Mar 31, 2021
The Board of Directors has the pleasure of presenting the 49th Annual Report of Steel Authority of India Limited (SAIL, the Company) together with the Audited Standalone and Consolidated Financial Statements for the Financial Year ended 31st March, 2021.
Financial Results |
 |
(Rs. in Crore) |
|
Sl. No. |
 |
Standalone Year ended |
|
 |
Particulars |
31st March 2021 Audited |
31st March 2020 Audited |
1 |
Income |
 |  |
 |
(a) Revenue from operations |
69110.02 |
61660.55 |
 |
(b) Other income |
1011.69 |
985.22 |
 |
Total Income |
70121.71 |
62645.77 |
2 |
Expenses |
 |  |
 |
a) Cost of materials consumed |
23136.17 |
29212.87 |
 |
b) Changes in inventories of finished goods, work-in-progress and by-products |
4268.58 |
(5555.82) |
 |
c) Employee benefits expense |
10445.94 |
8781.32 |
 |
d) Finance costs |
2817.14 |
3486.76 |
 |
e) Depreciation and Amortisation expenses |
4102.00 |
3755.05 |
 |
f) Other expenses |
18531.28 |
19023.17 |
 |
Total Expenses |
63301.11 |
58703.35 |
3 |
Profit before Exceptional items and Tax |
6820.60 |
3942.42 |
 |
Add / (Less): Exceptional items |
58.43 |
(771.76) |
4 |
Profit before Tax |
6879.03 |
3170.66 |
 |
Less: Tax expense |
 |  |
 |
Current tax |
12.05 |
224.14 |
 |
Deferred tax (refer note 8) |
3016.96 |
924.98 |
 |
Total Tax expense |
3029.01 |
1149.12 |
5 |
Net Profit for the period |
3850.02 |
2021.54 |
power rates, interest charges etc. and higher dividend income, foreign exchange gain and reversal of Covid-19 discount on sub grade iron ore fines.
Your Company continued its thrust on judicious fund management with timely repayment of loans including interest, advance planning and action for future fund raising, etc. to meet our growth objectives. There has been significant reduction in the borrowings of the company during the FY 2020-21due to improved cash flows because of increasing steel prices and demand in India. The Company had borrowings of ''37,677 crore as on 31st March 2021 vis-a-vis ''54,127 crore as on 31st March 2020 in line with INDAS. The Company has hedged the foreign currency risk on Buyers'' Credit and External Commercial Borrowings. The debt equity ratio of the Company as on 31st March, 2021 decreased to 0.87:1 from 1.36:1 as on 31st March, 2020 primarily due to decrease in borrowings during the year. The net worth of the Company increased to ''43,495 crore as on 31st March 2021 from ''39,777 crore as on 31st March 2020.
An Interim Dividend of 10% i.e. Re.1/- per equity share was paid during the month of January, 2021. The Board of Directors of your Company has further recommended a Final Dividend of 18%, subject to approval of Members in the ensuing Annual General Meeting of the Company, i.e. total dividend for FY 2020-21 being 28% on equity share capital of the Company. Further, no amount has been transferred to general reserve during the year under review.
M/s. CARE Ratings, M/s. India Ratings and M/s Brickwork Ratings, RBI approved Credit Rating Agencies, assigned âCARE AA Outlook: Stable'', âIndia Ratings AA- Outlook: Negative'' and âBWR AA Outlook: Negative'' ratings respectively for SAILs long-term borrowing programme.
Your Company is committed to the safety of its employees and the people associated with it including, those living in the neighbourhood of its Plants, Mines and Units. SAIL Safety Organization (SSO) monitors and guides the Safety Promotional and Fire activities undertaken at different Steel Plants/ Units/ Mines/ Stockyards. SSO formulates and prepares appropriate Safety Policies, Procedures, Systems, Action Plans, Guidelines, etc. and follows up for their implementation and thereby helps in providing Accident-free Work Environment. The Safety Guidelines framed by Ministry of Steel, developed by SSO in association with major private steel producers of India, as well as IPSS (Inter Plant Standardisation in Steel Industry) standards have been
Your Company achieved Sales Turnover of ''68,452 crore during the Financial Year (FY) 2020-21, which is higher by 12% as compared to corresponding period of last year (CPLY) mainly due to increase in Net Sales Realisation (NSR) of Saleable Steel of 5 Integrated Steel Plants by 10% and higher Sales Volume by 5%. During the Financial Year 2020-21 the Profit Before Tax and Profit After Tax are ''6,879 crore and ''3,850 crore respectively which shows a substantial growth as compared to CPLY Profit Before Tax of ''3,171 crore and Profit After Tax of ''2,022 crore There is an accounting impact of ''1,289 crore on Profit After Tax due to switch over to new tax regime under section 115BAA.
During the FY 2020-21, despite the lockdown in the Country during Q-1 because of Covid-19 situation, there has been significant improvement in the performance of the company mainly on account of increase in NSR of Saleable Steel (10%) and significant reduction in the imported coking coal prices (21%). The profit has further improved due to increase in saleable steel sales (5%) on account of higher demand of steel, higher sale of pig iron, secondary products and iron ore fines, decrease in expenditure of stores and spares, purchased
implemented and are extensively referred to in the course of working. Prioritising safety foremost, the Company has engaged Safety Management Consultant for Safety Culture Transformation, and a pilot project is in progress in Bhilai Steel Plant, and is in the process of being followed up in other Steel Plants/Units. Consistent efforts are also being made by SSO for competence building in the area of Safety Management through various HRD interventions, LEO workshops, webinars etc. on areas of concern, covering Heads of Shops, Line Managers, Safety Personnel and Trade Union leaders. Benefits of technology are leveraged by extensive utilization of IT in the area of Safety Management, by way of Web Portals for sharing important information, safety suggestions, etc. Good Practices in respect of Safety prevailing in the Plants & Units and other industries are captured and circulated among all for horizontal deployment and bringing improvement. Magazines in digital form are brought out periodically for increased safety communication and awareness among the employees. A multi-disciplinary Safety Engineering Departments exists in each of the Steel Plants and Mines to look after their safety needs. The emphasis is on Systematic Approach to Safety Management. SSO is also managing the secretariat of the Joint Committee on Safety, Health & Environment in the Steel Industry (JCSSI), a bipartite forum which addresses Steel Plant Safety, Health & Environment issues with active involvement of management and Central & Plant level trade unions and provides guidelines to the member organizations. Acknowledging the importance of Safety, the activities and measures undertaken are reviewed at the highest level by the Board Sub Committee on Health, Safety & Environment.
During the FY 2020-21, in-spite of the challenges of the market and the lock down and other restrictions imposed to contain the Covid-19 pandemic, your Company achieved Saleable Steel production of 14.602 million tonne (MT). Hot Metal and Crude Steel production during the FY 2020-21 was 16.582 MT and 15.215 MT respectively. There is negative growth in the Production over last year owing to the restricted production mainly in Q-1 of FY 2020-21 due to Covid-19 pandemic.
The outbreak of the Covid-19 pandemic in March, 2020 resulted in a series of restrictions by the Government of India/State Governments for preventing the spread of the virus. Due to the fast spread of Covid-19, the restrictions continued to be in place for more than four months before unlock down measures were initiated. The pandemic and countrywide restrictions severely affected market sentiments, coupled with interstate travel and transport restrictions, resulting in severe slump in the demand for steel products.
After the initial months of the FY 2020-21, your Company adopted focussed approach on improving its volumes, operational efficiencies, operating the facilities at optimum levels, reducing its inventory levels, etc. In spite of the pandemic situation resulting in lower production over previous year, your Company has achieved yearly best performance w.r.t. Coke Rate, CDI Rate and BF Productivity owing to better capacity utilization of bigger blast furnaces, optimization of BF operations and enhanced usage of CDI. The multi-pronged strategy has helped the Company to top the performances during the following quarters of the Financial Year.
The Research and Development Centre for Iron & Steel (RDCIS) of the Company provided innovative technological inputs to different Plants of SAIL, with special emphasis on productivity and quality improvement, product development and commercialization, energy conservation and automation. The continuous activities in respect of product development have led to development of 17 new Steel Products during FY 2020-21. Some of these products have been developed using the newly commissioned production facilities viz., Bar & Rod Mill and Universal Rail Mill at Bhilai Steel Plant; Medium Structural Mill at Durgapur Steel Plant; New Plate Mill at Rourkela Steel Plant; Cold Rolling Mill-III at Bokaro Steel Plant; Wire Rod Mill, Bar Mill and Universal Section Mill at IISCO Steel Plant.
At Bhilai Steel Plant (BSP), Blast Furnace-8 produced 2.45 MT of Hot Metal during the FY 2020-21, surpassing 2.36 MT achieved in the previous financial year. The SMS-III achieved its best ever production of 2.2 MT, surpassing the previous best of 1.14 MT achieved in the financial year 2019-20.The Plant has achieved best ever yearly Prime UTS-90 Rails production from its newly commissioned Universal Rail Mill at 6.29 lakh tonne in the FY 2020-21 against 5.38 lakh tonne in 2019-20. The improvement in production from new Universal Rail Mill (URM), has enabled a record loading of long rails at 7.36 lakh Tonne in FY 2020-21 against 6.33 lakh Tonne in 2019-20, registering a growth of 16.3%. A new grade of Rails (R 260) was developed and supplied to Indian Railways. At BRM, rolling of âSAIL SeQRâ grade TMT bars (>10-20 mm) was successfully developed in the FY 2020-21. The Mill has produced 3.84 Lakh Tonnes of Finished products this year, overcoming the previous best of 1.83 lakh tonnes achieved in the year 2019-20. Your Company has supplied 10.87 lakh tonnes of Rails to Indian Railways in the FY 2020-21, out of which 68% component was 260 metre long rail welded panels, which has been best ever quantity supplied with a growth of 16.5% over CPLY
Durgapur Steel Plant (DSP) recorded highest ever production from its new Medium Structural Mill (MSM) at 2.94 lakh tonnes in FY 2020-21 against 2.17 lakh tonnes during 2019-20. Among other remarkable achievements, the Plant recorded the best ever despatch of 13,688 numbers of WAG9 Wheels (an import substitution product) for electric locomotives. WDG4 Loco Wheels (500 nos.) were developed first time within a span of two months, the fastest development of any wheel type in a period of two months. Special low C (C-0.04%), low Mn and Al killed steel cast in Bloom and Round Caster for cold rolled applications and hollow structures were also developed .
At Rourkela Steel Plant (RSP), New National Benchmark was registered with respect to highest number of 48 blows in single Converter âCâ on 2nd July, 2020 and highest campaign life at 2500 heats in Torpedo Ladle during March, 2021. Successful rolling, finishing and supply of 4304 tonnes of API 5L X 70m PSL2 grade steel plate for pipeline transportation system was carried out. DMR-249B
At IISCO Steel Plant (ISP), with regard to development of new grades and sections to widen the product basket, 17 new grades, 4 new sections and 2 new products have been developed and dispatched in the FY 2020-21. Major Grades developed were Electrode Quality Grade, Cable Armour Quality, EN8D & EN8DCr Medium Carbon Wire Rods, High Carbon Basket (HC38B to HC80B) including PC115. New sections which were developed and dispatched included ISMC 300 Channel at WRM; 14 mm WRC, 6.5 mm WRC for Africa, 6 mm TMT Coil, 40 mm TMT bars at Bar Mill(the highest section in Bar Mill). Export quality semis in various grades (4sp, 5sp, SPHC, SS400) in 150x150 mm & 200x280 mm were also developed during the FY 2020-21.
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Your Company has always strived to maximize and optimise its captive power potential in view of reliability of power supply as well as availability of power at optimum cost. During the FY 2020-21, about 64% of the total requirement of 1230 MW was met from the captive Power Plants. With an objective to optimize the cost, SAIL has been actively procuring power through open access route since such opportunity was introduced in Electricity Act, 2003. Continuing the legacy, this year too, SAIL Plants procured about 460 Million Units of power through open access route which also included purchase from power exchange and purchase of 32 Million units of renewable power from sugar mills in the State of Madhya Pradesh.
With the objective to enhance the share of captive power and ensure supply of reliable power at optimum cost to expansion projects, your Company is in the process of installing new captive power facility of 250 MW at Rourkela Steel Plant and another (2x20) MW capacity at Durgapur Steel Plant by NTPC-SAIL Power Company Limited (NSPCL), a Joint Venture Company of SAIL & NTPC Ltd.
Your Company is always focussed on its approach towards achieving better performance parameters with respect to usage of power purchased from utilities and maximize the rebates and incentives available in the power tariff for achieving higher load factor, power factor, etc. During FY 2020-21, ''185 crore was received as incentives and rebate in the power bills of utilities. SAIL has also been able to utilize the Regulatory interventions to its benefits in past few years. During the FY 2020-21, past tariff matters were resolved through such interventions, which helped in getting a refund of about ''135 crore.
Besides above, optimization of electricity consumption in various steel making processes is major thrust areas of SAIL Plants for lowering the power consumption per tonne of Saleable Steel production. As a responsible corporate house, your Company has given adequate emphasis on development
and usage of renewable power sources with focussed approach on Roof Top Solar(RTS) Power Plants. A Capacity of 3010 KWp of Roof Top Solar power plants has already been installed across SAIL Plants and Units. Further, installation of 6145 KW capacity roof top solar plants is in progress at various Plants/ Units of the Company across the Country.
During the FY 2020-21, total requirement of iron ore was met from the captive sources. Your Company''s captive mines produced about 30.06 million tonnes (MT) of iron ore. However, in case of clean coking coal, a requirement of about 1.59 MT was met from indigenous sources (Coal India Limited & captive sources) and for the balance requirement of coking coal (13.70 MT), the Company had to depend on imports due to constraint of availability of required quantity and quality, within the Country. In the FY 2020-21, production from the captive collieries of the Company was about 0.55 MT, out of which 0.09 MT was raw coking coal and balance 0.46 MT was non-coking coal. In case of fluxes, around 1 MT of limestone and 0.77 MT of dolomite were produced, giving a production of 1.77 MT fluxes from captive sources. For thermal coal, your Company depends entirely on purchases from Coal India Limited except for small quantity produced from the captive mines.
On account of expiry of mining leases of Private Merchant Miners by 31st March, 2020 in the Country, Ministry of Mines, Government of India vide Order dated 16th September, 2019 has entrusted SAIL with the responsibility to make available in the open market, 25 percent of its total mineral production of the previous year. The permission is valid for a period of two years w.e.f. 16th September, 2019.
Further, in another separate Order dated 16th September, 2019, Ministry of Mines, has allowed SAIL to dispose off the old stock of 70 MT of low grade iron fines and ores (including slime) lying dumped across different captive mines of the Company. In this regard, efforts were being made in obtaining approval of respective State Governments and other concerned statutory authorities.
However, in view of delay in grant of permissions by the respective State Governments and Statutory Authorities, Ministry of Mines vide Orders dated 3rd December, 2020 modified the earlier Orders dated 16th September, 2019 and allowed sale of 25% of the cumulative production in the previous year in a State and also sale of sub-grade minerals lying at different captive mines under intimation to the concerned State Government and Indian Bureau of Mines. Accordingly, it was planned to make available about 7 MT of iron ore in FY 2020-21, subject to the grant of various approvals by the Government of Chhattisgarh, Jharkhand and Odisha i.e. forest land handover of Topailore Lease
of Gua, CTE & CTO from JSPCB for Duargaiburu Lease for selling of dump fines, etc. Subsequently, approvals from the State Governments of Chhattisgarh and Odisha were received. However, in view of the aforementioned approvals from Jharkhand State Government being still awaited, only about 4.55 MT of iron ore could be made available in open market during FY 2020-21.
In order to expedite capacity expansion projects of mines, Stage-II FC of 361.295 Ha of Duarguiburu Lease of Gua Ore Mines was granted on 7th December, 2020. However, Stage-II FC for the capacity expansion of Chiria Mines and opening of South-Central blocks in Kiriburu-Meghahatuburu Mines in Saranda forest in Jharkhand is awaited from MoEFCC. In addition to this, forest land w.r.t. Topailore and Duarguiburu Mining Leases of Gua Ore Mines is also to be released by the State Government. In view of its criticality to the capacity expansion projects, the matter is being actively pursued at the level of MoEFCC, Ministry of Steel and Government of Jharkhand.
In order to expedite the process of selling of dump iron ore from captive mines, proposals for amendment of existing environment clearances were submitted to the MoEFCC and on recommendation of Expert Appraisal Committee, following ECs have been granted:
⢠Topailore Lease (Gua) on 19th May, 2020.
⢠Amalgamated Lease (Kiriburu-Meghahatuburu) on 30th July, 2020.
⢠5.1 Sq. Miles Lease (Bolani) on 30th July, 2020.
⢠ML-130 Lease (Barsua-Taldih-Kalta) on 3rd July, 2020 (Corrigendum dated 13th July, 2020) and Amendment in redistribution again on 17th March, 2021.
⢠Duarguiburu Lease (Gua) on 6th November, 2020.
In addition to this, MoEFCC also granted EC for development of 1 MTPA iron ore mine at Kalwar-Nagur Lease of Bhilai Steel Plant on 7th December, 2020.
Extension of lease period and reservation of new areas
⢠Amalgamation of ML-130 & ML-162 Mining Leases of Barusa-Taldih-Kalta Mines upto 5th January, 2030 granted by Government of Odisha on 2nd December, 2020, along with extension of Lease period upto 5th January, 2030 on 30th March, 2021.
⢠Lease period of Tulsidamar Dolomite Lease extended upto 31st March, 2022 by Government of Jharkhand vide Order dated 13th February, 2021.
⢠Government of Odisha vide proceeding dated 24th February, 2021 has granted Prospecting License in respect of 268.221 ha (as per DGPS) / 277.683 ha (as per ROR) in village Thakurani Pahad Block-A, Keonjhar for a period of 3 years.
On seeking clarification, Ministry of Coal vide letter dated 21st January, 2021 has clarified that there is no prohibition in the MMDR Act for renewal of mining leases of coal mines, even if the total period of mining lease and all renewals exceeds 50 years. The clarification shall facilitate second renewal of Tasra Coal Mining Lease beyond 30th April, 2022, for which renewal application has already been made to the Jharkhand State Government on 10th July, 2020.
However, delay in extension of lease periods of remaining leases of Chiria and Gua leases, and reservation of area for sand for stowing, are matter of concern.
Commencement of interim Mining at Rowghat Anjrel Block
Mining Lease for Rowghat Deposit-F was granted by the Chhattisgarh State Government on 21st October, 2009. However, the development work of the Mine and construction of rail line linked with mining project got affected mainly due to law and order issues prevailing in the area.
Though for development of 14 MTPA Mine at Rowghat, Mine Developer cum Operator (MDO) was appointed in September, 2017, mine development may commence only after cutting of trees and handing over the forest land to SAIL by the State Government. In this regard, order for cutting of about 39,000 trees in Rowghat Deposit-F was issued by the State Government and the same has started.
As MDO will take 5 years to arrive at required scale of mining operations, SAIL made a provision of interim mining for the supply of 3 lakh tonnes of iron ore per annum for a period of three years from Anjrel Block of Rowghat. Consequent upon tree cutting permission by the State Government on 13th July, 2020, tree cutting activities could commence on 18th July, 2020. Thereafter, on 23rd November, 2020 Collector, Narainpurwas requested to grant enter upon permission in the handed over forest area of Anjrel Block, and thereafter, after receiving necessary approvals to enter upon in the handed over forest area of Anjrel Block of Rowghat from Government of Chhattisgarh on 27th January, 2021, interim mining at Anjrel Block has started on 5th February, 2021.
Consequent to the SAIL''s letter dated 12th March, 2018 to Ministry of Coal (MoC) regarding returning of Sitanala Coal Block, MoC, vide letter dated 4th October,
2018 issued a Termination Notice against Allotment Agreement and Allotment Order, in respect of Sitanala Coal Block and on 25th October, 2018 advised the bank to invoke the Bank Guarantee(BG) of ''10.43 crore. SAIL had preferred Writ Petitions before the Delhi High Court to challenge the Order dated 4th October, 2018. Though, Hon''ble Delhi High Court declined to pass any interim order, but clarified that if the petitioner prevails in this petition, the consequential direction for refund of the amount collected by invoking the BG will be passed. The matter is sub-judice.
Consequent to the SAIL''s letter dated 8th March, 2018 to Ministry of Coal (MoC) about returning of Parbatpur Coal Block, MoC, vide letter dated 5th December,
2019 issued a Termination Notice against Allotment Agreement and Allotment Order in respect of Parbatpur Coal Block and advised the bank to invoke the BG of '' 62.57 crore.
SAIL has preferred Writ Petitions before the Delhi High Court challenging the Order dated 5th December, 2019. In response, vide Order dated 19th December, 2019, the Hon''ble Delhi Court directed for maintaining status quo in respect of the BG, till the next date of hearing.
In view of the outbreak of Covid-19 pandemic and consequential lockdown, the matter on both the above mentioned cases could not be placed on scheduled dates and the next date of hearing is yet to be informed.
In the meanwhile, MoC in February, 2020, has appointed Chairman Coal India Limited(CIL) as the designated custodian to manage and operate Parbatpur Central Coal Mine. Subsequently, on request of SAIL, DC, Bokaro appointed Magistrate for assets verification of the Parbatpur Coal Blockand after completion of the same, Parbatpur Coal Block was handed over to BCCL on 10th July, 2020.
During the Financial Year (FY) 2020-21, your Company achieved its best ever Saleable Steel sales volume of around 14.937 million tonnes (MT), registering a growth of about 4.4% over previous year. Continuing its efforts to enhance presence in the international markets, the Company took a big leap, with saleable Steel exports being highest ever at about 1.924 MT, achieving thereby a growth of over 64% over the previous year. Further, in our pursuit for increased exports, your Company has entered into several new markets for various product categories.
During the initial Covid-19 pandemic phase and resulting lockdowns, avenues for Steel business dried up in the domestic market, which demanded strategic balancing on domestic and exports fronts. A buoyant international market at the time when domestic demand was subdued, helped in managing inventories and mitigating the impact on production volumes. The resurgence of domestic markets by third quarter, fuelled by pent-up demand, helped in liquidating excess inventories as well as catching up on lost ground during the remaining FY 2020-21.
As a part of ongoing research and development initiative, a new Rail grade R-260 was developed along with its Flash Butt welding technology and supplied to Indian Railways. Your Company has also developed WDG4 locomotive wheels as an import substitution item, thereby, furthering the cause of Atmanirbhar initiative of Government of India. Further, SAIL has successfully worked towards expanding the product-basket by developing special quality steels such as HC62, HC72, HC80, HCT1130Cr (PC115),CAQ, CHQ, Bright Bar, EN8D, EN8D Cr from Wire Rod Mill of ISP
Your Company''s presence in certain critical areas of Defence has been strategically significant with supply of DMR steel materials, which has been highest during last 11 years. In addition to this, Space exploration projects have also been serviced through supply of various special grades of alloy steels during the FY 2020-21.
The brand âSAIL SeQRâ reinforcement bars is growing from strength to strength by clocking 2.5 lakh tonnes during FY 2020-21, which helps in strengthening uniform brand experience in retail channel. Your Company is working towards expanding the 2-Tier and 1-Tier distributorship network across India, which will further strengthen our position in B2C space. As a part of supplementing this initiative, online e-portal has been launched during FY 2020-21 enabling the smallest of demand being serviced through the 2-Tier distributorship network. Your Company has been working towards focused brand building initiatives on âNEXâ brand of structural by holding webinars and workshops with key influencers.
Subsequent to launch of Mission Poorvodaya by Government of India, an Incentivization Scheme was introduced by SAIL for development of MSMEs based in the districts in which its Integrated Steel Plants are located and 132 MSMEs have joined during FY 2020-21. Besides this, a scheme to supply select steel products to MSME members of Engineering Export Promotion Council (EEPC) at export parity price has also been launched by your Company. Further, in line with National Steel Policy, to improve per capita consumption of steel in the Country, around 117 âGaon Ki Oreâ workshops were organised during FY 2020-21 across India.
Your Company has been contributing in nation building since inception by servicing the requirement of various Infrastructure Projects and also projects of Strategic Importance. Continuing the trend, SAIL has supplied significant quantity of Steel to Power Projects, Road, Rail, Airport & Port Infrastructure Projects, Metro Rail Projects, Irrigation & Drinking Water projects, Fertiliser Industry, Oil & Gas Sector, etc.
Your Company has a leadership position in consumer mind space and is striving sincerely to bridge the ever changing expectation gaps with improved services, products and processes.
As required by the Public Procurement Policy of the Government of India, the information on procurement from Micro & Small Enterprises during Financial Years 2020-21 and 2019-20 is given below:
priorities and objectives has facilitated smooth transition to âstate-of-the-art'' technology in the Modernization and Expansion Projects.
Your Company achieved the Labour Productivity (LP) of 396 TCS/Man/Year in 2020-21. The manpower strength of the Company was 65,564 nos. as on 1st April, 2021 with manpower rationalization of 3,815 nos. achieved during the year. The enhanced productivity with rationalized manpower could be achieved as a result of judicious recruitments, building competencies and infusing a sense of commitment and passion among employees to go beyond and excel. Trend of enhanced productivity and manpower rationalization since 2011-12, onwards is depicted below:
('' crore) |
||
Particulars |
2020-21 |
2019-20 |
Total Amount of Procurement |
3747.22 |
4961.03 |
Total Procurement from MSE |
1384.31 |
1431.27 |
%age Procurement from MSE |
36.94 |
28.85 |
The Modernisation and Expansion Plan (MEP) at Rourkela, Burnpur, Durgapur, Bokaro and Salem Steel Plants and all major facilities under MEP of Bhilai Steel Plant have been completed. The various facilities are under operation, stabilization and ramp up.
The Revised Cost Estimates (RCE) of MEP of all the Plants have been approved progressively by year 2020-21. Considering these RCEs, the indicative investment for MEP is likely to be ''80,170 crore (Gross) (excluding the sustenance schemes). The cumulative expenditure of ''68,267 crore (Gross) has been incurred till March, 2021 on MEP (excluding sustenance schemes).
A capital expenditure of ''4,283 crore has been incurred during FY 2020-21 against the revised estimates of ''4,800 crore and capex planned for the Financial Year 2021-22 is '' 8,000 crore.
The details of Addition, Modification & Replacement (AMR) Schemes under implementation are given in the Management Discussion & Analysis (MD&A) Report.
C. HUMAN RESOURCE MANAGEMENT REVIEW
Your Company recognizes contribution of its Human Resources in providing it the competitive advantage. The Company has achieved its present level of excellence through investment in its human resource, where skill and knowledge constitute the basis of every initiative - be it technology or innovation. Developing skills and capabilities of employees to improve manpower utilization and labour productivity is the key thrust area of Human Resource Management (HRM) in the Company.
Your Company provides an environment conducive for learning, encourages adoption of best practices in every area and nurtures creativity and innovation among employees. Human Resource initiatives in SAIL are focused on developing team spirit, employee empowerment and their involvement in various improvement activities. Strategic alignment of HRM to business
Your Company believes that people''s development is the key for overall growth of the organisation. Training and development activities have facilitated development of employee''s knowledge and skills, resulting in advancement of competencies, thereby leading to attainment of organisation''s goals and objectives. SAIL has been making sustained efforts through various training and development activities with focus on preservation, transfer and improvement of skills, knowledge and technology in collaboration with reputed organizations and development of effective managerial competencies in association with premier institutes.
Preparing employees for tomorrow is being given a major thrust for effectively taking up challenges and discharging new roles and responsibilities is being given a major thrust. Overall 36,563 employees were trained against target of 25,062 employees during the Financial Year 2020-21 on various contemporary technical and managerial modules in-spite of the challenges of Covid-19 pandemic.The learning and development continuity of the Organization was maintained through various online interventions, apart from the regular programs and e-learning modules being made available in the in-house e-learning portal, while ensuring adherence to all the protocols and local guidelines for the pandemic.
SAIL has maintained its glorious tradition of building and maintaining a conducive and fulfilling employer-employee relations environment. The healthy practice of sorting out and settling issues through discussions with trade unions/workers'' representatives enabled the Company in ensuring workers'' participation at different levels and establishing a peaceful industrial relations climate. Some of the bipartite forums are functioning since early seventies and are sufficiently empowered to address different issues related to wage, safety, and welfare of workers, thus, helping in establishing a conducive work environment.
Bipartite forums like National Joint Committee for Steel Industry (NJCS), Joint Committee on Safety, Health & Environment in Steel Industry (JCSSI), etc. with representation from major central Trade Unions as well as representative Unions of Plants/Units meet on periodic basis and jointly evolve recommendations/ action plans for ensuring a safe environment & harmonious work culture which gets substantiated from the harmonious Industrial Relations witnessed over the years by SAIL Plants/Units, marked with diverse work culture at multi-locations.
In addition, Quality Circles, Suggestion Schemes, Shop Welfare Committees, Safety Committee, Canteen Management Committee, Productivity Committee, etc. also offer multiple avenues for enhanced workers'' participation. Workers are also kept abreast of strategic business decisions and their views sought thereon through structured /interactive workshops.
Communication is done in a structured manner with employees at various levels on a wide range of issues impacting the Company''s performance as well as those related to employees'' welfare across the Company. Mass communication campaigns are undertaken at Chief Executive Officer / Senior Officers'' level involving structured discussion with large group of employees. These interactive sessions help employees to align their working with the goals and objective of the Company leading to not only higher production and productivity but also enhance the sense of belongingness of the employees.
Effective internal grievances redressal mechanism has been evolved and established in SAIL Plants and Units, separately for Executives and Nonexecutives. Joint grievance committees have been set up at Plant / Unit level for effective redressal of grievances.
SAIL Plants/Units are maintaining 3 stage grievance handling mechanism and employees are given an opportunity at every stage to raise grievances relating to wage irregularities, working conditions, transfers, leave, work assignments and welfare amenities, etc. Majority of grievances are redressed informally in view of the participative nature of environment prevailing in the Steel Plants/Units. The system is comprehensive, simple and flexible and has proved effective in promoting harmonious relationship between employees and management.
250 staff grievances were received during the FY 2020-21, with 6 grievances pending from previous year, 237 staff grievances have been disposed off during the year, achieving 92.58% fulfilment.
Further, during FY 2020-21, 852 grievances were received under Centralised Public Grievance Redressal and Monitoring System (CPGRAMS), a National level online system managed by Department of Administrative Reforms and Public Grievance (DARPG), Government of India CPGRAMS is the platform based on web technology which primarily aims to enable submission of grievances by the aggrieved citizens from anywhere and anytime (24x7) basis to Ministries/Departments/Organisations who scrutinize and take action for speedy and favourable redressal of these grievances. Tracking grievances is also facilitated on this portal through the system generated unique registration number. However, there are certain issues which are not taken up for redressal and these include subjudice cases or any matter concerning judgment given by any court, personal and family disputes, RTI matters, anything that impacts upon territorial integrity of the Country or friendly relations with other countries, etc.
The Status of Grievances received and disposed from 1st April, 2020 to 31st March, 2021 is as under:
Sl. No. |
Particulars |
Received |
Disposed |
Average Time taken for Disposal |
Time allowed as per Guidelines |
1 |
Brought Forward |
32 |
747 |
15 |
60 |
2 |
Public Grievances |
727 |
|||
3 |
Covid Related Grievances |
93 |
93 |
1.2 |
3 |
 |
Total |
852 |
840 |
 |  |
In SAIL, pay and other benefits for executives are based on the Presidential Directives issued by Ministry of Steel, Government of India. The last pay revision effective from 1st January, 2007 was implemented in accordance with Presidential Directives dated 5th October, 2009. In case of Non-executive employees, the salaries and wages are finalized / revised in bipartite forum of National Joint Committee for Steel Industry (NJCS). The last NJCS agreement was finalized and signed on 1st July, 2014, effective from 1st January, 2012. In terms of notification dated 5th June, 2015 issued by Ministry of Corporate Affairs, Government of India, the provisions of section 197 of the Companies Act, 2013 are not applicable to Government Companies. As such, the disclosures to be made in the Board''s Report in respect of overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits are not included in this Report.
SAIL Plants and Units including Mines are situated in economically backward regions of the Country with predominantly SC/ST/OBC population. Your Company has made commendable contribution to the overall development of civic, medical, educational and other facilities in these regions. Some of the contributions are:
⢠Recruitment of non-executive employees is carried out mainly on regional level and hence, a large number of SCs/STs/OBCs and other weaker section of the society get the benefit of employment in SAIL.
⢠Over the years, a large group of ancillary industries have also developed in the vicinity of Steel Plants. This has created opportunities for local unemployed persons for jobs and development of entrepreneurship.
⢠For jobs of temporary & intermittent nature, generally contractors are engaged for executing job contracts wherein they deploy workmen from the local areas, which again provides an opportunity for employment of local candidates from economically weaker section.
⢠Establishment of SAIL Steel Plants in economically backward areas has given a fillip to the economic activities, thus, benefiting the population in the peripheral areas with different types of services. Steel Townships developed by SAIL have the best of medical, education and civic facilities and are like an oasis for the local Scheduled Castes, Scheduled Tribes and other OBC population who share the benefits of prosperity and development along with SAIL employees.
SAIL has undertaken several initiatives for the socio-economic development of SCs/STs and other weaker sections of the society which are mainly as under:
⢠Special Schools have been started exclusively for poor, underprivileged children at five Integrated Steel Plant locations. The facilities provided include free education, mid-day meals, uniforms including shoes, text books, stationery items, school bags, water bottles and transportation in some cases.
⢠No tuition fee is charged from SC/ST students studying in the Company run schools, whether they are SAIL employees'' wards or non-employees'' wards.
⢠Free medical health centres for poor have been set up at Bhilai, Durgapur, Rourkela, Bokaro and Burnpur (Gutgutpara) providing free medical consultation, medicines, etc. to the peripheral population mainly comprising of SC/ST and weaker sections of society.
⢠SAIL Plants have adopted tribal children. They are being provided free education, uniforms, text books, stationery, meals, boarding, lodging and medical facilities for their overall growth at residential hostels, Saranda Suvan Chhatravas, Gyanodaya Hostel and an exclusive Gyan Jyoti Yojana for the nearly extinct Birhor Tribe.
⢠For Skill Development and better employability, tribal school passouts have been sponsored for coaching in premier institutes for IIT/JEE entrance examinations and for trainings along with monthly stipend, accommodation, transportation and food facility at various ITIs, Nursing and other vocational training institutes.
SC/ST/OBC/EWS/PWDs, etc.
⢠Your Company follows Presidential Directives on Reservation for Scheduled Castes, Scheduled Tribes, Other Backward Classes, etc. As on 31st March, 2021, out of total manpower of 65564, 10919 belong to SCs (16.65%), 10109 belong to STs (15.41%) and 9894 belongs to OBCs (15.02%).
⢠Liaison/Nodal Officers have been appointed as per Presidential Directives for due compliance of the Orders and instructions pertaining to reservation for SCs/STs/OBCs /PWDs at Plants/Units of SAIL.
⢠The Liaison Officers for SC/ST/OBC at respective Plants/Units along with their subordinate staff take care of interest of SC/ST and OBC respectively and the function of SC/ST/OBC cell is being carried out by them. A member belonging to SC/ST community is associated in all the Departmental Promotion Committees (DPCs)/Selection Committees for promotion. A sufficiently senior level officer of SC/ST & OBC category is nominated as member of the Recruitment Board /Selection Committees for Recruitment
⢠Internal workshops are conducted at regular intervals through an external expert for Liaison Officers for SC/ST/OBC and other dealing officers of SAIL Plants/Units to keep them updated on the reservation policy for SC/ST/OBC/ etc. and other related matters.
⢠Plants/Units of SAIL have SC/ST Employees'' Welfare Associations which conduct regular meetings with Liaison Officers on implementation of reservation policy & other issues. In addition, an Apex level umbrella body namely SAIL SC/ST Employees Federation also exists in SAIL to represent the issues of SC/ST Employees in a coordinated manner.
The provisions under the Right to Information Act, 2005(Act) are being complied by all the Plants and Units of SAIL. All statutory reports, including Annual Report, are being sent to Ministry of Steel and also being uploaded on the website of the Companv-www.sail.co.in. Your Company has appointed Public Information Officers (PIO)/Assistant. Public Information Officers and Appellate Authorities and Transparency Officer under Sections 5 and 19(1) of the Act in each Plant and Unit for speedy redressal of the queries received under the Act. Under Section 5(5), all the officers/ line managers responsible for providing information to the PIO are called Deemed PIO, and are made equally responsible as PIO, towards timely submission of information to the applicant.
An exclusive RTI Portal has been developed with link available on the website of the Company. All the Plants/Units have listed 17 manuals and details of Authorities under the Act are uploaded on the website of the Company. Quarterly Returns and Annual Returns on implementation of the Act are being submitted online through the CIC portal. Implementation of online request has already been introduced from 1st May, 2015. A compilation of Record Retention Policy of various functions of Corporate Office has also been uploaded on the website of the Company. In addition to this, compilations of important decisions of CIC, DoPT circulars and High Court cases are also available on the website of the Company.
Awareness Programs/Workshops on âObligation of Public Authorities under RTI'' have been organised across Plants/Units and Information Commissioner has been present in most of these programs. Further, awareness programmes on the RTI Act are also held at Plants, Units and Corporate Office.
SAIL received a total of 2,706 applications and 482 appeals under the Act during the Financial Year 2020-21 and all of them have been disposed-off within the stipulated time frame under the Act. CIC has also taken up 97 cases and most of these cases were disposed-off in favour of the Company.
Since enactment of the Act, SAIL has received a total of 46,867 applications and 7,105 appeals upto 31st March, 2021, which were disposed-off within the stipulated time. Out of these, 940 cases were taken up by the CIC and most of these cases were disposed-off in favour of the Company.
Your Company is totally committed to excellence in public service delivery through good governance, by a laid down process of identifying citizens, our commitment to them in meeting their expectations and our communication to them of our key policies, in order to make the service delivery process more effective.
SAILs Citizen Charter has outlined commitment of SAIL towards its stakeholders, thereby empowering them to demand better products and services. Objectives of the Citizen''s Charter of SAIL may be summarized as below:
⢠Ensuring citizen-centric focus across all its processes by adopting Total Quality Management Principles for improvement of products and services.
⢠Ensuring effective citizen communication channels.
⢠Demonstrating transparency and openness of its business operations by hosting the Citizen''s Charter on the Corporate website.
⢠Working towards the delight of citizens, by fail-safe processes and in case of exigencies leveraging its service recovery processes, like Grievance Redressal, Handling Complaints, etc.
The Company has set up Internal Complaints Committees in line with the requirement of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. These Committees have been set up to redress complaints received regarding sexual harassment. All employees of the Company are covered under these Rules. The details of sexual harassment complaints received and disposed off during the year 2020-21 are as under:
Particulars |
No. of Complaints |
Number of complaints pending as on 1st April, 2020 |
Nil |
Number of complaints received in 2020-21 |
7 |
Number of complaints disposed off during 2020-21 |
5 |
Number of complaints pending as on 31st March, 2021 |
2 |
SAIL has signed an MoU with National Health Authority (NHA) for empanelment of Company run hospitals at Plants/Mines directly under PM-JAY on 18th December, 2019 as National Health Care Providers (NHCPs). The MoU is aimed at partnering Government of India in its endeavor to ensure universal access to good quality health care services to the deprived population of the Country. The scheme provides cashless and paperless treatment to the beneficiaries at empanelled hospitals.
On 4th February, 2021, a meeting with Hospital Operations Division of NHA was held over Video Conference where status of empanelment of SAIL Hospitals has been shared and it has been reiterated that SAIL is committed to operationalization of PM-JAY at SAIL Hospitals. NHA has also proposed Training for operationalization of PM-JAY at one of the SAIL Hospitals to provide impetus to the process.
In the background of the announcement made by Hon''ble Prime Minister of India during his visit to Rourkela Steel Plant on 1st April, 2015, ISPAT Post Graduate Institute and Super Specialty Hospital (SSH) complex was dedicated to the nation by the Hon''ble President of India on 21st March, 2021 at Rourkela Steel Plant of SAIL. Subsequently, to tide over the surge in Covid-19 cases, the augmented ICU ventilator facilities for treatment of Covid patients, was dedicated by Shri Dharmendra Pradhan, the then Hon''ble Union Minister of Petroleum & Natural Gas and Steel, on 20th May, 2021 through virtual mode. The new state of the art hospital would provide quality healthcare facilities and specialized treatment at the doorstep of the population residing in the peripheral areas.
D. AWARDS & ACCOLADES WON DURING THE YEAR
Your Company has won the following awards during the Financial Year 2020-21:
⢠SAIL has been awarded with the prestigious Golden Peacock Environment Management Award for the year 2020 in the Steel Sector by the Institute of Directors. The Award was received through virtual mode by Chairman, SAIL on 15th December, 2020.
⢠Rourkela Steel Plant was awarded the âGreentech Foundation CSR Award, 2020'' for outstanding achievement in Promotion of Health and Healthcare category for CSR Project on Comprehensive Water & Sanitation Project in Rourkela. The award was received through virtual mode by Chairman, SAIL on 1st October, 2020.
⢠SAIL bagged six Awards at PRSI (Public Relations Society of India) National Awards 2020 for its efforts in the field of Communication. The Awards were presented by Union Education Minister during a virtual ceremony on 21st February, 2021. SAIL has been awarded in the category of Best House Journal (English), Best Communication campaign (External Public), Best Communication Campaign of the Year- COVID-19, Special /Prestige Publication, E-newsletter and Corporate Website categories.
⢠SAIL awarded with the âRajbhasha Unnayak Sammanâ for extensive contribution in the propagation of the use of the official language. The Award was received by Chairman, SAIL on 14th December, 2020.
⢠ISP bagged the second runners-up position in the Final round of AIMA''s â29th National Management Games (NMG)'' held through online mode on 1st September, 2020.
⢠In the Grand Finale of AIMA online âWomen''s Quizâ organised on 4th December, 2020, Bokaro Steel Plant was declared the Runners up.
⢠SAIL has been awarded with the prestigious 11th CII National HR Excellence Award-2020-21 Confluence on 18th March, 2021 virtually.
Within the ambit of notified environmental standards applicable for emission and discharge of pollutants into the environment and rules pertaining to ecofriendly management of various wastes, being generated inside the Plant premises as well as in the townships, SAIL Plants and Mines operate their processes without disturbing the ecological balance. Your Company has also drawn its environmental vision in consonance with the Corporate Environmental Policy, which not only addresses the need for compliance of stipulated norms but also emphasises on striving to go beyond. Besides, your Company is committed to address the stakeholders'' concerns and communicate its environmental philosophy to all the stake holders. The Corporate Environmental Policy is available at the website of the Company-www.sail.co.in.
SAIL Plants and Mines are efficiently operating the pollution control devices/facilities and maintaining regularly through revamping/ refurbishing/revitalization and also up-grading them as and when required, for the purpose of complying with the applicable environmental standards, which are becoming more and more stringent day by day. Concerted efforts have resulted in achieving major improvements during the FY 2020-21 over the last five years in the following areas:
⢠The Particulate Matter (PM) Emission Load has reduced by more than 18% to 0.63 kg/tcs.
⢠Specific Water consumption has reduced by more than 10% to 3.37 m3/tcs.
⢠Specific Effluent Discharge has reduced by more than 15% to 1.62 m3/tss.
⢠Specific Effluent Load has reduced by around 7% to 0.080 kg/tcs.
⢠Utilisation of BF slag has increased by more than 10% to 98.99 %.
⢠Specific CO emission has been reduced by more than 2% to 2.55 T/tcs.
⢠Total Solid Waste Utilisation has increased by more than 8% to 90%.
