Introduction of Ispat Industry Ltd.

Since its inception, the Ispat Group has been moving from

strength to strength, consistently breaking new grounds and

spearheading new developments in iron and steel. Ispat Industries, the

flagship of the Ispat Group, has taken expansive technological strides

to emerge as one of India’s leading manufacturers of quality steel

products. In the process, the company and its parent Group have

achieved many firsts in the steel sector and swept past a host of

memorable milestones.

1952

Mr. M L Mittal, the founder chairman of the Ispat Group, begins

his foray into the iron and steel business with the takeover of an ailing

rolling mill in Calcutta, India. The plant is turned around and later

sold off.

1953

A combination of technological vision and management leads

Mr. M.L. Mittal to experiment with an electric arc furnace at a steel

plant in Vizag, India. Spotting emerging trends in steel-making

technology, he establishes nine such Greenfield plants in India. Soon,

he acquires the necessary licence and takes over TOR Steel.

1

1974

Mr. M L Mittal enters the international steel arena by setting up

PT Ispat Indo in Indonesia. He christens his steel-making Group as

‘The Ispat Group’. In the Hindi language, Ispat means steel.

1980

This decade witnesses a series of acquisitions around the world

and hectic expansion in India. The Ispat Group takes over the Iron &

Steel Company of Trinidad and Tobago, Sidemgical Del Balsar SA,

Mexico, and additional units in Canada, Germany and Ireland. In

India, the Group sets up the first thin gauge galvanized sheet unit, a

specialty mini-mill to make rails and structures - Ispat Profiles, and a

cold rolling complex at Nagpur.

1984

Nippon Denro Ispat Limited was incorporated in 1984 and was

granted the first Industrial License by Government of India for

manufacturing Galvanised Plain/Corrugated Sheets.

1985

2

Nippon Denro Ispat Limited, now known as Ispat Industries

(IIL), is established and it rapidly emerges as the largest manufacturer

of galvanised steel products in the private sector.

1988

To better provide steel solutions to an increasingly sophisticated

marketplace, IIL sets up a highly advanced cold rolling reversing mill,

in collaboration with Hitachi of Japan, to manufacture a wide range of

cold rolled carbon steel strips.

1988

IIL installs a colour coating line – the first of its kind in India –

for the manufacture of pre-painted colour steel sheets.

1988

Nippon Denro Ispat Limited was granted Industrial License for

Cold Rolled Sheets.

1994

Business interests within the Ispat Group are demarcated. The

eldest son, Mr. L N Mittal continues to manage the international

operations while Mr. Pramod Mittal and Mr. Vinod Mittal, the

younger brothers focus on steel and other businesses in India.

3

1994

IIL commissions the world’s largest gas-based single mega

module plant for manufacturing direct reduced iron (sponge iron), at

its Maharashtra-based Dolvi plant. Within three months, the plant

exceeds its capacity of 1 million tones per annum (MTPA) of high

quality DRI.

1995

A 1.5 MTPA hot strip mill with Continuous Strip Processing

(CSP) technology is installed at Dolvi. A mechanised multi-functional

jetty situated close to the plant facilitates the automation of raw

material handling.

1998

A world-class integrated steel plant for the production of hot

rolled coils is launched, armed with cutting edge technologies, such as

the Conarc Process for steel making and the Compact Strip Process,

both introduced for the first time in Asia.

2000

4

The new millennium is witness to the erection and

commissioning of a 2 MTPA blast furnace at the Dolvi steel complex

in record time.

2003

Sponge iron capacity increased from 1.2 mtpa to 1.4 mtpa

2004

» Hot rolled coil steel-making capacity increased from 1.5 mtpa to 2.4

mtpa

» Sponge iron capacity increased from 1.4 mtpa to 1.6 mtpa

2005

Further expansion of Hot rolled coil steel capacity under

implementation.

5

0

5 0 0

1 0 0 0

1 5 0 0

2 0 0 0

2 5 0 0

Gross

Reven

ue (U

SD/m

illion)

0.33 MTPA CR Coil plant at Kalmeshwar

0.325 MTPA Galvanized Sheet Line

Colour Coating Plant

Establishing downstream capacity at Kalmeshwar

1.0 MTPA Sponge-Iron

Plant

1.5 MTPA HR Coil plant with Compact

Strip Mill

Sponge Iron Capacity Addition

2 MTPA Blast Furnace set-

up

HR Coilcapacity

upgraded to 2.4 MTPA

HR Coil ,Sinter & Blast Furnace Capacity Addition

• HRC Capacity increased to 3 MTPA

• 2.5 MTPA Sinter Plant and 1260 TPD Oxygen Plant established

Sponge Iron capacity

increased to 1.6 MTPA

Capacity / Operations related Events

Sponge-Iron Plant capacity increased

to 1.2 TPA

First in India

First in India

First in India

First in

India

First in India

First in

India

Ispat- Milestones

6

ISPAT Today

Ispat Industries Limited (IIL) is one of the leading integrated

steel makers and the largest private sector producer of hot rolled coils

in India. Set up as Nippon Denro Ispat Limited in May 1984 by

founding Chairman Mr. M L Mittal, IIL has steadily grown into a Rs.

9,400-crore company, assuming its position as flagship of the reputed

Ispat Group. A corporate powerhouse with operations in iron, steel,

mining, energy and infrastructure, the Group today figures among the

top 20 business houses in the country.

Headquartered at Mumbai, IIL employs a total of 3000 people

and is the leader in the national specialist steel market. The company's

core competency is the production of high quality steel, for which it

employs cutting edge technologies and stringent quality standards. It

produces world-class sponge iron, galvanized sheets and cold rolled

coils, in addition to hot rolled coils, through its two state-of-the art

integrated steel plants, located at Dolvi and Kalmeshwar in the state

of Maharashtra.

The sprawling 1,200 acres Dolvi complex houses the 3 million

tones per annum hot rolled coils plant, that combines the latest

technologies - the Conarc process for steel making and the compact

strip process (CSP) - introduced for the first time in Asia.

7

The complex also has a 1.6 million tones per annum sponge iron

(DRI) plant, which was commissioned in 1994 as the world's largest

and most efficient gas-based single mega module plant. Moreover, the

Dolvi complex is home to a 2 million tones blast furnace and also

boasts a mechanized multi-functional jetty situated nearby, that

facilitates the automation of raw material handling. A new 2.24

million tones per annum sinter plant; 1260 tones per day oxygen and a

new electric arc furnace have also been commissioned at IIL Dolvi.

Ispat is the only steel maker in India and among a few in the

world to have total flexibility in choice of steel making route, be it the

conventional blast furnace route or the electric arc furnace route. Its

dual technology allows Ispat the freedom to choose its raw material

feed, be it pig iron, sponge iron, iron ore, scrap or any combination of

various feeds. It also has total flexibility in choosing its energy

source, be it electricity, coal or gas.

The Kalmeshwar complex houses Ispat's 0.4 million tones cold

rolling complex, which also includes the galvanized plain/ galvanized

corrugated (GP/GC) lines and India's first colour coating mill.

Technology and innovation have always been the cornerstones

of IIL's quest for excellence and these state-of-the-art plants facilitate

the company's mission to attain and sustain market leadership,

through technological and product superiority.

8

The company's strengths lie in its integrated process

management, knowledge management and control systems. And its

seamless supply chain management systems further the efficient use

of raw materials, while its staff of highly skilled engineers,

technicians and managers with specialized domain knowledge, ensure

the choice of the relevant technology and the ability to produce

international quality products at a competitive price.

In line with its vision for the future, IIL is expanding its HRC

capacity to 3.6 million. Moreover, it aims to complete its vertical

integration process, increase the proportion of high-grade and value-

added steel products in its product mix and leverage the advantage the

modern design and the size of the facilities offers.

With investments of over US $2 billion, IIL is the seventh

largest Indian private sector company in terms of fixed assets. It aims

to consolidate its market leadership in the national specialty steel

market by capitalizing on the proximity of its manufacturing facilities

to major consumers of flat steel products in Maharashtra, while

increasing its presence in international markets by using its

convenient port location.

In the short span of time since its inception, Ispat Industries has

steadily raised the bar - in terms of its relentless pursuit of

technological advancement, unwavering focus on innovation, strident

emphasis on quality products and its constant initiatives aimed at

9

ensuring customer satisfaction. As it rapidly forges ahead on all these

fronts, IIL has successfully reinforced its position as market leader,

while simultaneously making technological breakthroughs and setting

even higher standards for it.

