The Members,
 
 The Directors have pleasure in presenting the 39th Annual Report of the
 company together with audited accounts for the year ended 31st March,
 2011.
 
 FINANCIAL REVIEW
 
 Your company increased production of value added steel and achieved the
 saleable steel production of 12.9 MT representing 116% of capacity
 utilisation. With the help of various management initiatives taken,
 your company achieved a turnover of Rs. 47,041 crore during 2010-11,
 which is higher by 7% over last year. Your company has also undertaken
 expansion and modernisation plan, which is expected to be completed by
 2012-13, with focus on higher production of value added products.
 
 The profit of your company for the year 2010-11 was affected adversely,
 mainly due to adverse impact of input prices consisting of imported
 coal, indigenous coal, limestone, nickel, ferro alloys, aluminium,
 boiler coal, purchase power, increase in royalty on minerals, salaries
 & wages, higher interest & depreciation. However, the adverse impact on
 profitability was partially off set by higher volume of saleable steel
 production, increase in net sales realisation of saleable steel, better
 product mix and higher value added steel production. The comparative
 performance of major financial parameters is given as under:
 
                                                     (Rs.In crore)
 
                                            2010-11        2009-10
 
 Sales Turnover                           47,040.50      43,934.70
 
 Profit before interest, depreciation and
 tax (EBIDTA)                              9,155.06      11,871.28
 
 Less: Interest and Finance Charges          474.95         402.01
 
 Less: Depreciation                        1,485.80       1,337.24
 
 Profit before tax (PBT)                    7,19431      10,132.03
 
 Less: Provision for taxation              2,289.57       3,377.66
 
 Profit after tax (PAT)                     4,90474       6,754.37
 
 Net Worth                                   37,069         33,317
 
 EBIDTA to Net sales (%)                       21.4           29.3
 
 Return (PAT) on Net worth (%)                 13.2           20.3
 
 EBIDTA to average capital employed (%)        22.0           31.1
 
 Earning per share (Rs.10/- each)              11.9           16.4
 
 Debt Equity Ratio                           0.54:1         0.50:1
 
 The continued thrust on optimum utilisation of funds by better fund
 management included replacement of high cost short term loans with low
 cost debts, strategic parking of surplus funds with scheduled banks,
 actions for future fund raising etc. to meet our growth objectives. The
 company had liquid assets of Rs.17,142 crore as on 31st March, 2011
 invested in short term deposits with scheduled banks against borrowings
 of Rs. 20,165 crore as on 31st March, 2011. The debt equity ratio of the
 company increased to 0.54:1 as on 31.03.2011 from 0.50:1 as on
 31.03.2010 mainly on account of increase in borrowings for capital
 expenditure. The net worth of company improved substantially and this
 helped in generation of internal resources for funding expansion plans
 of SAIL.
 
 The company paid interim dividend @ 12% of the paid-up equity share
 capital during the year. The Board of Directors has further recommended
 a final dividend @ 12% subject to approval of shareholders, thus making
 the total dividend @ 24% of the paid up equity share capital for the
 year 2010-11. A sum of Rs. 500 crore has been transferred to the general
 reserves during the year (previous year Rs. 680 crore).
 
 Credit Rating:
 
 M/s FITCH and M/s CARE, RBI approved credit rating agencies, maintained
 AAA ratings indicating the highest safety, to your company''s long
 term borrowing programme. Standard and Poor''s, an International Rating
 Agency, has reaffirmed Rating of BBB- with stable outlook for the
 company.
 
 PRODUCTION REVIEW
 
 In the year 2010-11, the plants of the company continued with their
 journey of relentless improvement in production, product- mix and
 efficiency parameters. Your company recorded higher volume of saleable
 steel production at 12.9 million tonnes, registering a growth of 2%
 over corresponding period of last year (CPLY), with capacity
 utilization of 116% during the year.  Production of hot metal at 14.9
 million tonne and crude steel at 13.8 million tonne, registered a
 growth of 3% and 2% respectively over CPLY. In line with market demand,
 SAIL produced 10.5 million tonne of finished steel which also
 registered a growth of 4% over CPLY. The production growth was achieved
 with better utilization of existing facilities since your company has
 not added any capacity in the year 2010-11.
 
 Higher production of special quality and value added products at 4.8
 million tonnes, a growth of 3% over CPLY, resulted in further
 improvement of the product-mix. Several new products were developed
 which have significant demand, ready market, and good contribution
 margin. Improvement in quality of products has remained an important
 imperative. Some of the major new products developed to meet the
 customer''s requirement and enhance market share were - High Tensile
 thicker plates in Normalized condition with sub-zero impact toughness
 and Ultra- sonic soundness for construction of sluice gate for Hydel
 Power Project in Uttaranchal, HT plates in grade 450E with improved
 toughness and corrosion resistance for steel super-structure of
 rail-cum-road bridge for the construction of steel super-structure of
 the two rail-cum-road bridges being built over the river Ganges at
 Patna and Munger, 45E1 Grade R260 Rails in Euronorm Specification (EN
 13674-4) for export to Sri Lanka, Killed quality structurals with low
 temperature impact toughness for construction of the superstructure of
 the rail-cum-road bridges of Ganges, High Strength 100 mm thick
 pressure vessel quality
 
 SA537Cl-1 plates with ultrasonic soundness for hydel power projects,
 for the first time, EMU wheels for Indian Railways.
 
 The Research & Development wing of your company provided innovative
 technological inputs to different units of your company with special
 emphasis on productivity and quality improvement, product development
 and commercialization, energy conservation and automation. The major
 projects completed are: Improvement of cast structure in blooms through
 optimization of EMS parameters at Bhilai Steel Plant (BSP); Development
 of a reliable position display system of screw down in Tandem Mill #1,
 CRM at Bokaro Steel Plant (BSL); Improving processing of low Nickel
 stainless steel through simulation studies at Salem Steel Plant (SSP).
 
 Your company in its endeavor to become energy and cost efficient, in
 the year 2010-11 increased production of crude steel through continuous
 casting route and achieved highest ever crude steel production through
 continuous casting route at 9.32 MT with a growth of 3% over CPLY. A
 large number of innovations are being carried out in plants for process
 improvements and cost competitiveness. In the area of Specific Energy
 Conservation, the projects completed were: Introduction of Energy
 Efficient Ignition System in machine #2, SP-1 and the single machine in
 SP-2 at Durgapur Steel Plant (DSP); Improving thermal efficiency of
 ladle heating system of BF at BSL; Selection and design of combustion
 system for new in-house built normalizing furnace of Plate Mill at BSP;
 Introduction of new BF gas burner in place of existing old BF gas
 burner in one Russian boiler of PBS and Power Plant-I at BSP. Your
 company witnessed highest ever Power Generation from captive and JV
 power plants at 671 MW during 2010-11 registering a growth of 1% over
 CPLY
 
 Raw Materials
 
 During 2010-11 almost total requirement of iron ore was met from
 captive sources, the company''s captive iron ore mines have produced
 about 24.45 million tonne. However, in case of coking coal, around 25%
 requirement was met from indigenous sources and balance through
 imports. During 2010-11, production in captive collieries of Steel
 Authority of India Limited (SAIL) resulted in annual production of
 about 1.10 million tonne. In case of flux, around 35% requirement of
 limestone and 41% requirement of dolomite were met through captive
 sources resulted in production of fluxes from captive sources of about
 2.33 million tonnes. For thermal coal, SAIL depends entirely on
 purchases from Coal India Limited (CIL) except small quantity produced
 from captive mine.
 
