DIRECTORSYour Directors present their Twentyfifth Annual Report on the operations of yourCompany alongwith the standalone and consolidated financial results for the fifteen-monthperiod ended 30th June, 2010.
FINANCIAL RESULTS
The highlights of the financial results (standalone) for the fifteen-month period areas under:-
| | (Rs. in crores) |
| 15 month period ended 30th June, 2010 | Year ended 31st March, 2009 |
| 1 Sales / Income from operations | 10983.14 | 9063.44 |
| Less : Excise Duty | 850.41 | 931.46 |
| 10132.73 | 8131.98 |
| 2 Other Income | 445.96 | 405.86 |
| 3 Total Income | 10578.69 | 8537.84 |
| 4 Total Expenditure | 8855.75 | 7107.11 |
| 5 Profit before Interest & Finance Charges and Depreciation | 1722.94 | 1430.73 |
| 6 Less : Interest & Finance Charges | 1285.45 | 1159.30 |
| 7 Profit before Depreciation | 437.49 | 271.43 |
| 8 Less : Depreciation | 773.95 | 646.62 |
| 9 Profit/(Loss) before Tax and Exceptional Items | (336.46) | (375.19) |
| 10 Add : Exceptional Items | — | 648.70 |
| 11 Profit/(Loss) before tax | (336.46) | (1023.89) |
| 12 Provision for Taxation (Net) | | |
| – Current Tax | 0.03 | 0.03 |
| – Fringe Benefit Tax | — | 3.00 |
| Deferred Tax Charge / (Credit) | (14.15) | (338.81) |
| 13 Net Profit/(Loss) | (322.34) | (688.11) |
| Add : Debenture Redemption Reserve written back | 20.26 | 27.71 |
| Add: | | |
| a) Balance brought forward from previous year | (1832.15) | (1046.00) |
| b) Adjustment towards Exchange Differences of 2007-08 | — | (125.75) |
| 14 Amount carried to next year | (2134.23) | (1832.15) |
Income from operations during the fifteen-month period under review was Rs.10983.14crores and profit before interest, finance charges and depreciation was Rs.1722.94 crores.
After providing for interest and finance charges of Rs.1285.45 crores, profit beforedepreciation was Rs.437.49 crores. After providing for depreciation of Rs.773.95 crores,loss before tax provisions was Rs.336.46 crores for the period under review.
After considering deferred tax credit of Rs.14.15 crores and providing for wealth taxRs.0.03 crores, net loss during the period under review was Rs.322.34 crores. ConsideringDebenture Redemption Reserve written back Rs.20.26 crores and accumulated losses ofRs.1832.15 crores brought forward from the previous year, the accumulated losses as at 30thJune, 2010 was Rs.2134.23 crores. The losses are proposed to be carried to nextyear’s accounts.
FINANCIAL YEAR
The financial year of the Company has been extended by a period of 3 (three) monthsupto 30th June, 2010. Accordingly, the Company’s financial year 2009-10 isfor a period of 15 (fifteen) months, 1st April, 2009 to 30th June,2010.
DIVIDEND
In view of the accumulated losses, the Board of Directors does not recommend anydividend on the Equity Shares. The Board of Directors does not declare dividend onCumulative Redeemable Preference Shares.
OPERATIONS
The deep economic recession had resulted in a negative global GDP during the year 2009.World economy has since regained certain stability and modest growth rates are beingwitnessed in the economies of developed countries. On the other hand, countries in thedeveloping world have, however, registered relatively high levels of economic growth androbust domestic markets.
Global steel industry had witnessed an unprecedented dip in demand and sharp decline inprices during the period of economic meltdown. Global steel production had declined by 8%during 2009 and consumption was lower by 6%, notwithstanding the visible rebound duringsecond half of 2009. Backed by fiscal stimulus-led global economic recovery, steelindustry has since demonstrated visible signs of demand pick-up and price stabilizationduring the last quarter of year 2009. The current year, so far, has seen a marked increasein domestic steel demand led by impressive growth in vital end-user segments, such as,automobile and consumer goods.
While developed economies had faced slow economic recovery, China and India registeredimpressive GDP growth. Steel production in India grew by 4% and consumption had risen by8%. The growth in consumption led to higher import of steel products into India. Highlevel of cheap imports has since led to an inevitable fall in domestic prices of steelproducts, with consequential impact on financials of major steel makers.
During the period under review, the Company sought to consolidate its efforts towardsoptimizing productivity and innovating its product basket.
Production of Hot Rolled Coils at 3.31 Million MTs was higher by 24% compared to theprevious financial year, on an annualized basis. Capacity utilization was over 80% of theenhanced annual capacity of 3.3 Million MTs.
Production of Direct Reduced Iron (Sponge Iron) at 1.68 Million MTs was higher by 23%over the previous financial year, on an annualized basis. Efforts undertaken by theCompany towards securing additional supplies of Natural Gas had resulted in improvedproduction of Direct Reduced Iron during the year.
Production of Hot Metal was higher at 2.13 Million MTs. Upgradation of Blast Furnaceduring 2009 has resulted in significant improvement in process efficiencies and newbenchmarks are being set on all production parameters.
Production of Cold Rolled Steel Coils/Sheets and Galvanized Coils/Sheets had registeredincrease at 0.31 Million MTs and 0.20 Million MTs, respectively. In its endeavour tocontinually offer superior products, the Company has added Galvalume, a premiummetallic-coated steel product, to its product-basket. Galvaume finds extensive applicationin corrosion and temperature resistance. Production of Galvalume Coils/Sheets has beenstreamlined during the period. Production of Tubes and Pipes had also stabilized duringthe period under review. Production of PVC coated sheets during the period was at 101% ofinstalled capacity.
Sales of Hot Rolled Coils at 2.88 Million MTs was higher by 19%, compared to previousyear, on an annualized basis. Sales of Cold Rolled Steel Coils/Sheets was higher by 11%,whereas sales of Galvanized Coils/Sheets was lower by 7%, compared to previous year, on anannualized basis. Sales of Tubes and Pipes was commensurate with production achievedduring the period.
