentiments.

2.0 Your Company’s performance

2.1 The production of crude steel was higherthan the previous year in all the months,except for the month of October 2013. Theproduction got severely affected inOctober and the plant was forced to beoperated at 40 to 50% capacity level forseveral days, as the State Grid was

disconnected from the Plant captivepower plant network for 3 days as part ofthe agitation on separate state, CyclonePhailin with impact on production for3 days and unprecedented rainfallimpacting transportation of Iron ore andCoal for about a week.

Further, BF-1 has been shut down since22nd Oct as part of Category-1 CapitalRepairs.

Production of Saleable Steel was affectedby Power Restrictions imposed in the wakeof acute shortage of power in the state.

However, with timely initiatives taken bythe Management, the production could bestepped up and positive growth of 4%could be achieved in Crude Steelproduction by the end of the year.

2.2 Financial Overview:

Your company has been able to achieve aProfit After Tax (PAT) of Rs.366.45 Crs,with Turnover of Rs.13,489.46 Crs. TheState of Andhra Pradesh and State ofTelangana where RINL has highestmarket share, got severely affected byacute power crisis forcing severalindustries to throttle /or cut downproduction. Competition in the Bars &Rods market increased due to higherproduction in this category from othermajor competitors without correspondingincrease in consumption.

Input costs especially basic raw materialslike Iron ore and Ferro alloys along withforeign exchange fluctuations alsoaffected adversely the bottom-line growth.The initiatives taken by RINL collectivecould partially off set the adverse impactof the above factors, mainly, through costreduction measures like optimisation ofCoal blend, maximisation of captivegeneration of power and improvement in

Unit: US $/tonne

Month Wire Rods Rebars Squares Scrap

March ‘12 683 668 602 420

March ‘13 601 592 528 384

March ‘14 545 530 500 355

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� Lower interest income is due to depletion ofTerm Deposit during the year on account ofthe following:

• Capex for an amount of Rs.1,512 crs

• Redemption of Preference Share capitalamounting to Rs.606.97 crores as per theRedemption Schedule.

• Dividend payment of Rs.102 Crs (Rs.44 Crsof Final Dividend for FY 2012-13 andRs.58 Crs Interim Dividend for FY 2013-14).

2.4.3 Expenditure (Net of Inter Account Adjustments)

Particulars F.Y 2013-14 F.Y 2012-13 % Inc/(Dec)(Rs.Crs) (Rs.Crs) over

previousyear

Cost ofmaterialsconsumed 7025.82 8098.66 (13)

Employees’benefits 1751.10 1469.07 19

Finance Costs 338.12 359.25 (6)

Depreciation &Amortisation 271.48 186.88 45

Other Expenses(net of Interacc Adj) 2382.88 2244.58 6

Total 11769.40 12358.44 (5)

� Higher depreciation is on account of full yeardepreciation for BF-3 capitalised in 2012-13and capitalisation of Boiler-6 and TG-5 duringthe year.

� Higher Employee benefits are mainly onaccount of higher Dearness Allowance (DA),promotions and increments and additionalimpact of finalization of wage revision forNon-Executive employees during the year.

other operational areas along withprudent fund management.

2.3 Financial PerformanceParticulars F.Y 2013-14 F.Y 2012-13 % Inc/(Dec)

(Rs.Crs) (Rs.Crs) over previous

year

SalesTurnover 13489.46 13552.93 -

PBDIT 1158.75 1072.60 8

Profit BeforeTax (PBT) 549.15 526.47 4

Profit AfterTax (PAT) 366.45 352.83 4

2.4 Analysis of the Financial Performance ofthe Company

2.4.1 Sales TurnoverParticulars F.Y 2013-14 F.Y 2012-13 % Inc/(Dec)

(Rs.Crs) (Rs.Crs) over previous

year

Sale ofSaleable steelproducts 11606.27 11409.27 2

Sale of otherProducts 1883.19 2143.66 (12)

Total SalesTurnover 13489.46 13552.93 (0)

Less: ExciseDuty(Including EDon Trial runsales) 1417.23 1464.72 (3)

Net SalesTurnover 12072.23 12088.21 (0)

2.4.2 Other RevenuesParticulars F.Y 2013-14 F.Y 2012-13 % Inc/(Dec)

(Rs.Crs) (Rs.Crs) over previous

year

InterestEarned 180.05 233.33 (23)

OtherNon-operatingIncome 126.83 221.96 (43)

Dividend 0.11 0.13 (15)

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2.4.4 Analysis of Expenditure for the F.Y 2013-14

2.5 Contribution to Exchequer

RINL contributed Rs.2250 Crs to the NationalExchequer in the form of dividend, taxes andduties to various Government agencies asagainst Rs.2374 Crs during the previous year.In addition to the above, RINL has paid to theGovt of India, an amount of Rs. 606.97 Crs (P.Y.Rs.1380.50 Crs) on account of redemption ofpreference share capital.

2.6 BorrowingsParticulars F.Y 2013-14 F.Y 2012-13 % Inc/(Dec)

(Rs.Crs) (Rs.Crs) over previous

year

Secured Loans 1792.97 1827.78 (2)

UnsecuredLoans 3150.49 3072.22 3

Total Loans(Long &Short Term) 4943.46 4900.00 1

2.7 Fixed AssetsParticulars F.Y 2013-14 F.Y 2012-13 % Inc/(Dec)

(Rs.Crs) (Rs.Crs) over previous

year

Net Block

Tangible 4530.03 3787.07 112

Intangible 2.75 2.74 (14)

Capital Work-in-Progress 10669.46 9965.24 (6)

IntangibleAssets underdevelopment 30.11 22.20 48

During the year, the following major unitstogether with related sub units werecapitalized which resulted in increase in netblock assets.

Unit Value Date of capitalisation(Rs.Crs)

330 T Boiler-6 300.71 31st Dec 2013

67.5 MW –TG5 279.95 28th Feb 2014

2.8 Non-Current Assets & Non-CurrentLiabilities

Particulars F.Y 2013-14 F.Y 2012-13 % Inc/(Dec)(Rs.Crs) (Rs.Crs) over

previousyear

Non-CurrentLiabilities

Long termBorrowings 1203.53 1241.56 (3) —

Other Longterm Liabilities 165.56 105.00 58

Long termProvisions 531.43 414.77 28

Non-CurrentAssets

Non-currentInvestments 362.53 362.58 0

Long termLoans &Advances 616.05 498.36 24

Other Non-

Current Assets 60.23 36.58 65

37

� Liquidation of Term Deposits during the yearon account of Capex programmes for anamount of Rs.1512 Crs (against Budgetestimate (RE) of Rs.1500 Crs) and redemptionof Preference Share capital amounting toRs.606.97 Crores as per the RedemptionSchedule have resulted in lower Cash & Bankbalances.

2.10 Initiatives taken by RINL:

2.10.1 Cost Control Measures:

a) Improvement in Techno EconomicParameters like Better Yields ofLiquid Steel, LD Gas, Gross Coke,Ammonium Sulphate, Lower Power& Heat Consumption in Coke Ovens,Blast Furnace, CRMP, MMSM andTPP, Reduction of Off-grade Heatsand Reduction in RailwayDemurrages resulted in additionalsavings of Rs.79 Crs in 2013-14.

b) Recycling of Metallurgical Wastes,Tar / Benzol Sludge, LD Slag, Usedrefractories, CRMP Returns,Copper scrap, CRMP Bag FilterDust, lime fines, lime Briquetting,Reclaimed Spares, Reclaimed Oil,Maintenance Scrap resulted insavings of Rs.162 Cr.

c) Substitution of materials by cheaperalternatives like Nut Coke in placeof BF Coke in Blast Furnaceresulted in savings of Rs.47 Cr.

2.10.2 Treasury Management Initiatives

a) The average working capital interestrate was lower at 8.54% comparedto previous year 9% in spite ofincrease in domestic borrowingrates, resulting into savings of Rs.15Crs approx. This was achieved byreorganising the banking facilitylimits.

b) Treasury Management initiativesexplored the interest rates scenarioto get higher interest yield oninvestments which were at 10.22%

2.9 Current Assets, Current LiabilitiesParticulars F.Y 2013-14 F.Y 2012-13 % Inc/(Dec)

(Rs.Crs) (Rs.Crs) over previous

year

CURRENTASSETSInventories

Semi-Finished/Finished goods 2065.05 2083.70 (1)Raw materials 1311.31 1283.35 2Stores &Spares 486.68 461.55 5

TotalInventories 3863.04 3828.60 1

TradeReceivables

Grossreceivables 823.97 1029.96 (20)

Less: Provisionfor Tradereceivables 20.32 20.31 0

NetReceivables 803.65 1009.65 (20)

Cash & Bankbalances 175.89 1625.02 (89)

Short termLoans &Advances 3461.35 3417.75 1

Other CurrentAssets 96.73 96.73 (0)

Total CurrentAssets 8400.66 9977.75 (16)

CURRENTLIABILITIES

Short termBorrowings 3739.93 3658.44 2

Trade payables 829.93 737.94 12

CurrentLiabilities 5484.04 5615.19 (2)

Short TermProvisions 157.65 173.10 (9)

Total CurrentLiabilities &Provisions 10211.55 10184.67 0

38

� Lack of level playingfield vis-à-vis othersdue to lack of CaptiveMines for iron ore &coking coal.

� Single LocationCompany & only Longproducts, exposed tocyclic markets.

� Steep rise in Cost ofproduction and fall inmargins.

� High cost of servicinghuge Equity base.

� SubduedInternational& sluggish domesticMarkets.

production from expansion units during2014-15.

b) The thrust areas for the year includemaximization of asset utilization,production of high end value added steelfrom SMS-2.

4.0 Strengths and weaknesses:

The few strengths and weaknesses of thecompany (not an exhaustive list) are placedbelow:

Strengths Weaknesses

compared to domestic INR loanswhich were raised at an averagecost of 9.10% against much highermarket rate of Borrowings. (SBICash Credit rates of 9.95% to10.40% pa during the year).

c) During the year, Fixed Deposits ofRs.495 Crs were pre-matured andre-invested to explore the interestrates, it resulted in additionalinterest income of Rs. 2.05 Crs.

d) Savings on Borrowings during theyear 2013-14.

Description FY 2013-14Weighted Savings

avg. RoI (%) (Rs.Crs)

Foreign currencyborrowings (FCB) 8.25 47.32

Commercial Paper (CP) 8.59 11.15

Borrowings fromBanks/Fin. Institutions 9.81 2.60

Total for all loans 8.54 61.07

Wt.Avg interest rate onCash Credit(**) 10.21

Notes: (**)Weighted Average Cash Creditinterest rate is calculated based on thesecured Cash Credit limits sanctionedwith periodical interest rates.

e) India Ratings & Research Pvt Ltd,(IRR) a Fitch Group Companyreaffirmed credit rating for shortterm Bank facilities as “IND AA/INDA1+” and for long term issuerratings as “IND AA”. Further, IRRreaffirmed credit rating for shortterm debt instruments as ‘IND A1+’for the year.

3.0 Outlook for the company in 2014-15:

a) Stage -1 units of expansion to 6.3 Mt havealready been commissioned and effortsare on to stabilize the operations andStage-2 units of the 6.3 Mt expansionproject will be commissioned during2014-15. Hence, RINL is at a crucialjuncture of stabilisation and ramping up

� Strong position in aHigh Growth Market.

� Strategic advantage ofShore based location.

� Operational Efficiency.

� Diverse CustomerBase served throughan ExtensiveMarketing Network.

� ExperiencedManagement Team.

� Availability of land andlayout for Expansionupto 20 Mt.

� Image as qualityproducer & value formoney supplier.

� Committed workforce.

39

Opportunities and Threats

Opportunities Threats

� Huge demandpotential in view ofthe projected growth.

� Encouraging signs dueto huge infrastructurespend planned in 12th

Five year plan.� Projected growth in

Steel consumption.� Improved availability

of Ports & logistics.� Diversifying to new

product mix likeAxles/ Wheels andTransmissionline Towers etc.

� Stiff competitionfurther compoundedby CapacityExpansion bycompetitors andentry of Internationalplayers.

� Increasing rawmaterial prices &shift of value chaintowards rawmaterials.

� Oligopolistic coalsupply side.

� Single iron oresupplier – located indisturbanceprone areas.

� Predominantsecondary sector inlong products.

� New materials,products ortechnologies couldreduce the demandfor RINL’s steelproducts.

� Continuing of poormacro-economicenvironment – e.g.slowdown ineconomic growthrates, depreciatingRupee, etc.

5.0 Road Ahead for RINL:

RINL is committed to expansion to itspotential capacity exploiting the alreadyexisting infrastructure in Visakhapatnam.However, lack of captive iron ore and coalmines to RINL continues to hamper the longterm expansion plans of RINL.

The long awaited success came with regardto Raw Material Securitisation for RINL. LOIhas been received for the first ever Iron Orelease to the Company in Bhilwara District ofRajasthan over an area of about 946 Hectares.Government of Rajasthan has alsorecommended allotment of another adjacentblock of Iron Ore over an area of 4,500 Hectaresand it is under consideration of Ministry of

Mines, Govt. of India. RINL will be setting upthe state of art mining facilities to use somuch needed low grade iron ore, in Bhilwara.

RINL’s strategic initiative for laying of SlurryPipeline from Nagarnar to Visakhapatnamand setting up of Pellet Plant atVisakhapatnam in a Joint Venture with NMDCis also taking shape.

RINL for the first time joined hands withRailways for setting up of a Forged WheelPlant adjacent to the Rail Coach Factory inRaebareli, Uttar Pradesh. This plant wouldbe the largest in the country and wouldsubstitute imports within a short time. Theproject has been frozen and orders are to beplaced shortly and the unit is likely to getcommissioned by 2017-18.

In any case, RINL being a shore based steelplant with port in its backyard is placed in anadvantageous position for exports. RINL hastaken initiatives for leveraging the same byopening branch in Sri Lanka and planningfurther addition of overseas branches. RINL,which exported 1 lakh tonne steel last fiscal,aims to treble the same in the current fiscal.

6.0 Sustainability Initiatives:

The sustainable economic development ofany country requires creating sustainablelivelihood besides industrial development onlarge scale. Keeping its responsibilitytowards the ecosystem, RINL has furtherstrengthened its sustainability policy whichfocuses on Society, Energy and Environmentand the Sustainability Policy stands to fulfilthe same.

7.0 Internal Control Systems and Adequacy

The Company is having an efficient system ofInternal control for achieving the objectivesof the Company by ensuring efficiency inoperations, protection of resources, accuracyand promptness in financial reporting andcompliance with the laid down policies andprocedures along with relevant Laws andregulations.

In RINL, there is a separate Internal Audit

40

Department and the Internal Audit isconducted by a team of experiencedChartered Accountants, Cost & ManagementAccountants and Engineers including aSystem Analyst with diversified experience.The Internal Audit Department carries outreviews, evaluates and appraises varioussystems, procedures and policies of theCompany and suggests meaningful anduseful improvements along with correctivemeasures wherever required.

The Internal Audit department focuses ontransparency in the systems and proper/adequate internal control mechanisms.Annual Audit Programmes are drawn upcovering critical areas of variousdepartments in order to bring overall

improvement in the Company. From time totime, the Audit Committee is being apprisedon status of pending audit paras.

The Internal control systems arecommensurate with the size of the Companyand the reports containing significant Auditfindings are submitted to the AuditCommittee of the Company from time totime.

The Company has put in place an EnterpriseRisk Management (ERM) Policy andprocedure duly approved by the Board andthe same has been put on Company’sWebsite. ERM is being implemented acrossthe organization covering both Works andNon Works Departments by an In-houseteam.

��

41

REPORT ON CORPORATE GOVERNANCEFOR THE YEAR 2013-14

Company’s Philosophy

A strong reputation for Integrity and Ethicalconduct is an important Corporate Asset. Itassures the Employees, Customers, Vendors,Regulators, Community neighbors andShareholders that the Company will deal withthem honestly and fairly. Everyone would benefitfrom being a part of the Company, which has builtreputation for honorable and principled actions.The philosophy of the Company in relation toCorporate Governance is to ensure Accountability,Transparency, Integrity, Disclosures and Reportingthat conforms fully with laws, regulations,guidelines, etc. and to promote ethical conductthroughout the organization. RINL believes in-conforming-to the highest standards of corporate-govemance in the country. It recognizes that each

Annexure - II

member of the Board owes his/her first duty forprotecting and furthering the interests of theCompany.

Board of Directors

Composition of Board

RINL follows DPE/SEBI Guidelines relatingto the compliance with the conditions of CorporateGovernance. As on 31st March, 2014, the totalnumber of Board of Directors is fifteen comprisedof Chairman-Cum-Managing Director, Four Wholetime Functional Directors, Two Part-time officialDirectors (i.e Government Nominee Directors) andEight Part-time Non-official Directors(i.eIndependent Directors). Director (Finance) posthas fallen vacant consequent to elevation ofSri P.Madhusudan as CMD w.e.f. 1st Jan’ 2014.

The Board of Directors as on 31st March, 2014 comprised as follows:

Functional Directors

1) Shri P. Madhusudan Chairman-Cum-Managing Director2) Shri Umesh Chandra Director (Operations) .3) Shri T.K. Chand Director (Commercial)4) Shri Y.R. Reddy Director (Personnel)5) Shri P.C. Mohapatra Director (Projects)

Part-time official Directors (i.e Government Nominee Directors)

6) Shri V.K. Thakral, IAS 7) Shri Lokesh Chandra, IAS

Part-time Non-official Directors (i.e Independent Directors)

8) Shri V.S. Jain 12) Dr. Sheela Bhide*, IAS (Retd.)9) Shri Ashhok Kumar Jain 13) Lt.Gen. Arvind Mahajan (Retd.)10) Prof. Sushil 14) Shri Ajay Kumar Goyal11) Prof. S.K. Garg 15) Shri Rajib Sekhar Sahoo

* One Woman Director has been appointed in Feb’2014, which complies with the provisions of theCompanies’ Act, 2013.

42

S.No.Category

Name & Designationof the Director(s)

No. ofMeetings

heldduring

respectivetenure ofDirector

No. ofBoard

Meetingsattended

Attendanceat last AGM

held on21-09-2013

No. ofother

Director-ships

held as on31.3.2014

No. of RINLBoard Sub-

Committees ason 31.3.2014

***

No. of Board Sub-Committees in other

companies asChairman / Member

as on 31.3.2014***

Chairman Member Chairman Member

Functional directors1) Shri P.Madhusudan**

CMD (w.e.f 01.01.2014) 11 11 Y 6 NIL 2**** NIL NIL2) Shri A.P.Choudhary

CMD (upto 31.12.2013) 10 10 Y Retired Retired Retired Retired Retired3) Shri Umesh Chandra

Director (Operations) 11 10 Y 5 NIL 1 1 34) Shri T.K.Chand

Director (Commercial) 11 11 Y 1 NIL 1 NIL 15) Shri Y.R.Reddy

Director (Personnel)(upto 30.04.2014) 11 11 Y NIL NIL 2 NIL NIL

6) Shri P.C.MohapatraDirector (Projects)(w.e.f. 01.11.2013) 4 4 N.A. NIL NIL NIL NIL NIL

7) Shri N.S.RaoDirector (Projects)(upto 31.10.2013) 7 7 Y Retired Retired Retired Retired Retired

Part-time official Directors (i.e Government Nominee Directors)8) Shri E.K.Bharat Bhushan, IAS

(upto 29.04.2013) 2 2 Resgn Resgn Resgn Resgn Resgn Resgn9) Shri V.K.Thakral, IAS

(w.e.f. 31.05.2013) 8 7 N 4 NIL NIL 1 NIL10) Shri Lokesh Chandra, IAS 11 10 N 7 NIL NIL NIL NIL

Board Meetings

During the financial year ended 31st March, 2014, Eleven Board Meetings were held on following dates;

Board Meeting No. Date Board Meeting No. Date

267 16-04-2013 273 26-09-2013268 25-04-2013 274 18-11-2013269 31-05-2013 275 21-11-2013270 21-06-2013 276 17-12-2013271 28-06-2013 277 24-01-2014272 05-09-2013

Details of number of Board Meetings attended by Directors, attendance at the last Annual GeneralMeeting (AGM), number of other directorships and number of Board Sub-Committees positions asChairman / Member in RINL/VSP etc., during the year 2013-14 were as follows:

43

S.No.Category

Name & Designationof the Director(s)

No. ofMeetings

heldduring

respectivetenure ofDirector

No. ofBoard

Meetingsattended

Attendanceat last AGM

held on21-09-2013

No. ofother

Director-ships

held as on31.3.2014

No. of RINLBoard Sub-

Committees ason 31.3.2014

***

No. of Board Sub-Committees in other

companies asChairman / Member

as on 31.3.2014***

Chairman Member Chairman Member

Part-time Non-official Directors (i.e Independent Directors)11) Shri A.P.V.N.Sarma, IAS (Retd.)

(upto 29.09.2013) 7 5 N Retired Retired Retired Retired Retired12) Shri Swashpawan Singh, IFS (Retd.)

(upto 30.09.2013) 7 7 N Retired Retired Retired Retired Retired13) Dr. U.D.Choubey, DG (SCOPE)

(upto 10.10.2013) 7 3 N Retired Retired Retired Retired Retired14) Shri H.S.Chahar, IAS (Retd.)