 Grant of Stage-I forest clearance & final environment clearances for
 the Ajitaburu & Budhaburu leases of Manoharpur Iron Ore Mines, Chiria
 by MoEF in Mar''11 have paved the way for early development of 7 Mtpa
 state-of-the-art mechanized mines at these leases. During 2010-11,
 Stage-I forest clearance for Barsua, Kalta, Bolani & South-Central
 Blocks of Kiriburu- Meghahatuburu mines have also been granted by MoEF.
 Your company has also received final environment clearance for
 integrated Barsua-Taldih-Kalta iron ore mining, beneficiation and
 pelletisation plant for 8.05 Mtpa (ROM) capacity and also for
 development of Sitanala coking coal mine of 0.3 Mtpa capacity by MoEF
 in Oct''10 & Dec''10 respectively.
 
 Chhattisgarh Government has accorded its approval for renewal of
 Baraduar Dolomite lease in Sep''10. This will enable SAIL to develop
 Baraduar dolomite mine for the securitization of low silica dolomite
 availability for SAIL.
 
 S&T Mining Company Pvt. Ltd., a joint venture company of SAIL & Tata
 Steel Limited, has been engaged to develop Bhutgoria mine of BCCL. The
 mine is estimated to produce 0.36 Mtpa (ROM) coking coal at full
 capacity which will be shared between SAIL & Tata Steel. The company
 has submitted tender to BCCL for construction of washery at Dugda for
 Non Linked Washery (NLW) coal. The JV company is also considering
 establishment of a stand alone NLW coal washery at Bhelatand with an
 investment of Rs. 196 crore.
 
 Your company is also making attempts for allocation of coking coal and
 thermal coal blocks under Government dispensation route for captive
 mining to enhance indigenous coal availability.
 
 India is dependent on imports for meeting the increasing requirement of
 metallurgical coal as its indigenous availability is short, both in
 quantity and quality. International metallurgical coal market is
 controlled by few producers who regulate production to maintain high
 prices extracting large margins from steel producers. After increase of
 FOB price of metallurgical hard coking coal from US $ 128 per tonne in
 2009-10 to US $ 213 per tonne in 2010-11, it has further gone up to US
 $ 330 per tonne in the first quarter of 2011-12 reaching historic high
 and impacting returns on steel business. Further, since 2010-11, the
 suppliers have imposed quarterly pricing in place of annual pricing,
 exposing the steel producers to vagaries of market volatility too.
 
 To achieve Raw material security, import of Low Silica Limestone is now
 established and regular imports are being done so as to have cost
 advantage/alternate source. Similarly, International source of Low
 Silica Dolomite is also being identified.
 
 SALES & MARKETING REVIEW
 
 Your company achieved a total sales volume of 11.9 million tonnes
 during FY''10-11 with sales of Long products in the home market at a
 record level of 4.62 million tonnes. Exports at 0.33 million tonnes
 registered a growth of 2.3% over FY''09-10. Major categories where
 growth was recorded in the sales included: Wire Rods- 12.1%; TMT Bars-
 3.8%;
 
 Structurals- 4%; Plates >20mm- 7.1% and Railway products- 8.5%. New
 records were also set in supplies of Loco wheels and Loose Axles to
 Indian Railways during the year.
 
 - During the year 2010-11 SAIL started operations at a new Warehouse at
 Jagdishpur. With this, SAIL''s marketing network has expanded to 37
 Branch Sales Offices (BSOs), 26 Customer Contact Offices (CCOs) and 67
 Warehouses.  SAIL also expanded its dealer network by 145 numbers
 during the year. As on 1st April, 2011, SAIL has a wide network of 2653
 dealers spread over 637 districts of the country.
 
 - The company strengthened its presence in neighbouring and traditional
 markets and exported 0.33 million tonnes steel during the year. The
 main products exported were Billets, Plates, HR Coils, GC Sheets, CR
 Coils and Rails. Exports were undertaken to Syria for the first time.
 System of E- bidding was also implemented in exports during the year.
 SAIL re-entered the export market for its high quality rails after a
 gap of over 5 years and has exported rails to Sri Lanka.
 
 GROWTH PLAN
 
 Keeping in view the acceleration in demand for steel in the country,
 the company is currently implementing growth plan to enhance its Hot
 Metal capacity from the level of 13.8 million tonnes in a phased
 manner. Under the ongoing phase-I of modernization and expansion plan,
 hot metal production capacity will get expanded to 23.46 million tonnes
 by 2012-13. The growth plan, besides targeting higher production, also
 addresses the need for eliminating technological obsolescence,
 achieving energy savings, enriching product-mix, reducing pollution,
 developing mines and collieries, introducing customer centric processes
 and developing matching infrastructure facilities.
 
 To maintain its current dominance in the domestic market and to meet
 the future challenges, your company is working on a long term strategic
 plan ''Lakshya 2020'', which will steer the company towards meeting its
 strategic objectives of achieving profitability through growth and
 customer satisfaction.
 
 MODERNISATION & EXPANSION PROJECTS
 
 The modernisation & expansion plan of your company aims at taking up
 capital projects related to ''Expansion'', ''Value Addition/ Product Mix
 improvement'', ''Technological Upgradation/ Modernisation of existing
 assets'', and ''Sustenance including Debottlenecking, Additions,
 Modifications, Replacements and Environment'' related projects.
 
 The modernisation & expansion plan envisages installation of New Coke
 Oven Batteries, New Sinter Plants, New Blast Furnaces of bigger
 capacity with up-gradation of existing Blast Furnaces, New Steel
 Melting Shops / addition of Convertor in existing shop, installation of
 New Mills etc. which will increase share of finished steel in salable
 steel. Along with addition of new facilities, most of the existing
 facilities are also being up graded to enable production of value added
 steel , reduce energy consumption and for improvement in productivity,
 etc.
 
 The expansion plan is being implemented simultaneously in all the
 Plants including mines and requires matrix planning, involvement/
 coordination with a large number of agencies, prudent fund management,
 selection of right technology etc. SAIL has already initiated actions
 and progressing smoothly towards handling this vast complex task.
 