INTEGRATED STEEL COMPLEX

10

ISPAT Overview

Business Manufactures and markets Hot Rolled (HR) coils, Cold Rolled (CR)

Coils, Galvanized and Colour Coated sheets

Key Offerings

Strong presence in the Original Equipment Manufacturer, Liquefied

Petroleum Gas and Oil & Gas pipeline applications, roofing and

paneling, drums and barrels, tube segments, automobile and white

goods segment

High growth domestic market, which gives freight advantage, is located

within 100 km

Technology and

Facilities

Uses the Thin Slab Casting Technology and the Twin Shell Electric Arc

Furnace, one of the most advanced steel making technologies in the

world

Combines the usage of sponge iron from the sponge iron (DRI) plant

and hot metal from the blast furnace in the Electric Arc Furnace for

making steel

Captive port with annual handling capacity of 10 MTPA

Employees Approximately 3,000 employees

11

Awards to ISPAT Industry Ltd.

Excellence Kaizen Award 2005

The QCFI Convention is a forum for interaction & sharing of

Knowledge, ideas & give recognition to members of Quality Circles

& other allied concepts like TPM, Kaizen, 5S, Poka Yoke, Six Sigma

etc.

Golden Peacock Award for Corporate Social Responsibility 2005

Ispat Industries Ltd. won the ‘Golden Peacock Award for

Corporate Social Responsibility - 2005’ in the category of ‘Private

Sector’. Instituted by the Institutes of Director, New Delhi, it is based

on the pattern of the Malcolm Baldrige Awards in USA for

outstanding achievements. This award is given by a panel of judges

headed by Justice P N Bhagwati, Former Chief Justice of India. The

award Jury constituted under the Chairmanship of Justice P N

Bhagwati, former Chief Justice of India, and Member, UN Human

Rights Commission conferred this award appreciating our company's

commitment for best Corporate Social Responsibility practices.

Safety Innovation Award 2006 12

For Implementing Innovative Safety Management Systems at

Ispat Industries Ltd., Raigad. Presented by Shri. Pradeep Chaturvedi,

Chairman, Safety & Quality Forum, New Delhi.

TPM Excellence Award - Level 1

Award in recognition of the efforts & contributions made by the

employees in the Organisation to achieve improvement in Plant

Maintenance technologies to achieve remarkable results in

productivity, quality, cost reduction & company cultural change.

Golden Peacock National Training Award 2007

Ispat Training Department won the “Golden Peacock National

Training Award” for the year 2006 for the excellent contribution

made in the area of Training and development. This award is given by

a panel of judges headed by Justice P N Bhagwati, Former Chief

Justice of India. The award Jury constituted under the Chairmanship

of Justice P N Bhagwati, former Chief Justice of India, and Member,

UN Human Rights Commission conferred this award appreciating our

company's commitment for best training practice.

Good Green Governance Award 2007

Award for the pro-environment work done by Organisation

beyond Compliance requirements.

13

India Manufacturing Excellence Award-2007 for Gold Category 2007

Appreciation for the efforts taken by the Plant & its personnel in

enhancement of the Manufacturing Excellence.

Golden Peacock Environment Management Award – 2006

Winner 2006: ‘Ispat Industries Ltd, Sponge Iron Plant, Raigad'

has been declared as the winner of “Golden Peacock Environment

Management Award” for the year 2006 by a jury headed by Justice P

N Bhagwati, Former Chief Justice of India. (During 8th World

Congress on Environment Management at Palampur).

QCFI Convention at Chapter and National Level Conventions - Par Excellence Kaizen Award

The QCFI Convention is a forum for interaction & sharing of

Knowledge, ideas & give recognition to members of Quality Circles

& other allied concepts like TPM, Kaizen, 5S, Poka Yoke, Six Sigma

etc.

Golden Peacock National Training Award 2008

Ispat Training Department won the “Golden Peacock National

Training Award” for the year 2006 for the excellent contribution

made in the area of Training and development.. This award is given

by a panel of judges headed by Justice P N Bhagwati, Former Chief

Justice of India. The award Jury constituted under the Chairmanship 14

of Justice P N Bhagwati, former Chief Justice of India, and Member,

UN Human Rights Commission conferred this award appreciating our

company's commitment for best training practices.

Amity HR Growth Award 2008

HR Excellence Award for 2008 for the exemplary acceleration

and development of the Organisation by managing a talent pool in a

talent source macro-environment, thus achieving unprecedental

growth by utilizing its human capital.

C II Exim Bank Award for Business Excellence 2008

The Award encourages the Organization to strengthen their

Management systems, practices, capabilities to enhance & sustain

their competitiveness to become World Class Organization through

Business Excellence.

15

Management of ISPAT Industry Ltd.

Board of Directors:-

Mr. Pramod Mittal Chairman

Mr. Vinod Mittal Vice Chairman & Managing Director

Mr. Anil Sureka Executive Director (Finance)

Mr. Vinod Garg Executive Director (commercial)

Mr. B K Singh Executive Director (Steel Plant)

Mr. Udipi M Rao Director

Dr. Besant C Raj Director

Dr. Basudeb Sen Director

Mr. R P Singh Nominee (IFCI)

Mr. B P Singh Nominee (IDBI)

Mr. M Sankaranarayanan Nominee (UTI)

16

Mr. Mayank Agarwal Nominee (ICICI)

Grading of Employees at ISPAT

Grades Designation Grades Designation

E00-E07 Engineer Officer/Technicians

E13 Assistant General Manager

E08 Senior Officer E14 Deputy General Manager

E09 Junior Manager E15 General Manager

E10 Asst. Manager E16 Vice President

E11 Deputy Manager E17 Senior Vice President

E12 Manager E18 President/ Director

E12A Senior Manager E18 Executive

17

Director

ISPAT Product

The following are Primary Products Manufactured by ISPAT:

SPONGE IRON

Ispat's sponge iron is manufactured at one of the most efficient

Sponge Iron plants in the world. The plant has been certified for ISO

9002 (1994) and ISO 14001 (1996). Ispat’s Sponge Iron is

manufactured at the efficient gas-based single mega module Directly

Reduced Iron (DRI).

HOT ROLLED COILS

Ispat manufactures international standard Hot Rolled (HR)

coils at its Hot Strip Mill (HSM), situated at Dolvi in the state of

Maharashtra, India. The production of these coils involves the use of

18

state-of-the-art equipment and manufacturing processes that ensure

products of the highest quality.

Ispat's HSM uses a combination of the advanced Con-arc

Process and Thin Slab Casting technology, which facilitates the

rolling of coils that are as thin as 1.2 mm with a width of 1250 mm.

These are superior to commercial grade cold rolled (CR) coils, and are

quite often a substitute for CR products in certain applications, due to

their thinner gauges and finer surface quality.

COLD ROLLED COILS

Ispat Industries Limited’s Cold Rolled Coils are manufactured at

the highly advanced Cold Rolling Mill at Kalmeshwar, and can be

used in a wide variety of applications.

GALVANISED SHEETS/COILS

Ispat Industries Limited was the first Indian company to set up a

Continuous Galvanizing Line for thin gauge sheets in 1985. In fact,

the company pioneered the manufacture of thin, medium and thick

gauge galvanized steel sheets in the country. With two Galvanizing

Lines at its plant at Kalmeshwar, it manufactures coils and GP/GC

sheets that meet the highest international specifications.

COLOUR COATED SHEETS

19

Ispat manufactures an innovative and exciting product, namely

color coated sheets called Polysteel, in a variety of shades and

designs, such as dark or pastel, printed or plain and striped or

embossed. These Polysteel sheets are painted after galvanising and

apart from creating a stunning visual impact, bring numerous

advantages to end user industries.

Polysteel building sheets, for instance, make it possible to

design and construct your choice of beautiful structures, save on

structural steel and maintenance, and obtain overall cost effectiveness

Polices of ISPAT Industry Ltd.

Quality Policy

We, at Ispat Industries Limited, are committed to achieving total

customer satisfaction through the supply of quality products and

services on time, as per mutually agreed specifications and terms. We

shall achieve this goal through the team effort of our committed

employees and by continuously elevating quality consciousness and

concern for the environment in all spheres of activity, in our

prevailing responsive working atmosphere.

Environment Policy

20

Ispat Industries Limited is committed, as a responsible corporate

citizen, to caring for the environment in all our activities, products

and services, in our endeavour to make the world a better place to live

in. We shall continuously strive to improve in various ways such as

reducing the consumption of material and energy, and minimize the

impact on the environment, while complying fully with all the

applicable environmental regulations. We shall encourage our

business associates to adopt a similar approach to environmental

protection. We shall continue to increase the greenery in and around

our premises. We will make all efforts to ensure the safety and well-

being of our employees and the society in general. To fulfill our

commitment to environmental protection, we shall set and

periodically review challenging objectives and targets.

Safety Policy

Ispat Industries Limited (IIL) firmly believes that health and

safety is one of its prime concerns. It is the company's policy that the

management shall do all that is reasonable to provide a safe and

healthy workplace and make every possible effort to prevent accidents

and minimize health hazards in the company's operations,

maintenance and other plant activities.