Your Company has already implemented latest state-of-the-art clean technologies and best available and feasible pollution control facilities in the course of its Modernization and Expansion Plan and thereafter, in its drive for adoption of cleaner technologies. Some of the major clean technologies are as under:
⢠Tall Coke Oven Batteries along with Coke Dry Cooling Plant, Land based Pushing Emission Control System, Computerised Combustion Control System, etc. at BSP RSP and ISP
⢠Sinter Plant integrated with improved ignition system (multi-slit burners), Waste Heat Recovery facility from sinter cooler, etc. at RSP and ISP
⢠Blast Furnace of higher capacity, equipped with Top Pressure Recovery Turbine, Waste Heat Recovery facility, Pulverised Coal Injection, Cast House De-dusting System and torpedo ladle at BSP RSP and ISP
⢠Hot Metal handling using Torpedo Ladle at BSP RSP BSL and ISP
⢠Progressively switching over to Cast House Slag Granulation Plant from offsite slag granulation facility.
⢠Phasing out of energy-intensive ingot route with continuous casting.
⢠Walking Beam Reheating Furnace (RHF) in place of pusher type RHF at the Rolling Mill in reducing energy consumption as well as CO emission.
⢠Introduction of Variable Voltage Variable Frequency (VVVF) drives in Plant machineries.
⢠New BOF Converters provided with a dedicated gas holder at SMS-III of BSP and SMS-I & II of BSL, for recovery and its use as fuel.
⢠Maximisation of Coal Dust Injection in Blast Furnaces.
⢠Up-gradation of BF stoves with heat recovery system at BSP and BSL.
⢠New Gas-fired boilers for power generation at BSP DSP and ISP
⢠Dog House for secondary emission control at all new Converters. Retrofitting of secondary emission control system is being taken up in phased manner in case of older Converters.
⢠Installation of energy-efficient LED lights instead of conventional lighting systems at Plants and Units.
Bhilai Steel Plant, in partnership with the MoEF & CC and UNIDO, has initiated a project for setting up a disposal facility for Polychlorinated
Biphenyls (PCBs), categorized as Persistent Organic Pollutants (POPs) at its site. The project is at advance stage of completion. On commissioning, the project will systematically dispose of the PCB wastes accumulated over the years not only in SAIL Plants but also in other industrial establishments across the Country. This unique facility will help the nation in fulfilling its international commitment.
Revamping of process ESP 1&2 of Sinter Plant at RSP along with replacement of 70 meter chimney with a new 100 meter tall chimney has been completed for adhering to the applicable environmental norms. This facility will also help in ensuring a safe, cleaner and greener environment.
Your Company is committed to reduce solid waste generation and maximise its utilisation to achieve 100% and has adopted the â4R''s Policyâ (Reduce, Recover, Recycle and Reuse) across all its processes. With a view to enhance utilisation of BOF Slag, a R&D project proposal on âDevelopment of Steel Slag based cost effective eco-friendly fertilizers for sustainable agriculture and inclusive growthâ has been taken up through ICAR-Indian Agricultural Research Institute, under the guidance of the Ministry of Steel. The project will ensure symbiotic growth of steel industry and agriculture.
As a green initiative and in compliance with the âSolid Waste Management (SWM) Rules, 2016â, BSP has set up a Solid Liquid Resource Management (SLRM) Centre. The waste is handled in a scientific and hygienic way at the centre. The wet garbage collected through door to door collection system in the township is processed to make fertilizer in specially designed trenches. The dry waste is segregated into plastic, construction debris and other inert materials.
With an aim to achieve 100% utilization of Gas Cleaning Plant (GCP) sludge, a brick manufacturing facility has been installed in Chandrapur Ferro Alloy Plant for making bricks out of GCP sludge and recycling thereafter through the Submerged Arc Furnaces (SAFs) to reuse the manganese of sludge.
An interactive web portal on âEnvironment of SAILâ has been created in the Intranet Portal of the Company with a provision of alerts for critical environmental compliance issues, important environmental achievement, statutory notices, etc. to improve environmental footprint of SAIL.
Environmental Management System (EMS) linked to ISO 14001 is a set of processes and practices that enable an organization to reduce its environmental impacts and increase its operating efficiency. Implementation of EMS has helped SAILs Plants and Mines to ensure that their performance being always within the applicable regulatory requirements.
The EMS (ISO-14001) was implemented at all the Plants and the Company is striving to cover all the Mines under its purview to further its commitment towards environment. In the recent years, Barsua Iron Ore Mine, Gua Ores Mine, Kiruburu and Meghahatuburu Iron Ore Mines, Bolani Iron Ore Mine, Mahoharpur Iron Ore Mine, Dalli Iron Mine and thirteen warehouses (Ahmedabad, Hyderabad, Ghaziabad, Faridabad, Vizag, Chennai, Mumbai, Delhi, Durgapur, Dankuni, Bokaro, Bangalore and Kanpur) of CMO have also been certified with ISO 14001.
(i) Restoration and rehabilitation of degraded ecosystem is essential for maintaining and enhancing bio-diversity as well as replenishing the ecosystem services. About 250 acres of old barren overburden dumps and water void in 200 acres of limestone mined out area in Purnapani have been successfully restored to fully functional ecosystems that generate ecosystem services and goods as well as sequester CO2. The restored ecosystem provides many livelihood options for local people at Purnapani.
(ii) An MOU has been signed in January, 2021 with Institute of Forest Productivity, Ranchi for eco-restoration of mined out area and waste dumps separately for Kiriburu Iron Ore Mines and Meghahatuburu Iron Ore Mines.
Your Company has set a target of installation of 242 MW renewable energy Power Plants at the following locations:
⢠120 MW capacity Solar Power Plant at Bokaro.
⢠50 MW capacity Solar Power Plant at Salem.
⢠40 MW capacity Solar Power Plant at Rourkela.
⢠25 MW capacity Solar Power Plant at Kulti.
⢠7 MW capacity Solar Power Plant at Bhilai.
Besides, some of the major initiatives undertaken towards implementation of renewable energy projects include setting up of (i)10 MW Hydel Power Plant at Mandira Dam, RSP under a Joint Venture initiative with Green Energy Development Corporation of Odisha Limited (GEDCOL) and (ii) 6.195 MW roof top Solar Units on different buildings at the various Plants/Units locations under Ministry of New and Renewable Energy (MNRE) scheme. 3 MW roof top Solar Power units have already been installed on various buildings of SAIL Plants & Units.
Your Company realizes the role of plantation in overall environmental management initiatives. It is a well-known fact that plants play an important role in balancing the ecosystem and function as a carbon sink. Such plantations are established to foster native species and promote forest regeneration on
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degraded lands as a tool of environmental restoration. The greenery developed by afforestation adds to the aesthetic environment, which becomes dust and noise barriers and also a natural sink/absorber of CO2. Keeping the enormous contribution of the plants in mind, SAIL has long been adopting extensive afforestation program religiously in its Plants and Mines since its nascent stage. More than 21.21 million saplings have been planted across SAIL Plants and Mines till date. Giving special thrust for plantation, more than 1.72 lakhs of saplings have been planted during 2020-21.
F. STRATEGIC INITIATIVES OF THE COMPANY
Your Company has adopted a multi-pronged approach that includes organic growth, brown-field projects, technology leadership through strategic alliances, ensuring raw material security by developing new mines, diversifying in allied areas, etc. In line with the above approach, SAIL has formed Joint Venture Companies in different areas viz. power generation, rail wagon manufacturing, slag cement production, securing coking coal supplies from new overseas sources, etc. New initiatives are currently being explored in areas such as pellet manufacturing in a joint venture, outsourcing of power distribution and township maintenance services in SAIL townships, etc. During the financial year 2020-21 closure of two Joint Ventures of SAIL namely SAIL Moil Ferro Alloys (P) Limited and SAIL Bengal Alloy Castings (P) Limited which were formed with MOIL Limited and Burn Standard Company Limited respectively but had failed to take off was completed. SAIL Board also approved exit of SAIL from S&T Mining Company Pvt. Ltd. (Joint Venture between SAIL and Tata Steel Limited) by transfer of the shares held by SAIL in this Joint Venture to Tata Steel Limited. The process of share transfer is being pursued with Tata Steel Limited.
⢠Disinvestment of SAIL Plants: The Cabinet Committee on Economic Affairs (CCEA) in its meeting held on 27th October, 2016 had accorded âin principle'' approval for strategic disinvestment of three units of Steel Authority of India Limited (SAIL) viz. Visveswaraya Iron & Steel Plant (VISP), Bhadravati, Karnataka, Salem Steel Plant (SSP), Tamil Nadu and Alloy Steels Plant (ASP), Durgapur, West Bengal.
Subsequently, SAIL Board had accorded âin-principle'' approval for the Strategic Disinvestment of these Steel Plants. The entire process of the Strategic Disinvestment is being overseen by an Inter-Ministerial Group (IMG) which is chaired by the Secretary (DIPAM) and co-chaired by Secretary (Steel). Chairman, SAIL and Director (Finance), SAIL are special invitees in the IMG.
SAIL has appointed M/s. SBI Capital Markets Ltd as Transaction Advisor (TA), M/s. Luthra & Luthra Law Offices as Legal Advisor (LA), M/s. Protocol Insurance Surveyors & Loss Assessors Pvt. Ltd. as Asset Valuer (AV) and M/s. KPMG as Tax-cum-Accounting Consultant (TCA) to assist SAIL in the disinvestment process.
Preliminary Information Memorandum (PIM) / Expression of Interest (EoI) of ASP SSP and VISP were issued on 4th July, 2019. EOI bids were opened on 10th September, 2020 and the eligible bidders have been shortlisted. The Confidential Information Memorandum (CIM), Request for Proposal (RFP) and Business Transfer Agreement (BTA) have been issued to the shortlisted bidders. The due diligence by the shortlisted bidders is under process.
Most of SAIL Plants/Units are certified to ISO 9000, ISO 14000, OHSAS 18000/ISO 45000, SA 8000, ISO 50000 and ISO 27000 Management Systems. Further, Empanelment of Certification Agencies for the third cycle i.e. 2020-2023 was completed in March, 2020 for Certification to six Management Systems i.e. ISO 9000, ISO 14000, OHSAS 18000/ISO 45000, SA 8000, ISO 27000 and ISO 50000 and related training. Due to the on-going Covid-19 pandemic, remote external/internal audits as well as on-site audits at some places were conducted for easy transition of existing certifications and maintaining all the Management Systems as per the requirements of the standards.
In today''s world of dynamic business environment, wherein, the competition is growing tremendously, your Company is leveraging information technology (IT) to face the challenges in the market place, in order to maintain and improve its competitive advantage. With this objective, your Company has already implemented ERP at all its Integrated Steel Plants, Marketing Organisation and Corporate Office. The robust IT Setup is being gainfully utilised for fulfilling the business requirements, to bring in efficiency and transparency as well as to reduce the operational cost and continuing with various IT initiatives within the Organization to strengthen its business processes. Some of these initiatives accomplished during FY 2020-21 are given below:
⢠âSAIL Pension Portal'' has been developed to facilitate ex-employees to apply for SAIL Pension Scheme. The Portal also facilitates the concerned officers at Plants/Units in processing the applications and calculation of pension amount.
⢠âCARE''- an Online Portal for enabling employees to apply for transfer on compassionate grounds has been developed to enhance transparency and employee satisfaction.
⢠Centralised Payroll System (CPRS) has been implemented for all the Plants/Units of SAIL, thereby bank payments of more than 65000 employees being operated centrally.
⢠New Online System for Executive Performance Management developed for executives in grades E-1 to E-7, ensures objective assessment of the executives and planning for their training & development.
⢠Your Company successfully complied with the statutory requirement of generating Invoice Registration Number and Quick Response Code under E-Invoicing System meeting the stringent deadlines. Further, ERP system was integrated with Government E-Way Bill Portal across all the Plants/Units of the Company.
⢠As a part of transparency, âSAIL Vendor Payment Query Portal'' has been designed and deployed where vendors can track their pending payments. Further, SAIL can also monitor high value inventory of Stores and Spares.
⢠As a step towards Paperless Office, On-Line Note-Sheet Approval System, ensuring confidentiality and protection against change in earlier notings and attachments, is functioning successfully. This has resulted in faster decision making, easy trackability of proposals while facilitating contactless working during the on-going Covid-19 pandemic.
⢠To take business automation ahead, provisions have been made for automatic mailing to customers on outstanding notification, interest bills, etc. and to vendors on generation of payment voucher.
⢠Technology is changing by leaps and bounds with the growth of mobile applications and digitization. In this regard, Real Time monitoring of important parameters in process areas like Blast Furnace, Steel Melting Shop, etc. has been made available on mobiles in some of the Plants. Further, for faster decision making, flow of Product Pricing from Central Marketing Organisation of the Company to respective Plants has been automated.
new norm, the role of sustained and effective communications became critical in every aspect of living, including the functioning of corporates and business houses. The changed scenario demanded that the stakeholders are continuously informed and updated about the company''s activities, priorities, strategies and other developments.
In the recent challenging period, the evolving role of Corporate Communication assumed an even greater significance, as the aftermath of Covid-19 pandemic has necessitated timely and continual engagement with the stakeholders. The companies around the world realized the significance and the utmost need to have a full-fledged and evolved team of communicators, who in the regular as well as in times of crisis, keep the good word and works of the organization in proper perspective and public focus. The Corporate Communication is a round-the-clock exercise, bridging the gap between the Stakeholders and the Company, strategize to bring the best image of the Company to the world in tandem with the evolving realties, goals and targets of the Company. While continuously fostering stakeholders'' engagement and employee motivation, the focus of corporate communication was also on aligning employees for better business performance.
⢠The procurements are being maximized through GeM Portal of Government of India and the same has been directly integrated with SAP SAP-ERP at Bhilai Steel Plant and integration is in progress at other Plants/Units.
⢠Initiatives undertaken during the ongoing Covid-19 pandemic, have resulted in formation of isolation wards; launching of various systems/apps at different Plants/Units for reporting of Covid-19 cases; constant updates for reimbursement of PPE & Hygiene products; onsite attendance recording during lock down period; conducting Financial & ISO Audits from âRemote'', Virtual Platforms, etc.
⢠The ongoing Covid-19 pandemic has also enabled your Company to conduct the Annual General Meeting through Online Mode, Board Meetings through Video Conferencing and facilitating remote access to the employees.
⢠Realising that IT is the way forward, all the remote locations/mines of SAIL have now been connected through Internet to facilitate in business and virtual interaction through Video conferencing.
The world experienced a disruptive change in FY 2020-21 with the onset of the Covid-19 pandemic. It greatly impacted our lives in every way. The business and industries initially grappled for a while, before they could adjust and adapt to the changing scenario, where doing more and more work online became sine qua non. With prolonged lockdowns and social distancing becoming the
information, was redesigned. In addition to this, through a well-coordinated approach, the communication efforts from SAIL''s Plants and Units got an added impetus, resulting in nationwide publicity and improved image management of the Company.
As the regular and routine communication channels and interfaces were affected during the Covid-19 period, extra efforts to keep the employees motivated and focussed during the challenging times, resulted in organisation of âSAIL Gaurav Diwas'' on 24th January, 2021 (SAIL Foundation Day) through online platform, thereby, ensuring participation from every Plant/Unit of the Company, spread over length and breadth of the Country. Also, a new SAIL logo with the caption âMera SAIL, Mera Gaurav'', fostering a strong sense of pride among employees and their families, was launched to commemorate the occasion. A special film involving top management and a cross section of employees was made to boost the morale and spirit of the people across the Organization during lockdown.
External Communications
Your company maintains a transparent channel with its external stakeholders and the issuance of regular and timely press releases and media information is a testimony of that commitment. During the FY 2020-21, the corporate website, also an effective medium for highlighting and sharing Company''s
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Excellent media relations were maintained through proactive and regular interactions with various media like newspapers, electronic including television and web based media by sharing Company''s important news on a regular and timely manner. The media was continuously informed about the various initiatives undertaken by SAIL to strengthen the nation''s fight against the Covid-19 pandemic and host of other issues.
A series of unique communication tools since the onset of Covid-19 pandemic have been deployed and still continuing to create awareness about Covid-19 and the various steps taken by your Company to tackle it. The efforts of SAIL in
preparing a creative on âAarogya Setu'' to create awareness about Covid-19 have been appreciated by the Hon''ble Prime Minister, Shri Narendra Modi. In addition to this, a tribute series of ten short films was conceptualized inhouse to recognize the contribution of the Corona warriors includingâbanking sector, sanitation workers, health workers, police, volunteers, employees of power sector, steel sector, etc. and was widely disseminated across various digital platforms. These innovative films became very popular and were highly appreciated from several corners. During the lockdown period, the Company strategically advertised and propagated the Covid message of âStay Home, Stay Safe'' on the tele-serials âRamayana'' and âMahabharata'', the two most widely watched programs during the period. A SOP was also designed on back to workplace and widely circulated for safety of employees -after re-joining work.
Strategically utilizing the various platforms of media for advertising and creating brand recall, mediums which were widely viewed during the pandemic time were selected. In this regard, major SAIL and SAIL SeQR branding campaign was taken up on television during the telecast of Ramayana and Mahabharat on Doordarshan, the two most widely watched programs during the period. It gave tremendous publicity to the brand SAIL. During the year, the Company extensively promoted the use of Brand Manual and facilitated in standardizing branding for all SAIL branded products across the Country.
Apart from organizing routine communication drives for various government initiatives like Atmanirbhar Bharat Abhiyan, Jan Andolan, Swachh Bharat Abhiyan, Jal Shakti Abhiyan, Yoga Day, etc. your Company undertook the special campaign drive for the commemoration of Dandi March in the month of March 2021. Also, the Government''s Covid-19 awareness campaigns was widely publicized at various points of time throughout the year.
Social Media Efforts
In addition to this, extensive use of social media platforms like Facebook, Twitter, Instagram, LinkedIn, etc. was undertaken for wider dissemination of Company''s information and for better engagement of various stakeholders. The average growth in social media penetration of SAIL across various platforms witnessed an impressive surge.
The objective of SAIL Vigilance is to facilitate an environment enabling people to work with integrity, efficiency and in a transparent manner, upholding highest ethical standards for the organization. To achieve this objective, the Vigilance Department carries out preventive, proactive and punitive actions with greater emphasis in the preventive and proactive functions. Following activities were undertaken during the Financial Year 2020-21:
⢠To increase vigilance awareness amongst employees, vigilance awareness sessions and workshops were regularly held at various Plants and Units of the Company. A total of 211 workshops involving 2854 participants were organized for enhancing Vigilance Awareness on Whistle Blower Policy, Purchase/Contract Procedures, Conduct & Discipline Rules, Common Irregularities, System and Procedure followed in SAIL, etc. In the months of August 2020, and September, 2020, discussions were held by Ministry of Steel and CVC with all the CPSEs under the Ministry of Steel regarding inclusion of two days Preventive Vigilance Module in Induction Programmes for new entrants and MidCareer Training Programmes. As envisioned by the CVC and Ministry of Steel, SAIL organised the inaugural two days Preventive Vigilance Awareness Programme for mid-level executives in blended mode on 24th & 25th September, 2020. The valedictory session of the program was graced by Shri Sanjay Kothari, Central Vigilance Commissioner; Shri Suresh N. Patel, Vigilance Commissioner; Shri PK. Tripathi, Secretary, Steel and other officials of CVC and Ministry of Steel. Twenty four such dedicated two day Preventive Vigilance training programs have been completed till March 2021, wherein a total of 1012 mid-level executives and 142 fresh entrants of SAIL have been covered.
⢠Periodic Surprise Checks including Joint Checks were conducted regularly in vulnerable areas of the Company. A total of 2330 periodic checks including file scrutiny and Joint Checks were conducted at different Plants/ Units.
⢠Vigilance provides vital inputs to the operating authorities for improving the prevailing systems for bringing about more transparency. Accordingly, fifteen major System Improvement Projects (SIPs) were undertaken at different Plants/Units of SAIL.
⢠14 cases were taken up for Intensive Examination at different Plants/Units. During these Intensive Examinations, high value procurement/contracts are scrutinized comprehensively and necessary recommendations are forwarded to concerned departments for implementing suggestions for improvement.
⢠As per the Guidelines of Central Vigilance Commission, Vigilance Awareness Week was observed in SAIL during 27th October to 2nd November, 2020. The week started with administering the Integrity pledge and reading out the messages of dignitaries on 27th October, 2020 at SAIL Corporate Office as well as in all Plants/Units of SAIL. During the week, Workshops/Sensitization Programmes, Anti-Corruption March/ Walkathon, Customers Meet, etc. were organised. Further, events like quiz, essay, slogan & drawing/poster, debate competition were organized for the employees and their families across SAIL. As outreach measures, various events like Speech/Oratory competition, Poster/Drawing competition, Essay/Slogan competition, Inter school debate competition, Quiz competition were organized for School and College Students across various townships of SAIL.
⢠The following four thrust areas were identified by SAIL Vigilance:
(i) Audit of SIPs implemented in 2017 and 2018.
(ii) Checking of loading/unloading/transportation of scrap/secondary materials inside Plant / Unit premises
(iii) Scrutiny of eligibility criteria fulfillment of the bidders (both eligible and non-eligible) in Open /Global Tender cases.
(iv) Scrutiny of Personnel Department related matters such as Recruitment, Promotion, Compassionate Appointment/Transfers, Retention of facilities on transfer, etc.
⢠âInspiration-Prerna'', an in-house publication of SAIL Vigilance is being published regularly. The above publication contains case studies and informative articles to enhance awareness of the readers.
⢠As on 1st April, 2020, a total of 119 complaints were pending and the closing balance as on 31st March, 2021 was 75. The summary of disposal of complaints during 2020-21 is as under:
Complaints Disposed:
Closed as found anonymous / pseudonymous (filed in line with CVC Guidelines) |
290 |
Closed as no vigilance angle / allegations not substantiated |
270 |
Referred to other departments |
142 |
Closed with preventive/administrative recommendations |
104 |
Regular Departmental Actions (RDAs) initiated (Include 8 cases of Major Penalty against 9 employees and 24 cases of Minor Penalty against 41 employees) |
32 |
Total Disposed |
838 |
Vigil Mechanism
The Company has adopted Vigil Mechanism for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour. All employees of the Company and directors on the Board of the Company are covered under this Mechanism. This Mechanism has been established for employees to report concerns about unethical behaviour, actual or suspected fraud or violation of Code of Conduct. It also provides for adequate safeguards against the victimization of employees who avail the Mechanism and allows direct access to the Chairperson of the Audit Committee in exceptional cases. No complaint was received during the Financial Year 2020-21.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis Report covering the performance and outlook of the Company is attached and forms part of this Report.
AUDITORS'' REPORT ON STANDALONE FINANCIAL STATEMENTS
The Statutory Auditors'' Report on the Standalone Financial Statements of the Company for the Financial Year ended 31st March, 2021 along with Management''s replies thereon is placed at Annexure-I to this Report. The comments of Comptroller & Auditor General of India (C&AG) on the Standalone Financial Statements of the Company for the Financial Year ended 31st March, 2021 under Section 143(6)(b) of the Companies Act, 2013 and the Management''s replies thereon are placed at Annexure-II to this Report.
COST AUDITORS
Pursuant to the direction of the Central Government for Audit of Cost Accounts, the Company has appointed M/s. Chandra Wadhwa & Co., New Delhi, M/s. ABK & Associates, Mumbai and M/s. R.M. Bansal & Co., Kanpur as Cost Auditors for the Financial Year 2020-21.
SECRETARIAL AUDITOR''S REPORT
In terms of the provisions of Section 204 of the Companies Act, 2013, the Board of Directors has appointed M/s. Agarwal S. & Associates, Company Secretaries, as the Secretarial Auditor to conduct Secretarial Audit of the Company for the FY ended on 31st March, 2021. Secretarial Audit Report is placed at Annexure-III to this Report.
With regard to the observation of the Secretarial Auditor, that composition of the Board of Directors of the Company was not as per requirements during the FY 2020-21, it is stated that appointment of Independent Directors on the Board of the Company is made by the Company based on nomination by Government of India. The Company has requested Ministry of Steel, Government of India for nomination of requisite number of Independent Directors on its Board.
In respect of observation regarding performance evaluation of the Directors not being carried out pursuant to the Regulation 17(10), 25(4) and 19(4) read with Schedule-II Part D(A) of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, it is mentioned that Ministry of Corporate Affairs has vide its Notification dated 5th June, 2015 notified the exemptions to Government Companies from the provisions of the Companies Act, 2013 which, inter-alia, provides that Sub Sections (2), (3) & (4) of Section 178 regarding appointment, performance evaluation and remuneration shall not apply to Directors of the Government Companies. Further, the Ministry of Corporate Affairs vide Notification dated 5th July, 2017 has notified certain amendments in Schedule IV of the Companies Act, 2013 relating to Code for Independent Directors. As per the Notification, in Schedule IV, the clauses relating to evaluation of performance of Non-Independent Directors, Chairperson and Board have been exempted for Government Companies.
CORPORATE GOVERNANCE
In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Corporate Governance Report and Auditors'' Certificate on compliance of conditions of Corporate Governance is placed at Annexure-IV to this Report.
In terms of the SEBI Regulations, the Board has laid down a Code of Conduct for all Board Members and Senior Management of the Company. The Code of Conduct has been uploaded on the website of the Company. All the Board Members and Senior Management Personnel have affirmed compliance with the Code.
BUSINESS RESPONSIBILITY REPORT
As per Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report describing the initiatives taken by the Company from Environmental, Social and Governance perspective forms part of this Annual Report.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES
IISCO-Ujjain Pipe and Foundry Company Limited, a wholly owned subsidiary of the erstwhile Indian Iron and Steel Company Limited (IISCO), was ordered to be wound up by BIFR. The Official Liquidator is continuing its liquidation process.
Your Company has four other subsidiary Companies namely, SAIL Refractory Company Limited (SRCL), SAIL Jagdishpur Power Plant Limited, SAIL Sindri Projects Limited and Chhattisgarh Mega Steel Limited. SRCL is operating the Salem Refractory Unit which was acquired by SAIL from Burn Standard Company Limited on 16th December, 2011. SAIL Jagdishpur Power Plant Limited, incorporated for setting up of Gas based Power Plant at Jagdishpur and SAIL Sindri Projects Limited, incorporated for revival of Sindri Unit of Fertilizer Corporation of India Limited have not taken off. SAIL Jagdishpur Power Plant Limited and SAIL Sindri Projects Limited have been Struck-Off from the Register of Companies. Chhattisgarh Mega Steel Limited was incorporated as a Special Purpose Vehicle with an objective of fast tracking developmental processes such as land acquisition, R&R activities, ensuring power and water linkages, securing necessary statutory approval/in-principle approval from Ministry of Environment, Forest and Climate Change, etc. for setting up of an Ultra Mega Steel Proiect. The project is no longer being pursued by SAIL.
The Annual Accounts of the subsidiary Companies and related detailed information shall be made available to the Shareholders of the holding and subsidiary companies, seeking such information at any point of time. Further, the Annual Accounts of the subsidiary companies are available for inspection by any Shareholder at the Registered Office of the Company and the Subsidiary Companies concerned between 11 AM to 1 PM on working days. A soft copy of the details of accounts of subsidiaries shall be furnished to the shareholders on receipt of written request.
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to provisions of Section 129(3) of the Companies Act, 2013, the duly Audited Consolidated Financial Statements of the Company for the Financial Year ended 31st March, 2021 are placed at Annexure-V to this Report.
AUDITORS'' REPORT ON CONSOLIDATED FINANCIAL STATEMENTS
The Statutory Auditors'' Report on the Consolidated Financial Statements along with the Management''s replies thereon is placed at Annexure-VI to this Report. The comments of Comptroller & Auditor General of India (C&AG) on the Consolidated Financial Statements of the Company for the Financial Year ended 31st March, 2021 under Section 143(6)(b) read with Section 129(4) of the Companies Act, 2013 and Management''s replies thereon are placed at Annexure-VII to this Report. Further, the statement containing salient features of the financial statements of the subsidiary, joint venture and associate companies in the prescribed Form AOC-1 is placed at Annexure-VIII to this Report.
EXTRACT OF ANNUAL RETURN
The Extract of Annual Return in Form MGT-9 as per the provisions of the Companies Act, 2013 and Rules prescribed therein is placed at Annexure-IX to this Report.
BOARD MEETINGS
During the year, 9 meetings of the Board of Directors of the Company were held, the details of which are given in the Corporate Governance Report, forming part of this Annual Report.
AUDIT COMMITTEE
The Audit Committee of the Board was initially formed by the Company in 1998. The Audit Committee has been reconstituted from time to time in terms of the SEBI Regulations and Companies Act, 1956/2013. The minutes of the Audit Committee meetings are circulated to the Board, discussed and taken note of. The composition and other details pertaining to the Audit Committee are given in the Corporate Governance Report at Annexure-IV.
INTERNAL FINANCIAL CONTROL (IFC) AND ITS ADEQUACY
The Company has well established and documented policies and procedures, which are adhered to for transparent, efficient and ethical conduct of business and for safeguarding its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of financial disclosures. Further, the Company has a good corporate governance structure, and strong management processes, controls, policies and guidelines which drives the organization towards its business objective and also meets the needs of various stakeholders.
Your Company''s robust protocols such as independent internal audit, documented policies, guidelines, procedures, regular review by Audit Committee / Board, etc. helps in compliance of Internal Financial Controls under the Companies Act, 2013, SEBI (LODR) Regulations, 2015, etc. The Company is committed to the highest standards of Corporate Governance where the Board is accountable to all stakeholders for reporting effectiveness of Internal Financial Control (IFC) and its adequacy. Corporate Governance has been carried out in accordance with the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, etc.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3) (c) of the Companies Act, 2013(the Act), the Directors state that:
(i) in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;
(ii) the Directors have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit or loss of the Company for that period;
(iii) the Directors have taken proper and sufficient care for the maintenance of adequate Accounting Records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) the Directors have prepared the Annual Accounts on a Going-Concern basis;
(v) the Directors have laid down internal financial control to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
(vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
INDEPENDENT DIRECTORS'' DECLARATION
In terms of Section 149(6) of the Companies Act, 2013, necessary declaration has been given by each Independent Director stating that he meets the criteria of independence. In terms of Section 149(7) of the Companies Act, 2013, Independent Directors of the Company have undertaken requisite steps towards registration of their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
In terms of the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014, the details of Loans, Guarantees and Investments given during the FY ended on 31st March, 2021 are given in Annexure-X to this Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUB-SECTION (1) OF SECTION 188
All the contracts / arrangements / transactions entered by the Company during the Financial Year 2020-21, with the related parties were in the ordinary course of business and on an arm''s length basis. The transactions with the related parties have been disclosed in the financial statements. Therefore, particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such contract or arrangement in Form AOC-2 do not form part of the Report.
DIVIDEND DISTRIBUTION POLICY
In terms of the Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company has adopted Dividend Distribution Policy. The Policy is uploaded on the website of the Company-https://sail.co.in/sites/default/files/Dividend Distribution Policy 2017.pdf
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
In accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies(Accounts) Rules, 2014, the particulars relating to Conservation of Energy, Technology Absorption and
Foreign Exchange Earnings and Outgo are given in Annexure-XI to this Report. RISK MANAGEMENT POLICY
Enterprise Risk Management (ERM) is a strategic business discipline that supports the organization''s objectives by addressing its risks and managing the impact of these risks. It is the practice of planning, coordinating, executing and handling the activities of an organization in order to minimize the impact of risk on investment, earnings and also strategic, financial and operational risks.
The Enterprise Risk Management Policy of your Company was approved by the Board much before the same became a statutory requirement and since then, risk management in SAIL has grown and developed in line with internal and external business and economic changes. The Policy provides guidance for the management towards business risks across the Organisation. It focuses on ensuring that the risks are identified, evaluated and mitigated within a given time frame on a regular basis.
Currently, the architecture of Enterprise Risk Management in SAIL comprises a well-designed multi-layered organization structure, with each Plant/Unit having its own perceived Risks which are under constant monitoring by the Risk Owners / Risk Champions who frame and implement the mitigation strategy and take it to its logical conclusion. Risk Management Committee of the Plant/Unit Chaired by the Head of the Plant /Unit periodically reviews the risks and its mitigation status and reports the same to Chief Risk Officer (CRO) of SAIL. SAIL Risk Management Committee (SRMC) oversees the Risk Management function in the Company by addressing issues pertaining to the policy formulation as well as evaluation of risk management function to assess its continuing effectiveness. Risks identified by the Risk Champion/Risk Officer are deliberated in the Risk Management Committee and strategy for mitigating such risks is formulated. Roles and responsibility of Board, Audit Committee, SAIL Risk Management Committee, Risk Management Steering Committee, CRO, Risk Officer/Risk Champion related to risk management are defined under the Policy and duly approved by the Board. The Enterprise Risk Management Policy of your Company is uploaded on its website https://sail.co.in/companv/companv-policies.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
SAILs Social Objective is synonymous with Corporate Social Responsibility. Apart from the business of manufacturing steel, the objective of your Company is to conduct business in ways that provide social, environmental and economic benefits to the communities in which it operates. For any organization, CSR begins by being aware of the impact of its business on society. With the underlying philosophy and a credo to make a meaningful difference in people''s lives, your Company has been structuring and implementing CSR initiatives right from the inception. These efforts have seen the obscure villages, where SAIL Plants are located, turn into large industrial hubs today.
The CSR initiatives of your Company have always been undertaken in conformity to the Companies Act, 2013, Companies (Corporate Social Responsibility Policy) Rules, 2014 and DPE Guidelines on CSR & Sustainability, 2014. SAIL carries out CSR projects in and around periphery of steel townships, mines and far flung location across the Country in the thrust areas falling in line with Schedule-VII to the Companies Act, 2013, namely, Education, Healthcare, Access to Drinking Water, Sanitation, Rural Development in Peripheral Areas, Environment Sustainability, Women Empowerment, Assistance to Divyangs, Sustainable Income Generation through Self-Help Groups, Promotion of Art and Culture, etc.
The details of various CSR initiatives taken by the Company along with the Report on CSR in prescribed format are placed at Annexure XII to this Report. The CSR Policy of the Company is available on the website of the Company www.sail.co.in.
The Covid-19 pandemic has created an unprecedented crisis globally. The consequential lockdown by the Government to stem the spread of Covid-19 in India, has taken its toll on vulnerable sections of the society. Your Company, as a responsive corporate organization is responsible to ensure the health and safety of its facilities/premises, employees at the Plants/Units and all other persons working at the sites. SAIL has activated a scaled response towards management of the pandemic at its Plants, Units, Mines and Townships.
During FY 2020-21, your Company has contributed an amount of '' 25 crore to the Prime Minister''s Citizen Assistance and Relief in Emergency Situations (PM CARES) Fund and also contributed '' 4 crore @ '' 1 crore each to the Chief Minister''s Relief Fund/Covid-19 Fund of the States of Chhattisgarh, Jharkhand, Odisha and West Bengal.
SAIL has supplied over 83000 Metric Tonnes of Liquid Medical Oxygen (LMO) to different States of the Country in its endeavour to partner the Government of India in combatting Covid-19, through Railway Oxygen Express.
SAIL Plants have setup separate Jumbo Covid-19 Care facilities equipped with gaseous oxygen through dedicated pipelines from the Plants viz. 200 bed facility with 10 ventilators and 8 ICU beds at IISCO Steel Plant, Burnpur; Covid Care Hospital with 200 beds at Durgapur Steel Plant; 114 bed care facility at Bhilai Steel Plant (BSP); Ispat Nidan Kendra with 100 oxygenated beds including 50 ventilator-attached beds at Rourkela Steel Plant (RSP); 500 bed Covid care centre (with oxygen support) has been set-up in the premises of Salem Steel Plant.
In addition, to cope up with the increased Covid-19 cases, SAIL Hospitals manned by more than 900 qualified doctors and 1500 para-medical staff to extend round the clock Healthcare, have earmarked 1000 dedicated Covid-19 beds with oxygen support and 129 ICU beds with ventilator support, created 600 beds Quarantine Facilities and developed Covid-19 testing facilities like RAT, RTPCR, TRU-NAT in coordination with the respective State Governments. Besides this, arrangements have been made for touch-free hand-sanitizers, water dispensers, spraying disinfectants, using digital thermal recorders at prominent locations, ensuring continuous water supply in all the peripheral villages.
SAIL, with the help of district authorities, civil society organizations, Self-Help Groups and its employees, is actively implementing the lockdown rules, social distancing norms and effective use of Aarogya Setu App for breaking the chain of transmission of Covid-19 virus in the peripheral areas of steel Plants and Units.
In order to support the vulnerable sections of society, daily-wage earners/ labourers, poor peasants and their families, who are left with dwindled resources during the pandemic, the SAIL Plants and Units, through district authorities, are distributing dry ration packets (comprising of Rice, Dal, Salt, Condiments, wheat atta, soap, etc.), Milk packets, Milk powder, Khichdi, routine medicines, sanitary napkins for women, etc. Daily cooked meals to patients and healthcare workers are also being served. SAIL Plants/Units have also been transporting patients and health workers. CSR departments of Plants are also facilitating stitching of Face Masks, Gamachhas, Aprons, Gloves, etc. through SHGs, and their distribution to peripheral areas, District Authorities, Ministry of Steel/PMO.
Healthcare: SAIL''s extensive and specialised Healthcare Infrastructure provided specialized and basic healthcare to 173.6 lakh people living in the vicinity of its Plants and Units during the period 2011-2020. In order to deliver quality healthcare at the doorsteps of the needy, regular health camps are being organised in various villages on fixed days for the people living in the periphery of Plants/Units/Mines. During the FY 2020-21, regular Health Camps have been organized and 5 Mobile Medical Units (MMUs) extended quality healthcare to about 46,900 villagers at their doorsteps in peripheral areas of Plants, Units and Mines. 24 Primary Health centres at Plants exclusively provided free medical care and medicines to more than 95,000 patients, including 34,000 Covid-19
nstionte
In addition to this, to fight against the surging Covid-19 pandemic, the Company rose to the occasion and newly developed stat-of-art Jumbo Covid Treatment Centres with 100, 200 and 200 oxygenated beds, have been created in fast-track mode at Rourkela Steel Plant, Durgapur Steel Plant and Burnpur during the period May/June, 2021. These Centres will give boost to the Covid related medical infrastructure and provide much needed help to the patients in the region.
Education: To develop the society through education, SAIL is supporting about 77 schools, providing modern education to more than 40,000 children in the steel townships, 20 Special Schools (Kalyan & Mukul Vidyalayas) are benefitting around 4939 BPL category students at integrated steel plant locations with facilities of free education, mid-day meals, uniform including shoes, text books, stationary items, school bag, water bottles, etc., under CSR. SAIL in association with the Akshaya Patra Foundation, is providing Mid-day meals to about 59,000 students in over 600 Govt. schools in Bhilai and Rourkela.
Vocational and specialised skill development training targeted towards sustainable income generation has been provided to 383 youths & 703 women of peripheral villages in areas such as Nursing, Physiotherapy, LMV Driving, Computers, Mobile repairing, Welder, Fitter, Electrician training, Improved agriculture, Mushroom cultivation, Goatery, Poultry, Fishery, Piggery, Achar/ Pappad/ Agarbati/ Candle making, Screen printing, Handicrafts, Sericulture, Yarn Weaving, Tailoring, Sewing and embroidery, Gloves, Spices, Towels, Gunny-bags, Low-cost-Sanitary Napkins, Sweet Box, Soap, Smokeless chullah making, etc. 666 youth have been sponsored for ITI training at ITCs Bolani, Bargaon, Baliapur, Bokaro Private ITI and Rourkela, etc.
Connectivity & Water facilities in Rural Areas: Over 79.03 lakh people across 450 villages have been connected to mainstream by SAIL, since its inception, by constructing and repairing roads. Over 8176 water sources have been installed, since inception, thereby enabling easy access to drinking water to over 50 lakh people living in far-flung areas.
Environment Conservation: Maintenance of parks, water bodies, botanical gardens and plantation & maintenance of over 5 lakh trees in the townships is being undertaken.
Support to Divyangs & Senior Citizens: Divyang children/people are being supported through provision of equipments like-tricycle, motorized vehicles, calipers, hearing aids, artificial limbs, etc. SAIL supports centres and programmes at SAIL Plants like âSchools for blind, deaf & mentally challenged childrenâ and âHome and Hopeâ at Rourkela; âAshalata Kendraâ at Bokaro; various programs like âHandicapped Oriented Education Programâ and âDurgpaur Handicapped Happy Homeâ at Durgapur; and âCheshire Homeâ at Burnpur. Old age homes are being supported at different Plant townships like âSiyanSadanâ at Bhilai, âAcharyaDham and Badshahâ at Durgapur, âSr. Citizens Homeâ at Rourkela, etc.
Sports, Art & Culture: SAIL is regularly organizing inter-village sports tournaments, extending support to major National sports events and tournaments. Also, supporting and coaching aspiring sportsmen and women through its residential sports academies at Bokaro (Football), Rourkela (Hockey) - with world class astro-turf ground, Bhilai (Athletics for boys), Durgapur (Athletics for girls) and Kiriburu, Jharkhand (Archery). Cultural events like Chhattisgarh Lok Kala Mahotsav, Gramin Lokotsav are organised every year.
Development of Aspirational Districts: In order to provide comprehensive development of both physical and social infrastructure, SAIL has undertaken CSR activities in 7 Aspirational Districts, viz. Kanker, Narayanpur and Rajnandgaon in Chhattisgarh and West Singhbhum, Bokaro, Ranchi in Jharkhand and Nuh in Haryana.
SAIL Employees Rendering Volunteerism & Initiatives for Community Engagement (SERVICE) Scheme: The ''SERVICE'' Scheme has been launched to support volunteer activities and community outreach by SAIL employees. It has provided a much needed platform for like-minded employees having a sense of social responsibility to unite in their effort to help the society brace the fallout of the Covid-19 Pandemic. Over 29,000 volunteers have registered on the SERVICE portal.
i. During the year, the Company has not accepted any deposits under the Companies Act, 2013.
ii. No significant or material orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and Company''s operations in future. However, attention of Members is drawn to the statement on contingent liabilities in notes forming part of the Financial Statements.
⢠Shri Atul Srivastava ceased to be Director w.e.f. 10th June, 2020 due to untimely demise.
⢠Shri Vivek Gupta ceased to be Director w.e.f. 31st July, 2020.
⢠CA K.S. Chauhan and Prof. N.K. Taneja have ceased to be Independent Directors w.e.f. 21st September, 2020.
⢠Shri Harinand Rai, Director (Technical) has been re-designated as Director (Technical, Projects & Raw Materials) w.e.f. 28th September, 2020.
⢠Shri Anirban Dasgupta, Director (Projects & Business Planning) has been re-designated as Director (Incharge-Bhilai Steel Plant) w.e.f. 28th September, 2020.
⢠Shri Amarendu Prakash, CGM (Chairman''s Secretariat) has been appointed as Director (Incharge-Bokaro Steel Plant) w.e.f. 28th September, 2020.
⢠Shri Vijoy Kumar Singh, Additional Secretary & Financial Adviser, Ministry of Textiles having Additional Charge of Financial Adviser, Ministry of Steel ceased to be Director w.e.f. 5th November, 2020.
⢠Shri Shashank Priya, Additional Secretary & Financial Adviser, Ministry of Commerce & Industry, having Additional Charge of Financial Adviser, Ministry of Steel was on the Board of the Company as Government Director from 17th December, 2020 to 22nd April, 2021.
⢠Shri Anil Kumar Chaudhary ceased to be Chairman w.e.f. 31st December, 2020.
⢠Ms. Soma Mondal, Director(Commercial) has been appointed as Chairman w.e.f. 1st January, 2021.
⢠Ms. Sukriti Likhi, Additional Secretary & Financial Adviser, Ministry of Steel, has been appointed as Government Director w.e.f. 23rd April, 2021.
The Board of Directors wish to place on record their appreciation for the sincere, untiring & dedicated efforts and contribution made by every member of the SAIL Family. The Directors acknowledge with deep sense of appreciation, the valuable guidance, support and co-operation received from Government of India, Regulatory & Statutory Authorities particularly from the Ministry of Steel, Ministry of Environment, Forests, & Climate Change, DIPAM, Niti Aayog, Department of Public Enterprises, Railways, State Governments, Electricity Boards, etc. The Board also convey its gratitude to all its stakeholders, including Bankers, Vendors, Customers, Investors, Consultants, and Members for their continued support and confidence reposed in the Organisation.