 SAIL Board accorded ''in-principle'' approval during the year for the
 Rebuilding of Coke Oven Battery No.3 and Installation of Additional
 Heat Treatment facilities at Special Plate Plant at RSP, Replacement of
 Converter Shell & its Assembly in SMS-2 at BSL, Installation of
 additional 45 MVA Sub-merged Arc Furnace at MEL with an estimated total
 outlay of around Rs. 650 crore.
 
 SAIL incurred a capital expenditure of Rs. 11,280 crore, including Rs.
 10,210 crore on modernisation and expansion plan, during 2010-11.
 Orders have been placed for about Rs. 52,750 crore under modernization
 and expansion plan of SAIL. An expenditure of Rs. 25,060 crore has been
 spent on modernisation and expansion plan of SAIL till 31st March,
 2011. Further, the capital expenditure planned to be incurred for the
 year 2011-12 is Rs. 14,337 crore including Rs. 12,642 crore for ongoing
 modernisation and expansion plan.
 
 At Salem Steel Plant, all major production facilities envisaged under
 Expansion Plan have been installed and units are now in regular
 production.
 
 For Chiria Iron Ore Mines the Forestry clearance has been accorded by
 Ministry of Environment and Forest in Feb''11 and Consultants have been
 appointed for preparation of DPR for Chiria as well as Taldih Iron Ore
 Deposits.
 
 At Bhilai Steel Plant, Up-gradation facilities under Plate Mill have
 been completed. Further, the linked facilities like Compressed Air
 Station-4 and installation of CNC Roll Grinding Machine have been
 completed. The Coke Oven Battery-6 has been re-built, in compliance
 with pollution control norms of Govt. of India and Oven Pushing has
 started in June''11.
 
 At IISCO Steel Plant, COB-10 has been re-built in Aug''10 in compliance
 with pollution control norms of Govt. of India and is in regular
 operation. Facilities like Sinter Plant, Pig Casting Machine, Main
 Receiving Station and Oxygen Plant, under expansion plan are ready for
 commissioning. Other facilities envisaged are at various stages of
 implementation.
 
 At Rourkela Steel Plant, 700 tpd Oxygen Plant and Simultaneous Blowing
 of Converters in SMS-II have been completed in Oct''10 and other
 facilities envisaged under Modernisation & Expansion Plan are at
 various stages of implementation.
 
 At Bokaro Steel Plant, Up-gradation of Blast Furnace No-2 has been
 completed in Jul''10. This will meet the enhanced Hot Metal requirement
 by the down stream facilities, post modernisation.  Further, the Coal
 Dust Injection System for BF-2 & 3 have been completed in Dec''10. This
 will lead to reduction in coke rate and improvement of the furnace
 productivity. The 2nd Ladle Furnace in SMS-II has been completed in
 Jul''10. The COB-1 & 2 which are being re-built in compliance with
 pollution control norms of Govt. of India, the Oven Pushing has been
 started in COB-1 in June''11. Other facilities under Modernization &
 Expansion Plan are at various stages of implementation.
 
 At Durgapur Steel Plant, the major packages envisaged under
 Modernisation & Expansion Plan, like, Bloom-cum-round Caster, Medium
 Structural Mill & Reheating Furnace for Medium Structural Mill, New
 Dolomite Plant, Re-building of COB-2, De- bottlenecking of Coal
 Handling Plant & Raw Material Handling Plant, Ladle Furnace, New Slag
 Yard and Civil & Structural works for Medium Structural Mill, are at
 various stages of implementation.
 
 For Raw Material Projects, in addition to mines expansion, the
 beneficiation facilities and pelletization facilities have also been
 envisaged to meet the post expansion raw material requirement.
 
 AMR SCHEMES
 
 A number of capital projects above Rs. 100 crore each are under
 implementation which include Installation of 700 T / day Air Separation
 Unit, Re-building of COB-1 & 2 at BSL; Enhancement of Loading Capacity
 at Bolani Iron Ore Mine; enhancement production capacity at Megathaburu
 Iron Ore Mines; installation of SPU at Bettiah and revival of
 Jagdishpur SAIL Unit.
 
 Projects completed/likely to be completed during 2011-12:
 
 Till date, Coke Oven Battery no.6 at Bhilai Steel Plant and Coke Oven
 Battery no.1 at Bokaro Steel Plant have been completed during the
 current financial year. The completion of these batteries will augment
 BF coke production for respective plants.  These batteries are equipped
 with state of art equipments to meet the latest emission norms of Govt
 of India.
 
 Further, 700 tpd Air Separation Unit-4 in Oxygen Plant-II at Bhilai
 Steel Plant; 7m tall Coke Oven Battery Complex, Sinter Plant - 3, 4060
 m3 Blast Furnace at Rourkela Steel Plant along with associated
 facilities; Turbo Blower-8 in Turbo Blower Station, Rebuilding of Coke
 Oven Battery - 2, New CRM complex (Major facilities) at Bokaro Steel
 Plant; Installation of one no. new 60 T Ladle furnace at Alloy Steels
 Plant; Main Receiving Station, Power and Blowing Station, Raw Material
 Handling System, Sinter Plant, Coke Oven Battery, Wire Rod Mill under
 Expansion of IISCO Steel Plant and Enhancement of Loading capacity at
 Bolani Iron Ore Mines are likely to be completed in the remaining
 period of current financial year.
 
 HUMAN RESOURCE MANAGEMENT
 
 Your company recognizes the potential of human resources in providing
 competitive advantage and considers its employees as most valuable
 resource. The company has achieved its present level of excellence
 through investing in its human resource, which are at the back of every
 activity, every technology and every innovation. Your company continues
 to work for developing capabilities and realization of best potential
 of its people.
 
 The thrust on achieving higher growth coupled with optimal utilization
 of manpower continued. The focus on improving productivity and adoption
 of best practices in every area was relentlessly pursued. Efforts for
 active participation by employees, implanting a conducive ambience for
 exhibiting creativity and innovation by employees and ensuring a
 climate that reflects synergy and contagious enthusiasm has been at the
 core of HR initiatives and interventions. Strategic alignment of HRM to
 business priorities and objectives facilitated steps for ensuring a
 smooth transition for upcoming new facilities in the modernization and
 expansion projects.
 
 Enhanced Productivity with Rationalized Manpower
 
 SAIL achieved its highest ever labour productivity of 241 T/man/ year
 in 2010-11 with all the five integrated steel plants recording their
 best ever labour productivity for the year. During 2010-11, the
 manpower of SAIL reached a level of 110794 (as on 31.3.2011) from
 116950 (as on 1.4.2010), thereby achieving rationalization of 6156. The
 enhanced productivity with rationalized manpower could be achieved as a
 result of judicious recruitments, correct deployment and redeployment
 strategies, multi-skilling and zeal of employees to go beyond and
 excel.
 
