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Directors Report of Tata Sponge Iron Ltd.

Mar 31, 2017

Dear Members,

The Directors take pleasure in presenting the Thirty-fourth Annual Report on the business and operations of the Company and its financial results for the year ended March 31,2017.

FINANCIAL RESULTS

Standalone

Consolidated

Particulars

FY 2016-17 (Rs. Lakh)

FY 2015-16 (Rs. Lakh)

FY 2016-17 (Rs. Lakh)

FY 2015-16 (Rs. Lakh)

(i)

Sales (Net of Excise Duty) and other income

65,218

67,071

65,223

67,076

(ii)

Profit before interest, depreciation and taxes

9,868

6,162

9,871

6,167

Less: Interest

244

538

244

538

Profit /(loss) before depreciation and taxes

9,624

5,624

9,627

5,629

(iii)

Less: Depreciation and amortization expenses

1,277

1,289

1,277

1,289

(iv)

Profit Before Taxes

8,347

4,335

8,350

4,340

(V)

Tax Expense

2,473

1,146

2,473

1,146

(Vi)

Profit after tax

5,874

3,189

5,877

3,194

“The Company has adopted Indian Accounting Standard (referred to as ‘IndAS) with effect from April 01, 2016 and accordingly these financial results along with the comparatives have been prepared in accordance with the recognition and measurement principles stated therein, prescribed under Section 133 of the Companies Act, 2013 (the Act) read with the relevant rules issued there under and the other accounting principles generally accepted in India.”

DIVIDEND

The Board has recommended a dividend of Rs 11 per share (i.e. 110%) on 1,54,00,000 equity shares of Rs.10 each for the financial year ended March 31, 2017 subject to approval of the shareholders at the ensuing Annual General Meeting. The total outgo on account of dividend (ex-taxes) will be Rs. 1,694 lakhs.

TRANSFER TO RESERVE

The Company proposes to retain the entire amount of Rs 5,874 lakhs in the statement of profit & loss account.

OPERATIONS

Sponge Iron

During the year (FY''17) the kilns produced 390,000 MT (100% of rated capacity) which is higher by 8.2% as compared to 360,446 MT of DRI production during the previous year (FY''16). During the year, daily production level was 1,247 TPD and average operating days were 313 days. Debottlenecking of Kiln 1, procurement of excellent quality of raw materials and process improvements have resulted in the enhanced production during the year.

The Company continues to enjoy uninterrupted supply of iron ore requirement from Tata Steel. During the year, the Company sourced 95% of iron ore from Tata Steel.

Based on the experience gained in the past from using imported coal of superior quality having a positive impact on the quality of sponge iron, the Company sourced 96% of coal of different grades from South Africa.

The sale of sponge iron has been 392,782 MT which is higher by 7.4% as against the sale of 365,815 MT during previous year. Increase in the dispatch was consequent to the higher production. As a part of customer engagement initiative, the Company dispatched sponge iron through containerized rakes during the year, which has also helped in enhancing efficiency and controlling cost.

Power

In FY’17, the total generation of power was 185.47 million Kwh vis-a-vis to 162.83 million Kwh during the last year, an increase of 13%. The power export was 132.49 million Kwh as compared to 113.59 million Kwh during FY''16, an increase by 16.6%.

MARKET

Even though the market conditions for steel and sponge iron were volatile during the year, the Company could maintain profitability due to record sponge iron dispatches of 3,92,782 MT, positive cash flow and focus on segments for higher net realization. The demand for steel and sponge iron recovered during the later part of the year. During the second half of the financial year, real estate segment recovered partly and there was an increased spending in infrastructure areas , which led to sustained demand and increase in price on month to month basis.

Further, the intention of Government to increase funding in infrastructure, affordable housing, smart cities etc will generate positive demand for steel and sponge iron. The Government has also supported the steel industry in curtailing cheap imports and supporting usage of locally made steel.

The above factors will have a positive impact for both sponge iron and steel industry during FY’18.

UPDATE ON RADHIKAPUR COAL BLOCK

The Radhikapur (East) Coal Block stands de-allocated and reallotment has not happened yet. The Ministry of Coal (“MoC”) vide its letter dated December 28, 2015, has reiterated its decision for encashment of the Bank Guarantee of Rs. 32.50 cr. The Bank

Guarantee has since expired. The Company has filed a writ petition before Hon''ble High Court of Delhi challenging the decision of MoC. Pending finalization of the matter, the Bank Guarantee amount continues to be disclosed as Contingent Liability as at the end of the year.

During pendency of the aforesaid matters in Hon''ble High Court of Delhi, the Hon''ble Supreme Court of India vide its order dated September24, 2014 has cancelled allocation of214 coal blocks including the Radhikapur (East) Coal Block which was allotted to the Company on February 7, 2006. The expenditure incurred on the Radhikapur (East) Coal Block as on March 31, 2017 aggregates to Rs. 18,040.96 lakhs (March 31, 2016: Rs. 18,040.96 lakhs).

Pursuant to the judgment of Hon''ble Supreme Court of India, the Government of India has promulgated Coal Mines (Special Provision) Rules, 2014 (“Rules”) for allocation of the coal mines through auction and matters related thereto. In terms of the said Rules, the successful bidder will be called upon to pay to the prior allocattee the expenses incurred by the prior allocatee towards land and mine infrastructure. Pursuant to MoC''s directive seeking the details of expenses vide letter dated December 26, 2014, the Company has furnished the required statement of expenses on January 5, 2015. Based on the Rules and necessary legal opinion obtained by the Company, no provision is considered necessary.

SUBSIDIARY COMPANY

Your Company has a wholly owned subsidiary i.e. “TSIL Energy Limited”. There is no associate or joint venture company as defined under the Companies Act, 2013.

Pursuant to provisions of Section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of TSIL Energy Limited in Form AOC-1 is annexed as Annexure A.

Pursuant to provisions of Section 136 of the Companies Act, 2013, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts of TSIL Energy Limited are available on the website of the Company.

INTERNAL PROCESS & FINANCIAL CONTROL

Improvement in the business processes and systems across all functions is a continuous process, in line with the Tata Business Excellence Model that the Company has adopted. The company continues to maintain Integrated Management System (IMS) comprising of Quality Management System (ISO: 9001). Environment Management System (ISO: 14001) and Occupational Health, Safety & Accountability Management System (ISO: 18001).

The Company has an internal control system commensurate with the size, scale and complexity of its operations. The scope of authority of the Internal Audit function is defined in the Internal Audit Charter. The Company''s internal controls are tested for adequacy and effectiveness by the Internal Auditor and Statutory Auditors on a regular basis.

LISTING FEES

The Annual Listing Fee for the financial year 2016-17 had been paid to those Stock Exchanges where the Company''s shares are listed.

CORPORATE SUSTAIN ABILITY

As a member of Tata Group and as a responsible corporate citizen the Company continues to undertake steps towards welfare of society around it, community initiatives, periphery development, environment protection and improvement in harmony with the normal business and contributing to exchequer through various taxes/duties etc. At the same time, the Company continued its focus on employees'' health and safety, skill development and superior living conditions. The Company has taken a serious note of threat of global warming and climate change. Through a specific study, the Company has measured carbon foot print of its operations and is taking steps to reduce the Green House Gas emissions. Corporate sustainability is aligned with Triple Bottom Line approach by complying with -

- the UN Global Compact by addressing its ten principles

- Guidelines of Tata Council for Community Initiatives (TCC)

The concept of inclusive growth through Affirmative Action (AA) has been adopted by the Company in the past. Further efforts have been made by the Company during the year to strengthen the actions.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the year, the Company has spent Rs. 219.21 lakhs (previous year Rs. 277.49 lakhs) on CSR Activities. An Annual Report on CSR Activities is annexed herewith as Annexure B in the prescribed format.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has a vigil mechanism by way of internal reviews and a third party helpline, escalating system of ethical concerns etc. The Company also has a “Whistle Blower Policy”, which is available on the website of the Company, namely www.tatasponge.com.

PREVENTION OF SEXUAL HARASSMENT AT WORK PLACES

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed there under.

Further, the Company has Internal Complaint Committees for various locations of the Company in compliance with the above mentioned Act and Rules. During the financial year 2016-17, one complaint was received and the same was resolved. No case remained pending at the end of the year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 134(3)(m)of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, particulars regarding conservation of energy, technology absorption, foreign exchange earnings and outgo are annexed to this report as Annexure C.

SAFETY, HEALTH & ENVIRONMENT

The Company is committed to providing a safe and healthy working environment and achieving an injury and illness free work place. In recognition of Company''s best practices in Safety, Health and Environment, the Company received the Cll Excellence award in Safety, Health and Environment during the year. During the year under review, there was no lost time injury incident reported.

Over the years, the Company has been setting benchmarks in its industry vertical in reducing its carbon footprint through the 3Rs (Reduce, Reuse and Recycle), producing power from waste heat in its twin captive power plants, keeping emissions well under prescribed norms and becoming a zero - affluent discharge Company.

PARTICULARS OF EMPLOYEES

The particulars of employees are given in Annexure D to this Report as required under Section 197(12) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

DIRECTOR(S)

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company''s Articles of Association, Mrs. Meena Lall (Non-Executive Director), retires by rotation at the forthcoming Annual General Meeting and, being eligible offers herself for re-appointment.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

During the year under review, Mr. Digambar Pandurang Deshpande superannuated from the services of the Company with effect from October31, 2016. The Board of Directors place on record their appreciation towards Mr. Deshpande’s contribution during his tenure as Director of the Company.