During the period under review, prices of basic inputs, namely, iron ore, coke andpellets had increased substantially. Simultaneously, prices of utilities, such as, naturalgas and energy, had also gone up. This had resulted in lower margins with consequentialimpact on the Company’s financial results.
EXPORTS
Export earnings during the period under review was Rs.433.44 Crores.
Exports were lower during the period due to slack demand conditions in the US, EuropeanUnion and Latin American zones. Sharp fall in export realizations, owing to depresseddemand conditions, had impacted the Company’s export earnings.
PROJECTS
The coke oven project of the annual capacity of 1 Million MTs, undertaken in jointventure, has been appraised at a cost of Rs.1124 Crores. Debt component of the project isexpected to be tied-up shortly. The project is expected to be commissioned within a periodof 24 months from achievement of financial closure.
Initial development activities have already commenced in the proposed iron ore pelletproject of 2 Million MTs. The Company has, simultaneously, entered into long-term supplycontract with a major producer of iron ore pellets, so as to effectively secure its inputrequirements.
The Company has obtained a prospective license for mining of iron ore in Damkodwadviarea of Bhamragarh in the state of Maharashtra. Prospecting activities have since beencompleted and it is estimated that the mines would have reserves of 101 Million Tons ofhigh-quality iron ore. Various Government approvals are being obtained. The prospectingreport has already been filed with the Mining Department of Government of Maharashtra forconversion of the license into a regular mining lease. Project activities had slowed dueto certain anti-national insurgent activities in the area. However, efforts are being madefor development of the mine by end-2011.
Initial activities have also been undertaken by the respective Wholly-OwnedSubsidiaries in the proposed iron ore and coal mining projects overseas.
The Company had entered into separate Memoranda of Understanding (MOU) with therespective Governments of Jharkhand and Chattisgarh for setting-up an integral steel plant(annual capacity of 2.8 Million MTs) and coal-based thermal power plant (annual combinedcapacity of 1200 MW).
Site selection activities are in the progress for the integrated steel plant proposedin the state of Jharkhand. The state government has been approached to allocate alternateiron ore mines, commensurate with the size of the project.
Progress in implementation of the coal-based thermal power plant in the state ofChattisgarh has slowed down due to delays in grant of coal linkage by the government.
CAPTIVE POWER PLANT OF ISPAT ENERGY LIMITED
Due to certain unforeseen delays in achieving financial closure, the schedule forimplementation of the 110 MW Power Plant by Ispat Energy Limited, the Company’swholly-owned subsidiary, has been further delayed. The project, proposed to be implementedin two separate phases of 55 MW each, is now scheduled to be commissioned during early2012. The cost of the project is estimated at Rs.491 Crores. Financial closure of theproject is expected to be achieved shortly.
ISSUE OF EQUITY SHARE WARRANTS
The Company had received an aggregate amount of Rs.51.98 Crores, during the previousfinancial year, from certain promoters towards allotment of equity warrants. The amountwas utilized by the Company for the identified purposes.
The promoters had, however, not exercised their right to apply for equity shares withinthe stipulated period of eighteen months from the date of allotment of equity warrants.Consequently, in accordance with applicable SEBI Regulations, the aggregate amount ofRs.51.98 crores received from the promoters, towards equity warrants, has been forfeitedby the Company.
During the current financial year, the Company has received an amount of Rs.18 Croresfrom certain promoters, towards part of the allotment money payable for a fresh issue ofequity warrants. The issue of such equity warrants to the promoters, on preferentialbasis, was approved by the members at their Extra Ordinary General Meeting held on 15thMay, 2010. "In-principle" approval of the Stock Exchanges is yet to be receivedfor want of certain clearance to be accorded by the Company’s lenders.
REDEMPTION OF 12% Cumulative Redeemable Preference Shares (CRPS)
In accordance with the terms governing issue of 12% CRPS, the Company has furtherredeemed 6% of the face value (Rs.100/- each) of the 12% CRPS. Upon redemption, theadjusted face value of the 12% CRPS is Rs.84/- each.
DIRECTORS
Mr. Pramod Mittal, Mr. B K Singh and Dr. Basudeb Sen retire by rotation at the ensuingAnnual General Meeting and, being eligible, offer themselves for re-appointment. Briefprofiles of the retiring Directors, including area of their expertise and other details,are attached to the Notice convening the ensuing Annual General Meeting.
The nomination of Mr. K M Jaya Rao was withdrawn by ICICI Bank Ltd. with effect from 20thApril, 2009. Mr. Mayank Agrawal was nominated as Director by ICICI Bank Ltd., in place ofMr. K M Jaya Rao, with effect from 30th April, 2009.
The nomination of Mr. B P Singh was withdrawn by IDBI Bank Ltd. with effect from 20thFebruary, 2010. Mr. S N Baheti was nominated as Director by IDBI Bank Ltd., in place ofMr. B P Singh, with effect from 5th April, 2010.
The nomination of Mr. R P Singh was withdrawn by IFCI Ltd. with effect from 28thAugust, 2010. Ms. Manju Jain has been nominated as Director by IFCI Ltd., in place of Mr.R P Singh, with effect from that date.
The Board of Directors wish to place on record its appreciation for the servicesrendered by Mr. K M Jaya Rao, Mr. B P Singh and Mr. R P Singh during their tenure asDirectors of the Company.
DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that :-
(i) in the preparation of the annual accounts for the financial year ended 30thJune, 2010, the applicable accounting standards have been followed and there have been nomaterial departures;
(ii) the Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit or loss of the Company for that period;
(iii) the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act, 1956for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; and
(iv) the Directors have prepared the annual accounts for the financial year ended 30thJune, 2010 on a going concern basis.
SUBSIDIARY COMPANIES
Ispat Energy Limited is setting up a 110 MW gas-based power plant at the Dolvi SteelComplex. The plant is expected to be commissioned, in two separate phases, of 55 MW each,during early 2012.