 Developing Employee Capabilities & Competencies
 
 In order to develop its human resources for harnessing their potential
 to the fullest and for according ample opportunity for realizing
 individual as well as organizational goals, company has been making
 sustained efforts through various training and development activities
 with focus on preservation of skills, transfer of skills and knowledge,
 training in specialized/advanced skills and technology in collaboration
 with reputed organizations and development of effective managerial
 competencies through association with premier institutes. Preparing
 employees for tomorrow, for effectively taking up challenges and
 discharging new roles and responsibilities was given a major thrust.
 Overall, 84973 employees were trained during the year on various
 contemporary technical and managerial modules. SAIL once again achieved
 level -I of performance evaluation parameter under MoU with Government
 of India for the financial year 2010-11.
 
 Harmonious Employee Relations
 
 SAIL prides itself in having a glorious tradition of conducive employee
 relations scenario marked by industrial harmony. The various
 participative forums functioning at different levels within your
 company have ensured employee''s involvement with the business
 priorities while implanting an organizational climate high on
 motivation and mutual trust.
 
 The VIIIth NJCS Agreement for wage revision of non executive employees
 was signed on 29th April, 2010. The agreement is for a period of five
 years w.e.f. 1.1.2007. Company''s resolve to implant performance
 orientation amongst employees was further strengthened with the
 implementation of concept of Performance Related pay (PRP) for
 executives for the first time for the year 2007-08, 2008-09 and
 2009-10. Payments under the said PRP scheme have been linked to the
 profitability of company with physical and financial performance of
 Company and Unit as well as individual performance as per DPE
 guidelines.
 
 Effective Grievance Redressal Mechanism
 
 Effective internal grievance redressal machinery exists in SAIL plants
 and units, both for executives and non-executives. The grievance
 procedure characterized by three stages in SAIL has evolved after
 sustained deliberations and consent of employees, trade unions and
 associations and has been effective in addressing concerns relating to
 service conditions, wage, work assignments and welfare amenities etc.
 Majority of grievances are redressed informally in view of the
 participative nature of environment existing in the steel plants. The
 system is comprehensive, simple and flexible and has promoted
 harmonious relationship between employees and management.  SAIL
 disposed off 3474 employees'' grievances during 2010-11.
 
 Initiatives for Socio-economic development of SCs/STs & Other Weaker
 Sections
 
 Presidential Directives on Reservation for Scheduled Castes and
 Scheduled Tribes in Appointments in Public Enterprises have been
 meticulously followed. As on 31st March, 2011, out of total manpower,
 15.58% were SC and 12.98% were ST. During the year 2010, out of total
 recruitments of 1543 made by SAIL, 238 belonged to SC category and 170
 belonged to ST category. SAIL continued to invest resources and
 contribute towards the overall development of civic, medical,
 educational and other facilities in the economically backward regions
 of the country where SAIL steel plants and mines are located and which
 are predominantly inhabited by SC/ST population.
 
 SAIL has undertaken several initiatives for the socio-economic
 development of SCs/STs and other weaker sections of the society which
 are mainly as under:
 
 Special School started exclusively for poor, underprivileged children
 at five integrated steel plant locations which provide for free
 education, mid-day meals and uniform including shoes, text books,
 stationery items, school bag, water bottles and transportation in some
 cases. The schools now provide education to around 1400 children.
 
 SAIL plants have also adopted over 245 SC/ST students belonging to BPL
 families/ primitive tribes. They are being provided free education,
 boarding, lodging and medical facilities for their overall growth. No
 tuition fee is charged from SC/ST students studying in the company run
 schools, whether they are SAIL employees'' wards or non-employees''
 wards. Scholarships are also awarded to Meritorious and deserving SC/ST
 wards of employees as well as non-employees.
 
 IMPLEMENTATION OF RTI ACT, 2005
 
 SAIL has implemented Right to Information Act, 2005 which empowers the
 common citizen by providing access to information with a view to
 maintain accountability and transparency. SAIL has always endeavoured
 to ensure that various enabling provisions of the RTI Act,2005 are
 implemented in letter and spirit. The manual of 17 items, details of
 Appellate Authority, Public Information Officer, Assistant Public
 Information Officer have been updated and hosted on SAIL website. A
 total of 3639 applications were received under RTI Act,2005 in SAIL
 during the financial year 2010-11, all of which have been disposed off
 within the stipulated timeline under the Act. SAIL has also organized
 Workshop on Obligation of Public Authorities under RTI and conducted
 several programmes for spreading awareness.
 
 AWARDS AND ACCOLADES
 
 The excellent performance of company as well as that of employees won
 laurels and appreciation from several quarters during the year 2010-11.
 SAIL employees continued to win maximum number of Prime Minister''s
 Shram Awards and Vishwakarma Rashtriya Puraskar declared by Govt. of
 India which recognizes the creativity and innovative abilities of our
 employees. Employees of SAIL once again proved their mettle.  Of the 33
 Prime Minister''s Shram Awards announced for 2010 by the Ministry of
 Labour, Government of India, 17 of which went to PSUs, SAIL employees
 bagged 11 awards. Of the total number of 76 awardees for the year, 45
 belong to SAIL - a remarkable distinction for any organisation. Adding
 to SAIL''s jubilation, all the 7 Shram Vir/ Veerangana Awards announced
 in the PSU category have been bagged by its employees. Out of a total
 128 awardees who have won the prestigious Vishwakarma Rashtriya
 Puraskar (VRP), 74 are from SAIL. The 15 out of 28 awards won by SAIL
 went to our 74 employees for the performance year 2008, once again
 establishing the zeal of our employees to excel with their creativity.
 SAIL employees in the International Convention on Quality Concept
 Circles-2010 held at Hyderabad bagged 18 gold, 6 silver and 2 bronze
 awards. In addition, SAIL employees also had a rich haul of awards in
 the 24th National convention on Quality Concepts (NCQC 2010) held at
 Visakhapattnam.
 
 Organisational excellence of SAIL garnered recognition and accolades at
 various prestigious forums. Some of the notable awards won by SAIL are
 SCOPE Meritorious Awards for Environment Excellence and Sustainable
 Development for 2009- 10, and Corporate Social Responsibility for
 2008-09, Asia Best Employer Award for ''continuous innovation in HR
 Strategies at work'', PSU Excellence Awards 2010 for Best Human
 Resource Management and Research & Development, Technology
 Development & Innovation by Indian Chamber of Commerce, India Pride
 Award under Metals and Minerals & Trade Award Category, Trail blazer
 leader of the year at Global HR Excellence Awards 2010-11 and
 Wockhardt Shining Star CSR Award in the Iron & Steel sector category,
 to name a few.
 
 SAIL''s efforts in promoting use of Rajbhasha have been recognized in
 the form of 1st prize at Town level by TOLIC for
 
 best official language implementation by Govt. of India. ''Rashtriya
 Rajbhasha Shield'' was also awarded to SAIL for best official language
 implementation by Rashtriya Hindi Academy. The in- house Hindi journal
 of SAIL, Ispat Bhasha Bharati bagged the 1st prize at national level.
 