To achieve this objective:

IIL will strictly comply with relevant statutory provisions

and adhere to various technical codes and standards.

21

The company has set up a fire and safety department

manned by qualified professionals who will be closely

associated with the day-to-day operations of the plant, and

who will also impart relevant training to the employees.

This will ensure that safe, healthy and environment-friendly

conditions prevail within the company, and that accidents

are prevented.

The company is committed to involving its employees in

safety activities through their active participation in safety

committees meetings, fire drills and safety week

celebrations.

The safety performance of each employee will be evaluated

at the time of his or her annual appraisal and career

advancement review.

The company shall impart adequate training to employees to

improve safety within the company.

The company shall periodically assess the status on safety,

health and environment by using various techniques such as

safety audits and risk assessments.

Hazard Identification

To identify the hazards in the day-to-day operations, we conduct

internal and external safety audits every year. This year, we conducted

internal safety audits through Tata AIG Risk Management Services

and IFFCO Tokyo Risk Assessment Services. An external safety audit

22

was also held through M/s K R Bedmutha Asso. Additionally, the

company's own officers carry out safety surveys and inspections at

regular intervals.

Training

We firmly believe that safety is a state of mind and that all

unsafe behaviour results from a wrong mind set. Training is the best

tool available to ensure that employees are armed with the proper

mind set. At Ispat, we place great emphasis on safety training. In the

past year, we have conducted 74 training programmes for employees

covering, about 1500 employees.

Human Resource Development Policy

Human capital is an appreciating asset at Ispat Industries

Limited. Our employee skill-sets are our competitive edge along with

technological innovation. Our employee skill-sets differentiate us

from our competitors.

The objectives of our Human Resources Development initiatives

are:

To become the Business Partner, thus, not just acquiring skills to

solve specific problems, but also expanding minds to address

problems and opportunities with a full understanding of cross-

functional linkages.

23

To continue developmental initiatives to harness the total

potential of our human capital.

To make Ispat a learning organisation for continued success.

Quality

Ispat Industries Limited (IIL) has consistently placed an added

emphasis on quality processes within the organisation. Its strict

adherence to standards of excellence in quality has seen the company

attain the QS 9000 and ISO 14001 certifications.

24

IIL's unwavering focus on quality is epitomized by its efficient

work force, its adoption of the latest international technology and its

exemplary product standards that emerge from the most stringent

quality control tests. Additionally, it boasts technologically advanced

machines and systems, professional management and a pioneering

zeal that is constantly in search for a new model of production. At IIL,

all these ingredients are synthesized to create an indomitable spirit for

excellence.

Total customer service and satisfaction are of prime importance

to IIL and act as drivers of the company's quality initiatives. In line

with achieving its goals of operating on par with global standards, IIL

has introduced a number of internationally recognized quality

initiatives, including Six Sigma, Total Quality Management and Total

Productive Management. These initiatives have aided the company in

putting in place efficient systems to ensure the timely supply of

quality products and services.

Career with ISPAT

Ispat Industries Limited (IIL) is one of the leading integrated

steel makers and the largest private sector producer of hot rolled coils

in India. Set up as Nippon Denro Ispat Limited in May 1984 by

founding Chairman Mr. M L Mittal, IIL has steadily grown into a Rs.

9400 crore company. A corporate powerhouse with operations in iron,

25

steel, mining, energy and infrastructure, the Group today figures

among the top 20 business houses in the country.

Ispat is the only steel maker in India and among a few in the

world to have total flexibility in choice of iron and steel making route,

be it the conventional blast furnace route or the electric arc furnace

route. Its dual technology allows Ispat the freedom to choose its raw

material feed, be it pig iron, sponge iron, iron ore, scrap or any

combination of feed-mix. It also has total flexibility in choosing its

energy source, be it electricity, coal or gas.

IIL’s integrated steel plant at Dolvi, about 90 km from Mumbai,

employs a total of 3000 people and is the leader in specialty steel

market. The company's core competency is the production of high

quality steel, for which it employs cutting edge technologies and

stringent quality standards. It produces world-class sponge iron,

galvanized sheets and cold rolled coils, in addition to hot rolled coils,

through its two state-of-the art integrated steel plants, located at Dolvi

and Kalmeshwar, near Nagpur in Maharashtra.

Ispat is a multi-racial, multi-lingual, multi-cultural and an equal

opportunity corporation. An employer of choice, Ispat attracts and

retains the very best of professionals. Ispat is not only a preferred

employer at top engineering and business schools of the country, it is

also the chosen corporate among the most experienced and talented

business managers of today. Ispat offers the most challenging work

environment amongst the industry.

26

ISO certificate to ISPAT Industry Ltd.

27

28

Hand Over & Take Over Policy of ISPAT

Hand over and take over Policy in case of Employee being out of Office for 7 or more days:-

Objective:To ensure proper transfer of work/assignments and culture of learning

cross functional activities & to have uninterrupted work flow when

employee is out of office for 7 or more days.

Scope:

All the employees including full time Consultants and Advisors of

Ispat Industries Limited.

Policy:

1. An employee who has planned to be out of office for 7 or more

days due to leave/training/deputation or any other reason must inform

Reporting Officer well in advance.

2. An employee going on leave must handover the charge of their

department to the senior level person of the other department without

fail so that cross functional team and exposure can be formed and also

by this process all senior colleague and HOD can get the work

exposure and experience of other department.

29

3. These handover of charge to Cross functional senior level

person to be intimated in writing to HR department in consultation

with respective HODs.

4. Employee going on leave/training/deputation or any other

reasons, for 7 or more days must hand over Charge including lotus

notes communications in Matrix format clearly indicating Urgent and

important jobs, Pending matters, total job/assignments being handled.

5. Circular/note to be issued by the employees to all the concerned

persons informing about hand over and take over of charge.

6. The person taking over charge has to sit & operate from the

chamber of Incumbent for around 2 hours daily.

7. Further, person taking on charge must submit a return back

charge note along with achievement report, improvement areas to the

person on return.

8. In cases where employee going on training /

leave/deputation/any other Reason has Secretary/Executive Assistant,

Reporting Officer will ask the Secretary/Executive Assistant to report

to the person taking over charge.

Note: It is mandatory for all the employees that while handing over

the charge they must fill up the attached standard format and give it to

the employee taking over charge.

30

Performance Management System

Performance Management is the use of performance measurement information to effect positive change in organizational culture, systems and processes, by helping to set agreed upon performance goals, allocating and prioritizing resources, informing managers to either confirm or change current policy or program directions to meet those goals, and sharing results of performance in pursuing those goals.

Performance management system (PMS) centers on creating stakeholder value by establishing the link between business strategy and day-to-day tactical execution by: Aligning and Confirming Strategy, Establishing Re-Engineering Priorities; and Framing the Value Proposition. Performance management enables an organization to assess business performance and its progress in implementing key initiatives using a set of financial and non-financial measures. PMS helps to ensure that strategies are clearly defined and communicated, and aims to influence behaviors in support of those strategies. Empirical research indicates that a direct correlation exists between the effective use of PMS tools and business results. Companies that have successfully implemented a PMS process are deriving significant benefits including:

Productivity Improvements

Organization/Structural Improvements

Enhanced Strategic Capabilities

31

Performance Management System provides organizations with a systemic approach to consistently manage performance by:

Establishing targets

Identifying vital measures throughout an organization to assess strategic performance

Providing relevant reports and analysis

Instituting a formal process to evaluate performance and take improvement initiatives.

Objectives:

Translate organizational vision into clear measurable outcomes that define success, and are shared throughout the organization and also with customers and stakeholders.

Provide a tool for assessing, managing, and improving the overall health and success of business processes.

Shift from prescriptive, audit- and compliance-based oversight to an ongoing, forward-looking strategic partnership involving employees at all level.

Include measures of quality, cost, speed, customer service, employee alignment, motivation, and skills to provide an in-depth, predictive performance management system.

Replace existing assessment models with a consistent approach to performance management.

Roles/ Account Ability of PMS Process Implementation:-

Role of HR Department

Ensuring that managers participate fully in the performance management process

Ensuring that every manager has a performance review conducted

32

Ensuring that the Performance Management Policy and performance management process are followed

Explaining corporate/department goals and priorities

Ensuring that the qualities of performance assessments are maintained.

Submitting assessment and performance ratings to Management and Directors.

Role of CARA

To check if KRAs defined in the PMS are consistent with the role and business plan

Integrate the PMS SOP with the alignment of PMS, including

Role clarity to reviewer and Appraisee

Compliance to timelines and SOP (& penalty otherwise)

Include the performance parameters in specific clusters for objective assessment of performance

Train/Communicate the participants about the refinements

Refine/edit PMS in conjunction with functional heads/ Directors/ VC & MD on a quarterly basis including weightages for specific performance parameters

Ensure completion and communication about the outcomes of PMS of employees to HR

PMS Process at Ispat:-

Guidelines are framed and circulated to all by HR department.