Ispat Jharkhand Steels Limited, a Special Purpose Vehicle (SPV) Company, proposes toset-up an integrated steel plant (annual capacity of 2.8 Million MTs) in the State ofJharkhand, pursuant to the Memorandum of Understanding entered into by the Company withGovernment of Jharkhand.
Rewa Infrastructures Private Limited, a Special Purpose Vehicle (SPV) Company, proposesto set-up a multi-product SEZ in the State of Maharashtra. Due to economic down-turncoupled with various other factors, including land-acquisition difficulties beingencountered, in general, by SEZ units, the project implementation activities have largelyslowed down.
The wholly-owned subsidiaries, namely, Erebus Limited and Arima Holdings Limited, havecommenced initial activities in the proposed iron ore and coal mining projects in Braziland Columbia, respectively. Activities are yet to be undertaken by Lakeland SecuritiesLimited in the proposed coal mining project.
The Company is seeking exemption under Section 212(8) of the Companies Act, 1956 fromattaching the Balance Sheet, Profit and Loss Account and other documents of the SubsidiaryCompanies to the Balance Sheet of the Company. The Company shall make available thesedocuments/details upon request made by any member of the Company or its SubsidiaryCompanies. The Annual Accounts of the Subsidiary Companies will also be kept open at theRegistered Office of the Company and that of the Subsidiary Companies, for inspection byany member.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company and its subsidiaries, prepared andpresented in accordance with Accounting Standard (AS) 21, are attached to and form part ofthe Annual Report.
AUDITORS
The Auditors, M/s S R Batliboi & Co., Chartered Accountants, retire at the ensuingAnnual General Meeting and have expressed their willingness to be re-appointed.
The Company has obtained a letter from the Auditors to the effect that there-appointment, if made, will be in conformity with the limits specified in Section 224(1B) of the Companies Act, 1956.
AUDITORS’ REPORT
The Auditors in their report have, while drawing attention to Note. 12 (a) of Schedule23 of the Accounts for the financial year ended 30th June, 2010 commented ontheir inability to express any opinion on the future profitability projections made by theCompany and their consequential impact, if any, on Deferred Tax Asset recognized in thesaid Accounts.
The Auditors in their report have also drawn attention to Note No.15 of Schedule 23 ofthe Accounts for the financial year ended 30th June, 2010, with regard topayment of remuneration to Managing and other Whole-time Directors in excess of approvalsreceived by the Company from the Ministry of Corporate Affairs during the period.
The Auditors, in their statement under Companies (Auditor’s Report) Order 2003annexed to the aforesaid Report, have observed the following:-
a) Physical verification not conducted in respect of transit stock of materials, forwhich confirmations have been furnished for the major amount thereof;
b) Delays in few cases in depositing undisputed statutory dues;
c) Accumulated losses as at end of the financial year exceeding fifty percent of theCompany’s net worth; d) Certain delays in repayment of dues to domestic financialinstitutions, banks and debenture holders during the year and the arrears of such dues ason the Balance Sheet date; and
e) Use by the Company of funds raised on short-term basis for repayment of long-termloans and financing of operating losses.
In the opinion of the Board of Directors, based on the Company’s business plans,strategies and profitability estimates, techno-economic study carried out by an expertappointed by the lenders, Debt Restructuring sanctioned by lenders under CDR mechanism,steady increase in steel demand, current trend of prices of finished steel products,up-gradation and modernization of Blast Furnace as well as process improvements carriedout for enhancing steel-making capacity as well as operating efficiency and reversal ofdeferred tax credit during the respective quarters ended December, 2009, March, 2010 andJune, 2010, the Company is virtually certain that there would be sufficient taxable incomein the future, to claim the tax credit.
Since certain anomalies have been observed in the approvals received from Ministry ofCorporate Affairs in relation to payment of remuneration to Managing and Whole-timeDirectors, the Company has made its representation to the Ministry of Corporate Affairsfor reconsideration and rectification of such anomalies. The matter is under considerationof Ministry of Corporate Affairs and, hence, no recovery of such excess remuneration hasbeen made by the Company.
Further, the Board of Directors inform that:-
a) Physical verification of materials in transit has not been carried out. However,necessary certificate/confirmation has been furnished in respect of the major amountthereof
b) Delays in few cases in depositing undisputed statutory dues have been due tomis-matches in cash flows, which were subsequently rectified.
c) Due compliance of the provisions contained in Section 23(1) of the Sick IndustrialCompanies (Special Provisions) Act, 1985 shall be ensured.
d) Delays in making payments were mainly due to mis-matches in cash-flows, which arerectified, from time to time.
e) Due to mis-matches in cashflows, certain repayment of long-term loans and financingof operating losses have been made out of funds raised on short-term basis.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, the ManagementDiscussion and Analysis and Corporate Governance Report together with the Certificate fromthe Auditors of the Company confirming compliance of the conditions of CorporateGovernance form part of this Report.
SECRETARIAL COMPLIANCE REPORT
The Company had engaged M/s Robert Pavrey & Associates, Practising CompanySecretaries, to review Secretarial Compliance for the financial year ended 30thJune, 2010. The Secretarial Compliance Certificate addressed to the Board of Directors ofthe Company is attached to the Annual Report. The Secretarial Compliance Certificateconfirms that the Company has complied with the applicable provisions of the CompaniesAct, 1956, Depositories Act, 1996, Listing Agreement with Stock Exchanges and all theRegulations of SEBI as applicable to the Company including SEBI (Substantial Acquisitionof Shares and Takeovers) Regulations, 1997 and the SEBI (Prohibition of Insider Trading)Regulations, 1992.
Though not mandatory, the Secretarial Compliance Certificate is also obtained, on aquarterly basis, from the aforementioned Practising Company Secretaries, and reviewed bythe Board.
CODE OF CONDUCT
The Board has laid down a Code of Conduct for all Board Members and Senior Managementof the Company. The Code of Conduct has been posted on the Company’s website.
Board Members and Senior Management personnel have affirmed compliance with the Codefor the financial year 2009-10. A separate declaration to this effect is annexed to theCorporate Governance Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
In accordance with the requirements of Section 217(1)(e) of the Companies Act, 1956read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,1988, the particulars with respect to Conservation of Energy, Technology Absorption andForeign Exchange Earnings and Outgo are annexed and form part of this Report. (Annexure"A").