(upto 29.09.2013) 7 6 N Retired Retired Retired Retired Retired15) Shri V.S.Jain 11 9 N 3 NIL NIL 1 316) Shri Ashhok Kumar Jain 11 11 Y NIL 2 NIL NIL NIL17) Prof. Sushil 11 11 N 2 NIL 2 NIL NIL18) Prof.S.K.Garg 11 11 N NIL NIL 1 NIL NIL19) Dr.Sheela Bhide* IAS (Retd.) 0 0 N.A 3 # # NIL 520) Lt.Gen.Arvind Mahajan* (Retd.) 0 0 N.A 3 # # NIL NIL21) Shri Ajay Kumar Goyal* 0 0 N.A 1 # # NIL 122) Shri Rajib Sekhar Sahoo* 0 0 N.A 5 # # 1 5

*Sl.No. 19 to 22 assumed charge w.e.f. 24.02.2014; Y-Attended; N - Not attended**Sl.No.1 Shri P.Madhusudan was elevated from Director (Finance) to CMD. Prior to his elevation as CMD, he attendedthe Board Meetings in the capacity of D(F).N.A. - Not appointed and hence not applicable; Resgn- Resigned;# As on 31.03.2014, No membership in any Committee(s) of RINL*** Audit Committee, CSR & SD Committee, Remuneration Committee, Shareholders Investors Grievance Committee beingCorporate Governance related Committees, are only considered & position as on 31.03.2014, was only reflected above.**** in the capacity of holding additional charge as D (F).

Board Meetings Procedure

The Company Secretary in consultation with theChairman cum Managing Director sends awritten notice of each Board meeting to eachDirector. The Board agenda is invariablycirculated to the Directors in advance.

The members of the Board have access torelevant information of the Company and arefree to recommend inclusion of any matter inthe agenda for discussion. In case of need, thesenior management is invited to attend theBoard Meetings to provide additional inputsrelating to the items being discussed and / orto give Presentation on each item to the Board.

The Board meets regularly and is responsiblefor the proper direction and management of theCompany.

Loan & Advances given to Directors :

There is no special loan or advance given toFunctional Directors. Normal employee’sbenefits towards advances like festival advanceand House Building advance are extended tothem.

Board’s Responsibilities

The mandate to the Board is to oversee theCompany’s strategic direction, review andmonitor corporate performance, ensure

44

regulatory compliance and safeguard theinterests of the shareholders. The Board hasreserved certain items of governance for itsreview, including the approval of annual andinterim financial results, disposals and jointventures, as well as material agreements, majorcapital expenditure, major sales contracts,employees’ remuneration and perquisites,manpower plans and long term plans for itsreview and approval.

Information placed before the Board ofDirectors:

The information under the following heads isusually presented to the Board of Directors ofthe Company either as part of the agendapapers or is tabled / presented during thecourse of the Board meeting:

• Annual operating plans and budgets andany updates.

• Capital budgets and any updates.

• Quarterly, Half-yearly & Annually resultsfor the company and its operating divisionsor business segments.

• Minutes of meetings of Audit Committeeand other Sub-Committees of the Board.

• Minutes of Board Meetings of subsidiarycompanies.

• Details of any Joint Venture or R&D projector technical collaboration agreementrequiring approval of Board of Directors.

• Sale of material, nature of investments,subsidiaries, assets, which is not in normalcourse of business.

• Action Taken Report on matters desired bythe Board.

• Disclosure of Interest by Directors aboutdirectorships and Committee positions

occupied by them in other companies.

• Quarterly report on Statutory Compliance.

• Information relating to major legaldisputes.

• Arbitration cases.

• Short term Investment of surplus funds.

• Significant Capital Investment proposals.

• Changes in significant accounting policiesand practices and reasons for the same.

• Compliance with the provisions andguidelines under Companies Act, 1956 orCompanies Act, 2013.

• Any other information required to bepresented to the Board either forinformation or approval.

Role of Independent Directors

The Independent Directors play an importantrole in deliberations of the Board and BoardSub-Committee Meetings and bring to theCompany their expertise in various fields viz.Engineering, Finance, Management, Law andPublic Policy. The Board has established variousSub-Committees such as Audit Committee andCSR Committee etc with adequaterepresentation of Independent Directors in linewith the requirements of Department of PublicEnterprises (DPE) Guidelines on CorporateGovernance for CPSEs. The Company has alsoconstituted a Remuneration Committee onPerformance Related Pay headed by anIndependent Director.

Consequent upon adoption of the DPEGuidelines on Corporate Social Responsibilityfor CPSEs as CSR Policy, the Board constitutedthe Board Level Apex Committee for CorporateSocial Responsibility for proper and periodicmonitoring of CSR activities.

45

Meetings of Independent Directors

A Board Sub Committee has been set upcomprising all the Independent Directors viz.Committee of Independent Directors (COID)which facilitates the Independent Directors tomeet and discuss on issues without thepresence of Whole time (Executive) Directors orManagement Personnel. During such meetingsthe Independent Directors discuss matterspertaining to the affairs of the company. For thisyear, one such meeting was held on25th Sept’ 2013.

Independence Certificate:

Independent Directors provided Certificate ofIndependence, which is introduced in line withOffice Memorandum issued by DPE on Roles andresponsibilities of Non-Official Directors on theBoards of CPSEs dated 28th Dec, 2012. All theIndependent Directors of the Company furnisha declaration annually that they comply with theconditions of their being Independent.

Selection of New Directors

As per Articles of Association of RINL, thePresident of India through Ministry of Steelappoints the Chairman & Managing Director,Functional Directors, Part-time OfficialDirectors (i.e Government Nominees) and Part-time Non-official Directors (i.e IndependentDirectors) on the Board of RINL. TheIndependent Directors are selected/ approvedby the Ministry of Steel in consultation with theSearch Committee of the Department of PublicEnterprises which maintains a panel of IAS(Retd), Ex CMDs, Professors and Professionalssuch as Chartered Accountants etc., having wideexperience in the fields of Management,Finance, Engineering, Administration andIndustry.

Terms & Conditions of Board Members &Retirement Policy

The appointment of Chairman cum ManagingDirector and Functional Directors of thecompany is made by the President of India fromtime to time on such terms and conditions likeremuneration payable, tenure etc.

Two Part-time Official Directors i.e GovtDirectors viz. Joint Secretary (Steel) andAdditional Secretary & Financial Advisor,Ministry of Steel are nominated by theGovernment of India on the Board of RINL andthey continue to hold such office at thediscretion of the Government of India.

Code of Conduct

As part of RINL’s persisting endeavor to set ahigh standard of conduct for its employees andits Board members, a ‘Code of BusinessConduct and Ethics’ has been laid down for allBoard Members and Senior Managementpersonnel. The same is placed at Company’swebsite.

The Code encompasses:

• General Moral Imperatives;

• Specific Professional Responsibilities; and

• Additional Duties / Imperatives for BoardMembers and Senior ManagementPersonnel.

Senior Management personnel and BoardMembers declare affirmation, annually that theydo read and follow the code.

Board Charter

For the purpose of clearly defining the roles andresponsibilities of the Board members, theBoard has laid down a Board Charter for theBoard of Directors of the Company. The Charteralso articulates Company’s CorporateGovernance objectives and approach.

46

The details of remuneration & sitting fee paid to Directors during the financial year 2013-14:

(Value in )

Allowances S. Name Basic and Perquisites SittingNo. Salary & other Fees Total Remarks

benefits retirement

1. P. Madhusudan* 998426.00 1711234 Nil 27096602. A.P.Choudhary* 772480.00 2961461 Nil 3733941 Superannuated

on 31-12-20133. Umesh Chandra* 1025740.00 1719703 Nil 27454434. T.K.Chand* 946330.00 1617898 Nil 25642285. Y.R.Reddy* 900000.00 1501821 Nil 24018216. N.S. Rao* 526330.00 4121464 Nil 4647794 Superannuated

on 31-10-20137. P.C.Mohapatra* 403686.00 646962 Nil 1050648 Director(Projects)

w.e.f 1-11-20138. E.K. Bharat Bhushan** Nil Nil Nil Nil9. V.K.Thakral** Nil Nil Nil Nil

10. Lokesh Chandra** Nil Nil Nil Nil11. A.P.V.N.Sarma*** Nil Nil 1,60,000 1,60,00012. Swashpawan Singh*** Nil Nil 4,20,000 4,20,00013. Dr. U.D.Choubey*** Nil Nil 1,60,000 1,60,00014. H.S.Chahar*** Nil Nil 3,80,000 3,80,00015. Ashhok Kumar Jain*** Nil Nil 4,40,000 4,40,00016. V.S.Jain*** Nil Nil 3,00,000 3,00,00017. Prof. Sushil*** Nil Nil 3,00,000 3,00,00018. Prof. S.K.Garg*** Nil Nil 2,80,000 2,80,000

(*)Whole Time Directors (WTD)/ FunctionalDirectors:

The Whole Time Directors/ Functional Directorsare appointed in terms of the Articles ofAssociation of the Company by the President ofIndia, in consultation with the Chairman of theCompany for a period of 5 years or till the age ofSuperannuation or until further orders, whicheveris earlier. The appointment may, however, beterminated by either side on three months noticeor on payment of three months’ salary in lieuthereof.

(**) Part-time official Directors/Govt Directors

Part-time official Directors/Government Directorsare 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 byGovernment of India as Director for a period of 3years from the date of assumption of charge oruntil further orders, whichever is earlier. Sittingfees is only paid by the Company to the part-timenon-official directors @ Rs 20,000/- for eachBoard/Board Sub-Committee Meetings attendedto by them.

47

Role of the Company Secretary in overallgovernance process:

The Company Secretary plays a key role inensuring that the Board procedures are followedand regularly reviewed. The Company Secretaryensures that all relevant information, details anddocuments are made available to the Directorsand Senior Management for effective decision-making at the Meetings. The Company Secretaryis primarily responsible to ensure compliance withapplicable statutory requirements under theCompanies Act, 1956 or any enactment thereofand is the interface between the Management andRegulatory Authorities for governance matters. Allthe Directors of the Company and SeniorManagement have access to the advice andservices of the Company Secretary.

Board Sub Committees

Procedure at Board Sub Committee Meetings

The guidelines relating to Board meetings aremostly followed for all Board Sub-committeemeetings. Minutes of the proceedings of theCommittee meetings are placed before the Boardmeetings for perusal and noting. CompanySecretary is also the Secretary to the respectiveBoard Sub-Committees.

Audit Committee

I. Composition of the Audit Committee as on31.3.2014 is as follows:

The Audit Committee was initiallyconstituted during the year 2006-07 in linewith the O.M.No.18(8)/2005-GM, dated16th June, 2005 issued by Department ofPublic Enterprises (DPE), Govt. of India.Later in terms of the Corporate Governanceguidelines issued by DPE in May 2010 andconsequent upon conversion into a PublicLimited Company, the Audit Committee wasreconstituted as per Section 292A of theCompanies Act, 1956. Audit Committee thusconstituted continues to discharge itsfunctions.

As on 31st March, 2014 the Audit Committeecomprise three Independent Directors, ofwhich one is the Chairman and the other two

are members and the details are givenbelow.

Name Status in the No.of MeetingsCommittee Attended

Held Attended

Shri A.K. Jain Chairman 6 6

Prof. S.K. Garg Member(from 12.11.2013) 2 2

Prof. Sushil Member(from 12.11.2013) 2 2

Dr.U.D.Choubey MemberDG (SCOPE) (upto 10.10.2013) 4 1

Shri H.S.Chahar MemberIAS (Retd.) (upto 30.09.2013) 4 4

Director (Finance) is a Permanent invitee andHead of Internal Audit & Stock VerificationDepartment is an Invitee for the meetingsof the Audit Committee.

II. Meetings and attendance of AuditCommittee during the year:

During the financial year ended 31st March,2014, Six Audit Committee Meetings wereheld on following dates,Meeting No Date Meeting No Date

39 16.04.2013 42 30.08.2013

40 31.05.2013 43 13.11.2013

41 21.06.2013 44 16.12.2013

The minutes of all the Audit Committeemeetings are put up to Board in theirsubsequent meetings as an item ofinformation. The Chairman of the AuditCommittee also appraises the Board aboutthe observations, if any, of the AuditCommittee during the Board Meeting.

The Other Corporate Governance related BoardSub-Committees (BSCs) (other than AuditCommittee) are given below:

1) Remuneration Committee.

2) CSR & Sustainability DevelopmentCommittee.

3) Human Resources Committee.

4) Shareholders’/Investors’ GrievanceCommittee.

48

5) Committee of Management (COM) for ShareTransfers.

6) Independent Ethics Committee.

7) Committee of Independent Directors. (3rdMeeting held on 25/09/2013)

The other BSCs have been constituted for specificpurpose on need basis and as per decisions ofthe Board of Directors from time to time and thesame are given below:

1) High Power Steering Committee (HPSC).

2) Committee of Management (COM).

3) Committee on Marketing (BSCOM).

4) Committee for Raw Material Security & JointVentures and Acquisitions (Including Fly Ash/Slag Based Cement Plant).

5) Initial Public Offer (IPO) Committee.

6) Grievance Redressal Committee.

7) BSC on Steel Processing Units.

8) Committee on Gangavaram Port Limited.

9) Steering Committee.

10) Committee for Award of Contracts forOperations and Expansion of Projects(CACOEP).

11) Committee on Broadening the Base of CoalSuppliers.

12) Committee on Transit and Handling Lossesof Raw Materials.

General Body Meetings

(i) Date, time and venue of the last three AGMsFinancial Date Time Venue

Year

2010-11 27.09.2011 10.00 hrs Admn Building,

2011-12 20.09.2012 17.00 hrs RINL/VSP,

2012-13 21.09.2013 16.00hrs Visakhapatnam

(ii) Whether any special resolutions passed inthe previous three AGMs

No.

(iii) AGM of the current year

Financial Date Time VenueYear

2013-14 29/09/14 15.00Hrs Admn Building,RINL/VSP,

Visakhapatnam

(iv) EGM and Special Resolution passed

One Extraordinary General Meeting (EGM)was held on 14th August, 2013 to pass SpecialResolution for alteration of Articles ofAssociation of the company.

Disclosures

Disclosures on materially significant relatedparty transactions that may have potentialconflict with the interests of the Company atlarge:

There were no transactions by the company ofmaterial nature with Promoters, Directors or theManagement, their subsidiaries or relatives etc.that may have potential conflict with the interestof Company at large.

Details of non-compliance by the Company,penalties, strictures imposed on the company byany statutory authority, on any matter related toany guidelines issued by Government, during thelast three years:

There were no instances of non-compliance by theCompany, Penalties, Strictures imposed on theCompany by any Statutory Authority, on any matterrelated to any guidelines issued by Government,during last three years.

Vigil Mechanism (Whistle Blower) Policy of RINL:

The Company has since put in place a VigilMechanism comprising Whistle Blower Policy.

Details of compliance with the requirements ofCorporate Governance Guidelines:

The Company has complied with the requirementof DPE Guidelines on Corporate Governance.

Details of Presidential Directives issued by theCentral Government and their compliance duringthe year and also in the last three years:

No Presidential Directives were issued by theCentral Government during the last three years.

49

Items of expenditure debited in books ofaccounts, which are not for the purposes of thebusiness:

There were no items of expenditure debited inbooks of accounts, which are not for the purposesof the business.

Expenses incurred which are personal in natureand incurred for the Board of Directors and TopManagement:

There were no expenses incurred which arepersonal in nature and incurred for the Board ofDirectors and Top Management.

Details of Administrative and Office Expenses as a percentage of total expenses vis-a-vis financialexpenses and reasons for increase/decrease :

Crores

Details 2013-14 2012-13 Increase/Decrease over2012-13 & Reasons therefor

1 Administrative and 79.08 71.92Office expenses

2 Financial expenses 338.12 359.25

3 Total expenses (as per P&L A/c) 11769.40 12358.44

4 Administrative expenses as a(%) of Total expenses (1÷3) 0.67 0.58 Increase (Due to increase

5 Administrative Vs Financial in Security expenses)expenses (%)(1÷2) 23.39 20.02

Note: Previous year’s figures have been regrouped as per Revised Schedule VI Format.

Means of communication

Quarterly Results

RINL is an unlisted company and hence quarterlyresults of the Company are not published inNewspapers. However, the same are being put upto the Administrative Ministry (MoS) and AuditCommittee respectively.

Newspapers wherein results normally published

A brief on Annual Results are covered byNewspapers viz. The Hindu, Eenadu (local Telugupaper) etc.

Any website, where displayed

Annual results as part of the Annual Reports forthe last three years are made available on thewebsite of the Company (www.vizagsteel.com).Website is designed to open the documents easilyand quickly. Hindi version of the Annual report isalso placed on the website along with Englishversion.

Whether it also displays official news releases.

The Company also displays official news releaseson its website (www.vizagsteel.com).

Shareholder’s information:

Company Registration Details

The Company is registered in the State of AndhraPradesh, India. The Corporate Identity Number(CIN) allotted to the Company by the Ministry ofCorporate Affairs is U27109AP 1982GOI003404.

Financial Year:

The financial year of the company is from01st April to 31st March.

Payment of Dividend:

The record date for the payment of Dividend isAGM Date. Dividend for the financial year wasrecommended by the Board of Directors of theCompany in their 281st Meeting held on July 03,2014 @ 10% of Profit After Tax for the EquityShareholders as on the date of AGM and as per

50

terms to Preference Shareholders. Further thefinal dividend for the year will be declared by theshareholders in the ensuing AGM.

Stock Code: ISIN-INE508F01013

Registrar and Share Transfer Agent:

KARVY COMPUTER SHARE PRIVATE LIMITED

Plot No. 17-24, Vithal Rao Nagar,Madhapur, Hyderabad-500081,State of Telangana, IndiaTelephone: +91 40 4465 5000,Facsimile: +91 40 2343 1551,Email: murali.m@karvy.comWebsite: www. karisma.karvy.comContact Person: Shri M. Muralikrishna,SEBI Registration Number: INR000000221

Share Transfer System

Entire share transfer activities under physicalsegment are being carried out by Karvy ComputerShare Private Limited. The share transfer systemconsists of activities like receipt of shares alongwith transfer deed from transferees, itsverification, preparation of Memorandum oftransfers, etc. Share transfers are approved bySub-Committee of the Board for Allotment andPost-Allotment activities of RINL’s Securities.

Equity Shareholding pattern as on 31.03.2014S.No. Name of the Shareholder Number of Equity

Shares

1 Shri P. Madhusudan 300

2 Shri Umesh Chandra 100

3 Shri T.K. Chand 100

4 Shri P.C. Mohapatra 100

5 Shri V.K.Thakral 100

6 Shri Lokesh Chandra 100

7 The President of India(Acting through MoS) 488,98,45,400

Total 488,98,46,200

* Shareholders from Sl.No 1 to 6 are holding theshares as a nominee of the President of India.

The Company is a wholly owned Governmentcompany. All the shares are held in the name ofthe President of India and his nominees.

RINL has following Subsidiaries as on31st March, 2014

(a) Eastern Investments Limited (EIL)

(b) Orissa Mineral Development CorporationLimited (OMDC)

(c) Bisra Stone Lime Company Limited (BSLC)

(OMDC & BSLC are the Subsidiaries of EIL)

RINL has following Joint Venture Companies ason 31st March, 2014

(a) RINMOIL Ferro Alloys Private Limited

(b) International Coal Ventures Pvt. Limited

Address for correspondence:

Shri P Mohan Rao,General Manager (Company Affairs) andCompany Secretary & Compliance Officer,D-12, D Block, 2nd Floor, Administrative Building,Rashtriya Ispat Nigam Limited (RINL),Visakhapatnam Steel Plant (VSP),Visakhapatnam - 530 031.E mail: pmr.cs@vizagsteel.com,Website: www.vizagsteel.com

Audit Qualifications

The Company is glad to mention that it secured‘NIL’ Comments from CAG of India for the last eightconsecutive years since 2007-08.

Training of Board Members

The Company has been sponsoring theindependent directors/ newly inducted directorsfor training programs conducted by SCOPE/ DPE/IPE. Further, during the Board / Sub-committeeMeetings, detailed presentations are also madeby Senior Executives/Professionals / Consultantsfacilitating the Board Members to know the detailsof the company performance, expansion plans andprojects.

Certification of Financial Statements by the CEOand CFO of the Company

The CEO (i.e. CMD of the Company) and CFO (i.e.Director (Finance)) of the company have providedthe Certification regarding the financialstatements for the year 2013-14, as reviewed byAudit Committee. (Copy enclosed) (Annexure- III).

51

Chief Executive Officer (CEO) andChief Financial Officer (CFO) Certification

I, P. Madhusudan, Chairman-Cum-Managing Director and holding additional charge as Director (Finance)

of RINL, to the best of my knowledge and belief, certify that:

1. We have reviewed the Balance Sheet and Statement of Profit & Loss, significant accounting policies and Notes toAccounts, as well as the Cash Flow Statement for the year ended March 31,2014;

2. Based on our knowledge and information, these statements do not contain any materially untrue statement or omitany material fact or contain statements that might be misleading or omit to the state a material fact necessary tomake the statements made, in light of the circumstances under which such statements were made, not misleadingwith respect to the statements made;

3. Based on our knowledge and information statements present true and fair view of the Company's affairs and are incompliance with the existing Accounting Standards and/or applicable Laws and Regulations;

4. To the best of our knowledge and belief, no transaction was entered into by the Company during the year which wasfraudulent, illegal or violative of the Company's Code(s) of Conduct;

5. We are responsible for establishing and maintaining internal controls for financial reporting and that we have evaluatedthe effectiveness of the internal control systems of the company pertaining to financial reporting and we have disclosedto the auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, ofwhich we are aware and the steps we have taken or propose to take to rectify these deficiencies;

6. We have indicated to the Company's Auditors and Audit committee of RINL's Board of directors

(a) Significant changes, if any, in internal controls over financial reporting during the year;

(b) Significant changes, if any in Accounting Policies during the year and that the same have been disclosed in thenotes to the financial statements;

(c) Instances of significant fraud of which we have become aware and the involvement therein, if any, of the managementor an employee having significant role in the Company's internal control system over financial reporting,

7. We further declare that all Board Members and Senior Managerial personnel have affirmed compliance with theCode of Conduct for the year ended 31.3.2014.