The Directors also thank the Comptroller & Auditor General of India, Statutory Auditors, Cost Auditors, Secretarial Auditor and other professionals associated with the Company for their valued contribution.
The Directors of your Company are immensely grateful for the invaluable contribution rendered by every person risking their life and safety to combat the pandemic and deeply regret the loss of human life due to COVID-19 Pandemic.
For and on behalf of the Board of Directors
Chairman
Place: New Delhi Date: 1st September, 2021
Mar 31, 2018
BOARDâS REPORT
To,
The Members,
Steel Authority of India Limited,
New Delhi
The Board of Directors has the pleasure of presenting the 46th Annual Report of Steel Authority of India Limited (SAIL, the Company) together with the Audited Standalone and Consolidated Financial Statements for the Financial Year ended 31st March, 2018.
A. FINANCIAL REVIEW
Your Company achieved sales turnover of Rs,58,297 crore during the Financial Year 2017-18, which is higher by 19% over previous year due to increase in both sales volume (7%) as well as Net Sales Realisation (NSR) of Saleable Steel of 5 Integrated Steel Plants by about 20%. However, the net sales turnover of Rs,56,893 crore was higher by 30% over last year''s net sales turnover of Rs,43,866 crore. The loss after tax of your Company for the Financial Year 2017-18 was reduced to a level of Rs,482 crore compared to loss after tax of Rs,2,833 crore in the previous Financial Year.
The loss of your Company during Financial Year 2017-18 has reduced mainly on account of increase in Saleable Steel Production, Concast Production, Saleable Steel Sales & Net Sales Realization of 5 Integrated Steel Plants, improved product mix, higher usage of CDI in CDI furnaces, reduction in Coke Rate, improvement in BF Productivity, improvement in Specific Energy Consumption, reduction in salaries & wages, etc. However, the same has been partially offset due to provisions made towards various mining related issues, increase in average imported and indigenous coal prices, increase in stores & spares, repair & maintenance, security expenses, higher usage of imported coal in the blend due to lower availability of indigenous coal, increase in average rate of purchased power and increase in interest cost and depreciation, etc.
SAIL continued its thrust on judicious fund management by timely repayment of loans including interest, advance planning and action for future fund raising, etc. to meet its growth objectives. The Company had borrowings of Rs,45,409 crore as on 31st March, 2018 vis-a-vis Rs,41,396 crore as on 31st March, 2017. The Company has fully hedged the foreign currency risk on Buyers'' Credit and repayment of External Commercial Borrowings. The debt equity ratio of the Company increased to1.27:1 as on 31st March, 2018 from 1.15:1 as on 31st March, 2017 due to increase in borrowings as well as reduction in net worth during the year. The net worth of Company declined from Rs,36,009 crore as on 31st March, 2017 to Rs,35,714 crore as on 31st March, 2018.
M/s. CARE Ratings, M/s. India Ratings and M/s. Brickwork Ratings, RBI approved credit rating agencies, assigned ''CARE AA- Outlook: Negative'', ''India Ratings AA- Outlook: Negative'' and ''BWR AA Outlook: Negative'' ratings respectively for SAIL''s long term-borrowing programme.
B. OPERATIONS REVIEW Production Review
Financial Year 2017-18 witnessed several landmark achievements through ramping up of new facilities and surpassing all previous records in physical performance. Your Company achieved its highest ever production of Hot Metal of 15.982 million tonnes(MT), Crude Steel of 15.020 MT and Saleable Steel of 14.074 MT.
Your Company achieved an all-time best performance of Continuous-Cast (CC) Steel Production of 12.794 MT with a growth of 9% over previous best of 11.77 MT, achieved during 2016-17. The proportion of CC in Crude Steel increased to 85% in comparison to 81% achieved in the previous Financial Year. New records in operating efficiency parameters such as Coke Rate, BF Productivity and Specific Energy Consumption were also achieved.
Bhilai Steel Plant''s new BF#8 ''Mahamaya'', having an annual Hot Metal production capacity of 2.8 MT, was blown-in on 2nd February, 2018. SMS-III was also started on 31st March, 2018 with blowing of first heat from Converter-1. The Financial Year 2017-18 has witnessed substantial increase in supply of rails to Indian Railways, with commercial production from new Universal Rail Mill(URM) enabling a 39.0% growth of total UTS-90 Rails Production (8.70 lakh ton) w.r.t. previous year (6.49 lakh ton) coupled with record long rail dispatch at 3.17 lakh ton.
Various new initiatives were undertaken at Durgapur Steel Plant to improve productivity and efficiency in process. During the Financial Year 17-18, Narrow Gauge wheels from Wheel & Axle Plant and high strength structural E350 grade from Medium Structural Mill (MSM) were developed in-house. New initiatives such as casting of 125 sq. mm. billets at Billet Caster m/c-1 and rolling of TMT bars with 125 sq. mm. billets at Merchant Mill will further increase the productivity.
At Rourkela Steel Plant, by rolling more than 8 lakh tonnes of plates, New Plate Mill recorded a growth of 48.1% over 2016-17. The Mill exported about 1,27,000 tonnes of CE marked plates to the European market during the Financial Year 2017-18. The Hot Strip Mill recorded all-time best performance of producing 16.8 lakh tonnes of HR coils during 2017-18, which is a rise of 8% over previous fiscal.
With consistent efforts, Bokaro Steel Plant registered record production of cast slab at 3.276 MT (previous best: 2.990 MT) and highest ever production of CR coil for sale at 0.916 MT (previous best: 0.776 MT). Major Techno-economic parameters at the Plant also recorded the best ever figures with Coke Rate at 470 kg/thm (previous best 480 kg/thm during 2016-17), Blast Furnace Productivity at 1.70 T/cum/day (previous best 1.68 T/cum/day during 2016-17) and Specific Energy Consumption at 6.68 Gcal/tcs (previous best 6.69 Gcal/tcs during 2014-15).
IISCO Steel Plant (ISP) achieved best annual production of Hot Metal at 2.055 MT (previous best 1.81 MT during 2016-17), Crude Steel at 1.801 MT (previous best 1.397 MT during 2016-17) and Saleable Steel at 1.687 MT (previous best 1.338 MT during 2016-17). ISP also achieved best ever Coke Rate, CDI, BF Productivity and Specific Energy Consumption for the year with Coke Rate at 412 kg/thm (previous best 446 kg/thm during 2016-17), CDI at 97 kg/thm (previous best 62 kg/thm during 2016-17), Blast Furnace Productivity at 1.62 T/cum/day (previous best 1.43 T/cum/day during 2016-17) and Specific Energy Consumption at 6.49 Gcal/tcs (previous best 7.20 Gcal/tcs during
2016-17).
Your Company renewed various initiatives to reduce environmental footprint and enhance operational efficiency and this has led to significant improvement in environmental parameters as well as techno-economic efficiency. This enabled SAIL to produce greener and more environmental friendly steel than ever before. SAIL recorded the best ever Coke Rate at 456 kg/thm, BF Productivity of 1.70 t/m3/day and Specific Energy Consumption at 6.49 Gcal/ TCS. Your Company was able to achieve this as a result of higher volume of Hot Metal produced through new state of art large volume Blast Furnaces (30% of total Hot Metal, up by 5% over CPLY) and increased Crude Steel Production through the energy efficient CC route (85% of total Crude Steel, up by 9% over CPLY).
Your Company, by supplying steel, partnered with prestigious and projects of national importance like Dhola-Sadiya Bridge, Sardar Sarovar Project, etc. to be a part of Country''s growth story under the ambit of National Steel Policy 2017 and ''Make in India'' movement.
Your Company in addition to supplying steel for various defence projects including indigenously built Anti-Submarine Warfare (ASW), Stealth Corvette INS-Kiltan, was also associated with iconic projects such as Chandrayan and Mangalyan missions.
Power
Your Company has always strived to optimally utilize its captive power resources to ensure reliability of power supply as well as availability of power at an optimum cost. During the Financial Year 2017-18, about 65% of the total requirement of 10653 Million Units(MU) was met from the captive Power Plants. SAIL has been the pioneer in utilizing open access regulations to its advantage with one of the first enterprises in the Country to start inter-regional wheeling of captive power. Continuing the legacy, this year too, SAIL Plants procured about 435 MU of power through open access which is around 4% of total power requirement. This included purchase of about 201 MU from the power exchanges.
In order to further enhance the share of captive power and supply additional power required after completion of ongoing expansion, new captive power capacity of 290 MW is in advanced stage of installation by Joint Venture Companies viz. NTPC-SAIL Power Company Limited (NSPCL) and Bokaro Power Supply Company Pvt. Limited (BPSCL), which own and operate most of captive facilities of the Company.
Besides captive generation, the consumption of electricity in the processes is also being emphasized through various measures which will result in lower power consumption per tonne of saleable steel production after the full-fledged operation of expansion units.
As a responsible corporate house, your Company is committed for development and usage of renewable power sources. While, 2MWp capacity of Solar Plants have already been installed, actions are under way for installation of another 198MWp solar capacity in near future. Further, your Company has entered into a JV agreement with Green Energy Development Corporation of Odisha(GEDCOL) to set up 10 MW Hydel Power at Mandira dam of Rourkela Steel Plant, which will be utilizing the potential energy of the water being discharged from the dam for usage in the Steel Plant to generate electricity.
Raw Materials
During Financial Year 2017-18, total requirement of iron ore was met from captive sources. Your Company''s captive mines produced about 26.83 million tonnes (MT) of iron ore. In case of coking coal, about 2MT was met from indigenous sources (Coal India Limited & captive sources) and for the balance requirement of coking coal (13.38 MT), the Company had to depend on imports due to limitation in availability within the Country. In the Financial Year 2017-18, production in captive collieries of the Company was about 0.97 MT, out of which 0.60 MT was raw coking coal and balance 0.37 MT of no coking coal. In case of fluxes, around 1.33 MT of limestone and 0.72 MT of dolomite were produced, giving a production of 2.05 MT fluxes from captive sources. For thermal coal, your Company depends entirely on purchases from Coal India Limited except small quantity produced from captive mines.
The iron ore production at Barsua mine remained suspended since 17th May, 2014 on the direction of Hon''ble Supreme Court. For resumption of iron ore production, continual efforts were made to get the clearance from Hon''ble Supreme Court for starting the mining operations and after necessary clearances, the iron ore production from Barsua mine resumed on 20th May, 2018.
In order to expedite capacity expansion projects of mines, following Environment and Forest Clearances have been obtained during the Financial Year 2017-18:
- Environment Clearance for setting up of 2 million tonnes per annum capacity Dolomite Mine at Baraduar was recommended by Expert Appraisal Committee of Ministry of Environment, Forest and Climate Change (MoEFCC) on 22nd December, 2017.
- Stage-II Forest Clearance for ML-162 lease of Barsua was granted by MoEFCC on 23rd October, 2017.
- On 24th July, 2017, MoEFCC had modified the Stage-I Forest Clearance conditions of 6.9 Sq. Mile lease of Bolani Mine issued vide Order dated 24th February, 1999.
- Stage-I Forest Clearance for diversion of Sabik Kisam forest lands under 5.1 Sq. Mile lease and 6.9 Sq mile lease of Bolani Mine were granted by MoEfCc on 12th September, 2017.
- Stage-I Forest Clearance for Jhillingburu-I lease of Gua Iron Ore Mine was granted by MoEFCC on 25th September, 2017.
However, the Stage-II Forest Clearances for the capacity expansions of Gua and Chiria mines and opening of South-Central Blocks in Kiriburu-Meghahatuburu mines in Saranda forest in Jharkhand are yet to be granted by MoEFCC. In view of its criticality to the capacity expansion projects, the matter is being actively pursued with the Government.
Consequent to the approval of Ministry of Mines, Government of India on 26th February, 2018 under Section 6(1)(b) of MMDR Act in respect of 12 Iron Ore Leases of SAIL Mines in Jharkhand, Government of Jharkhand on 6th March, 2018 has extended the Lease period of Dhobil Mines up to 7th March, 2038. This will facilitate extension of 12 Iron Ore Leases of SAIL Mines in Jharkhand.
Government of Karnataka vide letter dated 10th November, 2017 has forwarded the proposal for reservation of 150 acres of iron ore area in Ramandurga area in favour of VISP/SAIL for approval of Ministry of Mines, Government of India.
Impact of Judgment passed by Hon''ble Supreme Court in Common Cause
Consequent to the judgment dated 2nd August, 2017 of the Hon''ble Supreme Court in the matter of Common Cause, States of Jharkhand and Odisha have issued demand notices for payment of compensation amounting to a total of Rs,1963.60 crore (Odisha - Rs,204.58 crore & Jharkhand - Rs,1759.02 crore) under Section 21(5) of the MMDR Act, for EC violations related to iron ore, flux and coal mines till date. These notices were issued without giving any opportunity of being heard.
In order to mitigate the risk of closure of SAIL mines in Odisha and Jharkhand beyond 31st December, 2017 due to non-compliance of demand notices of respective State Government, SAIL has filed Writ Petitions before the Hon''ble High Courts challenging the demands (not for coal) issued by Governments of Odisha and Jharkhand. As no stay was provided by Hon''ble Jharkhand and Odisha High Courts on the notices of State Governments, therefore, to avoid closure of mines, SAIL under protest without prejudice to its rights and contentions raised in the writ petitions filed in respective High Courts, deposited a sum of Rs,66.89 crore (Govt. of Odisha) and Rs,200.00 crore (Govt. of Jharkhand) on 30th December, 2017.
The notices received for coal mines, were challenged by SAIL before the Revisional Authority (RA), Ministry of Coal(MoC), Government of India on 1st February, 2018. Vide Order dated 14th March, 2018, RA, MoC has stayed the execution of the notices till further orders and directed for no coercive action against SAIL.
Return of Parbatpur and Sitanala Coal Blocks
Due to reduction in coal mining lease area as well as coal reserves, the two recently allotted Coking Coal Blocks namely, Parbatpur and Sitanala have become unviable. Therefore, after due diligence, your Company has returned these Coal Blocks to Ministry of Coal(MoC) in March, 2018. Sail has requested MoC to refund the amounts paid including bank guarantee, submitted at the time of allocation of these Blocks and also for allotment of potential Coking Coal Blocks in lieu of the returned Blocks in line with recommendations made by NITI Aayog.
Sales & Marketing
During the year 2017-18, your Company achieved its best ever sales volume of 14.1 million tonnes (MT), registering a growth of about 8% over CPLY. Continuing to maintain its presence in international markets, SAIL exported
0.7 MT of steel, a growth of about 4% over the previous financial year.
To tap the vast potential of rural India, your Company organized 114 "Gaon Ki Ore" workshops in 26 States/Union territories for increasing awareness of steel. Small consumers continued to be a focus area and 0.8MT of steel was sold through the retail marketing channels.
Your Company simultaneously continued its efforts towards selling value added steel. Supplies from the Cold Rolling Mill #3 at Bokaro have commenced to consumers in the highly demanding, high value auto segment.
With commencement of production at the Universal Rail Mill at Bhilai, supply of long rail panels (260 meters) to Indian Railways registered a growth of around 112% in 2017-18. This Mill produces the longest single rail in the World (130 meters).
Overall supplies of rails to the Indian Railways by your Company grew by 41% to reach the highest ever levels at 0.87 MT.
Customization of supply is an important avenue for maximizing customer satisfaction and revenue. Your Company supplied around 50,000 tons of steel in customized sizes from its service centres in 2017-18, which represents a growth of 53% over the previous Financial Year.
Your Company continues to be a major contributor to the infrastructure sector of the Nation. Sales of Plate Mill Plates, a major input, reached highest ever levels at 2.12 MT, a growth of 16% over the previous year. Large quantities of Plates were supplied to prestigious power and irrigation projects in the Financial Year 2017-18.
Public Procurement Policy for Micro and Small Enterprises
As required by the Public Procurement Policy of the Government of India, the information on procurement from Micro & Small Enterprises during Financial Years 2017-18 and 2016-17 is given below:
(Rs, crore)
Particulars |
2017-18 |
2016-17 |
Total Amount of Procurement |
4143.67 |
3246.42 |
Total Procurement from MSE |
858.17 |
767.04 |
%age Procurement from MSE |
20.71 |
23.63 |
Modernisation & Expansion Programme
Your Company is in the last leg of implementation of on-going Modernisation & Expansion Programme. During the Financial Year 2017-18, your Company has achieved many milestones. At Bhilai Steel Plant, New Blast Furnace has been blown in and is under regular operation. First Heat from Coverter-1 at New Steel Melting Shop has been taken and Hot trials are in progress. A capital expenditure of Rs,5,130 crore has been incurred during Financial Year 2017-18 and capex planned for 2018-19 is Rs,4,000 crore.
The details of Addition, Modification & Replacement (AMR) Schemes under implementation are given in the Management Discussion & Analysis (MD&A) Report.
C. HUMAN RESOURCE MANAGEMENT REVIEW
Your Company recognizes contribution of its Human Resources in providing it the competitive advantage. The Company has achieved its present level of excellence through investment in its human resource, where skill and knowledge constitute the basis of every initiative - be it technology or innovation. Developing skills and capabilities of employees to improve manpower utilization and labour productivity is the key thrust area of Human Resource Management (HRM) in the Company.
Your Company provides an environment conducive for learning, encourages adoption of best practices in every area and nurtures creativity and innovation among employees. Human Resource initiatives in SAIL are focused on developing team spirit, employee empowerment and their involvement in various improvement activities. Strategic alignment of HRM to business priorities and objectives has facilitated smooth transition to state-of-the-art technology in the Modernization and Expansion Projects.
Enhanced Productivity with Rationalized Manpower
Your Company achieved the Labour Productivity (LP) of 344 TCS/Man/Year in 2017-18. The manpower strength of the Company was 76,870 nos. as on 31.3.2018 with manpower rationalization of 6,094 nos. achieved during the year. The enhanced productivity with rationalized manpower could be achieved as a result of judicious recruitments, building competencies and infusing a sense of commitment and passion among employees to go beyond and excel.
Developing Employee Capabilities & Competencies
Your Company believes that people''s development is the key for overall growth and training facilitates the development of employee''s knowledge and skills, so that the resultant advancement of competence contributes towards attainment of organizationâs goals and objective. SAIL has been making sustained efforts through various training and development activities with focus on preservation, transfer and improvement of skills, knowledge and technology in collaboration with reputed organizations and development of effective managerial competencies in association with premier institutes.
Preparing employees for tomorrow, for effectively taking up challenges and discharging new roles and responsibilities is being given a major thrust. Overall 41,355 employees were trained against target of 33,533 employees during the year on various contemporary technical and managerial modules.
Harmonious Employee Relations
SAIL has maintained its glorious tradition of building and maintaining a conducive and fulfilling employer-employee relations environment. The healthy practice of sorting out and settling issues through discussions with trade unions/workers'' representatives enabled the Company in ensuring workers'' participation at different levels and establishing a peaceful industrial relations climate. Some of the bi-partite forums are functioning since early seventies and are sufficiently empowered to address different issues related to wage, safety, and welfare of workers, arising from time to time, thus, helping in establishing a conducive work environment.
Bipartite forums like National Joint Committee for Steel Industry (NJCS), Joint Committee on Safety, Health & Environment in Steel Industry (JCSSI), etc. with representation from major central Trade Unions as well as representative Unions of Plants/Units meet on periodic basis and jointly evolve recommendations/ action plans for ensuring a safe & harmonious work culture which gets substantiated from the harmonious Industrial Relations enjoyed over the years by SAIL Plant/Units, marked with diverse work culture at multiplications.
In addition, Quality Circles, Suggestion Schemes, Shop Welfare Committees, Safety Committee, Canteen Management Committee, Productivity Committee, etc. also offer multiple avenues for enhanced workers'' participation. Workers are also kept abreast of strategic business decisions and their views sought thereon through structured /interactive workshops.
Communication with employees at various levels on a wide range of issues impacting the Company''s performance as well as those related to employees'' welfare is done in a structured manner across the Company. Mass communication campaigns are undertaken at Chief Executive Officer / Senior Officers'' level involving structured discussion with large group of employees. These interactive sessions help employees to align their working with the goals and objective of the Company leading to not only higher production and productivity but also enhance the sense of belongingness of the employees.
Grievance Redressal Mechanism
Effective internal grievances redressal machinery has been evolved and established in SAIL Plants and Units, separately for Executives and
Non-executives. Joint grievance committees have been set up at Plant/Unit level for effective redressal of grievances.
SAIL Plants/Units are maintaining 3 stage grievance handling mechanism and employees are given an opportunity at every stage to raise grievances relating to wage irregularities, working conditions, transfers, leave, work assignments and welfare amenities, etc. Majority of grievances are redressed informally in view of the participative nature of environment existing in the Steel Plants. The system is comprehensive, simple and flexible and has proved effective in promoting harmonious relationship between employees and management.
Against 376 staff grievances received during the Financial Year 2017-18 with 16 grievance pending from previous year, 366 staff grievances have been disposed of during the year, achieving 97.34% fulfillment.
Further, during Financial Year 2017-18, 856 grievances have been received under Centralized Public Grievance Redress and Monitoring System(CPGRAMS), a National level online system managed by Department of Administrative Reforms and Public Grievance (DARPG), Government of India and 23 grievances had been carried forward from the previous Financial Year. Total 864 grievances have been disposed of during Financial Year 201718, thereby achieving fulfillment rate of 98.20%. During the year, 92% grievances have been disposed within 0-15 days while only 8% were disposed within 16-30 days'' time frame. Government of India has fixed a time limit of 30 days for disposal of the Public Grievances.
Remuneration Policy
In SAIL, pay and other benefits for executives are based on the Presidential Directives issued by Ministry of Steel, Government of India. The last pay revision effective from 1st January, 2007 was done in accordance with Presidential Directives dated 5th October, 2009. In case of Non-executive employees, the salaries and wages are finalized / revised in bipartite forum of National Joint Committee for Steel Industry (NJCS). The last NJCS agreement was finalized and signed on 1st July, 2014, effective from 1st January, 2012. In terms of notification dated 5th June, 2015 issued by Ministry of Corporate Affairs, Government of India, the provisions of section 197 of the Companies Act, 2013 are not applicable to Government Companies. As such, the disclosures to be made in the Board''s Report in respect of overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits are not included in this Report.
Initiatives for Socio-economic Development of SCs /STs & Other Weaker Sections of the Society
SAIL follows Presidential Directives on Reservation for Scheduled Castes and Scheduled Tribes in the matter of recruitments and promotions. As on 1.4.2018, out of total manpower of 76870, 12632 belong to SCs (16.43%) and 11309 belong to STs (14.71%).
SAIL Plants and Units including Mines are situated in economically backward regions of the Country with predominant SC/ST population. Therefore, SAIL has contributed to the overall development of civic, medical, educational and other facilities in these regions. Some of the contributions are:
- Recruitment of non-executive employees, which comprise close to 85 % of the total employees, is carried out mainly on regional level and hence, a large number of SCs/STs and other weaker section of the society get the benefit of employment in SAIL.
- Over the years, a large group of ancillary industries has also developed in the vicinity of Steel Plants. This has created opportunities for local unemployed persons for jobs and development of entrepreneurship.
- For jobs of temporary & intermittent nature, generally contractors deploy workmen from the local areas, which again provide an opportunity for employment of local candidates of economically weaker section.
- Establishment of SAIL Steel Plants in economically backward areas has given a fillip to the economic activities, thus, benefiting the support population providing different types of services.
- Steel Townships developed by SAIL have the best of medical, education and civic facilities and are like an oasis for the local Scheduled Castes, Scheduled Tribes and other population who share the fruits of prosperity along with SAIL.
SAIL has undertaken several initiatives for the socio-economic development of SCs/STs and other weaker sections of the society which are mainly as under:
- Special Schools have been started exclusively for poor, underprivileged children at five integrated steel plant locations. The facilities provided include free education, mid-day meals, uniforms including shoes, text books, stationary items, school bags, water bottles and transportation in some cases.
- No tuition fee is charged from SC/ST students studying in the Company run schools, whether they are SAIL employees'' wards or non-employees'' wards.
- Free medical health centres for poor have been set up at Bhilai, Durgapur, Rourkela, Bokaro and Burnpur providing free medical consultation, medicines, etc. to the peripheral population mainly comprising of SC/ST and weaker sections of society.
- SAIL Plants have adopted tribal children. They are being provided free education, uniforms, text books, stationery, meals, boarding, lodging and medical facilities for their overall growth at residential hostels, Saranda Suvan Chhatravas, Gyanodaya Hostel and an exclusive Gyan Jyoti Yojana for nearly extinct Birhor Tribe.
- For Skill Development and better employability, tribal school passouts have been sponsored for coaching in premier institutes for IIT/JEE entrance examinations and for trainings along with monthly stipend, accommodation, transportation and fooding facility at various ITIs, Nursing and other vocational training institutes.
Implementation of Presidential Directives on Reservation for SC/ST
- Liaison Officers have been appointed as per Presidential Directives for due compliance of the Orders and instructions pertaining to reservation for SCs/STs/OBCs at Plants/Units of SAIL.
- SC/ST Cell is functioning in all of the main Plants/Units. A member belonging to SC/ST community is associated in all DPCs/Selection Committees. A sufficiently senior level officer of SC/ST category is nominated for the purpose as per the level of the Recruitment Board / Selection Committees/DPC.
- Internal workshops for Liaison Officers for SC/ST/OBC and other dealing officers of SAIL Plants/Units are conducted at regular intervals through an external expert to keep them updated on the reservation policy for SC/ ST and other related matters.
- Plants/Units of SAIL have SC/ST Employees'' Welfare Associations which conduct regular meetings with Liaison Officers on implementation of reservation policy & other issues. In addition, an Apex level umbrella body namely SAIL SC/ST Employees Federation also exists in SAIL to represent the issues of SC/ST Employees in a coordinated manner. A meeting with the Federation at the level of Director (Personnel) is organized on a regular basis.
Implementation of Right to Information Act, 2005
The provisions under the Right to Information Act, 2005(Act) are being complied by all the Plants and Units of SAIL. All statutory reports including Annual Report are being sent to Ministry of Steel and also being uploaded on the website of the Company-www.sail.co.in. Your Company has appointed Public Information Officers(PIO)/Asstt. Public Information Officers and Appellate Authorities and Transparency Officer under Sections 5 and 19(1) of the Act in each Plant and Unit for speedy redressal of the queries received under the Act. Under Sec.5(5), all the officers/ line managers responsible for providing information to the PIO are called Deemed PIO, and are made equally responsible as PIO, towards timely submission of information to the applicant.
An exclusive RTI Portal has been developed with link available on the website of the Company. All the Plants/Units have listed 17 manuals and details of Authorities under the Act are uploaded on the website of the Company. Quarterly Returns and Annual Returns on implementation of the Act are being submitted online through the CIC portal. Implementation of online request has already been introduced from 1st May, 2015. A compilation of Record Retention Policy of various functions of Corporate Office has also been uploaded on the website of the Company. In addition to this, compilations of important decisions of CIC, DOPT circulars and High Court cases are also available on the website of the Company.
Awareness Programs/Workshops on ''Obligation of Public Authorities under RTI'' are being organized across Plants/Units and Information Commissioner has been present in most of these programs. Further, Awareness Programmes on the Act are held at Plant, Units and Corporate Office regularly.
SAIL received a total of 3,364 applications and 625 appeals under the Act during the Financial Year 2017-18, all of which have been disposed-off within the stipulated time frame under the Act. CIC has also taken up 70 cases and most of these cases were disposed-off in favour of the Company.
Since enactment of the Act, SAIL has received a total of 38,710 applications and 5,760 appeals up to 31st March, 2018, which were disposed-off within the stipulated time. Out of these, 736 cases were taken up by the CIC and most of these cases were disposed-off in favour of the Company.
Citizen Charter
Your Company is totally committed to excellence in public service delivery through good governance, by a laid down process of identifying citizens, our commitment to them in meeting their expectations and our communication to them of our key policies, in order to make the service delivery process more effective.
SAIL''s Citizen Charter has outlined commitment of SAIL towards its stakeholders, thereby empowering them to demand better products and services. Objectives of the Citizen''s Charter of SAIL may be summarized as below:
- Ensuring citizen-centric focus across all its processes by adopting Total Quality Management Principles for improvement of products and services.
- Ensuring effective citizen communication channels.
- Demonstrating transparency and openness of its business operations by hosting the Citizen''s Charter on the Corporate website.
- Working towards delight of citizens, by fail-safe processes and in case of exigencies leveraging its service recovery processes, like Grievance Redressal, Handling Complaints, etc.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:
The Company has set up Internal Complaints Committees in line with the requirement of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. These Committees have been set up to redress complaints received regarding sexual harassment. All employees of the Company are covered under these Rules. The details of sexual harassment complaints received and disposed of during the year 2017-18 are as under:
Number of complaints received : 2
Number of complaints disposed off : 2
D. AWARDS & ACCOLADES WON DURING THE YEAR Company Level
- Your Company has won 3 Prime Minister''s Shram Awards (involving 18 employees) for the Performance Year 2015.
- Your Company has won 8 Vishwakarma Rashtriya Puraskar Awards (involving 34 employees) for the Performance Year 2015.
- Your Company has won Gold Trophy of "SCOPE Meritorious Award for Best Practices in Human Resource Management" for the Year 2014-15.
- Your Company has won Governance Now Award in the Turnaround (Financial) Category on 28th February, 2018.
- SAIL''s "Ispat Bhasha Bharti" received first prize for the best in-house journal for the Year 2016-17 of Town Official Language Implementation Committee.
IISCO Steel Plant
- IISCO Steel Plant bagged the Best Performer Award in energy saving in the Iron & Steel sector under the PAT (Perform, Achieve & Trade) Scheme Cycle I of Bureau of Energy Efficiency (BEE), Ministry of Power, Government of India at New Delhi on National Energy Conservation Day on December 14, 2017 in presence of the Hon''ble President of India.
Raw Materials Division
- Kiriburu Iron Ore Mines received 1st prize during 25th Mines Environment and Mineral Conservation (ME&MC) week celebration 2018 by Indian Bureau of Mines at Ranchi, for its overall commendable performance in Environment Protection and Sustainability Endeavour.
Alloy Steels Plant
- Alloy Steels Plant received the Best Performance Vendor 2017 Award from Ordnance Factory-Medak (OF-M) for indigenization, development and supply of import substitute steel plates.
E. ENVIRONMENT MANAGEMENT
Within the ambit of notified environmental standards applicable for emission and discharge of pollutants into the environment and rules pertaining to eco-friendly management of various wastes, being generated inside the Plant Premises as well as in the townships, SAIL Plants and Mines operate their processes without disturbing the ecological balance. Your Company has also drawn its environmental vision in consonance with the Corporate Environmental Policy, which not only addresses the need for compliance of stipulated norms but also emphasizes on striving to go beyond. Besides, your Company is committed to address the stakeholders'' concerns and communicate its environmental philosophy to all the stake holders.
Improvement in Emissions and Discharges
SAIL Plants and Mines are efficiently operating the pollution control devices/ facilities and maintaining regularly through revamping/refurbishing/revitalization and also up-grading them as and when required, for the purpose of complying with the applicable environmental standards, which are becoming more and more stringent day by day.
The Particulate Matter (PM) emission load (kg/tcs) has reduced by around 14% in the last five years. During the expansion cum modernization programs, state of the art technologies along with latest pollution control facilities have been installed, as a result of which the pollution level and CO2 emission have also come down.
During the last five years, the specific CO2 emission (T/tcs) has been reduced by around 5%. The specific effluent load in the discharged effluent has reduced by more than 25% in the last five years.
Adoption of Energy-Efficient Technologies and State-of-the-Art Pollution Control Equipment/Facilities
Some of the major best available technologies, adopted as steps towards implementation of clean technologies as well as latest pollution control facilities installed during Modernization and Expansion Plan of the Company are as follows:
- Higher capacity (tall) coke oven batteries equipped with Land based Pushing Emission Control System, Coke Dry Cooling Plant, etc. at BSP RSP & ISP
- Sinter Plant equipped with improved ignition system (multi-slit burners), Waste Heat Recovery facility from sinter cooler, etc. at RSP & ISP
- Blast Furnace of higher capacity equipped with Top Pressure Recovery Turbine (TRT), Waste Heat Recovery facility, Pulverised Coal Injection, Cast House De-dusting System, Cast House Slag Granulation Plant and torpedo ladle at BSP RSP & ISP
- Phasing out of energy-intensive ingot route across SAIL Plants.
- Walking Beam Reheating Furnace (RHF) in place of pusher type RHF at the Rolling Mill in reducing energy consumption as well as CO2 emission at all the Plants.
New Initiatives
a. Environment friendly disposal of Poly Chlorinated Bi-Phenyls (PCBs) - a toxic environmental pollutant
Bhilai Steel Plant, in partnership with the MoEF&CC and UNIDO, has initiated a project for setting-up a disposal facility for Polychlorinated Biphenyls (PCBs), categorized as Persistent Organic Pollutants (POPs) at its site. The project is likely to be completed by December, 2018.
b. Bio-sequestration of CO2
For the purpose of reduction of CO2 emission and sequestration of the generated carbon back into the system, SAIL is assessing its carbon footprint in one hand and potential of sequestration of CO2, through its existing biotic resources, on the other. A project on carbon sequestration through forestation has been taken up at the site of Rourkela Steel Plant. M/s. Tropical Forest Research Institute, Jabalpur, has been engaged as the sequestration partner to carry out the project in February, 2014. The project will continue till March, 2019.
c. Enhancing utilization of wastes through application of 4Rs (Reduction, Reuse, Recycling and Recovery):
With a view to increase utilization of wastes being generated inside Plant boundary, in the recent years, some R&D based initiatives like steam maturing of BOF slag, dry granulation of BOF slag, use of BOF slag as rail track ballast, use of BF and bOf slag as substitutes to natural aggregates, use of BF/BOF slag in road making have been undertaken in the recent years.
d. Application of Renewable Energy towards a new era
Your Company has set a target of installation of 200 MW renewable energy Power Plants by 2019. Some of the major initiatives taken towards implementation of renewable energy projects are under consideration:
- 7 MW capacity Solar Power Plant at Bhilai.
- 20 MW capacity Solar Power Plant at Durgapur.
- 2 MW capacity roof top Solar Power Plant on the buildings of BSL.
- 20-25 MW capacity Solar Power Plant at Kulti.
- 17 MW capacity roof-top Solar Power Plants on various buildings of SAIL including warehouses.
e. A green initiative by Rourkela Steel Plant
Rourkela Steel Plant(RSP) has recently taken up a green initiative for using waste plastics in the hot mix of road making. As a pilot project, a stretch of one km road has been constructed successfully. More roads in RSP and other Plants are planned to be taken up.
Environmental Management System (EMS) linked with ISO-14001:2015
Environmental Management System (EMS) linked to ISO 14001 is a set of processes and practices that enable an organization to reduce its environmental impacts and increase its operating efficiency. Implementation of EMS has helped the Plants and Mines to ensure that their performance being always within the applicable regulatory requirements.
During the Financial Year 2017-18, implementation of EMS (ISO-14001:2015) has been taken up at the Gua Ore Mines and the Collieries, since this is a prerequisite for implementation of Star Rating System by the Indian Bureau of Mines. This system is also under implementation at the CMO Warehouse at Kanpur. Further, 13 Warehouses under the Marketing Department have till date been certified to Environment Management System compliant to 14001:2015.
Sustainable Development Projects
Restoration and rehabilitation of degraded ecosystem is essential for maintaining and enhancing bio-diversity as well as replenishing the eco-system services. Mined out area and water body of mine voids of Purnapani Limestone Mines have been taken up for ecological restoration in association with Delhi University.
Plantation
Your Company realizes the role of plantation in overall environmental management initiatives. It is a well-known fact that plants play an important role in balancing the eco system and function as a carbon sink. Keeping the enormous contribution of the plants in mind, SAIL has long been adopting extensive a forestation program religiously in its Plants and Mines since its nascent stage. More than 20.1 million saplings have been planted across SAIL Plants and Mines till date. Giving special thrust for plantation, more than 8.27 lakhs of saplings have been planted during 2017-18.
F. STRATEGIC INITIATIVES OF THE COMPANY
Your Company has adopted a multi-pronged approach that includes organic growth, brown-field projects, technology leadership through strategic alliances, ensuring raw material security by developing new mines, diversifying in allied areas, etc. In line with the above approach, SAIL has formed Joint Venture Companies in different areas viz. power generation, rail wagon manufacturing, slag cement production, securing coking coal supplies from overseas sources, etc. New initiatives are currently being explored in areas such as outsourcing of power distribution and educational facilities in SAIL townships, etc. The status of Strategic Initiatives taken by your Company in the recent past includes the following:
In order to meet the challenges of adverse business environment, a Company-wide turnaround program was initiated during 2016-17. The program was taken up with an aim to review and sharpen SAIL''s business strategies and processes, build for sustained market leadership and drive the Company towards profitability. Towards this, your Company engaged M/s. Boston Consulting Group (BCG), a leading Global Management Consultant, to study the health of the Company, suggest suitable measures for its turnaround and provide hand holding support and assistance to SAIL for implementation of approved road map for turn around. The study phase of this program, named ''SAIL Uday'', culminated in October, 2017 with the submission of the ''Comprehensive Turnaround Roadmap'' Report by BCG. The Roadmap contains over 260 recommendations encompassing various functional areas of the Company including Raw Materials, Production, Sales & Marketing, Supply Chain & Logistics, Manpower & Productivity, etc. Your Company has now embarked upon the next phase of "SAIL Uday" program involving implementation of the recommendations which would contribute towards achieving the Company''s turnaround.
Disinvestment of SAIL Plants: On 27th October, 2016, the Government of India (Gol) accorded ''in-principle'' approval for Strategic Disinvestment of three Units of SAIL viz. Salem Steel Plant (SSP), Salem, Visvesvaraya Iron and Steel Plant (VISP), Bhadrawati and Alloy Steels Plant (ASP), Durgapur. The entire process of Strategic Disinvestment is being overseen by an Inter-Ministerial Group(IMG) constituted by the Ministry of Steel(MoS) and chaired by the Secretary, Steel.
SAIL Board has accorded ''in-principle'' approval for the Strategic Disinvestment of these Steel Plants. To carry out the process, the Company has appointed Transaction Advisor(TA), Legal Advisor (LA), Asset Valuer(AV) and Tax cum Accounting Consultant (TCA).
Upon receipt of approval of the Gol/MoS, Preliminary Information Memorandum (PIM)/Expression of Interest request (Eol) for disinvestment of ASP on 1st February, 2018, Public Notice for inviting Eol for ASF, Durgapur was issued on 14th February, 2018. The Eols received are under evaluation.
PIM/Eol Requests for Strategic Disinvestment of VISP and SSP have been sent to Ministry of Steel on 2nd May, 2018 and 9th May, 2018 respectively for obtaining approval of the Gol for issuance of Public Notice inviting Eol for Strategic Disinvestment. Clearance from GoI is awaited.
Outsourcing of the Company operated schools in townships of five Integrated Steel Plants.
Outsourcing Policy of SAIL lays down the objectives and framework for outsourcing of non-core activities. Based on the overall framework provided by the Outsourcing Policy, options for outsourcing of non-core activities like maintenance of townships, Company owned schools, power distribution in steel townships, coal handling plants, traffic systems, loco and wagon repairs are being evaluated. Actions are also being initiated towards rationalisation of contracts and identification of new areas for outsourcing.
Development of Rowghat - Jagdalpur Rail Corridor in the State of Chhattisgarh: With the aim of bringing about greater socio-economic development of the backward areas of Bastar region in Chhattisgarh and to further the industrial progress and mining activities of the region, an MoU was signed amongst SAIL, NMDC, IRCON International Ltd. and Government of Chhattisgarh in May 2015 for development of a rail corridor from Rowghat to Jagdalpur. This rail corridor shall be used for both freight and passenger services in the Southern part of Chhattisgarh. A Joint Venture Company under the name "Bastar Railway Private Limited" has been incorporated in May, 2016. Pre project activities are being undertaken by the Joint Venture Company.
JV with Arcelor Mittal for production of automotive steel: SAIL and Arcelor Mittal signed an MoU on May 22, 2015 to explore the possibility of setting up an automotive steel manufacturing facility under a Joint Venture (JV), in India. The proposed JV will construct a state-of-the-art cold rolling mill with a capacity of about 1.5 mtpa and other downstream finishing facilities in India that will offer technologically advanced steel products to India''s rapidly growing automotive sector. The input material for the CRM shall be supplied from SAIL''s upcoming Hot Strip Mill located at Rourkela Steel Plant. Thus, it would be a completely integrated indigenous supply chain for the Indian Automotive Sector. In this effect, a legally non-binding Term Sheet has been signed by SAIL and Arcelor Mittal, which lays down the fundamental principles based on which SAIL and AM agree to proceed with formation of the proposed JV Company.
Closure/Exit from non-operational and non-performing Joint Venture Companies.
SAIL has initiated actions for closure/exit from certain Joint Venture Companies which are either non-operational or non-performing. Further, options to monetize SAIL''s investment in certain Joint Venture Companies are also being explored.
Business Excellence Initiatives Implementation of Management Systems
Most of SAIL Plants/Units are certified to ISO 9000, ISO 14000, OHSAS 18000 and SA 8000 Management Systems. BSP was the latest addition to DSP and BSL which have implemented ISO 50000 (Energy Management System). BSP achieved ISO 27000 (Information Security System) certification also which was earlier achieved by DSP, BSL and RDCIS.
Certifications achieved during 2017-18:
- BSP achieved ISO 50000 EnMS and ISO : 27000 ISMS certification.
- ISP- Wire Rod Mill, Universal Section Mill, Bar Mill, Raw Material Handling Plant and Sinter Plant certified to ISO 9000 QMS.
- RSP - Entire Plant certified as per SA 8000: 2014 version.
- DSP - Medium Structural Mill certified to ISO 9000 QMS.
IT Related Initiative
Your Company has embarked upon various Information Technology (IT) initiatives within the organization for enabling SAIL''s competitiveness in the market place.
Your Company is implementing and expanding the coverage of its business operations under the sphere of Enterprise Resource Planning (ERP). Four Integrated Steel Plants at Bhilai, Durgapur, Bokaro and Rourkela and Central Marketing Organization (CMO) have already implemented ERP and have been benefitted by this. ERP implementation at IISCO Steel Plant and at Corporate Office is under progress.
SAIL has also implemented Supplier Relation Management (SRM)/e-Procurement. This has resulted in greater transparency and better market reach. The online customer enquiry systems and CRM are providing better interface between customers and manufacturing processes, thereby transcending customer experience.
Manufacturing Execution Systems (MES) have benefitted your Company in achieving the market expectations by making the production and the associated processes cost, quality and delivery efficient.
Goods and Services Tax (GST) has been implemented across SAIL and IT applications have been made GST compliant. The process for filing GST returns has been automated through Application Service Provider (ASP) & GST Suvidha Provider (GSP).
In pursuit of implementing ''Digital India Initiative'' of the Government of India, paperless office approach is being adopted by resorting to automated e-communications through sms/e-mail and usage of various mobile applications in business/employee welfare areas. Further, cashless transactions have been implemented, wherein almost all payments and receipts are being done through cashless digital mode, thereby, your Company has ensured full compliance of Government of India''s Guidelines with regard to ''Promotion of Payments by Digital Means''. Measures are also being taken to maximize usage of e-Procurement and e-Tendering in the Company.
To ensure data protection and security, steps have been taken at all Plants/ Units for Information Security Management System (ISMS):ISO certification.
Your Company has upgraded to High Definition Video Conference System, which is used extensively and it has facilitated strategic planning and decision making and also has proved to be cost effective and time saving.