PERSONNEL
Employee relations continued to be harmonious during the year.
The Company’s Performance Management System is robust and bench-marked withprevailing best practices. The Company seeks to continuously enhance competitiveness,skills and productivity of its employees. A healthy work environment is ensured andemployee-recognition is prompt and rewarding. The Company’s retention strategy isaimed at creating challenging assignments for its employees and also develop their careerambitions.
The Board wishes to place on record its appreciation for the efforts of all itsemployees.
Information in terms of Section 217(2A) of the Companies Act, 1956 read with theCompanies (Particulars of Employees) Rules, 1975 forms part of this Report. (Annexure"B").
APPRECIATION
Your Directors wish to place on record their appreciation for the support extended tothe Company by its lenders, the Central and State Governments as well as its businesspartners. Your Directors also thank the members for their continued support.
| For and on behalf of the Board |
| Mumbai, | ANIL SUREKA | VINOD MITTAL |
| the 28th August, 2010. | Executive Director (Finance) | Vice Chairman & Managing Director |
ANNEXURE (A) TO THE DIRECTORS’ REPORT
STATEMENT CONTAINING PARTICULARS PURSUANT TO THE COMPANIES (DISCLOSURES OF PARTICULARSIN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988 AND FORMING PART OF DIRECTORS’REPORT
A) CONSERVATION OF ENERGY
a. Steel Complex at Dolvi
1. Hot Strip Mill
3 Existing fuels used in Hot Strip Mill (HSM) has been replaced by RLNG in thefollowing areas :-
• Tunnel Furnace A and B were converted from Oil (LDO) fired Furnace to Dual fuel(RLNG/LDO) fired furnace.
• RLNG being used as fuel in 10 numbers Ladle Preheaters in Ladle Furnace area inplace of LDO.
• RLNG being used in Tundish Preheater and SEN heating in place of Propane.
• RLNG being used in Co-jet firing system in SMS in place of Propane.
• RLNG/LDO/FO being used in Boiler in HSM in place of LDO/FO (Dual fuel system).
• Conversion of the same leads to better surface quality and homogenisedmicrostructure.
• 8 nos. impellers in pumps at HSM utility area has been replaced to reduce powerconsumption.
2. Blast Furnace :
RLNG conversion projects have been implemented in the following areas of Blast Furnace:-
• RLNG is being used in Coal Injection plant as supporting fuel in place ofPropane.
• RLNG is being used for heating of Cast House Runner in place of Propane.
• RLNG is being used along with BF Gas in BF Stoves in place of Propane as pilotfuel.
• RLNG and BF Gas are being used in 16 TPH Boiler as fuel in place of FO.
3. Sinter Plant :
• RLNG is being used in Ignition Furnace as main fuel in place of Propane forignition. RLNG is being charged in the same network which was used for Propane.
4. Lime Calcination Plant:
• RLNG being used in LCP-1 in place of 80% LDO + 20% FO. Consumption of LDO/FO was89.50 litres per ton of lime production. On switching to RLNG, specific consumption ofRLNG is found to be 80 SCM/ton of lime production.
b. Cold Rolling Mill, Galvanising and Colour Coating Complex at Kalmeshwar
• CGL1 - Installation and commissioning of Digital DC drive for Bridle-1A andHeart Rolls and VFD for Jet Cooling Device to save power.
• Galvalume - Spence Blower installed to save power from 200 KW to 55 KW.
• CRS4 - DC motor blower power auto off automation done for power saving.
• ARP - PLC up-gradation done due to obsolete technology and V-30 Blower driveinstalled for energy saving.
• CTL3 - PLC panel assembling, erection, wiring, cabling and termination donein-house to replace old contactor logic.
• ECL - Up-gradation of PLC and drives due to obsolete technology to increaseequipment reliability.
• Narrow Slitter - New digital ABB Drives commissioning done in-house and linespeed increased from 20 MPM to 60 MPM.
• Mill Bay Transparent Roofing Sheets provided to avoid switching-on of Bay Lightduring day time/dim day light.
• Interlock provided for Auto Switching-Off of Pay-Off Reel Drive at 6 Hi Mill.
• 60 MT Crane not used while running one mill to reduce power consumption withrespect to use of 25 MT Mill Bay Crane.
c. Proposals for Reduction of Energy Consumption
• Installation of variable frequency drive for 1700KW main fan at Sponge IronPlant to reduce power consumption.
• Installation of variable frequency drive for 700 KW ID fan of Coal Injectionplant to reduce power consumption.
• Up-gradation of existing Vapor Absorption Machine and further utilization ofchilled water in ACs to reduce power consumption.
• Natural gas injection at Blast Furnace to reduce coke consumption as well ascost reduction.
• Energy audit being conducted for entire Dolvi complex (HSM, BF, Sinter, LCP,SIP, Oxygen plants etc) to identify further potential areas of thermal and electricalenergy conservation opportunities.
• Carbon foot print measurement study being conducted to further Carbon reductionopportunities and identification of CDM projects and develop carbon reduction strategy andset emission reduction targets.
• Installation of Magna drive/ coupling.
• Installation of solar panels in building roof tops.
d. The above steps initiated by the Company have enabled savings in energyconsumption as well as savings in costs. The Company constantly undertakes energy savingmeasures at its plant locations.