P MadhusudanChairman-cum-Managing Director

Holding additional charge as Director (Finance)Place: VisakhapatnamDate : 31-07-2014

Note : Shri P. Madhusudan, elevated from Director (Finance) to CMD w.e.f. 01/01/2014 and is also holdingadditional charge as Director (Finance) as on date.

u“ãty Nz̨ üÆÁzT N˛Á ÀƒÁTo “z, úfi N˛Á G∫ u∆V¿ utÆÁ \ÁÆzTÁ @

Annexure - III

∫Á…b~yÆ FÀúÁo uåT™ u¬u™bzg(ßÁ∫o Ã∫N˛Á∫ N˛Á GúN¿̨ ™)

Rashtriya Ispat Nigam Limited(A Government of India Undertaking)

Please send you reply to :Web Site : www.vizagsteel.com

uƒ∆ÁQúcm™ FÀúÁo ÃÊÆÊfi, uƒ∆ÁQúcm™ - 530 031Visakhapatnam Steel Plant, Visakhapatnam - 530 031Regd. Office : Rashtriya Ispat Nigam Limited (A Government of India Undertaking)

Visakhapatnam Steel Plant, Administrative Building, Visakhapatnam - 530 031, INDIAúÊ\yNw̨ o N˛ÁÆÁ|¬Æ: ∫Á…b~yÆ FÀúÁo uåT™ u¬u™bzg, (ßÁ∫o Ã∫N˛Á∫ N˛Á GúN¿̨ ™)

uƒ∆ÁQúc™™ FÀúÁo úu∫ÆÁz\åÁ, ü∆ÁÃuåN˛ ߃å, uƒ∆ÁQúcm™ - 530 031, ßÁ∫o

52

ToThe Members,Rashtriya Ispat Nigam Ltd.,Visakhapatnam Steel Plant,Administrative Building,Visakhapatnam - 530 031

CERTIFICATE ON COMPLIANCE OF GUIDELINES ONCORPORATE GOVERNANCE

1. We have examined the compliance of conditions of Corporate Governance by Rashtriya IspatNigam Limited, a Govt. of India Undertaking (Unlisted Public Company) for the financial yearended 31st March 2014 pursuant to the Guidelines on Corporate Governance issued by theMinistry of Heavy Industries and Public Enterprises, Department of Public Enterprises videtheir O.M. No. 18(8)/2005-GM, dated 14th May, 2010 which have become mandatory for allCPSEs. We have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of certification.

2 The Compliance of Guidelines on Corporate Governance is the responsibility of theManagement. Our examination was limited to the procedures and implementation thereof,adopted by the Company for ensuring the compliance of the Guidelines on CorporateGovernance. It is neither an audit nor an expression of opinion on financial statements of thecompany. Further, this certificate is neither an assurance as to the future viability of theCompany nor the efficiency or effectiveness with which the Management has conducted theaffairs of the Company

3. In our opinion and to the best of our information and according to the explanations given to usand the disclosures made in the Directors' Report, we hereby certify that the Company hascomplied with the conditions of Corporate Governance as stipulated in the above mentionedOM.

P.N. Rao & Co.,Company Secretaries

Phone : 0891-2751934e-mail: pnraoandco@gmail.com

Annexure - IV

Flat No. 102,1 Floor, Door No. 9-42-19/1, Swamy Prasad Vinayagar, Balajinagar, Siripuram,Adjacent to State Bank of India Administrative Office Main Entrance, Visakhapatnam-530 003

For P.N.Rao & Co.Company Secretaries

Visakhapatnam (P. NARASINGA RAO)Dt : 31-07-2014 Proprietor CP No.2552

53

ToThe Members,Rashtriya Ispat Nigam Ltd.,Visakhapatnam Steel Plant,Administrative Building,Visakhapatnam - 530 031

SECRETARIAL COMPLIANCE REPORTFOR THE FINANCIAL YEAR ENDED 31st MARCH 2014

We have examined the Registers, Records, Books and Papers of Rashtriya Ispat Nigam Limited, aGovt. of India Undertaking (unlisted Company) as required to be maintained under the Companies,Act, 1956 (Act) and the rules made there under, and also the provisions contained in the Memoran-dum and Articles of Association of the Company for the financial year ended on 31s1 March 2014. Inour opinion and to the best of our information and according to the examination carried out by us andexplanations furnished to us by the Company and 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 Companies Act,1956. It is an unlisted Public Limited company as on 31st March, 2014.

2. Maintenance of Statutory Records

The Company has kept and maintained all Registers as required to be maintained under theprovisions of the Act and the rules made thereunder 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,Andhra Pradesh, under the Act and the rules made there under.

P.N. Rao & Co.,Company Secretaries

Phone : 0891-2751934e-mail: pnraoandco@gmail.com

Annexure - V

Flat No. 102,1 Floor, Door No. 9-42-19/1, Swamy Prasad Vinayagar, Balajinagar, Siripuram,

Adjacent to State Bank of India Administrative Office Main Entrance, Visakhapatnam-530 003

54

P.N. Rao & Co.,Company Secretaries

Phone : 0891-2751934e-mail: pnraoandco@gmail.com

Flat No. 102,1 Floor, Door No. 9-42-19/1, Swamy Prasad Vinayagar, Balajinagar, Siripuram,

Adjacent to State Bank of India Administrative Office Main Entrance, Visakhapatnam-530 003

4. Composition of Board

The Company has a full time Chairman-cum-Managing Director, Two Govt. Directors, Five Func-tional Directors and Eight Independent Directors as on 31s1 March, 2014 thereby fulfilling therequirement to have 1/3 of Board strength as Independent Directors as per the DPE Guidelinesand also 1/2 of the Board strength in terms of listing requirement for proceeding with the pro-posed Initial Public Offer (EPO).

5. Board Meetings

The Board of Directors have duly met eleven (11) times on 16-04-2013, 25-04-2013, 31-05-2013,21-06-2013, 28-06-2013, 05-09-2013, 26-09-2013, 18-11-2013, 21-11-2013, 17-12-2013 and 24-01-2014 respectively in respect of which meetings, proper notices were given and the proceed-ings were properly recorded and signed in the minutes book maintained for the puipose.

6. Audit Committee

The Board has constituted an Audit Committee as required under Corporate Governance Guide-lines of DPE/provisions of the Companies Act, 1956. During the year, Six Meetings of the AuditCommittee were held on 16-04- 2013, 31-05-2013, 21-06-2013, 30-08-2013, 13-11-2013 and16-12-2013 respectively in respect of which meetings, notices were given and the proceedingswere properly recorded and signed in the minutes book maintained for the purpose.

7. Disclosure of Interest

The Directors have disclosed their interest in other companies to the Board of Directors pursu-ant 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, 2013was held on 21st September, 2013, The Resolutions passed thereat were duly recorded in min-utes book maintained for the purpose.

9. Extraordinary General Meeting

One Extraordinary General Meeting was held on 14th August, 2013 during the financial year andthe resolutions passed thereon were duly filed with ROC, Andhra Pradesh as per the provisionsof Companies Act, 1956.

55

P.N. Rao & Co.,Company Secretaries

Phone : 0891-2751934e-mail: pnraoandco@gmail.com

Flat No. 102,1 Floor, Door No. 9-42-19/1, Swamy Prasad Vinayagar, Balajinagar, Siripuram,

Adjacent to State Bank of India Administrative Office Main Entrance, Visakhapatnam-530 003

10. Appointment and changes amongst Directors

The Board of Directors of the Company is duly constituted and the appointment of Directorsincluding Chairman cum Managing Director, Whole time Directors and other Directors havebeen duly made in accordance with the provisions of Articles of Association of the Companyread with relevant provisions of the Act.

11. Directors' Report

The Company has duly complied with the provisions of Section 217 of the Act, 1956.

12. Acceptance of Public Deposits

The Company has not invited/accepted any deposits falling within the purview of Section 58A ofthe Act during the financial year.

13. Appointment of Cost Auditors

The Company has appointed Cost Auditors under Section 233 B of the Act for the FY 2013-14, forits Power / Steel 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 Em-ployees Contributory Provident Fund Trust within the prescribed time pursuant to Section 418of the Act.

15. Loans to Directors

The Company being a "Government Company" as on 31st March, 2014, the provisions of Section295 of the Act are not applicable.

16. Prosecution / Penalties

There was no prosecution initiated against or show cause notice received by the Company andno fines or penalties or any other punishment was imposed on the Company, its Directors andOfficers during the financial year for offences under the Act.

For P.N.Rao & Co.Company Secretaries

Visakhapatnam (P. NARASINGA RAO)Dt : 31-07-2014 Proprietor CP No.2552

56

INDEPENDENT AUDITOR’S REPORTTO THE MEMBERS OF RASHTRIYA ISPAT NIGAM LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of Rashtriya Ispat Nigam Limited (‘theCompany’) which comprise the balance sheet as at 31st March 2014, the statement of profit and lossand the cash flow statement for the year then ended and a summary of significant accounting policiesand other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fairview of the financial position, financial performance and cash flows of the Company in accordancewith the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act,1956 (“the Act”) read with the General Circular 15/2013 dtd. 13th Sept’ 2013 of the Ministry of CorporateAffairs in respect of Section - 133 of the Companies Act’ 2013. This responsibility includes the design,implementation and maintenance of internal control relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from material misstatement,whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. Weconducted our audit in accordance with the Standards on Auditing issued by the Institute of CharteredAccountants of India. Those Standards require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether the financial statements arefree from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the financial statements. The procedures selected depend on the auditor’s judgment, including theassessment of the risks of material misstatement of the financial statements, whether due to fraudor error. In making those risk assessments, the auditor considers internal control relevant to theCompany’s preparation and fair presentation of the financial statements in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing an opinionon the effectiveness of the entity’s internal control. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accounting estimatesmade by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion.

Annexure - VI

M/s Tej Raj & Pal M/s Rao & KumarChartered Accountants Chartered Accountants31-30-38 / 10, 3rd Floor, Sai Sampath Enclave, 10-50-19/4,Narayana Street, Daba Gardens Soudamani, Siripuram Jn.Visakhapatnam - 530020 (A.P) Visakhapatnam - 530003 (A.P)

57

Opinion

In our opinion and to the best of our information and according to the explanations given to us, thefinancial statements give the information required by the Act in the manner so required and give atrue and fair view in conformity with the accounting principles generally accepted in India:

(i) In the case of the balance sheet, of the state of affairs of the Company as at 31st March 2014;

(ii) In the case of the statement of profit and loss, 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”), as amended, issuedby the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we givein the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a. We have obtained all the information and explanations which to the best of our knowledgeand belief were necessary for the purpose of our audit;

b. In our opinion proper books of account as required by law have been kept by the Company sofar as appears from our examination of those books;

c. The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by thisReport are in agreement with the books of account;

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statementcomply with the Accounting Standards referred to in subsection (3C) of section 211 of theCompanies Act, 1956 read with the General Circular 15/2013 dtd. 13th Sept’ 2013 of theMinistry of Corporate Affairs in respect of Section - 133 of the Companies Act’ 2013; and

e. The provisions of Section 274 (1)(g) are not applicable to the Government Companies videnotification no. G.S.R. 829 (E) dated 21-10-2003 as declared by the Central Government.

For M/s Tej Raj & PalChartered AccountantsRegn.No(F.R.N)304124E

For M/s Rao & KumarChartered Accountants

Regn. No (F.R.N) 003089S

CA B. GangaRajuPartner

M.No:7605

CA V.V. Ram MohanPartner

M.No:18788

Place : VisakhapatnamDate : 04.07.2014

58

ANNEXURE TO AUDITORS’ REPORTAnnexure referred to in Paragraph 1 of ‘Report on Other Legal and Regulatory Requirements’ in ourreport of even date

1. Fixed Assets

(a) The Company has maintained proper records showing full particulars including quantativedetails of fixed assets.

(b) All assets have not been physically verified by the management during the year but there isa regular programme of verification which in our opinion is reasonable having regard to thesize of the company and the nature of its assets. No material discrepancies were noticed onsuch 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) Quantities of Closing stock of finished / semi-finished goods have been adopted as per bookbalances after duly adjusting for shortages/excesses identified on physical verification atanytime during the year. In respect of stores and spares, company has a regular programmeof verification in a phased manner. In our opinion the frequency of verification is reasonable.

(b) The procedure for physical verification of inventory followed by the management is reasonableand adequate in relation to the size of the company and the nature of its business.

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

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

The Company had neither granted nor taken any loans, secured or unsecured, to / from companies/ firms or other parties covered in the register maintained under Section 301 of the Act. In view ofthis, clauses (b), (c), (d) and (e) of paragraph 4(iii) of the order are not applicable.

4. Internal Control Procedure

In our opinion and according to the information and explanations given to us, having regard to theexplanation that some of the items purchased are of special nature and suitable alternative sourcesdo not exist for obtaining comparable quotations, there are adequate internal control procedurescommensurate with the size of the company and the nature of its business with regard to purchase

M/s Tej Raj & Pal M/s Rao & KumarChartered Accountants Chartered Accountants31-30-38 / 10, 3rd Floor, Sai Sampath Enclave, 10-50-19/4,Narayana Street, Daba Gardens Soudamani, Siripuram Jn.Visakhapatnam - 530020 (A.P) Visakhapatnam - 530003 (A.P)

59

of inventory, fixed assets and with regard to the sale of goods and services. During the course ofour audit, we have not noticed continuing failure to correct any major weaknesses in the internalcontrol system.

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

According to the information and explanations given to us, there are no transactions that need tobe entered into the register maintained under section 301 of the Companies Act, 1956. As thereare no such transactions, clause (b) of paragraph 4(v) is not applicable.

6. Acceptance of Deposits from Public

The Company had not accepted any deposits from the public. As such, the directives issued bythe Reserve Bank of India and the provisions of Section 58A & 58AA or any other relevant provisionsof the Act 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 natureof its business.

8. Maintenance of Cost Records

We have broadly reviewed the records maintained by the company pursuant to the rules made bythe Central Government for the maintenance of Cost Records under Section 209(1)(d) of theCompanies Act, 1956 and are of the opinion that prima-facie, the prescribed accounts and recordshave been made and maintained in respect of the applicable products. Cost Audit in respect ofspecified products has been ordered by the Central Government vide order No. 52/26 /CAB-2010dated 6-11-2012 of CAB, Ministry of Corporate Affairs. We are informed that the compilation ofCost Accounting records for the current year is in progress and hence we have not carried adetailed examination of the records with a view to determine whether they are accurate andcomplete.

9. Payments and remittances to Statutory Authorities

(a) According to the records of the Company, the company is generally regular in depositingwith appropriate authorities, undisputed statutory dues including Provident Fund, IncomeTax, Sales Tax, Investor Protection Fund, Wealth Tax, Service Tax, Customs Duty, ExciseDuty, Cess and other material Statutory dues applicable to it.

(b) According to the information and explanations given to us, there are no undisputed statutorydues outstanding for a period of more than six months from the date they became payableas per books of accounts as at 31st March 2014.

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

(d) According to the information and explanations given to us, as at the end of the financial yearthe disputed dues of Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty andCess which have not been deposited is as follows:

60

10. Accumulated Losses

The Company did not have any accumulated loss at the end of the financial year. The Companyhas not incurred cash losses in this financial year covered by our audit and also in the immediatelypreceding 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 inrepayment 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.

According to the information and explanations given to us, the Company has not granted anyloans and advances on the basis of security by way of pledge of shares, debentures and othersecurities.

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

In our opinion, the Company is not a chit fund or a nidhi /mutual benefit fund / society. Therefore,the provisions of clause 4(xiii) of the Order are not applicable to the Company.

Name of the Nature of dues Forum where dispute is pending AmountStatute ( in Crs.)

Finance Act, Excise duty, Commissioner(Appeals) 3.98Customs & Service Tax andExcise Act Cenvat

-do- -do- CESTAT 120.03

-do- -do- Honorable High Court of Andhra 1.71Pradesh

-do- Customs CESTAT 26.89

-do- Customs Honorable High Court of Andhra 0.36Pradesh

The Andhra -do- STAT 4.34Pradesh General

Sales Tax Act &C S T Act

-do- -do- Honorable High Court of Andhra 1675.08Pradesh

UP Trade Tax Act ST Appeal Tribunal Bench, Agra 0.10(Kanpur Branch)

Bihar VAT Act VAT Joint Commissioner Taxes (JCT) 0.05

Orissa Sales Tax Act Sales Tax Addl. Commissioner, Sales Tax, Orissa 0.26

61

14. Trading in Shares etc.

In our opinion, the company is not dealing in or trading in shares, securities, debentures andother investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable tothe Company.

15. Guarantee for Loan taken by others

We are informed that the Company has not given any Guarantee for loans taken by others fromBanks or financial institutions.

16. Application of Term Loans

According to information and explanation given to us, during the year the Company applied termloan for the purpose for which the term loans were obtained.

17. Usage of Short Term and Long Term Funds

According to the information and explanations given to us and on an overall examination of thebalance sheet of the Company, we report that no funds raised on short-term basis have beenused 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 anypreferential allotment of shares to parties and companies covered in the register maintainedunder Section 301 of the Act, during the year.

19. Issue of Debentures

According to the information and explanations given to us, the Company had not issued debenturesduring the year.

20. End use of money raised by Public Issue

According to the information and explanations given to us, during the year the company has notraised any money by public issues.

21. Frauds

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

For M/s Tej Raj & PalChartered AccountantsRegn.No(F.R.N)304124E

For M/s Rao & KumarChartered Accountants

Regn. No (F.R.N) 003089S

CA B. Ganga RajuPartner

M.No:7605

CA V.V. Ram MohanPartner

M.No:18788

Place : VisakhapatnamDate : 04.07.2014

62

Annexure - VII

ßÁ∫oyÆ ¬zQÁ osÁ ¬zQÁú∫yqÁ uƒßÁTüáÁå uåtz∆N˛ ƒÁumu[ÆN˛ ¬zQÁú∫yqÁ LƒÊútzå ÃtÀÆ ¬zQÁú∫yqÁ §Ázg| N˛Á N˛Á´ÁÁ|¬Æ, “{t∫Á§ÁtINDIAN AUDIT AND ACCOUNTS DEPARTMENTOFFICE OF THE PRINCIPAL DIRECTOR OFCOMMERCIAL AUDIT AND EX-OFFICO MEMBER,AUDIT BOARD, HYDERABAD.

PDCA/A/c/Desk/2013-14/RINL/1.01/188utåÁÊN˛ :Date : 22 July 2014

ToThe Chairman-cum-Managing Director,Rashtriya Ispat Nigam Limited,Visakhapatnam

Sub: - Comments of the C&AG of India under Section 619(4) of the Companies Act, 1956 onthe accounts of Rashtriya Ispat Nigam Limited, Visakhapatnam for the year ended on 31March 2014

Sir,

I forward herewith the ‘Nil Comments’ Certificate of Comptroller and Auditor Generalof India under Section 619(4) of the Companies Act, 1956 on the accounts of Rashtriya IspatNigam Limited, Visakhapatnam for the year ended on 31 March 2014.

2. The date of placing the comments along with Annual Accounts and Auditor’s Reportbefore the shareholders of the Company may please be intimated and a copy of theproceedings of the meeting may be furnished.

3. The date of forwarding the Annual Report and Annual Accounts of the Companytogether with Auditor’s Report and comments of the Comptroller and Auditor General ofIndia to the Central Government for being placed before the Parliament may please beintimated.

4. Ten copies of the Annual Report for the year 2013-14 may please be furnished in duecourse.

The receipt of this letter along with the enclosures may please be acknowledged.

Encl:- As aboveYours faithfully

(Arabinda Das)Principal Director

™“Á¬zQÁN˛∫ N˛Á N˛ÁÆÁ|¬Æ úu∫Ã∫, Ã{¢˛ÁßÁt, “{t∫Á§Át - 500 004A.G.’s Office Complex, Saifabad, Hyderabad - 500 004 Grams : DIRCOMIT Fax : 040-23231318e-mail : mabhyderabad@cag.gov.in Phone : 23233315, 23230415

63

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 619(4) OF THECOMPANIES ACT, 1956 ON THE ACCOUNTS OF RASHTRIYA ISPAT NIGAM LIMITED, VISAKHAPATNAM FORTHE YEAR ENDED 31 MARCH 2014

The preparation of financial statements of Rashtriya Ispat Nigam Limited, Visakhapatnam for the year endedon 31 March 2014 in accordance with the financial reporting framework prescribed under the Companies Act,1956 is the responsibility of the management of the company. The Statutory Auditor appointed by theComptroller and Auditor General of India under Section 619(2) of the Companies Act, 1956 is responsible forexpressing opinion on these financial statements under Section 227 of the Companies Act, 1956 based on theindependent audit in accordance with the Standards on Auditing prescribed by their professional body, theInstitute of Chartered Accountants of India. This is stated to have been done by them vide their Audit Reportdated 04 July 2014.