Corporate Communication
Your Company recognizing the need to evolve new and innovative ways to engage with its employees has conducted a series of large group interactions at its Plants and Units, wherein the top management comprising Chairman and Directors of the Company, held two-way communication with employees, apprising them of the challenges before the Company and encouraging them towards better performance. Apart from this, the Company following a comprehensive approach in its communication initiatives engaged in internal communication utilizing the mediums of the management''s New Year message, Intranet, Newsletters, etc. SAIL''s intranet enables employees to catch up on all important and valuable information pertaining to the Company, provides interactive forums to partake in various competitions/quizzes and let them share their feedback on various issues. SAIL News-our internal newsletter, with its informative, motivational, employee and product focused content, not only effectively communicates but also fosters a sense of pride in the employees for the Company.
In order to build your Company''s brand image, promote its products and their applications, highlight its role in nation building, Make in India drive and to effectively communicate with external stakeholders, your Company participates in events and exhibitions, releases advertisements, maintains its website and presence on social media, sponsors various events, etc.
Your Company participated in a number of domestic exhibitions and fairs throughout the year including Vision Jammu & Kashmir 2018, International Engineering Sourcing Show 2018 (Chennai), Emerging North East 2018 held at Guwahati, Assam, exhibitions in Jaipur, Visakhapatnam), etc. SAIL has also been successfully participating in India International Trade Fair, regularly for over two decades. The ''SAIL Lion''-a figurine specially crafted out of SAIL Salem Stainless steel showcasing different products and applications of steel, was a major draw at IITF-2017. Your Company also took part in major international exhibitions namely INDEE (Indian Engineering Exposition) Bangladesh, MSV International Engineering Fair (Czech Republic), India Sourcing Fair 2018 (Russia) and Hanover Messe 2018 in Germany. In addition, the Company has sponsored a number of sports, cultural and educational
events that provided extensive visibility for SAIL.
Your Company has created visually appealing, crisp, trendy and emotional connect generating advertisements which were successful in conveying the meaning of ''Brand SAIL'' to society at large while commemorating SAIL''s 60th year of production. They provided visibility to your Company across different formats such as print, electronic, online, mobile, etc. SAIL advertisements with rural focus support the organization''s rural marketing initiatives. SAIL website serves as an important source of information to our investors and other important stakeholders. Your Company has also created a number of films on a diverse range of subjects including steel making, safety, swachhta, vigilance, steel applications, environment conservation initiatives, etc., which have been showcased nationally and internationally at various events.
G. VIGILANCE ACTIVITIES
The objective of SAIL Vigilance is to facilitate an environment enabling people to work with integrity, efficiency and in a transparent manner, upholding highest ethical standards for the organization. To achieve this objective, the Vigilance Department carries out preventive, proactive and punitive actions with greater emphasis in the preventive and proactive functions. Following activities were undertaken during the Financial Year 2017-18:
- To increase vigilance awareness amongst employees, vigilance awareness sessions and workshops were regularly held at various Plants and Units of the Company. A total of 145 workshops involving 2838 participants were organized for enhancing Vigilance Awareness on Whistle Blower Policy, Purchase/Contract Procedures, RTI Act, Conduct & Discipline Rules, System and Procedures followed in SAIL, etc.
- Periodic surprise checks including Joint Checks were conducted regularly in vulnerable areas of the Company. A total of 2490 periodic checks including file scrutiny and Joint Checks were conducted at different Plants / Units. A saving of approx. ''18.45 crores accrued from the preventive vigilance activities mainly on account of these surprise checks.
- Vigilance provides vital inputs to the operating authorities for improving the prevailing systems for bringing about more transparency. Accordingly, eight major System Improvement Projects (SIPs) were undertaken at different Plants/Units of SAIL.
- 13 cases were taken up for Intensive Examination at different Plants / Units. During these Intensive Examinations, high value procurement / contracts are scrutinized comprehensively and necessary recommendations are forwarded to concerned departments for implementing suggestions for improvement.
- As per the Guidelines of Central Vigilance Commission, Vigilance Awareness Week was observed in SAIL during 30th October to 4th November, 2017. The week started with administrating the Integrity pledge and reading out of messages of dignitaries on 30th October 2017 at SAIL Corporate Office as well as all Plants/Units of SAIL. During the week, Workshops/ sensitization programmes, talks by eminent speakers like Ex-Secretary, Government of India, SP CBI, etc., Customers meet, Anticorruption March / Walkathon involving common people, events like quiz, essay, slogan & drawing/ poster, debate competition were organized for the employees and their families. The activities conducted during the week were posted on social media like twitter handle and face book account of SAIL for wider publicity. During the week, employees, their families, students, customers, vendors, etc. were encouraged to take E-pledge.
- The following four (4) thrust areas were identified by SAIL Vigilance:
i) Surveillance in the areas of receipt, sampling & testing of high value raw materials.
ii) Use of analytics from Business Intelligence (BI)/ERP Central Component (ECC) Module while identifying areas of scrutiny of files and surprise checks at Bhilai, Bokaro, Rourkela, Durgapur and Central Marketing Organization.
iii) Scrutiny of projects w.r.t change orders.
iv) Scrutiny of Audit Reports.
- SAIL Vigilance team received an Excellence Award for the BEST CASE STUDY from Central Vigilance Commission (CVC) during the XIV anniversary celebrations of Vigilance Study Circle, Hyderabad held on 14th July 2017.
SAIL Vigilance also received two VIGILANCE EXCELLENCE AWARDs, one each for ''Vigilance Innovation'' and ''Excellence in Investigation'' from the Hon''ble Vice President of India in the inaugural function of Vigilance Awareness Week organized by CVC on 30th October 2017 at Vigyan Bhawan, New Delhi.
- ''Inspiration- Prerna'', an in-house publication of SAIL Vigilance is being published regularly. The above publication contains case studies, articles from eminent personalities, quiz on policy matters, etc. to enhance awareness of the readers.
- Summary of processing of vigilance cases during 2017-18 is as under:
Source |
Complaints |
||
Received |
Disposed |
||
CVC |
5 |
5 |
|
MoS |
39 |
34 |
|
Direct |
732 |
704 |
|
Total |
776 |
743 |
|
Type of Complaints disposed: |
|||
Closed as found anonymous / pseudonymous (filed in line with CVC guidelines) |
207 |
||
Closed as no vigilance angle / allegations not substantiated |
398 |
||
Closed with preventive/administrative Recommendations |
122 |
||
Regular Departmental Actions initiated |
16 (6 cases of major penalty against 7 employees and 10 cases of Minor Penalty against 16 employees) |
||
Total Disposed |
743 |
||
Vigil Mechanism
The Company has adopted Vigil Mechanism for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. All employees of the Company and Directors on the Board of the Company are covered under this Mechanism. This Mechanism has been established for employees to report concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct. It also provides for adequate safeguards against the victimization of employees who avail of the Mechanism and allows direct access to the Chairperson of the Audit Committee in exceptional cases.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As per the SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis Report covering the performance and outlook of the Company is attached and forms part of this Report.
AUDITORS'' REPORT
The Statutory Auditors'' Report on the Accounts of the Company for the Financial Year ended 31st march, 2018 along with Management''s replies thereon is placed at Annexure-I to this Report. The Comptroller & Auditor General of India (C&AG) vide its letter dated 31st July, 2018 has given "Nil" comments on the Standalone Financial Statements of the Company for the Financial Year ended 31st March, 2018 under Section 143(6)(a) of the Companies Act, 2013. A copy of the above letter of C&AG is placed at Annexure-II to this Report.
COST AUDITORS
Pursuant to the direction of the Central Government for Audit of Cost Accounts, the Company has appointed M/s. Sanjay Gupta & Associates, New Delhi, M/s. Shome & Banerjee, Kolkata and M/s. R.J. Goel & Co., New Delhi as Cost Auditor(s) for the Financial Year 2017-18.
SECRETARIAL AUDITOR''S REPORT
In terms of the provisions of Section 204 of the Companies Act, 2013, the Board of Directors has appointed M/s. Agarwal S. & Associates, Company Secretaries, as the Secretarial Auditor to conduct Secretarial Audit of the Company for the Financial Year ended on 31st March, 2018. Secretarial Audit Report is placed at Annexure-III to this Report.
With regard to the observation of the Secretarial Auditor, that composition of the Board of Directors of the Company was not as per requirements during a part of the Financial Year 2017-18, it is stated that appointment of Independent Directors on the Board of the Company is made by the Company based on nomination by Government of India. The Company has requested Ministry of Steel, Government of India for nomination of requisite number of Independent Directors on its Board.
In respect of observation regarding performance evaluation of the Directors not being carried out pursuant to the Regulation 17(10) & 25(4) of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, it is mentioned that Ministry of Corporate Affairs has vide its Notification dated 5th June, 2015 notified the exemptions to Government Companies from the provisions of the Companies Act, 2013 which, inter-alia, provides that Sub Sections (2), (3) & (4) of Section 178 regarding appointment, performance evaluation and remuneration shall not apply to Directors of the Government Companies. Further, the Ministry of Corporate Affairs vide Notification dated 5th July, 2017 has notified certain amendments in Schedule IV of the Companies Act, 2013 relating to Code for Independent Directors. As per the Notification, in Schedule IV, the clauses relating to evaluation of performance of Non-Independent Directors, Chairperson and Board have been exempted for Government Companies.
CORPORATE GOVERNANCE
In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, the Corporate Governance Report and Auditors'' Certificate on compliance of conditions of Corporate Governance is placed at Annexure-IV to this Report.
In terms of the SEBI Regulations, the Board has laid down a Code of Conduct for all Board Members and Senior Management of the Company. The Code of Conduct has been posted on the website of the Company. All the Board Members and Senior Management Personnel have affirmed compliance with the Code.
BUSINESS RESPONSIBILITY REPORT
As per Regulation 34(2)(f) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report describing the initiatives taken by the Company from Environmental, Social and Governance perspective forms part of this Annual Report.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES
IISCO-Ujjain Pipe and Foundry Company Limited, a wholly owned subsidiary of the erstwhile Indian Iron and Steel Company Limited (IISCO), was ordered to be wound up by BIFR. The Official Liquidator is continuing its liquidation process.
Your Company has four other subsidiary Companies namely, SAIL Refractory Company Limited (SRCL), SAIL Jagdishpur Power Plant Limited, SAIL Sindri Projects Limited and Chhattisgarh Mega Steel Limited. SRCL is operating the Salem Refractory Unit which was acquired by SAIL from Burn Standard Company Limited on 16th December, 2011. SAIL Jagdishpur Power Plant Limited, incorporated for setting up of Gas based power Plant at Jagdishpur and SAIL Sindri Projects Limited, incorporated for revival of Sindri Unit of Fertilizer Corporation of India Limited have not taken off. Under present situation, the objectives with which these Companies were incorporated are difficult to achieve, hence the Board of Directors of your Company has decided to close SAIL Jagadishpur Power Plant Limited and SAIL Sindri Projects Limited. Further actions for closure of these Companies are being taken. Chhattisgarh Mega Steel Limited which was incorporated as a Special Purpose Vehicle for setting up of an Ultra Mega Steel Plant of 6 Million Tonnes per annum as a green field steel project under Joint Venture is yet to commence operation.
The Annual Accounts of the subsidiary Companies and related detailed information shall be made available to the Shareholders of the holding and subsidiary companies, seeking such information at any point of time. Further, the Annual Accounts of the subsidiary companies are available for inspection by any Shareholder in the Registered Office of the Company and the Subsidiary Companies concerned between 11 AM to 1 PM on working days. A hard copy of the details of accounts of subsidiaries shall be furnished to the shareholders on receipt of written request.
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to provisions of Section 129(3) of the Companies Act, 2013, the duly Audited Consolidated Financial Statements are placed at Annexure-V to this Report. The Statutory Auditors'' Report on the Consolidated Financial Statements along with the Management''s replies thereon is placed at Annexure-VI to this Report. The Comptroller & Auditor General of India (C&AG) vide its letter dated 31st July, 2018 has given "Nil" comments on the Consolidated Financial Statements of the Company for the Financial Year ended 31st March, 2018 under Section 143(6)(a) read with Section 129(4) of the Companies Act, 2013. A copy of the above letter of C&AG is placed at Annexure-VII to this Report. Further, the statement containing salient features of the financial statements of the subsidiary, joint venture and associate companies in the prescribed Form AOC-1 is placed at Annexure-VIII to this Report.
EXTRACT OF ANNUAL RETURN
The Extract of Annual Return in Form MGT-9 as per the provisions of the Companies Act, 2013 and Rules prescribed therein is placed at Annexure-IX to this Report.
BOARD MEETINGS
During the year, 11 meetings of the Board of Directors of the Company were held, the details of which are given in the Corporate Governance Report.
AUDIT COMMITTEE
The Audit Committee of the Board was initially formed by the Company in 1998. The Audit Committee has been reconstituted from time to time in terms of the SEBI Regulations and Companies Act, 1956/2013. The minutes of the Audit Committee meetings are circulated to the Board, discussed, and taken note of. The composition and other details pertaining to the Audit Committee are given in the Corporate Governance Report.
INTERNAL FINANCIAL CONTROL (IFC) AND ITS ADEQUACY
The Company has well established and documented policies and procedures for ensuring the orderly and efficient conduct of business, including adherence to various policies and procedures for safeguarding its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures. Further, the Company has adopted a corporate governance structure, various management processes, controls, policies and guidelines that drive the organization towards its business objective, while also satisfying various stakeholders'' needs.
Some of your Company''s robust protocols such as independent internal audit, well drafted and documented policies, guidelines, procedures, regular review by Audit Committee / Board, etc. helps in compliance of Internal Financial Controls under the Companies Act, 2013, SEBI (LODR) Regulations, 2015, etc. Your Company is committed to the highest standards of Corporate Governance where the Board is accountable to all stakeholders for reporting effectiveness of Internal Financial Control (IFC) and its adequacy. Corporate Governance has been carried out in accordance with the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, etc.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors state that:
(i) in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;
(ii) the Directors have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit or loss of the Company for that period;
(iii) the Directors have taken proper and sufficient care for the maintenance of adequate Accounting Records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) the Directors have prepared the Annual Accounts on a Going-Concern basis;
(v) the Directors have laid down internal financial control to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
(vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
INDEPENDENT DIRECTORS'' DECLARATION
In terms of section 149(7) of the Companies Act, 2013, necessary declaration has been given by each Independent Director stating that he/she meets the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
In terms of the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014, the details of Loans, Guarantees, Investments given during the Financial Year ended on 31st March, 2018 are given in Annexure-X to this Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUB-SECTION (1) OF SECTION 188
All the contracts / arrangements / transactions entered by the Company during the Financial Year 2017-18, with the related parties were in the ordinary course of business and on an arm''s length basis. The transactions with the related parties have been disclosed in the financial statements. Therefore, particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such contract or arrangement in Form AOC-2 do not form part of the Report.
DIVIDEND DISTRIBUTION POLICY
In terms of the Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company has adopted Dividend Distribution Policy which is uploaded on the website of the Company - https://sail.co.in/sites/default/files/Dividend_Distribution_ Policy_2017.pdf
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
In accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies(Accounts) Rules, 2014, the particulars relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in Annexure-XI to this Report.
RISK MANAGEMENT POLICY
Enterprise Risk Management (ERM) is a strategic business discipline that supports the organization''s objectives by addressing full spectrum of its risks and managing the combined impact of those risks as an inter-related risk portfolio. The Risk Management Policy of your Company was approved by the Board much before the same became a statutory requirement and since then, the risk management in SAIL has grown and developed in line with internal and external requirements. The Policy provides guidance for the management of the business risks across the organization. It focuses on ensuring that the risks are identified, evaluated and mitigated within a given time frame on a regular basis.
Currently, the architecture of Enterprise Risk Management in SAIL comprises a well-designed multi-layered organization structure, with each Plant/Unit having its own perceived Risks which are under the constant monitoring by the Risk Owners / Risk Champions who frame and implement the mitigation strategy and take it to its logical conclusion. Risk Management Committee of the Plant/Unit Chaired by the Head of the Plant /Unit periodically reviews the risks and their mitigation status and reports the same to Chief Risk Officer (CRO) of SAIL. SAIL Risk Management Committee (SRMC) oversees the Risk Management function in the Company by addressing issues pertaining to the policy formulation as well as evaluation of risk management function to assess its continuing effectiveness. Risks identified by the Risk Champion/Risk Officer are deliberated in the Risk Management Committee, escalated and draw the mitigation strategy. Roles and responsibility of Board, Audit Committee, SAIL Risk Management Committee, Risk Management Steering Committee, CRO, Risk Officer/Risk Champion related to risk management are defined under the Policy and duly approved by the Board.
M/s. Grant Thornton India LLP has been appointed to review and update the existing ERM Policy in SAIL to meet the statutory requirements of Companies Act, 2013 and SEBI Regulations.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
SAIL''s Social Objective is synonymous with Corporate Social Responsibility. Apart from the business of manufacturing steel, the objective of the Company is to conduct business in ways that produce social, environmental and economic benefits to the communities in which it operates. For any organization, CSR begins by being aware of the impact of its business on society. With the underlying philosophy and a credo to make a meaningful difference in people''s lives, your Company has been structuring and implementing CSR initiatives right from the inception. These efforts have seen the obscure villages, where SAIL Plants are located, turn into large industrial hubs today.
The CSR initiatives of your Company have always been undertaken in conformity to the Companies Act-2013, Companies (Corporate Social Responsibility Policy) Rules, 2014 and CSR Policy. SAIL carries out CSR projects in and around periphery of steel townships, mines and far flung location across the Country in the thrust areas falling in line with Schedule-VII of the Companies Act-2013, namely, education, medical and health care facilities, village development, access to water facilities, infrastructural development in peripheral rural areas, environment conservation, women empowerment, assistance to people with disabilities, sustainable income generation through self-help groups, promotion of sports, art, culture & heritage conservation, etc.
The details of various CSR initiatives taken by the Company along with the Report on CSR in prescribed format are placed at Annexure XII to this Report. The CSR Policy of the Company is available on the website of the Company-www.sail.co.in.
Healthcare: SAIL''s extensive and specialized healthcare infrastructure provided specialized and basic healthcare to 1.70 crore people living in the vicinity of its Plants and Units during the period 2011-18. In order to deliver quality healthcare at the doorsteps of the needy, regular health camps in various villages on fixed days are being organized for the people living in the periphery of Plants/Units, Mines and far-flung areas. During the Financial Year 2017-18, about 4,130 Health Camps have been organized benefitting over 76,000 villagers. 7 Mobile Medical Units (MMUs) running in the Plant''s peripheries have benefitted 44,000 villagers at their doorsteps.
27 Primary Health centres at Plants exclusively provided free medical care and medicines to 3.43 lakh villagers during the Financial Year 2017-18.
Education: To develop the society through education, SAIL is supporting over 77 schools which are providing modern education to more than 40,000 children in the steel townships. 19 Special Schools (Kalyan & Mukul Vidyalayas) are benefitting over 4,270 BPL category students at integrated steel plant locations with facilities of free education, mid-day meals, uniform including shoes, text books, stationary items, school bag, water bottles and transportation.
Your Company in association with Akshya Patra Foundation is providing midday meals to 68,000 students of over 630 Government schools in Bhilai and Rourkela.
Women Empowerment & Sustainable Income Generation: Vocational and specialized skill development training targeted towards sustainable income generation have been provided to 600 youths and 1,468 women of peripheral villages in areas such as Nursing, Physiotherapy, LMV Driving, Computers, Mobile repairing, Welder, Fitter & Electrician Training, Improved Agriculture, Mushroom Cultivation, Goatery, Poultry, Fishery, Piggery, Achar/Pappad/ Agarbati/Candle Making, Screen Printing, Handicrafts, Sericulture, Yarn Weaving, Tailoring, Sewing & Embroidery, Gloves, Spices, Towels, Gunny-bags, Low-cost-Sanitary Napkins, Sweet Box, Soap, Smokeless Chullah making, etc. 845 youths have been sponsored for ITI Training at ITCs Bolani, Bargaon, Baliapur, Bokaro Pvt. ITI and Rourkela, etc. and 31 youths in Plastic Engineering through CIPET at Bokaro.
Connectivity & Water facilities in Rural Areas: Over 79.03 lakh people across 450 villages have been connected to mainstream by SAIL since its inception by constructing and repairing of roads. Over 8,100 water sources have been installed during last five years, thereby enabling easy access to drinking water to 50 lakh people living in far-flung areas.
Environment Conservation: Over 3 lakh trees have been planted and maintained at Bhilai, Bokaro, Rourkela & Mines areas. A 409 acres Bio-Diversity Environment Theme Park ''VASUNDHARA'' with a water body and plantation of 400 varieties of trees, medicinal plants, rainwater harvesting, soil conservation for maintaining ecological balance has been developed at Durgapur. The park is enriching the environment for approx. 75,000 natives year on year.
Support to Differently Abled & Senior Citizens: Differently abled children/ people are being supported through provision of equipments like- tricycle, motorized vehicles, calipers, hearing aids, artificial limbs, etc. Your Company supports various schemes and centres at Plants under CSR like "Sneh Sampada", "Prayas"and ''Muskaan" at Bhilai, "Schools for blind, deaf & mentally challenged children" and âHome and Hope" at Rourkela, "Ashalata Viklang Kendra" at Bokaro, various programs like "Handicapped Oriented Education Program" (Hope) and "Durgapur Handicapped Happy Home" at Durgapur, and "Cheshire Home" at Burnpur. Support has also been provided to NGOs working in this field like TAMANNA, Deepalaya, etc. Old age homes are being supported at different Plant townships like "Siyan Sadan" at Bhilai, Acharya Dham and Badshah at Durgapur, etc.
Sports, Art & Culture and Heritage Conservation: SAIL is regularly organizing inter-village sports tournaments, extending support to major national sports events & tournaments. Also, supporting and coaching aspiring sportsmen and women through its residential sports academies at Bokaro (Football), and Rourkela (Hockey)- with world class astro-turf ground, Bhilai (Atheletics for boys), Durgapur (Athletics for girls) and Kiriburu, Jharkhand (Archery). Cultural events like Chhattisgarh Lok Kala Mahotsav and Gramin Lokotsav are organised every year.
Disaster Relief: Your Company, as a responsible corporate citizen, supported the rehabilitation initiatives for the people affected by Natural Calamities, such as floods in Jammu & Kashmir, Phylin cyclone in Odisha, Flash Floods in Uttarakhand, etc. in the past.
Saranda Forest Development: In an effort to bring the marginalized masses to the mainstream of development, SAIL initially established an Integrated Development Centre (with 26 shops/offices) at Digha village. At the hostel facility setup viz. Saranda Suvan Chhatravas, 24 Tribal children have been adopted and accommodated and facilitated with free of cost education, accommodation, meals & uniforms, textbooks, etc. An Ambulance/MMU is running and providing healthcare at doorsteps of villagers in Saranda Forest.
Ladies Cricket Coaching Club, Bolani has been set up by RMD. About 30 young tribal ladies who were daily wage-earners as ''load-lifters'', devoid of basic amenities, have been motivated, counselled, provided free of cost healthy food, cricket coach and sports kits/tools and training/practice sessions, etc. Today, the Champions are representing Odisha & Jharkhand States in National, State and District level cricket tournaments, wherein, their performance has been adjudged as ''Women of the Tournament'', etc.
SAIL has converged its CSR endeavours by developing sustainable tap water source and constructing useable toilets for each of the 1854 households in 19 villages of Kuarmunda Block, Rourkela in a comprehensive manner. Village level committees have been formed for long-term sustenance of the project.
Bolani Ore Mine is facilitating drinking water supply and sanitation facility for 300 natives of Barik Sahi (Kuni Sahi), Bolani connecting the village with Jhinkaria Springs through G.I. pipelines.
GENERAL DISCLOSURES
i. During the year, the Company has not accepted any deposits under the Companies Act, 2013.
ii. No significant or material orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and Company''s operations in future. However, attention of Members is drawn to the statement on contingent liabilities in notes forming part of the Financial Statements.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
- Dr. N. Mohapatra has ceased to be Director w.e.f. 30th June, 2017(A/N).
- CA K.S. Chauhan and Prof. N.K. Taneja have been appointed as Independent Directors w.e.f. 22nd September, 2017.
- Shri PK. Dash has resigned from the Board w.e.f. 3rd October, 2017(A/N).
- Shri Sunil Barthwal has ceased to be Director w.e.f. 11th October, 2017.
- Ms. Urvilla Khati was Director from 11th October, 2017 to 28th February, 2018.
- Shri Kalyan Maity has resigned from the Board w.e.f. 28th February, 2018(A/N).
- Shri Atul Srivastava has been appointed as Director w.e.f. 12th March,
2018 (A/N).
- Shri Puneet Kansal, Joint Secretary to the Govt. of India, Ministry of Steel has been appointed as Director w.e.f. 7th May, 2018.
- Shri PK. Singh has ceased to be Chairman and Managing Director of the Company w.e.f. 30th June, 2018(A/N).
- Shri Saraswati Prasad, Special Secretary & Financial Adviser to the Government of India, Ministry of Steel assumed Additional Charge as Chairman and Managing Director of the Company w.e.f. 1st July, 2018 (F/N).
- Shri Raman has ceased to be Director w.e.f. 31st July, 2018(A/N).
- Shri Harinand Rai has been appointed as Director w.e.f. 1st August, 2018 (F/N).
ACKNOWLEDGEMENT
The Board of Directors wish to place on record their appreciation for the support and value contributed by every member of the SAIL family. The Directors are thankful to the State Governments, Electricity Boards, Railways, Banks, Suppliers, Customers and Investors for their continued co-operation. The Directors also wish to acknowledge the continued support and guidance received from the different wings of the Government of India, particularly from the Ministry of Steel.
For and on behalf of the Board of Directors
(Saraswati Prasad)
Chairman & Managing Director
Place: New Delhi
Dated: 13th August, 2018
Mar 31, 2017
To,
The Members,
The Board of Directors has the pleasure of presenting the 45th Annual Report of Steel Authority of India Limited (SAIL, the Company) together with Audited Accounts for the Financial Year ended 31st March, 2017.
A. FINANCIAL REVIEW
Your Company achieved a turnover of Rs,49,180 crore during the Financial Year 2016-17, which was higher by 14% over previous year due to increase in both sales volume (8%) as well as Net Sales Realization (NSR) of Saleable Steel of 5 Integrated Steel Plants by about 6%. The loss after tax of your Company for the Financial Year 2016-17 has reduced to Rs,2,833 crore as compared to loss after tax of Rs,4,021 crore in the previous Financial Year.
The reduction in loss has been mainly on account of higher sales volume, higher Net Sales Realization of 5 Integrated Steel Plants, higher production, increase in value added production, lower usage of imported coal in blend, higher usage of CDI in CDI furnaces, reduction in coke rate, improvement in BF productivity, reduction in salaries and wages, decrease in average purchase power rate, foreign exchange gain, etc. However, the same has been partially offset by increase in imported and indigenous coking coal prices, increase in interest cost and depreciation.
SAIL continued its thrust on optimum utilization of funds by better fund management. This included replacement of high cost loans with low cost debts, timely repayment of loans including interest, action for future fund raising, etc. to meet our growth objectives. Further, the Company hedged the foreign currency risk on Buyer''s Credit and repayment of External Commercial Borrowings depending on market conditions. The Company had borrowings of ''41,396 crore as on 31st March, 2017. The debt equity ratio of the Company increased to 1.15:1 as on 31st March, 2017 from 0.90:1 as on 31st March,
2016, due to increase in borrowings as well as reduction in net-worth during the year. The net-worth of Company declined substantially from Rs, 39,196 crore as on 31st March, 2016 to Rs,36,009 crore as on 31st March, 2017.
M/s CARE Ratings and M/s Brickwork Ratings, RBI approved credit rating agencies, assigned ''CARE AA Outlook: Negative'' and ''BWR AA Outlook: Stable'' ratings respectively for SAIL''s long term borrowing programme.
B. OPERATIONS REVIEW Production Review
Financial Year 2016-17 has been a year full of challenges for your Company. The Company faced tough times amidst plunging steel prices, a flood of low-priced imports from China and other countries, unprecedented increase in input prices and a subdued demand of steel.
The new facilities already operational were ramped up during the year. New Blast Furnace at RSP achieved about 100% of its capacity, whereas, other facilities like New Caster and New Plate Mill were also in process of stabilization and achieved 84% and 80% of their respective capacities during the year. The new facilities at IISCO Steel Plant have also been ramped up and the capacity utilization in Hot Metal, Crude Steel and Saleable Steel production was in the range of 50-70% of capacity during this year. At Bhilai Steel Plant, Universal Rail Mill (URM) (with capacity to produce World''s longest single-piece 130-meter long rail) along with Rail Welding Line for production of 260 meter Long
Rails, has been completed and the Mill has started regular production from Jan''17. Other facilities like Ore Handling Plant Part-A, 2nd Sinter Machine in Sinter Plant-3 and Coke Oven Battery-11 are in regular operation. Further, Bar line of Bar and Rod Mill (BRM) has been completed and hot trial of BRM has started in Mar''17. At IISCO, third converter(#1) in SMS was started in August''16.
Financial Year 2016-17 also witnessed several landmark achievements. Your Company achieved highest ever Hot Metal production of 15.73 Million Tonnes(MT) surpassing its previous best of 15.72 MT achieved in 2015-16, highest ever Crude Steel production at 14.50 MT surpassing previous best of 14.29 MT achieved in 2015-16 and highest ever Saleable Steel production at 13.87 MT surpassing previous best of 13.04 MT achieved in 2007-08.
SAIL has achieved an all time best performance in case of Continuously-Cast Steel and Sinter production, with production of 11.77 MT and 23.1 MT registering a growth of 9% and 1% respectively over last year.
SAIL''s various initiatives to reduce environmental footprint and enhance operational efficiency have led to significant improvement in environmental parameters as well as techno-economic efficiency. This has enabled your Company to produce greener and more environmental friendly steel, than ever before. The Plants recorded the best ever Coke Rate at 473 kg/thm and BF productivity of 1.67 t/m3/day. This was achieved, as a result of higher volume of Hot Metal produced through new state of art Blast Furnaces (29% of total Hot Metal) and increased Crude Steel production through energy efficient Continuous Casting route (81%, up by 5% over CPLY).
SAIL became true force in transforming the Nation by supplying steel to ISRO for the launch of a record 104 satellites in a single rocket by way of providing high quality stainless steel for the fuel and oxidizer tanks used in the launch vehicle. SSP had earlier supplied steel for the iconic Chandrayan and Mangalyan missions too.
Power
Captive Power Generation during the Financial Year 2016-17 increased to 820 MW from 785 MW in the previous year, with growth of 4.5%. About 68.3% of the Company''s total power requirement of 1200 MW was supplied from Captive power generation, 30% by purchasing power from grid utilities and the balance 1.7% from Power Exchange through Open Access.
During the Financial Year 2016-17, with an objective to optimize power cost, SAIL Plants procured about 572 Million Units(MU) power through open access which was highest ever in any year since open access regulations came into effect in the Country. Your Company was the first non-power entity to have started wheeling of power in the year 2004 after enactment of Electricity Act, 2003. Out of the 572 MU, about 393 MU of captive power was wheeled from NTPC SAIL Power Company Limited(NSPCL), Bhilai, a joint venture of SAIL and NTPC Ltd. to RSP SSP and CFP and the remaining 179 MU were purchased from Power Exchange for RSP VISP and SSP Such power availed through open access helped in replacing costly grid power in the recipient Plants and resulted in substantial cost savings.
Grid power being the costliest source of power, there was continuous emphasis on reduction in purchase of power from grid and Contract Demand with grid was reduced by 48 MVA during the year, from the earlier level of 975 MW to 927 MW, reduction by about 5% on year-on-year basis, though there was substantial increase in the production of saleable steel and commissioning of new facilities. Continuous efforts were made towards improvement in the performance parameters of Captive Power Plants, both own as well as under joint ventures. The performance of some of the Captive Power Plants under Joint Venture was better than the performance norms in the Country and improvement in performance parameters helped in achieving considerable cost savings.
Your Company has always laid stress on reliability of power supply in its Plants and strengthening of the power distribution system. Connectivity of
BSL with DVC grid at 220 KV level was commissioned during the year. With this, all the Integrated Steel Plants of SAIL are now connected with utility grids at 220 KV level, which enhances the reliability of grid power supply and lowers the tariff of grid power as well as open access charges for having grid connectivity at such high voltages.
Captive power generation capacity is being augmented by capacity addition of 290 MW through NSPCL. Orders for supply and installation of Power Plants of 1 x 250 MW at RSP and 2 x 20 MW at DSP were placed during the year. These Plants are expected to commence commercial operations during the Financial Year 2019-20.
As a part of commitment towards development of renewable energy, your Company has already installed a capacity of 1070 KWp rooftop solar plants at various locations and 1 MWp grid interactive solar plant at RSP Further actions for installation of 200 MWp capacity solar plants at various SAIL Plant locations have also been initiated.
Raw Materials
During Financial Year 2016-17, total requirement of iron ore was met from captive sources. The Company''s captive iron ore mines produced about 26.44 Million Tonnes(MT). However, in case of coking coal, about 19% requirement (2.91MT) was met from indigenous sources (Coal India Limited & captive sources) and for the balance requirement of coking coal (12.41 MT), the Company has to depend on imports due to limitation in availability within the Country. In the Financial Year 2016-17, production in captive collieries of the Company was about 0.68 MT, out of which 0.54 MT was raw coking coal and balance 0.14 MT of non coking coal. In case of fluxes, around 1.36 MT of Limestone and 0.72 MT of Dolomite was produced giving a production of 2.08 MT fluxes from captive sources. For thermal coal, your Company depends entirely on purchases from Coal India Limited (CIL) except for small quantity produced from captive mines.
In order to expedite capacity expansion projects of mines, following environment and forest clearance have been obtained during the Financial Year 2016-17:
- Environment Clearance(EC) for setting up of 3.5 million tonnes per annum (MTPA) capacity washery at Tasra was granted by MoEFCC on 30th March, 2017.
- Environment Clearance of the Dhobil Iron Ore mine has been amended by MoEFCC on 19th April, 2017 for the limited purpose of continuation of transportation of iron ore for further period of 5 years beyond 24th January, 2017.
- MoEFCC vide letter dated 29th November, 2016 has revalidated the earlier Environment Clearance of Sitanala Coal block in favour of the Company.
- MoEFCC vide letter dated 06th December, 2016 transferred the Environment Clearance for Parbatpur Coal block to SAIL with a condition that "No mining shall be carried out till the washery is operational".
However, the Stage-II forest clearances for the capacity expansions of Gua and Chiria mines and opening of South-Central Blocks in Kiriburu-Meghahatuburu mines in Saranda forest in Jharkhand are yet to be granted by MoEFCC. In view of its criticality to the capacity expansion projects, the matter is being actively pursued with the Government.
In view of promulgation of MMDR Amendment Act, 2015 and further issuance of Mineral (Mining by Government Companies), Rules, 2015, lease period of the following leases have been extended:
- Lease period of ML-162 mining lease of Barsua Iron Ore Mine for an area of 77.94 Ha. has been extended by Government of Odisha vide Order dated 5th July, 2016. Under the said Rules, the first lease is deemed to be granted for 50 years i.e. from 29th April, 1960 to 28th April, 2010 and further lease period is extended for another period of 20 years from 29th April, 2010 to 28th April, 2030. Lease Amendment Agreement in this regard was signed on 29th September, 2016.
- Lease period of the Nandini Limestone Mine of BSP for the area of 526.34 Ha. has been extended by Government of Chhattisgarh till 31st March, 2028. Lease Amendment Agreement in this regard was signed on 22nd March, 2017.
Government of Chhattisgarh vide Order dated 25th June, 2016 has extended the lease period of Hirri Dolomite Mine of BSP for an area of 128.77 Ha. under Chhattisgarh Minor Minerals Rules, 2015 till 31st March, 2020. Lease Amendment Agreement in this regard was signed on 22nd March, 2017.
Sales & Marketing
In-spite of the challenging market conditions, your Company achieved a total sales volume of 13.1 million tonnes during the Financial Year 2016-17, registering a growth of about 13% over the previous financial year. With regard to Dealer Sales, record sales of around 0.82 million tonnes were achieved during the Financial Year 2016-17, thereby registering a growth of 3% over 2015-16. In respect of exports, 0.67 million tonnes were exported, which were higher by over 200% as compared to the previous year.
Your Company achieved highest ever despatches of Long Rails(260m panels) to Indian Railways with a growth of 11.1% over the previous year. Further, 181 numbers of Narrow Guage Forged wheels were specially manufactured and supplied for maintenance of the Kalka-Shimla Railway Line, a UNESCO declared World Heritage Site.
Your Company was the main supplier of steel in construction of the Country''s longest bridge "Dhola-Sadiya" built on river Lohit in Assam, connecting the States of Assam and Arunachal Pradesh. SAIL has supplied around 30,000 tonnes (90%) of steel comprising TMT, Structurals and Plates, for this prestigious project built under public private partnership. The bridge being 9.15 km in length, is 3.55 km longer than Mumbai''s Bandra-Worli Sea Link.
Public Procurement Policy for Micro and Small Enterprises
As required by the Public Procurement Policy of the Government of India, the information on procurement from Micro & Small Enterprises during Financial Years 2016-17 and 2015-16 is given below:
(Rs, Crore)
Particulars |
2016-17 |
2015-16 |
Total Amount of Procurement |
3246.42 |
3211.93 |
Total Procurement from MSE |
767.04 |
677.53 |
%age Procurement from MSE |
23.63 |
21.09 |
Modernisation & Expansion Programme
Your Company is nearing towards the last leg of implementation of on-going Modernisation & Expansion Programme. During the Financial Year 2016-17, your Company has achieved many milestones. At Bhilai Steel Plant, New Universal Rail Mill for supply of 130 m rail, World''s longest single piece rail, has been commissioned and welded 260 m rail panels are being dispatched to Railways. Hot trial in Bar & Rod Mill has been carried out. Heating of stoves of Blast Furnace-8 has also been started. A capital expenditure of Rs,4,939 crore has been incurred during Financial Year 2016-17 and capex planned for 2017-18 is Rs,3,500 crore.
The details of Addition, Modification & Replacement (AMR) Schemes under implementation are given in the Management Discussion & Analysis (MD&A) Report.
C. HUMAN RESOURCE MANAGEMENT REVIEW
Your Company recognizes contribution of its Human Resources in providing it the competitive advantage. The Company has achieved its present level of excellence through investment in its human resource, where skill and knowledge constitute the basis of every initiative - be it technology or innovation. Developing skills and capabilities of employees to improve manpower utilization and labour productivity is the key thrust area of Human Resource Management (HRM) in the Company.
Your Company provides an environment conducive for learning, encourages adoption of best practices in every area and nurtures creativity and innovation among employees. Human Resource initiatives in SAIL are focused on developing team spirit, employee empowerment and their involvement in various improvement activities. Strategic alignment of HRM to business priorities and objectives has facilitated smooth transition to state-of-the-art technology in the Modernization and Expansion Projects.
Enhanced Productivity with Rationalized Manpower
Your Company achieved the Labour Productivity (LP) of 320 TCS/Man/Year in 2016-17. The manpower strength of the Company was 82,964 nos. as on
31.3.2017 with manpower rationalization of 5,691 achieved during the year. The enhanced productivity with rationalized manpower could be achieved as a result of judicious recruitments, building competencies and infusing a sense of commitment and passion among employees to go beyond and excel. To give further thrust for enhancing productivity and manpower rationalization, your Company has recently introduced Voluntary Retirement Scheme-2017 w.e.f. 15th June, 2017. Trend of enhanced productivity and manpower rationalization since 2007-08 onwards is depicted below:
Developing Employee Capabilities & Competencies
Your Company believes that people''s development is the key for overall growth and training facilitates the development of employee''s knowledge and skills, so that the resultant advancement of competence contributes towards attainment of organizationâs goals and objective. SAIL has been making sustained efforts through various training and development activities with focus on preservation, transfer and improvement of skills, knowledge and technology in collaboration with reputed organizations and development of effective managerial competencies in association with premier institutes.
Preparing employees for tomorrow, for effectively taking up challenges and discharging new roles and responsibilities was given a major thrust. Overall 36,059 employees were trained against target of 34,822 employees during the year on various contemporary, technical and managerial modules.
Harmonious Employee Relations
SAIL has maintained its glorious tradition of building and maintaining a conducive and fulfilling employee-employer relations environment. The healthy practice of sorting out and settling issues through discussions with trade unions/workers'' representatives enabled the Company in ensuring workers'' participation at different levels and establishing a peaceful IR climate. Some of the bi-partite forums are functioning since early seventies and are sufficiently empowered to address different issues related to wage, safety, and welfare of workers, arising from time to time, thus helping in establishing a conducive work environment.
Bipartite forums like National Joint Committee for Steel Industry (NJCS), Joint Committee on Safety, Health & Environment in Steel Industry (JCSSI) etc. with representation from major central Trade Unions as well as representative
Unions of Plants/Units meet on periodic basis and jointly evolve recommendations/ action plans for ensuring a safe & harmonious work culture which gets substantiated from the harmonious Industrial Relations enjoyed over the years by SAIL Plant/Units, marked with diverse work culture at multiplications.
In addition, Quality Circles, Suggestion Schemes, Shop Welfare Committees, Safety Committee, Canteen Management Committee, Productivity Committee, etc. also offer multiple avenues for enhanced workers'' participation. Workers are also kept abreast of strategic business decisions and their views sought thereon through structured /interactive workshops.
Communication with employees at various levels on a wide range of issues impacting the Company''s performance as well as those related to employees'' welfare is done in a structured manner across the Company. Mass communication campaigns are undertaken at CEO / Senior Officers'' level involving structured discussion with large group of employees. These interactive sessions help employees to align their working with the goals and objective of the Company leading to not only higher production and productivity but also enhance the sense of belongingness of the employees.
Grievance Redressal Mechanism
Effective internal grievances redressal machinery has been evolved and established in SAIL Plants and Units, separately for executives and nonexecutives. Joint grievance committees have been set up at Plant/Unit level for effective redressal of grievances.
SAIL Plants/Units are maintaining 3 stage grievance handling system and employees are given an opportunity at every stage to raise grievances relating to wage irregularities, working conditions, transfers, leave, work assignments and welfare amenities, etc. Majority of grievances are redressed informally in view of the participative nature of environment existing in the steel plants. The system is comprehensive, simple and flexible and has proved effective in promoting harmonious relationship between employees and management.
Against 402 staff grievances received during the Financial Year 2016-17 with 1 grievance pending from previous year, 387 staff grievances have been disposed off during the year, achieving 96.03% fulfillment.
Further, during Financial Year 2016-17, 1144 grievances have been received under Centralized Public Grievance Redress and Monitoring System (CPGRAMS) while 17 grievances had been carried forward from the previous financial year. Total 1139 grievances have been disposed off during Financial Year 2016-17, thereby achieving fulfillment rate of 98.10%. All the grievances have been disposed off within 30 days of its receipt against the stipulated time of 60 days.
Remuneration Policy
In SAIL, pay and other benefits for executives is based on the Presidential Directives issued by Ministry of Steel, Government of India. The last pay revision effective from 01/01/2007 was done in accordance with Presidential Directives dated 05/10/2009. In aforementioned pay revision, variable pay in the form of Performance Related Pay (PRP) has been introduced for executives. The PRP is based on the performance / profitability of the Company as well as individual performance rating based on Key Performance Areas(KPAs) aligned to the organization objectives. In case of Non-executive employees, the salaries and wages are finalized / revised in bipartite forum of National Joint Committee for Steel Industry (NJCS). The last NJCS agreement was finalized and signed on 01.07.2014, effective from 01.01.2012. In terms of notification issued by the Government of India, the provisions of section 197 of the Companies Act, 2013 are not applicable to Government Companies. As such, the disclosures to be made in the Board''s Report on the remuneration of Directors and other prescribed details are not included in this Report.