The Board in its meeting held on October21, 2016, has appointed Mr. Sanjay Kumar Pattnaik as Managing Director with effect from November 01, 2016. Necessary resolutions together with the explanatory statement have been included in the Notice of Thirty-Fourth Annual General Meeting as the above appointment/re-appointment are subject to the approval of the shareholders.

DIRECTORS’ RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory, Cost and Secretarial Auditors and external consultant(s) including audit of internal financial controls over financial reporting by the statutory auditors, reviews performed by the management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during the financial year 2016-17.

Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

(i) in the preparation of annual financial statements, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(ii) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year 2016-17 and of the profit of the company for that period;

(iii) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the directors have prepared the annual accounts on a going concern basis;

(v) the directors had laid down proper internal financial controls and such internal financial controls are adequate and were operating effectively; and

(vi) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

BOARD EVALUATION

The Board had carried out an annual performance evaluation of its own performance and that of its Committees and individual directors. The manner in which the evaluation was carried out has been explained in the Corporate Governance Report.

INDEPENDENT DIRECTORS’ MEETING

During the year under review, the Independent Directors met on March 22,2017, inter alia, to:

a) Review the performance of Non Independent Directors, and the Board of Directors as a whole;

b) Review the performance of the Chairman of the Company, taking into account the views of the Executive and Non-Executive Directors;

c) Assess the quality, content and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

All the Independent Directors were present at this meeting.

The observations made by the Independent Directors have been adopted and put into force.

APPOINTMENT AND REMUNERATION POLICY FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection, appointment and remuneration of Directors, Senior Management Personnel and Key Managerial Personnel (“KMP”). This Policy is described in the Corporate Governance Report.

KEY MANAGERIAL PERSONNEL

The following are the Key Managerial Personnel of the Company:

1. Mr. Sanjay Kumar Pattnaik-Managing Director

2. Mr. S. K. Mishra - Chief Financial Officer

3. Mr. Sanjay Kasture - Company Secretary

During the year, Mr. Digambar Pandurang Deshpande, superannuated as Managing Director of the Company with effect from October31,2016.

The Board in its meeting held on October 21, 2016 has appointed Mr. Sanjay Kumar Pattnaik as Managing Director with effect from November01,2016.

BOARD MEETINGS/ BOARD COMMITTEE MEETINGS

A calendar of meetings is prepared and circulated in advance to the Directors. During the year six (6) Board meetings and five (5) Audit Committee meetings were held, details of which are given in the Corporate Governance Report. The gap between the meetings was within the period prescribed under the Companies Act, 2013/ SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. All recommendations made by the Audit Committee were accepted by the Board during the financial year 2016-17. All other Committees have also met during the year and have helped the Board to provide direction to the management.

PARTICULARS OF CONTRACTS ORARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT, 2013

During the year under review, purchase of Iron ore from Tata Steel Limited, promoter of the Company, constitutes majority of the transactions entered with related parties. The transactions, being material, were approved by the shareholders during the year. All the transactions with related parties were on an arm''s length basis and were in the ordinary course of business.

All related party transactions are placed before the Audit Committee and the Board for approval.

The particulars of material contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, is given in prescribed FormAOC-2as Annexure-E.

The policy on Related Party Transactions as approved by the Board is displayed on the website of the Company, viz, www.tatasponge.com. Members'' attention is also drawn on Notes to Financial Statements which sets out details of related party transactions.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

The Management Discussion and Analysis Report for the year under review, as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of this Annual Report.

CORPORATE GOVERNANCE REPORT:

As per Regulation 34(3) read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on corporate governance, together with a certificate from the Company''s Secretarial Auditors, forms part of this Report.

AUDITORS

(a) STATUTORY AUDITORS

Under Section 139 of the Companies Act, 2013 and the rules made there under, it is mandatory to rotate the Statutory Auditors on completion of their term of five consecutive years. The Rules also lays down the transitional period that can be served by the existing auditors depending on the number of consecutive years for which an audit firm has been functioning as auditor in the same company. The incumbent auditors, Messrs Deloitte Haskins & Sells, Chartered Accountants (Firm Registration No. 302009E) have served the Company for over 10 years before the Act was notified and will be completing the maximum number of transitional period (three years) at the ensuing Thirty Fourth Annual General Meeting.

Based on the recommendation of the Audit Committee, the Board in its meeting held on Tuesday, June 06, 2017, appointed Messrs Price Waterhouse & Co. Chartered Accountants LLP (Firm Registration No. 304026E/E-300009) ("PWC”) as the Statutory Auditors of the Company. PWC will hold office for a period of five consecutive years from the conclusion of the Thirty Fourth Annual General Meeting of the Company till the conclusion of the Thirty Ninth Annual General Meeting to be held in 2022. As required under the Companies Act, 2013, a resolution seeking member''s approval for the appointment of Statutory Auditor forms part of the Notice convening the Annual General Meeting.

There is no audit qualification for the year under review.

(b) COST AUDITOR

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out cost audit every year. The Board of Directors, on the recommendation of Audit Committee, has appointed Messrs Shome & Banerjee, Cost Accountants, (Firm Registration Number: 000001) as Cost Auditor to audit the cost statements of the Company for the financial year 2017

18. As required under the Companies Act, 2013, a resolution seeking member''s approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting for their ratification.

(C) SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Messrs S. M. Gupta & Company, a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company for the financial year 2017-18.

The Secretarial Audit Report for the financial year 2016-17, is annexed herewith as Annexure - F.

COMMENTS ON AUDITORS / SECRETARIAL AUDIT REPORT

There are no qualifications, reservations or adverse remarks or disclaimers made either by the Statutory Auditors or by the Secretarial Auditors in their report for the year under review. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company during the year under review.

EXTRACT OF ANNUAL RETURN

The extract of the Annual Return as provided under Section 92(3) of the Companies Act, 2013 in the prescribed Form MGT - 9 is annexed herewith as Annexure - G.

DISCLOSURES WITH RESPECT TO EMPLOYEES STOCK OPTION SCHEME

The Company does not have any Employees Stock Option Scheme.

RISK MANAGEMENT

The Company has a Risk Management framework in place to identify, assess, monitor and mitigate various risks to the business. This framework seeks to minimize adverse impact on the business objectives and enhance the Company''s competitive advantage. The framework also defines the risk management approach across the enterprise at various levels. Risk Management forms an integral part of the Company''s planning process.

A Risk Management Committee of the Board reviews the process of risk management. The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board''s Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BYTHE COMPANY

Details of loans, guarantees or investments are given in the notes to financial statements.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORY BODIES/COURTS

During the financial year under review, no significant or material orders were passed by the Regulatory/ Statutory Authorities or the Courts which would impact the going concern status of the Company and its future operations.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

During the year under review, there has been no material changes and commitments affecting the financial position of the Company.

AWARDS

During the year, following awards were received by the Company:-

a) Conferred the Productivity Award 2016 for Significant Improved Productivity during the year 2016byCII (Eastern Region).

b) Tata Sponge Power Plant Quality Circle Team, PRATIBHA received the NCQC Excellence Award.

c) Received the Cll Excellence Award on Safety, Health & Environment 2015.

d) Tata Sponge Power Plant Quality Circle Team, PRATIBHA received the CCQC 2016 Gold Award.

DEPOSITS

During the year, the Company has not accepted any “Deposits”, as defined under Companies Act, 2013.

ACKNOWLEDGEMENT

The Board takes this opportunity to sincerely thank all its stakeholders namely, shareholders, customers, suppliers/ contractors, bankers, employees, government agencies, local authorities, and the immediate society for their un-stinted support and co-operation during the year.

On behalf of the Board of Directors

sd/-

Kolkata A.M. Misra

June06,2017 Chairman


Mar 31, 2015

Dear Members,

The Directors take pleasure in presenting the Thirty-second Annual Report on the business and operations of the company and its financial results for the year ended 31st March, 2015.

FINANCIAL RESULTS

Standalone

Current Previous year year (Rs. Lac) (Rs.Lac)

(i) Sales (Net of Excise Duty) and other 84522 81764 income (ii) Profit before depreciation 14941 16754

(iii)Depreciation and amortisation expenses 1294 1775

(iv) Profit before taxes 13647 14979

(v) Current Tax 4294 5661

(vi) Deferred Tax 164 (799)

(vii) Profit after tax 9189 10117

(viii)Profit brought forward from previous 1807 1472 year

Adjustment for change in useful life (80) - of assets

(ix) Profit available for appropriation 10916 11589

(x) Dividend : 100% (2013-14 : 100 %) 1540 1540

(xi) Tax on Dividend 314 262

(xii) Transfer to General Reserve 7000 7980

(xiii)Surplus carried to Balance Sheet 2062 1807

Consolidated

Current Previous year year (Rs. Lac) (Rs.Lac)

(i) Sales (Net of Excise Duty) and other 84528 81767 income (ii) Profit before depreciation 14946 16757

(iii)Depreciation and amortisation expenses 1294 1775

(iv) Profit before taxes 13652 14982

(v) Current Tax 4294 5661

(vi) Deferred Tax 164 (799)

(vii) Profit after tax 9194 10119

(viii)Profit brought forward from previous 1802 1465 year

Adjustment for change in useful life (80) - of assets

(ix) Profit available for appropriation 10916 11584

(x) Dividend : 100% (2013-14 : 100 %) 1540 1540

(xi) Tax on Dividend 314 262

(xii) Transfer to General Reserve 7000 7980

(xiii)Surplus carried to Balance Sheet 2062 1802

DIVIDEND

3. The Board has recommended a dividend of Rs.10/- per share (i.e.100%) on 1,54,00,000 equity shares of Rs.10 each for the financial year ended 31st March, 2015, subject to approval of the shareholders at the ensuing Annual General Meeting. The total outgo on account of dividend (ex-taxes) will be Rs.1540 lac equalling to previous year.