Grade (E00-E07)

Review of performance rating by Reporting Officer every quarter for payment of Variable Pay as stipulated in the wage

33

settlement. Ratings assigned in a variation of 1-5 (i.e. Outstanding, Very Good, Good, Average, Below Average).

Framing of promotion guidelines.

In September every year the Increment Lists along with Increment / Promotion guidelines are sent to all HODs for reviewing the yearly performance in accordance with the guidelines as per settlement.

The final Moderated ratings & recommendations for Promotion will be given by concerned. HODs duly approved by the respective Divisional Heads to HRD for issuing Promotion letters.

Accordingly, the Promotions letters will be issued to the individuals based on the rate of Increments decided in the wage settlement.

Grade (E08-E12A)

Finalization of Annual Plan/Goals: Setting up of Key Result Area by the individual executives for the year in the first week of April in consultation with the concerned Reporting Officer. The KRA’s typically have a link with the Corporate Plan of the Department and drill downs from the KRA’s of the HOD, the KRA’s set should be SMART : (S- Specific, M- Measurable, A- Achievable, R-Realistic, T-Time Bound), focusing on activities and promising the standards.

The Broad Areas of Measurement of KRA’s are Finance, Internal Business process, Customer perspective, People Development & growth and Projects.

The KRA achieved should be put in the quarterly review form every quarter.

KRA achieved should have direct linkage with the Annual KRA target for the relevant period.

Self-appraisal & Review by Reporting Officer & Reviewer at the end of every quarter.

The reporting officer should comment on the self-appraisal for the employees both on the performance as well as the

34

constraints highlighted in the self-appraisal and send to Reviewer for reviewing the quarterly performance.

Employees undertaking new or additional activities over and above envisaged in the Annual KRA Target for the relevant period may include new /additional KRA in their self appraisal.

Final approval and Grant of Ratings will be done by the Reviewing Officer. Five types of ratings are defined in the system (i.e. Exceptional Contributor, Significant Contributor, Contributor, Partial Contributor & Non Performer)

Compilation of ratings of 4 quarters and average of 4 quarters is considered as Average rating of the year.

Framing of Compensation Strategy by HR for the subsequent year which includes the Increment and Promotion and ELVP guidelines after consultation with all Divisional heads and HR Committee members.

Grade (E13-E19) – Balanced Score CardObjectives

To ensure employee performance towards organizational goal.

To create performance link between Employee and Subordinates. (Employee has to make own annual plan from the annual plan of his/ her reporting officer.)

To bring transparent and accurate performance measurement system.

To bring the awareness on Financial (i.e. Financial Perspective) and Non-Financial parameters (i.e. Customer Perspective, Process Improvement Perspective, Learning & Growth Perspective) and there measurements.

To bring the positive culture on PMS system in the organization.

Key Features of Annual Plan There will be four perspectives i.e. Financial, Customer, Process

Improvement, Learning & Growth.

35

Each perspective weigthage will be there and total weight age of four perspectives will be 100.

Minimum and Maximum weight age of a particular perspective will be 10 and 40 respectively.

In each perspective, there will be provision for maximum 8 KRA and minimum 1KRA.

Measurement criteria will be optional.

Unit of measurement will be mandatory.

Annual Target will be fully numeric (like: 1, 2, 3….)

In each perspective, total KRA weigthage will be 100.

All monthly target cells will be fully numeric (like: 1, 2, 3….).

After approval of Reviewer, Annual plan will be freeze for the respective year.

There will be link in the PMS system that appraise can see the annual plan of all senior executives who will be in the same (Division or Department wise) hierarchy.

Key Features of Monthly Plan All annual KRA will show automatically in your monthly plan.

Perspective weight age can be changed month to month basis but the weight age criteria will remain same.

No editing option will be there for that KRA.

There will be provision to add only two extra KRA in each perspective.

These extra KRA will show automatically in annual plan in the respective perspective as an additional KRA which will not be the part of annual rating calculation.

Monthly target and weigthage will be editable.

36

Code of Conduct and Business Ethics

Mission:

To be amongst the world’s most admired new generation steel company in our products, in the manner in which we service our clients, in our work -ethics and in our culture of societal integration.

An Introductory Statement:

In support of its Vision and Mission, ISPAT Industries Ltd. sets forth the ideals of motivation, life long learning, service to others, enrichment through diversity, commitment to excellence, mutual respect, and pe rsonal integrity. The Company is guided by the belief that a sense of true society is achieved when these ideals and values are reflected in the behavior of its employees towards one another.

ISPAT Industries Ltd. is committed to creating an atmosphere of respect and civility amongst its employees. The charge to the “SHEE (Safety, Health, Environment and Ethics)” Pillar to create a Code of Conduct and Ethics provided the organization with the opportunity to define our standards of behavior towards each other.

As employees of the organization, our interactions with one another are to be guided by these principles as set forth in the Code of Conduct and Ethics developed through The Company’s governance process. In order to make this a living document, each m ember of the organization must commit to these standards and promote its general

37

principles. Failure to follow this Code of Conduct and Ethics will call for Disciplinary action.

The document covers following sections:

A. Code of Conduct

1. Corporate Responsibilities to Employees & Associates2. Basic Ethics for Employees & Associates

B. Business Ethics1. Responsibilities& obligations to Customers2. Fair Competition3. Fair Transactions4. Responsibilities to Society & Country5. General

A. Code of Conduct

Section 1: Corporate Responsibilities to Employees and Associates

ISPAT shall Endeavour to respect the human dignity of its employees and provide fair treatment based on their abilities and performance. The Company shall also strive to foster creativity and individualization among its employees. Recognizing that each individual is a separate soul and requires individual attention and support, the Company shall encourage creative approaches to business and personal lives.

1. Respect for Human Dignity: ISPAT shall treat each employee with trust and respect and value every individual's human dignity and family responsibilities. The Company shall make best efforts to help employees attain pride and personal fulfillment by instilling a sense of ownership in their jobs. Ispat’s employees shall be treated with dignity and in accordance with maintaining work place free of sexual harassment, whether physical, verbal or psychological.

2. Equality in Employment and Opportunity: ISPAT shall offer equal opportunities to all its employees based on their abilities, merit and talents. The Company shall apply fair measures to evaluate

38

abilities and performances of its employees, and reward them accordingly. Company shall provide equal opportunities to all its Employees and all qualified applicants for employment, without regard to their race caste, religion, color, ancestry, marital status, sex, age, and nationality.

Section 2: Basic Ethics for Employees and Associates

1. Basic Ethics: The employees of ISPAT shall take pride in their company and always maintain an honest and fair attitude. The employees must keep high standard of morality and continuously strive to maintain their personal dignity and the company's honor.

2. Self Development: The employees must strive to enhance their abilities and image through continuous self -development. ISPAT believes in continuing education through formal and informal means. Individual self actualization is a key component in all activities and is positively promoted.

3. Fairness in Performance: The employees should carry out their duties based on honesty and fairness, seeking to foster a sound business culture. While performing their duties, they must not accept any form of financial benefit from interested parties that may obstruct fair judgment. The employees should refrain from any immoral or unethical behavior as prescribed by social norms in performing their duties and in living their personal lives.

4. Avoidance of Conflict with Company Interests: The employees should avoid any individual behavior or relationship that is in conflict with company’s interests. The employees must not use company property to pursue their personal interests without prior permission. Business opportunities should not be used for personal gains. Likewise they should not make or influence business decisions either for their own or their relatives’ benefits. The employees must not take Concurrent or part-time employment / consultancy while in service. When there is acceptance of gifts, donations, hospitality etc beyond the customary level, adequate and full disclosure of the same should be made.

5. Securities Transactions and Confidential Information: An employee of ISPAT and his immediate family shall not derive any

39

benefit or assist others to derive any benefit from the access to and possession of information about the Company which is not in the public domain and thus constitutes insider information.

An employee of ISPAT shall not use or proliferate information which is not available to the investing public and which therefore constitutes insider information for making or giving advice on investment decisions on the securities of the Company on which such insider information has been obtained.

Such insider information might include the following:

Acquisition and divestiture of businesses units Financial information such as profits, earnings and dividends Announcement of new product introductions or developments Asset revaluations Investment decisions / plans Restructuring plans Major supply and delivery agreements Raising finances

6. Knowledge Sharing: The employees ensure dissemination of Knowledge gained by them during Training / Conferences/ Seminars/ Technical Visits etc. Each Employee should submit the report & relevant documents of the same within one week of his/her attending such conference / seminar / training / technical visits to the Learning Center so that the knowledge can be shared with other employees.