Initiatives for Socio-economic Development of SCs /STs & Other Weaker Sections of the Society
SAIL follows Presidential Directives on Reservation for Scheduled Castes (SCs) and Scheduled Tribes (STs) in the matter of recruitments and promotions. As on 1.4.2017, out of total manpower of 82964, 13604 belong to SCs (16.40%) and 12018 belong to STs (14.49%).
SAIL Plants and Units including Mines are situated in economically backward regions of the Country with predominant SC/ST population. Therefore, SAIL has contributed to the overall development of civic, medical, educational and other facilities in these regions. Some of the contributions are:
- Over the years, a large group of ancillary industries has also developed in the vicinity of Steel Plants. This has created opportunities for local unemployed persons for jobs and development of entrepreneurship.
- For jobs of temporary & intermittent nature, generally contractors deploy workmen from the local areas, which again provide an opportunity for employment of local candidates of economically weaker section.
- Establishment of SAIL Steel Plants in economically backward areas has given a fillip to the economic activities thus benefiting the support population providing different types of services.
- Steel Townships developed by SAIL have the best of medical, education and civic facilities and are like an oasis for the local Scheduled Castes, Scheduled Tribes and other population who share the fruits of prosperity along with SAIL.
SAIL has undertaken several initiatives for the socio-economic development of SCs/STs and other weaker sections of the society which are mainly as under:
- Special Schools have been started exclusively for poor, underprivileged children at five integrated steel plant locations. The facilities provided include free education, mid-day meals, uniforms including shoes, text books, stationery items, school bags, water bottles and transportation in some cases.
- No tuition fee is charged from SC/ST students studying in the Company run schools, whether they are SAIL employees'' wards or non-employees'' wards.
- Free medical health centres for poor have been set up at Bhilai, Durgapur, Rourkela, Bokaro, Burnpur providing free medical consultation, medicines, etc. to the peripheral population mainly comprising of SC/ST and weaker sections of society.
- SAIL Plants have adopted tribal children. They are being provided free education, uniforms, textbooks, stationery, meals, boarding, lodging and medical facilities for their overall growth at residential hostels, Saranda Suvan Chhatravas, Gyanodaya Hostel and an exclusive Gyan Jyoti Yojana for nearly extinct Birhor Tribe.
- For Skill Development and better employability, tribal school passouts have been sponsored for coaching in premier institutes for IIT/JEE entrance examinations and for trainings along with monthly stipend, accommodation, transportation and flooding facility at various ITIs, Nursing and other vocational training institutes.
Implementation of Presidential Directives on Reservation for SC/ST
- Liaison Officers have been appointed as per Presidential Directives for due compliance of the Orders and instructions pertaining to reservation for SCs/STs/OBCs at Plants/Units of SAIL.
- SC/ST Cell is functioning in all of the main Plants/Units. A member belonging to SC/ST community is associated in all DPCs/Selection Committees. A sufficiently senior level officer of SC/ST category is nominated for the purpose as per the level of the Recruitment Board / Selection Committees/DPC.
- Internal workshops for Liaison Officers for SC/ST/OBC and other dealing officers of SAIL Plants/Units are conducted at regular intervals through an external expert to keep them updated on the reservation policy for SC/ ST and other related matters.
- Plants/Units of SAIL have SC/ST Employees'' Welfare Associations which conduct regular meetings with Liaison Officers on implementation of reservation policy & other issues. In addition, an Apex level umbrella body namely SAIL SC/ST Employees Federation also exists in SAIL to represent the issues of SC/ST Employees in a coordinated manner. A meeting with the Federation at the level of Director (Personnel) is organized on a regular basis.
Implementation of Right to Information Act, 2005
The provisions under the Right to Information Act, 2005 (RTI Act) are being complied by all Plants and Units of SAIL. All statutory reports including Annual Report are being sent to Ministry of Steel and also being uploaded on the website of the Company. Your Company has appointed Public Information Officers(PIO)/Asstt. Public Information Officers and Appellate Authorities and Transparency Officer under Section 5 and Section 19(1) of the RTI Act in each Plant and Unit for speedy redressal of the queries received under the Act. Under Sec.5(5), all the officers/ line managers responsible for providing information to the PIO are called Deemed PIO and are made equally responsible as PIO, towards timely provision of information to the applicant.
An exclusive RTI Portal has been developed with link available on the website of the Company. All the Plants/Units have listed 17 manuals and details of Authorities under the Act are uploaded on the website of the Company. Quarterly
Returns and Annual Returns on implementation of RTI Act are being submitted online through the CIC portal. Implementation of online request has already been introduced from 1st May 2015. A compilation of Record Retention Policy of various functions of Corporate Office has also been uploaded on the website of the Company. In addition to this, compilations of important decisions of CIC, DOPT circulars and High Court cases are also available on the website of the Company.
Awareness Programs/Workshops on ''Obligation of Public Authorities under RTI'' are being organized across Plants/Units and Information Commissioner has been present in most of these programs. Further, Awareness Programmes on RTI Act are held at Plant, Units and Corporate Office regularly.
SAIL received a total of 3,564 applications and 612 appeals under RTI Act, 2005 during the Financial Year 2016-17, all of which have been disposed off within the stipulated time frame under the Act. CIC has also taken up 82 cases and most of these cases were disposed off in favour of the Company.
Citizen Charter
Your Company is totally committed to excellence in public service delivery through good governance, by a laid down process of identifying citizens, our commitment to them in meeting their expectations and our communication to them of our key policies, in order to make the service delivery process more effective.
SAIL''s Citizen Charter has outlined commitment of SAIL towards its stakeholders, thereby empowering them to demand better products and services. Objectives of the Citizen''s Charter of SAIL may be summarized as below:
- Ensuring citizen-centric focus across all its processes by adopting Total Quality Management principles for improvement of products and services.
- Ensuring effective citizen communication channels.
- Demonstrating transparency and openness of its business operations by hosting the Citizen''s Charter on the Corporate website.
- Working towards delight of citizens, by fail-safe processes and in case of exigencies leveraging its service recovery processes, like Grievance Redressal, Handling Complaints, etc.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:
The Company has in place a system of Complaints Committees (under SAIL Conduct, Discipline and Appeal (CDA Rules, 1977) in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. These Committees have been set up to redress complaints received regarding sexual harassment. All employees of the Company are covered under these Rules. The following is a summary of sexual harassment complaints received and disposed off during the year 2016-17:
Number of complaints received : 5
Number of complaints disposed off : 6 (including 1 pending of previous year)
D. AWARDS & ACCOLADES WON DURING THE YEAR
Company Level
- Your Company has won 7 Prime Minister''s Shram Awards (involving 26 employees) for the year 2015.
- Your Company has won 10 Vishwakarma Rashtriya Puraskar Awards (involving 42 employees) for the performance year 2015.
- Your Company has won Gold Trophy of "SCOPE Meritorious Award for Best Practices in Human Resource Management" for the year 2014-15.
- Your Company has won Golden Peacock Award for Corporate Governance, by the Institute of Directors, India, for the year 2016.
- Your Company bagged the Governance Now PSU Award 2016 under the award category ''Relative Growth & Adaptation''.
- Your Company was awarded the Ispat Rajbhasha Trophy for the year 2014-15 for SAIL''s best official language implementation.
Bhilai Steel Plant
- CII-Exim Bank Business Excellence Award 2016 organized by the CII Institute of Quality.
- Excellence Award in the category of Integrated Steel Plants under Iron & Steel Sector for the year 2015-16, in the State Level Sustainable Energy Awards-2016 by Chhattisgarh State Renewable Energy Development Agency (CREDA).
- Vayoshreshtha Samman for the "Best Public Sector Organization in Promoting the Well Being and Welfare of Senior Citizens" on the occasion of International Day for Older Persons at Vigyan Bhawan, New Delhi on 1st October, 2016.
- NARAKAS Bhilai-Durg bagged the "Madhya Kshetriya Pratham Puraskar" for the year 2015-16.
- Best Chapter Award for QCFI Bhilai Chapter in the event "NCQC-2016" held in Raipur for significant contribution towards Quality propagation.
- 17 Quality Circle Teams won awards (15 Par Excellence and 2 Excellence) from QCFI during their 30th National Convention on Quality Concepts.
Durgapur Steel Plant
- 10 Quality Circle Teams won awards (8 Par Excellence and 2 Excellence) from QCFI during their 30th National Convention on Quality Concepts.
Rourkela Steel Plant
- CII EXIM Bank Business Excellence Award for Strong Commitment to Excellence for the year 2015-16.
- Coal & Coke Zone and Steel and CCM Zone bagged ''Zero Fatality'' awards for the years 2015 and 2016 respectively from the Joint Committee on Safety, Health & Environment in the Steel Industry (JCSSI).
- 8 Quality Circle Teams won awards (6 Par Excellence and 2 Excellence) from QCFI during their 30th National Convention on Quality Concepts.
Bokaro Steel Plant
- Golden Peacock HR Excellence Award for the year 2016
- Gold Award in Training Excellence Category at the 6th Annual Greentech HR Award for the year 2015-16.
- Energy Management Department, First Prize in CII (ER) Productivity Awards 2016.
- 6 Quality Circle Teams won awards (1 Par Excellence and 5 Excellence) from QCFI during their 30th National Convention on Quality Concepts.
Visvesvaraya Iron & Steel Plant
- Ispat Suraksha Puraskar for ''No fatal accident occurred during the Calendar Years 2015 & 2016 under Scheme-II, Group (B) (Special Steel Plant)'' by Joint Committee on Safety, Health & Environment in the Steel Industry.
- Ispat Suraksha Puraskar for ''No fatal accident occurred involving Contract Labour during the Calendar Years 2015 & 2016 under Scheme-II, Group (B) (Special Steel Plant)''by Joint Committee on Safety, Health & Environment in the Steel Industry.
Salem Steel Plant
- Ispat Suraksha Puraskar for ''No fatal accident'' during the Calendar Year 2016 under Scheme-II, Group (B) (Special Steel Plant).
- Ispat Suraksha Puraskar for ''No fatal accident'' involving Contract Labour during the Calendar Year 2016 under Scheme-IV Group (B) (Special Steel Plant).
- National Award for the Empowerment of Persons with Disabilities-2016. (Best Employee with Disabilities under Hearing Impairment Category) from Hon''ble President of India on 03.12.2016 at Vigyan Bhawan, New Delhi.
Raw Materials Division
- 8 Quality Circle Teams won awards (5 Par Excellence and 3 Excellence) from QCFI during their 30th National Convention on Quality Concepts.
Research & Development Centre for Iron & Steel
- National G-cube (Good Green Governance) Award 2016 at Delhi on Earth Day, 22nd April, 2016.
E. ENVIRONMENT MANAGEMENT
Your Company is committed to conduct operations in an environmentally responsible manner to comply with applicable legal and other requirements related to the environmental aspects. The environmental vision of the Company is drawn from the tenets of the Policy which not only stresses on the need to remain in compliance but also to strive to go beyond, address stakeholder concerns, and communicate Company''s environmental philosophy to all the stake holders.
Improvement in Emissions and Discharges
Concerted efforts have been put over the last few years with a view to conduct various operations in an environment friendly manner. These have resulted in reduction of emissions and discharge levels, increase in utilization of solid wastes and green cover. The Plants are effectively maintaining the air pollution control devices and regularly up-grading them in order to maintain the norms which are becoming stringent day by day. Through continuous efforts, the specific Particulate Matter (PM) emission load from the major stacks has reduced by more than 12% in the last five years. Moreover, as a part of the on-going expansion cum modernization projects, state of the art technologies are being installed to further bring down the pollution level and CO2 emission. During the last five years, the specific CO2 emission has been reduced by more than 5%.
Water pollution level at the Steel Plants are taken care by effective utilization of the installed Effluent Treatment Plants (ETPs) at various shops, rejuvenation of the existing water re-circulation systems and recycling of used water for other operational purposes. The treated effluent from the ETPs, are then let out through the outfalls outside the Plant boundary only after meeting the stipulated norms of effluent discharge. The specific effluent load of the discharges have reduced by more than 21% in the last five years. The quality of discharges through the outfalls has remained well within the stipulated norms at all the Plants.
Major Pollution Control facilities installed during the year
- Secondary emission control facility, equipped with dog house and ESPs for new converter (#3) at SMS-2 of RSP
- Comprehensive Effluent Treatment Plant at the existing Hot Strip Mill of RSP
- Primary emission control facility with Converter#5 of SMS-1 at RSP New Initiatives
a. Use of Weathered LD Slag as Rail Track Ballast
The physical properties of Weathered LD Slag (WLD Slag) meet the specification required for stone ballast for use as rail track ballast. In response to a proposal by the Company, South Eastern Railway (SER) has agreed to conduct a field trial at the Bokaro Rail Yard with the WLD Slag from BSL. Field trial in association with SER has started from June 2015, at Ispat Nagar Railway Yard, Bokaro. Inspections of the track parameters are being carried out jointly by the representatives of the SER and SAIL, on monthly basis, which shall continue for a total period of about two years.
b. Bio-sequestration of CO2
Job assigned to M/s. Tropical Forest Research Institute, as the sequestration partner for the project which is being implemented at RSP The following activities have been completed till the Financial Year 2016 -17:
- Vegetation survey, identification of high carbon sequestering species, training, development of nursery at site.
- Submission of reports for Biodiversity, Soil Organic Carbon, Soil Characterisation and on quantification of existing total carbon stock in vegetation, deadwood and litter.
Scheduled completion of the project is by March 2019.
Environmental Management System linked with ISO-14001:2004
Environmental Management System (EMS) linked to ISO-14001 is a set of processes and practices that enable an organization to reduce its environmental impacts and increase its operating efficiency. Implementation of EMS has helped the Plants and Mines to ensure that their performance remain within the regulatory requirements.
During the Financial Year 2016-17, implementation of EMS-ISO-14001:2004 was completed at the CMO Warehouses at Bangalore and Bokaro.
Sustainable Development Projects
- Eco-restoration of mined out areas: As a part of the on-going Sustainable Development Project on long term maintenance of ecologically restored 250 acre Limestone mined out area and 200 acre water body of mine void at PLDQ, Purnapani, more than 10,000 saplings of different native plant species and more than 2000 saplings of medicinal plants were planted during the year.
- Training was provided to around 100 villagers (mostly from tribal community) from Purnapani and neighboring villages on practicing of silviculture, apiculture, pisciculture, etc.
Plantation
Your Company realizes the role of plantation in overall environmental management initiatives. It is a well-known fact that plants play an important role in the eco system and function as a carbon sink. Extensive forestation programme has been religiously followed in all the Plants and Mines over the past few decades. Around 2.10 lakhs saplings were planted in and around SAIL Plant and Mines during the year 2016-17.
Other Environmental Efforts
- Your Company observed January 2017 as Water Conservation Month, with the objective to reduce water consumption by 25%, through various awareness programmes and workshops.
- Corporate Sustainability Report, 2015-16, in accordance with ''core option'' of GRI''s G4 Guidelines has been published through in-house resources and has been up-loaded on the website of the Company.
- For the first time a third party compliance audit for environmental performance was conducted at BSP The consultant M/s. Bhagvati Ana Labs Pvt. Ltd. Hyderabad (a Bureau Veritas Group Company), a NABET accredited agency, has submitted the report within the schedule time.
F. STRATEGIC INITIATIVES OF THE COMPANY
Your Company has adopted a multi-pronged approach that includes organic growth, brown-field projects, technology leadership through strategic alliances, ensuring raw material security by developing new mines, diversifying in allied areas, etc. In line with the above approach, SAIL has formed Joint Venture Companies in different areas viz. power generation, rail wagon manufacturing, slag cement production, securing coking coal supplies from indigenous as well as imported sources, etc. New initiatives are currently being explored in areas such as outsourcing of power distribution and educational facilities in SAIL townships, forged roll manufacturing, etc. The status of Strategic Initiatives taken by your Company in the recent past includes the following:
SAIL has undertaken a company-wide transformational and turnaround programme, "SAIL Uday", supported by M/s. Boston Consulting Group (BCG), one of the top global consulting firm, covering improvements for all functions in the Plants and Units, while reviewing and sharpening our business strategy and processes. BCG shall study the present health of the Company and suggest suitable measures for its turnaround. The "SAIL Uday" initiative is expected to drive the Company towards profitability as well as build for sustained market leadership.
Disinvestment of SAIL Plants: The Cabinet Committee on Economic Affairs (CCEA) in its meeting held on 27.10.2016 has ''in-principle'' decided for strategic disinvestment of Alloy Steels Plant (ASP), Durgapur; Visvesvaraya Iron and Steel Plant (VISP), Bhadrawati; and Salem Steel Plant (SSP), Salem. The process is being carried out with the help of Advisors (Transaction Advisor, Legal Advisor and Asset Valuer).
Development of Rowghat - Jagdalpur Rail Corridor in the State of Chhattisgarh: With the aim of bringing about greater socio-economic development of the backward areas of Bastar region in Chhattisgarh and to further the industrial progress and mining activities of the region, an MOU was signed amongst SAIL, NMDC Ltd., IRCON International Ltd. and Government of Chhattisgarh, in May 2015 for development of a rail corridor from Rowghat to Jagdalpur. This rail corridor shall be used for both freight and passenger services in the Southern part of Chhattisgarh. A new Joint Venture Company under the name "Bastar Railway Private Limited" has been incorporated in May, 2016. The survey work & feasibility study for Railway line is being undertaken by IRCON.
Rail Transportation: A Joint Venture Company(JVC) between SAIL and RITES viz. "M/s. SAIL RITES Bengal Wagon Industry Pvt. Ltd. (SRBWIPL)" has been formed for manufacture and rehabilitation of railway wagons. The JVC has commenced commercial operations at its factory at Kulti, West Bengal and Orders from Railways are being executed.
JV with ArcelorMittal for production of automotive steel: In line with Make in India programme of Govt. of India, SAIL and ArcelorMittal signed an MOU in May, 2015 to explore the possibility of setting up an automotive steel manufacturing facility under a Joint Venture (JV), in India. The proposed JV will construct a state-of-the-art Cold Rolling Mill (CRM) and other downstream finishing facilities in India that will offer technologically advanced steel products to India''s rapidly growing automotive sector. Joint Task Force of SAIL and ArcelorMittal is working on feasibility study, location of unit and business model for the alliance. Based on the outcome of Joint Study, definitive agreements for setting up the JV Company shall be entered into.
Ultra Mega Steel Project: With the aim to develop large capacity mega steel projects in the Country, which would help India in achieving the capacity growth of 300 million tonnes of crude steel, Ministry of Steel has evolved a concept of developing Ultra Mega Steel Plants. SAIL is participating for setting up of an Ultra Mega Steel Plant of capacity (3 3) or (4 2) MTPA (million tonnes per annum) in Bastar, Chhattisgarh. An MoU to this effect was signed amongst SAIL, NMDC, Ministry of Steel and Government of Chhattisgarh in May, 2015, at Dantewada in the presence of Hon''ble Prime Minister. New Joint Venture Companies for Steel SPV and Mining SPV have been formed. MECON has submitted a report for probable sites for the steel plant. Activities related to land acquisition, land development, etc. would be initiated after the iron ore mine is leased to the Mining SPV by the State Government.
Business Excellence Initiatives Excellence Model
SAIL has adopted European Foundation of Quality Management (EFQM) Model which is implemented in India through CII-EXIM Bank Award for Business Excellence. BSP has been awarded the PRIZE (Score of 600 ) consecutively for the second year. Amongst PSUs, BSP is only the second PSU ever to be awarded the Prize. It is also the only PSU to receive the PRIZE twice. In steel arena, BSP has been the only steel maker ever to have achieved this coveted distinction twice in a row.
Total Quality Management (TQM)
Most of SAIL Plants/Units of your Company are certified to ISO 9000, ISO 14000, OHSAS 18000 and SA 8000 Management Systems. DSP & BSL have also implemented ISO 50000 (Energy Management System). In addition to other Management Systems, DSP, BSL & RDCIS have also implemented ISO 270000 (Information Security System). Following Certifications were achieved during 2016-17:
- BSL - ISO : 27000 ISMS certification.
- RSP - New Plate Mill certified to ISO 9000 QMS.
The Certification Agencies for four Management Systems i.e. ISO 9000, ISO 14000, OHSAS 18000 & SA 8000 were empanelled in 2013 for three years for first time. The system resulted in reduction in cost, reduction in audit man-days, ease of operation in engaging Certification Agencies, improved quality of audits and reduced administrative hassles. Second cycle of empanelment for three years has been completed with an extended scope which includes Management System related to training, in addition to the Certification for the Management Systems mentioned above. With a view to enhance awareness of Business Excellence Initiatives, sharing of Knowledge and Best Practices 3rd Annual e-BE Journal was prepared and uploaded on Portal. The other ongoing initiatives across organization are Quality Circles, 5-S, Six Sigma and TPM implementation.
IT Related Initiative
Your Company has embarked upon various Information Technology (IT) initiatives, duly aligned with its business goals and vision to maintain its competitive position in the marketplace.
Through Enterprise Resource Planning (ERP), the best global practices in all major functions like procurement, sales and distribution, production, finance, etc. have been implemented at 4 Integrated Steel Plants i.e. BSP DSP BSL & RSP and Central Marketing Organization. ERP implementation at IISCO Steel Plant and at Corporate Office for SAIL wide data consolidation through integration of all Plants/Units is in progress. Better market reach and transparency has been achieved through Supplier Relation Management (SRM)/ e-Procurement. SAIL has also been able to connect with customers through Customer Relationship Management. Seamless integration of IT driven automation applications has led to the evolution of an organization-wide information backbone with better control and faster execution of various processes.
Production data has its roots in the strong foundation of ''Manufacturing Execution Systems'' (MES) which has benefitted SAIL in achieving the market expectations by making the production and the associated processes cost, quality and delivery efficient.
Various steps have been taken up to promote ''Digital India Initiative'' and systems are being upgraded to maximize paperless/cashless transactions in business/ employee welfare areas. As a step forward, various mobile applications are also being developed.
Utmost care is being taken for internal financial control for protection and security of data & information. To ensure data security, steps have been taken at all Plants/Units for Information Security Management System (ISMS):ISO certification.
For better face to face discussions and reduction in tour & travel expenses, existing Video Conference system has been upgraded to High Definition System along-with strengthening network bandwidth connecting all Plants & Units of the Company.
Corporate Communication
Your Company recognizing the need for continuous efforts required for brand building and maintaining streamlined internal and external communications, undertook various new and innovative efforts during 2016-17.
Your Company actively participated in a number of exhibitions & fairs including India Steel Expo, BRICS Summit, Vibrant Gujarat, India Maritime Summit, India International Trade Fair, CSR Fair, etc. Also, 2017 marks â70 years of Indo Russia Friendshipâ and in this regard, SAIL took part in the India Sourcing Fair which was held in St. Petersburg. These events saw massive participation of senior dignitaries of the Government of India, public & private sector, and industrial participants from around the globe. Brand building exercises also included a number of initiatives to connect with stakeholders through news, web, phone alerts, media features, daily news summaries, etc.
Advertising in different media formats including print, outdoor, television, mobile and internet has been a major focus of corporate communication activities at SAIL. In line with your Company''s strategy, SAIL''s advertising and visibility efforts, across different formats, highlight use of SAIL steel in projects of national importance apart from showcasing the core features of SAIL''s products, which stand for quality, durability, endurance, dependability and nation building.
G. VIGILANCE ACTIVITIES
The objective of SAIL Vigilance is to facilitate an environment enabling people to work with integrity, efficiency and in a transparent manner, upholding highest ethical standards for the organization. To achieve this objective, the Vigilance Department carries out preventive, proactive and punitive actions with greater emphasis in the preventive and proactive functions. Following activities were undertaken during the Financial Year 2016-17:
- To increase vigilance awareness amongst employees, vigilance awareness sessions and workshops were regularly held at the various Plants and Units. A total of 143 workshops involving 2938 participants were organized for enhancing Vigilance Awareness on Whistle Blower Policy, Purchase/ Contract procedures, RTI Act, Conduct & Discipline Rules, System and Procedures followed in SAIL, etc.
- Periodic surprise checks including Joint Checks were conducted regularly in vulnerable areas of the Company. A total of 2531 periodic checks including file scrutiny and Joint Checks were conducted at different Plants / Units. A saving of approx. Rs,23.81 crores accrued from the preventive vigilance activities mainly on account of these surprise checks.
- Vigilance provides vital inputs to the operating authorities for improving the prevailing systems for bringing about more transparency. Accordingly, eight major System Improvement Projects (SIPs) were undertaken at different Plants/Units of SAIL.
- 19 cases were taken up for Intensive Examination at different Plants / Units. During these Intensive Examinations, high value procurement / contracts are scrutinized comprehensively and necessary recommendations are forwarded to concerned departments for implementing suggestions for improvement.
- As per the Guidelines of Central Vigilance Commission, Vigilance Awareness Week was observed in SAIL during 31st October to 5th November, 2016. On the opening day i.e. 31st October 2016, Pledge was administered to the employees by Chairman, SAIL and CVO, SAIL at Corporate Office and by respective Chief Executives at Plants / Units. During the week, a booklet on "Preventive Vigilance- Do''s & Don''ts" and 16th edition of "Inspiration", the in-house journal of SAIL Vigilance were released. Various events including talk by eminent personalities, essay/ debate/quiz competitions, etc. for employees/ families, interaction with vendors/contractors were also organized across SAIL. In addition, as an outreach measure, essay/debate/poster competitions were organized amongst students of various schools / colleges located at various townships and the cities like Delhi, Kolkata, Chennai, etc. Events like Walkathon / March against Corruption were organized at DSP Durgapur & VISL, Bhadrawati, wherein general public, students, NGOs also participated. Detailed report on observance of Vigilance Awareness Week-
2016 has been sent to CVC.
- The following three thrust areas were identified by SAIL Vigilance:
i) Implementation of e-procurement in Contract Cell (Works & No works) including Township Contracts.
ii) Installation of CCTV cameras at sensitive areas.
iii) Surveillance in the areas of receipt, sampling & testing of high value raw materials.
- With a view to introduce analytics in the areas of procurement & contracting, in order to generate exception alerts and red flags for corrective action / system improvements, Business Intelligence (BI) Modules have been developed in the existing SAP/ERP system in Integrated Steel Plants and Central Marketing Organization.
- A Vendors'' Meet was organized on "Success through Synergy" at New Delhi on 16th July, 2016. The programme was chaired by Chairman, SAIL where IEMs of SAIL, CVO SAIL and Functional Directors of SAIL were present. Around 33 senior Management Executives from global / indigenous Vendors for Projects and Corporate Material Management Group attended the programme.
- Certain vulnerable points were identified in the Plants/Units such as weigh bridges, dispatch and unloading points, entry and exit points for goods, places of sampling and chemical analysis of received materials, etc., on the advice of SAIL Vigilance. CCTV and allied data recording systems have been installed at these places for monitoring and surveillance, which would help in preventing fraudulent activities at the above sensitive areas.
- It has been decided to introduce GPRS/GPS system for monitoring the movement of tippers /dumpers which are to be used by contractors for transportation of Iron Ore to railway sidings which are at far-away locations. The fleet monitoring system has been introduced in Kalta Iron Ore Mines and is being extended to other mines.
- ''Inspiration- Prerna'', an in-house publication of SAIL Vigilance is being published regularly. The above publication contains case studies, articles from eminent personalities, quiz on policy matters, etc. to enhance awareness of the readers.
Vigil Mechanism
The Company has adopted Vigil Mechanism for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. All employees of the Company and Directors on the Board of the Company are covered under this Mechanism. This Mechanism has been established for employees to report concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct. It also provides for adequate safeguards against the victimization of employees who avail the Mechanism and allows direct access to the Chairperson of the Audit Committee in exceptional cases.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As per the SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis Report covering the performance and outlook of the Company is attached and forms part of the Annual Report.
AUDITORS'' REPORT
The Statutory Auditors'' Report on the Accounts of the Company for the Financial Year ended 31st March, 2017 along with Management''s replies thereon is placed at Annexure-I. The Comments of Comptroller and Auditor General of India (C&AG) on the accounts of the Company for the Financial Year ended 31st March, 2017 under Section 143(6) of the Companies Act, 2013 and the Managements'' replies thereto are placed at Annexure-II.
COST AUDITORS
Pursuant to the direction of the Central Government for Audit of Cost Accounts, the Company has appointed M/s. Sanjay Gupta & Associates, New Delhi, M/s. Shome & Banerjee, Kolkata and M/s. R.J. Goel & Co., New Delhi as Cost Auditor(s) for the Financial Year 2017-18.
SECRETARIAL AUDITOR''S REPORT
In terms of the provisions of Section 204 of the Companies Act, 2013, the Board of Directors have appointed M/s. Agarwal S. & Associates, Company Secretaries, as the Secretarial Auditor to conduct Secretarial Audit of the Company for the Financial Year ended on 31st March, 2017. Secretarial Audit Report is placed at Annexure-III.
With regard to the observation of the Secretarial Auditor, that composition of the Board of Directors of the Company was not in compliance with Regulation 17(1) of Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015 and Clause 3.1.4 of the DPE Guidelines on Corporate Governance for Central Public Enterprises, it is stated that appointment of Independent Directors on the Board of the Company is made by the Company based on nomination by Government of India. The Company has requested Ministry of Steel, Government of India for nomination of requisite number of Independent Directors on its Board.
In respect of observation regarding performance evaluation of the Directors being not carried out as per the Regulation 17(10) & 25(4) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, it is mentioned that Ministry of Corporate Affairs has vide its notification dated 5th June, 2015 has exempted Government Companies from the provisions of the Companies Act, 2013 which, inter-alia, provides that Sub Sections (2), (3) & (4) of Section 178 regarding appointment, performance evaluation and remuneration shall not apply to Directors of the Government Companies. Further, the Ministry of Corporate Affairs vide notification dated 5th July, 2017 has notified certain amendments in Schedule IV of the Companies Act, 2013 relating to Code for Independent Directors. As per the notification, the clauses relating to evaluation of performance of Non Independent Directors, Chairperson and Board in Schedule IV have been exempted for Government Companies.
CORPORATE GOVERNANCE
In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance and Auditors'' Certificate thereon form part of the Annual Report. In terms of the SEBI Regulations, the Board has laid down a Code of Conduct for all Board Members and Senior Management of the Company. The Code of Conduct has been posted on the website of the Company. All the Board Members and Senior Management Personnel have affirmed compliance with the Code.
BUSINESS RESPONSIBILITY REPORT
As per Regulation 34(2)(f) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report describing the initiatives taken by the Company from Environmental, Social and Governance perspective forms part of the Annual Report. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES IISCO-Ujjain Pipe and Foundry Company Limited, a wholly owned subsidiary of the erstwhile Indian Iron and Steel Company Limited (IISCO), was ordered to be wound up by BIFR. The Official Liquidator is continuing its liquidation process.
Your Company has four other subsidiary Companies namely, SAIL Refractory Company Limited (SRCL), SAIL Jagdishpur Power Plant Limited, SAIL Sindri Projects Limited and Chhattisgarh Mega Steel Limited. SRCL is operating the Salem Refractory Unit which was acquired by SAIL from Burn Standard Company Limited on 16th December, 2011. SAIL Jagdishpur Power Plant Limited, incorporated for setting up of Gas based power Plant at Jagdishpur and SAIL Sindri Projects Limited, incorporated for revival of Sindri Unit of Fertilizer Corporation of India Limited have not taken off. Under present situation, the objectives with which these Companies were incorporated are difficult to achieve, hence the Board of Directors of your Company has decided to close SAIL Jagadishpur Power Plant Limited and SAIL Sindri Projects Limited. Further actions for closure of these Companies are being taken. Chhattisgarh Mega Steel Limited which was incorporated as a Special Purpose Vehicle for setting up of an Ultra Mega Steel Plant of 6 Million Tonnes per annum as a green field steel project under Joint Venture is yet to commence operation.
The Annual Accounts of the subsidiary Companies and related detailed information shall be made available to the Shareholders of the holding and subsidiary companies, seeking such information at any point of time. Further, the Annual Accounts of the subsidiary companies are available for inspection by any Shareholder in the Registered Office of the Company and of the Subsidiary Companies concerned between 11 AM to 1 PM on working days. A hard copy of the details of accounts of subsidiaries shall be furnished to the shareholders on receipt of written request.
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to provisions of Section 129 (3) of the Companies Act, 2013, the duly Audited Consolidated Financial Statements are placed at Annexure-IV. The Statutory Auditors'' Report on the Consolidated Financial Statements along with the Management''s replies thereon is placed at Annexure-V. The Comments of Comptroller and Auditor General of India (C&AG) on the Consolidated Financial Statements of the Company for the Financial Year ended 31 st March, 2017 and the Management''s replies thereto are placed at Annexure-VI. Further, the statement containing salient features of the financial statements of the subsidiary, joint venture and associate companies in the prescribed Form AOC-1 is placed at Annexure -VII.
EXTRACT OF ANNUAL RETURN
The Extract of Annual Return in Form MGT-9 as per the provisions of the Companies Act, 2013 and Rules prescribed therein is placed at Annexure-VIII.
BOARD MEETINGS
During the year, 12 meetings of the Board of Directors of the Company were held, the details of which are given in the Corporate Governance Report forming part of the Annual Report.
AUDIT COMMITTEE
The Audit Committee of the Board was initially formed by the Company in 1998. The Audit Committee has been reconstituted from time to time in terms of the SEBI Regulations and Companies Act, 1956/2013. The minutes of the Audit Committee meetings are circulated to the Board, discussed, and taken note of. The composition and other details pertaining to the Audit Committee are included in the Corporate Governance Report.
INTERNAL FINANCIAL CONTROLS (IFCs) AND ITS ADEQUACY
The Company has well established and documented policies and procedures for ensuring the orderly and efficient conduct of business, including adherence to various policies and procedures for safeguarding its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures. Further, the Company has adopted a corporate governance structure, various management processes, controls, policies and guidelines that drive the organization towards its business objective, while also satisfying various stakeholders'' needs. Some of your Company''s robust protocols such as independent internal audit, well drafted and documented policies, guidelines, procedures, regular review by Audit Committee / Board, etc. helps in compliance of Internal Financial Controls under the Companies Act, 2013, SEBI (LODR) Regulations, 2015, etc. Your Company is committed to the highest standards of Corporate Governance where the Board is accountable to all stakeholders for reporting effectiveness of Internal Financial Controls (IFCs) and its adequacy. Corporate Governance has been carried out in accordance with the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, etc.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors state that:
(i) in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;
(ii) the Directors have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit or loss of the Company for that period;
(iii) the Directors have taken proper and sufficient care for the maintenance of adequate Accounting Records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) the Directors have prepared the Annual Accounts on a Going-Concern basis;
(v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
(vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
INDEPENDENT DIRECTORS'' DECLARATION
In terms of Section 149(7) of the Companies Act, 2013, necessary declaration has been given by each Independent Director stating that he/she meets the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
The details of Loans, Guarantees, Investments given during the Financial Year ended on 31st March, 2017 are given in Annexure-IX. in compliance with the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUB-SECTION (1) OF SECTION 188
All the contracts / arrangements / transactions entered by the Company during the Financial Year 2016-17, with the related parties were in the ordinary course of business and on an arm''s length basis. The transactions with the related parties have been disclosed in the financial statements. Therefore, particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such contract or arrangement in Form AOC-2 do not form part of the Report.
DIVIDEND DISTRIBUTION POLICY
In terms of the Regulation 43A of SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company has adopted Dividend Distribution Policy and the same is given at Annexure-X to this Report. The Policy has also been uploaded on the website of the Company www.sail.co.in.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
In accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies(Accounts) Rules, 2014, the particulars relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in Annexure-XI to this Report.
RISK MANAGEMENT POLICY
Enterprise Risk Management (ERM) is a strategic business discipline that supports the organization''s objectives by addressing full spectrum of its risks and managing the combined impact of those risks as an inter-related risk portfolio. The Risk Management Policy of your Company was approved by the Board much before the same became a statutory requirement and since then, the risk management in SAIL has grown and developed in line with internal and external requirements. The Policy provides guidance for the management of the business risks across the organization. It focuses on ensuring that the risks are identified, evaluated and mitigated within a given time frame on a regular basis.
Currently, the architecture of Enterprise Risk Management in SAIL comprises a well-designed multi-layered organization structure, with each Plant/Unit having its own perceived Risks which are under the constant monitoring by the Risk Owners / Risk Champions who frame and implement the mitigation strategy and take it to its logical conclusion. Risk Management Committee of the Plant/Unit Chaired by the Head of the Plant /Unit periodically reviews the risks and its mitigation status and reports the same to Chief Risk Officer (CRO) of SAIL. SAIL Risk Management Committee (SRMC) oversees the Risk Management function in the Company by addressing issues pertaining to the policy formulation as well as evaluation of risk management function to assess its continuing effectiveness. Risks identified by the Risk Champion/Risk Officer are deliberated in the Risk Management Committee, escalated and draw the mitigation strategy. Roles and responsibility of Board, Audit Committee, SAIL Risk Management Committee, Risk Management Steering Committee, CRO, Risk Officer/Risk Champion related to risk management are defined under the Policy and duly approved by the Board.
CORPORATE SOCIAL RESPONSIBILITY
SAIL''s Social Objective is synonymous with Corporate Social Responsibility (CSR). Apart from the business of manufacturing steel, the objective of the Company is to conduct business in ways that produce social, environmental and economic benefits to the communities in which it operates. For any organization, CSR begins by being aware of the impact of its business on society. With the underlying philosophy and a credo to make a meaningful difference in people''s lives, your Company has been structuring and implementing CSR initiatives right from the inception. These efforts have seen the obscure villages, where SAIL Plants are located, turn into large industrial hubs today.
The CSR initiatives of your Company have always been undertaken in conformity to the Companies Act, 2013, Companies (Corporate Social Responsibility Policy) Rules, 2014 and DPE Guidelines on CSR & Sustainability, 2014. SAIL carries out CSR projects in and around periphery of steel townships, mines and far flung location across the Country in the thrust areas falling in line with the Schedule-VII of the Companies Act, 2013, namely, Education, providing Medical and Health Care facilities, village development, access to water facilities, infrastructural development in peripheral rural areas, environment conservation, women empowerment, assistance to people with disabilities, sustainable income generation through self help groups, promotion of sports, art, culture & heritage conservation, etc.
The details of various CSR initiatives taken by the Company alongwith the Report on CSR in prescribed format are placed at Annexure-XII. The CSR Policy of the Company is available on the website of the Company-www.sail.co.in.
Swachh Bharat Abhiyaan-Swachh Vidyalaya Abhiyaan: Your Company has been actively participating in the "Swachh Bharat Abhiyan" initiated by the Hon''ble Prime Minister of India. Under the campaign, construction of 672 toilets in schools falling within the periphery of its Plants & Mines in the States of Chhattisgarh, West Bengal, Odisha, Jharkhand, Madhya Pradesh and Tamil Nadu; as allocated to SAIL by Ministry of HRD, had been undertaken and completed. Facilities like squatting units, urinals, washbasin and overhead water storage have also been provided.
Healthcare: SAIL''s extensive and specialized healthcare infrastructure provided specialized and basic healthcare to 99 lakh people living in the vicinity of its Plants and Units during the period 2011-16. In order to deliver quality healthcare at the doorsteps of the needy, regular health camps in various villages on fixed days are being organized for the people living in the periphery of Plants/Units, mines and far-flung areas. During the Financial Year 2016-17, 6,240 Health Camps have been organized benefitting over 1,25,000 villagers. 7 Mobile Medical Units (MMUs) running in the Plant''s peripheries have benefitted 28,000 villagers at their doorsteps.
24 exclusive Health centres at Plants/Units provided free medical care and medicines to 1,10,000 villagers during the Financial Year 2016-17.
Education: To develop the society through education, SAIL is supporting over 145 schools which are providing modern education to more than 55,000 children in the steel townships. 20 Special Schools (Kalyan & Mukul Vidyalayas) are benefitting over 3,100 BPL category students at integrated steel plant locations with facilities of free education, mid-day meals, uniform including shoes, text books, Stationary items, school bag, water bottles, etc. are running under CSR.
Your Company in association with Akshya Patra Foundation is providing midday meals to 68,000 students of over 500 Government schools in Bhilai and Rourkela.
Women Empowerment & Sustainable Income Generation: Vocational and specialized skill development training targeted towards sustainable income generation has been provided to 2,070 youth and 2,461 women of peripheral villages in areas such as Nursing, Physiotherapy, LMV Driving, Computers, Mobile repairing, Welder, Fitter & Electrician Training, Improved agriculture, Mushroom cultivation, Goatery, Poultry, Fishery, Piggery, Achar/Pappad/ Agarbati/Candle making, Screen printing, Handicrafts, Sericulture, Yarn Weaving, Tailoring, Sewing & embroidery, Gloves, Spices, Towels, Gunny-bags, Low-cost-Sanitary Napkins, Sweet Box, Soap, Smokeless chullah making, etc. 683 youths have been sponsored for ITI training at ITCs Bolani, Bargaon, Baliapur, Bokaro Pvt. ITI and Rourkela, etc. and 31 youths in Plastic Engineering through CIPET at Bokaro.
Connectivity & Water facilities in Rural Areas: Over 77.88 lakh people across 435 villages have been connected to mainstream by SAIL since its inception by constructing and repairing of roads. Over 7,940 water sources have been installed during last five years thereby enabling easy access to drinking water to 46.46 lakh people living in far-flung areas.
Environment Conservation: Maintenance of parks, water bodies & botanical gardens in its townships and plantation and maintenance of over 4 lakh trees at various locations has been undertaken.
Support to Differently Abled & Senior Citizens: Differently abled children/ people are being supported through provision of equipments like- tricycle, motorized vehicles, calipers, hearing aids, artificial limbs, etc. Your Company supports various schemes and centres at Plants under CSR like "Sneh Sampada", "Prayas"and ''Muskaan" at Bhilai, "Schools for blind, deaf & mentally challenged children" and Home and Hope" at Rourkela, "Ashalata Viklang Kendra" at Bokaro, various programs like "Handicapped Oriented Education Program" and "Durgapur Handicapped Happy Home" at Durgapur, "Cheshire Home" at Burnpur. Support has also been provided to NGOs working in this field like TAMANNA, Deepalaya, etc. Old age homes are being supported at different Plant townships like "Siyan Sadan" at Bhilai, Acharya Dham and Badshah at Durgapur, etc.
Sports, Art & Culture and Heritage Conservation: SAIL is regularly organizing inter-village sports tournaments, extending support to major national sports events & tournaments. Also, supporting and coaching aspiring sportsmen and women through its residential sports academies at Bokaro (football), Rourkela (Hockey) - with world class astro-turf ground, Bhilai (Atheletics for boys), Durgapur (Athletics for girls) and Kiriburu, Jharkhand (Archery). Cultural events like Chhattisgarh Lok Kala Mahotsav, Gramin Lokotsav are organized every year.
Disaster Relief: Your Company, as a responsible corporate citizen, supported the rehabilitation initiatives for the people affected by Natural Calamities, the recent being flood ravaged Jammu & Kashmir, Phylin cyclone in Odisha, Flash Floods in Uttarakhand, etc.
SARANDA Forest Development: In an effort to bring the marginalized masses of the remote forest areas to the mainstream of development, SAIL in association with Govt. of Jharkhand and Ministry of Rural Development, Govt. of India actively participated in the development process of Saranda forest, Jharkhand. SAIL provided ambulances, 7000 each of bicycles, transistors, solar lanterns and established an Integrated Development Centre (IDC) at Digha village in Saranda forest. IDC comprises of facilities like Bank, Panchayat Office, Ration shop, Telecom office, Anganwadi Centre, Meeting room, etc. for the local populace.
In an effort to align the marginalized masses, a project to promote comprehensive Water Supply and Sanitation has been initiated by Rourkela Steel Plant covering 897 households in 10 villages of Kuarmunda block. Each household is being provided potable water through a ground water source, storage tank and supply network of pipelines with 3 tap points and Sanitation unit with RCC roof on partnership model. The villagers have been mobilized and empowered for their active participation in the project. Village level committees have been formed for long-term sustenance of the project.