I, on the behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit underSection 619(3) (b) of the Companies Act, 1956 of the financial statements of Rashtriya Ispat Nigam Limited,Visakhapatnam for the year ended on 31 March 2014. This supplementary audit has been carried outindependently without access to the working papers of the Statutory Auditors and is limited primarily toinquiries of the Statutory Auditor and company personnel and a selective examination of some of the accountingrecords. On the basis of my audit, nothing significant has come to my knowledge, which would give rise to anycomment upon or supplement to Statutory Auditor’s report under Section 619(4) of theCompanies Act, 1956.

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

(Arabinda Das)Place: Hyderabad Principal Director of Commercial Audit &Date: 22 July 2014 Ex-Officio Member, Audit Board,

Hyderabad

64

STATEMENT PURSUANT TO SECTION 212 (1) (e) OFTHE COMPANIES ACT 1956,

RELATING TO SUBSIDIARY COMPANIES FOR THE YEAR 2013-14

Notes:* As per Section 4(1)( c) of companies Act 1956 a subsidiary of a subsidiary of holding company is a

subsidiary of holding company.# Out of the above 4,36,51,855 equity shares are held by EIL and 1,82,927 are held by RINL.@ Extent of holding through EIL is 50.01% and directly is 0.21%.$ Net aggregate amount of profit/loss includes the proportionate profit relating to direct holding of

RINL.For and on behalf of Board of Directors

(T.V.S. Krishna Kumar) (P. Madhusudan)Director (Finance) Chairman-Cum-Managing Director

(P. Mohan Rao)Company Secretary

Place: VisakhapatnamDate: 28

th September, 2014.

1. Financial year of the subsidiary ended on 31st March 2014 31

st March 2014 31

st March 2014

2. The extent of holding company’s interest in thesubsidiary at the end of 31

st March 2014

a) Number of Fully Paid up Equity shares of 10 each (Nos) 7,36,638 3,00,089 4,38,34,782 #

b) Extent of Holding (%) 51.00 50.01 50.22 @

3 The Net aggregate amount of the profit / (loss)of the subsidiary company not dealt with in theCompany’s accounts so far as it concerns themembers of the holding company: ( Cr)a) For the financial year ended

on 31st March 2014 0.05 3.13 (9.43)$

b) For all the previous financial years of thesubsidiary since it became subsidiary 2.38 9.06 (13.20)$

4 The Net aggregate amount of the profit/(loss) ofthe subsidiary company so far as its profits aredealt with in holding company’s accounts: ( Cr)a) For the financial year ended

on 31st March 2014 0.11 Nil Nil

b) For all the previous financial years of thesubsidiary since it became subsidiary. 0.61 Nil Nil

PARTICULARSEastern

InvestmentsLimited (EIL)

Orissa Min-eral Develop-ment Corpo-ration (Sub-

sidiary of EIL)*

Bisra StoneLime Com-

pany Limited(Subsidiary

of EIL)*

Annexure - VIII

65

A. Energy Management:

RINL-VSP is the first Indian Steel plant tobe certified for ISO: 50001 Energy ManagementSystem.

Energy Consumption (Gcal/tCS ) & CO2Emissions(Tons/tCS):

Year Sp. Energy Consumption CO2 emissions(Gcal/tCS) (Tons/tCS)

2012-13 6.31 2.66

2013-14 6.19 2.66

The following measures have been takenduring the year 2013-14 for conservation ofenergy:

• Reduction of BF gas bleeding from 2.95 % to1.96 % by taking up proactive measures andoptimizing distribution through SupervisoryControl and Data Acquisition system (SCADA).

• Replacement of Air Recuperator in F/C-1 ofLMMM.

• Commissioning of Waste Heat Recovery systemat Sinter Machine-3 for pre heating ofcombustion air to ignition furnace andsupplying hot air to extended hood of SinterMachine-3.

• Commissioning of Energy Efficient furnace withenergy efficient burners in Sinter Machine-3.

• 20.6 MW waste heat recovery system on sinterstraight-line cooler of sinter machines 1 &2was made ready for synchronization.

B. Other Initiatives

1. Energy Conservation plans under progress:

• Installation of Pulverized coal injection in BlastFurnace-1

• Installing Energy Conservation facilities inexpansion such as Pulverized coal injection inBF 3

• Commissioning of 14 MW TRT of BF 3

• Commissioning of Waste Heat Recovery systemin stoves of BF-3 for preheating of fuel gas forstoves heating. This system will reduce fuelgas loss to atmosphere by recovering wasteheat and preheats combustion air and fuel gas.

• Conduct of mandatory energy audit as per EnergyConservation Act-2001 by accredited energy auditagency to improve the energy efficiency.

2. (i) Waste Heat Recovery Systems (2013-14)Energy Saving Units Energy Boiler Coal Reduction

facility Recovered Saved of CO2(tonnes) emission

(tonnes)

Total volume MN 307.559 171003 269614of LD Gas Cumrecovered atLD Gasrecovery plant

Total power MWH 193331 154665 243855generated atBack PressureTurbine Station(BPTS)

Total power MWh 41671 33337 52561generated atGas ExpansionTurbineStation (GETs)

(MNcum-Million Normal Cubic Meters,MWH-Mega Watt Hours)

(ii)Usage of By-product gases in ThermalPower Plant (2013-14)

Name of Units Value Boiler ReductionFuel used Coal of CO2

in TPP Saved emission(tonnes) (tonnes)

Coke OvenGas MNcum 498.685 706138 1113344

BF gas MNcum 2582.921 611291 963803

Annexure – A

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.

Energy Conservation measures taken during the Year 2013-14

66

3. Clean Development Mechanism:

• As a part of registration, Top pressure RecoveryTurbine (TRT) of BF-3 has been submitted toUNFCCC for registration.

• As a part of Validation,

• Draft Validation Report (DVR) was obtainedfrom DOE for the following projects.

• Power Generation from Cooling of coke in CokeDry Cooling Plant of Coke Oven Battery -4.

• Waste heat recovery from Circular cooler ofSinter Plant-2.

• 120 MW BF gas based Captive Power Plant.

• Deviation to Methodology (ACM 0012,version 4) in respect of “Waste Heat Recoverysystem of Sinter Circular Cooler of SinterPlant 3” was sought from CDM ExecutiveBoard (EB).

• Designated Operational Entity (DOE) wasengaged for the following projects.

• Pulverized Coal Injection (PCI) in BlastFurnace-3.

• Pulverized Coal Injection (PCI) in BlastFurnace-1

• Installation of Energy Efficient Air separationunit-4&5.

• Obtained Host country Approval (HCA) for thefollowing projects:

• Pulverized Coal Injection (PCI) in BlastFurnace- 2

• Waste Heat Recovery (WHR) from Wire RodMill-2

4. Energy Management System:

RINL was certified for BS EN: 16001 EnergyManagement System during Dec’2010 which wasvalid upto Dec’2013. The Energy managementsystem has been upgraded from System to ISO:50001 Energy Management System during themonth of Aug’2012. Hence, Recertification auditfor ISO: 50001 was conducted during the monthof Oct’2013. BVCI recertified RINL for ISO: 50001,which would be valid for a period of three yearsfrom Dec’13 onwards.

5. NEDO Model Project on Sinter Cooler WasteHeat Recovery:

RINL signed Memorandum ofUnderstanding with NEDO of Japan to install20.6 MW waste heat recovery system on SinterStraight-line cooler of sinter machine. Equipmenterection was completed for all packages and theplant was made ready for synchronization inMar’14.

67

FORM-A

A. Power and fuel Consumption 2013-14

Unit 2013-14 2012-13

1) Electricity: a) Purchased (Import from AP TRANSCO) MWH 342044 318276 b) Gross exported MWH 1112 1522 c) Net Imported MWH 340932 316754 Total cost Rs Crores 267.73 280.80 Cost/unit Rs/unit 7853 8865 d) Own generation-Through Steam Turbine/Generator MWH 1681798 1613665 Total cost Rs Crores 927.34 866.54 Cost/unit Rs/unit 5514 5370 -Through Back pressure Turbine Station MWH 193331 178846 -Through Gas Expansion Turbine Station MWH 41671 536752) Coal consumption a)Boiler coal (indegenous) t 1345160 1270444 Total cost Rs Crores 294.86 257.52 Cost/unit Rs/unit 2192 2027 b)Imported coking coal t 2622497 2570245 Total cost Rs Crores 2619.61 2973.52 Cost/unit Rs/unit 9989 11569

c)Imported Soft Coking Coal t 500049 402620 Total cost Rs Crores 415.94 388.89 Cost/unit Rs/unit 8318 9659 d)US Coal & Canada coal t 438467 475987 Total cost Rs Crores 449.47 490.46 Cost/unit Rs/unit 10251 10304 e)Indegenous Medium coking coal t 399153 496590 Total cost Rs Crores 270.87 319.41 Cost/unit Rs/unit 6786 64323) Furnace oil consumption Kl 3250.91 570.67 Total cost Rs Crores 16.38 2.85 Cost/unit Rs/unit 50396 498704) HSD Consumption Kl 2665.99 2573.30 Total cost Rs Crores 16.13 15.58

Cost/unit Rs/unit 60502 60530

B. Consumption per unit of productionItem Unit Per tonne of Crude Per tonne of Crude

steel production steel production

Imported Electricity KWH 106.5 103.1Boiler coal Boiler coal (Indegenous) Kg 420.1 413.7Coking Coal Imported coking coal Kg 819.1 836.9Imported Soft Coking Coal Kg 156.2 131.1US Coal Kg 136.9 155.0Indegenous Medium Coking Coal Kg 124.7 161.7 Furnace oil liters 1.02 0.19HSD liters 0.83 0.84Crude Steel Production tons 3201685.00 3071232.00

68

FORM B

FORM FOR DISCLOSURE OF PARTICULARSWITH RESPECT TO TECHNOLOGY ABSORPTION

Research & Development (R & D)

• Specific areas in which R&D carried out by thecompany

Research & Development in RINL is mainlypursuing in the areas of process improvement,environment protection, waste management,cost reduction, new product development andnew technology development

• Benefits derived as a result of the above R&D

(a) Optimization of design and operatingparameters like wire speed, bath superheat, steel grades on Calcium recovery andits efficacy for inclusion modification

Visakhapatnam Steel Plant is practicingAluminium and Silicon deoxidation of steel.Alumina is formed during the processcreating clogging problems during casting.A joint research project is taken up with IIT,Kharagpur to mitigate the problem.Addition of calcium in the form of Ca-Si andCa-Fe resulted in modification of inclusionsthereby reducing clogging tendency.

(b) Effect of iron ore micro-fines on sinteringprocess

Increased levels of production of iron leadto more mining resulting in increase ingeneration of micro fines. These micro fineswhich are generated, have high iron contentand are left unutilised. Attempts are beingmade to maximize use of iron ore micro-fines in sintering process. A collaborationproject is taken up with IMMT,Bhubaneswar for studying the effect ofmicro-fines on sintering process.

(c) Feasibility studies of enrichment of BF gasfor enhancement of calorific value

Blast Furnace (BF) gas has 18-20% ofCarbon Monoxide and its calorific value is700-850kcal/Nm3. Studies are underway toincrease the calorific value by reducing thecontents of CO2 and N2 in gas mixture.CGCRI, Kolkata is the research partner.

(d) Development of thermo-mechanicallytreated bars having improved seismicresistance

Thermo mechanical treated bars are usedin RCC (Reinforced Concrete Cement) inconstruction. Their Seismic resistance isinsufficient to withstand earthquakes ofeven medium intensity. It is proposed toincrease its seismic resistance throughalteration in chemistry and coolingparameters.

(e) Studies and development of Carbon dioxide(CO2) sequestration technique using LDConverter slag (steel slag) to control theGreen House Effect of Carbon dioxide

CO2 emissions and generation of LD slagare some of the major causes of concernfor steel industry. Sequestration of CO2

making use of the calcium component ofLD slag is under study. NIOT, Chennai is thecollaborative Research Partner.

• Future plan of action

Discussions are in progress with TheEnergy and Research Institute, New Delhi;Tata Research Development and DesignCentre, Pune; MEFOS, Sweden and BattelleMemorial Institute, Pune to pursue jointresearch projects in the areas of Iron andSteel, Energy, Environment and Water.

69

A green building with state of artinfrastructural facilities, laboratories andsheds for pilot plants etc., is planned forR&D Centre, as envisaged in the Roadmapof R&D at an estimated cost of

153.7 Crores.

An investment of 136 Crores was approvedby Board for development of CRGO steelsin the collaborative project with Tata Steel,NML and MoS.

Proposal to take up a collaborative research

project with National MetallurgicalLaboratory, Jamshedpur on “Developmentof Amorphous Electrical Steels” at a totalexpenditure of 40 Crores is in progress.

• Expenditure on R&D : (For 2013-14)

• Capital : Nil

• Revenue/ recurring : 50.27Cr

• Total : 50.27Cr

• Total R&D expenditure as a percentage oftotal turnover: 0.37

70

71

72

73

BALANCE SHEET AS AT 31st MARCH 2014 Crs

ParticularsNote As at As at

No. 31st March 2014 31st March 2013

EQUITY AND LIABILITIESSHAREHOLDERS’ FUNDS

Share Capital B 01.00 5739.85 6346.82Reserves and Surplus B 02.00 6400.89 6130.50

NON CURRENT LIABILITESLong-term borrowings B 03.00 1203.53 1241.56Deferred Tax Liabilities (Net) B 04.00 419.01 229.21Other Long-term Liabilites B 05.00 165.56 105.00Long-term provisions B 06.00 531.43 414.77

CURRENT LIABILITESShort-term borrowings B 07.00 3739.93 3658.44Trade payables B 08.00 829.93 737.94Other current liabilities B 09.00 5484.05 5615.19Short-term provisions B 10.00 157.65 173.10

Total 24671.83 24652.52

ASSETSNON CURRENT ASSETS

Fixed AssetsTangible assets B 11.00 4530.03 3787.07Intangible assets B 11.00 2.75 2.74Capital work-in-progress B 12.00 10669.47 9965.24Intangible assets under development 30.11 15232.36 22.20 13777.25

Non Current Investments B 13.00 362.53 362.58Long-term Loans and Advances B 14.00 616.05 498.36Other Non Current assets B 15.00 60.23 36.58

CURRENT ASSETSInventories B 16.00 3863.04 3828.60Trade receivables B 17.00 803.65 1009.65Cash and Bank balances B 18.00 175.89 1625.02Short-term Loans and Advances B 19.00 3461.35 3417.75Other Current assets B 20.00 96.73 96.73

Total 24671.83 24652.52

Significant Accounting Policies [A] andNotes to Accounts [B 01.00 to B 31.00] annexed form part of the Accounts

As per our report of even dateFor and on behalf of Board of Directors

CA B. Ganga RajuPartner

M.No:7605

CA V.V. Ram MohanPartner

M.No:18788

For M/s Tej Raj & PalChartered AccountantsRegn.No(F.R.N)304124E

For M/s Rao & KumarChartered Accountants

Regn. No (F.R.N) 003089S

Place : VisakhapatnamDate : 04.07.2014

(P. Madhusudan)Chairman-cum-Managing Director

(Umesh Chandra)Director (Operations)

(P. Mohan Rao)Company Secretary

74

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31st MARCH 2014 Crs

ParticularsNote For the year ended For the year ended

No. 31st March, 2014 31st March, 2013

INCOMERevenue From Operations B 21.00 13,431.48 13,565.28Less: Excise duty 1,403.15 12,028.33 1 454.59 12,110.69Other Income B 22.00 306.99 455.42

Total Revenue 12,335.32 12 566.11

EXPENSESCost of materials consumed B 23.00 7,025.82 8,098.66Changes in Inventories of Semi-finished/Finished goods B 24.00 18.65 (303.74)Employees' benefits B 25.00 1,751.10 1,469.07Finance Costs B 26.00 338.12 359.25Depreciation and Amortisation B 11.01 271.48 186.88Other expenses B 27.00 2,441.45 2,296.75

Total Expenses 11,846.62 12,106.87Less: Inter account adjustments-raw material mining cost 58.57 52.17

Net Expenses 11,788.05 12 054.70Profit for the year before Prior period Items (PPI) 547.27 511.41Prior period items - Net (Debit) / Credit B 28.00 1.88 15.06Profit after PPI and Before Exceptional & Extraordinary Items and Tax 549.15 526.47Exceptional Items 0.00 0.00Profit Before Extraordinary Items and Tax 549.15 526.47Extraordinary items 0.00 0.00Profit Before Tax 549.15 526.47Tax Expense

Current Tax (MAT) 116.76 103.98Less: MAT Credit Entitlement (116.76) 0.00 (96.88) 7.10Earlier years adjustments (7.10) (1.69)Deferred Tax 189.80 168.23

Profit /(loss) for the period from Continuing Operations 366.45 352.83Profit /(loss) for the period from Discontinuing Operations 0.00 0.00Tax Expense of Discontinuing Operations 0.00 0.00Profit /(loss) for the period from Discontinuing Operations (after Tax) 0.00 0.00

Profit / (loss) for the period 366.45 352.83

Basic and Diluted Earnings Per Share (in )(Face Value 10 per share) B 29.00 0.62 0.48Significant Accounting Policies [A] andNotes to Accounts [B 01.00 to B 31.00] annexed form part of the Accounts

As per our report of even dateFor and on behalf of Board of Directors

CA B. Ganga RajuPartner

M.No:7605

CA V.V. Ram MohanPartner

M.No:18788

For M/s Tej Raj & PalChartered AccountantsRegn.No(F.R.N)304124E

For M/s Rao & KumarChartered Accountants

Regn. No (F.R.N) 003089S

Place : VisakhapatnamDate : 04.07.2014

(P. Madhusudan)Chairman-cum-Managing Director

(Umesh Chandra)Director (Operations)

(P. Mohan Rao)Company Secretary

75

CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH 2014 Crs

ParticularsFor the year ended For the year ended

31st March, 2014 31st March, 2013

A. Cash flow from Operating activitiesNet Profit / (Loss) before taxation 549.15 526.47

Add / (Less) Adjustments for:Depreciation 271.48 187.68Interest and Finance Charges 338.12 359.25Provisions 33.84 (17.20)Unrealised Foreign Exchange (Gain) /Loss (0.07) 1.01(Profit)/Loss on sale of fixed assets (0.56) (0.45)Interest Income (120.01) (151.26)Dividend Income (0.11) (0.13)

Operating Profit Before working capital changes 1071.84 905.37Adjustments for:

(Increase) / Decrease in Inventories (34.44) (425.49)(Increase) / Decrease in Trade Receivables 206.00 (582.50)(Increase) / Decrease in Loans & Advances (130.45) (212.87)(Increase) / Decrease in Other Non-current assets (23.65) (26.24)(Increase) / Decrease in Other current assets (1.68) 96.65Increase / (Decrease) in Liabilities 183.13 639.53

Cash generated from OperationsLess: Income Tax paid (103.46) (143.60)

Net cash from / (used in) Operating activities 1167.29 250.83

B. Cash flow from Investing activitiesPurchase of Fixed Assets (1664.91) (1351.96)Proceeds from / (Purchase of ) Investments 0.05 152.59Dividend received 0.11 0.13Proceeds from sale of Fixed Assets 0.77 0.59Interest received 125.57 206.42Net cash from / (used in) Investing activities (1538.41) (992.23)

C. Cash flow from Financing activitiesProceeds from / (Repayment of) Long-term loans (38.03) 1241.56Proceeds from / (Repayment of) Short-term loans 81.49 1083.30Proceeds from Prime Minister’s Award Funds 0.56 1.44Proceeds from / (Repayment of) Share capital (606.97) (1380.50)Interest and Finance charges (396.16) (333.03)Dividend Paid (101.64) (270.79)Dividend Tax Paid (17.26) (43.91)Net proceeds from other Bank balances 0.00 5.00Net cash from / (used in) Financing activities (1078.01) 303.08

Net Increase / (decrease) in Cash and Cash equivalents (A+B+C) (1449.13) (438.32)

Opening Balance of Cash and Cash equivalents 1625.02 2063.34Closing Balance of Cash and Cash equivalents 175.89 1625.02(Represented by Cash and Bank Balances - Note B 18.00 )

1. This statement has been prepared under the “Indirect Method” as set out in the Accounting Standard 3.2. Significant Accounting Policies and Notes to Accounts form part of the Cash Flow Statement.3. Previous year’s figures have been rearranged / regrouped wherever necessary to conform to current year’s classification.

As per our report of even dateFor and on behalf of Board of Directors

CA B. Ganga RajuPartner

M.No:7605

CA V.V. Ram MohanPartner

M.No:18788

For M/s Tej Raj & PalChartered AccountantsRegn.No(F.R.N)304124E

For M/s Rao & KumarChartered Accountants

Regn. No (F.R.N) 003089S

Place : VisakhapatnamDate : 04.07.2014

(P. Madhusudan)Chairman-cum-Managing Director

(Umesh Chandra)Director (Operations)

(P. Mohan Rao)Company Secretary

76

A. SIGNIFICANT ACCOUNTING POLICIES1.0 GENERAL

1.1 Financial Statements are prepared under the historical cost convention in accordance with fundamental accountingassumptions and Generally Accepted Accounting Principles (GAAP) in India and the relevant provisions of theCompanies Act, 1956 including Accounting Standards notified there under.

1.2 The preparation of financial statements in conformity with Generally Accepted Accounting prinicples requireestimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure ofcontingent liabilities on the date of financial statements and the reported amounts of revenues and expensesduring the reporting Period. Actual results could differ from these estimates and differences between actualresults and estimates are recognised in the periods in which the results are known/materialised.