OPERATIONS

Sponge Iron

4. During the year, all the three kilns produced 3,65,324 MT of sponge iron compared to 3,76,432 MT in the previous year. The capacity utilisation was lower at 94 % as compared to 97 % in the previous year.

The company sourced almost all of its iron ore requirement from Tata Steel. It sourced half of its coal requirement from auctions of Coal India, other half was imported. The linkage coal continues to remain unavailable, with Coal India and Ministry of Coal connecting it to coal block allocation. While some of the linkage quota is connectable, the whole is not. The Company has disputed this interpretation.

The despatch of sponge iron during the year was 3,62,912 MT as compared to 3,74,782 MT in the previous year. Decrease in the despatch was consequent to lower production.

Power

5. During the year, the total generation of power from the two power plants (of 7.5MW and 18.5 MW capacity) was 173 million kwh out of which 121 million kwh of surplus power was exported, compared with generation of 196 million kwh and export of 141 million kwh in the previous year. The decrease in the generation and sale of power was consequential to (i) lower availability of waste gas from the kilns due to lower production of sponge iron and (ii) increase in steam consumption.

MARKET

6. The year commenced on a positive note for sponge iron industry with good demand. However, this trend could not sustain in later half of the year mainly due to sluggish economic growth, though with help of good performance in the first half of the year and by using strategic initiatives in marketing, the Company could improve the net realisation by about 3 % over the previous year. There was no due from debtors at the close of the year.

FINANCE

7. Despite the increase in the average net realisation from sale of sponge iron, the earning per share has declined to Rs 59.67 as compared to previous year (Rs.65.69) due to lower sales volume. The company continued to be debt free during the year. Sale of power, waste materials and earning from financial activities supported the earnings.

DE-ALLOCATION OF COAL BLOCK

8. The work in connection with development of coal block at Radhikapur (East) in Talcher coalfields was started in 2006-07. The Company had made significant progress in private land acquisition during 2013-14. However, the Hon'ble Supreme Court of India vide its order dated 24th Sept, 2014 , has cancelled allocation of several coal blocks including Radhikapur (East) coal block which was allotted to the Company on 7th Feb, 2006. The carrying value of investments made in this coal block was Rs 18074.18 lac as on 31st March, 2015. The Company had lodged a claim with the Nominated Authority of Ministry of Coal for refund of the invested amount. However, the claim has not reached the finality.

During the year 2013-14 the Ministry of Coal ordered for forfeiture of the Bank Guarantee worth Rs.32.50 crore alleging delay in operationalizing the coal block. However, the company had taken up the matter with appropriate Court of Law against this order on the plea that the delays in licensing/approvals are causing this delay. The Hon'ble High Court of Delhi vide its order dated 30th Oct, 2014 has granted a stay on invocation of Bank Guarantee . The High Court also directed the Company to keep the Bank Guarantee valid till 28th May, 2015. Pending finalisation of the matter the BG amount continues to be disclosed as Contingent Liability as at the end of the year.

SUBSIDIARY COMPANY

9. The Company has a wholly owned subsidiary namely, "TSIL Energy Limited" incorporated on 20th November, 2012, with an authorised share capital of Rs.10 crore and paid up capital of Rs.1,06,00,600 (10,60,060 equity shares of Rs.10 each). The consolidated accounts also include figures of this subsidiary from 1st April, 2014 to 31st March, 2015.

CONSOLIDATED FINANCIAL STATEMENTS

10. The Audited Consolidated Financial Statements based on the Financial Statements received from the subsidiary Company, TSIL Energy Limited, as approved by its Board of Directors, have been prepared in accordance with the Accounting Standard - 21 (AS- 21) - 'Consolidated Financial Statements', Accounting Standard - 23 (AS-23) - 'Accounting for Investment in Associates' and other applicable Accounting Standards issued by The Institute of Chartered Accountants of India.

The consolidated financial statements presented by your Company include financial information of the subsidiary, i.e. TSIL Energy Limited, prepared in compliance with applicable Accounting Standards. The Ministry of Corporate Affairs, Government of India, vide its Circular No.5/12/2007-CL-III dated February 8, 2011 has granted general exemption under Section 212(8) of the Companies Act, 1956, from attaching the balance sheet, profit and loss account and other documents of the subsidiary companies to the balance sheet of the Company, provided certain conditions are fulfilled. Accordingly, annual accounts of the subsidiary company and the related detailed information will be made available to the holding and subsidiary company's investors seeking such information at any point of time. The annual accounts of the subsidiary company will also be kept for inspection by any investor at the Registered Office of the Company, At/Post - Joda, Dist-Keonjhar Orissa - 758 034, and that of the subsidiary company at Tata Sponge Administrative Building, Bileipada, Post - Baneikala, Joda, Dist-Keonjhar, Orissa - 758 038.

Further a statement containing salient features of the financial statements of this subsidiary Company is included in the Annual Report in the format prescribed under Section 129(3) of the Companies, At, 2013 read with the Rule made thereunder. This reflects performance and financial position of the subsidiary company as per Rule 8 (1) of the Companies (Accounts) Rules, 2014.

INTERNAL SYSTEM AND PROCESS

11. Efforts are going on to improve the business processes across all functions in accordance with Tata Business Excellence Model. The company continued to maintain Integrated Management System (IMS) comprising of Quality Management System (ISO : 9001). Environment Management System (ISO:14001) and Occupational Health, Safety & Accountability Management System (ISO: 18001).

AWARDS

12. During the year the Company received National Sustainability Award (First) for 2013-14 from Indin Institute of Metals, Ferrous Division, Pune and the Kalinga Safety Award for 2013-14.

LISTING FEES

13. The Annual Listing Fee for the year 2014-15 had been paid to those Stock Exchanges where the company's shares are listed.

CORPORATE SUSTAINABILITY

14. As a member of Tata Group and as a responsible corporate citizen the company continues to undertake steps towards welfare of society around it, community initiatives, periphery development, environment protection and improvement in harmony with the normal business and contributing to exchequer through various taxes/duties etc. At the same time, the company continued its focus on employees' health and safety, skill development and superior living conditions. The company has taken a serious note of threat of global warming and climate change.Through a specific study, the company has measured carbon foot print of its operations and is taking steps to reduce the Green House Gas emissions.

Corporate sustainability is aligned with Triple Bottom Line approach by complying with -

* the UN Global Compact by addressing its ten principles

* Guidelines of Tata Council for Community Initiatives (TCCI)

CORPORATE SOCIAL RESPONSIBILITY

15 The Company has a Corporate Social Responsibility Committee comprising of four directors which stood as follows as on 31st March, 2015 :

Mr.R. Ranganath (Non-executive Director) - Chairman

Mr.Manoj T. Thomas (Non-executive and Independent Director) - Member

Mr. D P Deshpande (the Managing Director)-Member

Mr. Sanjay Kumar Pattnaik ( the Executive Director)- Member

The terms of reference and scope of work is same as prescribed in Section 135 of the Companies Act, 2013, and the Rules thereunder. The Committee met four times during the year to discharge its responsibilities. As part of its initiatives under "Corporate Social Responsibility" (CSR) the Company has undertaken projects in the areas of Education, Livelihood, Health, Water and Sanitation, Environment, Rural development etc . An Annual Report on CSR activities is annexed herewith as Annexure - C in the prescribed format. During the year the Company has spent Rs 259.02 lakh towards CSR activities.

COMPOSITION OF THE AUDIT COMMITTEE:

16. As prescribed under sub section 3 of the Section 177 of the CompaniesAct, 2013 the Composition of the Audit Committee is given in the Corporate Governance Report which is part of the Directors Report. Further, there was no instance when the Board has not accepted any recommendation of the Audit Committee.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY:

17. The Company has a vigil mechanism named as Whistle Blower Policy text of which is available on the website of the Company , namely www.tatasponge.com.

MEASURES FOR PREVENTION OF SEXUAL HARASSMENT AT WORKPLACES

18. The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder.

Further, the Company has an Internal Complaint Committees for various locations of the Company in compliance with the above mentioned Act and Rules. For the financial year 2014-15, no case of sexual harassment was pending at the beginning , no case was received during the year nor any case remained pending at the close of the year.

INCLUSIVE GROWTH

19. The concept of inclusive growth through Affirmative Action (AA) has been adopted by the company in the past. Further efforts have been made by the company during the year to strengthen the actions.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO.

