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Production for Asia was 897.9 million tonnes of crude Steel in 2010, an increase of 11.6%compared to 2009. Its share of world Steel production decreased to 63.5% in 2010 from 65.5%in 2009. China’s crude Steel production in 2010 reached 626.7 Mt, an increase of 9.3% over 2009.China’s share of world crude Steel production declined from 46.7% in 2009 to 44.3% in 2010. Japanproduced 109.6 Mt in 2010, 25.2% higher than 2009. In 2010, South Korea’s crude Steel productionwas 58.5 Mt, a 20.3% growth compared to 2009. India increased its annual production by 6.4% tonearly 67 million tonnes.Iron Ore Market:The demand for Iron Ore continued to improve during the first half of 2010 with rebounding ofglobal economy from middle of 2009. With main stream Countries embarking on many infrastructuralprojects, the demand for Steel went up resulting in improved demand for Iron Ore.The total Iron Ore production during 2010 was around 1,851 Mt, an increase of about 15.4%over 2009 production of 1,603 Mt. This is also a new record for global Iron Ore production.Australia with a production of 433 Mt of Iron Ore stood first, Brazil occupied the second spotwith a production of 398 Mt followed by China and India with production of 359 Mt and 231.5 Mt(estimated) respectively. Above four major Iron Ore producing Countries accounted for 76.8% oftotal Iron Ore produced globally during 2010.Year 2010 witnessed shifting of Iron Ore pricing system from 40 year old Annual Bench MarkPricing System to Quarterly Pricing Mechanism. This has induced a new element of volatility to themarket.Current Scenario on Indian Iron and Steel Market :14During 2010, India produced about 231.5 Mt (Estimated) of Iron Ore out of which about 117 Mt(Estimated) of Iron Ore was exported. This figure is likely to come down in 2011 due to restrictionsimposed by Government of Karnataka on export of Iron Ore. Karnataka accounts for 35 to 40 % ofIron Ore exported from India. Also in order to discourage Iron Ore exports, Government of Indiaimposed export duty of 20% on Iron Ore fines & lumps. However, the export duty of 15 % whichwas levied on Iron Ore Pellets was withdrawn as Iron Ore Pellet is a value added product.I take this opportunity to thank the Ministry of Steel and Govt. of India for the same. Theremoval of export duty on Pellets would improve the profitability and the turnover of your Companyin the coming years.Usage of Pellets in Steel making is increasing due to, decline in availability of good quality IronOre lumps & also to adhere to stringent pollution norms put in place by various governments. GlobalPellet production capacity was around 380 million tonnes during 2009 is expected to cross 500 milliontonnes by the end of 2011. Vale the biggest producer of Iron Ore Pellets is continuously increasingPellet production capacity by setting up plants near to markets to cover total global demand.India the third biggest exporter of Iron Ore is also increasing the Pellet production capacitycontinuously to utilize low grade Iron Ore and to meet the increased demand. The Pellet capacity
Chairman's Statement (Contd.)in India is expected to touch 50 million tonnes by the end of 2012. Most of the plants are coming upin Karnataka and Orissa where low grade fines are available abundantly with good water supply andlogistics. But the cost of production in India is higher due to high energy costs, due to which IndianPellet manufactures are in a disadvantageous position. However removal of export duty on Pellets byconsidering it as a value added product has provided some relief to Pellet producers.Future Outlook:The outlook of year 2011 has been positive. Year 2010 saw a steady recovery of Steel demandwhich began in the second half of 2009 driven by stimulus packages globally, the resilience of emergingeconomies and an overall market recovery. In 2011, a further growth of 5.9% in world Steel demandis expected.The short range outlook published by World Steel predicts that the Steel use in the developedworld will still be at 14% below the 2007 level whereas in the emerging and developing economies,it will be 38% above. In 2012, the emerging and developing economies will account for 72% of worldSteel demand in contrast to 61% in 2007.Chinese economy is likely to maintain its growth at around 9%. China’s Ministry of Housingand Urban-Rural Development (MOHURD) has raised its construction target of affordable housingto 10 million units in 2011. However, series of measures have been initiated by Chinese Governmentto discourage high energy consuming Steel mills from operating. This may act as a dampener to thedemand for Iron Ore. Shifting from annual bench mark pricing mechanism to quarterly pricing systemhas already infused some amount of volatility to the market. Added to this, there is a move in themarket to introduce monthly pricing