SAIL/Bolani Ore Mines has initiated a project to provide continuous drinking water supply and sanitation facility in the remote village of Barik Sahi (Kuni Sahi) under Bolani Panchayat connecting it with the water source: Jhinkaria Spring, on south of Bolani through a network of G.I. pipelines. All the 300 natives of Barik Sahi (Kuni Sahi), who had to travel Up to 2 kms daily to fetch water from the springs, have been benefitted with this facility.
SAIL Bio-Diversity Environment Theme Park ''VASUNDHARA'' near JC Bose Avenue of DSP Township, Durgapur: The development of a 409 acres BioDiversity Environment Theme Park with a large water body and plantation of 400 varieties of trees to attract migratory birds facilitating avian diversity, propagation of rare and medicinal plants, rainwater harvesting and soil conservation for maintaining ecological balance and environmental sustainability has been carried out. The park site is enriching the environs for 75,000 natives year on year.
GENERAL DISCLOSURES
i. During the year, the Company has not accepted any deposits under the Companies Act, 2013.
ii. No significant or material orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and Company''s operations in future. However, attention of Members is drawn to the statement on contingent liabilities in notes forming part of the Financial Statements.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
- Shri S.S. Mohanty ceased to be Director on superannuation from services of the Company on 30th June, 2016(A/N).
- Shri Raman has been appointed as Director w.e.f. 1st July, 2016(F/N).
- Dr. Atmanand and Shri J.M. Mauskar, Independent Directors have ceased to be Directors w.e.f. 18th July, 2016 on completion of their tenure.
- Smt. Bharathi S. Sihag ceased to be Director w.e.f. 30th November, 2016 (A/N).
- Shri Nilanjan Sanyal and Dr. Samar Singh have been appointed as Independent Directors w.e.f. 4th February, 2017.
- Shri Saraswati Prasad, Additional Secretary and Financial Adviser, Ministry of Steel has been appointed as Government Nominee Director on the Board of the Company on 8th February, 2017.
- Shri Binod Kumar has ceased to be Director on superannuation from services of the Company on 28th February, 2017(A/N).
- Ms. Soma Mondal has been appointed as Director w.e.f. 1st March, 2017 (F/N).
- Dr. N. Mohapatra has ceased to be Director on superannuation from services of the Company on 30th June, 2017(A/N).
ACKNOWLEDGEMENT
The Board of Directors wish to place on record their appreciation for the support and value contributed by every member of the SAIL family. The Directors are thankful to the State Governments, Electricity Boards, Railways, Banks, Suppliers, Customers and Investors for their continued co-operation. The Directors also wish to acknowledge the continued support and guidance received from the different wings of the Government of India, particularly from the Ministry of Steel.
For and on behalf of the Board of Directors
(RK. Singh)
Chairman
Place: New Delhi
Dated: 11th August, 2017
Mar 31, 2016
The Board of Directors has the pleasure of presenting the 44th Annual
Report of the Steel Authority of India Limited (SAIL, the Company)
together with Audited Accounts for the Financial Year ended 31st March,
2016.
A. FINANCIAL REVIEW
Your Company achieved a turnover of Rs.43,337 crore during the
Financial Year 2015-16, which is lower by 14% over previous year,
mainly due to decrease in Net Sales Realisation of Saleable Steel of 5
Integrated Steel Plants by about 20%. The prices of steel products kept
falling throughout the year due to fall in Global Steel Prices leading
to predatory imports from China, Japan, Korea, etc. However, there has
been an increase in price realisation after imposition of Minimum
Import Price(MIP) w.e.f. 5th February, 2016. The loss after tax of your
Company for the Financial Year 2015-16 was Rs.4,137 crore compared to
net profit after tax of Rs. 2,093 crore in the previous Financial Year.
The performance of the Company during the year was adversely affected
due to lower Net Sales Realisation, lower saleable steel production,
adverse financial impact of on account of contribution to District
Mineral Foundation and National Mineral Exploration Trust w.e.f. 12th
January, 2015, higher usage of relatively expensive imported coal in
the blend due to lower availability of indigenous coal, higher salaries
& wages, higher repairs & maintenance expenditure, higher interest
charges and reduction in interest earnings on term deposits, higher
depreciation due to capitalisation of new facilities and
non-availability of gain on sale of investment in Bokaro Jaypee Cement
Limited considered in the previous financial year. However, the adverse
factors have been partially offset by higher sales volume and lower
imported & indigenous coal prices, reduction in coke rate, reduction in
demurrage expenses, reduction in price of ferro alloys, etc.
SAIL continued its thrust on optimum utilisation of funds by better
fund management. This included replacement of high cost short term
loans with low cost debts, timely repayment of loans including
interest, strategic parking of surplus funds with scheduled banks,
advance actions for future fund raising, etc. to meet our growth
objectives. Further, the Company hedged the foreign currency risk on
Buyer''s Credit depending on market conditions. The Company had
borrowings of Rs.33,217 crore as on 31st March 2016. The debt equity
ratio of the Company increased to 0.85:1as on 31st March 2016 from
0.69:1 as on 31st March 2015 due to increase in borrowings as well as
reduction in net worth during the year. The net worth of Company
declined from Rs.43,505 crore as on 31st March 2015 to Rs.39,281 crore
as on 31st March 2016.
M/s India Ratings & Research Pvt. Ltd., M/s CARE and M/s Brickwork
Ratings, RBI approved credit rating agencies, assigned ''IND AA Negative
Outlook'', ''AA '' and ''BWR AA outlook stable'' ratings respectively for
SAIL''s long term-borrowing programme.
B. OPERATIONS REVIEW
Production Review
Financial Year 2015-16 witnessed several landmark achievements by your
Company. The Company achieved highest ever Hot Metal production of 15.7
Million Tonne(MT) surpassing its previous best of 15.4 MT achieved in
2014-15 and crude steel production of 14.3 MT surpassing previous best
of 13.9 MT achieved in 2007-08. The new Bloom cum Round Caster, new
Dolomite Plant and 125 Tonne Ladle Furnace have been commissioned in
Durgapur Steel Plant. The Medium Section Mill(MSM) started trial
production from January, 2016. Production from new facilities is being
ramped up to the rated capacity. Total Hot Metal production from new
facilities was 3.54 MT, Crude Steel production was 1.86 MT and Saleable
Steel production was 1.5 MT. SAIL has achieved all time best
performance in case of Continuously-Cast Steel and Sinter production,
with a production of 10.8 MT & 22.6 MT and growth of 4% & 10%
respectively over last year.
SAIL''s various initiatives to reduce environmental footprint and
enhance operational efficiency have led to a significant improvement in
environmental parameters as well as in techno-economic efficiency. This
has enabled your Company to produce steel in a greener and more
environmental friendly manner than ever before. SAIL Plants recorded
the best ever Coke Rate at 489 kg/thm and Specific Energy Consumption
of 6.51 Gcal/tcs. This was achieved as a result of higher volume of Hot
Metal produced through new state of the art Blast Furnaces (23% of
total Hot Metal) and increased Crude Steel production through energy
efficient CC route (up by 4% over corresponding period of last year).
In addition, SAIL achieved the lowest ever Particulate Matter (PM)
Emission Load (0.81 kg/tcs), Specific Water Consumption (3.51 m3/tcs)
and Specific Effluent load (0.09 m3/tcs). SAIL Plants have also reduced
their CO2 emission levels to 2.61 T/tcs which is their lowest ever
emission, showing significant improvement over previous years.
Maintaining the fervor for continuous improvement, your Company has
developed several new products during the year including earthquake
resistant structurals as per ISI5962:20I2 and two new grades of TMT
rebars namely Fe 4155 and Fe 500S as per ISI786:2008 standard on "High
strength deformed bars and wires for concrete reinforcement", further
enhancing its extensive product portfolio. A total of 24 new products
were developed during the Financial Year 2015-16, catering to industry
sectors including automobiles, construction, engineering, defense, etc.
Power
Average power requirement of SAIL Plants during the FinancialYear 2015-
16 was 1180 MW, which was higher by 40 MW compared to last year due to
increased operations following commissioning of expansion facilities at
Rourkela Steel Plant and IISCO Steel Plant. Captive Power Plants
supplied about 67% of the total power requirement and balance 33% was
purchased from grid utilities. The percentage of power requirement met
through captive power generation in 2015-16 had increased to 67% from
6I% in the previous year due to enhanced power generation by captive
facilities.
The practice of gainful utilization of surplus captive power through
inter- plant wheeling of power was continued during the year. Rourkela
Steel Plant, Salem Steel Plant and Chandrapur Ferro Alloy Plant (CFP)
received wheeled power of about 140MU from Power Plant-3(PP-3) at
Bhilai Steel Plant. Wheeling from PP-3 was started for the first time
to CFP during the year, which helped in replacing costly grid power and
thereby, resulting in substantial cost savings.
For cost optimisation, about 100 Million Units of cheaper power were
purchased from Power Exchange which contributed to substantial cost
savings. Further, various other measures for reducing the grid power
costs, including reduction of contract demand of Plants with respective
grid supply utilities to optimum levels, were also undertaken during
the year, resulting in cost savings.
Augmentation of the Company''s captive power generation capacity by
installation of Captive Power Plants as a part of ongoing expansion as
well as new capacity addition through joint venture company, NTPC- SAIL
Power Company Pvt. Ltd.(NSPCL), is underway. Out of total 2I6MW
envisaged capacity addition under ongoing expansion, I60 MW capacity
has been added so far and balance is expected in the next year.
Proposed installation of 290 MW capacity through NSPCL is also in
advanced stage.
With regard to Company''s commitment towards renewable power sources,
actions have been initiated for development of 200 MW renewable
capacity by the year 20I9 through NSPCL. This includes IMW capacity
grid interactive Solar PV Plant at RSP which was commissioned during
the year.
Raw Materials
During the Financial Year 20I5-I6, total requirement of iron ore was
met from captive sources. The Company''s captive iron ore mines produced
about 24.83 million tonnes(MT). However, in case of coking coal, around
I4% requirement was met from indigenous sources (Coal India Limited &
captive sources) (2.08MT) and for the balance requirement of coking
coal (13.30 MT), the Company has to depend on imports due to limitation
of availability within the Country. In the Financial Year 2015-16,
production in captive collieries of the Company was about 0.73 MT, out
of which 0.56 MT was raw coking coal and balance 0.I7MT being non
coking coal. In case of fluxes, around 1.28 MT of limestone and 0.98
MT of dolomite were produced, giving a production of 2.26 MT fluxes
from captive sources. For thermal coal, your Company depends entirely
on purchases from Coal India Limited except small quantity produced
from captive mines.
The iron ore production at Barsua mine, suspended since 17th May, 20I4
as per the direction of the Hon''ble Supreme Court, is yet to resume. In
the matter of restarting operations in ML-162 lease of Barsua mine, the
Hon''ble Supreme Court passed interim order on 2nd March 20I6 and
directed to revert back after obtaining Stage-II FC for diversion of
forest land in ML-162 lease of SAIL Barsua mine.
In order to expedite capacity expansion projects of mines, following
environment and forest clearance have been obtained during the
Financial Year 2015-16:
- Environment clearance for setting up of I MTPA Pellet Plant with
upstream slime beneficiation facilities at Dalli-Rajhara Iron ore
Complex, Chhattisgarh was granted by Ministry of Environment, Forests
and Climate Change (MoEFCC) on I7th April, 2015.
- Environment clearance for capacity expansion of Kuteshwar Limestone
mine from Right Bank lease to 2.32 MTPA was granted by MoEFCC on 2nd
August, 2015.
- Environment clearance for 0.06 MTPA capacity production from Left
Bank lease of Kuteshwar Limestone mine was granted by MoEFCC on 17th
August, 20I5.
- Environment clearance for re-opening of Baraduar Dolomite mine with
capacity of 2 MTPA with a condition to obtain Stage-I Forestry
Clearance within 18 months was granted by MoEFCC on 2nd September,
20I5.
- Environmental Clearance for Topailore Iron Ore Mining Project has
been granted by Jharkhand SEIAA, Ranchi vide letter dated 17.08.20I5
for production of 0.6 MTPA iron ore.
- Stage-II forest clearance for diversion of 60 Ha of forest land in
Mahamaya & Dulki iron ore mining lease of Bhilai Steel Plant''s mine was
granted by MoEFCC on 7th August, 20I5.
- Stage-II forest clearance for diversion of 37.66 Ha of Jungle Jhar
land for creating infrastructure for Gua capacity expansion project in
Surface lease of Gua mine was granted by Regional office of MoEFCC on
4th March, 20I6.
However, the Stage-II forest clearance for the Duargaiburu lease of Gua
mine is yet to be granted by MoEFCC. In view of its criticality to the
Gua capacity expansion project, the matter is being actively pursued at
various levels in the Government.
In view of promulgation of MMDR Amendment Act, 20I5, Order of Ministry
of Mines, Government of India dated 6th February, 2015 regarding
extension of leases period for Government Companies till 31st March,
2020, and Mineral (Mining by Government Company) Rules, 2015 dated 3rd
December, 2015, following mining lease periods have been extended by
respective State Governments:
- Government of Odisha vide Order dated I0th February, 20I6 has
extended the period of the original grant of mining lease of ML-I39 of
Barsua-Kalta to 50 years i.e. from I7.01.1975 to 16.01.2025
- Government of Odisha vide Order dated I4th March, 20I6 also extended
the validity period of the Purnapani Limestone & Dolomite mining lease
from the date of expiry of the last validity period of lease up to 31
st March, 2020.
- Government of Chhattisgarh vide Order dated I4th March, 2016 has
extended the period of the original grant of mining lease of
Kalwar-Nagur of Bhilai Steel Plant for 50 years i.e. from 01.04.1975 to
31.03.2025.
Under notified coal blocks for allotment to Government Companies, two
coal blocks namely Sitanala and Parbatpur Coking Coal Mines have been
allocated to SAIL and Agreements in this regard with the Nominated
Authority for Sitanala and Parbatpur were signed on 31st August, 2015
and 26th October, 2015 respectively. Further, Allotment Orders for the
Sitanala and Parbatpur Coking Coal Mines were issued by Nominated
Authority, Ministry of Coal on 31st August, 2015 and 23rd March, 20I6
respectively.
Sales & Marketing
In-spite of the challenging market conditions, your Company achieved a
total sales volume of 12.2 million tonnes during the Financial Year
20I5- I6, registering a growth of about 4% over the previous year. With
regard to Dealer Sales, the best ever sales of 0.79 million tonnes were
achieved during the Financial Year 2015-16, thereby registering a
growth of 29% over such sales during 2014-15. Stainless Steel Cold
Rolled Coils were exported to Brazil for the first time.
Your Company achieved highest ever sales of Plate Mill Plates of I.79
million tonnes with a growth of I6% over previous year. Similarly,
sales of Long Products also registered a growth of 21% with best ever
sales of TMT & WRC at 1.68 million tonnes & 0.41 million tonnes
respectively.
Public Procurement Policy for Micro and Small Enterprises
As required by the Public Procurement Policy of the Government of
India, the information on procurement from Micro & Small Enterprises
during Financial Years 2015-16 and 20I4-15 is given below:
(Rs. Crore)
Particulars 2015-16 2014-15
Total Amount of Procurement 3211.93 3372.98
Total Procurement from MSE 677.53 737.60
%age Procurement from MSE 21.09 21.87
C. GROWTH PLAN AND MODERNISATION & EXPANSION PROGRAMME Growth Plan
To maintain its current dominance in the domestic market and to meet
the future challenges, your Company is working on a long term strategic
plan ''Vision 2025'', which will steer the Company towards a target of 50
million tonnes of Hot Metal capacity, thereby meeting the strategic
objectives of maintaining leadership in Indian Steel sector and a
position amongst the top Steel companies globally. The growth plan,
besides targeting higher production, also addresses the need for
eliminating technological obsolescence, achieving energy savings,
enriching product- mix, reducing pollution, developing mines and
collieries, introducing customer centric processes and developing
matching infrastructure facilities.
Modernisation & Expansion Programme
Your Company is nearing towards the last leg of implementation of
current phase of Modernisation & Expansion Programme. At present, the
installed Hot Metal capacity of the Company is 19.73 million tonnes per
annum and the envisaged Hot Metal capacity of 23.46 million tonnes per
annum will be achieved in 20I7.
During the Financial Year 20I5-I6, your Company has achieved many
milestones. At Bokaro Steel Plant, Roughing Mill Up-gradation of Hot
Strip Mill has been completed and has become operational. At Durgapur
Steel Plant, New Medium Structural Mill has become operational. At
Bhilai Steel Plant, New Rail Welding Line is in operation and Hot
trials in Universal Rail Mill have been carried out. A capital
expenditure of Rs.6,034 crore has been incurred during Financial Year
20I5-I6 and Capex planned for 2016-17 is Rs.4,000 crore.
The details of Addition, Modification & Replacement (AMR) Schemes under
implementation are given in the Management Discussion & Analysis (MD&A)
Report, which is attached and forms part of the Annual Report.
D. HUMAN RESOURCE MANAGEMENT REVIEW
Your Company recognizes contribution of its Human Resources in
providing it the competitive advantage. The Company has achieved its
present level of excellence through investment in its human resource,
whose skill and knowledge constitute the basis of every initiative - be
it technology or innovation. Developing skills and capabilities of
employees to improve manpower utilization and labour productivity is
the key thrust area of Human Resource Management (HRM) in the Company.
Your Company provides an environment conducive for learning, encourages
adoption of best practices in every area and nurtures creativity and
innovation among employees. Human Resource initiatives in SAIL are
focused on developing team spirit, employee empowerment and their
involvement in various improvement activities. Strategic alignment of
HRM to business priorities and objectives has facilitated smooth
transition to state-of-the-art technology in the Modernization and
Expansion Projects.
Enhanced Productivity with Rationalized Manpower
Your Company achieved the Labour Productivity (LP) of 3I5 TCS/Man/ Year
in 20I5-I6. The manpower strength of the Company as on 3Ist March, 20I6
was 88,655 nos. with manpower rationalization of 4,697 nos. achieved
during the year. The enhanced productivity with rationalized manpower
could be achieved as a result of judicious recruitments, building
competencies and infusing a sense of commitment and passion among
employees to go beyond and excel. Trend of enhanced productivity and
manpower rationalization since 2006-07 onwards is depicted below:
Developing Employee Capabilities & Competencies
Your Company believes that training facilitates the development of
employee''s knowledge and skills so that the resultant growth of
competence contributes towards attainment of organisation''s goals and
objective. SAIL has been making sustained efforts through various
training and development activities with focus on preservation,
transfer and improvement of skills, knowledge, technology in
collaboration with reputed organizations and development of effective
managerial competencies in association with premier institutes.
Preparing employees for tomorrow, for effectively taking up challenges
and discharging new roles and responsibilities was given a major
thrust.
Overall 33,563 employees were trained against target of 3I,049
employees during the year on various contemporary, technical and
managerial modules.
Harmonious Employee Relations
SAIL has maintained its glorious tradition of building and maintaining
a conducive and fulfilling employee relations environment. The healthy
practice of sorting out and settling issues through discussions with
trade unions/workers'' representatives enabled the Company in ensuring
workers'' participation at different levels and maintaining a peaceful
IR climate. Some of the bi-partite forums are functioning since early
seventies and are sufficiently empowered to address different issues
related to wage, safety, and welfare of workers, arising from time to
time, thus helping in establishing a conducive work environment.
Bipartite forums like National Joint Committee for Steel Industry
(NJCS), Joint Committee on Safety, Health & Environment in Steel
Industry (JCSSI), etc. with representation from major central Trade
Unions as well as representative Unions of Plants/Units meet on a
periodic basis and jointly evolve recommendations/ action plans for
ensuring a safe and harmonious work culture, which gets substantiated
from the harmonious Industrial Relations enjoyed over the years by SAIL
Plants/Units, marked with diverse work culture at multi-locations.
In addition, Quality Circles, Suggestion Schemes, Shop Improvement
Group workshops also offer multiple avenues for enhanced workers''
participation. Workers are also kept abreast of strategic business
decisions and their views sought thereon through structured
/interactive workshops.
Communication with employees at various levels on a wide range of
issues impacting the Company''s performance as well as those related to
employees'' welfare is done in a structured manner across the Company.
Mass communication campaigns are undertaken at CEO / Senior Officers''
level involving structured discussion with large group of employees.
These interactive sessions help employees to align their working with
the goals and objective of the Company leading to not only higher
production and productivity but also enhance the sense of belongingness
of the employees.
Grievance Redressal Mechanism
Effective internal machinery for grievances redressal has been evolved
and established in SAIL Plants and Units, separately for executives and
non-executives. Joint grievance committees have been set up at Plants/
Units level for effective redressal of grievances.
SAIL Plants/Units are maintaining 3 stage grievance handling system and
employees are given an opportunity at every stage to raise grievances
relating to wage matters, working conditions, leave, work assignments
and welfare amenities, etc. Majority of grievances are redressed
informally in view of the participative nature of environment existing
in the Plants/ Units. The system is comprehensive, simple and flexible
and has proved effective in promoting harmonious relationship between
employees and management.
Against 7 staff grievances pending at the start of the year (i.e. as on
1.4.20I5) and 4I6 staff grievances received during the year, SAIL
disposed 422 staff grievances during the year 20I5-I6, achieving 99.76%
fulfillment.
Remuneration Policy
In SAIL, pay and other benefits for executives are based on the
Presidential Directives issued by Ministry of Steel, Government of
India. The last pay revision effective from 0I/0I/2007 was done in
accordance with Presidential Directives dated 05/I0/2009. As per this,
variable pay in the form of Performance Related Pay (PRP) has been
introduced for executives. The PRP is based on the performance /
profitability of the Company as well as individual performance rating
which is aligned to the organization''s objectives. In case of
Non-executive employees, the salaries and wages are finalized / revised
in bipartite forum of National Joint Committee for Steel Industry
(NJCS). The last NJCS agreement was finalized and signed on 0I.07.20I4,
which resulted in pay revision of non- executive employees w.e.f.
0I.0I.20I2. In terms of notification issued by the Government of India,
the provisions of section I97 of the Companies Act, 20I3 are not
applicable to Government Companies. As such, the disclosures to be made
in the Board''s Report on the remuneration of Directors and other
prescribed details are not included in this Report.
Initiatives for Socio-economic Development of SCs /STs & Other Weaker
Sections of the Society
Presidential Directives on Reservation for Scheduled Castes and
Scheduled Tribes in Appointments in Public Enterprises continue to be
implemented. As on I.4.20I6, out of total manpower of 88,655 nos.,
I4,454 belonged to SCs (I6.30%), I2,587 belonged to STs (I4.20%) and
I0,768 belonged to OBCs (I2.I5%).
SAIL Plants and Units including Mines are situated in economically
backward regions of the Country with predominant SC/ST population.
Therefore, your Company has contributed to the overall development of
civic, medical, educational and other facilities in these regions. Some
of the contributions are:
- Recruitment of non-executive employees, which comprise of over 84% of
the total employees, are carried out mainly on regional level and hence
a large number of SCs/STs and other weaker sections of the society get
the benefit of employment in SAIL.
- Over the years, a large group of ancillary industries has also
developed in the vicinity of Steel Plants. This has created
opportunities for local unemployed persons for jobs and development of
entrepreneurship.
- For jobs of temporary & intermittent nature, generally contractors
deploy workmen from the local areas, which again provide an opportunity
for employment of local candidates of economically weaker section.
- Establishment of SAIL Steel Plants in economically backward areas has
given a fillip to the economic activities, thus benefiting the support
population providing different types of services.
- Steel Townships developed by SAIL have the best of medical, education
and civic facilities and are like an oasis for the local Scheduled
Castes, Scheduled Tribes and other population who share the fruits of
prosperity along with SAIL employees.
SAIL has undertaken several initiatives for the socio-economic
development of SCs/STs and other weaker sections of the society which
are mainly as under:
- Special Schools have been started exclusively for poor,
underprivileged children at the five integrated Steel Plant locations.
The facilities provided include free education, mid-day meals, uniforms
including shoes, text books, stationery items, school bag, water bottle
and transportation in some cases.
- No tuition fee is charged from SC/ST students studying in the Company
run schools, whether they are SAIL employees'' wards or non-employees''
wards.
- Free medical health centres for poor have been set up at Bhilai,
Durgapur, Rourkela, Bokaro, Burnpur (Gutgutpara) providing free medical
consultation, medicines, etc. to the peripheral population mainly
comprising of SC/ST and weaker sections of society.
- SAIL Plants have adopted tribal children. They are being provided
free education, uniforms, textbooks, stationery, meals, boarding,
lodging and medical facilities for their overall growth at residential
hostels, such as Saranda Suvan Chhatravas, Gyanodaya Hostel and an
exclusive Gyan Jyoti Yojana for nearly extinct Birhor Tribe.
- For Skill Development and better employability, tribal school
passouts have been sponsored for coaching in premier institutes for
IIT/JEE entrance examinations and for trainings along with monthly
stipend, accommodation, transportation and fooding facility at various
ITIs, Nursing and other vocational training institutes.
Implementation of Presidential Directives on Reservation for SC/ST
- Liaison Officers have been appointed as per Presidential Directives
for due compliance of the Orders and instructions pertaining to
reservation for SCs/STs/OBCs at Plants/Units of SAIL.
- SC/ST Cell is functioning in all of the main Plants/Units. A member
belonging to SC/ST community is associated in all DPCs/Selection
Committees. It is ensured to keep minimum one SC/ST category member on
every selection panel. A sufficiently senior level officer of SC/ST
category is nominated for the purpose as per the level of the
Recruitment Board /Selection Committees/DPC.
- Internal workshops for Liaison Officers for SC/ST/OBC and other
dealing officers of SAIL Plants/Units are conducted at regular
intervals through an external expert to keep them updated on the
reservation policy for SC/ST and other related matters.
- Plants/Units of SAIL have SC/ST Employees'' Welfare Associations which
conduct regular meetings with Liaison Officers on implementation of
reservation policy & other issues. In addition, an Apex level umbrella
body namely SAIL SC/ST Employees Federation also exists in SAIL to
represent the issues of SC/ST Employees in a coordinated manner. A
meeting with the Federation at the level of Director (Personnel) is
organized on a regular basis.
- National Commission for Scheduled Tribes reviewed position of SAIL
w.r.t. implementation of reservation policy and CSR schemes in respect
of Scheduled Tribes on 2nd February, 20I6 at New Delhi.
Hon''ble Chairperson, Dr. Rameshwar Oraon praised the efforts of SAIL
towards rehabilitation of tribals and other schemes of SAIL.
Implementation of Right to Information Act, 2005
Your Company has been occupying a pioneer position in implementation of
Right to Information (RTI) Act, 2005 in letter and spirit. The Company
has designated Public Information Officers (PIO) / Assistant Public
Information Officers and Appellate Authorities and Transparency Officer
under Section 5 and Section I9(I) of RTI Act in each Plant and Unit for
speedy redressal of the queries received under the Act. The provisions
under the Act are being complied with by all the Plants and Units of
the Company. All statutory reports including Annual Report are sent to
Ministry of Steel, besides uploading on website of the Company-
www.sail.co.in. Under Sec.5(5), all the officers/ line managers
responsible for providing information to the PIO are called Deemed PIO
and are made equally responsible as PIO towards timely providing of
information to the applicant.
An exclusive RTI Portal has been developed with link being available on
website of the Company. All the Plants/Units of SAIL have listed I7
manuals and details of Authorities under the Act are available on the
website of the Company. Quarterly Returns and Annual Returns on
implementation of RTI Act are being submitted online through the CIC
portal. Implementation of online request has been introduced from Ist
May 20I5 onwards. A compilation of Record Retention Policy of various
functions of Corporate Office has also been uploaded on the website of
the Company. In addition, compilations of important decisions of CIC,
DOPT circulars and High Court cases have also been made available on
the website of the Company.
Workshops on ''Obligation of Public Authorities under RTI Act, 2005 are
being organised at Corporate Office/Plants/Units and a Information
Commissioner has been present in most of these programs. Further,
awareness programmes on RTI Act are also held at Plants/ Units
including Corporate Office on a regular basis.
A total of 3758 applications and 639 appeals were received under RTI
Act, during the Financial Year 20I5-I6, all of them have been disposed
off within the stipulated time prescribed under the Act. 90 number of
cases were taken up with the CIC and all of them were disposed off in
favour of the Company.
Citizen Charter
Your Company is totally committed to excellence in public service
delivery through good governance, by a laid down process of identifying
citizens, our commitment to them in meeting their expectations and our
communication to them of our key policies, in order to make the service
delivery process more effective.
SAIL''s Citizen Charter has outlined commitment of SAIL towards its
stakeholders, thereby empowering them to demand better products and
services. The Citizen''s Charter of SAIL may be summarized in four
objectives, as given below:
- Ensuring citizen-centric focus across all its processes by adopting
Total Quality Management principles for improvement of products and
services.
- Ensuring effective citizen communication channels.
- Demonstrating transparency and openness of its business operations by
hosting the Citizen''s Charter on the Corporate website.
- Working towards delight of citizens, by fail-safe processes and in
case of exigencies leveraging its service recovery processes, like
Grievance Redressal, Handling Complaints, etc.
Disclosure under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013:
The Company has in place a system of Complaints Committees (under SAIL
Conduct, Discipline and Appeal (CDA Rules, I977)) in line with the
requirements of the Sexual Harassment of Women at the Workplace
(Prevention, Prohibition and Redressal) Act, 20I3.These Committees have
been set up to redress complaints received regarding sexual harassment.
All employees of the Company are covered under this Policy.The
following is a summary of sexual harassment complaints received and
disposed off during the year 20I5-I6:
Number of complaints received : 5
Number of complaints disposed off : 4
E. AWARDS & ACCOLADES WON DURING THE YEAR Company level
- Your Company has won 4 Prime Minister''s Shram Awards (involving 23
employees) for the year 20I4.
- Your Company has won I5 Vishwakarma Rashtriya Puraskar Awards
(involving 86 employees) for the performance year 20I3.
- Bhilai Steel Plant (BSP), bagged the Prime Minister''s Trophy for the
Best Performing Integrated Steel Plant in the Country for the year
20II-I2, declared in 20I4-I5, for a record IIth time. Chairman, SAIL
and Chief Executive Officer, BSP received the trophy from Hon''ble Prime
Minister Shri Narendra Modi at Rourkela on Ist April, 20I5.
- Your Company won Dainik Bhaskar India Pride Award 20I5-I6 under
Corporate Social Responsibility award category.
- Your Company won CII-ITC Sustainability 20I5 Award for ''Corporate
Excellence - Commendation for Significant Achievement'' in recognition
of its exemplary performance and contribution in the economic, social
and environmental segment.
- Your Company won India Today - MDRA CPSE Best HR Excellence Award -
20I5.
- Your Company was awarded with the prestigious EEPC India National
Awards for Engineering Export Excellence as the Star Performer for the
year 20I3-I4 in the Basic Iron and Steel - Large Enterprise product
group category.
- Town Official Language Implementation Committee (PSU), Delhi under
the Chairmanship of SAIL was been adjudged 3rd in Northern Region for
commendable performance in implementing the Official Language Policy of
the Union during the year 20I4-I5.
- Hindi in-house journal of SAIL ''Ispat Bhasha Bharti'' bagged Shiromani
Patrika Puraskar at town level.
- Your Company was conferred with the first award in the I2th National
Award for Excellence in Cost Management 20I4 under the category of
Public Manufacturing Organization.
- Your Company was awarded India Pride Awards 20I4-I5 for Excellence in
Environment Protection and Conservation by Dainik Bhaskar Group.
- Your Company won BT-STAR PSU Award 20I5 for its R&D and innovations
in the Category of Maharatna and Navratna PSUs.
Bhilai Steel Plant
- CREDA Energy Efficiency & Innovation Award for the year 20I4-I5 in
the category of Integrated Steel Plants under Iron & Steel Sector in
August, 20I5 by Chhattisgarh State Renewable Energy Development Agency
(CREDA)
- CII Exim Bank Award 20I5 - ''PRIZE'' for exceptional business
excellence initiatives.
- Golden Peacock Environment Management Award 20I5 in the category of
Steel in July, 20I5.
- NARAKAS, Bhilai-Durg bagged the Rajbhasha Kirti Puraskar in
September, 20I5.
- Best Rajbhasha implementation award in Central Region for the third
consecutive year in February, 20I6.
- Businessworld HR Excellence Awards 20I5 under award category of "Best
Initiative for Connect with Family" in recognition of effective
implementation of an Innovative workplace practice "Aap Bhi Janiye".
Durgapur Steel Plant
- Greentech Environment Award - Gold for the year 20I4-I5 by Greentech
Foundation, New Delhi in November, 2015.
- CII Exim Bank Award 20I5 - ''Commendation for significant
achievement''.
- Greentech Safety Award 20I5 - Certificate of Appreciation in Metal
and Mining Sector for the year 2014 in recognition of Safety by
Greentech Foundation.
- Greentech HR Award 20I5 (Training Excellence) - Silver organized by
Greentech Foundation, New Delhi.
- Ispat Suraksha Puraskar for No Fatal Accident in Rolling Mills during
20I3 & 20I4 by JCSSI.
- Srishti Good Green Governance Award 20I5 - Certificate of
Commendation in recognition of Environment for the year 2013-14
organized by Srishti Publications.
Rourkela Steel Plant
- CII National HR Excellence Award 20I5-I6 (Strong commitment to HR
Excellence) on 15th February, 2016.
- Ist Prize in ''National Energy Conservation Award 20I5'' in Integrated
Steel Plant sector for fiscal year 2014-15.
- 5th Annual Greentech CSR Award 20I5 - Gold Award under the category
Metal & Mining organized by Greentech Foundation in November, 20I5.
- CII Exim Bank Award 20I5 - ''Commendation for significant
achievement''.
- OTV CSR Award in the Water and Sanitation Category for CSR
initiatives in October, 20I5.
Bokaro Steel Plant
- Green-Tech Award - 20I5 to Environment Control Department of BSL from
Greentech Foundation.
- CII Exim Bank Award 20I5 - ''Commendation for significant
achievement''.
- Greentech HR Award 20I5 (Corporate Category of Training Excellence) -
Gold organized by Greentech Foundation.
Alloy Steels Plant
- GreenTech Environment Award 20I5 - Gold in Metal & Mining Sector for
outstanding contribution in Environment Management from Greentech
Foundation.
- Ispat Suraksha Puraskar 20I5 for No Fatal Accidents for regular
employees and contract labour separately.
Salem Steel Plant
- SSP won the Ispat Suraksha Puraskar - 20I6 award under JCSSI for
achieving "No Fatal Accident" during the calendar year 20I5 for regular
employees and contract labour separately.
- National Sustainability Award (First Prize) for the year 20I4-I5 from
the Indian Institute of Metals, Kolkata in Secondary Steel Plants /
Alloy Steel Plants category. SSP has achieved this award for the I8th
time since inception.
Raw Materials Division
- Barsua Iron Mine bagged Ist Prize in "Installation & Use of Mineral
Beneficiation Equipments including Crushing" & 2nd Prize in "Noise,
Vibration & other Scientific Studies" in the category of fully
Mechanized Mines in I7th Mines Environment and Mineral Conservation
Week-20I4-I5 held on I7th May, 20I5 at Puri, Odisha under the aegis of
IBM, Bhubaneswar.
- The mines of RMD have won the following prizes in the Annual Safety
Week-20I5 celebrations:
- BOM - Ist Prize in Publicity & Propaganda, Ist Prize in Survey &
Mining Software, Ist Prize in First Aid Trade Test, Ist Prize in
Mechanical Trade Test, 2nd Prize in Illumination, 3rd Prize in General
Working.
- GOM - Ist Prize in Mechanical Trade Test, 2nd Prize in Dozer Operator
Trade Test, 2nd Prize in Survey & Scientific Study, 2nd Prize in
Workshop Facilities, 2nd Prize in Statutory Provision & Compliances,
3rd Prize in Overall Performance, 3rd Prize in Publicity & Propaganda.
- BIM - Ist Prize in Workshop Facilities, Ist Prize in Poster, Ist
Prize in Trade Test(Drill), 2nd Prize in Safe Handling of Explosives.
- KIOM - 2nd Prize in Plant & Equipment, 2nd Prize in First Aid Trade
Test, 2nd Prize in Trade Test(Drill), 3rd Prize in Survey & Scientific
Study, 3rd Prize in GVTC.
- MIOM - Ist Prize in Trade Test(Shovel), 3rd Prize in Safe Handling of
Explosives, 3rd Prize in Mechanical Workshop.
Chandrapur Ferro Alloy Plant
- Ispat Suraksha Puraskar under Scheme-II & IV, Group-B (amongst
Special Steel Plants) for achieving "No Fatal Accident" involving
regular employees and contract labour separately during calendar years
20I3 & 20I4 from JCSSI.
- Ispat Suraksha Puraskar under Scheme II, Group - B (amongst Special
Steel Plants) for achieving "NO FATAL ACCIDENT" during calendar years
20I3 & 20I4 from Joint Committee on Safety, Health & Environment in the
Steel Industry.
Research & Development Centre for Iron & Steel
- The BT Star PSU for Excellence in Innovation (Tech/R&D) under
category Maharatna & Navratna.
- 2nd Prize for "Best IT Practices of Govt. organizations for the
citizens/ employees and students" in Digital India Week - 20I5, Ranchi.
F. ENVIROMENT PROTECTION AND CONSERVATION
As a responsible Corporate Citizen, your Company is committed to
improve its environmental footprint. With determined efforts, the
Company has been able to achieve the best ever environmental
performance indicators, during the Financial Year 20I5-I6. In addition,
efforts for eco-restoration of mined-out areas, greening of warehouses
and other environmental projects have yielded positive results.
Corporate Environmental Vision, Policy and Responsibility
A comprehensive report on "Corporate Environmental Vision, Policy and
Responsibility", conceptualised and recommended by the Board Sub
Committee on Health, Safety and Environment, has been approved by the
Board of Directors in January 20I6. As per the approved report, to
achieve the objectives articulated under the strategic action points,
Unit- wise action plans are to be prepared and implemented.
Improvement in Environmental Footprints and Operational Efficiency
The Company''s commitment to "comply with applicable environmental
regulations and striving to go beyond", results from concerted efforts
by the SAIL collective towards environmental stewardship and protection
of the environment in and around its operating Units, leading to
consistent improvement in the environmental indices over the years, are
shown below:
Major Pollution Control facilities installed during the year
- Augmentation of ESPs with Boiler#I, 2 & 5 of the Power Plant-I at
BSP.
- Sodium Hypochlorite dosing system at the BOD Plant outlet of DSP for
further reduction of cyanide level.
- Cast House De-fuming system at BF#4 at RSP.
- Primary emission control facility with the Converter#5 of SMS-I at
RSP.
- Revival of the existing dust extraction and dust suppression system
of the Crushing & Screening Plants, both at Dalli (Mech) I/o Mine and
Rajhara Mech I/o Mines. Dust Injection (CDI) facility at BF #2 and
augmentation of CDI facility with BF-3, at DSP
New Initiatives
a. Use of Weathered LD Slag as Rail track Ballast
The physical properties of weathered LD slag (WLD Slag) meet the
specification required for stone ballast for use as rail track ballast.
In response to a proposal by the Company, South Eastern Railway (SER)
has agreed to conduct field trials at the Bokaro Rail Yard with the
weathered LD Slag from Bokaro Steel Plant. Field trials in association
with SER has started from June 20I5, at Ispat Nagar Railway Yard,
Bokaro. Inspections of the track parameters are being carried out
jointly by the representatives of SER and SAIL, on monthly basis, which
shall continue for a total period of two years.
b. Use of BF-BOF slag as replacement of natural aggregates (Sand) in
IS: 383
Through regular pursuation/follow-ups with the Bureau of Indian
Standards (BIS), the relevant IS code (IS: 383) has now been amended
(Amendment- III), as a result of which, iron and steel slag can now be
utilised as a replacement of sand upto the extent as has been given in
the amended IS code.
c. Bio-sequestration of CO2
Job has been assigned to M/s. Tropical Forest Research Institute as the
sequestration partner for the project being implemented at Rourkela
Steel Plant. The following activities were completed during the
Financial Year 20I5 -I6:
- Vegetation survey by laying quadrates in and around RSP and in nearby
forests.
- Maintenance of plantation of twelve different selected tree species
in the designated site for identification of high carbon sequestering
species.
- Submission of Biodiversity report, Soil Organic Carbon report and
Soil Characterisation report.
Scheduled completion of the project is by March 20I9.
Use of Renewable Energy
RSP
- I MW Solar Power Plant has been commissioned. The Power Plant is
connected with the electrical grid system of the State Electricity
Board.
- 6 nos. solar water heating systems have been installed at the
Rourkela House and action has been initiated for 90 more such heaters
at the Ispat General Hospital.
- Two nos. of 5 KW capacity Solar Power Packs have been installed and
installation of another seven nos. at various locations (inside and
outside works premises) has been planned.
BSL
- A total of 65 nos. Solar Street Lights have been installed at various
locations of the Plant.
Environmental Management System (EMS) linked with ISO- 14001:2004
Implementation of EMS, which is essentially a voluntary initiative, has
become an effective tool in your Company towards protection of the
environment. It has helped the Plants and the Mines to ensure that
their performance remain within the regulatory requirements, and the
ISO I400I accredited Units have been able to minimise environmental
liabilities, maximize the efficient use of resources, reduce wastes,
build awareness of environmental concern among employees, improve
environmental performance through more efficient operations and
demonstrate a good corporate image.
During the Financial Year 20I5-I6, implementation of EMS-ISO I400I:2004
was completed at the following Plants/Units:
- Alloy Steels Plant, Durgapur
- CMO Warehouse at Durgapur Sustainable Development Projects
Bio-diversity Conservation and CO2 Sequestration at Bolani Ores Mine:
- Ecological restoration of 75 acres of de-graded landscape has been
taken up through collaboration with the Delhi University and Ambedkar
University, Delhi. During 20I5-I6 (till end of the assigned time period
i.e., Oct. 20I5), 65,000 saplings and 5,000 seeds of different native
tree species were planted. Also more than 2,500 saplings of fruit
yielding trees were planted to enrich the project site.
- Long term maintenance of ecologically restored 250 acres Lime Stone
mined out area at Purnapani Lime Stone & Dolomite Quarry is a five year
project started in Dec. 20I4 towards sustainability of the restored
ecosystems while providing ecological services and goods to the local
communities.
Plantation
Extensive afforestation programme has been consistently followed in all
the Plants and the Mines over the last few decades. The green belt
developed by afforestation adds not only to aesthetic environment but
also helps in watershed management, soil protection, erosion control
and landslide stabilization. Around 4.67 lakhs saplings were planted in
and around SAIL Plants and Mines during the year 20I5-I6, thus bringing
to a total of more than 195 lakhs saplings since the initiation of such
schemes.
Other Environmental Efforts
- Continuous Emission Monitoring System (CEMS) and Effluent Quality
Monitoring System (EQMS) have been installed at all the integrated
steel Plants, along with the facility for up-linking of the real time
data for onward visibility by the Central Pollution Control Board
(CPCB) and the respective State Pollution Control Boards (SPCBs).
- Corporate Sustainability Report, 20I4-I5 has been published as per
GRI G4 Guidelines (New Guidelines of GRI) after having been confirmed
by GRI to have successfully completed the GRI content index service and
receiving the organisational mark of GRI.
- For conducting Environmental Compliance Audit cum Consultancy Service
at BSP through an external agency, consultant has been selected during
March, 20I6. This effort is first of its kind to be implemented in an
integrated steel Plant in India.
- SAIL is empanelled with the Delhi Pollution Control Committee (DPCC)
for preparation of adequacy reports for pollution control devices. EMD
inspected and prepared Adequacy Reports for four bus depots of Delhi
Transport Corporation during the Financial Year 20I5-I6.