2.0 FIXED ASSETS

2.1 Fixed assets are stated at historical cost less depreciation.

2.2 Expenditure attributable / relating to construction, to the extent not directly identifiable to any specific Plant Unit,is kept under ‘Expenditure During Construction’ for allocation to Fixed Assets and is grouped under ‘Capital Work-in- Progress’.

3.0 INVESTMENTS

3.1 Current investments are carried at lower of cost and fair value.

3.2 Long-term investments are carried at cost. Diminution in value, other than temporary, is provided for.

4.0 INVENTORIES

4.1 Inventories are valued at lower of cost and net realizable value.

4.2 The basis of determining cost is:

4.2.1 Finished / Semi-finished goods - Weighted Average cost.

4.2.2 Raw material, Stores & Spares, Loose Tools - Monthly weighted average cost and those in transit at cost.

4.3 Obsolete / Surplus / Non-moving inventory are adequately provided for.

5.0 REVENUE RECOGNITION

5.1 Sales are recognized when all significant risks and rewards of ownership have been transferred to the buyer.

5.2 Export incentives under various schemes are recognized as Income on certainty of realisation.

6.0 CLAIMS

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

7.0 FOREIGN CURRENCY TRANSACTIONS

7.1 Foreign currency monetary items are recorded at the closing rate.

7.2 Exchange differences arising on account of settlement / conversion of foreign currency monetary items arerecognised as expense or income in the Period in which they arise.

8.0 EMPLOYEE BENEFITS

8.1 Actuarial gains and losses on defined benefit plans are recognised during the Year,

77

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 periodderived in accordance with the provisions of Schedule XIV of the Companies Act, 1956, except the following:

9.1.1 Assets costing up to 5000/- are fully depreciated in the year of capitalisation.

9.1.2 Depreciation on the following categories of assets is provided up to full value of the cost of asset on SLM over theperiod of their useful life based on the Management’s estimate given in brackets.

Photo Copiers & Fax Machines, Telecom Equipment (5 years); Cranes, Slag Pot Carriers, Audio & Visual Equipment(10 years); Other Office Equipment, Earth Moving Equipment, Forklift Trucks, Air Conditioners, Refrigerators,Water Coolers, Air Coolers, Freezers (7 years); Cars (6 years); Safety Equipment, Other light vehicles (8 years);Computers [including system Software] (4 years); Coke Ovens & Coal Chemical Plant (15 years).

9.2 Amortisation of “Intangible Assets” is accounted as follows:

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

9.2.2 Software which is not an integral part of related hardware, is treated as intangible asset and amortised over aperiod of 4 years or its licence period, whichever is less.

10.0 BORROWING COSTS

10.1 Borrowing costs incurred for obtaining assets which take more than 12 months to get ready for its intended use arecapitalised to the respective assets wherever the costs are directly attributable to such assets and in other cases byapplying weighted average cost of borrowings to the expenditure on such assets.

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

11.0 PRIOR PERIOD ITEMS

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

78

B. NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2014Note 01.00 : Share Capital Crs

ParticularsAs at As at

31st March, 2014 31st March, 2013

AUTHORISED

4,890,000,000 (Previous Year 4,890,000,000) Equity Shares of 10 each 4890.00 4890.003,110,000,000 (Previous Year 3,110,000,000) Preference Shares of 10 each 3110.00 3110.00Total 8000.00 8000.00

ISSUED, SUBSCRIBED AND FULLY PAID-UP4,889,846,200 (Previous Year 4,889,846,200) Equity Shares of 10 each. 4889.85 4889.85850,000,000 (Previous Year 1,456,970,000) 7 % Non-Cumulative redeemable PreferenceShares of 10 each redeemable at par, as under 850.00 1456.97

550,000,000 during 2014-15300,000,000 during 2015-16

Total 5739.85 6346.82

01.01 : Statement of Reconciliation of Issued, Subscribed and Fully paid-up Share capital

Equity Shares 7% Non-Cumulative RedeemableParticulars Preference Shares

Number Face Value( ) Crs Number Face Value( ) Crs

Shares outstanding as at the beginning 4,889,846,200 10 4889.85 1,456,970,000 10 1456.97of the year (48,898,462) (1000) (4889.85) (28,374,700) (1000) (2837.47)

Add : Issue of Shares(a) Issue of Equity & Preference shares of - - - - - -

Face value of 10 each on (4,889,846,200) (10) (4889.85) (1,652,470,000) (10) (1652.47)Sub division of Equity & Preference shareswith Face value of 1000

Less : Reduction of shares(a) On Redemption of Preference shares of - - - - - -

Face Value of 1000 each (11,850,000) (1000) (1185.00)

(b) Reduction of Equity & Preference shares - - - - - -of Face value of 1000 on (48,898,462) (1000) (4889.85) (16,524,700) (1000) (1652.47)Sub division into Equity & Preferenceshares with Face value of 10 each

(c) On Redemption of Preference shares of - - - 606,970,000 10 606.97Face Value of 10 each - - - (195,500,000) (10) (195.50)

Shares outstanding as at the end of the year 4,889,846,200 10 4889.85 850,000,000 10 850.00

(4,889,846,200) (10) (4,889.85) (1,456,970,000) (10) (1456.97)

Sub Note: Figures in the brackets are for previous year.

01.02 : Details of Shareholders holding more than 5% of Share holding as at 31.03.2014Type of Shares Name of the Shareholder % of Shares held No of Shares Held

Equity President of India 100% 4,889,846,200(100%) (4,889,846,200)

Preference President of India 100% 850,000,000(100%) (1,456,970,000)

Sub Note: Figures in the brackets are for previous year.

01.03 :Company does not have any Holding Company as at 31.03.2014.

79

Note 02.00 : Reserves and Surplus Crs

ParticularsAs at As at

31st March, 2014 31st March, 2013

Capital Redemption ReserveAmount as per last Balance Sheet 1480.50 100.00Add: Amount transferred during the year 606.97 2087.47 1380.50 1480.50

Other ReservesReserve for Redeeming Preference Share CapitalAmount as per last Balance Sheet 1456.97 2837.47Less: Transfer to Capital Redemption Reserve 606.97 850.00 1380.50 1456.97

Prime Minister’s Trophy Award Fund *Amount as per last Balance Sheet 5.45 4.01Add: Amounts received / Interest accrued during the year 0.56 6.01 1.44 5.45

SurplusAmount as per last Balance Sheet 3187.58 2990.49Add: Surplus as per Statement of Profit and Loss 366.45 352.83

Adjustment of Proposed Dividend on Redeemed Preference shares 10.05 2.91Adjustment of Tax on Proposed Dividend on Redeemed Preference shares 1.71 0.47Adjustment of Dividend Tax credit on dividend received from EIL (subsidiary) 0.02 378.23 0.02 356.23

Less:AppropriationsInterim Dividend 58.00 82.88Proposed Dividend (Final) 34.65 53.69Tax on Interim Dividend 9.86 13.45Tax on Proposed Dividend (Final) 5.89 108.40 3457.41 9.12 159.14 3187.58

TTTTTotototototalalalalal 6400.89 6130.50

* The fund has been created out of Award conferred by the Prime Minister of India as best Integrated Steel Plant in India and the earnings from the fund are utilised for the purposes intended for.

02.01: Proposed Dividend and Dividend per Share

Particulars 2013-14 2012-13Preference Dividend

Interim Dividend Crs 55.00 72.85Proposed Dividend (Final) Crs 1.00 56.00 28.44 101.29Number of Preference Shares No.of shares 800,000,000 1,421,970,000Dividend per share 0.70 0.71

Equity DividendInterim Dividend Crs 3.00 10.03Proposed Dividend (Final) Crs 33.65 36.65 25.25 35.28Number of Equity Shares No.of shares 4,889,846,200 4,889,846,200Dividend per share 0.07 0.07

Sub Note: Preference shares outstanding as at 31-05-2014.

80

Note 03.00 : Long-term Borrowings Crs

Particulars As at As at31st March, 2014 31st March, 2013

Term LoansFrom Banks

Secured Loans 1203.53 1241.56(Secured by hypothecation of Fixed Assets)

1203.53 1241.56

03.01 : Loans guaranteed by Directors and Others 0.00 0.00

03.02 : Default in repayment of loans and interest 0.00 0.00

Note 04.00 : Deferred Tax liabilities (Net) Crs

ParticularsParticularsParticularsParticularsParticulars As at As at31st March, 204 31st March, 2013

Deferred Tax LiabilitiesDifference between book and tax depreciation 479.92 280.75

Sub-Total (A) 479.92 479.92 479.92 479.92 479.92 280.75

Deferred Tax AssetsProvision for Gratuity 0.00 2.03Provision for Doubtful Debts, Advances,Claims,Interest 30.21 28.86Other Deferred Tax Assets 30.70 20.65

Sub-Total (B) 60.91 51.54

Net Deferred tax Liability (A) - (B) 419.01 229.21

Note 05.00 : Other Long-Term liabilities Crs

Particulars As at As at31st March, 2014 31st March, 2013

Trade Payables 0.00 12.14Others

Security deposits 81.17 64.25Other Liabilities 84.39 28.61

Total 165.56 105.00

Note 06.00 : Long-term Provisions Crs

Particulars As at As at31st March, 2014 31st March, 2013

Provision for Employee BenefitsCompensated Absences 118.06 107.79Post-retirement Benefits 201.64 163.55Employee Family Benefit Scheme 163.36 102.80Long Service Awards 35.76 36.74Leave Travel Concession 9.52 0.93

OthersMines Closure 3.09 2.96

Total 531.43 414.77

06.01 : Disclosures of Provisions required by Accounting Standard (AS) 29 ‘ Provisions, Contingent Liabilities and Contingent Assets’ : Crs

Particulars Opening Balance Additions during Utilised during Closing Balanceas at 01.04.2013 the year the year as at 31.03.2014

Provision for Mines Closure Expenditure 2.96 0.13 0.00 3.09

81

Note 07.00 : Short-term Borrowings Crs

Particulars As at As at31st March, 2014 31st March, 2013

Loans repayable on demandFrom Banks

Secured LoansWorking Capital Borrowings

(Secured by hypothecation of Current Assets) 589.44 586.22

Unsecured LoansWorking Capital Borrowings 229.63 203.80Short-term Loans 487.31 0.00Short-term Foreign currency facilities 2433.55 3150.49 2520.84 2724.64

Other LoansUnsecured

Commercial Papers 0.00 347.58

Total 3739.93 3658.44

07.01 : Loans guaranteed by Directors and Others 0.00 0.00

07.02 : Default in repayment of loans and interest 0.00 0.00

Note 08.00 : Trade Payables Crs

Particulars As at As at31st March, 2014 31st March, 2013

MSME 60.32 54.73Others 769.61 683.21

Total 829.93 737.94

08.01 : Information relating to ‘Supplier’ under the provisions of Micro,Small and Medium Enterprise Development Act, 2006. Crs

Particulars As at As at31st March, 2014 31st March, 2013

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

ii) Payments made beyond the appointed day and interest thereon during the year Nil Niliii) The amount of interest due and payable for the period of delay in making payments Nil Nil

but with out adding the interest.iv) The amount of interest accrued and remaining unpaid at the end of the year Nil Nilv) The amount of further interest remaining due and payable in the succeeding

year until the date such interest is actually paid Not Applicable Not Applicable

82

Note 09.00 : Other Current liabilities Crs

Particulars As at As at31st March, 2014 31st March, 2013

Interest accrued but not dueShort-term borrowings 4.49 6.12Income Tax 0.79 5.28 0.00 6.12

Advances from customers 133.35 183.85Other advances 0.18 0.14Earnest money, security & other deposits 361.35 303.97Current Liabilities of Long-term Employee Benefits

Compensated Absences 98.00 183.64Post-retirement Benefits 18.14 12.36Employee family Benefit Scheme 25.21 17.18Long Service Awards 2.85 1.44Leave Travel Concession 1.92 146.12 8.34 222.96

Other liabilitiesSundry Creditors 644.98 746.09Foreign Exchange Forward Contract Payables 2621.18 2604.02Other Payables 1571.61 4837.77 1548.04 4898.15

Total 5484.05 5615.19

09.01 : : : : : Other Payables include net liability of 594.69 Crs (Previous Year 438.63 Crs) towards provision on account of pay revisioneffective from 01.01.2007 in respect of Executive employees and w.e.f 01.01.2012 in respect of Non-Executive employeespending finalisation of wage revision.

Note 10.00 : Short-term Provisions Crs

Particulars As at As at31st March, 2014 31st March, 2013

Provision for Employee BenefitsGratuity to employees 0.00 5.98

OthersCurrent Income Tax 116.76 103.98Wealth Tax 0.35 0.32Proposed Dividend (Final) 34.65 53.69Tax on proposed Dividend (Final) 5.89 9.12

Total 157.65 173.10

83

Note 11.00 : Fixed Assets Crs

Particulars Gross Block

As at 1st Additions & Sales & As at 31st

April, 2013 adjustments adjustments March, 2014

A.TANGIBLE ASSETSLand

- Freehold (Including cost of development) 55.80 (-) 0.03 — 55.77- Leasehold 1.65 — — 1.65

Railway Lines & sidings 60.29 22.53 — 82.82Roads, Bridges & Culverts 161.24 31.91 — 193.15Buildings 1224.38 16.16 — 1240.54Plant & Equipments 9671.44 801.00 7.33 10465.11Furniture & Fixtures 23.76 1.79 0.08 25.47Locomotives 138.84 1.58 — 140.42Vehicles 13.16 3.74 — 16.90Electrical Installations 642.11 65.14 0.01 707.24Water Supply & Sewerage systems 424.66 86.27 — 510.93Miscellaneous Assets 157.45 6.49 1.96 161.98

Total (A) 12574.78 1036.58 9.38 13601.98Figures for the previous year 10380.49 2205.38 11.09 12574.78

B. INTANGIBLE ASSETSComputer software 7.73 0.74 0.09 8.38Mining rights 5.83 — — 5.83

Total (B) 13.56 0.74 0.09 14.21Figures for the previous year 13.38 0.18 0.00 13.56

TOTAL (A+B) 12588.34 1037.32 9.47 13616.19Figures for the previous year 10393.87 2205.56 11.09 12588.34

Note 11.00 : Fixed Assets Continued … Crs

ParticularsDepreciation Net Block

As at 1st For the Year Sales & As at 31st As at 31st As at 31st

April, 2013 ( incl. PPA) adjustments March, 2014 March, 2014 March, 2013

A. TANGIBLE ASSETSLand

- Freehold (Including cost of development) 55.7755.7755.7755.7755.77 55.80- Leasehold 0.70 0.03 — 0.73 0.92 0.95

Railway Lines & sidings 48.30 1.52 — 49.82 33.00 11.99Roads, Bridges & Culverts 32.92 3.11 — 36.03 157.12 128.32Buildings 603.87 35.97 — 639.84 600.70 620.51Plant & Equipments 7336.18 201.88 7.30 7530.76 2934.35 2335.26Furniture & Fixtures 15.15 0.98 0.04 16.09 9.38 8.62Locomotives 72.55 4.20 — 76.75 63.67 66.29Vehicles 10.93 1.04 — 11.97 4.93 2.23Electrical Installations 305.56 21.68 0.00 327.23 380.01 336.55Water Supply & Sewerage systems 254.97 11.65 — 266.62 244.31 169.69Miscellaneous Assets 106.58 11.34 1.81 116.10 45.88 50.87

Total (A) 8787.70 293.40 9.16 9071.94 4530.03 3787.07Figures for the previous year 8596.83 201.70 10.83 8787.70 3787.07 1783.65

B. INTANGIBLE ASSETSComputer software 7.05 0.44 0.09 7.40 0.98 0.68Mining rights 3.77 0.29 — 4.06 1.77 2.06

Total (B) 10.82 0.73 0.09 11.46 2.75 2.74Figures for the previous year 10.19 0.63 — 10.82 2.74 3.19

TOTAL (A+B) 8798.52 294.13 9.25 9083.40 4532.78 3789.81Figures for the previous year 8607.02 202.33 10.83 8798.52 3789.81 1786.84

84

11.01: ALLOCATION OF DEPRECIATION Crs

Particulars As at As at31st March, 2014 31st March, 2013

Current year 271.48 186.88Prior periods 0.00 (0.80)Total 271.48 186.08

11.02: Allocation of Depreciation not included above and charged to:Expenditure During Construction 22.65 16.25

11.03: Land at a cost of 39.99 Crs (Previous year 39.99 Crs) is being held in the name of President of India. The Company is holdingPower of Attorney issued by Govt. of India for utilisation of the land acquired for the Project and related purposes incidentalthereto.

11.04: Land includes 367.07 acres (Previous year 367.07 acres) allotted to various agencies on lease basis.

11.05: Land includes 12.5 acres ( 0.03 Crs) whose title is under dispute.

11.06: Sale deeds in respect of the following assets are yet to be executed:a) Stockyard at Chennai 2.37 Crs(Previous Year 2.37 Crs)b) i) Office building at New Delhi 1.09 Crs(Previous Year 1.09 Crs)

ii) Office building at New Delhi 24.44 Crs(Previous Year 24.44 Crs)c) Office buildings at Ahmedabad 0.18 Crs(Previous Year 0.18 Crs)d) Residential buildings at Kolkata 0.95 Crs(Previous Year 0.95 Crs)e) i) Stockyard at Hyderabad 0.00 Crs(Previous Year 1.00 Crs)

ii) Site for Liaison Office 1.30 Crs(Previous Year 1.30 Crs)

11.07: Fixed Assets include 1.02 Cr (Debit) [ Previous year 0.14 Cr (Debit) ] representing Net Exchange Rate Variation for the yearin respect of foreign currency liabilities with regard to acquisition of fixed assets prior to 1st April 2004.

11.08:Capital expenditure common to more than one asset are capitalised on the basis of consultants’/engineers’ estimates.

11.09:Main plant units, including Mills, constitute “Continuous process plant”.

Note 12.00 : Capital Work-In-Progress Crs

Particulars As at As at31st March, 2014 31st March, 2013

Work-in-Progress (Including Material issued to contractors)Coke Oven Battery-4 242.93 208.406.3 MT Expansion 8731.18 8668.44Others 1234.63 10208.74 703.63 9580.47

Less: Provision for dropped SLTM Project 18.27 10190.47 18.27 9562.20

Expenditure during construction awaiting allocation (Note : 12.01) 479.00 403.04

Total 10669.47 9965.24

85

12.01 : Expenditure During Construction Crs

Particulars As at As at31st March, 2014 31st March, 2013

Opening Balance (A) 403.04 354.24

Expenditure during the year:Employees’ Remuneration & Benefits 44.06 38.59Other Expenses & Provisions 42.66 45.74Interest 4.73 3.73Depreciation 22.65 114.10 16.25 104.31

Less :Interest Receipts 0.04 0.00Other Revenue (5.82) (5.78) (0.53) (0.53)

Net expenditure during the year (B) 119.88 104.84

Total (A+B) 522.92 459.08

Less: Amount allocated to Fixed Assets 43.92 56.04

Balance carried forward to Note 12.00 479.00 403.04

Note 13.00 : Non Current Investments Crs

Particulars No. of fully paid-up Face Value of As at As atEquity Shares each Share ( ) 31st March,2014 31st March, 2013

TradedInvestment In Equity InstrumentsQuoted (A)

SubsidiaryEastern Investments Ltd 736638 10 361.02 361.02

(736638)Others

Bisra Stone Lime Company Ltd * 182927 10 0.00 0.00(182927)

Total (A) 361.02 @ 361.02

Unquoted (B)Joint Ventures

Rinmoil Ferro Alloys Private Limited 100000 10 0.10 0.10(100000)

International Coal Ventures Pvt. Ltd 1400000 10 1.40 1.50 1.40 1.50(1400000)

Others #

Free Press House Limited $ 2280 1 0.00 0.00(2280)

Steelscape Consultancy Pvt. Ltd ^ 0 10 0.00 0.00 0.05 0.05(50000)

Total (B) 1.50 1.55

Total (A+B) 362.53 362.58

Sub Note : Figures in the brackets are for previous year.

@ Aggregate Market Value as at 31st March 2014 & 31st March 2013 is not ascertainable due to non-availability of Quotes in StockExchange.

* Investments amounted to 1000/-, hence rounded off to zero.

# Others include one fully paid-up Equity share of 100/- each in Anakapalli Rural Electric Co-operative society Limited.

$ Investments amounted to 2280/-, hence rounded off to zero

^ Shares were written off during the current Year

86

13.01 : Joint Venture Entities

Details of Company’s share of ownership interest, assets, liabilities, income, expenses, contingent liabilities and capitalcommitments in the joint venture entities, all incorporated in India, are given below: Crs

Name of the Joint Percentage of Company’s Assets Liabilities Income Expenditure Contingent CapitalVenture Entitity ownership interest Liabilities Commitments

1. RINMOIL Ferro 50.00 * * * * * 51.55 Alloys Pvt Ltd

2. International Coal 14.29 * * * * * 500.00 Ventures Pvt Ltd

(*) The accounts of the respective joint ventures for the Financial Year 2013-14 are not yet prepared.