The required data with regard to Conservation of Energy, as applicable to our Industry,is furnished below:
| Sl. No. Particulars | For 15 month period ended 30th June, 2010 | For the year ended 31st March, 2009 |
| I) POWER AND FUEL CONSUMPTION | | |
| 1 Electricity | | |
| a) Purchased (Units in ‘000) | 2231972 | 1637039 |
| Total Amount (Rs. in Crores) | 1142.90 | 740.50 |
| Rate/Unit (in Rs.) | 5.12 | 4.52 |
| b) Own generation | | |
| Units | 84656731 | 67668788 |
| Unit/Ltrs of Furnace oil | 4.15 | 4.27 |
| Cost/Unit (in Rs.) | 4.94 | 5.65 |
| 2 Coal | | |
| Quantity (MT) | 12197 | 7079 |
| Total Cost (Rs. in Crores) | 2.84 | 1.46 |
| Avg. Rate/Unit (in Rs.) | 2328 | 2062 |
| 3 Furnace Oil & LDO | | |
| Quantity (Ltrs in ‘000) | 26668 | 36298 |
| Total amount (Rs. In Crores) | 79.02 | 107.07 |
| Avg. Rate/Unit (in Rs.) | 29.63 | 29.50 |
| 4 LPG/Propane | | |
| Quantity (in MT) | 16268 | 39653 |
| Total Amount (Rs. in Crores) | 52.06 | 157.24 |
| Avg. Rate/Unit (in Rs.) | 32004 | 39654 |
| 5 RLNG | | |
| Quantity (SCM in ‘000) | 37150 | - |
| Total Amount (Rs. in Crores) | 35.50 | - |
| Avg. Rate/Unit (in Rs.) | 9.55 | - |
| 6 Oxygen | | |
| Quantity (in MT) | 24687 | 18385 |
| Total Amount (Rs. in Crores) | 21.30 | 10.64 |
| Avg. Rate/Unit (Rs. ) | 8629 | 5790 |
| 7 Nitrogen | | |
| Quantity (in MT) | 5798 | 4702 |
| Total Amount (Rs. in Crores) | 4.05 | 3.72 |
| Avg. Rate/Unit (Rs.) | 6984 | 7902 |
| Sl. No. Particulars | For 15 month period ended 30th June, 2010 | For the year ended 31st March, 2009 |
| 8 Others | | |
| Quantity (in Ltrs) | 1023154 | 705532 |
| Total Amount (Rs. in Crores) | 3.63 | 2.54 |
| Avg. Rate/Unit (in Rs.) | 35.52 | 36.00 |
| II. CONSUMPTION PER MT OF PRODUCTION | | |
| 1 Galvanised Sheets | | |
| Electricity (in Units) | 101 | 116 |
| Furnace Oil (Ltrs.) | 0.21 | 0.23 |
| LPG/Propane (in Kgs.) | 18.78 | 20.98 |
| 2 Cold Rolled Steel Sheets | | |
| Electricity (in Units) | 132 | 132 |
| Furnace Oil (Ltrs.) | 3.31 | 3.75 |
| Coal (in Kgs.) | 36.88 | 34.13 |
| L.P.G. (in Kgs.) | 1.89 | 2.28 |
| 3 Colour Coated Sheets | | |
| Electricity (in Units) | 81 | 86 |
| Furnace Oil (Ltrs.) | 0.01 | 0.05 |
| Propane (in Kgs.) | 22.60 | 24.15 |
| 4 Tube Mill | | |
| Electricity (in Units) | 86 | - |
| Furnace Oil (Ltrs.) | 0.34 | - |
| 5 Pipe Mill | | |
| Electricity (in Units) | 42 | - |
| 6 Galvalume | | |
| Electricity (in Units) | 311 | - |
| Furnace Oil (Ltrs.) | 0.06 | - |
| L.P.G (in Kgs.) | 21.00 | - |
| 7 Sponge Iron | | |
| Electricity (in Units) | 92.71 | 98.64 |
| L.P.G. (in Kgs.) | - | 22.08 |
| Gas (M3) | 303.34 | 253.29 |
| 8 Hot Strip Mill | | |
| Electricity (in Units) | 513.95 | 620.09 |
| Furnace Oil (Ltrs.) | 7.27 | 15.17 |
| Propane (in MT) | 1.90 | 4.43 |
| Gas (in MT) | 9.20 | 10.81 |
| Sl. No. Particulars | For 15 month period ended 30th June, 2010 | For the year ended 31st March, 2009 |
| 9 Blast Furnace | | |
| Electricity (in Units) | 173.35 | 207.39 |
| L.P.G./Propane (in Kgs.) | 1.46 | 1.05 |
| Oxygen (in MT) | - | 0.00 |
B) RESEARCH AND DEVELOPMENT AND TECHNOLOGY ABSORPTION
As a result of continuous research undertaken by the Company, plant level modificationand developments have been carried out so as to achieve cost-savings, increased efficiencyand enhanced productivity as well as to serve customers, both in India and abroad.
a) Steel Complex at Dolvi
• All re-heating furnaces have been converted into natural gas with in-housedesign leading to reduction in pollution as well as cost saving.
• Increase of yield in CONARC furnace by re-designing the furnace lining andprocess.
• Increase of Blast Furnace output by increasing the working volume and augmentingcoal injection plus oxygen enrichment.
• Process innovation carried-out to increase power generation in GET in BlastFurnace.
• Enhancement of DRI productivity by increasing system pressure.
• Increase of energy efficiency and sinter productivity by recycling fuel gas onsinter bed.
• Increase of EAF Shell Door height by 300 mm for yield improvement.
• Increase in Caster sequence length by reverse SEN ramping.
• Extension of Caster # 1 metallurgical length for increasing Caster speed.
• Electrical Steel development upto 1.5 % Si for semi and full processed nichemarket.
• Automotive wheel segment – Ultra fine grained high tensile steel for highend passenger car sector.
• Ferritic and Martensitic steel development through LF – VOD route (SS409,SS 409M, SS412/413).
b) Cold Rolling Mill, Galvanising and Colour Coating Complex at Kalmeshwar
i) Cold Rolling Mill
• Development of ST52 Grade tubes from MC2052 HR Coils.
• Development of High Tensile grade TR 55.
Product Developed
• Development of CRFH 0.20 for Refrigerator Back Panel.
• Development of 43F45 & 46F40 for Auto components.
• Development of C 30 grade material for Chain Sprocket / Strapping
• Development of MC 12 grade of material for Auto/Cycle chain, hair clip.
• Development of Medium Carbon Steel in HRSP Segment.
ii) Continuous Galvanizing Line
Product Developed
• Development of High Tensile GP (Gr 50) upto 450 GSM zinc coating.