20. As required under Sub-section 3(m) of Section 134 of the Companies Act, 2013, read with the Rule 8 of the Companies (Accounts) Rules, 2014, particulars regarding conservation of energy, technology absorption, foreign exchange earnings and outgo are annexed to this report as Annexure B

PARTICULARS OF EMPLOYEES

21. The particulars of employees are given in Annexure - A to this Report as required under Section 197 of the CompaniesAct, 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

DIRECTORS

22. Mr. D. P. Deshpande retires by rotation and, being eligible, offers himself for re-appointment.

23. In accordance with the provisions of Section 149, 152 and other applicable provisions of the Companies Act, 2013 and Rules made thereunder, it is proposed to appoint Mr. P. C. Parakh who is currently a non-executive independent director of the company and who meets the criteria for independence as provided in Section 149(6) of the Companies Act, 2013, as independent director for a period of 5 years or earlier on attaining the age of retirement fixed by the Company.

24. Dr O N Mohanty was appointed Additional Director we f 16th July, 2014 and Mr Sanjay Kumar Pattnaik, Mr Krishnava Dutt and Mrs Meena Lall were also appointed as Additional Directors we f 16th August, 2014, and who hold office up to the date of the forthcoming Annual General Meeting of the company ,each have been proposed in writing by a shareholder for the office of Director.

The Board commends appointment of Dr O N Mohanty, Mr Sanjay Kumar Pattnaik, Mr Krishnava Dutt and Mrs Meena Lall as Directors.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the CompaniesAct, 2013 and Clause 49 of the Listing Agreement.

25. Based on the recommendation of the Nomination and Remuneration Committee, the Board, in its meeting held on 12th August, 2014, appointed Mr Sanjay Kumar Pattnaik as Executive director we f 16th August, 2014 for a period of three years i e up to 15th August, 2017. The Notice of the Annual General Meeting includes the Resolution and terms and conditions for his appointment as Executive Director as the same is subject to approval of the shareholders.

The Board commends appointment of Mr Pattnaik as the Executive Director.

26. Mr Manikanta Naik and Mr D B Sundararamam resigned from the Board during the year. The Board of Directors placed on record its sincere thanks and gratitude for their contribution to the company.

DIRECTORS' RESPONSIBILITY STATEMENT

27. Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory, Cost and Secretarial auditors and external consultant(s) and the reviews performed by the management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2014-15.

Accordingly, pursuant to Section 134(5) of the CompaniesAct, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

(i) in the preparation of annual financial statements, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(ii) the directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year 2014-15 and of the profit of the company for that period;

(iii) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the directors have prepared the annual accounts on a going concern basis;

(v) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively;

BOARD EVALUATION

28. Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance and that of its Committees and individual directors. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

INDEPENDENT DIRECTORS' MEETING:

29. During the year under review, the Independent Directors met on 19th Jan, 2015, inter alia, to:

* Review the performance of Non Independent Directors, and the Board of Directors as a whole;

* Review the performance of the Chairman of the Company, taking into account the views of the Executive and Non Executive Directors.

* Assess the quality, content and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

All the Independent Directors were present at this meeting.

APPOINTMENT AND REMUNERATION POLICY FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

30. The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management Personnel and Key Managerial Personnel and their remuneration. This Policy is described in the Corporate Governance Report.

DIRECTORS REMUNERATION vis-a-vis MEDIAN EMPLOYEES' REMUNERATOIN etc:

31. Particulars of Directors' remuneration vis-a-vis median employees' remuneration etc. as required under Section 197 (12) and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given in Annexure - D to this Report.

BOARD MEETINGS

32. A calendar of meetings is prepared and circulated in advance to the Directors. During the year eight Board meetings and four Audit Committee meetings were held details of which are given in the Corporate Governance Report. The gap between the meetings was within the period prescribed under the CompaniesAct, 2013

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

33. All the related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. Further, there was only one material Related Party transaction (as defined in clause 49 of the Listing Agreement) with the promoters, i.e. Tata Steel Ltd for purchase of Iron ore in the ordinary course of business and also at arm's length basis. This transaction was approved by the shareholders during the year.

All related party transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval is obtained on a quarterly bases for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all elated party transactions is placed before the Audit Committee and the Board for their approval on quarterly basis. The statement is supported by a Certificate from the Managing Director and the Chief Financial Officer. The Company has developed a Related Party Transactions Manual for the purpose of identification and monitoring of such transactions.

The policy on Related Party Transactions as approved by the Board is displayed on the website of the Company, viz, www.tatasponge.com. Members' attention is also drawn on Note No 34 of Financial Statements which sets out details of Related Party transactions.

REPORT ON CORPORATE GOVERNANCE

34. Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, the followings form part of this Annual Report :

(i) Managing Director's declaration regarding compliance of Code of Conduct by Board Members and Senior Management personnel;

(ii) Management Discussion and Analysis;

(iii) Report on the Corporate Governance;

(iv) Auditors' Certificate regarding compliance of conditions of Corporate Governance.

AUDIT/AUDITORS

35 (a) The Auditors, Messrs Deloitte Haskins & Sells, Chartered Accountants, retire at the conclusion of the ensuing Annual General Meeting and, being eligible, offer themselves for reappointment.

(b) The Board had appointed M/s. Shome & Banerjee as Cost Auditors for the year 2015-16 in its meeting held on 20th April, 2015. Their remuneration is subject to ratification by shareholders at the ensuing Annual General Meeting.

(c) Pursuant to the provisions of Section 204 of the CompaniesAct, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014 the Company has appointed M/s S. M. Gupta & Company, a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as Annexure - E

EXTRACT OF ANNUAL RETURN

36. The extract of the Annual Return in form MGT 9 is annexed herewith as Annexure - F DISCLOSURES WITH RESPECT TO EMPLOYEES STOCK OPTION SCHEME

37. The Company does not have any Employees Stock Option Scheme. Hence no disclosure is required.

RISK MANAGEMENT

38. Pursuant to provision of Clause 49 of the Listing Agreement, the Company has constituted a Risk Management Committee. The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report.

The Company has a robust Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The framework also defines the risk management approach across the enterprise at various levels. Risk Management forms an integral part of the Company's planning process.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

39. There are no significant or material orders passed by the Regulators or the Courts which would impact the going concern status of the Company and its future operations. However, the Hon'ble Supreme Court of India vide its order dated 24th Sept, 2014 has cancelled the allocation of Radhikapur (East) coal block wherein the Company had incurred, invested and advanced (including deposits/advances to IDCOL and other parties) the money equal to Rs 214 crore. Subsequently, the Union Government promulgated The Coal Mines (Special Provisions) Ordinance, 2014 which intended to take appropriate actions to deal wiith situation arising pursuant to the Hon'ble Supreme Court's decision. The management, based on its understanding and interpretation of the Ordinance and on the basis of legal advice, believes that the financial loss or operational impact, if any, will not be significant. Further, the Company has lodged a claim with Ministry of Coal for refund of this amount along with interest totalling to Rs 328.23 crore as compensation to prior allotttee , i e the Company.

DEPOSITS

40. The Company does not have any Deposit from public at the close of the year. Hence, no disclosure is required in this connection.

ACKNOWLEDGEMENT

41. The Board takes this opportunity to sincerely thank all its stakeholders namely, shareholders, customers, suppliers/contractors, bankers, employees, government agencies, local authorities, and the immediate society for their un-stinted support and co- operation during the year.

On behalf of the Board of Directors

Jamshedpur (A.M. Misra )

20th April, 2015 Chairman


Mar 31, 2013

The Directors take pleasure in presenting the Thirtieth Annual Report on the business and operations of the company and its financial results for the year ended 31st March, 2013.

FINANCIAL RESULTS

Standalone Consolidated

Current year Previous year Current year Previous year (Rs. Lac) (Rs.Lac) (Rs. Lac) (Rs. Lac)

2 (i) Sales (Net of Excise Duty) and other income 82732 65693 82732 -

(ii) Profit before depreciation 14378 13044 14371 -

(iii) Depreciation and amortisation expenses 1788 1837 1788 -

(iv) Profit before taxes 12590 11207 12583 -

(v) Current Tax 4342 4290 4342 -

(vi) Deferred Tax (295) (651) (295) -

(vii) Profit after tax 8543 7568 8536 -

(viii) Profit brought forward from previous year 1470 1434 1470 -

(ix) Profit available for appropriation 10013 9002 10006 -

(x) Dividend : 80% (2011- 2012 : 80%) 1232 1232 1232 -

(xi) Tax on Dividend 209 200 209 -

(xii) Transfer to General Reserve 7100 6100 7100 -

(xiii) Surplus carried to Balance Sheet 1472 1470 1465 -

DIVIDEND

3. The Board has recommended a dividend of Rs.8/- per share (i.e.80%) on 1,54,00,000 equity shares of Rs.10 each for the financial year ended 31st March, 2013, subject to approval of the shareholders at the ensuing Annual General Meeting. The total outgo on account of dividend (ex-taxes) will be Rs.1232 lac, which is equal to previous year.

OPERATIONS

4. During the year, all the three kilns produced 3,60,697 MT of sponge iron compared to 2,72,106 MT in the previous year. The capacity utilisation was higher at 92% as compared to 70% in the previous year, which happened mainly due to better availability of iron ore.

The iron ore supply, which was adversely affected during the previous year, has been restored to a large extent resulting in to higher capacity utilisation during the year.