Note 14.00 : Long-term Loans and Advances Crs

Particulars As at As at31st March, 2014 31st March, 2013

Capital advancesAdvances & other recoverables(Recoverable in cash or in kind or for value to be received)

Government departments 4.52 9.89Less:Provision for doubtful advances 0.00 4.52 0.00 9.89

Contractors 37.99 29.31Less:Provision for doubtful advances 0.00 37.99 42.51 0.00 29.31 39.20

Security Deposits 45.79 28.44Loans and Advances to Related parties

Directors 0.00 0.00Joint venture Companies 4.36 4.36 4.36 4.36

Other Loans and AdvancesLoans

Employees 52.60 48.27Others 249.47 302.07 280.64 328.91

AdvancesMAT Credit Entitlement 220.71 96.88Others 0.61 221.32 0.57 97.45

Total 616.05 498.36

14.01 Particulars of Long-term Loans & AdvancesCapital Advances

Secured & Considered good 0.00 0.00Unsecured & Considered good 42.51 39.20Doubtful 0.00 42.51 0.00 39.20

Security DepositsSecured & Considered good 45.79 28.44Unsecured & Considered good 0.00 0.00Doubtful 0.00 45.79 0.00 28.44

Loans and Advances to Related partiesSecured & Considered good 0.00 0.00Unsecured & Considered good 4.36 4.36Doubtful 0.00 4.36 0.00 4.36

Other Loans and AdvancesSecured & Considered good 0.00 0.00Unsecured & Considered good 523.39 426.36Doubtful 0.00 523.39 0.00 426.36

Total 616.05 498.36

14.02 : Loans and advances due by Directors/officers 0.00 0.00

14.03 : Loans and advances due by Private Companies in which Director of the Company is a director 4.36 4.36

87

Note 15.00 : Other Non Current Assets Crs

Particulars As at As at31st March, 2014 31st March, 2013

Interest Accrued on LoansEmployees 14.63 12.58Others 45.60 24.00

Total 60.23 36.58

Note 16.00 : Inventories (As taken and certified by the Management) Crs

Particulars As at As at31st March, 2014 31st March, 2013

Semi Finished/ Finished goods 2057.42 2078.74Add: In-transit 7.63 2065.05 4.96 2083.70

Raw materials 1277.26 1169.53Add: In-transit/ Under inspection 362.11 306.45

1639.37 1475.98Less: Provision for shortages 328.06 1311.31 192.63 1283.35

Stores & Spares 488.10 463.73Add: In-transit/ Under inspection 34.29 30.32

522.39 494.05Less: Provision for obsolescence & Non-moving items 35.71 486.68 32.50 461.55

Total 3863.04 3828.60

16.01 ::::: Quantities of Closing Stock of finished / semi-finished goods have been adopted as per book balances after duly adjusting forshortages/ excesses identified on physical verification at anytime during the year.

16.02: In line with industry practice, no credit is taken for the value of material in process except those lying at mills.

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

16.04: Since the Coke Breeze is used for internal consumption, the same has been valued at 60% of the production cost of BF coke.

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

16.06: The stock of production related iron scrap and steel scrap has been considered in the accounts on the basis of visual survey/ estimates and are valued al 75 % and 90 % respectively, at lower of the cost of Pig Iron and of the domestic net realisablevalue of Pig Iron.

88

Note 17.00 : Trade Receivables Crs

Particulars As at As at31st March, 2014 31st March, 2013

Trade ReceivablesDebts over six months 20.87 33.98Other debts 803.10 995.98

823.97 1029.96Less : Provision for doubtful debts 20.32 20.31

Total 803.65 1009.65

17.01: Particulars of Trade ReceivablesSecured and considered good 0.00 0.00Unsecured and considered good 803.65 1009.65Doubtful 20.32 20.31

17.02 : Debts due by Directors/Officers 0.00 0.00

17.03 : Debts due by Private Companies in which Director of the company is a Director 0.00 0.00

Note 18.00 : Cash and Bank balances Crs

Particulars As at As at31st March, 2014 31st March, 2013

Cash and cash equivalentsBalances with Banks 55.48 4.65Cheques, Drafts on hand 111.19 71.73Cash on Hand 0.03 0.05Remittances in-transit 0.00 0.20Term deposits with Banks 3.18 1542.94Earmarked Balances with Banks

Prime Minister’s Trophy Award Fund 6.01 175.89 5.45 1625.02

TTTTTotototototalalalalal 175.89 1625.02

89

Note 19.00 : Short-term Loans and Advances Crs

Particulars As at As at31st March, 2014 31st March, 2013

Loans and Advances to Related PartiesDirectors 0.00 0.00Joint venture Companies 1.64 1.64 1.39 1.39

Loans and Advances to OthersLoans

Material issued on loan 0.38 0.12Advances & other recoverables

(Recoverable in cash or in kind or for value to be received)Government departments 8.29 9.69Less:Provision for doubtful advances 0.62 7.67 0.62 9.07

Contractors 72.02 34.42Less:Provision for doubtful advances 5.16 66.86 4.38 30.04

Suppliers 51.61 33.10Less:Provision for doubtful advances 8.98 42.63 7.88 25.22

Employees 7.41 10.09Less:Provision for doubtful advances 0.16 7.25 0.16 9.93

Foreign Exchange Forward contract receivables 2437.30 2533.11Others 679.15 546.17Less:Provision for doubtful advances 35.80 3080.65 33.99 3045.29

Advance Income Tax 105.00 3310.06 143.60 3263.15

Prepaid expenses 6.85 2.39

Claims recoverable 52.68 53.46Less: Provision for doubtful claims 17.83 34.85 17.23 36.23

Deposits 107.57 114.47

Total 3461.35 3417.75

19.01: Particulars of Loans & AdvancesLoans and Advances to Related parties

Secured & Considered good 0.00 0.00Unsecured & Considered good 1.64 1.39Doubtful 0.00 1.64 0.00 1.39

Loans and Advances to OthersSecured & Considered good 0.00 0.00Unsecured & Considered good 3459.71 3416.36Doubtful 68.55 3528.26 64.26 3480.62

Total 3529.90 3482.01

19.02: Loans and advances due by Directors/Officers 0.00 0.00

19.03: Loans and advances due by Private Companies in whichDirector of the Company is a Director 1.64 1.39

19.04: Short-term loans and advances include 395.39 Crs (Previous Year 381.50 Crs) pertaining to deposits / advances madeagainst disputed taxes.

90

Note 20.00 : Other Current assets Crs

Particulars As at As at31st March, 2014 31st March, 2013

Current maturities of Long-term LoansEmployees 16.36 14.91Others 24.00 40.36 24.00 38.91

Interest accrued on loans to employees 1.25 1.01Interest accrued — others 11.95 17.81

Less: Provision for Non recoverable interest 0.04 11.91 0.34 17.47Assets Retired from active use and held for disposal

Value of Fixed Assets 6.67 5.66Less: Provision for loss 6.55 0.12 5.53 0.13

Deferred Premium on Forward contracts 43.09 39.21Total 96.73 96.73

20.01 : Loans due by Directors 0.00 0.0039

Note 21.00 : Revenue from Operations Crs

Particulars Year ended Year ended31st March, 2014 31st March, 2013

Sale of ProductsDomestic 12751.31 12954.86Export 738.15 13489.46 598.07 13552.93Less: Sale of Trial Run Production (Transferred to CWIP) 125.29 13364.17 89.83 13463.10

Other Operating RevenuesInternal consumption 56.09 80.39Export benefits 11.22 21.79

Total 13431.48 13565.28

21.01 : As per section 441A of the Companies Act 1956, cess on turnover is leviable. Government of India has not yet framed any rules/ guidelines in this regard and hence no amount has been provided and / or paid.

91

Quantity in Tonnes *21.02 : Stocks & Sales Value in Crs

Pig Iron Blooms Saleable Sundries *Particulars Steel Coke & Coke

OthersTotal

ProductsOpening stock Quantity 9654 65050 175565 722879 269696 —

(4667) (55773) (84517) (686698) (274288) —Value 24.53 206.12 622.51 999.63 230.91 2083.70

(12.40) (174.52) (304.68) (1062.92) (225.43) (1779.96)

Sales Quantity 283945 118607 2868155 249415 1731079 —(454104) (130906) (2670542) (178871) (1406112) —

Value 681.10 357.72 11606.27 277.16 441.92 13364.17(1092.89) (425.33) (11409.27) (208.48) (327.13) (13463.10)

Closing stock Quantity 46913 77564 145367 705548 349812 —(9654) (65050) (175565) (722879) (269696) —

Value 119.14 227.11 479.48 984.62 254.70 2065.05(24.53) (206.12) (622.51) (999.63) (230.91) (2083.70)

(*) 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 19721.77 tonnes of value 72.51 Crs (Previous year 17202.93 tonnes of value 64.88 Crs.) in the

custody of Consignment / Handling Agents.(iii) Figures of closing stock are after adjustment for internal consumption, transfers to capital works, shortages / excesses.(iv) Others include By-products and Iron & Steel Scrap.

Note 22.00 : Other Income Crs

Particulars Year ended Year ended31st March, 2014 31st March, 2013

Interest IncomeBanks 120.01 151.26Loans to employees 3.79 3.97Others 56.25 180.05 78.10 233.33

Dividend Income 0.11 0.13Other Non-Operating Income

Claims for finished goods (Shortages & Missing Wagons) 0.83 0.86Rent recoveries 7.80 7.11Liquidated damages 16.79 17.46Profit on sale of fixed assets 0.56 0.45Other Income 1.71 1.02Provision no longer required written back 1.03 12.34Sundry receipts* 98.11 126.83 182.72 221.96

Total 306.99 455.42

* Consequent to opinion of ICAI on ‘advances paid’ for “Assets not owned by an Enterprise”, an amount of 50.80 Crs was reversed, which was previously charged to Statement of Profit and Loss.

92

Quantity: TonnesNote 23.00 : Cost of Materials consumed Value: Crs

Particulars Year ended 31st March, 2014 Year ended 31st March, 2013Quantity Value Quantity Value

Raw MaterialsCoal 3967493 3708.08 3901112 4346.08Iron Ore 5724941 2777.27 5776883 3161.71Limestone 975567 142.24 1043217 139.87Dolomite 603606 98.17 557355 84.88Silico Manganese 53589 288.58 48876 278.00Ferro Silicon 4840 36.51 4875 33.80Aluminium 4612 59.68 3379 44.11Manganese Ore 15978 2.72 14161 2.45Petroleum Coke 6028 15.29 5693 15.12Sea Water Magnesite 2729 13.21 2135 8.38Billets 0 0.00 13470 50.65Others 14.47 9.01

7156.23 8174.07Intermediate ProductsOutput from Trial Run Production 178.16 1242.48

Less: Material Consumed for Trial Run Production 308.57 1317.89Total 7025.82 8098.66

23.01 : Value of Indigenous and Imported Raw materials consumed

Particulars Year ended 31st March, 2014 Year ended 31st March, 2013 Crs % Crs %

Indigenous 3575.19 49.96 4008.68 49.04Imported 3581.04 50.04 4165.39 50.96Total 7156.23 100.00 8174.07 100.00

Note 24.00 : Changes in Inventories of Semi-Finished / Finished goods Crs

Particulars Year ended Year ended31st March, 2014 31st March, 2013

Opening stock 2083.70 1779.96Less: Closing stock 2065.05 2083.70Net Reduction / (Accretion) 18.65 (303.74)

Note 25.00 : Employee Benefits Crs

Particulars Year ended Year ended31st March, 2014 31st March, 2013

Salaries and wages 1483.10 1269.37Company’s contribution - provident fund & other funds 94.72 104.41Staff Welfare expenses 173.28 95.29

Total 1751.10 1469.07

25.01: Expenditure on Employee benefits not included above and charged to: Crs

Particulars Year ended Year ended31st March, 2014 31st March, 2013

Capital Work in Progress / Expenditure During ConstructionSalaries and wages 119.28 100.77Company’s contribution - provident fund & other funds 8.16 8.58Staff Welfare expenses 14.08 8.31Total 141.52 117.66

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25.02 : Details of Employee Benefits

25.02.01: An amount of 6.16 Crs (Previous Year 6.02 Crs) recognised in the Statement of Profit and Loss Account and 0.53Cr (Previous Year 0.50 Cr) in Capital Work in Progress, 0.03 Cr (Previous Year 0.03 Cr) in Intangible Assets underDevelopment towards Superannuation Benefit Scheme (Post Employment Benefit - Defined Contribution Plan).

25.02.02: General Description of the Post Employment Benefits - Defined Benefit Plans:Provident Fund - Company pays fixed contribution to Provident Fund, at predetermined rates, to

a separate Trust, which invests the funds in permitted securities. OnContributions, the Trust is required to pay a minimum rate of interest, to themembers, as specified by Govt. of India. The obligation of the Company is limitedto the shortfall in the rate of interest on the Contribution based on its return oninvestments as compared to the declared rate.

Gratuity - Payable to employees, who render continuous service of 5 years or more, onseparation, at 15 days of last drawn pay for each completed year of service.

Retirement Settlement Benefits - The retired employees, their dependents, as also the dependents of theemployees expired while in service are entitled for travel and transport expensesto their place of permanent residence. At the time of retirement, employees willbe given 10 Gms. of gold each.

Employee Family Benefit Scheme - Monthly payments, till the notional date of superannuation, to employeesseparated upon disablement / legal heirs of deceased employees at their optionwho fulfill the criteria of prescribed amount of deposit.

25.02.03: Reconciliation of present value of defined benefit obligations: Crs Retirement Retirement Employee

Particulars Gratuity Medical Settlement Family BenefitBenefits Benefits Scheme

Obligation as at the beginning of the period 677.22 150.23 50.98 119.97(629.89) (145.63) (44.06) (97.83)

Service Cost 12.78 6.99 1.86 26.72(19.00) (5.48) (1.77) (17.00)

Interest Cost 60.63 11.98 4.00 8.80(49.59) (11.44) (3.46) (7.17)

Actuarial gains (-) / losses (+) -28.31 23.32 -2.10 52.94(-1.27) (-7.08) (3.20) (14.43)

Benefits paid -21.82 -0.93 -1.89 -19.87(-20.00) (-5.24) (-1.53) (-16.46)

Obligations as at the end of the period 700.50 191.59 52.85 188.56(677.22) (150.23) (50.98) (119.97)

Sub Note: Figures in the brackets are for previous year.

25.02.04: Against present value of gratuity obligation as at 31st March 2014 of 700.50 Crs (Previous Year 677.22 Crs) , Companyhas funded a sum of 717.40 Crs (Previous Year 671.24 Crs) through a separate Gratuity Fund which are covered bythe Trust’s Plan Assets for equal amount. The excess funding of 16.90 Crs is proposed for withdrawal during thenext financial year. The other post-retirement defined benefit obligations are unfunded.

25.02.05: Reconciliation of fair value of Plan Assets: Crs

Particulars Gratuity2013-14 2012-13

Balance as at the opening of the period 671.24 630.39Expected Return 59.70 55.90Actuarial gains (+) / losses (-) 2.29 3.47Contributions by the Employer 5.99 1.47Benefits paid (21.82) (20.00)Balance as at the end of the period 717.40 671.24

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25.02.06: Reconciliation of Present Value of Defined Benefit Obligation and Fair value of Plan Assets: Crs Particulars Gratuity

2013-14 2012-13Fair Value of Plan Assets 717.40 671.24Present Value of Defined Benefit Obligation 700.50 677.22Amount recognised in Balance Sheet as at the end of the period (16.90) 5.98

25.02.07: Expenses recognised in the statement of Profit and Loss . Crs

Particulars Gratuity Retirement Retirement Employee FamilyMedical Benefits Settlement Benefits Benefit Scheme

Service Cost 12.78 7.00 1.86 26.72(19.00) (5.49) (1.77) (17.00)

Interest Cost 60.63 11.98 4.00 8.80(49.59) (11.44) (3.46) (7.17)

Actuarial gains (-) / losses (+) -30.60 23.32 -2.10 52.94(-4.73) (-7.08) (3.20) (14.43)

Expected Return on Plan Assets -59.70 0.00 0.00 0.00(-55.90) (0.00) (0.00) (0.00)

Accounting Estimate Change on Opening obligation 0.00 0.00 0.00 0.00(0.00) (0.00) (0.00) (0.00)

Total to be charged - Employees Benefits -16.89 42.30 3.76 88.46(7.96) (9.85) (8.44) (38.60)

Amount charged to :

Statement of Profit & Loss (Note -B 25.00) -15.64 39.18 3.49 81.93(7.37) (9.13) (7.82) (35.77)

Expenditure During Construction -0.18 0.64 0.05 1.34(0.17) (0.20) (0.17) (0.79)

Capital Work in Progress -1.03 2.39 0.21 5.01(0.40) (0.50) (0.43) (1.96)

Intangible Assets under Development -0.04 0.09 0.01 0.18(0.02) (0.02) (0.02) (0.08)

Sub Note: Figures in the brackets are for previous year.

25.02.08: Effect of one percentage point change in the assumed inflation rate in case of valuation of benefits under post retirementmedical benefit scheme:

Crs

Particulars Effect of one percentage point Effect of one percentage pointincrease in medical cost trend rate decrease in medical cost trend rate

2013-14 2012-13 2013-14 2012-13

On aggregate current service and interest cost of 3.76 4.54 (3.23) (3.52)post retirement medical benefits

On present value of defined benefit obligations 32.28 37.22 (28.30) (28.82)as at end of the period

25.02.09: Actuarial assumptionsDescription As at 31st March 2014 As at 31st March 2013

Discount Rate (per annum) 9.1% 8 %Mortality rate Indian Assured lives (2006-08) Ultimate Table Indian Assured lives (2006-08) Ultimate TableWithdrawal rates (per annum) Upto 30 years of age 3%; Upto 44 years of age Upto 30 years of age 3%; Upto 44 years of age

2%; Above 44 years of age 1% 2%; Above 44 years of age 1%.Estimated rate of return onPlanned Assets 9 % 9 %Medical Cost Trend Rates (Per Annum) 4.5% of Hospital Cost and Medi-claim Premium 4.5% of Hospital Cost and Medi-claim PremiumSalary Escalation (per annum) 7 % 7 %

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

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Note 26.00 : Finance Costs Crs

Particulars Year ended Year ended31st March, 2014 31st March, 2013

Interest :Foreign currency facilities 204.43 133.67Bank Loans & Commercial papers 129.74 217.79Income Tax 0.79 0.00Others 0.75 2.90

Other Borrowing costs 2.49 4.83Loss/(Gain) on Foreign currency transactions and translation (0.08) 0.06

Total 338.12 359.25

26.01: Expenditure on Finance Costs not included above and charged to:Capital Work in Progress / Expenditure During ConstructionInterest - Banks 164.25 56.71

Note 27.00 : Other expenses Crs

Particulars Year ended Year endedNote No: 31st March, 2014 31st March, 2013

Consumption of Stores and Spare parts 27.02 556.98 529.88Power and Fuel 27.03 671.34 630.95Repairs and Maintenance 27.04 236.49 204.43Remuneration to Auditors 27.05 0.32 0.26Miscellaneous Expenses 27.06 236.45 282.75Rent 2.13 1.92Rates and taxes 32.94 32.22Insurance 9.31 9.28Handling and scrap recovery 144.84 132.91Freight outward 501.28 415.09ProvisionsShortage/damaged material/obsolescence/non-moving items of stores 4.42 2.82Doubtful advances and claims 3.83 1.65Doubtful debts 0.00 0.01Dropped SLTM Project 0.00 0.54Non Recoverable Interest 0.00 8.25 0.30 5.32Write-offsShortage/damaged material/obsolescence/non-moving items of stores 0.03 0.04Doubtful advances and claims 0.00 0.03 0.00 0.04Sundries 41.09 51.70

Total 2441.45 2296.75

25.02.10: Provident Fund : Companys’ contribution paid/payable during the year to Provident Funds are recognised in the Statementof Profit & Loss. The company’s Provident Fund Trusts are exempted under section 17 of the Emplyees’ Provident Fund andMiscellanceous Provisions Act, 1952. The conditions for grant of exemption stipulated that the employer shall make good,deficiency if any, in the interest rate declared by the Trusts vis-a-vis statutory rate. The Company doesnot anticipate anyfurther obligations in the near forseeable future having regard to the assets of the funds and return on investment.

96

27.01: Expenditure on Other expenses not included above and charged to: Crs

Particulars Year ended Year ended31st March, 2014 31st March, 2013

Capital Work in Progress / Expenditure During ConstructionPower and Fuel 11.38 26.42Repairs and maintenance - Plant and Equipment and others 0.56 0.05Security Expenses 13.73 14.58Travelling Expenses 6.36 2.05Printing and Stationery 0.02 0.02Postage, telegrams and telephone 0.22 0.22Water Charges 11.89 3.19Advertisement 1.59 1.90Technical consultancy 0.02 0.05Sundries 0.06 0.05

Total 45.83 48.53

27.02 : Value of Indigenous and Imported Stores and Spares consumedYear ended Year ended

Particulars 31st March, 2014 31st March, 2013 Crs % Crs %

Indigenous 506.67 90.97 483.13 91.18Imported 50.31 9.03 46.75 8.82

Total 556.98 100.00 529.88 100.00

27.03 : Power and Fuel Crs

Particulars Year ended Year ended31st March, 2014 31st March, 2013

Purchased power 273.86 286.93Coal 381.42 342.47Furnace oil/ LSHS/ LDO 16.06 1.55

Total 671.34 630.95

27.03.01 : Cost of Power and fuel does not include the cost of generation of power and production of certain fuel elements in the Plantwhich are internally consumed. The related expenses have been included under the primary heads of account.