7. Duty of Confidentiality: The employees shall ensure that they do not divulge confidential information gained during employment. Also they should not use or proliferate information unavailable with public.

8. Use of Company’s Asset s: The employees shall ensure that all the company’s assets are used in the best interest of the company. Its employees must protect and preserve company property as the owners of the assets (Equipments, Building, and Area etc) by participating in TPM Jishu Ho zen activities.

9. Work Culture: The employees should exert themselves,

40

To enhance work Productivity /Efficiency through open communication and cooperation with colleagues and business partners.

To strictly follow the SOP’s, Procedures, Rules and Regulations etc. Any deviation should be brought to the notice of the superior.

To participate proactively in all Brainstorming and Root cause analysis meetings to come out without hiding the facts to reach to solution and also on a continual basis think about Kaizens (Continuous Improvements).

To ensure that no wastages (Material, Man hours, Machines Timings, Money etc) are allowed to happen in their area and such observations should be brought immediately to the notice of the Superiors.

To ensure that all Safety Protective Equipments provided are used by each and every one of them and non compliance should also be brought to the notice of the Superiors immediately. All Safety Rules and Regulations to be strictly adhered to, and no shortcuts to be taken. The principle of “Safety First” should be strictly followed.

To ensure that “5S” Housekeeping principles are followed strictly. No action of theirs should cause any violation of Health and Environment practices.

To maintain fairness and transparency. To be responsible for full implementation and compliance of the

Code of Ethics.

The employees shall promptly report any possibility/ actual violation of the Code of Ethics or any event that could affect the business or reputation of the Company.

B. Business Ethics

Section 1: Responsibilities and Obligations to Customers

ISPAT, as an organization shall highly regard the opinions of its Customers in the belief that they form the very base of our business. We shall seek to secure unconditional trust from our Customers by continuously providing them practical values and operating in an open, honest and ‘above board’ manner at all times. We shall promote

41

a ‘best practices’ approach in all Customer engagements and offer our honest opinion.

1. Respect for Customers: ISPAT shall value the opinions of our Customers and attempt to validate their true needs at all times. We shall regard our Customers as the primary focus for our decisions and conduct. We shall attempt to comply with all existing Customer values and processes except where they may be in conflict with our existing Code of Ethics.

2. Creating Value: ISPAT shall work to create value for its Customers, for it is through Customer’s satisfaction that we build the foundation of our prosperity. We shall continuously create practical value that fully benefits and satisfies our Customers.

3. Providing Value: ISPAT shall always be truthful to and respectful of its Customers, and shall be bound to keep its words. We shall offer top quality products and services to our Customers at reasonable prices and respond to their requests with speed and accuracy.

4. Gifts and Donations: ISPAT shall neither receive nor offer or make directly or indirectly any illegal payments, remuneration, gifts, donations or comparable benefits to obtain business or uncompetitive favors. But we may accept and offer nominal gifts of customary and of commemorative nature.

5. Quality of Products and Services: ISPAT shall be committed to supply goods and services of the highest quality standards backed by efficient after sales service consistent with the requirements of the customers to ensure their total satisfaction.

Section 2: Fair Competition

All business transactions shall occur based on the principles of fair competition with equal opportunities guaranteed for all entities to participate. We shall build trust and cooperative relationships through fair and transparent transactions. Such relationships shall be built with a long-term perspective for mutual growth.

1. Pursuit of Free Competition: ISPAT shall uphold the principle of a free market economic system; therefore we shall pursue free

42

competition and earn our Customers' trust through top quality products and services. We shall compete fairly and capably with our competitors, but shall not intrude upon their interests, or exploit their weaknesses.

2. Compliance with Laws and Regulations: ISPAT shall conduct our domestic and overseas business activities in strict accordance with local laws and regulations, and with respect for local business customs.

Section 3: Fair Transactions with Customers, Vendors, Service

Providers etc.

1. Equal Opportunity: ISPAT shall offer equal opportunities to all qualified companies seeking to become our business partners. All applicants shall be registered and selected in a rational manner following a fair and objective evaluation process.

2. Fair Transaction Procedures: AT ISPAT all business transactions shall be conducted under equitable circumstances. The terms and procedures of the transaction shall be sufficiently discussed between parties involved. Any form of unjust transaction abusing superior position shall never be taken. Information required for transactions is exchanged through appropriate procedures in a timely manner. Transaction results shall be evaluated on a regular basis where complementary measures shall be mutually taken.

3. Fair Vendor Relations: ISPAT shall support the long -term growth of our partners and vendors by enhancing their competitiveness through technological and managerial assistance. We shall pursue mutual effort and cooperation with our partners and vendors in promoting a healthy trading environment and maintaining fair trading system.

Section 4: Responsibilities to Society and Country

ISPAT contributes to national welfare by supporting Government of India and its lawful agencies and protects its partner’s interests by developing sound business operations.

43

1. Rational Business Development: ISPAT shall conduct its business, respecting the social values at home and abroad. The Company shall promote its business expansions based on stable corporate growth.

2. Contribution to Social Development: ISPAT shall engage and contribute to national and social development through job creation, tax payments, and promotion of cultural and educational programs.

3. Environmental Conservation: ISPAT shall strive to prevent environmental pollution and employs reasonable measures to conserve precious natural resources in accordance with sound scientific principals and current knowledge. The Company shall prevent wasteful use of natural resources and minimize any hazardous impact of its activities on the ecological environment.

Section 5: General

1. Financial Reporting and Records: ISPAT shall prepare and maintain its accounts fairly and accurately in accordance with the accounting and financial reporting standards which represent the generally accepted guidelines, principles, standards, laws and regulations of the country in which the company conducts its business affairs.

Internal accounting and audit procedures shall fairly and accurately reflect all of the company's business transactions and disposition of assets. All required information shall be accessible to company auditors and other authorized parties and government agencies.

Any willful material misrepresentation of and/or misinformation on the financial accounts and reports shall be regarded as a violation of the Code apart from inviting appropriate civil or criminal action under the relevant laws.

2. Health, Safety and Environment: ISPAT shall strive to provide a safe and healthy working environment and comply, in the conduct of its business affairs, with all regulations regarding the preservation of the environment of the territory it operates in. We shall be committed to prevent the wasteful use of natural resources and minimize any

44

hazardous impact of the development, production, use and disposal of any of our products and services on the ecological environment.

3. Shareholders: ISPAT shall be committed to enhance shareholder value and comply with all regulations and laws that govern shareholders' rights. The Board of Directors shall duly and fairly inform its shareholders about all relevant aspects of the Company's business and disclose such information in accordance with the respective regulations and agreements.

Career Development Policy

Keeping in view the requirement of balanced growth of employees where an employee acquires broad based experience before going up vertically, it has been thought to provide the avenue of career development through job rotation.

Objectives:

This policy seeks to optimize the potentialities of employees fully by putting her/him through more apt and productive assignments & exposure and at the same time meet the requirements of the organization by fully optimizing available talents.

To promote growth of employees from within

45

Focus on the growth of high performers in the organization through competency development to fulfill future organizational requirements

To provide avenues to an employee towards his/her career growth within the Organization

Scope:

All regular employees in grade E08 & above category preferably those who have completed two years in the current position.

In all other grades, inter-departmental and intra-departmental transfers will take place depending on the opportunities available within the organization, as well as the company’s requirements.

Quantum of job rotation

Every department shall strive to have 1% Job Rotation every month. However, this will not apply to departments/positions requiring specialized knowledge and skill.

Rules:

Inter as well as intra-department rotation will qualify as Job Rotation.

Head of Department to prepare monthly plan of rotating 1% employees based on length of service in the current role.

HOD to recommend if any additional training is to be imparted to prepare the employee for the new assignment.

Suitability for job rotation to be ascertained keeping in view qualification, skill and experience.

Job Description for the new role to be made available to the employee.

Intra-department rotation to be finalized by HOD. Inter-department, but intra-division rotation to be finalized by concerned Divisional Head. In case of inter-division job rotation, request is to be routed through HR Department.

Performance in the new role to be regularly monitored for smooth operation of the Department.

46

Human Resource Management

The Human Resources Management (HRM) function includes a variety of activities, and key among them is deciding what staffing needs you have and whether to use independent contractors or hire employees to fill these needs, recruiting and training the best employees, ensuring they are high performers, dealing with performance issues, and ensuring your personnel and management practices conform to various regulations. Activities also include managing your approach to employee benefits and compensation, employee records and personnel policies. Usually small businesses

47

(for-profit or nonprofit) have to carry out these activities themselves because they can't yet afford part- or full-time help. However, they should always ensure that employees have -- and are aware of -- personnel policies which conform to current regulations. These policies are often in the form of employee manuals, which all employees have.