The company is no more getting coal under linkage which has been stopped by Ministry of Coal linking it to coal block development. The company had to largely source its coal requirement from domestic market through e- auctions and imports. The indigenous coal was optimally used along with imported coal.

The despatch of sponge iron during the year was 3,59,912 MT as compared to 2,73,766 MT in the previous year. Increase in the despatch was consequent to higher production.

POWER

5. During the year, the total generation of power from the two power plants (of 7.5MW and 18.5 MW capacity) was 179 million kwh out of which 124 million kwh of surplus power was exported to the State Grid regularly up to January, 2013, compared with generation of 134.39 million kwh and sale of 88.31 million kwh in the previous year. As the State Grid did not require power from February, 2013, the same is sold through power exchange. The increase in the generation and sale of power was consequential to higher availability of waste gas from the kilns due to higher production of sponge iron.

FINANCE

6. The market for steel has remained sluggish and therefore sponge iron market was subdued. The price of Sponge Iron decreased in the later part of the year. Earning per share has improved to Rs.55.47 as compared to previous year (Rs.49.14) due to higher sales volume. The company continued to be debt free during the year. Sale of waste materials and earning from financial activities supplemented the margin.

DEVELOPMENT OF COAL BLOCK

7. The work in connection with development of coal block at Radhikapur (East) and Utkal-F in Talcher coalfields was started in 2006-07. The Company has made significant progress in private land acquisition and the land lease agreement is expected in the coming financial year. The coal block is expected to become operational in next two to three years. So far the company has spent an amount of Rs.204 crore till March, 2013, by way of funding from internal accruals.

During the year the Ministry of Coal ordered for forfeiture of the Bank Guarantee worth Rs.32.50 crore alleging delay in operationalizing the coal block. However, the company has taken up the matter with appropriate Court of Law against this order on the plea that the delays in licensing/approvals are causing this delay.

SUBSIDIARY COMPANY

8. A wholly owned subsidiary namely, "TSIL Energy Limited" has been incorporated on 20th November, 2012, with an authorised share capital of Rs.10 crores and an initial subscribed and paid up capital of Rs.6,00,600 (60,060 equity shares of Rs.10 each). The company has already received the Certificate of Commencement of Business on 21st February, 2013. The consolidated accounts also include figures of this subsidiary from 20th November, 2012 to 31st March, 2013.

CONSOLIDATED FINANCIAL STATEMENTS

9. The Audited Consolidated Financial Statements based on the Financial Statements received from the subsidiary Company, TSIL Energy Limited, as approved by its Board of Directors, have been prepared in accordance with the Accounting Standard - 21 (AS-21) - ''Consolidated Financial Statements'', Accounting Standard - 23 (AS-23) - ''Accounting for Investment in Associates'' and other applicable Accounting Standards notified under Section 211 (3C) of the Companies Act, 1956 read with Companies (Accounting Standards) Rules, 2006, as applicable.

The consolidated financial statements presented by your Company include financial information of the subsidiary, i.e. TSIL Energy Limited, prepared in compliance with applicable Accounting Standards. The Ministry of Corporate Affairs, Government of India, vide its Circular No.5/12/2007-CL-III dated February 8, 2011 has granted general exemption under Section 212(8) of the Companies Act, 1956, from attaching the balance sheet, profit and loss account and other documents of the subsidiary companies to the balance sheet of the Company, provided certain conditions are fulfilled. Accordingly, annual accounts of the subsidiary company and the related detailed information will be made available to the holding and subsidiary company''s investors seeking such information at any point of time. The annual accounts of the subsidiary company will also be kept for inspection by any investor at the Registered Office of the Company, At/Post - Joda, Dist-Keonjhar Orissa - 758 034, and that of the subsidiary company at Tata Sponge Administrative Building, Bileipada, Post - Baneikala, Joda, Dist-Keonjhar, Orissa - 758 038.

TATA BUSINESS EXCELLENCE MODEL (TBEM)

10. Further efforts were made by the company to improve its business processes across all functions. During the year the company participated in dip stick assessment and maintained the score band of 551 - 650.

INTEGRATED MANAGEMENT SYSTEM (IMS) FOR QMS, EMS AND OHSAS:

11. The company continued to maintain Integrated Management System (IMS) comprising of Quality Management System (ISO : 9001). Environment Management System (ISO:14001) and Occupational Health, Safety & Accountability Management System (ISO: 18001). The performance on these fronts has been mentioned in the Triple Bottom Line report given elsewhere in the Annual Report.

AWARDS

12. During the year the company received the ESH (Environment Safety & Health) Awards 2012 constituted by CII, Orissa, and won 2nd prize (National Sustainability Award) from CII. The company also won the "TPM

Excellence Award'' in Category - A from JIPM, Japan. Your company is the first one in sponge iron industry to bag the award in the country. The Company has also won the CII (EASTERN Region) "Quality Award" and "Energy Conservation Award" for the year 2012-13.

LISTING FEES

13. The Annual Listing Fee for the year 2012-13 had been paid to those Stock Exchanges where the company''s shares are listed.

DIRECTORS

14. Mr. D. K. Banerjee retires by rotation and, being eligible, offers himself for re-appointment.

15. Mr. P. C. Parakh retires by rotation and, being eligible, offers himself for re-appointment.

16. Mr. D. B. Sundararamam, who was appointed Additional Director w.e.f. 1st December, 2012, and who holds office up to the date of the forthcoming Annual General Meeting of the company, has been proposed in writing by a shareholder for the office of Director.

17. Mr. Suresh Thawani ceased to be the Managing Director of the company on and from 1st April, 2013. He had served the company for more than 6 years and significantly contributed towards all round development of the company. The Board of Directors placed on record their sincere thanks and gratitude for his contribution to the company.

18. In the Board meeting held on 29th March, 2013, Mr. D. P. Deshpande was appointed Additional Director of the company w.e.f. 1st April, 2013. He holds office up to the date of the forthcoming Annual General Meeting of the company and has been proposed in writing by a shareholder for the office of Director.

The Board commends appointment of Mr. D. K. Banerjee, Mr. P. C. Parakh, Mr. D. B. Sundararamam and Mr. D. P. Deshpande.

19. Consequent upon the retirement of Mr. Suresh Thawani, the Board in its meeting held on 29th March, 2013, appointed Mr. D. P. Deshpande as the Managing Director of the company w.e.f. 1st April, 2013. Necessary resolutions together with the explanatory statement have been included in the Notice of the Thirtieth Annual General Meeting as his appointment is subject to approval of the shareholders.

CORPORATE SUSTAINABILITY

20. As a member of Tata Group and as a responsible corporate citizen the company continues to undertake steps towards welfare of society around it, community initiatives, periphery development, environment protection and improvement in harmony with the normal business and contributing to exchequer through various taxes/duties etc. At the same time, the company continued its focus on employees'' health and safety, skill development and superior living conditions. The company has taken a serious note of threat of global warming and climate change. Through a specific study, the company has measured carbon foot print of its operations and is taking steps to reduce the Green House Gas emissions.

Corporate sustainability is aligned with Triple Bottom Line approach by complying with -

- the UN Global Compact by addressing its ten principles

- Guidelines of Tata Council for Community Initiatives (TCCI)

A detailed report on Corporate Sustainability based on Triple Bottom Line approach is appearing elsewhere in the Annual Report.

INCLUSIVE GROWTH

21. The concept of inclusive growth through Affirmative Action has been adopted by the company in the past. Further efforts have been made by the company during the year to strengthen the actions.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO.

22. As required under Sub-section 1(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, particulars regarding conservation of energy, technology absorption, foreign exchange earnings and outgo are annexed to this report.

PARTICULARS OF EMPLOYEES

23. As required under Sub-section 2A of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, the particulars of such employees are given in a statement annexed to this report.

DIRECTORS'' RESPONSIBILITY STATEMENT

24. Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that : -

(i) in the preparation of annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(ii) they have, in the selection of accounting policies, consulted the statutory Auditors and have applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year 2012-13 and of the profit of the company for that period;

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis.

REPORT ON CORPORATE GOVERNANCE

25. Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, the followings form part of this Annual Report :

(i) Managing Director''s declaration regarding compliance of Code of Conduct by Board Members and Senior Management personnel;

(ii) Management Discussion and Analysis;

(iii) Report on the Corporate Governance;

(iv) Auditors'' Certificate regarding compliance of conditions of Corporate Governance.

VOLUNTARY DELISTING OF THE COMPANY''S EQUITY SHARES FROM CERTAIN STOCK EXCHANGES

26. The Equity Shares of the company have been voluntarily delisted from The Stock Exchange, Ahmedabad and The Delhi Stock Exchange Association Ltd. during 2004-05, from Bhubaneswar Stock Exchange during 2006-07 and from Calcutta Stock Exchange Association Ltd. during the year 2008-09.

Shares of the company are actively traded in the National Stock Exchange of India Ltd. and Bombay Stock Exchange Ltd.

AUDITORS

27 (a) The Auditors, Messrs Deloitte Haskins & Sells, Chartered Accountants, retire at the conclusion of the ensuing Annual General Meeting and, being eligible, offer themselves for reappointment.

(b) The Board has appointed M/s.Shome & Banerjee as Cost Auditors for the year 2012-13.