27.04 : Repairs and Maintenance Crs

Particulars Year ended Year ended31st March, 2014 31st March, 2013

Plant and Equipment 114.37 99.60Buildings 56.60 39.92Others 65.52 64.91

Total 236.49 204.43

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27.05 : Remuneration to Auditors Crs

Particulars Year ended Year ended31st March, 2014 31st March, 2013

As Auditor 0.10 0.10For taxation matters 0.02 0.02Other Services 0.00 0.01For reimbursement of expenses 0.20 0.13Total 0.32 0.26

27.06 : Miscellaneous Expenses Crs

Particulars Year ended Year ended31st March, 2014 31st March, 2013

Technical services 6.79 5.89Travelling expenses 70.88 74.93Printing and stationery 2.40 2.47Postage, telegrams and telephone 3.59 3.50Water charges 39.31 38.17Legal expenses 1.26 1.11Bank charges 0.88 1.47Community Development Welfare 6.57 0.33Donations

CSR Foundation 4.12 4.44Others 4.75 8.87 1.04 5.48

Security expenses 41.61 35.31Entertainment expenses 2.01 2.40Advertisement 10.44 14.27Demurrages and wharfages 1.67 17.05ISO Audit Expenses 0.21 0.09Selling expenses 22.43 17.22Exchange Differences (Net) 29.12 15.17Excise Duty (11.59) 47.89

Total 236.45 282.75

27.06.01 : Excise Duty of 11.59 Crs (Credit) [Previous year 47.89 Crs (Debit)] disclosed in miscellaneous expenses comprise ofExcise Duty component on stock at branches, Goods in transit and shortage at branches, Accretion / Reduction of Inventoriesof Semi / Finished Goods and By products at Plant.

Note 28.00 : Prior period items Crs

Particulars Year ended Year ended31st March, 2014 31st March, 2013

Sale of products 0.00 (0.09)Other Revenue (0.31) (4.38)Raw Materials 0.00 (2.97)Stores and spares 0.00 (0.09)Other Expenses (1.57) (4.96)Depreciation 0.00 (0.80)Internal Consumption 0.00 (1.77)

Total (1.88) (15.06)

Sub Note: Figures in brackets represent credit amounts.

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Note 29.00 : Earning Per Share (EPS) CrsParticulars 2013 - 2014 2012 - 2013

Net Profit as per P&L Account Crs 366.45 352.83Preference Dividend and Tax thereon Crs 65.52 117.94Net Profit attributable to Equity Shareholders Crs 300.93 234.89Weighted average number of Equity Shares outstanding during the year No.of shares 4889846200 4889846200Face value per share 10 10Basic and diluted EPS 0.62 0.48

Note 30.00 : Contingent Liabilities and Commitments (to the extent not provided for)

30.01 : Contingent Liabilities

30.01.01: Claims against the company not acknowledged as debt Crs

Particulars As at 31st As at 31st

March, 2014 March, 2013

Contractors / Suppliers / Customers 775.55 585.25Local Authorities - State Govt. 176.82 152.89Sales Tax matters * 1768.83 1633.24Income Tax 207.14 195.52Customs / Excise duty 218.72 200.86R & D Cess 3.38 3.38Others 408.43 401.42

(*) No liability is expected to arise as the movement of goods were on stock transfer and Sales Tax is paid on eventual sales.

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

30.01.03 : Liability towards reimbursement of excise duty on structural works wherever applicable. - Amount not ascertainable.

30.01.04 : Show cause notices issued by various Government Authorities are not considered as contingent liabilities.

30.02 : CommitmentsEstimated amount of contracts remaining to be executed on capital account and not provided for 6524.27 Crs(Previous Year 4992.12 Crs).

Note 31.00 : Notes to accounts - Others

31.01 : For a substantial portion of Loans and Advances, Trade payables/ Trade receivables / Other payables, letters seekingconfirmation of balances were sent and no material discrepancies were found in respect of balances confirmed.

31.02 : Details of Foreign Exchange Transactions Crs

31.02.01 : Expenditure in foreign currency 2013-14 2012-13(a) Technical consultation fee / know-how 18.38 5.09(b) Interest 20.88 22.54(c) Others 1.03 14.83

Crs31.02.02 : Earnings in foreign exchange 2013-14 2012-13

(a) Export of goods (on FOB basis) 737.71 597.79(b) Others 3.74 1.13

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Crs31.02.03 : Value of imports during the year calculated on CIF basis 2013-14 2012-13

(a) Raw materials 3767.65 3961.18(b) Components and Spare parts 87.63 89.02(c) Capital Goods 131.94 134.78

31.03 : Disclosure regarding related parties for the year 2013-14Nature of Relationship Name of the Related party

(a) Joint Ventures RINMOIL Ferro Alloys Pvt LtdInternational Coal Ventures Pvt Ltd

(b) Key Management Personnel Shri A.P. Choudhary (Upto 31.12.2013)Shri P.MadhusudanShri Umesh ChandraShri T.K.ChandShri Y.R.ReddyShri N.S.Rao (Upto 31.10.2013)Shri P.C. Mohapatra (w.e.f. 01.11.2013)

The details of transactions between the Company and the related parties during the year are given below Crs

Joint Venture Key Management Personnel Note No:

Nature of Transaction As at 31st As at 31st As at 31st As at 31st

March 2014 March 2013 March 2014 March 2013

Investments 1.50 1.50 — — B 13.00Long-term Loans and Advances 4.36 4.36 0.00 0.00 B 14.00Short-term loans and advances 1.64 1.39 0.00 0.00 B 19.00Interest Accrued 0.00 0.00 0.00 0.0039 B 20.00Current maturity of Long-term Loansand advances 0.00 0.00 0.00 0.00 B 20.00

For theYear Ended For theYear Ended2013-14 2012-13 2013-14 2012-13

Remuneration 0.00 0.00 1.41 1.32 B 25.00Interest earned 0.00 1.24 0.00 0.00 B 22.00Miscellaneous expenses 0.00 0.00 0.01 0.03 B 27.06

31.04 : The Company’s business is construed as one business segment which comprises of mainly production of Steel products,whose associated risks and returns are predominantly the same. Further, the Company has no geographical segments whichare subject to different risks and returns. Hence no separate disclosure in terms of Accounting Standard (AS) 17 on ‘SegmentReporting’ is considered necessary.

31.05 : Since the Lease transactions of the Company, are incidental to the Company’s main business of production & sale of Iron & Steelproducts, specific disclosures as per AS - 19 on ‘Leases’, are not considered necessary.

31.06 : The entire plant is considered as a Cash Generating Unit. As Recoverable amount of the Cash Generating Unit, being its valuein use, is in excess of its carrying amount, there is no impairment loss in terms of the AS 28 - ‘Impairment of assets’.

31.07 : Previous year’s figures have been rearranged / regrouped wherever necessary to conform to current year’s classification.

100

Rashtriya Ispat Nigam LimitedVisakhapatnam Steel Plant

Visakhapatnam

CIN:U27109AP1982GO1003404

N O T I C E

NOTICE is hereby given to all the Shareholders of Rashtriya Ispat Nigam Limited that the 32ndAnnualGeneral Meeting of the Company will be held at 15.00hrs on Monday, the 29th September, 2014 atthe Registered Office of the Company at Administrative Building, Visakhapatnam Steel Plant,Visakhapatnam – 530 031, to transact the following business :

ORDINARY BUSINESS:

1. To receive, consider and adopt the audited financial statements of the Company for the yearended March 31, 2014, the reports of the Board of Directors and Auditors thereon.

2. To confirm payment of interim dividend already paid and to declare final dividend for the financialyear 2013-14.

3. To appoint a Director in place of Shri Ashhok Kumar Jain (DIN: 0598647) who retires by Rotationand being eligible offers himself for re-appointment.

4. To appoint a Director in place of Prof. Sushil (DIN: 05300091) retires by Rotation and beingeligible offers himself for reappointment.

5. To appoint a Director in place of Prof. S.K.Garg (DIN: 06416704) who retires by Rotation andbeing eligible offers himself for reappointment.

6. To fix the Remuneration of the Statutory Auditors

It is proposed that the Members may consider and if thought fit, to pass with or withoutmodification the following Resolution as an Ordinary Resolution.

“RESOLVED THAT the Board of Directors of the Company be and are hereby authorized to fix theAuditors’ Remuneration, out of pocket expenses, Travelling expenses and other living expensesappropriately for the Statutory Auditors, who will be appointed by the C&AG with therecommendations of Audit Committee from time to time.

FURTHER RESOLVED THAT the Board of Directors be and are hereby further authorized to fixthe payment for any other services rendered by the Statutory Auditors so appointed, with therecommendations of Audit Committee from time to time.

101

SPECIAL BUSINESS

Appointment of Directors

7. To appoint Dr Sheela Bhide (DIN: 1843547) as Director of the Company and in this regard toconsider and if thought fit, to pass with or without modification(s), the following Resolution asan Ordinary Resolution.

RESOLVED THAT pursuant to the provisions of Section 149, 152 and other applicable provisions,if any, of the Companies Act, 2013 and rules made thereunder, Dr Sheela Bhide (DIN: 1843547)who was appointed as part time non-official director (i.e. Independent Director) by the Presidentof India pursuant to powers vested under the Article No.75 of Articles of Association of RINLand assumed charge on 24th February, 2014, be and is hereby appointed as a Director of theCompany, liable to retire by Rotation.

8. To appoint Lt. Gen (Retd) Arvind Mahajan (DIN: 02410540) as Director of the Company and inthis regard to consider and if thought fit, to pass with or without modification(s), the followingResolution as an Ordinary Resolution.

RESOLVED THAT pursuant to the provisions of Section 149, 152 and other applicable provisions,if any, of the Companies Act, 2013 and rules made thereunder, Lt. Gen (Retd) Arvind Mahajan(DIN: 02410540) who was appointed as part time non-official director (i.e. Independent Director)by the President of India pursuant to powers vested under the Article No.75 of Articles ofAssociation of RINL and assumed charge on 24th February, 2014, be and is hereby appointed asa Director of the Company, liable to retire by Rotation.

9. To appoint Shri Ajay Kumar Goyal (DIN: 02726120) as Director of the Company and in this regardto consider and if thought fit, to pass with or without modification(s), the following Resolutionas an Ordinary Resolution.

RESOLVED THAT pursuant to the provisions of Section 149, 152 and other applicable provisions,if any, of the Companies Act, 2013 and rules made thereunder, Shri Ajay Kumar Goyal (DIN:02726120) who was appointed as part time non-official director (i.e. Independent Director) bythe President of India pursuant to powers vested under the Article No.75 of Articles of Associationof RINL and assumed charge on 24th February, 2014, be and is hereby appointed as a Director ofthe Company, liable to retire by Rotation.

10. To appoint Shri Rajib Sekhar Sahoo (DIN: 02708503) as Director of the Company and in thisregard to consider and if thought fit, to pass with or without modification(s), the followingResolution as an Ordinary Resolution.

RESOLVED THAT pursuant to the provisions of Section 149, 152 and other applicable provisions,if any, of the Companies Act, 2013 and rules made thereunder, Shri Rajib Sekhar Sahoo (DIN:02708503) who was appointed as part time non-official director (i.e. Independent Director) bythe President of India pursuant to powers vested under the Article No.75 of Articles of Associationof RINL and assumed charge on 24th February, 2014, be and is hereby appointed as a Director ofthe Company, liable to retire by Rotation.

102

11. To appoint Shri P.C.Mohapatra (DIN: 06738364) as Director (Projects) of the Company and inthis regard to consider and if thought fit, to pass with or without modification(s), the followingResolution as an Ordinary Resolution.

RESOLVED THAT pursuant to the provisions of Section 149, 152 and other applicable provisions,if any, of the Companies Act, 2013 and Rules made thereunder, Shri P.C.Mohapatra (DIN:06738364) who was appointed as Director (Projects) by the President of India pursuant to powersvested under the Article No.75 of Articles of Association of RINL and assumed charge on 01st

November, 2013, be and is hereby appointed as a Director (Projects) of the Company.

12. To appoint Dr.G.B.S.Prasad (DIN: 06886500) as Director (Personnel) of the Company and in thisregard to consider and if thought fit, to pass with or without modification(s), the followingResolution as an Ordinary Resolution.RESOLVED THAT pursuant to the provisions of Section 149, 152 and other applicable provisions,if any, of the Companies Act, 2013 and rules made thereunder, Dr.G.B.S.Prasad (DIN: 06886500)who was appointed as Director (Personnel) by the President of India pursuant to powers vestedunder the Article No.75 of Articles of Association of RINL and assumed charge on 01st May,2014, be and is hereby appointed as a Director (Personnel) of the Company.

13. To appoint Shri.D.N.Rao (DIN: 06914797) as Director (Operations) of the Company and in thisregard to consider and if thought fit, to pass with or without modification(s), the followingResolution as an Ordinary Resolution.

RESOLVED THAT pursuant to the provisions of Section 149, 152 and other applicable provisions,if any, of the Companies Act, 2013, Rules made thereunder, Shri D N Rao (DIN: 06914797) whowas appointed as Director (Operations) by the President of India pursuant to powers vestedunder the Article No.75 of Articles of Association of RINL and assumed charge on 1st August,2014, be and is hereby appointed as a Director (Operations) of the Company.

Cost Auditors ‘Remuneration

14. To ratify the remuneration of the Cost Auditors for the financial year 2014-15 and in this regardto consider and if thought fit, to pass, with or without modification(s), the following resolutionas an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 148 and all other applicable provisionsof the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 (including anystatutory modification(s) or re-enactment thereof), the Cost Auditors appointed by the Board ofDirectors of the Company, to conduct the audit of the cost records of the Company for the financialyear 2014-15, be paid the remuneration of 1,55,000/- (One Lakh Fifty Five Thousand only) plusapplicable service tax and other facilities detailed in the Statement annexed to the Noticeconvening this Meeting.

RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorisedto do all acts and take all such steps as may be necessary, proper or expedient to give effect tothis resolution.”

103

15. To adopt new set of Articles of Association of RINL

To adopt new set of Articles of Association of the Company containing regulations in conformitywith the Companies Act, 2013 and in this regard to consider and if thought fit, to pass, with orwithout modification(s), the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of Section 14 and all other applicable provisionsof the Companies Act, 2013 read with Companies (Incorporation) Rules, 2014 (including anystatutory modification(s) or re-enactment thereof, for the time being in force), the draft regulationscontained in the Articles of Association of RINL submitted to this meeting be and are herebyapproved and adopted in substitution and to the entire exclusion, of the regulations contained inthe existing Articles of Association of the Company;

RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorizedto do all acts and take all such steps as may be necessary, proper or expedient to give effect tothis resolution.”

16. To accord approval for the number of directors on the Board of RINL to be a maximum ofSixteen directors

“RESOLVED THAT pursuant to the provisions of Section 149 and other applicable provisions, ifany, (including modification and re-enactment thereof) of the Companies Act, 2013 and subjectto the Articles of Association of the Company, the consent of the members be and is herebyaccorded for the number of directors on the Board of RINL to be a maximum of Sixteen directors.”

“RESOLVED FURTHER THAT the Company Secretary of RINL be and is hereby authorized to doall the acts, deeds and things which are necessary to give effect to the aforesaid resolution.”

17. To accord approval for issue of Non-Convertible Debentures (NCDs)

To consider and if thought fit, to pass, with or without modification(s), the following resolutionas a Special Resolution:

“RESOLVED THAT pursuant to provisions of Section 42 of the ‘Companies Act, 2013’, read withrule 14 (2) (a) of ‘The Companies (Prospectus and Allotment of Securities) Rules 2014’, andother applicable provisions, if any, of the ‘Companies Act 2013’ (including any statutorymodification(s) or re-enactment(s) thereof), the consent of the Company be and is hereby accordedto for issue of non-convertible bonds upto 4,000Crs (Rupees Four thousand Crores only),through private placement, in one or more tranches, within one year from the date of approval,as a part of borrowings for capex purpose by the Company, approved by the Board at its 284th

Board meeting held on September 09, 2014.”

“RESOLVED FURTHER THAT the Board be and is hereby authorized to do or cause to be done allsuch acts, deeds and other things as may be required or considered necessary or incidentalthereto, for giving effect to the aforesaid resolution”

104

18. To appoint Shri.T.V.S.Krishna Kumar (DIN: 06914774) as Director (Finance) of the Company andin this regard to consider and if thought fit, to pass with or without modification(s), the followingResolution as an Ordinary Resolution.

RESOLVED THAT pursuant to the provisions of Section 149, 152 and other applicable provisions,if any, of the Companies Act, 2013 and Rules made thereunder, Shri.T.V.S. Krishna Kumar (DIN:06914774) who was appointed as Director (Finance) by the President of India pursuant to powersvested under the Article No.75 of Articles of Association of RINL and assumed charge on 25th

August, 2014 be and is hereby appointed as Director (Finance) of the Company.

Registered office By order of the Board

Administrative BuildingVisakhapatnam Steel Plant P Mohan RaoVisakhapatnam 530 031 General Manager (CA) &

Company SecretaryDate:23rd Sept. 2014

NOTE:1. A Member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and

vote instead of himself and the proxy need not be a Member.2. The President of India may appoint one or more person(s) to represent at the Meeting.3. Relevant documents referred to in the accompanying notice and the Statement are open for

inspection by the members at the Registered office of the Company on all working days duringbusiness hours.

105

ANNEXURE TO NOTICEEXPLANATORY STATEMENT TO THE SPECIAL BUSINESSES PROPOSED IN THE NOTICE

(Pursuant to Section 102(1) of the Companies Act, 2013)

Item No.7: Dr.Sheela Bhide was appointed as part-time non official director of RINL by the Presidentof India vide its letter No.1(4)2013-VSP dated February 20, 2014 issued by Ministry ofSteel (MoS) for a period of three years from the date of notification i.e., February 20, 2014or until further orders from the MoS, whichever is earlier.

Her brief resume, inter-alia, giving nature of expertise in specific functional area isprovided elsewhere which forms part of this notice.

None of the Directors or Key Managerial Personnel of the Company or their relativesexcept Dr.Sheela Bhide is in any way, concerned or interested, financially or otherwise,in the resolution.

The Board recommends the resolution for the approval of shareholders.

Item No.8: Lieutenant General (Retired) Arvind Mahajan was appointed as part-time non officialdirector of RINL by the President of India vide its letter No.1 (4)2013-VSP dated February20, 2014 issued by Ministry of Steel (MoS) for a period of three years from the date ofnotification i.e., February 20, 2014 or until further orders from the MoS, whichever isearlier.

His brief resume, inter-alia, giving nature of expertise in specific functional area isprovided elsewhere which forms part of this notice.

None of the Directors or Key Managerial Personnel of the Company or their relativesexcept Lieutenant General (Retired) Arvind Mahajan is in any way, concerned or interested,financially or otherwise, in the resolution.

The Board recommends the resolution for the approval of shareholders.

Item No.9: Mr. Ajay Kumar Goyal was appointed as part-time non official director of RINL by thePresident of India vide its letter No.1 (4)2013-VSP dated February 20, 2014 issued byMinistry of Steel (MoS) for a period of three years from the date of notification i.e., February20, 2014 or until further orders from the MoS, whichever is earlier.

His brief resume, inter-alia, giving nature of expertise in specific functional area isprovided elsewhere which forms part of this notice.

None of the Directors or Key Managerial Personnel of the Company or their relativesexcept Mr. Ajay Kumar Goyal is in any way, concerned or interested, financially orotherwise, in the resolution.

The Board recommends the resolution for the approval of shareholders.

Item No.10: Mr. Rajib Sekhar Sahoo was appointed as part-time non official director of RINL by thePresident of India vide its letter No.1 (4)2013-VSP dated February 20, 2014 issued byMinistry of Steel (MoS) for a period of three years from the date of notification i.e., February20, 2014 or until further orders from the MoS, whichever is earlier.

His brief resume, inter-alia, giving nature of expertise in specific functional area isprovided elsewhere which forms part of this notice.

106

None of the Directors or Key Managerial Personnel of the Company or their relativesexcept Mr. Rajib Sekhar Sahoo is in any way, concerned or interested, financially orotherwise, in the resolution.

The Board recommends the resolution for the approval of shareholders.

Item No.11: Mr. P. C. Mohapatra was appointed as Director (Projects) of RINL by the President ofIndia vide its letter No. 1(8)2012-VSP dated August 16, 2013 issued by Ministry of Steel(MoS) for a period of five years from the date of assumption of charge of the post, i.e.November 1, 2013, or till the date of his superannuation or until further orders from theMoS, whichever is earliest.The terms and conditions regulating his appointment, is asper the letter No. 1(8)2012-VSP, dated February 10, 2014 issued by the MoS, Govt of India.

His brief resume, inter-alia, giving nature of expertise in specific functional area isprovided elsewhere which forms part of this notice.

None of the Directors or Key Managerial Personnel of the Company or their relativesexcept Mr. P. C. Mohapatra is in any way, concerned or interested, financially or otherwise,in the resolution.

The Board recommends the resolution for the approval of shareholders.

Item No.12: Dr.G.B.S.Prasad, Executive Director (Personnel) of RINL was appointed as Director(Personnel) of RINL by the President of India vide its letter No.1(9)2013-VSP datedFebruary 11, 2014 issued by Ministry of Steel (MoS) for a period of five years from thedate of assumption of charge of the post, i.e. May 01, 2014, or till the date of hissuperannuation or until further orders from the MoS, whichever is earliest. The termsand conditions regulating his appointment is as per the letter No. 1(9)/2013-VSP datedJuly 02, 2014 issued by the MoS, Govt.of India.

His brief resume, inter-alia, giving nature of expertise in specific functional area isprovided elsewhere which forms part of this notice.

None of the Directors or Key Managerial Personnel of the Company or their relativesexcept Dr.G.B.S.Prasad is in any way, concerned or interested, financially or otherwise,in the resolution.