mechanism which is strongly resisted by Chinese Steel industry.In general, though the projections are positive, high degree of volatility makes it difficult to predictmarket direction.PHYSICO FINANCIAL PERFORMANCE OF THE COMPANY FOR THE YEAR 2010-11 :Financial year 2010-11 was a year of improved performance, recovery and consolidation for us.The global economic climate posed several challenges, but we made the best use of our resourcesand abilities for growth. At the beginning of the year, we had projected a revenue growth of 77%whereas in actual, we could post higher growth of 82% over the previous year. The total revenuestood at Rs. 1803.46 crore, a YoY growth of 81.67%. The profit after tax was Rs.76.27 crore, a YoYgrowth of 143.02%.DIVIDEND :We are pleased to announce a final dividend of Re. 0.25 per equity share including the InterimDividend already paid. The dividends are payable on the equity shares as on book closure dateand are subject to approval by the shareholders. Earlier in the year, we paid an interim dividend ofRe. 0.08 per share.Before we go ahead, I will touch upon some of the projects as envisaged in the 11th Five Year Plan(2007-2012) and the progress made.15
Page 3: ContentsBoard of Directors 3Notice
Page 10 and 11: EXPLANATORY STATEMENT PURSUANT TO S
Page 13: Form of ProxyKIOCL LIMITEDRegd. Fol
Page 18 and 19: PROJECTS UNDER CONSTRUCTION :In my
Page 20 and 21: 18Captive Iron Ore Mine:The Company
Page 22 and 23: Directors’ ReportDear Shareholder
Page 24 and 25: 4.3 The following table summarises
Page 26 and 27: efforts to cool down the overheatin
Page 28 and 29: Plant at Mangalore, KIOCL has to ge
Page 30 and 31: Consultant recommended that KIOCL c
Page 32 and 33: mortar manufacture. This can also b
Page 34 and 35: Other Mining /Prospecting Leases9.4
Page 36 and 37: either from the recognised Union or
Page 38 and 39: Visit of Third Sub-Committee of Par
Page 40 and 41: Former Secretary (Steel) Shri Atul
Page 42 and 43: Groups on rolls of the Company as o
Page 44 and 45: 23.4 Your Company has also nominate
Page 46 and 47: 25.3 Inspections: 7 CTE type inspec
Page 48 and 49: 27. BOARD OF DIRECTORSAppointmenti)
Page 50 and 51: energy audit to quantify the target
Page 53 and 54: Annexure-IICORPORATE GOVERNANCECOMP
Page 55 and 56: is not practical to send the releva
Page 57 and 58: Corporate Governance (Contd.)c) To
Page 59 and 60: Corporate Governance (Contd.)Detail
Page 61 and 62: Corporate Governance (Contd.)(iii)
Page 63 and 64: Corporate Governance (Contd.)(xii)
Page 65 and 66: Corporate Governance (Contd.)(xx) R
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WeaknessCorporate Governance (Contd
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Corporate Governance (Contd.)local
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KIOCL Limited(Formerly Kudremukh Ir
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Annexure-IIIASA & ASSOCIATESCharter
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C. a. Confirmations of Balances hav
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Auditors' Report (Contd.)5. a. In o
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Auditors'ReportPara No.COMMENTS/OBS
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COMMENTS OF THE COMPTROLLER AND AUD
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3.2 Depreciation in respect of Asse
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7.2 Provision for Leave Encashment
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Profit and Loss Account for the yea
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Schedule 3FIXED ASSETSG R O S S B L
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Schedules (Contd.)Schedule 6CURRENT
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Schedules (Contd.)Schedule 7CURRENT
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Schedule 10ACCRETION/(-)DEPLETION T
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Schedules (Contd.)Schedule 14PRIOR
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Schedules (Contd.)Schedule 16NOTES
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5. In pursuance of the directive of
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y the Govt of India and is binding
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Schedules (Contd.)Year ended Year e
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Details of measurement of present v
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TYPE OF PLANLONG TERM COMPENSATEDAB
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TYPE OF PLANLONG TERM COMPENSATEDAB
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Balance Sheet Abstract and Company'
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Cash Flow Statement for the year en
Page 117 and 118:
SEGMENT REPORTING FOR THE YEAR ENDE
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