HRM Polices in ISPAT Industry Ltd.:-

1. Standard Operating Procedure for joining of an Employee2. Training and Development Policy

3. Transfer Policy

4. Transport Policy

5. Uniforms/ Dress Code Policy

6. Accident Compensation & Life Cover Scheme

7. Competency and Skill Development

8. Housing Policy

9. Leave Rules

10. Recruitment Policy

Standard Operating Procedure (SOP) for Joining of an Employee

48

Objective:

The objective of the joining policy for hassle free step through recruitment and making joining process smooth and to make the new entrant feel comfortable.

Standard Operating Procedures (SOP):

1. FOR ALL NEW JOINEES (Recruitment Dept.)

A. Once candidate selected he/she shall be sent for pre-employment medical check up at MGM Hospital, Vashi or any other authorized medical center for pre-employment medical check up.

B. Once candidate found medically fit his / her recruitment paper / process will be audited by Business Process Solution (BPS) dept.

C. Once pre-employment medical check up report received and candidates is found medically fit and after BPS audit report, offer letter will be issued along with following forms and ask him/her to bring at the time of joining :-

Business Declaration form MIS form Gratuity Nomination form PF Nomination form Superannuation Nomination form Address with contact nos. of medical officer Route map for Dolvi Means and available sources of traveling to Dolvi

D. Before joining of Seven days in advance, recruitment cell will coordinate with the employees and recruitment cell will send the employee docket containing following documents in a sealed envelop to Dolvi office for joining process.

Documents to be sent by the Recruitment Cell to HR dept. at Dolvi plant

Unsigned Appointment Letter49

The Offer Letter Employment form Interview Assessment Sheet Any other documents if any. Audit Report of Business Process Solution Medical Report

E. If new joinee needs guest house accommodation, Recruitment cell / HR dept. will inform GS dept. to organize the same.

F. HR dept. on date of joining :

a) Will check and verify:

PF Nomination Form in duplicate. Declaration of Business Dealings Form Gratuity form Superannuation Nomination Form MIS form Employment Form Feedback Form Bank Account opening form (Axis Bank or IDBI

Bank) Copy of mark sheet and credential certificate with

original Confidential Agreement Copies of Service Bond (as and when applicable)

b) On confirmation of above will issue appointment letter to the candidate.

G. The Dolvi HR will ensure about necessary arrangement of refreshment / lunch etc .for the new employee.

H. H R Department will create an Employee ID in the system through SAP and subsequently in SYBASE system.

I. Facilitate bank account opening process.J. Give details and information about KM portal to

familiarize with HR policy and rules and other important information.

50

K. H R Department will issue Temporary ID Card along with Swiping Card.

L. Request is forwarded to IT dept. to prepare his Lotus Note ID and workstation.

M. GS dept. will organize his sitting arrangement.N. GS dept. will organize guest house arrangement as per

policy as and when required.O. All joining formalities will be completed at Dolvi.P. The employee is then taken to his department and

introduced to his functional head.

2. Training department will arrange induction training for new joinee

3. CANDIDATES GM & ABOVE

For all candidates joining as GM and above over and above formalities mentioned in 1 & 2 following additional procedure will be followed:

A. Once receiving information from Recruitment dept. about arrival details of GM & above candidate GS dept. will organize

a) Transport for pick up from airport (if candidate from outstation)

b) Guest house arrangement for staying as per policy

c) Transportation to drop at Dolvi for joining

d) Transportation for daily commuting till he gets his own vehicle

B. In advance prepare joining circular and issue the same on joining of the employee.

C. Arrange mobile phone / blackberry with nos.

D. Sitting arrangement / cabin with work place

E. Laptop through system dept (GS will intimate one week in advance)

51

4. Role of System / IT dept. on receiving intimation from GS / HR

A. Arrange work station / laptop as per requirement

B. Create Lotus note ID at least one week in advance.

52

Training & Development Policy

Training Objectives

To ensure that organization achieves the business plan by analyzing business gaps, failures, which includes technical and behavioral related issues by developing individuals and group learning and there by competencies to be enhanced for their knowledge, skills and attitude to achieve business excellence.

Scope of Training Activities

People development has been our key strategy for corporate performance. In line with the same, we are undertaking intense training and development activities in our organization in the areas of technical and functional skill enrichment, managerial competency enhancement, pioneering operational excellence and new initiatives.

Major training activities of the company are enlisted as follows:

1. Review of the total Organization Business Plan.

2. Analysis of training inputs required to achieve business plan.

3. Identification of Training Needs.

4. Assessment of Skills/Competencies required for different roles & individuals.

5. Development of course material.

6. Training on Consultants Reports.

7. Training for Overseas employees.

8. Training on Break-downs & Operational Failures.

9. Training on New Initiatives (TPM, Six Sigma).

10. External Training Programmes.

11. Brainstorming and SWOT Analysis.53

12. Development of Internal Trainers.

13. Training Feedback.

Graduate Engineer Trainees & Management Trainees Training Scheme (GEMS) GROWTH PATTERN The GETs, DETs & MTs Training System (GEMS) has been formulated with a view to ensure full utilization of the inherent skills of the new entrants and provide them with comprehensive foundations needed for successful performance in the first job and in subsequent career progression. Adequate emphasis shall be given on developing the essential knowledge required to perform as a Front Line Manager, i.e.

Knowledge in terms of:

Process Parameters

Setting and Maintaining Standards

Man Management

Line and Function Relationships

Skills in terms of:

Investigation and Analysis

Problem Solving and Decision-Making

Preparing and Presenting a Case

Presentation & Report Writing

Team Working

The company has a system of Project Based Training (PBT) as a part of GEMS wherein each trainee is assigned a number of projects from his/her core area of education as well as from other functions. Hands-On Training is also included in the curriculum with a view to strengthen the technical base of the Trainees. Induction of Graduate Engineer Trainees (GETs), Diploma Engineer Trainees (DETs) & Management Trainees (MTs) in company shall be done each year on the basis of requirement. Training period for GETs/ MTs will be 6

54

months from date of joining and where as for DETs training period will be1 year from date of joining.

A) Central Induction– The Trainees shall undergo the Central Induction during the first two months wherein they shall be given inputs about the group companies and orientation of various functions in the company along with site visits. They shall also be exposed to cross-functional areas wherein the GETs shall undergo a mini-MBA from/ in association with a local management institution and the MTs shall undertake projects in the functions other than their core function. Input on presentation skills, report writing skills, inter personal skills, communication skills shall also be given to equip them with the behavioral aspects that will enable them to successfully take up the future roles and responsibilities. With a view to instill team building potentials and also to develop the risk management potential, out bound training will be organized. Tests shall be held mid-way and at the end to ensure perseverance of the learning.

B) Departmental Induction – This shall form the second phase of training and will last for next one month. The Trainees will be deployed to specific department based on the generic branch of their study, performance in the tests & counseling interview and will undergo departmental orientation wherein they shall be associated with different functions within the allocated department, on a rotational basis. They will be associated with a mentor and will be required to undertake an in-depth study of the functions of the department. The trainees shall also undergo critical equipment training. Industrial tour to other companies is a part of this module. Assessment of performance shall be done through project reports, presentations, report by the mentor & performance in tests.

C) On-the Job Training – This shall form the third phase of GEMS and shall last for the balance three months of the training period. The trainees shall be allocated specific responsibilities in the department. They shall then undertake project based hands - on training in the respective department.

D) The trainees shall then be absorbed into regular grades based upon the Project presentations, personal interviews (by a panel comprising

55

of Departmental Representative, Training Manager & HR representative) and assessment by the Project Tutor.

Transfer Policy

Objective:

To provide avenues to our associates for their career growth within the Organization and to simultaneously address the dynamic business needs of our Department/ Sections this in turn will lead to Job Enrichment and Job Rotation.

Guidelines:

Below mentioned policy should be followed while transferring an Associate:-

1. Vacancy to be notified internally and selection process should be carried out by HRD in consultation with the HOD in whose area the vacancy exist.

2. Detailed job description of the Role & Responsibility should be prepared by HOD in whose department vacancy exists and sent to HRD so that the same can be handed over to employee being transferred.

3. Employee seeking transfer should submit approval note from his HOD to HRD that replacement would not be sought against transfer.

4. Details of employee seeking transfer such as existing job description, PMS rating and any other relevant details to be given by HRD to the HOD of the Department where vacancy exists.

5. Transfer should be affected after discussion with the HOD of the Transferee and intimation to the HOD of the department to which the person is being transferred.

6. HRD should issue transfer order to the employee being transferred and update the system wherever it is required.

56

7. The HOD of the department to whom the employee is being transferred, should prepare KRAs & Task Sheet for the transferee and link it to his PMS. He should also identify his Training needs based on the new Job description and communicate the same to the Training Department.

Transport Policy

Objectives:

This policy shall facilitate the commuting of employees to and from their residence to the place of work as well as for business related local travel.