ACKNOWLEDGEMENT

The Board takes this opportunity to sincerely thank all its stakeholders namely, shareholders, customers, suppliers/contractors, bankers, employees, government agencies, local authorities, and the immediate society for their un-stinted support and co-operation during the year.

On behalf of the Board of Directors

(A.M. Misra)

Chairman

Jamshedpur

22nd April, 2013


Mar 31, 2012

The Directors take pleasure in presenting the Twenty-ninth Annual Report on the business and operations of the company and its financial results for the year ended 31st March, 2012.

FINANCIAL RESULTS

Current year Previous year

(Rs. Lac) (Rs. Lac)

2. (i) Sales (Net of Excise Duty) and other income 65693 69487

(ii) Profit before depreciation 13044 16880

(iii) Depreciation and amortisation expenses 1837 1852

(iv) Profit before taxes 11207 15028

(v) Current Tax 4290 5560

(vi) Deferred Tax (651) (666)

(vii) Profit after tax 7568 10134

(viii) Profit brought forward from previous year 1434 1232

(ix) Profit available for appropriation 9002 11366

(x) Dividend: 80% (2010-2011 : 80%) 1232 1232

(xi) Tax on Dividend 200 200

(xii) Transfer to General Reserve 6100 8500

(xiii) Surplus carried to Balance Sheet 1470 1434

DIVIDEND

3. The Board has recommended a dividend of Rs. 8/- per share (i.e. 80%) on 1,54,00,000 equity shares of Rs.10 each for the financial year ended 31st March, 2012, subject to approval of the shareholders at the ensuing Annual General Meeting. The total outgo on account of dividend (ex-taxes) will be Rs. 1232 lac, which is equal to previous year.

OPERATIONS

4. During the year, all the three kilns produced 2,72,106 MT of sponge iron compared to 3,83,002 MT in the previous year. The capacity utilisation was lower at 70% as compared to 98% in the previous year. The under-utilistion of capacity was mainly due to frequent disruptions in supply of iron ore due to factors beyond company's control which prevailed over last three quarters of the year.

Supply of linkage coal has been stopped by Ministry of Coal. The company had to largely source coal from domestic market through e-auctions and imports. The indigenous coal was optimally used along with imported coal. Planned operations could not be carried out due to paucity of iron ore and frequent shutdown of the kilns. However, the down-time was gainfully used to maintenance and modification projects.

The despatch of sponge iron during the year was 2,73,766 MT as compared to 3,80,273 MT in the previous year. Reduction in the despatch was consequent to lower production due to the reasons stated above.

POWER

5. During the year, the total generation of power from the two power plants (of 7.5MW and 18.5 MW capacity) was 134.39 million kwh out of which 88.31 million kwh of surplus power was exported to the State Grid compared with generation of 191.37 million kwh and sale of 133.77 million kwh in the previous year. The downfall in the generation and sale of power was consequential to lower availability of waste gas from the kilns due to lower production of sponge iron.

The Board in its meeting held in March, 2011, had approved the installation of an AFBC boiler based power plant with a capacity of 25 MW to utilise the waste. This was subject to obtaining necessary approvals / clearances etc. The project implementation has not started till date because of the undue delay in getting statutory clearances, change in eco-dynamics and identification of a long term buyer.

FINANCE

6. The market for steel and therefore sponge iron was stable with little fluctuations in demand. Disruption in supply of iron ore led to short-fall in production and despatch. The price of Sponge Iron improved in the later part of the year. Price of iron ore and coal registered sharp increase during the year and these reflected in the price of Sponge Iron too. Earning per share dropped to Rs.49.14 as compared to previous year (Rs. 65.80). The company continued to be debt free during the year. The loss in revenue due to lower production was partly compensated by sale of waste materials and earning from financial activities.

DEVELOPMENT OF COAL BLOCK

7. The work in connection with development of coal block at Radhikapur (East) and Utkal-F in Talcher coalfields was started in 2006-07. The Company has made significant progress in land acquisition and has deposited requisite money with Government of Orissa for 1st phase of land requirement. After a good progress, the land acquisition process took a pause due to technical reasons of land acquisition process being followed. The coal block is expected to become operational from end 2013-14. So far all expenditure has been funded out of internal generations only.

TATA BUSINESS EXCELLENCE MODEL (TBEM)

8. Further efforts were made by the company to improve its business processes across all functions. During the year the company participated in JRD-QV Quality Award competition and scored over 550 marks twice in a row. During the year. the management emphasised the need to implement the Business Excellence Plans at all relevant areas.

INTEGRATED MANAGEMENT SYSTEM (IMS) FOR QMS,EMS,AND OHSAS:

9. The company continued to maintain Integrated Management System (IMS) comprising of Quality Management System(ISO : 9001). Environment Management System(ISO:14001) and Occupational Health, Safety & Accountability Management System(ISO: 18001). The performance on these fronts has been mentioned in the Triple Bottom Line report given elsewhere in the Annual Report.

AWARDS

10. CII (Eastern Region) Quality Award - The company has yet again won the CII (ER) Quality Award 2012 in an industry wide contest.

11. IIM National Quality Award - The Company, for the sixth time, won the National Quality Award instituted by the Indian Institute of Metals for the year 2010-11 under the category of Pig Iron/Rolling Mill/DRI.

12. HRD Thinker Award - The company won the 'HRD Thinker Award ( a cash award and gold medal) instituted by the Indian Society of Training & Development, New Delhi, on its unique internal training programme of employees called 'Empowered Associate' or e-associate.

LISTING FEES

13. The Annual Listing Fee for the year 2011-12 had been paid to those Stock Exchanges where the company's shares are listed.

DIRECTORS

14. Mr.N.P. Sinha retires by rotation and, being eligible, offers himself for re-appointment.

15. Mr.S.P. Mehrotra, who is due to retire at the forthcoming Annual General Meeting, had informed the company that he did not wish to seek reappointment. Therefore, it is proposed to appoint Mr.S. Srikanth as a Director on the Board of Directors of the company at the forthcoming Annual General Meeting in place of Mr.S.P. Mehrotra.

16. Mr. Rajesh Chintak retires by rotation and, being eligible, offers himself for re-appointment.

The company has received notice from a member of the company proposing the candidature of Mr.S. Srikanth as Director of the company.

The Board placed on record its deep appreciation of the sincere services and invaluable advice rendered to the company by Mr.S.P. Mehrotra during his association as Director on the Board of Directors of the company.

17. Mr.Manoj Thankachan Thomas, who was appointed Additional Director w.e.f. 12th September, 2011, and who holds office up to the date of the forthcoming Annual General Meeting of the company, has been proposed in writing by a shareholder for the office of Director.

The Board commends appointment of Mr.N.P. Sinha, Mr.S. Srikanth, Mr. Rajesh Chintak and Mr.Manoj Thankachan Thomas.

CORPORATE SUSTAINABILITY

18. As a member of Tata Group and as a responsible corporate citizen the company has been undertaking steps towards welfare of society around it, community initiatives, periphery development, environment protection and improvement in harmony with the normal business and contributing to exchequer through various taxes/duties etc. At the same time, the company continued its focus on employees' health and safety, skill development and superior living conditions. The company has taken a serious note of threat of global warming and climate change. Through a specific study, the company has measured carbon foot print of its operations and is taking steps to reduce the Green House Gas emissions.

Corporate sustainability is aligned with Triple Bottom Line approach by complying with -

- the UN Global Compact by addressing its ten principles

- Guidelines of Tata Council for Community Initiatives (TCCI)

A detailed report on Corporate Sustainability based on Triple Bottom Line approach is appearing elsewhere in the Annual Report.

INCLUSIVE GROWTH

19. The concept of inclusive growth through Affirmative Action has been adopted by the company in the past. Further efforts have been made by the company during the year to strengthen this concept.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO.

20. As required under Sub-section 1(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, particulars regarding conservation of energy, technology absorption, foreign exchange earnings and outgo are annexed to this report.

PARTICULARS OF EMPLOYEES

21. As required under Sub-section 2A of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, the particulars of such employees are given in a statement annexed to this report.

DIRECTORS' RESPONSIBILITY STATEMENT

22. Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that: -

(i) in the preparation of annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(ii) they have, in the selection of accounting policies, consulted the statutory Auditors and have applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year 2011-12 and of the profit of the company for that period;

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis.

REPORT ON CORPORATE GOVERNANCE

23. Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, the followings form part of this Annual Report :

(i) Managing Director's declaration regarding compliance of Code of Conduct by Board Members and Senior Management personnel;

(ii) Management Discussion and Analysis;

(iii) Report on the Corporate Governance;

(iv) Auditors' Certificate regarding compliance of conditions of Corporate Governance.

VOLUNTARY DELISTING OF THE COMPANY'S EQUITY SHARES FROM CERTAIN STOCK

EXCHANGES

24. The Equity Shares of the company have been voluntarily delisted from The Stock Exchange, Ahmedabad and The Delhi Stock Exchange Association Ltd. during 2004-05, from Bhubaneswar Stock Exchange during 2006-07 and from Calcutta Stock Exchange Association Ltd. during the year 2008-09.

Shares of the company are actively traded in the National Stock Exchange of India Ltd. and Bombay Stock Exchange Ltd.

AUDITORS

25 (a) The Auditors, Messrs Deloitte Haskins & Sells, Chartered Accountants, retire at the conclusion of the ensuing Annual General Meeting and, being eligible, offer themselves for reappointment.