 SAIL Plants/Units have also excelled in various areas and have won
 awards for their performance, salient ones are listed as under:
 
 - BSP was awarded the CII Sustainability Award-2010 under independent
 unit category for performance year 2009-10 from CII-ITC in recognition
 of Excellent performance in the various areas of economic,
 environmental and social activities.
 
 - BSP was recognized by Greentech Foundation in the form of Greentech
 Safety Gold Award-2010, Greentech HR Excellence Award & Greentech
 Environment Excellence Platinum Award in Metal & Mining Sector.
 
 - BSP has won INSSAN Award from INSSAN Eastern India Chapter, in
 recognition of Excellence in Suggestion Scheme besides winning the
 Golden peacock eco- innovation award- 2010 for installation of energy
 efficient curtain flame burners in SP-2 for the year 2009-10 by World
 Environment Foundation.
 
 - DSP bagged the INSSAN Award for the year 2009-10 from INSSAN
 Northern Region Chapter, in recognition of effective implementation of
 suggestion scheme. It also won the Greentech Safety Award for the
 year 2008-09 Greentech HR Excellence Award for the year 2009
 ,Greentech HR Excellence Award for young Managers for the year 2009 &
 Greentech Environment Excellence Award for the year 2009 from
 Greentech Foundation.
 
 DSP was awarded the Rajiv Gandhi National Quality Award for the year
 2008-09 by Bureau of Indian Standards, New Delhi and Golden Peacock
 National Training Award for the year 2009-10 by Institute of
 Directors, New Delhi besides winning the Safety Innovation Award for
 the year 2009 by Institution of Engineers.
 
 RSP was conferred with Greentech Environment Excellence Gold
 Award-2009 for the year 2008-09 from Greentech Foundation in
 recognition of Excellence in Environment Management and also won the
 Shrishti Good Green Governance Award-2009 for the year 2009-10 in
 recognition of Excellence in Innovative Management of Environment.
 
 BSL''s improvement in productivity was recognized by CII
 (ER)Productivity Award as HSM Group of BSL bagged the 1st position and
 CCS won the 2nd position.
 
 BSL team won the national competition for Business Management
 Simulation by All India Management Association at ''AIMA National
 Management Games-2010''.  Team from BSL also won the Rs.AIMA National
 Management Quiz-2010 - Northern Zone Championship'' for the year 2010.
 
 - SSP made SAIL proud by winning the Greentech Safety Award - Gold
 for Best Safety Performance and Outstanding Contribution Award for
 the year 2010 from Quality Circle Forum of India (QCFI), Chennai
 Chapter.
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 SAIL as a corporate entity is fully aware of the obligation that it has
 towards planet earth, the country and the society. CSR in SAIL has
 enlarged the ambit of work being done earlier under Peripheral
 Development. In addition to Health, Education and development of
 Infrastructure, SAIL has focused on ensuring sustainable development
 and equitable growth. Credo of SAIL specifically highlights the
 commitment towards society at large which states inter-alia Make a
 meaningful difference in people''s lives.
 
 To meet the above objective, Corporate Social Responsibility (CSR)
 Groups have been formed at Corporate level and Plants/ Units in SAIL.
 As a matter of policy, the Budget allocated for Corporate Social
 Responsibility [CSR] is 2% of budgeted distributable surplus (after
 Dividend and Dividend Tax).
 
 CSR activities of SAIL are focused in the areas of Health & Medical
 care, Education, Access to potable water, Connectivity / roads, Income
 generation through Self Help Groups (SHGs) etc. These services to
 society are provided by SAIL through specific and targeted
 interventions like Health Camps, special drives, exclusive
 infrastructure for the underprivileged etc.
 
 Company also focused on Income Generating Schemes (through
 
 Self Help Groups), Education & Health issues. SAIL is working for
 establishing a Technical University at Bhilai, Chattisgarh.  Besides
 these, Special Schools have been started exclusively for poor,
 underprivileged children at five integrated steel plant locations viz
 Bhilai, Durgapur, Rourkela, Bokaro & Burnpur. The facilities provided
 in these schools include free education, mid- day meals, uniform,
 stationary items, school bags etc. A number of benefits are being
 provided to the children from SC/ST communities, such as scholarships
 to deserving SC/ST undergraduate engineering students and adoption of
 225 tribal children at Bhilai for providing free education, boarding
 and lodging facilities, etc. More than 25000 children studying in
 schools in and around Bhilai are provided mid-day meals in association
 with Akshay Patra Foundation.
 
 In the field of health care, free medical health centres have been set
 up exclusively for the underprivileged at Bhilai, Durgapur, Bokaro,
 Rourkela, Burnpur which provided free medical consultation, medicines,
 immunisation etc. Over 3800 camps were organised in 2010-11,
 benefitting around 2.64 lakh people.  24 number of Ambulances etc. were
 provided to various NGOs like HelpAge India, Bharat Sewashram Sangha,
 Anugraha Drishtidaan etc in 2010-11.
 
 SAIL''s role as a responsible corporate citizen in nation building has
 been appreciated at various forums in the form of prestigious awards,
 honours and accolades. SAIL was conferred with India Shining Star CSR
 Award-2010 by Wockhardt Foundation in the Iron & Steel Category,
 SCOPE Meritorious Award for Corporate Social Responsibility &
 Responsiveness for the year 2008-09, Annual FICCI Awards 2008-09 in
 the category of The Vision Corporate Triple Impact - Business
 Performance : Social & Environmental Action and Globalisation Award,
 CSR Award of the Ministry of Rural Development, Government of India;
 Golden Peacock Award - 2008, 2009 & 2008-09 for CSR to Bhilai
 
 Steel Plant of SAIL ; CSR Award of Tamil Nadu Government to Salem Steel
 Plant for the year 2008-09 etc.
 
 CITIZEN CHARTER
 
 SAIL''s Citizen Charter has outlined commitment of SAIL towards its
 stakeholders thereby empowering them to demand better products and
 services. The Citizen''s Charter of SAIL may be summarised in four
 objectives, as given below:
 
 - Ensuring citizen-centric focus across all its processes by adopting
 Total Quality Management principles for improvement of products and
 services
 
 - Ensuring effective citizen communication channels
 
 - Demonstrating transparency and openness of its business operations by
 hosting the Citizen''s Charter on the corporate web site
 
 - Working towards delight of citizens by fail-safe processes and in
 case of exigencies leveraging its service recovery processes, like
 Grievance Redressal, Handling Complaints etc.
 