G. STRATEGIC INITIATIVES OF THE COMPANY
Your Company has adopted a multi-pronged approach that includes organic
growth, brown-field projects, technology leadership through strategic
alliances, ensuring raw material security through acquisition and
development of new mines, diversifying in allied areas, R&D Master Plan
and a Technology Plan. Such a strategy of investing in different areas
will mitigate risk and help in maximizing returns.
Over a span of last few years, SAIL has formed Joint Venture companies
in different areas viz. power generation, rail transportation, slag
cement production, securing supplies of key input raw materials viz.
coking coal (from indigenous as well as imported sources), etc. New
joint venture in the area of production of specialized products to
cater to automotive sector, etc. is being envisaged. The Strategic
Initiatives taken by your Company include the following:
Ultra Mega Steel Project in Bastar Distt., Chhattisgarh : With the aim
to develop large capacity mega steel projects in the Country, which
would help India in achieving the capacity growth of 300 million tonnes
of crude steel by 2025-26, Ministry of Steel has evolved a concept of
developing Ultra Mega Steel Plants. SAIL is participating for setting
up of an Ultra Mega Steel Plant of capacity (3 3) or (4 2) MTPA
(million tonnes per annum) in Bastar, Chhattisgarh. An MoU to this
effect was signed between SAIL, NMDC, Ministry of Steel and Government
of Chhattisgarh in May 20I5 at Dantewada in the presence of Hon''ble
Prime Minister. Definitive Agreements amongst the Parties have been
signed and action has been initiated for identification of suitable
site for the project.
Development of Rail Corridor from Rowghat to Jagdalpur in the State of
Chhattisgarh. : With the aim of bringing about greater socio-economic
development of the backward areas of Bastar region in Chhattisgarh and
to further the industrial progress and mining activities of the region,
an MOU was signed amongst SAIL, NMDC, IRCON and Government of
Chhattisgarh in May 20I5 for development of a rail corridor from
Rowghat to Jagdalpur. The rail corridor with a proposed length of I40
kms would also pass through Narayanpur and Kondangaon in Chhattisgarh.
A Shareholders Agreement (SHA) has been signed amongst the Parties in
January 20I6 and a joint venture company has been incorporated under
the name "Bastar Railway Private Limited". Survey work and feasibility
study for Railway line are being undertaken by IRCON.
Automotive steel joint venture in India: SAIL and ArcelorMittal are in
discussions for exploring the possibility for setting up an automotive
steel manufacturing facility under a Joint Venture (JV) arrangement in
India. The two companies signed an MOU on May 22, 20I5 to this effect.
The proposed JV will construct a state-of-the-art Cold Rolling Mill
(CRM) and other downstream finishing facilities in India which will
offer technologically advanced steel products to India''s rapidly
growing automotive sector. The input material for the CRM would come
from SAIL''s new Hot Strip Mill being set up at Rourkela Steel Plant,
with capacity of 3 Million Tonne Per Annum(MTPA). The annual capacity
of the CRM is targeted at I.5 MTPA. A task force comprising
representatives from both SAIL and ArcelorMittal will be completing a
Feasibility Study and Business Model as a part of comprehensive due
diligence for the proposed JV.
Business Excellence Initiatives Enterprise Scorecard
Fifth Enterprise Scorecard of SAIL was prepared for the Financial Year
20I5-I6 comprising of 74 Strategic Objectives; I3 in Financial
Perspective, 9 in Customer Perspective, 29 in Internal Business Process
Perspective and 23 in Organisational Capability Building Perspective.
Enterprise Scorecard not only brings integration with Memorandum of
Understanding with Government of India and Annual Business Plan of the
Company, but also facilitates deployment of the strategy across
organisation through Unit Scorecards and individual Scorecards of top
three leadership levels.
Excellence Model
Your Company has adopted European Foundation of Quality Management
(EFQM) Model which is implemented in India through CII-EXIM Bank Award
for Business Excellence. Four Plants of your Company i.e., BSP, DSP,
BSL and RSP participated in the process of CII-EXIM Bank Award for
Business Excellence 20I5. The highlight of this year is BSP crossing
600 Score and receiving PRIZE. Amongst PSUs, BSP is the second PSU Unit
ever to achieve the Prize in 23 years of Award history. All other
participating Plants i.e. DSP, RSP & BSL have scores of more than 500
and have received "Commendation Award for Significant Achievement".
Further, all the four Plants have exhibited continuous improvement in
nine Award criteria.
Total Quality Management (TQM)
Most of Plants/Units of your Company are certified to ISO 9000, ISO
I4000, OHSAS I8000 and SA 8000 Management Systems. DSP & BSL have also
implemented ISO 50000 (Energy Management System). DSP in addition has
also implemented ISO 270000 (Information Security System). Some other
Plants/Units have also started implementation of ISO 50000 & ISO 27000.
Following Certifications were achieved during 20I5-I6:
- DSP - First SAIL Unit to achieve ISO : 50000 EnMS certification.
- ISO I4000 EMS & OHSAS I8000 at ASP
- ISO: 50000 EnMS at BSL IT Related Initiatives
Your Company, being a progressive and vibrant organization, has always
believed in keeping pace with the changing times. The old business
models and overall business strategy are being redefined by moving
ahead in innovative usage of Information Technology (IT).
With the objective of bringing in efficiency & transparency in
operations of the Company, SAIL with its consistent efforts has been
able to cover the entire spectrum of business operations under the
sphere of Enterprise Resource Planning (ERP). Four Integrated Steel
Plants at Bhilai, Durgapur, Bokaro and Rourkela and Central Marketing
Organization have already implemented ERP and are reaping its benefits.
ERP implementation at 5th Integrated Steel Plant i.e. IISCO Steel Plant
at Burnpur and at Corporate Office for data consolidation through
integration of data of all Plants/ Units is in progress. A
comprehensive ERP Implementation Roadmap has been finalized for ERP
implementation at other remaining Plants/Units.
The production data has its roots in the strong foundation of
''Manufacturing Execution Systems'' (MES) which has benefitted the Plants
in reducing steel defects, improving order delivery and complete
synchronized data for analysis and optimum utilization of mills.
Hospital facility automation with web-based IT interface has been done
for streamlining procurement of medicines, viewing of on-line patient
medical history, prescription & lab test results.
Continuous efforts are being made for paperless working to promote
''Digital India Initiative''. Systems have been modified for generation
of automatic SMS/e-mail facility for employees, customers & suppliers.
Currently, the Company is working on strengthening Network &
Communication facilities through Video Conference for reduction in tour
& travel expenses.
Corporate Communication
The Corporate communication activities for the year 20I5 -I6 have been
centered on strengthening the image of ''Brand SAIL'' wherein your
Company employed strategic tools of communication while reaching out to
stakeholders.
Your Company participated in a number of high profile events and
exhibitions during the year which included; Make in India Summit, Indo
African Summit, Indian Maritime Summit, Railway Summit, IITF 20I5,
Steel Mart 20I5, Bhopal Vigyan Mela, India Industrial Fair, among
others. These events generated business queries from India and abroad,
which in future may lead to business opportunities for SAIL.
Media features in national and vernacular publications across India
have helped in increasing your Company''s visibility among stakeholders.
The prestigious events - "Dedication to the Nation of the modernized &
expanded Rourkela and IISCO Steel Plants by Hon''ble PM - Shri Narendra
Modi have also accounted for tremendous media coverage for SAIL. Your
Company continued to attract attention and interest of international
media such as Platts, metal bulletin, etc.
Your Company identified several sponsorship initiatives of various
important events to enhance the image of SAIL brand and, association of
SAIL brand with worthwhile causes in the interest of national and
social development.
Advertisements released by your Company at Plants, Corporate Office and
Central Marketing Organization during the year, have a special focus on
SAIL''s product portfolio. These advertisements were released in leading
publications with high readership and circulation. Similarly radio
jingles created by your Company also have a way of connecting deeply
with core target audiences both in the rural and urban areas.
The Corporate Communications department also regularly holds internal
communication exercises in order to convey thoughts, long term vision &
strategy and expectations of the top management to employees present at
various locations, down to the last man on the shop floor level. Face
to face interactions, video conferences, in house television
programmes, newsletters, e-portal, intranet web alerts, essay and
slogan competition are some of the internal communication tools that
your Company regularly utilizes to convey a message to personnel.
SAIL website has been revamped with a new layout and design-introducing
theme based displays on the days of national and international
importance. An interactive online ''order booking'' feature engaging
with the end user of steel has been added to the SAIL website.
Additionally, your Company''s foray into Digital and Social media has
received widespread attention during the year. Special efforts have
been undertaken to enhance SAIL''s presence on sites such as Facebook,
Twitter, Flickr and Slideshare. Other initiatives of communication of
your Company during the year have been in line with various ongoing
initiatives which include Swacch Bharat Abhiyan, Make in India, and
Digital India.
H. VIGILANCE ACTIVITIES
The objective of SAIL Vigilance is to facilitate an environment
enabling people to work with integrity, efficiency and in a transparent
manner, upholding highest ethical standards for the organization. To
achieve this objective, the Vigilance Department carries out
preventive, proactive and punitive actions with greater emphasis in the
preventive and proactive functions. Following activities were
undertaken during the Financial Year 20I5-I6:
- To increase vigilance awareness amongst employees, vigilance
awareness sessions and workshops were regularly held at various Plants
and Units. A total of I4I workshops involving 2938 participants were
organized for enhancing Vigilance Awareness on Whistle Blower Policy,
Purchase/Contract procedures, RTI Act, Conduct & Discipline Rules,
System and Procedures followed in SAIL, etc.
- Periodic surprise checks including joint checks were conducted
regularly in vulnerable areas of the Company. A total of 2765 periodic
checks including file scrutiny and joint checks were conducted at
different Plants / Units. A saving of approx. Rs.10.12 crores accrued
from the preventive vigilance activities mainly on account of these
surprise checks.
- Vigilance provides vital inputs to the operating authorities for
improving the prevailing systems for bringing about more
transparency. Accordingly, eight major System Improvement Projects (SIPs)
were undertaken at different Plants/Units of SAIL.
- I3 cases were taken up for Intensive Examination at different Plants
/ Units. During Intensive Examination, high value procurement /
contracts were scrutinized comprehensively and necessary
recommendations were forwarded to concerned departments for
implementing suggestions for improvement.
- As per the Guidelines of Central Vigilance Commission, Vigilance
Awareness Week was observed in all the Plants and Units during the
period 26.I0.20I5 to 3I.I0.20I5, on the theme of "Preventive Vigilance
as a tool of Good Governance".
- The following three (3) thrust areas were identified by
SAIL Vigilance:
i) Scrutiny of files pertaining to high value projects undertaken at
various Plants / Units, in line with the Guidelines of Chief Technical
Examiner of CVC.
ii) Scrutiny of the contracts awarded on single tender enquiry
(proprietary purchase basis) of value more than Rs 5 lakhs
iii) Surveillance in the areas of receipt, sampling & testing of high
value raw materials
- Certain vulnerable points were identified in the Plants/Units such as
weigh bridges, dispatch and unloading points, entry and exit points for
personnel and goods, places of chemical analysis of received materials,
etc. To monitor these areas closely, CCTV and allied data recording
systems have been installed at these places which would help in curbing
illegal activities at the above vulnerable points.
- After incorporating the suggestions of Vigilance amongst others and
vetting by SAIL Vigilance, revised Recruitment Policy & Recruitment
Manual was issued on I2.05.20I5.
- ''Inspiration- Prerna'', an in-house publication of SAIL Vigilance is
being published regularly. The above publication contains case studies,
articles from eminent personalities, quiz on policy matters, etc. to
enhance awareness of the readers.
Vigil Mechanism
The Company has adopted Vigil Mechanism for conducting the affairs in a
fair and transparent manner by adopting highest standards of
professionalism, honesty, integrity and ethical behaviour. All
employees of the Company and Directors on the Board of the Company are
covered under this Mechanism. This Mechanism has been established for
employees to report concerns about unethical behaviour, actual or
suspected fraud or violation of Code of Conduct. It also provides for
adequate safeguards against the victimization of employees who avail of
the Mechanism and allows direct access to the Chairperson of the Audit
Committee in exceptional cases.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As per the SEBI(Listing Obligations and Disclosure Requirements)
Regulations, 20I5, Management Discussion and Analysis Report covering
the performance and outlook of the Company is attached and forms part
of the Annual Report.
AUDITORS'' REPORT
The Statutory Auditors'' Report on the Accounts of the Company for the
Financial Year ended 3Ist March, 20I6 along with Management''s replies
thereon is placed at Annexure-I. The Comments of Comptroller and
Auditor General of India (C&AG) on the accounts of the Company for the
Financial Year ended 3Ist March, 20I6 under section I43(6) of the
Companies Act, 20I3 and the Managements replies thereto are placed at
Annexure-II.
COST AUDITORS
Pursuant to the direction of the Central Government for audit of cost
accounts, the Company has appointed M/s. Sanjay Gupta & Associates, New
Delhi, M/s. Shome & Banerjee, Kolkata and M/s. R.J. Goel & Co., New
Delhi as Cost Auditor(s) for the Financial Year 20I6-I7.
SECRETARIAL AUDITOR''S REPORT
In terms of the provisions of Section 204 of the Companies Act, 20I3,
the Board of Directors have appointed M/s. Agarwal S. & Associates,
Company Secretaries, as the Secretarial Auditor to conduct Secretarial
Audit of the Company for the Financial Year ended on 3Ist March, 20I6.
Secretarial Audit Report is placed at Annexure-III.
With regard to the observation of the Secretarial Auditor that
composition of the Board of Directors of the Company was not in
compliance with Regulation I7(I) of Securities Exchange Board of India
(Listing Obligations & Disclosure Requirements) Regulations, 20I5
(erstwhile Clause 49(II) (A) & (B) of the Listing Agreement) and Clause
3.I.4 of the DPE Guidelines on Corporate Governance for Central Public
Enterprises, it is stated that appointment of Independent Directors on
the Board of the Company is made by the Company based on nomination by
Government of India. The Company has requested Ministry of Steel,
Government of India for nomination of requisite number of Independent
Directors on its Board.
CORPORATE GOVERNANCE
In terms of SEBI(Listing Obligations and Disclosure Requirements)
Regulations, 20I5, a Report on Corporate Governance and Auditors''
Certificate thereon form part of the Annual Report. In terms of the
SEBI Regulations, the Board has laid down a Code of Conduct for all
Board Members and Senior Management of the Company. The Code of Conduct
has been posted on the website of the Company. All the Board Members
and Senior Management Personnel have affirmed compliance with the Code.
BUSINESS RESPONSIBILITY REPORT
As per Regulation 34(2)(f) of the SEBI(Listing Obligations and
Disclosure Requirements) Regulations, 20I5, the Business Responsibility
Report describing the initiatives taken by the Company from
Environmental, Social and Governance perspective forms part of the
Annual Report.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES
IISCO-Ujjain Pipe and Foundry Company Limited, a wholly owned
subsidiary of the erstwhile Indian Iron and Steel Company Limited
(IISCO), was ordered to be wound up by BIFR. The Official Liquidator is
continuing its liquidation process.
Your Company has four other wholly owned subsidiary Companies namely,
SAIL Refractory Company Limited (SRCL), SAIL Jagdishpur Power Plant
Limited, SAIL Sindri Projects Limited and Chhattisgarh Mega Steel
Limited. SRCL has taken over the Salem Refractory Unit of Burn
Standard Company Limited on I6th December, 20II and is operating the
same. SAIL Jagdishpur Power Plant Limited, incorporated for setting up
of Gas based power Plant at Jagdishpur and SAIL Sindri Projects
Limited, incorporated for revival of Sindri Unit of Fertilizer
Corporation of India Limited are yet to commence operations pending
relevant approvals. Chhattisgarh Mega Steel Limited which was
incorporated as a Special Purpose Vehicle for setting up of an Ultra
Mega Steel Plant of 6 Million Tonnes per annum as a green field steel
project under Joint Venture is yet to commence operation.
The Annual Accounts of the subsidiary Companies and related detailed
information shall be made available to the Shareholders of the holding
and subsidiary companies, seeking such information at any point of
time. Further, the Annual Accounts of the subsidiary companies are
available for inspection by any Shareholder in the Registered Office of
the Company and of the subsidiary companies concerned during the office
hours between II AM to I PM. A hard copy of the details of accounts of
subsidiaries shall be furnished to the shareholders on receipt of
written request.
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to provisions of Section I29 (3) of the Companies Act, 20I3,
the duly Audited Consolidated Financial Statements are placed at
Annexure-IV. The Statutory Auditors'' Report on the Consolidated
Financial Statements along with the Management''s replies thereon is
placed at Annexure-V. The Comments of Comptroller and Auditor General
of India (C&AG) on the Consolidated Financial Statements of the Company
for the Financial Year ended 3Ist March, 20I6 and the Management''s
replies thereto are placed at Annexure-VI. Further, the statement
containing salient features of the financial statements of the
subsidiary, joint venture and associate companies in the prescribed
Form AOC-I is placed at Annexure -VII.
EXTRACT OF ANNUAL RETURN
The Extract of Annual Return in Form MGT-9 as per the provisions of the
Companies Act, 20I3 and Rules prescribed therein is placed at
Annexure-VIII.
BOARD MEETINGS
During the year, I2 meetings of the Board of Directors of the Company
were held, the details of which are given in the Corporate Governance
Report forming part of the Annual Report.
AUDIT COMMITTEE
The Audit Committee of the Board was initially formed by the Company in
I998. The Audit Committee has been reconstituted from time to time in
terms of the SEBI Regulations and Companies Act, I956/20I3. The minutes
of the Audit Committee meetings are circulated to the Board, discussed,
and taken note of. The composition and other details pertaining to the
Audit Committee are included in the Corporate Governance Report.
INTERNAL FINANCIAL CONTROLS (IFCs) AND ITS ADEQUACY
The Company has well established and documented policies and procedures
for ensuring the orderly and efficient conduct of business, including
adherence to various policies and procedures for safeguarding its
assets, prevention and detection of frauds and errors, accuracy and
completeness of the accounting records and timely preparation of
reliable financial disclosures. Further, in order to enable the
Statutory Auditors of the Company to report on adequacy of IFCs as per
the Companies Act, 20I3, the Company has engaged M/s Grant Thornton
India LLP to study the existing framework of IFCs in the Company and
suggest improvement thereon and design a suitable framework for IFCs
covering Financial Reporting and Operational Controls.
First phase of exercise involving Financial and Financial Reporting
Controls including Test of Design and Test of Operating Effectiveness
was taken up in Feb, 20I6 and has been successfully completed by the
Consultant in March, 20I6. Based on the control gaps emerging from Test
of Design and Test of Operating Effectiveness, the Management has
initiated the remedial measures.
Similarly, the Operational Control reporting exercise has been taken up
in the second phase starting from June, 20I6, which, inter alia, covers
review of operational sub areas within the processes viz. Fixed Assets
Management, Financial Reporting, Inventory Management, Order to Cash,
Procurement to Pay, HR & Payrolls, Project & Capital Expenditure, Cash
Management, Production, Shipping & Logistics, Operations and Quality
Assurance, Safety, Security and Environment. Based on the control gaps,
mitigation plan will be drawn by the respective Plant/Unit for
remediation.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section I34(3)(c) of the Companies Act, 20I3, the Directors
state that:
(i) in the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed along with proper explanation
relating to material departures;
(ii) the Directors have selected such Accounting Policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the Financial Year and of the profit or
loss of the Company for that period;
(iii) the Directors have taken proper and sufficient care for the
maintenance of adequate Accounting Records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
(iv) the Directors have prepared the Annual Accounts on a Going-
Concern basis.
(v) the Directors have laid down internal financial control to be
followed by the Company and that such internal financial controls are
adequate and are operating effectively; and
(vi) the Directors have devised proper systems to ensure compliance
with the provisions of all applicable laws and that such systems are
adequate and operating effectively.
INDEPENDENT DIRECTORS'' DECLARATION
In terms of section I49(7) of the Companies Act, 20I3, necessary
declaration has been given by each Independent Director stating that
he/ she meets the criteria of independence as provided in sub-section
(6) of Section I49 of the Companies Act, 20I3.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
The details of Loans, Guarantees, Investments given during the
Financial Year ended on 3Ist March, 20I6 are given in Annexure-IX in
compliance with the provisions of Section I86 of the Companies Act,
20I3 read with Companies (Meetings of Board and its Powers) Rules,
20I4.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED
TO IN SUB-SECTION (1) OF SECTION 188
All the contracts / arrangements / transactions entered by the Company
during the Financial Year 20I5-I6, with the related parties were in the
ordinary course of business and on an arm''s length basis. The
transactions with the related parties have been disclosed in the
financial statements. Therefore, particulars of contracts or
arrangements with related parties referred to in Section I88(I) along
with the justification for entering into such contract or arrangement
in Form AOC-2 do not form part of the Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
In accordance with the provisions of Section I34(3)(m) of the Companies
Act, 20I3 read with Rule 8 of the Companies(Accounts) Rules, 20I4, the
particulars relating to Conservation of Energy, Technology Absorption
and Foreign Exchange Earnings and Outgo are given in Annexure-X to this
Report.
RISK MANAGEMENT POLICY
Your Company is conscious and sensitive to the challenges posed to its
business by the events unfolding in global and domestic business
environment including competitors which could give rise to substantive
risks. With this in view, the Company has instituted a robust
Enterprise Risk Management(ERM) System to help the organization to
efficiently manage risk, sustain growth and create value for the
stakeholders. The Risk Management Policy of SAIL was approved by the
Board in August 2009 and since then the risk management has matured in
SAIL. The Policy provides guidance for the management of the business
risks across SAIL. It focuses on ensuring that the risks are
identified, evaluated and mitigated within a given time frame on a
regular basis.
Currently, the architecture of Enterprise Risk Management in SAIL
comprises of a well- designed multilayered organization structure, with
each Plant/Unit having its perceived Risks which are under the constant
monitoring of Risk Owners / Risk Champions who frame and implement the
mitigation strategy and take it to its logical conclusion. Risk
Management Committee (RMC) of the Plants/Units chaired by the Head of
the Plant /Unit, periodically reviews the risks and its mitigation
status and reports the same to Chief Risk Officer (CRO) of SAIL.
Due to the changing operational requirements and greater emphasis on
ERM outlined in the Companies Act, 20I3 and SEBI Regulations and in
accordance with the SEBI Regulations, a SAIL Risk Management Committee
(SRMC) has been constituted. SRMC oversees the Risk Management function
in SAIL by addressing issues pertaining to the policy formulation as
well as evaluation of risk management function to assess its continuing
effectiveness. It also assists the Board in framing and monitoring risk
management systems for the Company and guiding the Risk Policy. It is a
high level committee Chaired by Chairman Audit Committee and has
Independent Directors, Functional Directors, and CEOs of some
Integrated Plants as its Members.
Key risks at Company level and their mitigation plans have been
presented to the Board. These risks along with mitigation plans are
continuously reviewed and monitored by Risk Management Committees at
Plant/Unit level. Communication is being maintained across the
organization regarding Risks and a suitable Risk Response to mitigate
the risk.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
SAIL''s social objective is synonymous with Corporate Social
Responsibility (CSR). Apart from the business of manufacturing steel,
the objective of the Company is to conduct business in ways that
produce social, environmental and economic benefits to the communities
in which it operates. For any organization, CSR begins by being aware
of the impact of its business on society. With the underlying philosophy
and a credo to make a meaningful difference in people''s lives, your
Company has been structuring and implementing CSR initiatives right
from the inception. These efforts have seen the obscure villages,
where SAIL Plants are located, turn into large industrial hubs today.
CSR initiatives of your Company have always been undertaken in
conformity to the prevalent guiding principles issued by Government
like applicable DPE Guidelines, Companies Act, 2013 and
Companies(Corporate Social Responsibility Policy) Rules, 20I4. SAIL''s
CSR projects are carried out in and around steel townships, mines and
far flung locations across the Country in the areas of education,
providing medical and health care facilities, village development,
access to water facilities, infrastructural development in peripheral
rural areas, environment conservation, women empowerment, assistance to
people with disabilities, sustainable income generation through self
help groups, promotion of sports, art, culture & heritage conservation,
etc.
The details of various Corporate Social Responsibility (CSR)
initiatives taken by the Company along with the Report on CSR in
prescribed format are placed at Annexure-XI. The CSR Policy of the
Company is available on SAIL website-www.sail.co.in.
Swachha Bharat Abhiyaan-Swachha Vidhyalaya Abhiyaan: Your Company has
been actively participating in the "Swachh Bharat Abhiyan" initiated by
the Hon''ble Prime Minister of India. Under the campaign, construction
of 672 toilets falling within the periphery of its Plants & Mines in
the States of Chhattisgarh, West Bengal, Odisha, Jharkhand, Madhya
Pradesh and Tamil Nadu, as allocated to SAIL by Ministry of HRD, were
undertaken and completed. Facilities like squatting units, urinals,
washbasin and overhead water storage have been provided. Apart from
toilet construction, cleanliness campaigns have been undertaken all
across the Organisation. Cleanliness drive is going on at various
locations including the works premises, awareness campaigns are being
run and proper house- keeping is being practiced throughout the
Company.
Healthcare: SAIL''s extensive and specialised healthcare infrastructure
provided specialized and basic healthcare to 96 lakh people living in
the vicinity of its Plants and Units during the period 20II-I6.
Surgeries like Cataract and lens implant, cleft lip and palate
disorder, polio-leg correction, etc. are conducted. Treatment of
hearing impaired, anemia and identification & counseling of Sickle cell
& Thalassemia patients, women with gynecological disorders, leprosy &
tuberculosis patients is provided free of cost.
In order to deliver quality healthcare at the doorsteps of the needy,
regular health camps in various villages on fixed days are being
organized for the people living in the periphery of Plants/Units, Mines
and far-flung areas. During the year 20I5-I6, more than 3800 Health
Camps have been organized benefitting over 97,000 villagers. 36 Mobile
Medical Units running in the Plant''s peripheries have benefitted around
one lakh villagers at their doorsteps.
24 exclusive Health Centers at Plants are providing free medical care
and medicines to around I00,000 poor and needy beneficiaries every
year. During 20I5-I6, more than 1.32 lakh villagers have availed free
healthcare at these Health Centers.
Education: To develop the society through education, your Company is
supporting over I45 schools in the steel townships to provide modern
education to more than 55,000 children and is assisting over 636
Government schools in Bhilai and Rourkela with about 75,000 students by
providing Mid-day meals in association with Akshya Patra Foundation.
2I Special Schools (Kalyan & Mukul Vidyalayas) are benefitting over
3600 BPL category students at Integrated Steel Plant locations with
facilities of free education, mid-day meals, uniform including shoes,
text books, stationary items, school bag, water bottles and
transportation in some cases. 335 number of Tribal children are getting
free Education, Accommodation, Meals & Uniforms, textbooks, etc. at
Saranda Suvan Chhatravas, Kiriburu; RTC Residential Public School,
Manoharpur; Gyanodaya Chhatravas, BSP School Rajhara, Bhilai; Kalinga
Institute of Social Sciences, Bhubaneswar; Gyanjyoti Yojna, Bokaro.
Over 2I00 school students have been awarded annual scholarships in
Plant peripheries.
Bokaro Steel Plant has introduced "Gyan JyotiYojana" scheme for
providing education and holistic development for the children of Birhor
tribe, which is at the verge of extinction. I5 Birhor children were
adopted and provided free education along with boarding, lodging,
nourishing and wholesome food, clothing, free medical treatment, sports
and cultural opportunities in a conducive atmosphere. They are the
first Matriculates and I2th pass from their community. Inspired from
their achievements, another batch of I5 new Birhor children have been
adopted, who are all set to begin their life in new surroundings. For
Skill Development and better employability, 9 Matriculate Birhor Boys
adopted under Gyan Jyoti Yojana have been sponsored for ITI training in
"Welder trade" alongwith stipend of ''2500/- each, accommodation and
food facility at Bokaro Pvt. ITI.
Women Empowerment & Sustainable Income Generation:Vocational and
specialised skill development training targeted towards sustainable
income generation has been provided during the year 20I5-I6 to 947
youths and I785 women of peripheral villages in areas such as Nursing,
Physiotherapy, LMV Driving, Computers, Mobile repairing, Welder, Fitter
& Electrician Training Improved agriculture, Mushroom cultivation,
Goatery, Poultry, Fishery, Piggery, Achar/Pappad/Agarbati/Candle
making, Screen printing, Handicrafts, Sericulture, Yarn Weaving,
Tailoring, Sewing & embroidery, Gloves, Spices, Towels, Gunny-bags,
Low-cost-Sanitary Napkins, Sweet Box, Soap, Smokeless chullah making,
etc. These activities are being carried out at various centres located
in and around the Plants/Mines locations. Your Company is also
instrumental in marketing of the products manufactured at such centres.
Infrastructure Development in Rural Areas: Over 77.84 lakh people
across 435 villages have been connected to mainstream by your Company
since its inception by constructing and repairing of roads. It has
installed over 7907 water sources during last four years thereby
enabling easy access to drinking water to over 45.96 lakh people living
in far-flung areas.
Environment Conservation: To promote renewable sources of energy, Solar
street lights have been installed in rural areas, Solar Lanterns and
smokeless chullahs have been distributed among the rural people of
Saranda and other locations. Maintenance of parks, water bodies and
botanical gardens in its townships and plantation & maintenance of over
3.85 lakh trees at various locations has also been undertaken. Further,
your Company has also supported setting up and operation of I00 KW
Capacity Solar Power Plant at Jari, Gumla in Jharkhand.
Support to Differently Abled & Senior Citizens: Differently abled
children/ people are being supported through provision of equipments
like- tricycle, motorized vehicles, calipers, hearing aids, artificial
limbs, etc.Your Company supports various schemes and centers at Plants
like "Sneh Sampada", "Prayas"and ''Muskaan" at Bhilai, "Schools for
blind, deaf & mentally challenged children" and Home and Hope" at
Rourkela, "Ashalata Viklang Kendra" at Bokaro, various programs like
"Handicapped Oriented Education Program" and "Durgpaur Handicapped
Happy Home" at Durgapur, "Cheshire Home" at Burnpur. Support has also
been provided to NGOs like TAMANNA, DEEPALAYA, etc. Old age homes are
being supported at different Plant townships like "Siyan Sadan" at
Bhilai, Acharya Dham and Badshah at Durgapur, etc. Besides, your
Company has also adopted, developed and is maintaining a Lepers Colony
at Kajora through Durgapur Steel Plant wherein all the social and
infrastructure facilities have been maintained.
Sports, Art & Culture and Heritage Conservation: SAIL is regularly
organizing inter-village sports tournaments, extending support to major
national sports events & tournaments. Also, supporting and coaching
aspiring sportsmen and women through its residential sports academies
at Bokaro (football), Rourkela (Hockey) - with world class astro-turf
ground, Bhilai (Athletics for boys), Durgapur (Athletics for girls) and
Kiriburu, Jharkhand (Archery). Musical Instruments were distributed in
6 Peripheral Villages of Gua (Lipunga, Thakura, Guasai, Baihatu,
Jojogutu & Rajabera) to improve the Tribal Culture in Villages.
Cultural events like Chhattisgarh Lok Kala Mahotsav, Gramin Lokotsav
are organised every year. Conservation and maintenance of National
heritage sites such as 5 monuments in the Lodhi Garden at New Delhi,
"Ved-vyas" of Mahabharat fame historical site in Rourkela, etc. are
supported by your Company.
Disaster Relief: SAIL, as a responsible corporate citizen, supported
the rehabilitation initiatives for the people affected by Natural
Calamities, like flood ravaged in Jammu & Kashmir, Phylin cyclone in
Odisha, Flash Floods in Uttarakhand, etc.
Saranda Forest Development: In an effort to bring the marginalized
masses of the remote forest areas to the mainstream of development,
your Company in association with Government of Jharkhand and Ministry
of Rural Development, Government of India actively participated in the
development process of Saranda forest, Jharkhand. SAIL provided
ambulances, 7000 each of bicycles, transistors, solar lanterns and
established an Integrated Development Centre (IDC) at Digha village in
Saranda forest. IDC comprises of facilities like Bank, Panchayat
Office, Ration shop, Telecom office, Anganwadi Centre, Meeting room,
etc. for the local populace.
Model Steel Villages: In order to bridge the gap between rural and
urban areas and to provide comprehensive development of both physical
and social infrastructure, 79 villages were identified as "Model Steel
Villages"(MSV) across the Country (in eight States). The developmental
activities undertaken in these villages include medical & health
services, education, roads & connectivity, sanitation, community
centers, livelihood generation, sports facilities, etc. The facilities
developed at these MSVs are being run and maintained regularly.
SAIL''s efforts as a responsible corporate citizen in Nation building
have been recognized by various organizations in the form of awards and
accolades during the year such as Dainik Bhaskar India Pride Award for
CSR ''Greentech Gold Award for CSR-20I5'' for Durgapur and Rourkela Steel
Plants, etc.
GENERAL DISCLOSURES
i. During the year, the Company has not accepted any deposits under
the Companies Act, 20I3.
ii. No significant or material orders were passed by the Regulators or
Courts or Tribunals impacting the going concern status and Company''s
operations in future. However, attention of Members is drawn to the
statement on contingent liabilities in notes forming part of the
Financial Statements.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
- Shri C.S. Verma ceased to be Chairman of the Company w.e.f. I0th
June, 20I5(A/N).
- Shri Rakesh Singh, Secretary to the Government of India, Ministry of
Steel assumed Additional Charge as Chairman of the Company from IIth
June, 20I5 to 30th September, 20I5(A/N).
- Dr. Anup K. Pujari, Secretary to the Government of India, Ministry of
MSME assumed Additional Charge as Chairman of the Company from Ist
October, 20I5 to I0th December, 20I5 (F/N).
- Shri P.K. Singh, has been appointed as Chairman of the Company w.e.f.
I0.I2.20I5(F/N).
- Shri T.S. Suresh ceased to be Director of the Company w.e.f.
3I.05.20I5(A/N).
- Shri P.K. Das, Prof. Ashok Gupta, Shri Parmod Bindal and Mrs. Anshu
Vaish have been appointed as Independent Directors w.e.f. I8.II.20I5.
- Dr. N. Mohapatra has been appointed as Director w.e.f. 27.II.20I5
(F/N).
- Shri G. Vishwakarma has been appointed as Director w.e.f.
3I.I2.20I5(F/N).
- Shri S.S. Mohanty ceased to be Director w.e.f. 30.06.20I6(A/N).
- Shri Raman has been appointed as Director w.e.f. 0I.07.20I6(F/N).
- Dr. Atmanand and Shri J.M. Mauskar, Independent Directors have ceased
to be Directors w.e.f. I8th July, 20I6 on completion of their tenure.
- Government of India has extended the tenure of Shri A.K. Chaudhary,
Director (Finance) beyond 3Ist August, 20I6 till 3Ist December, 2020
i.e. the date of his superannuation or until further orders, whichever
is the earliest.
ACKNOWLEDGEMENT
The Board of Directors wish to place on record their appreciation for
the support and value contributed by every member of the SAIL family.
The Directors are thankful to the State Governments, Electricity
Boards, Railways, Banks, Suppliers, Customers and Investors for their
continued co-operation. The Directors also wish to acknowledge the
continued support and guidance received from the different wings of the
Government of India, particularly from the Ministry of Steel.
For and on behalf of the Board of Directors
(P.K. Singh)
Chairman
Place: New Delhi
Dated: 11th August, 20I6
Mar 31, 2015
To, The Members,
The Directors have the pleasure of presenting the 43rd Annual Report of
the Company together with Audited Accounts for the Financial Year ended
31st March, 2015.
A. FINANCIAL REVIEW
Your Company achieved a turnover of Rs.50,627 crore during 2014-15, which
is lower by 2% over previous year, mainly on account of lower sales
volume. The steel prices which were at a high in the beginning of
Financial Year 2014-15, started falling gradually every month from
September''2014 onwards. Towards the end of the Financial Year 2014-15,
the steel prices reached at the lowest for the Financial Year. The
Profit After Tax of your Company for the Financial Year was Rs.2,093
crore as compared to Rs.2,616 crore in the previous Financial Year, which
included the one time receipt of Rs.1,056 crore from M/s. Vale Australia
Pty Ltd.
The net profit of your Company for the year 2014-15 has been negatively
impacted on account of stagnant saleable steel production and lower
sales volume of saleable steel, higher salaries & wages, higher stores
& spares expenditure, higher repairs & maintenance expenditure,
increase in royalty on iron ore, increase in purchased power rate,
higher usage of imported coal in the blend due to lower availability of
indigenous coal, higher interest charges, higher depreciation due to
capitalization of new facilities and reduction in interest earning on
term deposits. The Management has taken various cost reduction measures
like reduction in usage of external BF Coke, lower coke rate & energy
consumption, higher CDI usage, etc. to offset the impact of adverse
factors.
Your Company continued its thrust on optimum utilisation of funds by
better fund management. This included replacement of high cost short
term loans with low cost debts, timely repayment of loans including
interest, strategic parking of surplus funds with scheduled banks,
actions for future fund raising etc. to meet the growth objectives.
Further, the Company hedged the foreign currency risk on Buyer''s Credit
and repayment of External Commercial Borrowings depending on market
conditions. The Company had liquid assets of Rs. 2,000 crore as on 31st
March, 2015 invested in short term deposits with scheduled banks
against borrowings of Rs. 29,898 crore as on 31st March 2015. The debt
equity ratio of the company increased to 0.69:1 as on 31st March 2015
from 0.59:1 as on 31st March 2014 mainly on account of increase in
borrowings during the year. The net worth of company improved from Rs.
42,666 crore as on 31st March 2014 to Rs. 43,505 crore as on 31st March
2015 and this helped in generation of internal resources for funding
expansion plans of SAIL. During the Financial Year 2014-15, the capital
expenditure incurred was Rs. 6,840 crore.
The Company paid interim dividend @ 17.5% of the paid-up equity share
capital during the year. The Board of Directors has further recommended
a final dividend @ 2.5% subject to approval of shareholders, thus
making the total dividend @ 20% of the paid up equity share capital for
the Financial Year 2014-15.
Credit Rating:
M/s India Ratings & Research Pvt. Ltd. and M/s CARE, RBI approved
credit rating agencies, maintained ''AAA'' ratings indicating the highest
safety, for SAIL''s long term-borrowing programme. The international
borrowings programme of the Company has been rated at ''BBB-'' by M/s.
FITCH Ratings.
B. OPERATIONS REVIEW
Production Review
Financial Year 2014-15 witnessed several landmark achievements in the
ongoing Modernisation and Expansion Plan of the Company. Your Company
achieved its highest ever Hot Metal production of 15.4 Million Tonne
(MT) surpassing its previous best of 15.2 MT achieved in 2007-08. This
was a result of series of ongoing projects getting either commissioned
or stabilized during the year towards achievement of their envisaged
capacity. Each and every Integrated Steel Plant of SAIL has achieved a
breakthrough in operationalizing new units as stated below:
- Bhilai Steel Plant has stabilised performance of the new Sinter
Machine in SP-3 and new Coke Oven Battery-11 and has started trials in
the new Rail Welding Plant which is a part of Universal Rail Mill.
- At Durgapur Steel Plant, the new Bloom cum Round Caster has started
trial production from Feb 2015 and is expected to stabilize soon.
- At Rourkela Steel Plant, new Converter-C was commissioned and has
been stabilized with maximum of 21 heats. Similarly, the new Caster has
also been ramped up achieving a production level of 28 casts in a
single day on 19/09/2014.
- At Bokaro Steel Plant, new CRM-III has begun trials and will ramp up
production after commissioning of auxiliaries.
- At IISCO Steel Plant, Burnpur, new BF-5, new SMS (currently
operating with 2 Converters and 2 Casters) and new Bar Mill have been
commissioned and operation of Wire Rod Mill has been stabilised.
Your Company achieved an all time best performance in case of
Continuously-Cast (CC) Steel and Sinter production, with a production
of 10.3 MT & 20.7 MT and a growth of 6% &11% over last year
respectively. The Company also registered an improvement in its Crude
Steel production volume, registering a growth of 2% over last year.
Your Company''s various initiatives to reduce environmental footprint
and enhance operational efficiency have led to a significant
improvement in environmental parameters as well as in Techno-economic
efficiency. This has enabled the Company to produce steel in a greener
and more environmental friendly manner than ever before. SAIL Plants
recorded the best ever Sp. Energy Consumption of 6.52 Gcal/Tonne of
Crude Steel (tcs), an improvement of 1% over 2013-14. This was
achieved, as a result of higher volume of crude steel being produced
through energy efficient CC route (up by 6% over 2013-14). In addition,
SAIL achieved the lowest ever Particulate Matter (PM) Emission Load
(0.83 kg/tcs), Specific Water Consumption (3.66 m3/tcs) and Specific
Effluent discharge (2.16 m3/Tonne of Saleable Steel (tss)). SAIL
Plants have also reduced their CO2 Emission levels to 2.65 T/tcs which
is their lowest ever emission, showing significant improvement over
earlier years.
Your Company is proud to be a part of India''s ''Make in India''
initiative, wherein the Country''s first indigenously built warship
named INS Kamorta, an anti-submarine warfare corvette, was built with
special grade high-tensile (DMR249A) steel produced by Bhilai Steel
Plant. The ship was handed over to the Indian Navy by Garden Reach
Shipbuilders & Engineers Limited in the month of July''14.
Maintaining this fervor for continuous improvement, your Company has
developed several new products during the year, further enhancing its
extensive product portfolio. To satisfy the requirements for
manufacturing of bullet proof vehicles for Indian Army, three heats of
Armor quality steel were made at Alloy Steels Plant and 8 slabs were
processed through Hot Strip Mill and Special Plates Plant at RSP to be
dispatched to Vehicle Factory, Jabalpur. The hardness achieved was
490-520 BHN and it satisfied the specification of CQA M (47) or
equivalent for protection from AK-47 from a distance of 10 meters.
With the recent amendment of IS 1786 in 2012, two new grades of seismic
resistant rebars, namely Fe-415S and Fe-500S with a minimum UTS/YS
ratio of 1.25 were added. To keep pace with this development, SAIL took
up the challenge to be the first producer in India for development of
IS 1786 S grade in line with international specifications like ISO
6935-2, ASTM A706, etc. Accordingly, process technology for production
of Fe-415S and Fe 500S grades were established.
In addition, Research & Development Centre for Iron & Steel (RDCIS) and
Plants have developed a new standard IS 15962: 2012 on ''Structural
Steels for Buildings and Structures with improved Seismic Resistance''
in line with ISO 24314 and JIS G 3136. No Indian specification existed
earlier for seismic resistant steel structures and plates. With these
aforementioned initiatives, SAIL is planning to launch seismic grade
plates, structurals and TMT rebars in 2015-16 which will make SAIL the
"First Producer" of these grades in India.
Several initiatives have been undertaken for implementation of the
ambitious R&D Master Plan of SAIL, initiated under three broad
categories namely, Centre of Excellence Projects (CoE), High Impact
Projects (HIP) and Technology Missions (TM) Projects.
Some of the assignments in these projects involving in-house process
innovation / modifications / trials have been completed. Other
assignments are in various stages of implementation. The implementation
of R&D Master Plan and increased thrust on R&D activities across SAIL
Plants/ Units has led to a significant increase in R&D expenditure from
Rs.100 crores in 2013-14 to Rs. 264 crores in 2014-15 and the R&D
expenditure as percentage of turnover (net of excise) has increased
from 0.24 in 2013-14 to 0.58 in 2014-15.
Under CoE Projects, the average campaign life of steel ladle in SMS-2,
BSL has increased from 80 to 101 heats, also achieving a maximum life
of 123 heats. In addition, an RFID based ladle tracking system is being
implemented in SMS-2, BSL and improved quality fused Alumina based
Alumina-Magnesia-Carbon bricks have been developed for bottom impact
pad of steel ladle giving an average life of 50 heats with a
possibility of maximum of 62 heats. RDCIS has also undertaken a new
CoE project for development of high strength nano steels for which a
MoU with Indian Institute of Science, Bangalore has been signed.