• Development of thicker gauge corrugated for roofing.
• Development of GP/GPSP with guard film for electrical panels.
• Development of New Grade HSLA - 410.
iii) Galvalume Line
• Commissioning of Galvalume line with on-line electrolytic cleaning and modernS-wrap coater for bare Galvalume production.
• Development of a vendor as India’s first "Pre Mix Alloy producer"for Galvalume as an import substitution.
• Development of on-line scrapper of sink roll with low cost automation and 1.5 tmould charging hook for Galvalume PM Pot.
• Commissioning of on-line skinpass mill at CGL1 to supply material to CCL and OEMalong with flexibility of producing trade GC with pre-managed campaign.
• Upgradation of emission spectometer (which was installed in 1988) by replacingsolid state source by new one for analysis of bath chemistry.
• Procurement of protaspec equipment for analysis of chrome load in acryliccoating and chromating. iv) Colour Coating Line
• Development of new shades in surf mist, toba blue, sky blue, pale ecy, shadowgrey, cottage green, torres blue, castle red, nuva blue, bright green, Asian white, winered, Nippon blue, and ral 7036 to meet customers requirement.
• Development of new shades in PVDF as daffodil yellow, sandstone beige.
v) Tube & Pipe Mill
• Development of square pipe.
• Development of rectangular pipe.
c. Future plans for technology absorption, research etc.
• Development of additional new facilities for high end value added product(Normalizing facility, Ultrafast cooling system in mill etc.)
• Green or energy efficient Steel, wider range particularly Martensitic stainlesssteel etc, Product Re-engineering and Brand development.
• In-house adaptation of ultra fast cooling at beginning of Lamellar cooling toproduce acicular ferrite, high work hardenable steels for Auto Sector.
Future plans also include :-
Hot Strip Mill
• Installation of 165 MVA Transformer(Shell 1/2 & 3/4)
• Installation of 2 nos. dedicated top lance for each Shell
• Installation of EOT crane 300 T for EF- Bay
• Installation of Hydraulic Oscillator for Caster # 1
• Reinforcement of F1 Stand
• Increase of Tunnel Furnace Swivel Speed
Sponge Iron Plant
• Capacity enhancement of the Plant up to 240 MTPH production rate.
• Conversion of existing Shaft furnace for production of hot DRI for transferringto HSM.
• Plant operation with DRI Metallization > 95 % with higher load operation.
Blast Furnace
• Natural Gas (NG) injection in Blast Furnace along with Coal to optimize the fuelcost and to reduce carbon foot print
• Installation of Expert system to improve the process control
Sinter Plant
• Improve mixing and nodulizing efficiency for mixers
• Emission reduction of sintering process
d. Expenditure on Quality Assurance & R & D
| a) | Capital | : Nil |
| b) | Recurring | : Expenses incurred are charged to separate heads and not allocated separately. |
| c) | Total | : Not determinable |
| d) | Total R&D expenditure | : Not determinable |
C) FOREIGN EXCHANGE EARNINGS AND OUTGO
| (Rs. in crores) |
| - Foreign Exchange Earnings | |
| a) Exports (FOB Value) | 433.44 |
| b) Compensation for non fulfillment of contracts | 6.33 |
| - Foreign Exchange Outgo | |
| a) CIF value of Imports | |
| Raw Materials, Components, Spare Parts & Production Consumables | 3336.07 |
| Capital Goods | 73.79 |
| b) Other Expenditure | 176.39 |
| For and on behalf of the Board |
| Mumbai, | ANIL SUREKA | VINOD MITTAL |
| the 28th August, 2010. | Executive Director (Finance) | Vice Chairman & Managing Director |
ANNEXURE (B) TO DIRECTORS’ REPORT
STATEMENT OF PARTICULARS OF EMPLOYEES FOR THE FIFTEEN MONTH PERIOD ENDED 30TH JUNE,2010 PURSUANT TO SECTION 217 (2A) OF THE COMPANIES ACT,1956 READ WITH THE COMPANIES(PARTICULARS OF EMPLOYEES) RULES,1975 AND FORMING PART OF THE DIRECTORS’ REPORT.
| Sl. No. | Name | Designation | Qualification | Age (Yrs.) | Experience (Yrs.) | Date of Joining | Total Income-(Rs.) | Last Employment | Designation in Last Employment |
| 1 | Agarwal J.P. | Director - Corporate Finance | BCom, Company Secretary. | 53 | 25 | 1/7/1998 | 12005515 | Mudra Ispat Limited. | Managing Director |
| 2 | ** Bharadwaj Ashok Venkatram | Director - Marketing | MBA. | 51 | 26 | 20/7/2009 | 3480722 | Mercedes Benz | Head - Business Sales |
| 3 | ** Biyani B.L. | President - Business Development | BCom, ICWA. | 51 | 32 | 2/5/1990 | 8801139 | Birla Yamaha Ltd. | Sr. Manager-Accounts |
| 4 | Chandra Alok | President - Iron Making | BE. | 44 | 22 | 14/3/2000 | 5550806 | Steel Authority of India Ltd, (Bhilai) | Manager |
| 5 | Chapatwala Kailas | President - HR | PHD.Org Behavior, MBA (HR & Personnel Mgt). | 44 | 21 | 1/12/2008 | 6464622 | J K Tyres and Industry Ltd. | Vice President |