(b) During the year, the Central Government prescribed the Cost Accounting Records to be maintained by the Company and also mandated that Cost Audit of eligible products/services be carried out. Therefore, the Board had appointed M/s.Shome & Banerjee as Cost Auditors for the year 2011-12 and also for 2012-13.

ACKNOWLEDGEMENT

The Board takes this opportunity to sincerely thank all its stakeholders namely, shareholders, customers, suppliers/contractors, bankers, employees, government agencies, local authorities, and the immediate society for their un-stinted support and co-operation during the year.

On behalf of the Board of Directors

(A.M. Misra)

Chairman

Jamshedpur,

23rd April, 2012


Mar 31, 2011

The Directors take pleasure in presenting the Twenty-eighth Annual Report on the business and operations of the company and its financial results for the year ended 31st March, 2011.

FINANCIAL RESULTS

Current year Previous year (Rs. Lac) (Rs. Lac)

2. (i) Sales (Net of Excise Duty) and other income 69487 54194

(ii) Profit before depreciation 16880 14560

(iii) Depreciation and other non-cash expenses 1852 1938

(iv) Profit before taxes 15028 12622

(v) Provision for Current Tax 5560 4608

(vi) Provision for Deferred Tax (666) (440)

(vii) Fringe Benefit Tax - 2

(viii) Profit after tax 10134 8452

(ix) Profit brought forward from previous year 1232 917

(x) Profit available for appropriation 11366 9369

(xi) Dividend: 80% (2009-2010: 80%) 1232 1232

(xii) Tax on Dividend 200 205

(xiii) Transfer to General Reserve 8500 6700

(xiv) Surplus carried to Balance Sheet 1434 1232

DIVIDEND

3. The Board has recommended a dividend of Rs.8/- per share (i.e. 80%) on 1,54,00,000 equity shares of Rs.10 each for the financial year ended 31st March, 2011, subject to approval of the shareholders at the ensuing Annual General Meeting. The total outgo on account of dividend (excluding dividend distribution tax) will be Rs. 1232 lac.

OPERATIONS

4. During the year, all three kilns were in operation and achieved the highest ever production of 3,83,002 MT of sponge iron compared to 3,59,333 MT in the previous year. The capacity utilisation was 98 % as compared to 92% in the previous year, i.e. an increase of 6%.

Iron ore and coal are two major raw materials for making sponge iron in rotary kilns. Tata Steel Ltd supplied entire quantity of iron ore. Coal India supplied negligible coal against linkages. The company had to largely source coal from domestic sources through e-auctions and imports. The indigenous coal was optimally used along with imported coal. Improved operating practices resulted into longer campaign life of Kilns. Substantial reduction in down time of kilns for repairs and maintenance was achieved by focussing on modern project management techniques.

The despatch of sponge iron during the year was the highest ever at 3,80,273 MT as compared to 3,61,207 MT in the previous year, i.e. an increase of 5%.

POWER

5. During the year, both the power plants (of 7.5MW and 18.5 MW capacity) together produced 191.37 million kwh of power and 133.77 million kwh of surplus power was sold compared with generation of 181.39 million kwh and sale of 125.01 million kwh in the previous year. There was improvement in supply of power from various power plants to State-Grid. This led to reduction in price of power during course of the year.

The Board in its meeting held in March, 2011, has approved the installation of an AFBC boiler based power plant with a capacity of 25 MW to utilise the solid waste. The project will be financed with internal generation and borrowings. This is subject to obtaining necessary approvals / clearances etc.

FINANCE

6. The market for steel and therefore sponge iron was normal with seasonal fluctuations in demand and prices. Prices of iron ore and coal gradually firmed up during the year and these reflected in the price of product too. Earning per share increased to Rs.65.80 as compared to previous year (Rs. 54.88). The company remained debt free during the year

DEVELOPMENT OF COAL BLOCK

7. The work in connection with development of coal block at Radhikapur (East) and Utkal-F in Talcher coalfields was started in 2006-07. The Company made significant progress in land acquisition and has deposited requisite money with Government of Orissa for 1st phase of land requirement. Depending upon the money needed, the financial tie-up for the coal block will be completed in next few months. The coal block is expected to become operational from 2012-13.

TATA BUSINESS EXCELLENCE MODEL (TBEM)

8. Further efforts were made by the company to improve its business processes across all functions. During the year the company participated in JRD-QV duality Award competition and scored over 550 marks thereby declared as "Emerging Industry Leader". During the year, the spirit of achieving excellence was reinforced across the organisation through appropriate training and communication by the management.

INTEGRATED MANAGEMENT SYSTEM (IMS) FOR QMS.EMS.ANDOKSAS:

9. The company continued to maintain Integrated Management System (IMS) comprising of Quality Management System(ISO : 9001), Environment Management System(ISO:14001) and Occupational Health, Safety & Accountability Management System(ISO: 18001). The performance on these fronts has been mentioned in the Triple Bottom Line report given elsewhere in the Annual Report.

AWARDS

10. In recognition of companys effective pollution control measures with adoption of sound environment management practices, the Orissa State Pollution Control Board has conferred the company with Pollution Control Appreciation Award for2010.

11.; The Company continues to maintain high product quality standards. During the year it won, yet again, the prestigious Oil (Eastern Region) Quality award for the year 2010. The company was also certified as a Model TQM Company for 2010 in an industry wide contest.

LISTING FEES

12. The Annual Listing Fee for the year 2010-11 had been paid to those StockExchanges whece the companys shares are listed.

DIRECTORS

13. Mr. K.K. Varughese retires by rotation and, being eligible, offers himself for re-appointment.

14. Mr. Arun Misra retires by rotation and, being eligible, offers himself for re-appointment.

15. Mr. P. K. Lahiri, who is also due to retire at the forthcoming Annual General Meeting, had informed the company that he does not wish to seek reappointment. A resolution pursuant to Section 256 of the Companies Act, 1956, for not filling the vacancy caused by the retirement of Mr. P. K. Lahiri has been included in the Notice of the 28th Annual General Meeting.

The Board placed on record its deep appreciation of the sincere services and invaluable advice rendered to the company by Mr. P. K. Lahiri during his long association as a Director of the company.

CORPORATE SUSTAINABILITY

16. As a member of Tata Group and as a responsible corporate citizen, the company has been undertaking steps towards welfare of society around it, community initiatives, periphery development, environment protection and improvement in harmony with the normal business and contributing to exchequer through various taxes/duties etc. At the same time, the company continued its focus on employees health and safety, skill development and superior living conditions. The company has taken a serious note of threat of global warming and climate change. Through a specific study, the company has measured carbon foot prints and is taking steps to reduce the Green House Gas emissions.

Corporate sustainability is aligned with Triple Bottom Line approach by complying with -

- The UN Global Compact by addressing its ten principles

- Guidelines of Tata Council for Community Initiatives (TCCI)

A detailed report on Corporate Sustainability based on Triple Bottom Line approach is appearing elsewhere in the Annual Report.

INCLUSIVE GROWTH

17. The concept of inclusive growth through Affirmative Action has been adopted by the company in the past. Further efforts have been made by the company during the year to strengthen this concept.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO.

18. As required under Sub-section 1 (e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, particulars regarding conservation of energy, technology absorption, foreign exchange earnings and outgo are annexed to this report.

PARTICULARS OF EMPLOYEES

19. As required under Sub-section 2A of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, the particulars of such employees are given in a statement annexed to this report.

DIRECTORS RESPONSIBILITY STATEMENT

20. Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that: -

(i) in the preparation of annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(ii) they have, in the selection of accounting policies, consulted the statutory Auditors and have applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year 2010-11 and of the profit of the company for that period;

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis.

REPORT ON CORPORATE GOVERNANCE

21. Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, the followings form part of this Annual Report:

(i) Managing Directors declaration regarding compliance of Code of Conduct by Board Members and Senior Management personnel;

(ii) Management Discussion and Analysis;

(iii) Report on the Corporate Governance;

(iv) Auditors Certificate regarding compliance of conditions of Corporate Governance.

VOLUNTARY DELISTING OF THE COMPANYS EQUITY SHARES FROM CERTAIN STOCK EXCHANGES

22. The Equity Shares of the company have been voluntarily delisted from The Stock Exchange, Ahmedabad and The Delhi Stock Exchange Association Ltd. during 2004-05, from Bhubaneswar Stock Exchange during 2006-07 and from Calcutta Stock Exchange Association Ltd. during the year 2008-09.

Shares of the company are actively traded in the National Stock Exchange of India Ltd. and Bombay Stock Exchange Ltd.

AUDITORS

23. The Auditors, Messrs Deloitte Haskins & Sells, Chartered Accountants, retire at the conclusion of the ensuing Annual General Meeting and, being eligible, offer themselves for reappointment.

ACKNOWLEDGEMENT

The Board takes this opportunity to sincerely thank all its stakeholders namely, shareholders, customers, suppliers/contractors, bankers, employees, government agencies, local authorities, and the immediate society for their unstinted support and co-operation during the year.



On behalf of the Board of Directors

(A.M. Misra) Chairman

Jamshedpur, 6th May, 2011


Mar 31, 2010

The Directors take pleasure in presenting the Twenty-seventh Annual Report on the business and operations of the company and its financial results fortheyear ended 31st March, 2010.