 The Management of SAIL is totally committed to excellence in public
 service delivery through good governance by a laid down process of
 identifying citizens, our commitment to them in meeting their
 expectations and our communication to them of our key policies in order
 to make the service delivery process more effective. The Citizen
 Charter is a dynamic commitment which is reviewed continually to
 improve the effectiveness of the document.
 
 STRATEGIC INITIATIVES OF THE COMPANY
 
 During the year 2010-11, your company continued its focus towards
 taking new business initiatives including incorporation / formation of
 new JVs, mergers & acquisitions and entering into Memorandum of
 Understandings (MOUs) for its long term strategic objectives. Your
 company has established communication channels with renowned
 international technology providers for forging strategic alliances in
 production of value added products. Your company is continuously
 adopting the path of entering into Joint Ventures (JV) with public /
 private parties to attain its strategic goals of maximizing gains with
 optimal utilization of resources. These include:
 
 (a) Merger & Acquisitions (M&A) :
 
 (i) Merger of Maharashtra Elecktosmelt Limited (MEL) with SAIL: The
 approval of the shareholders for the Scheme of Amalgamation of
 Maharashtra Elektrosmelt Limited (MEL) was obtained in a meeting held
 on 30th September, 2010. Subsequently a petition was submitted to the
 Ministry of Corporate Affairs (MCA) for sanctioning the scheme of
 amalgamation of MEL with SAIL. The Ministry of Corporate Affairs (MCA),
 New Delhi vide its letter dated 14.6.2011 has forwarded the Order of
 the Central Government sanctioning the scheme of amalgamation of
 Maharashtra Elektrosmelt Limited (MEL) with Steel Authority of India
 Limited (SAIL) under Section 391-394 of the Companies Act, 1956. The
 appointed date of amalgamation is 1.4.2010. MEL has now become a unit
 of SAIL and it has been renamed as Chandrapur Ferro Alloy Plant.
 
 (ii) Transfer of Salem Refractory Unit of Burn Standard Company Limited
 to SAIL: Cabinet Committee on Economic Affairs (CCEA) in June''10
 approved transfer of Refractory Unit of BSCL at Salem and authorized
 Ministry of Steel (MoS) and Department of Heavy Industries (DHI) to
 work out operational steps for transfer of Refractory Unit of BSCL at
 Salem in consultation with Ministry of Corporate Affairs (MCA). The
 outstanding issues for the take over are being worked out by DHI before
 operationalization of CCEA decision.
 
 (b) Joint Ventures:
 
 (i) After signing an MOU with M/s RITES for undertaking a feasibility
 study for setting up the Wagon Manufacturing Factory in Joint Venture,
 a Joint Venture Company SAIL RITES Bengal Wagon Industry Pvt. Ltd.
 has been incorporated in Decmber''2010. The work on the newly
 incorporated JV Company between SAIL and RITES has already commenced.
 The unit will have the capacity to manufacture 1500 wagons per annum
 (manufacture of 1200 wagons and rehabilitation of 300 wagons) which
 will include BOXN-type wagons, specialized high-end wagons and modern
 stainless steel wagons.
 
 (ii) SAIL has formally acquired 50% of the shares held by the
 Government of Kerala (GoK) in Steel Complex Limited (SCL), Kozhikode
 and taken over the operations of SCL on 13th February ''11. SAIL-SCL
 Limited, the joint venture company resulting from the acquisition, will
 work towards the revival of SCL. The JV is in line with the
 Government''s policy of bringing together synergies of PSUs and
 strengthening them to be competitive in the market.
 
 (c) Strategic Alliances:
 
 (i) SAIL is simultaneously jointly working with Kobe Steel Limited
 [KSL], a renowned Japanese Steel maker, for ascertaining the
 feasibility of using ITmK3 technology [Iron Making Technology Mark
 Three] developed by KSL for producing premium grade iron in the form of
 nuggets using iron ore fines and non-coking coal. The annual production
 capacity of ITmk3 Plant is envisaged to be around 0.5 million tonnes to
 produce premium grade Iron nuggets. The pre-feasibility report is in
 the final stages of completion.
 
 (ii) SAIL and M/s Burn Standard Company Limited (BSCL), a PSU under the
 charge of Ministry of Railways signed an MOU for setting up a factory
 which will manufacture cast steel bogies, couplers and other related
 products.  The unit will come up in approximately 128 acres of
 leasehold land under the possession of M/s BSCL at Jellingham, West
 Bengal. Railways will provide an average assured off-take of 5,000
 bogies and equal number of couplers per annum for a period of ten
 years.
 
 (iii) Hajigak Iron Ore Deposits Owned by Government of Afghanistan:
 Your company has been short-listed along with 21 other companies (13
 Indian companies) for the bidding process of multiple exploration
 concessions of Hajigak Iron Ore Deposits invited by Islamic Republic of
 Afghanistan, Ministry of Mines. SAIL has formed a consortium with five
 other companies for Joint Bidding.
 
 (iv) Expansion of Captive Power Plants of SAIL: SAIL is planning to
 expand the captive power generating capacity at BSP and RSP through its
 Joint Venture with NTPC by installing 2x250 MW Units at BSP and 1x250
 MW Units at RSP. NSPCL is conducting feasibility studies for these
 power projects and has applied for various statutory clearances like
 Environment Clearance and allocation of coal and water.
 
 (v) Installation of Renewable Energy Based Power Plants: In line with
 policy framework provided by Electricity Act, 2003 and National
 Electricity Policy, Electricity regulatory Commissions of various
 states which mandates all users of captive power generation to either
 purchase / generate a specified minimum percentage of captive power
 generated from renewable energy sources (Solar, Bio Mass, Wind , Small
 Hydro etc). A long term strategy to meet renewable energy purchase
 Obligation has been worked out and options are being evaluated for
 installing Captive Power generation based on renewable energy sources.
 
 (d) Memorandum of Understanding [MoU]/Commercial Agreements entered
 into with various companies:
 
 (i) MoU signed with Kobe Steel Ltd. of Japan for comprehensive
 strategic collaboration producing high value products. Discussions are
 ongoing with M/s Kobe Steel Ltd. for a steel plant at Jagdishpur which
 shall utilize technology of Direct Reduced Iron making (Gas based) and
 Electric Arc Furnace steel making for manufacture of value added
 products.
 
 (ii) SAIL and M/s Severstal have agreed to work jointly on Operational
 Benchmarking. This would open opportunities in areas of productivity
 improvement, energy efficiency and other collaborative research.
 
 (iii) MoU signed with IRCON International Limited, a PSU under the
 Ministry of Railways for jointly working on rail infrastructure
 projects both in India and abroad.
 
 (iv) Another MoU signed with Hindustan Prefab Limited (HPL), a PSU
 under the Ministry of Housing & Urban Poverty Alleviation, for carrying
 out business of prefabricated structures in steel and cement. Actions
 have already been initiated in this regard for forming a joint venture
 company which may undertake study in the prefabricated structures in
 steel and cement.  INSDAG has been appointed as a Consultant for
 undertaking pre-feasibility study which will be completed by June''11.
 