| 6 | Chatterjee Amitav | VP - Strategy | BE, MBA(Finance). | 41 | 16 | 1/10/2007 | 4946991 | Philips India Ltd. | Business Analyst |
| 7 | Chaudhuri Abhijit | Director - Supply Chain Management | B(Tech)-Mechanical. | 56 | 34 | 24/10/2007 | 6535042 | Blue Star Ltd. | Sr. General Manager |
| 8 | ** Choudhary U K | VP - E&A | BSC Engg (Elect ), | 63 | 39 | 16/2/2005 | 1063165 | Steel Authority of India Ltd, (Bokaro) | General Manager |
| 9 | ** Darade S. B. | DGM - Drawings | Diploma (Mechanical) | 58 | 40 | 14/2/1995 | 678509 | Llyods Steel Ltd | Chief Draughtsmen |
| 10 | Das B K | Sr VP- Projects | H.S.C., L.M.E. | 55 | 36 | 16/10/1992 | 4533479 | Essar Projects Ltd. | Dy Construction Supervisor |
| 11 | Das Sanjoy | President- HSM | B(Tech),PGDM. | 53 | 31 | 16/3/2004 | 6545513 | Bilad,Oman | Chief Executive Officer |
| 12 | ** Dattani Nilesh C. | President- SCM - Raw Material | BE ( Mech ), BE (Marine), MBA. | 45 | 21 | 2/6/2010 | 214004 | Llyods Agency | Business Head |
| 13 | Deshpande Tushar | VP- Marketing | BCom ( Hons), MBA( Fin ). | 51 | 28 | 2/2/2005 | 3239037 | KEC International Ltd. | Chief Manager International Division |
| 14 | Dewangan B. K. | VP - SMS | BE (Mettalurgy) | 57 | 34 | 10/4/1995 | 3252560 | Boiser Tarapur | Production Superintendent |
| 15 | ** Donde Rajiv Shashikant | Sr VP- Business Excellence | M.F.M, B Pharma. | 55 | 30 | 8/9/1994 | 2506675 | Neon Laboratories | Manager |
| 16 | ** Dwivedi Lalji | Head-Domestic Marketing | B (Tech). | 58 | 36 | 7/3/2001 | 3889101 | Essar Steel Ltd. | General Manager |
| 17 | Garg Sunil Kumar | VP -Accounts | BCom , MCom. | 47 | 26 | 19/5/1995 | 3084511 | Shalimar Paints Limited. | Executive - Accounts. |
| 18 | Garg Vinod | Executive Director - Commercial | BCom, FCA. | 54 | 35 | 1/8/1984 | 17821804 | Ispat Projects Limited. | Executive |
| 19 | ** Ghosh Susanta | President - HSM | BE (Metallurgy) | 42 | 20 | 12/3/2010 | 923480 | AKG Bangladesh | CEO |
| 20 | ** Himalian B. S. | Director - Projects | MSc., MMS, M (Tech)-Civil | 63 | 42 | 21/1/2008 | 2209766 | NMSEZ & MSEZ | Head-Construction |
| 21 | Jain Vijendra Kumar | Director- (Metals & Minerals) | BSC-Mining Engg | 62 | 38 | 1/9/2008 | 5454357 | National Mineral Development Corporation Ltd. | Director- Production |
| 22 | Kanjilal Jayanta | President - (Raw Met M.) | BE (Met). | 61 | 38 | 12/12/2007 | 4547736 | Steel Authority of India Ltd. (Bhilai) | Ex-Director |
| 23 | ** Kulkarni Rahul | VP - Marketing | BE, MBA. | 37 | 15 | 10/4/2006 | 505249 | Stainless Steel Ltd. | Chief Respondent - General Manager |
| 24 | ** Kulkarni Santosh | Manager - Mechanical | BE ( Mech ). | 33 | 11 | 13/10/1999 | 250760 | — | — |
| 25 | Kumar Atul | President-Automation | MS., M(Tech), BE. | 54 | 37 | 5/11/2003 | 5560611 | Gati Limited | Sr Vice President & Chief IT Officer |
| 26 | Kumar Hemant | President - Legal | BSC, LLB. | 53 | 24 | 14/4/2004 | 6936107 | Steel Authority of India Ltd. | Joint Principal Law Officer |
| 27 | Malhotra Rajiv | VP - Procurement | BE ( Mech ). | 46 | 28 | 6/11/2003 | 3643211 | Tata International Limited, Delhi | Divisional Manager |
| 28 | ** Misra Dilip Kumar | VP - Central Maintenance | BSC ( Mech ). | 58 | 33 | 7/10/2003 | 1675296 | Steel Authority of India Ltd. | Asst General Manager |
| 29 | Mittal Vinod | Vice Chairman & Managing Director | BSC, DBM. | 53 | 29 | 28/6/1997 | 33322046 | — | — |
| 30 | Mohite Krishnarao Nivritti | VP - Procurment | AIME, GDMM | 47 | 24 | 5/5/2003 | 3110410 | Jindal Iron & Steel | Asst. General Manager |
| 31 | ** Nand Guna | DGM - IT | PGD in Computers, PGD in Business Management | 41 | 20 | 3/3/2003 | 266431 | Cresco Technology | Project Manager |
| 32 | ** Nath Balendra Kumar | Sr VP - Gas Projects | BE ( Mech ). | 51 | 25 | 5/4/2010 | 716706 | Great Eastern Energy Corporation Ltd. | General Manager- Projects |
| Sl. No. | Name | Designation | Qualification | Age (Yrs.) | Experience (Yrs.) | Date of Joining | Total Income-(Rs.) | Last Employment | Designation in Last Employment |
| 33 | Pande Pradeep | President - HR | BSC,LLB,MLS, DIPT in T & D. | 57 | 28 | 18/4/2005 | 9130874 | Lupin Ltd. | President |
| 34 | Patil V.N. | Sr VP - Oprns (BF) | BE, M.Tech (Met). | 56 | 31 | 1/3/2004 | 3192696 | Kudremukh Iron & Steel Ltd, Mangalore | General Manager |
| 35 | Patra Pradip Kumar | Sr VP -Product Development | BE Metallurgy, M.Tech. | 50 | 28 | 15/10/2001 | 3296820 | Jindal Strips Limited, Hissar | Additional General Manager |
| 36 | Prakash Om | VP -Corporate Strategy | MBA (Strategy) | 44 | 18 | 10/9/2008 | 3841837 | Yamaha Motors Pvt. Ltd. | Divisional Head |
| 37 | Prakash Satya | VP - E & A | B(Tech). | 44 | 20 | 16/3/2005 | 3579313 | Steel Authority of India Ltd. (Bokaro) | Sr. Manager |