Scope: All employees on Ispat Roll are covered under this policy.

(A) Bus Facility–GradeE14&below

Staff Buses shall be provided from specified locations viz.; Thane, Kalian, Vashi, Nerul, Panvel, Pen, Nagothane, Alibag, etc. for employees in grades E14& below, working in Dolvi Plant for commuting from their residence to the place of work for all four shifts.

1. Vehicle Leasing Scheme–GradeE15&above

The car shall be purchased by employees in Grades E15 & above registered in his / her name or in the name of spouse or used /old cars can be spouse leased. However the car should not be more than 4 years old and its total mileage is not more than 1,25,000 Kms. If employee feels that instead of buying a new car at the end of the4th year and can continue with existing car for one more year, in such case based on self application of concerned employee the limit of leasing the car can be further extended to 5th year subject to certification of condition on road worthiness of the car by the competent authority decided by the company. On the 5th year, the employee will get 50% leasing amount. This will be effective from 1st April 2009. Such vehicle is required to be leased with the Company. If the vehicle is registered in the name of the employee

57

then it becomes a Self Leased vehicle and in case of being registered in the name of the spouse will be a Dry Leased vehicle.

Company shall provide monetary assistance to concerned employees for taking a vehicle on lease / Dry Lease for commuting to and from the place of work; to their residence as well as for business related local travels.

The level wise eligibility of lease amount shall be as under:

Level Monthly Pay-out

General Managers Rs 15000

Vice Presidents Rs 21000

Senior Vice Presidents Rs 25000

Presidents & Directors Rs 30000

General Managers & above who are currently availing the facility of cars under the ‘Own Your Car Scheme’ shall continue in the scheme till they purchase the current car upon running the Car for 1,00,000 kms or 3 years whichever is earlier. On purchase of the existing car, they will be eligible to move to the above mentioned Vehicle Leasing Scheme Reimbursement for the fuel shall be as based on the distance between residence& workplace of the employee. Over and above this, expenses reimbursement of on account of maintenance of vehicle, hiring of Driver, etc. shall be done as per the eligibility of the respective Grade.

Amendment for Fuel Reimbursement (GM & Above)

Reduction in fuel Reimbursement expenses (GMs & above): As decided in57th HRC held on 13th March 2009, fuel reimbursement is to be reduced by25% with effect from 1st April 2009 for Dolvi.

Reimbursement for GM & Above for Extra Kilometers

58

GM and above claiming extra kilometer for using their car for official purpose will be reimbursed fuel expenses.

(B) Local Conveyance Reimbursement

Local Travel for this policy shall mean traveling from either residence or company location (Dolvi, Casablanca, Nirmal or Mittal Towers) to another company location or to the premises of external agency located in Mumbai, Navi Mumbai, Raigad, Thane& Kalyan.

Employees in the Grades E15 & above

The employees in the above mentioned grades shall use their own cars which they have to utilize for all official purposes. They will not be eligible for any reimbursement over and above the eligibility as per the Own Your Car Scheme / Dry Lease Scheme.

Employees in the Grades E12A – E14

The employees in the above mentioned grades shall be eligible for travel by a metered taxi and the expenses on account of the same shall be reimbursed after due approval of the concerned Functional Head.

Employees in the Grades E08 – E12 & Trainees

The employees in the above mentioned grades shall be eligible to travel either wholly or in a combination by a public transport (not Taxi), three- wheeler & First Class Ticket by the Mumbai Local Train and claim reimbursement after due approval of the concerned Functional Head.

The employees (E08 to E14) shall also be eligible to use their personal vehicle for the purpose kilometer for. In such cases, reimbursement shall be made @ Rs. 6.75 per travel by a Four Wheeler or @ Rs 2.50 for travel made by a two wheeler.

59

Reimbursement of parking and toll charges in such cases would be done on actual.

Employees in the Grade E07 & below

The employees in the above mentioned grade shall be eligible to travel either wholly or in a combination by a public transport (not Taxi), three- wheeler & Second Class Ticket by the Mumbai Local Train for the purpose and claim reimbursement after due approval of the concerned Controlling Officer. The employee is also eligible to use his personal vehicle (two-wheeler only) for the purpose. In such case, the reimbursement shall be made @ Rs 2.50 per kilometer for travel made by a two wheeler.

Note

1. Wearing of Crash Helmet is mandatory while driving a two wheeler. It will also be the responsibility of the driver to ensure the driver also wears the helmet.

2. Safety belt in cars: The driver and front seat passenger must apply the safety belt while driving/ sitting in the car.

3. Leasing charges are subject to VAT.

(C) Company Ambulance Usage

Scope:

All regular employees including Trainees and Contractual workers working at Dolvi plant.

Process:

Company Ambulance will be utilized only for conveying accident cases from plant to the First aid Centre in order to render immediate First aid.

In case the accident is of serious nature and needs immediate further treatment, the patient will be carried in the same Ambulance to

60

the nearest hospital in order to reach at the earliest. In case of sudden illness of employee at work, the Ambulance will be used to transport the employee to the nearest hospital where treatment can be given for his illness. The Ambulance shall immediately return back to plant and shall not stop for any further assistance once the patient has been taken to the pre-specified and required hospital.

Uniforms/ Dress Code Policy

Objective:

To provide for Safety of the employees, induce homogeneity & evolve a sense of belongingness amongst the employee for the company.

Scope

All regular employees working at Plant including Trainees.

1. Employees & Trainees posted at Dolvi

Male Members

All male employees posted at Dolvi shall be provided with three sets of company uniforms (Full Sleeve Shirts & Trousers), one pair of Safety Shoes & one Safety Helmet. The uniforms & safety shoes are provided once every year.

Female Members

61

All female employees posted at Dolvi shall be provided with three sets of company uniforms (Salwar Suits), one pair of Safety Shoes & one Safety Helmet. The uniforms & safety shoes shall be provided once every year.

In case of the employees working in Plant area if the Safety shoes provided is worn out, one more pair of Safety Shoes shall be provided within the same year after due recommendation of the Head of Department.

The regular employees working in Plant area or field shall be provided with one set of Rainwear (Jacket & Trouser type) and those working in office area shall be provided one umbrella annually.

2. Employees & Trainees posted at other locations including branch offices

Male Members

All male employees posted shall be provided with three sets of uniforms (Full Sleeve Shirts & Trousers).

Female Members

All female employees shall be provided with three sets of uniforms once every year.

All the employees shall also be provided with one umbrella annually.

Note

The employees shall take care of the uniform and protect it from damage or misuse. It is compulsory for employees provided with

62

company uniform to wear them on all working days in Office. Alteration or gifting of uniform is not permitted.

Accident Compensation & Life Cover Scheme

Objectives:

To provide workmen and/or their dependents some relief in case of accidents and causing either death or disablement of workmen.

Scope: All Ispat employees are covered under this policy.

Accident compensation

Accident compensation will be paid as per the laid-down policy of the company in force and amended from time to time.

This covers death / permanent and partial disability and reasonable medical expenses.

The cover in the event of death is equivalent to 100times the gross pay.

63

The coverage is for all 365 days against accident within or outside plant premises.

Group Life Insurance Policy

Life insurance coverage to a maximum extent of Rs.3 lakes, depending on the grade as mentioned below shall be provided during the course of the employment for death due to sickness, etc.

Grade AmountGrade E08-E12A Rs. 1,00,000/-

Grade E13 to E14 Rs. 2,00,000/-

Grade E15 & Above Rs. 3,00,000/-

Competency And Skill Development

Objective

To ensure continual development of skills & competencies of employees.

Scope

This policy shall be applicable to all regular employees in Grades E00-E19 (including Trainees).

Identification of Training Needs

Training needs are identified on an annual basis.

For the employees in grades E08 & above, training needs are derived from the Balance Score Card and assessment of Competencies through the Assessment Centers.

64

For the Operation, Maintenance & Support Services Staff (E07 & below Grades) the needs are projected by the Supervisors / Controlling Officers through the Annual Appraisals. Assessments of Skills are also done annually to ascertain the skill gaps. Over and above that there are organizational interventions like Multi-skill wherein the Supervisor identifies the skills that need to be learnt by the employee in order to form multi-functional workgroups.

The company also has organizational initiatives wherein the target population is identified for the purpose of each initiative and the same is included in their training need.

Assimilation of Training Needs & Draw-up of Annual Training Plan

All projected needs are assimilated and groups are formed on the basis of level, function, skill /competency, initiative, etc. and an annual training plan is drawn. This plan contains the dates for each programme, venue, target population, number of participants per programme, training Hours per programme, Faculty for the programme, etc.

Conducting Programmes

Faculty is identified for each programme from internal sources, OEMs or experts in respective fields.