 IT RELATED INITIATIVES
 
 SAIL has been moving ahead in innovative usage of Information
 Technology (IT). Enterprise Resource Planning (ERP) is being
 implemented in the company. After implementation of ERP in BSP, DSP,
 BSL and CMO, its implementation is in progress at RSP.
 
 Keeping pace with the technological trend in the field of IT
 communications, SAIL has installed & commissioned layer 3 distributed
 Local area network along with Wi-Fi connectivity with latest network
 security systems. Also a secure internet connectivity of 8 Mbps
 bandwidth through optical fiber has been commissioned at Corporate
 Office in SAIL.
 
 In house software implementations includes: a) online system for filing
 of Annual Immovable Property Return by executives of SAIL, b) system
 for ''Balanced Score Card'' for GMs and EDs of SAIL, c) system to view
 SAIL manpower details, labour productivity and award details .
 
 ENTERPRISE SCORE CARD
 
 For the first time in your company, Balanced Scorecard system has been
 introduced for evaluation/appraisal of performance management and
 strategy deployment. The Balanced Scorecard initiative was launched in
 August, 2010, and after deliberations by the top management in the
 Annual Business Plan meeting in March''11, Enterprise Scorecard of the
 company has been framed. Based on the Enterprise Scorecard, exercise
 for preparation of Unit Scorecard and Individual Scorecards up to the
 rank of Executive Directors and General Managers is being undertaken.
 
 An IT portal has been launched under the name BUSINESS EXCELLENCE
 where areas like Scorecards, Excellence, TQM, Articles and On- line
 QUIZ are uploaded for enhancing awareness amongst the employees.
 
 ENVIRONMENT MANAGEMENT
 
 Corporate Environmental policy of SAIL emphasizes on conducting our
 operations in an environmentally responsible manner to comply with
 applicable regulations and striving to go beyond. SAIL plants have
 attained improvement in major environmental parameters by continuous
 efforts :
 
 PM emission load has reduced from 2.3 kg/ tcs in 06-07 to 1.11 kg/tcs
 in 2010-11, a reduction of 52% in the last 5 years.
 
 Specific effluent discharge from SAIL Plants has reduced to 2.49m3/tfs
 in 2010-11; a reduction of around 9% over the last 5 years.
 
 - Specific Water Consumption of 4.06 m3/tcs was achieved in 2010-11; a
 reduction of 11% in the last 5 years.
 
 - Kuteswar Limestone Mines was accredited to ISO 14001.
 
 - Over 1.7 lakh saplings were planted in plants and mines during
 2010-11.
 
 CORPORATE COMMUNICATION
 
 Communication, both internal and external, plays a pivotal role in
 keeping us well connected to our stakeholders and in brand building
 exercises of organization. We have upheld the confidence of our
 stakeholders by proactively sharing organization''s achievement,
 utilizing the media optimally and innovatively. SAIL, a Maharatna
 Company has continually taken diverse initiatives in communication
 strategies to increase its brand visibility and highlight the brand
 SAIL. The approach for external communication included dynamic media
 interaction with print, electronic & online media through:
 
 - Structured press conferences & press interactions.
 
 - Chairman''s interview on organization''s expansion & modernization
 targets, future strategies including joint ventures.
 
 - Sustained communication with media for ensuring publication of press
 releases.
 
 - Outdoor publicity modes of hoardings, banners, posters, ad clips
 reinforced our existing image building exercise.
 
 - Ensured publication of advertisements in major dailies.
 
 - Maintenance of an updated SAIL website which features our current
 accomplishments, production record, overview of all units, major
 information.
 
 - Newsletters, printed folders, brochures, annual report.
 
 The company lays great emphasis on keeping the employees informed about
 the strategies being adopted for growth and future of the organization.
 Publication of in-house journals like SAIL News & other journals, daily
 telecast of news bulletins in various Plants - DSP, RSP & BSL, short
 films & documentaries on Units /Plants are some of the regular modes of
 information & interaction. SAIL sponsored CWG medal winners'' wrestler
 Sushil Kumar, Yogeshwar Dutt and shooter Deepak Sharma who bagged gold
 and silver respectively were felicitated by Steel Minister. Asian Tour
 level Golf tournament organized for 4th consecutive year in March 2011
 which saw participation of many international players from various
 countries.
 
 VIGILANCE ACTIVITIES
 
 SAIL Vigilance is laying emphasis on preventive and proactive
 activities to facilitate a conducive environment for enabling people to
 work with integrity, impartiality and efficiency, in a fair and
 transparent manner, upholding highest ethical standards to enhance
 reputation and create value for the organization.
 
 SAIL Vigilance has undertaken the following major activities during the
 year:
 
 With a view to increase transparency and competition in commercial
 areas, Vigilance has initiated process for review of guidelines like
 manuals for Handling / Contract and Consignment Agency Contracts of
 Central Marketing Organization (CMO).
 
 To enhance awareness amongst employees, vigilance awareness sessions
 and workshops on systems and procedures followed in SAIL were regularly
 held at the various plants and units. A total of 123 such workshops
 involving 2923 participants were held on Purchase/Contract Procedures,
 Conduct & Discipline Rules, RTI Act etc. This also included special
 programme on Purchase Contract Procedure including case studies
 conducted for executives of SAIL Refractory Unit (SRU) (erstwhile
 Bharat Refractory Limited).
 
 A total of 4008 periodic checks, including surprise checks and the file
 scrutiny were conducted in the vulnerable areas / departments of
 different Plants & Units. Further, 13 major system improvement projects
 were undertaken by SAIL Vigilance over and above the system
 improvements recommended on the basis of vigilance investigations and
 checks. Vigilance measures have resulted in savings to the tune of Rs.
 1429.05 lacs during the year.  Savings of Rs. 1743 lacs approx. accrued
 from Vigilance measures during the period April 2010 to March 2011.
 
 For effective implementation of the Integrity Pact, review meetings
 were conducted periodically with the Independent External Monitors
 (IEMs). Based on the recommendations of IEMs, the threshold value for
 implementing Integrity Pact for tenders / contracts/ long term
 agreements has been reduced from Rs. 50 crore to Rs. 20 crore to cover more
 such contracts/ tenders under the ambit of Integrity Pact.
 
 As a step towards addressing the issue of corruption at grass roots
 level by reinforcing ethical values in society, a pilot project has
 been launched in the schools at Bhilai to inculcate ethics amongst
 children in their formative stage. It is envisaged to emulate the
 project at schools of other plant locations as well.
 
 The Results Framework Document (RFD), a tool for monitoring and
 evaluating performance, has been implemented in Vigilance for
 monitoring key activities such as System Improvement Projects,
 Intensive Examinations and Thrust Areas identified for Vigilance.
 Implementation of the RFD will enable timely completion of these
 activities and facilitate realization of envisaged benefits.
 