| 38 | Prasad Nathuni | President - Coal Development | MBA (Ind Env), M.Tech in Mining, B.SC in Mining. | 62 | 36 | 2/2/2008 | 4046370 | Visa Power | Sr. Vice President |
| 39 | Sahai Yadavendra | Director & SBU Head - Down Stream Products | B(Tech) (Metallurgical), PGDM. | 50 | 26 | 1/5/2009 | 5348037 | Raychem RPG Ltd. | Business Head - International Business Division |
| 40 | Sahoo Subrat Kumar | GM -Raw Material Procurement | M.Tech (Mining), MBA (Finance) | 41 | 19 | 19/9/2007 | 3040021 | Stemcore UK India Pvt. Ltd. | DGM-SCM. |
| 41 | Seth Aditeshwer Dayal | Sr VP - Corporate Strategy | MBA (Marketing & Finance) | 35 | 9 | 16/3/2009 | 3815010 | Lodha Group | Strategy Leader |
| 42 | Sharma Anil | Director - Corporate Affairs. | BA. | 56 | 34 | 15/6/2006 | 10771773 | Bharti Tele Ventures Ltd. | Vice President - Corporate Affairs |
| 43 | Sharda Rajendra | Sr VP - Accounts | BCom , FCA. | 53 | 27 | 2/8/1988 | 4823227 | Patel Machinery Pvt. Ltd. | Manager-Finance |
| 44 | Sharma N.K. | President- Maintenance | BSC, BE. | 64 | 42 | 20/5/2004 | 4819059 | Steel Authority of India Ltd. | General Manager- Maint & Utility |
| 45 | Sharma Shashikant | Sr VP - Logistics | BCom, Dip in Busi. Admn. | 51 | 32 | 28/5/2004 | 4338416 | Essar Steel Ltd. | General Manager - Jt(Materials) |
| 46 | ** Shende Shamkumar N | Sr. Manager - Quality Control | BSC , D.I.R.M. | 58 | 32 | 8/12/1993 | 450315 | Electrolytic Manganese Co. | Chemist |
| 47 | ** Shettar M. B. | DGM - Operations | BE ( Mech). | 41 | 20 | 1/2/1993 | 2470402 | Ispat Profiles Ltd | Asst. Manager |
| 48 | Singh B.K. | Executive Director - Steel Plant | BE ( Mech). | 66 | 43 | 11/3/2004 | 17201763 | Steel Authority of India Ltd.(Bhillai) | Managing Director |
| 49 | Singh R. B. | VP - Marketing | Dip in Marketing Mgt, BSC. | 48 | 25 | 1/1/2007 | 3367847 | Essar Steel Ltd. | Jr. General Manager - Marketing |
| 50 | ** Singh R.N. | Director - Mining | MSC (Min.) | 66 | 33 | 2/7/2004 | 4095003 | National Mineral Development Corporation Ltd. | Director (Comm) |
| 51 | ** Singh Vijay Kumar | Chief Representative | B (Tech)-Chemical. | 44 | 22 | 30/5/1989 | 1792884 | Asian Paints Ltd. | Asst.Manager - R & D. |
| 52 | Somani K.C. | Sr VP - Finance | BCom, ACA. | 54 | 26 | 19/8/1986 | 4277784 | Shri Hanuman Sugar Ind Ltd. | Manager-Accounts |
| 53 | ** Srinivasan S. | VP- HSM Costing | BE , MMS. | 45 | 22 | 1/4/2005 | 348428 | Mineral Pulveraising Mills Pvt. Ltd. | Head |
| 54 | Subramanian T.P. | President & Company Secretary | BCom, CS , LLB, CAIIBI | 55 | 36 | 1/5/1996 | 8420342 | Ispat Profiles India Ltd. | General Manager |
| 55 | Sureka Anil | Executive Director - Finance | BSC (Hons), ACS. | 54 | 37 | 1/5/1998 | 17075863 | Ispat Finance Ltd. | President |
| 56 | Sureka Raj Kumar | President - Taxation | BCom., FCA, AICWA. | 51 | 34 | 1/2/1997 | 5714311 | Balasore Alloys Limited | General Manager- Commercial |
| 57 | ** Swaminathan S | VP - Ship Chartering | BA ,MA (Economics), MA (History), PGDIT. | 45 | 22 | 18/3/2004 | 3069655 | Reliance Industries Ltd. | General Manager-Shipping |
| 58 | ** Syam Debasis | VP- Strategy Business Development | BE (Comp Tech) , MS , MBA. | 34 | 11 | 3/5/2010 | 432928 | Tata Steel Ltd. | Head - Strategy |
| 59 | ** Thakur R.A. | VP - Electrical | BSC ( Engg) , PGDBA. | 57 | 32 | 10/4/1997 | 2840690 | Uptron India Ltd. | Dy.Resident Manager |
| 60 | ** Varma Shree Krishna | Sr VP - Procurement & Stores | BE, PGDBM. | 59 | 36 | 5/7/2001 | 1879713 | TISCO | Divisional Manager |
| 61 | Yadav Tapan S. | VP - Marketing | MBA (Marketing) | 43 | 15 | 24/2/2009 | 3307651 | Unitech Ltd. | General Manager |
** Employed for the part of the year.
Notes (A) Remuneration as shown above comprises Salary,Commission,Dearness Allowance,House Rent Allowance, Company’s Contribution to Provident Fund, Superannuation Fund,Leave Travel Allowance, Medical expenses reimbursed and Value of other perquisitesevaluated as per the Income Tax Rules,1962.
(B) All appointments are non-contractual except that of Mr.Vinod Mittal, Mr.Vinod Garg,Mr. Anil Sureka and Mr B K Singh.
(C) None of the above employees are related to any Director of the Company except MrVinod Mittal, Vice Chairman & Managing Director, who is related to Mr Pramod Mittal.
(D) There was no employee who holds by himself or along with his spouse and dependentchildren two percent or above of the equity share capital of the Company and has receivedremuneration in excess of that drawn by the Managing / Whole - Time Director .
| For and on behalf of the Board |
| Anil Sureka | Vinod Mittal |
| Executive Director (Finance) | Vice Chairman & Managing Director |