FINANCIAL RESULTS

Current year Previous year (Rs. Lac) (Rs. Lac)

2. (i) Sales (Net of Excise Duty) and other income 54194 62828

(ii) Profit before depreciation 14560 19948

(iii) Depreciation and other non-cash expenses 1938 1831

(iv) Profit for the year 12622 18117

(v) Provision for Current Tax 4608 6285

(vi) Provision for Deferred Tax write back (440) (262)

(vii) Fringe Benefit Tax 2 27

(viii) Profit after tax 8452 12067

(ix) Profit brought forward from previous year 917 948

(x) Profit available for appropriation 9369 13015

(xi) Dividend: 80% <2008-2009: 80%) 1232 - 1232

(xii) Tax on Dividend 205 209

(xiii) Transfer to General Reserve 6700 10657

(xiv) Surplus carried to Balance Sheet 1232 917

DIVIDEND

3. TheBoardhas recommended a dividend of Rs8 per share (ie 80%) on 1,54,00,000 equity shares of Rs. 10 each for the financial year ended 31st March, 2010, subject to approval of the shareholders at the ensuing Annual General Meeting. The total outgo on account of dividend (ex-taxes) will be Rs. 1232 lacs which equals to previous year.

OPERATIONS

4. During the year, all the three kilns were in operation and produced 3,59,333 MT of sponge iron compared to 3,42,074 MT in the previous year. The capacity utilisation was 92% as compared to 88% in the previous year, i.e. an increase of 4%.

Iron ore and coal are two major raw materials for making sponge iron in rotary kilns. Tata Steel Ltd supplied entire quantity of iron ore. The supply of coal against linkage from Coal India Ltd was less than requirement. In addition, ash percentage in the linkage coal has been steadily going up. The company had to source the balance requirement of coal from domestic market and imports. The indigeneous coal was optimally used along with imported coal. Improved operating practices resulted into longer campaign life. Substantial reduction in down time of kiln for repairs and maintenance was achieved by focussing on modern project management techniques.

The despatch of sponge iron during the year was 3,61,207 MT as compared to 3,42,920 MT in the previous year, i.e. an increase of 5%.

FINANCE

5. There were signs of recovery of the economy after severe melt down in later part of the year 2008. However, the year saw very unstable market for steel and related products due to which selling price of Sponge Iron varied all along the year impacting the margin. Earning per share declined to Rs. 54.88 as compared to previous year (Rs. 78.35). However, the company remained debt free during the year.

POWER

6. During the year, both the power plants (of 7.5MW and 18.5 MW capacity) together produced 181.39 million kwh of power and 125.02 million kwh of surplus power was sold compared with generation of 181.01 million kwh and sale of 124.82 million kwh in the previous year. There was marginal increase in the selling price of power from March, 2009 which helped the company in generating additional revenue.

DEVELOPMENT OF COALBLOCK

7. The preliminary work in connection with development of coal block at Radhikapur (East) and Utkal-F in Talcher coalfields was started in 2006-07. The Company made progress in land acquisition and has deposited money with Government of Orissa for a part of land. The financial tie-up for the coal block will be completed shortly. The coal block is expected to become operational from 2012-13.

TATA BUSINESS EXCELLENCE MODEL (TBEM)

8. Further efforts were made by the company to improve its business processes across a!! functions. During the year the company participated in JRD-QV Quality Award competition and scored for the first time more than 500 marks thereby winning Active Promotion Award. During the year, the spirit of achieving excellence was reinforced across the organisation through appropriate training and communication by the management.

INTEGRATED MANAGEMENT SYSTEM (IMS) FOR QMS, EMS, AND OHSAS:

9. During previous year the company had qualified for the Integrated Management System (IMS) comprising of Quality Management System(ISO : 9001) Environment Management System(ISO:14001) and Occupational Health, Safety & Accountability Management System(ISO: 18001) The performance on these fronts has been mentioned in the Triple Bottom Line report given elsewhere in the Annual Report. The Company also adopted a Climate Change policy as a part of Tata Group initiative,

AWARDS

10. in recognition of the relentless efforts by the company towards combating climate change, the company won for the second time the "Good Green Governance (G3) Award" constituted by Shristi Foundation for the year 2008. It was also adjudged winner in the Metal & Mining Category for its outstanding achievement in Environment Management and was awarded the GreenTech Environment Excellence Gold Award for the year 2009 instituted by Greentech Foundation. Further, in recognition of the companys initiatives to implement economical and sustainable ways of designing, manufacturing and commercial use of materials and products to minimise the impact on the environment and human health, itwasgiven Green IndiaAward 2009 by Frost & Sullivan

11. The Company continues to maintain high product quality standards. During the year it won the prestigious CM (Eastern Region) Quality award. The company was also certified as a Model TQM Company for 2008-09 in an industrywide contest.

LISTING FEES

12. The Annual Listing Fee for the year 2009-10 had been paid to those Stock Exchanges where the companys shares are listed.

DIRECTORS

13. Mr.A.D. Baijai, who has been on the Board of your Company both as director as weil as the Chairman, relinqished his office w.e.f. 2nd August, 2009.

The Board placed on record its deep appreciation of the sincere services and invaluable advice rendered to the company by Mr. A.D. Baijai during his association as a Director and subsequently as the Chairman of the Board of Directors of the company.

14. Mr. A. M. Misra was nominated as a Special Director by Tata Steel Limited according to the provisions of Article 110 of the Articles of Association of the company and assumed the post of Chairman of the company w.e.f. 2nd August, 2009. According to the Article 110, the Special Director so nominated shall not be liable to retire by rotation.

15. Mr. D.K. Banerjee retires by rotation and, being eligible, offers himself for re-appointment.

16. Mr.P.C. Parakh retires by rotation and, being eligible, offers himself for re-appointment.

17. Mr.Suresh Thawani retires by rotation and, being eligible, offers himself for re-appointment. MANAGING DIRECTOR

1S. The Board at its meeting held on 21 st January, 2010 has reappointed Mr. Suresh Thawani as Managing Director of the company from 10th March, 2010 to 31 st March, 2013. Necessary resolutions together with the explanatory statement have been included in the Notice of Twenty-seventh Annual General Meeting as the above reappointment is subject to the approval of the shareholders.

CORPORATE SUSTAINABILITY

19. As a member of Tata Group and as a responsible corporate citizen the company has been undertaking steps towards welfare of society around it, community initiatives, periphery development, environment protection and improvement in harmony with the normal business and contributing to exchequer through various taxes/duties etc. At the same time, the company continued its focus on employees health and safety, skill development and superior living conditions. The company has taken a serious note of threat of global warming and climate change. Through a specific study, the company has measured carbon foot prints and is taking steps to reduce the Green House Gas emissions.

Corporate sustainability is aligned with Triple Bottom Line approach by complying with -

- the UN Global Compact by addressing its ten principles

- Guidelines of Tata Council for Community Initiatives (TCCI)

Adetailed report on Corporate Sustainability based on Triple Bottom Line approach is appearing elsewhere in the Annual Report.

INCLUSIVE GROWTH

20. The concept of inclusive growth through Affirmative Action has been adopted by the company In the past. Further efforts have been made by the company during the year to strengthen this concept.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO.

21. As required under Sub-section 1{e)ofSection217oftheCompaniesAct, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, particulars regarding conservation of energy, technology absorption, foreign exchange earnings and outgo are annexed to this report.

PARTICULARS OF EMPLOYEES

22. As required under Sub-section 2Aof Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended from time to time, the particulars of such employees are given in a statement annexed to this report.

DIRECTORS RESPONSIBILITY STATEMENT

23. Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that: -

(i) in the preparation of annual accounts, the applicable accounting standards have been followed and that there are no material departures;

(ii) they have, in the selection of accounting policies, consulted the statutory Auditors and have applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year 2009-10 and of the profit of the company for that period;

(iii) they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act. 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis.

REPORT ON CORPORATE GOVERNANCE

24. Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, the followings form part of this Annual Report:

(i) Managing Directors declaration regarding compliance of Code of Conduct by Board Members and Senior Management personnel;

(ii) Management Discussion and Analysis;

(iii) Report on the Corporate Governance;

(iv) Auditors Certificate regarding compliance of conditions of Corporate Governance. VOLUNTARY DELISTING OF THE COMPANYS EQUITY SHARES FROM CERTAIN STOCK EXCHANGES

25. The Equity Shares of the company have been voluntarily delisted from The Stock Exchange, Ahmedabad and The Delhi Stock Exchange Association Ltd. during 2004-05, from Bhubaneswar Stock Exchange during 2006-07 and from Calcutta Stock Exchange Association Ltd. during the year 2008-09.

Shares of the company are actively traded in the National Stock Exchange of India Ltd. and Bombay Stock Exchange Ltd.

AUDITORS

26. The Auditors, Messrs Deioitte Haskins & Sells, Chartered Accountants, retire at the conclusion of the ensuing Annual General Meeting and, being eligible, offer themselves for reappointment.

ACKNOWLEDGEMENT

The Board takes this opportunity to sincerely thank all its stakeholders namely, shareholders, customers, suppliers/contractors, bankers, employees, government agencies, local authorities, and the immediate society for their un-stinted support and co-operation during the year.

On behalf of the Board of Directors

Jamshedpur A. M. Misra

22nd April, 2010 Chairman

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