The Board recommends the resolution for the approval of shareholders.

Item No.13: Mr. D.N.Rao, Executive Director (Works), RINL was appointed as Director (Operations) ofRINL by the President of India vide its letter No.1(11)2013-VSP dated July 01, 2014 issuedby Ministry of Steel (MoS) for a period of five years from the date of assumption of chargeof the post, i.e. August 01, 2014, or till the date of his superannuation or until furtherorders from the MoS, whichever is earliest. The terms and conditions regulating hisappointment is to be determined by the Government of India.

His brief resume, inter-alia, giving nature of expertise in specific functional area isprovided elsewhere which forms part of this notice.

None of the Directors or Key Managerial Personnel of the Company or their relativesexcept Mr. D.N.Rao is in any way, concernedor interested, financially or otherwise, in theresolution.

The Board recommends the resolution for the approval of shareholders.

107

Item No.14: Based on recommendation of Audit Committee, the Board of Directors of RINL hasapproved the appointment of M/s.Narasimha Murthy & Co., as Cost Auditors for thefinancial year 2014-15.

M/s.Narasimha Murthy & Co, Cost Accountants, Hyderabad is panel of cost auditors ofRINL. Sri. K. Narasimha Murthy who is principal partner of Narasimha Murthy & Co,Cost Accountants, having 33 years of professional experience and expertise over 45Industries on all aspects of Cost control, Cost Reduction and Corporate Management.He has served in various committees constituted by the GoI and GoAP. He held variousBoard level positions in the industry.

Based on Audit Committee recommendations the Board approved the remuneration ofRs.1,55,000/- (Rupees One Lakh Fifty Five Thousand only) for the financial year 2014-15plus applicable service tax and other facilities extended similar to financial year2013-14 i.e (a) Air Fare/s from Hyderabad to Visakhapatnam and back to Partners of theAudit Firm. (b) II AC Train Fare/s from Hyderabad to Visakhapatnam and back to AuditAssistants of the Audit Firm. (c) Local Conveyance at Hyderabad (to and Fro Airport) andat Visakhapatnam i.e providing of AC Car. (d) Hospitality by VSP during the period of theirstay at VSP Guest House as Company’s Guests.

As per Rule 14 of Companies (Audit and Auditors) Rules, 2014 read with section 148(3) ofthe Companies Act, 2013, the remuneration recommended by the Audit Committee shallbe considered and approved by the Board of Directors and ratified subsequently by theshareholders.

Accordingly, members are requested to ratify the remuneration payable to the CostAuditors for the financial year 2014-15.

None of the Directors or Key Managerial Personnel of the Company or their relatives isin any way, concerned or interested, financially or otherwise, in the resolution.

The Board recommends the resolution for the approval of shareholders.

Item No.15: The present Articles of Association (“AoA”) of RINL are based on the Companies Act,1956 and several regulations in the existing AoA of RINL contain references to specificsections of the Companies Act, 1956 and some regulations in the existing AoA are nolonger in conformity with the Act.

The Companies Act, 2013 is now largely in force. On September 12, 2013, the Ministry ofCorporate Affairs (“MCA”) had notified 98 Sections for implementation. Subsequently,on March 26, 2014, MCA notified most of the remaining Sections. However, substantivesections of the Act which deal with the general working of companies stand notified.

With the coming into force of the Act several regulations of the existing AoA of RINLrequire alteration or modification or deletions in several articles. Given this position, it isconsidered expedient to wholly replace the existing AoA by a new set of Articles.

The new AoA to be substituted in place of the existing AoA are based on the CompaniesAct, 2013.

Pursuant to Section 14 of the Companies Act, 2013 (“Act”), the consent of the Members ofthe Company by way of a Special Resolution is required for adoption of a new set ofArticles of Association of the Company. Accordingly, this matter has been placed beforethe General Meeting for approval of shareholders.

108

The Board of Directors of the Company, therefore, recommends passing of the SpecialResolution by the shareholders as set out in the Notice above.

A copy of the proposed new set of the Articles of Association of the Company would beavailable for inspection at the registered office of the Company.

None of the directors, managers, key managerial personnel of the Company and theirrespective relatives are in any way interested in the resolution.

Item No.16: In terms of Article 73 of the Articles of Association of RINL, the number of Directors ofthe Company shall not be more than sixteen and the Board strength of RINL as on date issixteen directors.

As per the provisions of Section 149 of the Companies Act, 2013 which came into forcew.e.f. April 01, 2014, the Company shall have a maximum of fifteen directors only. Providedthe company may appoint more than fifteen directors after passing a special resolutionby the shareholders in the General Meeting.

Accordingly, in order to comply with the latest provisions of the Companies Act, 2013, theresolution as set out in the notice is proposed for passing by the shareholders.

The Board of Directors of the Company, therefore, recommends passing of the SpecialResolution by the shareholders as set out in the Notice above.

Item No.17: To meet the Capital Expenditure of the Company the Board in its 284thmeeting held onSeptember 09, 2014 has approved borrowing limits of 9,000 Crs (Rupees Nine thousandCrores only) for funding the capex, for various ongoing / new projects, which are requiredto be funded through debt which includes, inter alia, long term debt from banks andissue of non-convertible debentures etc.

As on 30thJune 2014 the Company has outstanding funded borrowings for capitalexpenditure of 1736 Crs, which were drawn from Banks as long term and short termborrowings keeping in view the interest rate scenario. Further Company is required todraw additional borrowings to meet the expenditure for ongoing projects

To tap the debenture market for the purpose of capex borrowings, Company has obtainedratings of ‘AA’ from CRISIL and ‘AA+’ from CARE rating agencies, for 2000 Crs. There isan opportunity to the Company to borrow long term funds through issue of Non-Convertible Debentures (NCDs) at lower interest rates when the debt markets arefavorable. To meet the requirement of Capital Expenditure, issue of NCDs, upto an amountof 4,000 Crs, in smaller tranches will benefit the Company which is offered throughprivate placement. Necessary rating would be obtained for 4000 Crs.

The Companies Act 2013, which is effective from 12thSeptember, 2013 requires previousapproval of the General Meeting for private placement of Securities like NCDs etc., whichwas not envisaged in the erstwhile Companies Act, 1956.

Section 42 of Companies Act, 2013’, read with rule 14 (2) (a) of ‘The Companies (Prospectusand Allotment of Securities) Rules 2014’, which are effective from 1stApril 2014, requiresprior approval by the shareholders of the Company, by a Special Resolution, in case ofoffer or invitation for non-convertible debentures under private placement. It shall besufficient if the Company passes a special resolution only once in a year for all the offersor invitation for such debentures during the year.

109

Since the Company has the approval of Board in place, for borrowings up to 9000 Crsfor capex purposes, which is within the borrowing powers of Board as per Section 179and 180 (1) (c) of the Companies Act, 2013, it is required to obtain the approval ofshareholders under Section 42 of the Companies Act, 2013, by special resolution, forraising funds through issue of NCDs, by private placement, as explained above. Suchapproval of shareholders will be valid for one year, for issue of NCDs. This would enablethe Company to issue bonds for an amount of 4000 Crs, if required, in one or moretranches, based on the debenture market conditions.

None of the directors, managers, key managerial personnel of the Company and theirrespective relatives are in any way interested in the resolution.

The Board of Directors of the Company, therefore, recommends passing of the SpecialResolution by the shareholders as set out in the Notice above.

Item No.18: Mr. T.V.S.Krishna Kumar, General Manager (F&A), RINL was appointed as Director(Finance) of RINL by the President of India vide its letter No. 1(1)2014-VSP dated August25, 2014 issued by Ministry of Steel (MoS) for a period of five years from the date ofassumption of charge of the post, or till the date of his superannuation or until furtherorders from the MoS, whichever is earliest. The terms and conditions regulating hisappointment is to be determined by the Government of India.

His brief resume, inter-alia, giving nature of expertise in specific functional area isprovided elsewhere which forms part of this notice.

None of the Directors or Key Managerial Personnel of the Company or their relativesexcept Mr. T.V.S.Krishna Kumar is in any way, concerned or interested, financially orotherwise, in the resolution.

The Board recommends the resolution for the approval of shareholders.

110

Name Ashhok Kumar Jain Prof Sushil Prof S.K GargIndependent Director Independent Director Independent Director

DIN

Date of Birth &Age

Qualifications

Expertise inspecificfunctional Area

Directorshipheld in otherPubliccompanies

Membership/Chairmanship ofCommittees inRINL

Membership/Chairmanship ofCommittees inother publicCompanies(other thanRINL)

No.of Sharesheld in RINL

05298647

June 27, 1951 ; 63 yrs

Charted Accountant

He has more than 34years of experience asan Income Taxpractitioner. He is asenior partner in theChartered Accountantfirm of M/S.Jain KapilaAssociates, CharteredAccountants.

NIL

Chairman of AuditCommittee.Member of Nomination& RemunerationCommittee andStakeholdersRelationshipCommittee;Grievance RedressalCommittee andCommittee ofIndependent Directors(COID)

NIL

NIL

05300091

September 17, 1956; 57 yrs

Ph.D., IIT – Delhi, M.Tech (IndustrialEngineering), B.E (MechanicalEngineering) from M.I.T.S.,Gwalior

He has 24 years of experience as aprofessor. He is currently aprofessor at Indian Institute ofTechnology, New Delhi and is also avisiting/adjunct professor in variousother institutions. He has authoredpublications on topics like CoreCompetence and Flexibility inStrategic Formulation and FlexibleEnterprise for Global Business.

1) River Engineering Private Limited.

2) Hospital Services Consultancy Corporation (India) Ltd.(HSCC)

Chairman of Nomination &Remuneration and StakeholdersRelationship Committee.Member of Audit Committee;High Power Steering Committee;and Committee of IndependentDirectors (COID)

Chairman of CSR and SustainabilityCommittee - HSCCMember of Audit Committee –HSCC Performance Related PayRemuneration Committee - HSCC

NIL

06416704

February 13, 1963 ; 51 yrs

Ph.D - Mechanical Engineering

He has vast experience in teachingand research. He has focused onmanufacturing process andautomation, technologymanagement, decision science,production management, materialsmanagement, operations research,supply chain management,manufacturing strategy, productionplanning and control.

NIL

Chairman of Shareholders/Investors Grievance Committee;BSC on CSR SustainabilityDevelopment Committee;Member of Audit Committee;BSC on Marketing (BSCOM) andCommittee of IndependentDirectors (COID)

NIL

NIL

111

Name Dr. Sheela Bhide Lt. Gen (Retd) Ajay Kumar Goyal Rajib Sekhar SahooArvind Mahajan

Independent Director Independent Director Independent Director Independent DirectorDIN

Date of Birth& Age

Qualifications

Expertise inspecificfunctionalArea

01843547

June 12, 1948 ; 66 yrs

Ph. D. in InternationalTrade from theInstitute ofInternational Studies,Geneva., MastersDegree in Economicsfrom the GeorgeMason University,USA., Masters Degreein Public Policy fromthe HarvardUniversity.

In the course of her36 year long career,has held variousposts such asChairman-Cum-Managing Director, inTrade PromotionOrganization, Ministryof Commerce,Additional Secretaryand Financial Advisor,Ministry of ExternalAffairs, AdditionalSecretary andFinancial Advisor,Ministry of Defenceand Joint Secretary,Ministry of CorporateAffairs of GoI.

02410540

December 24, 1947 ;66 yrs

M.Phil, FIE, B.Sc,PGDBM, MastersDiploma in Business &Administration

He has 40 years ofexperience in theIndian Army intransformingoperations of a largescale private sector /public sectororganization. He is amulti-facetedprofessional withdomain expertise inthe fields ofoperational logisticsand supply chainmanagement,equipmentmanagement & itstechnical repairs andmaintenanceenvironment andinfrastructuremanagement,sanctioning ofenvironmentalclearances forinfrastructure andcoastal regulationzone projects, power,steel, miningmanagement anddisaster management.Lieutenant GeneralMahajan has beenawarded with thehighest military andnational awardsPVSM, AVSM, VSM.

02726120

January 2, 1951; 63 yrs

M.Sc– Physics

During his 37 yearscareer has held variouspositions in the railwayscommercial functions inIRAQ for 2 years during1988-1990. At presenthe is a director in MSTCLimited.

02708503

July 01, 1962 ;52 yrs

Charted Accountant

He is a Director inNTPC Limited,Hindustan ZincLimited and TehriHydro DevelopmentCorporation IndiaLimited and Bank ofBaroda. He is aMember of Task Forceon MoU, DPE, GoI forthe years 2011-12 and2012-13. He is aMember of the FeeStructure Committeefor ProfessionalEducationalInstitutions of Odishaappointed as per thedirection of SupremeCourt of India since2007. He is thetreasurer of the IndusEntrepreneur. He hasreceived variousawards from differentinstitutions i.e.,‘Corporate Odisha’award 2012; ‘KuberaShree’ award 2011 and‘Snehi PratibhaSanman’ award 2011.

112

Name Dr. Sheela Bhide Lt. Gen (Retd) Ajay Kumar Goyal Rajib Sekhar SahooArvind Mahajan

Independent Director Independent Director Independent Director Independent DirectorDirectorshipheld inother Publiccompanies

Membership/ChairmanshipofCommitteesat RINL

Membership/ChairmanshipofCommitteesacross allpublicCompanies(other thanRINL)

No.ofShares heldin RINL

1. Suryoday Micro Finance Limited.

2. L&T Metro Rail (Hyderabad)

Limited.3. Gati - Kintetsu Express Private

Limited.

4. Gati Limited

Chairman ofHigh Power SteeringCommittee;Member ofNomination &Remuneration andStakeholdersRelationshipCommitteeBSC on Marketing(BSCOM) andCommittee ofIndependentDirectors (COID)

Suryoday MicroFinance :Member of followingCommittees :AuditRemunerationRisk ManagementManagementL&T Metro Rail(Hyderabad Ltd):Member ofAudit Committee

NIL

Konkan RailwayCorporation Limited

Chairman ofEthics and HRCommitteeMember ofBSC for SteelProcessing Units(SPU), Raw MaterialSecurity and JointVentures &AcquisitionCommitteeand Committee ofIndependent Directors(COID)

NIL

NIL

MSTC Limited

Chairman ofGrievance RedressalCommittee;Member ofBSC on CSRSustainabilityDevelopmentCommitteeEthics and HRCommittee andCommittee ofIndependent Directors(COID)

MSTC :Member ofAudit Committee

NIL

1. Hindusthan Zinc Limited

2. THDC India Limited

3. Odisha State CivilSuppliesCorporation Limited

4. IFCI Factors Limited

Chairman ofBSC for SteelProcessing Units(SPU), Raw MaterialSecurity and JointVentures & AcquisitionCommittee;Member ofAudit Committee;BSC on CSRSustainabilityDevelopmentCommittee andCommittee ofIndependent Directors(COID)

THDC India Limited:Member of followingcommitteesAuditRemuneration CSR

NIL

113

Name P.C. Mohapatra, Dr.G.B.S.Prasad D.N.Rao T.V.S. Krishna KumarDirector (Projects) Director (Personnel) Director (Operations) Director (Finance)

DIN

Date of Birth& Age

Qualifications

Expertise inspecificfunctionalArea

Directorshipheld in otherPubliccompanies

Membership/ChairmanshipofCommitteesat RINL

06738364

January 01,1959;55yrs

B.E – REC, Rourkela

Mr. P.C. Mohapatraacquired knowledgein operation andmaintenance ofThermal Power Plantand lead departmentslike MediumMerchant StructuralMill and Wire RodMill. During his 34years of experience insteel and powerindustries puttogether and haveacquired managingexperience inprojects, operationand maintenance oflarge organizations.He is well-versedwith the latesttechnologicaldevelopments in steelindustries.

RINMOIL Ferro AlloysPrivate Limited

RINL:

Member of followingCommittees;BSC for SteelProcessing Units(SPU), Raw MaterialSecurity and JointVentures &AcquisitionCommittee.High Power Steering

06886500

December 04,1956;57 yrs

Ph.D –HRM.,M.B.A.,B.L., M.Phil-Labour Studies.,

Dr.G.B.S. Prasad hasbeen instrumental inestablishing thehuman resourcesfunction, policies andsystems at project,commissioning,operation andexpansion stage (s) ofour Company. Heplayed a pivotal role inCompany to turnaround from the brinkof being referred toBIFR, redesigningperformanceappraisal system,introduction of valueadded designations &non-unionizedsupervisory cadre thatresulted in ourCompany beingrecognized as the‘Best Place to WorkFor’.He has a vastexperience of morethan 35 years inHuman ResourcesManagement withproven track record.

NIL

RINL:

Member of followingCommittees;BSC on CSRSustainabilityDevelopmentCommitteeNomination &Remuneration andStakeholdersRelationship

06914797

July 29, 1957 ; 57 yrs

B.E - REC (Warangal)

Mr. D.N. Rao joined as aManagement Trainee atRourkela, SAIL in theyear 1980 worked for 9years. During hisservice at Rourkela, inthe year 1985 he visitedGermany and acquiredTechnical skills inmaintenance of HighSpeed RotatingEquipments. InNovember, 1989 heJoined VisakhapatnamSteel Plant, RINL/VSPand served in manycapacities, right fromDeputy Manager to ED(Works) I/c . He is therecipient of theprestigious ‘JawaharlalNehru Award’ in 1999for his outstandingcontribution to VSP.

OMDC

RINL:Member of followingCommittees;

BSC on CSRSustainabilityDevelopment

Ethics and HRCommittee

Grievance &RedressalCommittee

06914774

May 28, 1956 ; 58 yrs

Charted Accountant,M.B.A. from AndhraUniversity., PGDCA.

Mr. T.V.S. KrishnaKumar, contributed hisvast knowledge inCapital Restructuringand other areashelped the company inits Turnaround fromloses to the growthpath of expanding itscapacities. He workedthrough variouspositions reaching upto the level of generalmanager (Finance &Accounts) in 2010. Hewas commended byManagement onseveral occasions forhis meritorious workand givenInstantaneousRecognition Awardsand Commendationletters.

NIL

RINL:

Member of followingCommittees;Committee ofManagementHigh Power SteeringCommittee (HPSC)BSC on Marketing(BSCOM)Grievance Redressal

114

Name P.C. Mohapatra, Dr.G.B.S.Prasad D.N.Rao T.V.S. Krishna KumarDirector (Projects) Director (Personnel) Director (Operations) Director (Finance)

Membership/Chairmanshipofcommitteesacross allpublicCompanies(other thanRINL)

No.ofShares heldin RINL

Committee (HPSC)Shareholders/Investors GrievanceCommitteeCommittee ofManagement

NIL

100As a nominee ofPresident of India

CommitteeEthics andHR CommitteeShareholders/Investors GrievanceCommitteeCommittee ofManagement.

NIL

NIL

Committee ofManagement

NIL

NIL

Committee BSC forSteel Processing Units(SPU), Raw MaterialSecurity and JointVentures & AcquisitionCommittee.Shareholders/Investors GrievanceCommittee;BSC on CSRSustainabilityDevelopmentCommittee

NIL

100As a nominee ofPresident of India

115

RASHTRIYA ISPAT NIGAM LIMITEDVISAKHAPATNAM STEEL PLANT

VISAKHAPATNAM - 530 031

CIN:U27109AP1982GO1003404

SUPPLEMENTARY NOTICE

All concerned are hereby informed that the following Independent Directors have submittedresignations from the Board of the Company.

S. No. Name of the Director and DIN No.

1. Dr. (Mrs) Sheela Bhide, DIN : 1843547

2. Lt Gen (Retd.) Arvind Mahajan, DIN : 02410540

3. Shri A.K. Goyal, DIN : 02726120

4. Shri Rajib Sekhar Sahoo, DIN : 02708503

Consequently the proposals for their appointment as Independent Directors as mentioned in ItemNos. 7, 8, 9 & 10 of Annual General Meeting Notice dated 23rd Sept. 2014 will not be taken up forconsideration in the Meeting scheduled to be held on Monday, the 29th Sept. 2014 at 3.00 PM atVisakhapatnam.

P. Mohan Rao

GM (CA) & Company Secretary

Dated : 25th Sept. 2014

Place : Visakhapatnam

116

Vision, Mission and ObjectivesVISION

To be a continuously growing world class company,

We shall

• harness our growth potential and sustain profitable growth

• deliver high quality and cost competitive products and be the first choice of customers

• create an inspiring work environment to unleash the creative energy of people

• achieve excellence in enterprise management

• be a respected corporate citizen, ensure clean and green environment and develop vibrant communitiesaround us

MISMISMISMISMISSIONSIONSIONSIONSIONTo attain 20 million tonne (Mt) liquid steel capacity through technological up-gradation, operationalefficiency and expansion; augmentation of assured supply of raw materials; to produce steel atInternational Standards of Cost and Quality; and to meet the aspirations of the Stakeholders.

OBOBOBOBOBJECJECJECJECJECTIVESTIVESTIVESTIVESTIVES• Stabilise 6.3 Mtof Liquid Steel Expansion by 2014-15 with the mission to expand further in

subsequent phases as per the corporate plan.

• Revamp existing Blast Furnaces to make them energy efficient to contemporary levels and in theprocess increase their capacity by 0.5 Mt each, thus total hot metal capacity to 7.5 Mt. by 2015-16.

• Achieve higher levels of customer satisfaction.

• Vibrant work culture in the organisation.

• Be proactive in conserving environment, maintaining high levels of safety and addressing socialconcerns.

CORE VALUESCommitment Customer Satisfaction

Continuous Improvement Concern for Environment

Creativity & Innovation