External Training Programmes

Employees are nominated for programmes / seminars / workshops / visits conducted by leading institutions / professional bodies.

Assessment of Effectiveness of Training

Study of effectiveness of training is done every 3 months wherein the trained personnel as well as his / her supervisor respond about the benefits accrued out of the training in terms of skill /competency up gradation and the resultant tangible / intangible

65

benefits. Skill / competency assessment is also done to measure the effectiveness of training imparted.

Retraining

Retraining is imparted to an employee; if after assessment it is found that his/her skill or competency level has not improved to the benchmarked standards.

Housing Policy

Objective:

To provide assistance to employees in finding an accommodation suitable to their needs based upon respective eligibility.

Scope:

All regular employees at all locations shall be covered by this Policy.

Process:

66

A) Employees in grades E08 & above

The Company shall provide for 2 alternatives for accommodation of employees, i.e. Bachelor & Family accommodation.

1. Bachelor Accommodation The GETs and MTs shall be provided with the Hostel

accommodation. On successful completion of Training, the GET/MT/DETs

shall have to vacate the Hostel accommodation and opt for either a Bachelor’s accommodation or a Family accommodation.

In case of semi furnished Hostel / Bachelor’s accommodation, 10% of the basic pay per month shall be charged as rent, which will be deducted from the salary.

2. Family Accommodation

Family accommodation shall be provided as Company Leased or Self Leased.

Company leased accommodation shall be provided by the company. The rent along with the security deposit (equal to 10 months rent) in such case shall be directly sent to the owner. Brokerage would be 30 days (one month) rent fixed for the accommodation as per the Lease Agreement in Mumbai & Navi Mumbai only.

Self Leased accommodation shall be provided to employees having a house in his/her own name or in the name of the spouse. Such accommodation shall be hired by the Company on lease and license basis and provided to the said employee as Self Leased accommodation.

3. House Rent Allowance

The Employee shall have the option to draw HRA to have accommodation on rental basis. No brokerage or deposit shall be permissible in such case.

In any of the above cases, HRA shall be admissible at 40% of the basic pay of the employee for employees in grades E08 & above.

B) Adjustment of rent from the employee67

If Company leased accommodation is provided (in case of employees in all Grades E08 and above) and the rent is more than 40% of the basic pay, the difference between entitlement & lease rent shall be recovered from the salary of concerned employee. However, if the rent is less than the entitled HRA of 40%, the balance amount shall be given to the employee as a component in Special Allowance.

C) Relocation / Change of Accommodation

An employee shall be allowed to change his/her accommodation due to the following reasons:

a) Notice from the house owner for vacation.

b) Management decisions to relocate the employee.

c) On request of employee due to personal problems.

d) Deterioration in the condition of the house or inadequacy of basic needs like water, electricity, etc.

In case of request for change of accommodation for the reasons at c & d above, the employee shall be required to provide documentary proof for consideration.

Leave Rules

Objective:

To provide guidelines for permissible leaves per annum.

Scope:

This policy shall be applicable to all regular Employees and trainees at all locations.

1. Leave Entitlement

68

All employees shall be given 23 days of earned paid leave per annum.

The employees who have worked for 240 days or more (excluding leave/ holidays declared by the company) in a Calendar Year will be entitled for leave (i.e. 23 days per annum). The employees who have worked for less than 240 days in a Year shall be entitled for leave on pro- rata basis i.e. @ 1 day for every 16 days of service (including leave and holidays).

The employees who joins after 1st Jan. shall be entitled for leave on pro- rata basis i.e.@1 days for every 16 working days of service( including leave and holidays), provided they worked for two-third of the days in the remainder of the calendar year(instead of 240 days mentioned above in clause above).

While calculating the leave, the fraction of leave of half a day or more shall be treated as one full day's leave, and fraction of less than half day shall be omitted.

All trainees shall also get leave @ 23 days per annum on pro-rata basis and the same will be credited to their account on 1st January

2. Leave Availment

Employees can avail leave for 1/2 day or more subject to approval of management.

The leave can be prefixed and / or suffixed to holidays / Offs. The intervening holidays / offs during the period of leave will be

excluded from leave. At the beginning of the Calendar Year (i.e. .on 1st Jan) leave

earned by the employees in the previous year shall be credited to their account

3. Accumulation and encashment of leave

1. The unavailed leave can be accumulated upto 330 days. Leave beyond 330 would lapse automatically.

2. Earned leave standing to the credit of an employee while in service may be encashed at his/her option, only once in a calendar year in the following manner.

69

If an employee had more than 120 days earned leave at his/her credit, he/ she can encash any amount of leave over and above 60 days leave to be kept as his/her credit.

In case the earned leave balance is 120 days or below, then the employee an encash 50% of the leave at his/her credit and balance 50 % will remain at his/her credit.

The encashment shall be admissible only when the employee has taken minimum 6 days leave in that particular calendar year.

On separation/ Superannuation/ Death, the unavailed leave shall be encashed.

An employee, while in service, shall be required to apply in writing through HOD for leave encashment. The HRD shall process and pass for the payment.

4. Other Leave

1. Maternity Leave It covers only married female employees who have

completed 180 days continuous service on date of availing the leave restricted to two children.

Maternity Leave maximum admissible shall be 12 weeks (84 days) with full pay, six weeks before and six weeks after delivery or in any other proportions.

2. Paid Holidays

In addition to existing 6 paid holidays employees will be entitled to avail two Restricted Holiday (RH) from the below mentioned list of holidays during the calendar year.

Employees will avail RH with prior intimation and permission of the Company.

The unavailed RH will not be allowed to be carried forward. At times, RH balancing is to be done so as to ensure that

normal operations are not effected.

5. Birthday /Marriage Anniversary Leave

All regular employees shall avail leave for either Birthday or Marriage Anniversary on application.

70

This leave cannot be carried forward, clubbed or encashed. If Birthday/ Marriage Anniversary fall due on a holiday, the same cannot be claimed on any other day and it shall lapse.

Compulsory Annual Leave:-

1. Total compulsory annual leave will be of 12 days for every calendar year.

2. Out of 12 days CAL, leave of 7 days will be taken at a stretch by employee.

3. Remaining 5 days CAL, can be taken by employee in combination of 1 to 5 days as per his / her requirement.

4. While proceeding on CAL employees are requested to follow the handing over and taking over charge policy.

Incase the same is not availed, twelve days leave (CAL) for the current year will be deducted from their accrued leave balance as on 1st January of Next calendar year.

Recruitment Policy

The Recruitment Policy at ISPAT aims at enriching its pool of talent through increasing skill and functional expertise, to become a global leader through committed, motivated and empowered employees. All of us should remember that it’s not the candidate who is seeking employment with us but it is we who are seeking him for

71

the company. Hence, each and every candidate should be treated with full dignity and respect.

Objective:

The objective of the Recruitment Policy is to resource the best talent through Internal and External sources to achieve the Business Objectives and Goals of the Company.

Recruitment Process :

1. Internal Recruitment

Scope:

All regular employees at all locations.

Process:

The vacancies which are to be filled up internally shall be first posted on Lotus Notes, under “Internal Job Posting” (IJP), displayed on the notice boards and in house journals.

Eligible employees can apply for the same in the prescribed format mentioning the reference number along with a forwarding note by the Reporting Officer.

All applications shall be sent to the Recruitment Head. The job opening shall be posted for a period as decided on case

to case basis but for a minimum period of one week. The job posting shall indicate detailed Job Description, location

of the job, the minimum requirement of experience in the Company Grade and the last date of application.

The process of selection shall include interview by panel and competency matching for the post advertised. For any skill based vacancy, skill test shall be administered.

The decision of the panel shall be binding and final. Canvassing and influencing in any form shall immediately result

in disqualification of the candidate.

2. External Recruitment

Scope:

72

All vacancies in the company which need to be filled up through external sources due to non availability of requisite talent/expertise within the company shall be done through external recruitment. Even the Casual employees of the Company can apply for such openings.

Process:

All vacancies in the company which are to be filled externally shall be advertised through Internet and/ or print media inviting applications from eligible persons.

Predetermined recruitment consultants would also be intimated about the requirement solely on need base as decided by the recruitment department.

The Potential candidates shall apply for the same in the prescribed form.

The job posting shall indicate detailed Job Description, location of the job, the minimum requirement of Professional experience/expertise and the competency requirements along with the last date of application.

The process of selection shall include interview by panel. The panel would comprise of Departmental / Sectional Head of the concerned area of vacancy and the location HR Head.

The decision of the panel shall be binding and final. Canvassing and influencing in any form shall immediately result

in disqualification of the candidate. Candidate of age 55 & above shall not be considered as

candidature for the position of GM and above. Moreover for the position upto DGM, candidate should not be more than 45 years of age. However for deserving candidate in both the cases, special approval needs to be taken from Hon’ble VC.

73