 Various initiatives have been undertaken by SAIL Vigilance to enhance
 leveraging of technology in vigilance functions. These include making
 provision for on-line submission of Property Returns, generating
 on-line vigilance status, augmentation of on-line submission of
 management information system reports by vigilance departments of
 plants / units of SAIL etc.
 
 SAIL vigilance manual published in 2003 has been revised to include
 latest CVC guidelines / circulars etc. The revised version has been
 published as SAIL Vigilance Manual 2011.
 
 CONSULTANCY SERVICES
 
 Based on its large and varied expertise and experience acquired over
 the last five decades, SAIL, through its Consultancy Division
 (SAILCON), the single window provider of design, engineering, training,
 technical & management consultancy services in Iron & Steel and related
 areas, offers a wide range of services to clients globally.
 
 During the year, SAILCON laid enhanced focus on taking up training
 assignments for some leading organizations in the area of Steel making,
 thereby strengthening the knowledge base of personnel associated with
 Steel Industry.
 
 SAILCON is providing consultancy services to UNDP/GEF, Project
 Management Cell, Ministry of Steel for energy efficiency and
 productivity improvement in Steel re-rolling mills.  Consultancy is
 also being extended for setting up of Power Plants, based on waste heat
 recovery from the flue gases released out of Blast Furnace and
 non-recovery type of Coke Oven batteries, as an environment friendly
 measure and as a step to combat global warming.
 
 So far, SAILCON has served clients in Egypt, Saudi Arabia, Iran, Qatar,
 Bangladesh, Oman, Philippine, Nepal, Taiwan, Thailand, Georgia,
 Azerbaijan and Nigeria. This is besides the long list of Indian clients
 for whom SAILCON has extended a wide range of consultancy services.
 
 MANAGEMENT DISCUSSION & ANALYSIS REPORT
 
 The Management Discussion & Analysis Report covering the performance
 and outlook of the Company is enclosed.
 
 AUDITORS'' REPORT
 
 The Statutory Auditors'' Report on the Accounts of the Company for the
 financial year ended 31st March, 2011 along with Management''s replies
 thereon is enclosed at Annexure-I. The Comptroller & Auditor General of
 India (C&AG) vide its letter dated 26th July, 2011 has given ''nil''
 comments on the accounts of the company for the year ended 31st March,
 2011, under Section 619 (4) of the Companies Act, 1956. A copy of the
 above letter of C&AG is enclosed at Annexure - II.
 
 REPORT ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, ETC.
 
 Information in accordance with the provisions of Section 217(1)(e) of
 the Companies Act, 1956 read with the Companies (Disclosure of
 Particulars in the Report of Board of Directors) Rules, 1988 regarding
 Conservation of Energy, Technology Absorption and Foreign Exchange
 Earnings and Outgo is given at Annexure-III to this report.
 
 PARTICULARS OF EMPLOYEES
 
 There was no employee of the company who received remuneration in
 excess of the limits prescribed under Section 217(2A) of the Companies
 Act, 1956 read with the Companies (Particulars of Employees) Rules,
 1975.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, it is hereby
 confirmed:
 
 (i) that in the preparation of the annual accounts, the applicable
 accounting standards had been followed along with proper explanation
 relating to material departures;
 
 (ii) that the directors had 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 and of the
 profit or loss of the company for that period;
 
 (iii) that the directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Act for safeguarding the assets of the company and
 for preventing and detecting fraud and other irregularities;
 
 (iv) that the directors had prepared the annual accounts on a going
 concern basis.
 
 CORPORATE GOVERNANCE
 
 In terms of listing agreement with the Stock Exchanges, a compliance
 report on Corporate Governance is given at Annexure-IV. A certificate
 from Auditors of the company regarding compliance of conditions of
 Corporate Governance is placed at Annexure-V. In terms of Listing
 Agreement, the Board has laid down a Code of Conduct for all Board
 Members and Senior Management of the company. The Code of Conduct has
 been posted on the website of the company. All the Board Members and
 Senior Management Personnel have affirmed compliance with the code.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 In terms of listing agreement with the Stock Exchanges, the duly
 audited consolidated financial statements are placed at Annexure-VI.
 
 SUBSIDIARY
 
 The Maharashtra Elektrosmelt Limited (MEL) recorded a turnover of Rs.
 395.70 crore. The Net Profit after Tax (PAT) for the year was Rs.40.18
 crore after charging depreciation of Rs.2.58 crore, interest/ finance
 charges of Rs.0.28 crore and tax of Rs.12.59 crore. MEL produced 88904
 tonnes of High Carbon Ferro Manganese and 21784 tonnes of Silico
 Manganese during the year. MEL has since been amalgamated with SAIL,
 the appointed date of amalgamation being 1.4.2010.
 
 IISCO-Ujjain Pipe & Foundary Company Limited, a wholly owned subsidiary
 of the erstwhile Indian Iron & Steel Company Limited (IISCO), was
 ordered to be wound up by BIFR. The Official Liquidator is continuing
 its liquidation process. The assets of the Company have been realized
 and the settlement of claims is in process.
 
 DIRECTORS
 
 Shri V.K. Gulhati, Director (Technical) ceased to be Director w.e.f.
 31.08.2010 on attaining the age of superannuation.
 
 Shri S.N. Singh, MD, RSP, Shri P.K. Bajaj, MD, DSP and Shri S.S.
 Mohanty, MD, BSL ceased to be Directors w.e.f. 28.10.2010 on
 rightsizing of SAIL Board.
 
 Shri S.S. Ahmed, Director (Commercial) ceased to be Director w.e.f.
 31.10.2010 on attaining the age of superannuation.
 
 Shri Shuman Mukherjee, Director (Commercial) has been appointed as
 Director w.e.f. 23.12.2010.
 
 Shri P.K. Sengupta and Shri PC. Jha have been appointed as Directors
 w.e.f. 13.01.2011.
 
 Shri G. Elias, Joint Secretary, Ministry of Steel has resigned from the
 Directorship of the Company w.e.f. 20.01.2011.
 
 Shri Upendra Prasad Singh, Joint Secretary, Ministry of Steel has been
 appointed as Director of the Company w.e.f. 4.5.2011
 
 ACKNOWLEDGEMENT
 
 The Board of Directors wish to place on record their appreciation for
 the support and cooperation extended by every member of the SAIL
 family. The Directors are thankful to the State Governments,
 Electricity Boards, Railways, Banks, Suppliers, Customers and
 Shareholders for their continued cooperation.  The Directors also wish
 to acknowledge the continued support and guidance received from the
 different wings of the Government of India, particularly from the
 Ministry of Steel.
 
 For and on behalf of the Board of Directors
 
 (C.S. Verma)
 Chairman
 
 New Delhi
 
 Dated: 5th August, 2011