Under High Impact Projects, lab experiments for slime beneficiation at
Barsua Mines have been completed and order placement on turnkey basis
is in progress. For use of air cooled BF slag for road making,
laboratory investigations with different compositions using slag, local
soil and moorum from BSP were carried out at Central Road Research
Institute. Based on encouraging results, pilot construction of rigid
pavement has been initiated at RDCIS as a separate project.
Adoption of technologies for thin strip casting and CRGO steel
production has been envisaged under TM-1 & TM-2 Projects. Discussions
regarding modalities of technology transfer by the technology vendors
are under advanced stages. Working and licensing agreement with the
vendors are being worked out.
Under TM-2, one heat of CRGO steel was made at RSP as per the process
prepared jointly by RDCIS and RSP. Rolling of two slabs was taken up in
HSM. Detailed metallurgical characterization of Hot Rolled (HR) Coils
was taken up at RDCIS. Samples of HR coils were annealed and their
characterization is in progress at RDCIS. A MOU has been signed
between RDCIS and Mishra Dhatu Nigam Limited (MIDHANI) for development
of CRGO steel at MIDHANI.
Under TM-3 Project on Carbon sequestration through afforestation, M/s
Tropical Forest Research Institute (TFRI), Jabalpur, M.P. have been
appointed to act as Carbon Sequestration Service Provider. TFRI has
carried out base period measurement of 200 samples of soil for organic
carbon content. Plantation of 12 different species of trees in 10 acres
for pilot study on carbon sequestration has been completed and
monitoring of growth of the plants is under progress.
Power
Average power requirement of SAIL Plants during the year was 1140 MW.
This had increased by 60 MW from the previous year due to commissioning
of expansion facilities at RSP and ISP. Captive Power Plants supplied
about 61% of the total power requirement and balance 39% was purchased
from outside, mainly grid utilities. With an aim to reduce cost, about
42 Million Units of cheaper power available in the power exchange were
purchased which contributed to substantial cost savings. This practice
of purchasing cheaper power from power exchange will be continued and
increasing the quantity of such power will be targeted.
The practice of gainful utilization of surplus captive power available
at one Plant by wheeling to another Plant was continued during the
year. DSP and RSP received wheeled power from Bhilai for the first
time, whereas wheeling to VISL was also continued. About 134 Million
Units of power were wheeled from Bhilai to other Plants to replace
costlier grid power and thereby resulting in substantial cost savings.
The Company is in the process of upgrading Transmission & Distribution
(T&D) facilities inside its Plants to facilitate handling of higher
quantum of power requirement after ongoing expansion and improve the
reliability of power supply. While power system at RSP, ISP, DSP, SSP
and BSP have already been upgraded to higher voltages (220/230 KV),
such up-gradation to 220 KV is nearing completion at BSL and CFP.
Besides improving reliability of power supply, such arrangement will
also help in reducing power cost as power tariff for some utilities is
lower at high voltages.
The Company is also in the process of augmenting its captive power
generation capacity by installing new Captive Power Plants as part of
its ongoing expansion and also through joint venture company with NTPC
namely NTPC SAIL Power Company Private Limited (NSPCL). While, new
power generation facilities of 146 MW capacities have already been
added during the year, another 70 MW is expected during next year.
Besides this, proposal for installation of 370 MW capacity through
NSPCL is in advanced stage.
As part of its commitment towards encouraging usage of renewable
sources, the Company has initiated proposals for installation of 200 MW
capacity Renewable energy projects during the period 2015-19. Out of
this, proposal for installation of 15 MW capacity small hydel plant at
Mandira Dam, Rourkela is in advanced stage and Installation of 1 MW
capacity grid interactive Solar PV plant at RSP is under progress.
Raw Materials
During the Financial Year 2014-15, total requirement of iron ore was
met from captive sources. The Company''s captive iron ore mines produced
about 23.18 million tonnes (MT). However, in case of coking coal,
around 14% requirement was met from indigenous sources (Coal India
Limited & captive sources) and balance through imports (12.87 MT).
During 2014-15, production from captive collieries of the Company was
about 0.65 million tonnes, out of which 0.44 million tonnes was raw
coking coal and balance 0.21 million tonnes of non coking coal. In case
of fluxes, around 1.11 million tonnes of Limestone and 0.97 million
tonnes of Dolomite were produced, totaling to 2.08 million tonnes of
fluxes from captive sources. For thermal coal, your Company depends
entirely on purchases from Coal India Limited (CIL) except small
quantity produced from captive mines.
During 2014-15, at a time when consequent to a decision of the Apex
Court of the Country, mining activities came to a grinding halt across
the Country affecting some of the mines of the Company also, SAIL could
manage its steel production level without disruption by ramping up
production from its operating mines at a short notice. Most of the
steel makers who have got access to captive sources had to still import
iron ore. This is a sign of our intrinsic strength in regulation of
operations as per the statute as well as in meeting crisis/challenges.
In order to expedite capacity expansion projects of mines, following
environment and forest clearance have been obtained during 2014-15:
-Stage-II Forestry Clearance for diversion of 274.6916 Ha of forest
land in Duargaiburu Lease-I of Gua mines.
-Environment Clearance for capacity expansion of Kiriburu-
Meghahatuburu mines to 16 MTPA ROM capacity.
-Stage-II Forestry Clearance for diversion of 644.26 Ha of forest land
in Lease-I of Kiriburu-Meghahatuburu mines.
-Stage-II Forestry Clearance for balance area of 262.95 Ha and for
safety Zone area of 5.1 Sq. Mile lease of Bolani Iron Ore Mine.
-Stage-I Forestry Clearance with working permission for diversion of
77.94 Ha of forest land in ML-162 lease of Barsua mines.
-Environment Clearance for capacity expansion of Mahamaya- Dulki iron
ore mine to 1.46 MTPA capacity.
With execution of lease deeds for Barsua and Bolani mines, lease period
of ML-130 lease of Barsua-Kalta mine and 5.1 Sq Mile lease of Bolani
mine has now been renewed till January, 2030 and April, 2030
respectively.
In view of promulgation of MMDR Ordinance, 2015 and subsequent Order of
the Ministry of Mines, Government of India dated 6th February, 2015
regarding extension of lease period for Government Companies till 31st
March, 2020, Jharkhand State Government vide Order dated 18th March,
2015 has extended the lease renewal period of SAIL''s seven Iron Ore
leases and four Flux leases till 31st March, 2020. Subsequently, vide
Order dated 26th March, 2015, Government of Odisha has also extended
the lease renewal period of ML-162 lease of Barsua mines to 31st March,
2020.
Ministry of Mines, vide Notification dated 16th February, 2015 has
notified SAIL along with 4 other PSUs for the purposes of carrying out
exploration under second proviso to sub-section (1) of Section 4 of
MMDR Act.
Under notified Coal Blocks for allotment to Government Companies,
Sitanala Coking Coal Block was allotted to SAIL and the Agreement in
this regard with the Nominated Authority was signed on 30th March,
2015.
For allotment of new coking coal and thermal coal blocks efforts are
being made for obtaining allotment of coal blocks under Government
dispensation route.
Sales & Marketing
In-spite of the challenging market conditions, your Company achieved a
total sales volume of 11.8 million tonnes during the Financial Year
2014-15. With regard to Dealer Sales, the best ever sales of 0.63
million tonnes was achieved during the Financial Year 2014-15, thereby,
registering a growth of 2% over previous best of 0.62 million tonnes in
Financial Year 2013-14. Similarly, in case of Alloy & Stainless Steel,
the best ever sales of 0.25 million tonnes was achieved in 2014-15
which recorded a growth of 18% over previous year.
Your Company had an export booking of 0.591 million tonnes, which was a
significant growth over the previous year. Exports to neighbouring
markets, however, increased at a faster pace of 15% over the previous
year. The Company exported Plates to Brazil for the 1st time and a
prestigious export order of Stainless Steel Cold Rolled Coils for
French Mint was executed successfully.
During the Financial Year 2014-15, 532 new SAIL Dealers were appointed.
With this, total number of SAIL dealers stood at 2711 as on 1st April,
2015.
Public Procurement Policy for Micro and Small Enterprises
As required by the Public Procurement Policy of the Government of
India, the information on procurement from Micro & Small Enterprises
during 2014-15 and 2013-14 is given below:
(Rs. Crore)
Particulars 2014-15 2013-14
Total Amount of Procurement 3372.98 3862.69
Total Procurement from MSE 737.60 789.64
%age Procurement from MSE 21.87 20.44
C. GROWTH PLAN AND MODERNISATION & EXPANSION PROGRAMME
Growth Plan
To maintain its current dominance in the domestic market and to meet
the future challenges, your Company is working on a long term strategic
plan ''Vision 2025'', which will steer the Company towards a target of 50
million tonnes of Hot Metal capacity, thereby meeting the strategic
objectives of achieving leadership in Indian Steel sector and a
position amongst the top Steel companies globally. The growth plan,
besides targeting higher production, also addresses the need for
eliminating technological obsolescence, achieving energy savings,
enriching product-mix, reducing pollution, developing mines and
collieries, introducing customer centric processes and developing
matching infrastructure facilities.
Modernisation & Expansion Programme
Your Company is in the last leg of implementation of the ongoing
Modernisation & Expansion Programme (MEP). SAIL has added about 5.5
million tonnes per annum of Hot Metal capacity by 2014- 15 and will
achieve the envisaged Hot Metal capacity of 23.5 million tonnes per
annum in the Financial Year 2015-16.
During the Financial Year 2014-15, the Company has achieved many
milestones in the ongoing MEP. At Rourkela Steel Plant, all new
facilities under the integrated process route of BF-BOF-Caster- Plate
Mill have been made operational and Hon''ble Prime Minister of India
dedicated Modernized & Expanded Rourkela Steel Plant to the Nation on
1st April, 2015. At IISCO Steel Plant, Burnpur, with the completion of
India''s largest Blast Furnace, all facilities under the integrated
process route have become operational. On 10th May, 2015, Hon''ble
Prime Minister of India dedicated to the Nation, the Modernized and
Expanded IISCO Steel Plant. At Bokaro Steel Plant, the major facility
i.e. the new 1.2 MTPA Cold Rolling Mill has become operational. At
Durgapur Steel Plant, all major facilities like Coke Oven Battery No.
2, Ladle Furnace, Lime & Dolomite Plant and Bloom cum Round Caster
become operational. At Bhilai Steel Plant, facilities like 2nd Sinter
Machine in SP-3 and Coke Oven Battery -11 have become operational.
A capital expenditure of Rs.6,840 crore has been incurred during
Financial Year 2014-15 and capex planned for 2015-16 is Rs.7,500 crore.
Besides the Modernisation & Expansion Programme, the Company regularly
undertakes various Addition, Modification & Replacement (AMR) Schemes
at its Plants, the details of which are given in the Management
Discussion & Analysis (MD&A) Report.
D. HUMAN RESOURCE MANAGEMENT REVIEW
Your Company recognizes contribution of its Human Resources (HR) in
providing it the competitive advantage. The Company has achieved its
present level of excellence through investment in its human resource,
whose skill and knowledge constitute the basis of every initiative  be
it technology or innovation. Developing skills and capabilities of
employees to improve manpower utilization and labour productivity is
the key thrust area of Human Resource Management (HRM) in the Company.
Your Company provides an environment conducive for learning, encourages
adoption of best practices in every area and nurtures creativity and
innovation among employees. HR initiatives in SAIL are focused on
developing team spirit, employee empowerment and their involvement in
various improvement activities. Strategic alignment of Human Resource
Management to business priorities and objectives has facilitated smooth
transition to state-of-the-art technology in the Modernization and
Expansion Projects.
Enhanced Productivity with Rationalized Manpower
Your Company achieved the Labour Productivity (LP) of 302 TCS/Man/Year
in 2014-15. The manpower strength of the Company was 93,352 nos. (as on
31.03.2015) with manpower rationalization of 4,545 nos. achieved during
the year. The enhanced productivity with rationalized manpower could
be achieved as a result of judicious recruitments, building
competencies and infusing a sense of commitment and passion among
employees to go beyond and excel. Trend of enhanced productivity and
manpower rationalization since 2004-05 onwards is depicted below:
Developing Employee Capabilities & Competencies
Your Company believes that training facilitates the development of
employee''s knowledge and skills so that the resultant growth of
competence contributes towards attainment of organisation''s goals and
objectives. SAIL has been making sustained efforts through various
training and development activities with focus on preservation,
transfer and improvement of skills, knowledge, technology in
collaboration with reputed organizations and development of effective
managerial competencies in association with premier institutes.
Preparing employees for tomorrow, for effectively taking up challenges
and discharging new roles and responsibilities was given a major
thrust. Overall, 45,124 employees were trained against target of 40,003
employees during the year on various contemporary technical and
managerial modules.
Harmonious Employee Relations
Your Company has maintained its glorious tradition of building and
maintaining a conducive and fulfilling employee relations environment.
The healthy practice of sorting out and settling issues through
discussions with trade unions/ workers'' representatives enabled the
Company in ensuring workers'' participation at different levels and
establishing a peaceful IR climate. Some of the bipartite forums are
functioning since early seventies and are sufficiently empowered to
address different issues related to wage, safety, and welfare of
workers, arising from time to time thus helping in establishing a
conducive work environment.
Bipartite forums like National Joint Committee for Steel Industry
(NJCS), Joint Committee on Safety, Health & Environment in Steel
Industry (JCSSI), etc. with representation from major central trade
unions as well as representative unions of Plants/ Units meet on a
periodic basis and jointly evolve recommendations/ action plans for
ensuring a safe & harmonious work culture which gets substantiated from
the harmonious Industrial Relations enjoyed over the years by SAIL
Plants/ Units, marked with diverse work culture at multiple locations.
The 9th NJCS agreement was finalised and signed on 1st July, 2014 which
resulted in pay revision of non executive employees w.e.f. 1st January,
2012.
In addition, Quality Circles, Suggestion schemes, Shop Improvement
workshops also offer multiple avenues for enhanced workers''
participation. Workers are also kept abreast of strategic business
decisions and their views are sought thereon through structured
/interactive workshops.
Communication with employees at various levels on a wide range of
issues impacting the Company''s performance as well as those related to
employees'' welfare is done in a structured manner across the Company.
Mass communication campaigns are undertaken at the level of Chief
Executive Officer(s) /Senior Officers of the Plants involving
structured discussion with large group of employees. These interactive
sessions help employees to align their working with the goals and
objectives of the Company, leading to not only higher production and
productivity but also enhance the sense of belongingness to the
employees.
Grievance Redressal Mechanism
Effective internal grievances redressal machinery has been evolved and
established in SAIL Plants and Units, separately for Executives and
Non-executives. Joint grievance committees have been set up at Plants/
Units level for effective redressal of grievances.
SAIL Plants/ Units are maintaining 3 stage grievance handling system
and employees are given an opportunity at every stage to raise
grievances relating to wage irregularities, working conditions, work
assignments, welfare amenities, etc. Majority of grievances are
redressed informally in view of the participative nature of environment
existing in the Steel Plants. The system is comprehensive, simple and
flexible and has proved effective in promoting harmonious relationship
between employees and the Management.
Against 14 staff grievances pending at the start of the year (i.e. as
on 1.4.2014) and 696 staff grievances received during the year, your
Company disposed 703 staff grievances during 2014-15 achieving 99.01%
fulfillment.
Remuneration Policy
In SAIL, pay and other benefits for Executives are based on the
Presidential Directives issued by Ministry of Steel, Government of
India. The last pay revision effective from 01/01/2007 was done in
accordance with Presidential Directives dated 05/10/2009. As per this,
variable pay in the form of Performance Related Pay (PRP) has been
introduced for Executives. The PRP is based on the
performance/profitability of the Company as well as individual
performance rating which is aligned to the organization objectives. In
case of Non-executive employees, the salaries and wages are finalized /
revised in bipartite forum of National Joint Committee for Steel
Industry (NJCS). The last NJCS Agreement was finalized and signed on
01.07.2014, which resulted in pay revision of non- executive employees
w.e.f. 01.01.2012. In terms of notification issued by the Government of
India, the provisions of section 197 of the Companies Act, 2013 are not
applicable to Government Companies. As such, the disclosures to be made
in the Board''s Report on the remuneration of Directors and other
prescribed details are not included in this Report.
Initiatives for Socio-economic Development of SCs /STs & Other Weaker
Sections of the Society
Your Company follows Presidential Directives on Reservation of posts
for Scheduled Castes and Scheduled Tribes in the matter of recruitments
& promotions. As on 31st March 2015, out of total manpower of 93352,
around 16.18% belong to SC category and 13.98% belong to ST category.
SAIL Plants and Units including Mines are situated in economically
backward regions of the Country with predominant SC/ST population.
Therefore, SAIL has contributed to the overall development of civic,
medical, educational and other facilities in these regions. Some of the
contributions are:
-Recruitment of non-executive employees, who comprise around 85% of the
total employees, are carried out mainly on regional level and hence a
large number of SCs/STs and other weaker sections of the society get
the benefit of employment in SAIL.
-Establishment of SAIL Steel Plants in economically backward areas has
given a fillip to the economic activities thus benefiting the support
population providing different types of services.
-Over the years, a large group of ancillary industries have developed
in the vicinity of Steel Plants. This has created opportunities for
local unemployed persons for jobs and development of entrepreneurship.
-For jobs of temporary & intermittent nature, generally contractors
deploy workmen from the local areas, which again provide an opportunity
for employment of local candidates of economically weaker sections.
-Steel Townships developed by SAIL have the best of medical, education
and civic facilities and are like an oasis for the local Scheduled
Castes, Scheduled Tribes and other population who share the fruits of
prosperity along with SAIL employees.
-SAIL has also undertaken several initiatives for the socio- economic
development of SCs/STs and other weaker sections of the society, such
as:
- Special Schools have been started exclusively for poor,
underprivileged children at the five Integrated Steel Plant locations.
The facilities provided include free education, mid-day meals, uniforms
including shoes, text books, stationary items, school bags, water
bottles and transportation in some cases. The schools now provide
education to more than 1600 children.
- SAIL Plants have adopted 15 children from nearly extinct Birhor
Tribe. They are being provided free education, boarding, lodging and
medical facilities for their overall growth.
- No tuition fee is charged from SC/ST students studying in the Company
run schools, whether they are SAIL employees'' wards or non-employees''
wards.
- Free medical health centers for poor have been set up at Bhilai,
Durgapur, Rourkela and Bokaro for providing free medical consultation,
medicines, etc. to the peripheral population mainly comprising of
SC/ST and economically weaker sections of society.
- Villagers are given free treatment- outdoor and indoor -in the
hospitals of SAIL Mines at Kiriburu, Gua and Chiria when recommended by
Manki/ Munda (Local Tribal Village Heads) of the peripheral villages
which mainly helps the ST community people and other economically
weaker sections of society.
Initiatives Towards Propagating Awareness About Reservation Policy
- Internal workshops for Liaison Officers for SC/ST and other dealing
officers of SAIL Plants/Units are conducted at regular intervals
through an external expert to keep them updated on the Reservation
Policy and Presidential Directives for SC/ST and other related matters.
- SAIL has an Apex level identified body namely SAIL SC/ST Employees
Federation to represent the issues of SC/ST employees in a coordinated
manner. A meeting with the Federation is organized on a regular basis.
- Parliamentary Committee on Welfare of Scheduled Castes & Scheduled
Tribes during their study tour to Kochi, Bengaluru, Goa and Mumbai from
4th to 9th February, 2015, examined representation of SCs/STs in
services of SAIL on 6th February, 2015. The meeting was attended by
Chairman, SAIL along with some senior officials. The Committee also met
the representatives of the SAIL SC/ST Employees Federation separately.
ImplementationofRighttoInformationAct,2005
Your Company has been a front runner in implementation of Right to
Information Act, 2005 in true spirit. The Company has designated Public
Information Officers (PIO)/Asstt. Public Information Officers (APIO),
Appellate Authorities and Transparency Officer under Section 5 &
Section 19(1) of RTI Act in each Plant and Unit for speedy replies to
the queries received under the Act.
The provisions under the Act are being complied with by all Plants and
Units of SAIL. All statutory reports including Annual Report are sent
to Ministry of Steel and are also posted on SAIL website. Under Sec.
5(5), all the officers/line managers responsible for providing
information to the PIO, called Deemed PIO, have been made equally
responsible as PIO towards timely providing of information to the
applicant.
All Plants/Units of SAIL have listed 17 manuals and details of
designated officials in line with the provisions of the RTI Act, on
SAIL website. Your Company has also institutionalized an exclusive RTI
Portal for better awareness and knowledge sharing. In all, a total
number of 4496 applications and 659 appeals were received under the RTI
Act, during the Financial Year 2014-15 and all of them have been
disposed off within the timelines. Efforts towards spreading awareness
about RTI amongst general public as also for PIOs/Deemed PIOs continued
throughout the year.
Citizen Charter
SAIL''s Citizen Charter has outlined commitment of SAIL towards its
stakeholders, thereby empowering them to demand better products and
services. The Citizen''s Charter of SAIL may be summarized in four
objectives, as given below:
- Ensuring citizen-centric focus across all its processes by adopting
Total Quality Management principles for improvement of products and
services.
- Ensuring effective citizen communication channels.
- Demonstrating transparency and openness of its business operations by
hosting the Citizen''s Charter on the Corporate website.
- Working towards delight of citizens, by fail-safe processes and in
case of exigencies leveraging its service recovery processes, like
Grievance Redressal, Handling Complaints, etc.
Your Company is totally committed to excellence in public service
delivery through good governance, by a laid down process of identifying
citizens, our commitment to them in meeting their expectations and our
communication to them of our key policies, in order to make the service
delivery process more effective.
Disclosure under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013:
The Company has in place a system (under SAIL Conduct, Discipline and
Appeal (CDA) Rules, 1977) in line with the requirements of the Sexual
Harassment of Women at the Workplace (Prevention, Prohibition and
Redressal) Act, 2013. Complaint Committees have been set up to redress
complaints received regarding sexual harassment. All employees of the
Company are covered under this Policy. The following is a summary of
sexual harassment complaints received and disposed off during the year
2014-15:
- Number of complaints received : 5
- Number of complaints disposed off : 4
E. AWARDS & ACCOLADES WON DURING THE YEAR
Company level
- Your Company has been conferred with "Excellent" MoU Rating for the
year 2013-14 for the 12th consecutive year.
- 3 out of the 33 Prime Minister''s Shram Awards declared for the year
2013 were won by SAIL, involving 3 numbers of employees.
- Out of 28 awards declared, SAIL won 19 Viswakarma Rashtriya Puraskar
involving 105 employees for the performance year 2012.
- Bhilai Steel Plant (BSP), bagged the Prime Minister''s Trophy for the
Best Performing Integrated Steel Plant (ISP) in the Country for the
year 2011-12 declared in 2014-15. Chairman, SAIL and Chief Executive
Officer, BSP received the trophy from Hon''ble Prime Minister, Shri
Narendra Modi at Rourkela on 1st April, 2015.
- SAIL bagged NARAKAS Rajbhasha Shield 2013-14 (1st Prize) for the
"Best Implementation of Official Language" at the 40th Town Level
Meeting & Prize Distribution Ceremony of NARAKAS on 25th February,
2015.
- SAIL won ''Golden Peacock Award'' for ''Corporate Social Responsibility''
for the year 2014 at the 9th International Conference on Corporate
Social Responsibility on 19th January, 2015 at Mumbai.
- SAIL was awarded the "PHD Chamber Good Corporate Citizen Award 2014"
at an award ceremony held on 20th December, 2014 at New Delhi.
- SAIL won ''SCOPE Meritorious Award for Environment Excellence &
Sustainable Development for the year 2012-13''.
The Award was given by Hon''ble President of India, Shri Pranab
Mukherjee, in presence of other dignitaries in a award function held at
Vigyan Bhawan, Delhi on 5th November, 2014.
- The then Chairman, SAIL, Shri C. S. Verma received the IIM JRD Tata
Award for "Excellence in Corporate Leadership in Metallurgical
Industries" for the year 2014 from Hon''ble Minister of Mines & Steel,
Shri Narendra Singh Tomar in a ceremony held at Pune on 14th November,
2014.
- Town Official Language Implementation Committee (PSU), Delhi
spearheaded by SAIL was adjudged First at National Level for
commendable performance in implementing the Official Language Policy
during the year 2013-14. The Award, in the form of Indira Gandhi
Rajbhasha Shield, was given by Hon''ble President of India, Shri Pranab
Mukherjee, in a function organized at Vigyan Bhawan, New Delhi on 15th
November, 2014.
- SAIL won Governance Now PSU Award 2014 under two award categories
viz. IT Adoption in HR and Best HR Practices (Training).
- SAIL won Skoch Renaissance Awards 2014 in the category ''Sustainable &
Balanced Business Performance''.
- SAIL was also conferred with Skoch Order-of-Merit Award in the
following categories:
- Best Project in the Country for Comprehensive Water & Sanitation
Project (a CSR initiative of SAIL / RSP)
- Unit Training System in SAIL
- Environment Management
- SAIL bagged the award for the ''Best in CSR & Sustainability as well
as the Most eco-friendly PSU in the Maharatna Category'' at the 1st
India Today Group PSU Awards-2014 at a function held in Delhi on 21st
August, 2014.
- The in-house Hindi journal of SAIL ''Ispat Bhasha Bharti'' bagged 1st
prize at town level for the best magazine.
- SAIL won BT Star Award, 2014 for Excellence in HR Management.
- The then Chairman, SAIL, Shri C.S. Verma was awarded ''CEO of the
Year'' at the 2014 Platts Global Metals Awards Ceremony held in London
on 21st May, 2014, in recognition of improving the Company''s
operational performance while also demonstrating a strong commitment to
human resource development and corporate social responsibility.
- SAIL won 5th Dalal Street Investment Journal PSU Award 2013 in the
category of Highest Asset Creating Maharatna.
- 5 Quality Circle teams from SAIL involving 26 employees participated
in International Convention on Quality Circle 2014 held at Colombo, Sri
Lanka during 12th -15th October, 2014. Quality Circle Teams from DSP &
BSL won Gold Awards whereas teams of BSP, RSP and RMD have won Silver
Award.
- SAIL has been conferred with the First Award under the category of
Public Manufacturing Organisation (Large) at the 12th National Award
for Excellence in Cost Management by the Institute of Cost Accountants
of India, 2014 on 15th July, 2015.
- Shri Anil Kumar Chaudhary, Director (Finance), SAIL was conferred
with the Best CMA CFO Award-2014 by the Institute of Cost Accountants
of India on 7th July, 2015.
Bhilai Steel Plant
- IIM National Sustainability Award 2013-14 for performance and
achievements accomplished during the Financial Year 2013-14 from IIM,
Kolkata on 14th November, 2014.
- CII - Exim Bank Award 2014 - Commendation Certificate for significant
achievement from CII Institute of Quality on 14th November 2014.
- CII Sustainability Award 2014 for performance and achievements
accomplished during the Financial Year 2013-14 from CII on 19th
November, 2014.
- National Energy Conservation Award 2014 in the integrated steel
sector on the basis of improvement in its energy performance over the
previous year 2012-13.
- Recognized and awarded for the maximum contribution towards ESIC in
the State of Chhattisgarh in a function organized by ESIC on 30th
April, 2014.
Durgapur Steel Plant
- Indira Gandhi Paryavaran Puraskar 2012 from Ministry of Environment &
Forests, GoI for the year 2012-13 on 2nd February, 2015.
- Greentech Environment Award-2015 (Gold) and Greentech CSR Award-2015
(Gold) from Greentech Foundation, Delhi on 28th January, 2015 at
Kolkata for the performance year 2013-14.
- CII-Exim Bank Award for Business Excellence- Commendation Certificate
for significant achievement from CII Institute of Quality on 19th
November 2014 for the performance year 2014.
- Safety Innovation Award from Institution of Engineers for the year
2013-14 on 20th November, 2014.
- Ispat Suraksha Puraskar awarded by JCSSI for the year 2013.
Rourkela Steel Plant
- 1st runner-up award for "Best Overall HR Practices" in 4th ZENITH
Rewards & Recognition Programme organized by NHRD Bhubaneswar chapter
at Bhubaneswar on 19th December, 2014.
- Commendation for "Strong Commitment to HR Excellence" in 5th CII
National HR Excellence Award on 5th December, 2014 at New Delhi.
- BG Deshmukh Special Award for Excellence in CSR-2014 instituted by
Maratha Chamber of Industry and Agriculture, Pune on 16th October,
2014.
Bokaro Steel Plant
- Rajbhasha Karyanvayan Award - Third Prize for outstanding work done
in Rajbhasha in Eastern Region for 2013-14 by Hon''ble Governor, West
Bengal in February, 2015.
- CII (ER) Productivity Award 2014 by CII(ER) in February, 2015.
- Greentech Award (Gold) in the Metal & Mining Sector from Greentech
Foundation, Delhi on 28th January, 2015 at Kolkata for the performance
year 2014.
- CII-ITC Sustainability Award - 2014 for Excellence in Corporate
Social Responsibility on 19th December 2014 at New Delhi.
- IIM SMS DMAG Excellence Award from The Indian Institute of Metals for
outstanding leadership contribution in Iron & Steel Industries in India
on 14th November 2014 for the performance year 2014-15.
- CII-Exim Bank Business Excellence Award - Strong Commitment to Excel
from CII Institute of Quality on 19th November 2014 for the performance
year 2014-15.
- Shri Ashok Kumar, Junior Manager in the Slabbing Mill department of
Bokaro Steel Plant was felicitated with the ''National Brand Ambassador
for Vocational Training'' honour on 16th October, 2014 at the Pandit
Deendayal Upadhyay Shramev Jayate Karyakram at Vigyan Bhavan, New
Delhi. The programme was launched by the Hon''ble Prime Minister, Shri
Narendra Modi in presence of Shri Narendra Singh Tomar, Hon''ble
Minister for Steel, Mines, Labour & Employment and other dignitaries.
Alloy Steels Plant
- First prize for Best Unit in Implementation of Rajbhasha given by
TOLIC, Durgapur.
Salem Steel Plant
- Out of 91 State Shram Awards (Tamilaga Arasin Uyarntha Uzhaipalar
Viruthu) for the year 2010, 2011 & 2012 awarded by Directorate of
Industrial Safety and Health, Government of Tamil Nadu, Salem Steel
Plant bagged 17 awards (18.7%)
- 13th Annual Greentech Safety Gold Award in Metal & Mining Sector for
outstanding achievements in Safety Management for Performance Year
2013-14 awarded by Greentech Foundation.
- JCSSI - Ispat Suraksha Puraskar - 2014 for no fatal accident
(including contract labour) occurred during the calendar years 2012 &
2013.
Raw Materials Division
- Kalta Iron Ore Mines bagged the National Safety Awards (Mines) for
longest accident free period. Hon''ble President of India, Shri Pranab
Mukherjee gave away the awards at the presentation ceremony of the
National Safety Awards (Mines) for the years 2011 & 2012 at Vigyan
Bhawan, New Delhi on 20th March, 2015.
- 1st Pandit Madan Mohan Malaviya Bronze Award 2014 from CSR Times for
its extensive contribution to support the students of disturbed areas.
SAIL Refractory Unit
- SRU received the "Running Trophy" and the "Certificate" on
16th Sept.''2014 by the "NARAKAS".
F. ENVIROMENT PROTECTION AND CONSERVATION
Your Company is committed to improve its environmental footprint and
hence has initiated various activities with an aim to achieve
sustainable solutions. The Company is fully committed to abide by the
Rules, Regulations and the Laws of the land. The Company has
progressively introduced Environment Management System: ISO 14001
certification at most of its steel Plants/ Units and Mines.
Compliance with the relevant environmental laws and effective operation
of the various pollution control facilities are ensured at all the
Plants/Units. Compliance of the relevant environmental laws and the
various clearance conditions are monitored meticulously and quarterly
reports are submitted to the Board of Directors.
During October 2014, a Board Sub-committee (BSC) on Health, Safety and
Environment has been constituted to review the policy, procedures and
systems on these issues and to guide the Company towards adoption of a
holistic approach for improvement. Besides this Apex Level Committee,
other Committees like "Expert Committee on Environment", "Expert
Committee on Water" and "Expert Committee on Material Recovery and
Waste Product Utilisation" are in operation to contribute towards
overall improvement in environment.
The challenges lying before the Company is to achieve 100% solid waste
utilization, zero effluent discharge, bring down CO2 emission at the
level of Global bench-marking, 100% regulatory compliance and go
beyond. Enhancement of environmental awareness and regular monitoring
are being fostered to ensure non-occurrence of any serious
environmental incident.
Improvement in Environmental Footprints and Operational Efficiency
The Company has established a structured mechanism for monitoring the
environmental safe guarding activities by setting up the Environment
Management Division as a nodal agency and Environment Departments at
Plants, Mines and Unit levels. Review of the environmental performance,
including the compliance of Environment Clearance and Consent
conditions, are being carried out regularly through detailed
interactive discussions with the Plants and Units. Concerted efforts
have resulted in achieving major improvements in the following areas:
Particulate Matter (PM) Emission Load has reduced to 0.83 Kg/tcs from
1.11 Kg/tcs in 2010-11, which is a reduction of more than 25% in the
last five years.
Specific water consumption has reduced to 3.66 m3/tcs from 4.06 m3/tcs
in 2010-11, which is a reduction of around 10% in the last five years.
Specific Effluent load has reduced to 0.10 Kg/tcs from 0.15 Kg/tcs in
2010-11, which is a reduction to the tune of 33% in the last five
years.
Specific CO2 emission has reduced to 2.65 T/tcs from 2.87 T/tcs in
2010-11, which is a reduction of 8% over the last five years.
Major Pollution Control projects implemented during the year
-Coal Dust Injection (CDI) facility at BF #2 and augmentation of CDI
facility with BF-3, at DSP
- CDI facility at BF#4 & BF#5 at RSP
- Process ESP of strand#1 and strand#2 of Sinter Plant-1at RSP.
- Dry Fog Dust Suppression System at Hammer Crusher of Coke Oven at
BSL.
- Incinerator for processing of the segregated Bio-medical Wastes (BMW)
at BSL.
Greenery and Eco-restoration
- Green belts act as effective barrier to dust, noise and as sink for
carbon dioxide. Every year, SAIL Units carry out extensive plantation
programmes. During the year 2014-15, more than 2.64 lakhs saplings were
planted in and around SAIL Plants and mines. Since the initiation of
such schemes, a total of more than 186 lakhs saplings have been
planted.
- A project on restoration and rehabilitation of degraded ecosystems is
under execution at Purnapani Limestone Mine, where 190.92 acres of
mined out area has been successfully restored so far to productive
ecosystems by planting more than 3.485 lakhs saplings. During 2014-15,
25,000 saplings have been planted, covering an area of 18 acres, which
includes replacement plantation. Pisciculture had been put into
practice in five abandoned quarries filled with water.
Environmental Management System (EMS) linked with ISO- 14001:2004
During the year 2014-15, the following Units of SAIL have been
recommended for accreditation to EMS-ISO 14001:2004:
- Barsua Iron Ore Mine
- Warehouses of CMO at Delhi and Visakhapatnam Sustainable Development
Projects
- SAIL is executing a Sustainable Development Project on "Biodiversity
Conservation & CO2 Sequestration at Bolani Iron Ore Mine" over and
above the stipulated legal requirements. This three year long
ecological restoration project is in its final year of operations and
is progressing as per schedule. During the year, over 1.36 lakh
saplings of native tree species have been introduced
- In order to maintain the restored ecosystem, SAIL has engaged the
''Centre for Environment Management of Degraded Eco-system'' (CEMDE) for
a period of five years to achieve the objective of Sustainable
Development at Purnapani.
- 160 KW Off Grid PV System has been installed at the Roof Top of
Burnpur Hospital, IISCO Steel Plant.
- For conservation of water and also to minimise pollution from surface
water by reducing discharge into the surrounding environment,
re-circulation of overflow water to the tune of 42.682 lakhs m3 from
Hitkasa Tailing pond of Dalli (Mech.) Mines of BSP was done during
2014-15.
- To increase the life of the tailings pond and to reduce the surface
water pollution, around 1.413 lakh m3 slimes from Hitkasa tailings pond
of Dalli (Mech.) Mines of BSP has been de-silted during the year.
- Bokaro Steel Plant has taken up a project with the South Eastern
Railway (S.E.R.) to conduct a field trial at the Bokaro Rail Yard with
the Weathered LD (WLD) Slag from the Plant. Commencement of field
trial is expected shortly.
- Lab scale study is being conducted at IIT, Kharagpur, for development
of technology for Dry Granulation of LD/BOF Slag and heat recovery.
Scheduled completion of the study is by March, 2016.
- In response to a representation from the major steel manufacturers,
the Bureau of Indian Standard (BIS), New Delhi, has agreed
''in-principle'' to include BF and BOF slag as alternate material
(partial replacement), in place of natural sand, for manufacturing
cement concrete, in the relevant BIS standard (IS:383).
- Bio-sequestration of CO2 Project (Technology Mission-3) under R&D
Master Plan, is being jointly implemented by SAIL and the Tropical
Forest Research Institute (TFRI) at the Rourkela Steel Plant (RSP).
Scheduled completion of the Project is by March 2019.
G. STRATEGIC INITIATIVES OF THE COMPANY
Your Company has adopted a multi-pronged approach that includes organic
growth, brown-field projects, technology leadership through strategic
alliances, ensuring raw material security through acquisition and
development of new mines, diversifying in allied areas, R&D Master Plan
and a Technology Plan. Such a strategy of investing in different areas
will mitigate risk and help in maximizing returns.
Over a span of last few years, SAIL has formed Joint Venture companies
in different areas viz. power generation, rail transportation, slag
cement production, securing supplies of key input raw materials viz.
coking coal (from indigenous as well as imported sources), etc. New
joint venture in the area of production of specialized products to
cater to automotive sector, etc. is being envisaged. The Strategic
Initiatives taken by your Company include the following:
Growth Strategy in Steel: SAIL plans to scale up its production to 50
million tonnes of Hot Metal by 2025-26 which will place the Company
amongst the top global steel producers in the World. The capacities of
Crude Steel and Saleable Steel have been planned at 48 million tonnes
and 46 million tonnes respectively. Further, SAIL will develop a strong
presence in the Value Added Products arena and capacities of the mines
will be increased to take care of higher iron ore needs in line with
increased production as above.
Ultra Mega Steel Project in Bastar District, Chhattisgarh :
A concept has been evolved by Ministry of Steel with the aim to develop
large capacity mega steel projects in the Country, which would help
India in achieving the capacity growth of 300 million tonnes of crude
steel by 2025-26. Towards accomplishing this vision, SAIL would be
participating for setting up of an Ultra Mega Steel Plant (UMSP) of
approximately 6 million tonnes green-field capacity in Bastar district
of Chhattisgarh. "Chhattisgarh Mega Steel Limited" has been
incorporated by SAIL as a Special Purpose Vehicle (SPV) for UMSP in
Chhattisgarh on 20th January 2015. The SPV will induct NMDC as a Joint
Venture partner. In addition, a Mining SPV will be created which will
undertake mineral exploration, mine development and commercial
production of iron ore. A Memorandum of Understanding for setting up
UMSP in Chhattisgarh has already been signed amongst Ministry of Steel,
Government of India, SAIL, NMDC Ltd. and the Government of Chhattisgarh
on 9th May, 2015 in the august presence of Hon''ble Prime Minister of
India.
Development of Rail Corridor from Rowghat to Jagdalpur in the State of
Chhattisgarh:
In a significant move which will bring about socio-economic development
of the backward areas of Bastar region predominantly inhabited by
tribal population in the Chhattisgarh State and further the industrial
progress and mining activities in the region, Government of India has
taken a momentous step to expand the reach of its network in this
backward area meeting the long pending demand of the local population.
A Memorandum of Understanding has been signed amongst SAIL, State
Government of Chhattisgarh, NMDC Ltd. and IRCON International Limited,
for construction of 140 kilometer rail corridor from Rowghat to
Jagdalpur via Narayanpur, Kondagaon in the State of Chhattisgarh.
Automotive Steel Joint Venture in India:
SAIL and ArcelorMittal are in discussions for exploring the possibility
for setting up an automotive steel manufacturing facility under a Joint
Venture (JV) arrangement in India. The proposed JV will construct a
state-of-the-art cold rolling mill and other downstream finishing
facilities in India that will offer technologically advanced steel
products to India''s rapidly growing automotive sector. A MoU in this
regard has been signed between the two companies on May 22, 2015.
Joint Ventures
International Coal Ventures Pvt. Ltd.: In a landmark acquisition of
large coal mine and coal assets overseas by Indian companies,
International Coal Ventures Pvt. Ltd. (ICVL), the joint venture of
SAIL, Coal India Limited, Rashtriya Ispat Nigam Limited, NMDC Limited &
NTPC Limited took over an operating coal mine and coal assets of Rio
Tinto Limited in Moatize Coal basin in Tete province of Mozambique,
with a total coal resource of 2.6 billion tonnes. This acquisition has
been intended to give long term security for supply of a critical raw
material for its Promoter Companies. The operating coal mine at Benga
produces prime hard coking coal / thermal coal, and has a
state-of-the-art wash plant and surface infrastructure with a potential
to expand the raw coal production from the current 5 million tonnes per
annum (Mtpa) to 12 Mtpa.
Rail Transportation: A Joint Venture company between SAIL and RITES
viz. "SAIL RITES Bengal Wagon Industry Pvt. Ltd." has been formed for
fabrication of wagons. Installation of plant and machinery is in
progress. Rehabilitation of Wagons is ready to start and awaiting
Assured Off-take Agreement from Railways.
SAIL SCL Kerala Ltd. : Towards the quest for revival of operations of
the joint venture company formed between SAIL and Government of Kerala
(GOK), a new rolling mill for manufacturing 65,000 tonnes per annum. of
TMT bars has been installed. The Hot Trials of the mill have been
completed. Commercial production is awaited subject to BIS clearance.
Business Excellence Initiatives
Enterprise Scorecard (ESC)
Fourth Enterprise Scorecard (ESC) of SAIL was prepared for the
Financial Year 2014-15 comprising of 82 Strategic Objectives; 16 in
Financial Perspective, 10 in Customer Perspective, 33 in Internal
Business Process Perspective and 23 in Organisational Capability
Building Perspective. Enterprise Scorecard not only brings integration
with Memorandum of Understanding (MoU) with Government of India and
Annual Business Plan (ABP) of the Company, but also facilitates
deployment of the strategy across various leadership levels through
Strategic Objectives and Key Initiatives. Enterprise Scorecard is
deployed downwards through Unit Scorecards, Functional Scorecards and
Departmental Scorecards and addresses the long term and short term
issues.
Excellence Model
Your Company has adopted European Foundation of Quality Management
(EFQM) Model which is implemented in India through CII-EXIM Bank Award
for Business Excellence. Four SAIL Plants, i.e., BSP, DSP, BSL and RSP
participated in the process of CII-EXIM Bank Awards for Business
Excellence 2014. These Plants got following Recognition/ Awards:
BSP - Commendation award for Strong Achievement.
DSP - Commendation award for Strong Achievement.
RSP - Commendation award for strong Commitment to Excel.
BSL - Commendation award for Strong Commitment to Excel.
Total Quality Management (TQM)
Most of our Plants and Units are certified to ISO 9000, ISO 14000,
OHSAS 18000 and SA 8000 Management Systems. During the Financial Year
2014-15, BSP implemented Integrated Management System (IMS) by
integrating ISO 9000, ISO 14000, OHSAS 18000 and SA 8000 Management
Systems while SSP implemented IMS by integrating ISO 9000, ISO 14000
and OHSAS 18000. Lead Auditors were developed for ISO 50000 (Energy
Management System) and ISO 27000 (Information Security System) through
in-house programmes. Following Certifications were achieved during
2014-15:
- ISO 50000 (EnMS) Energy Management System at DSP
- ISO 27000 (ISMS) Information Security Management System at RDCIS
The other ongoing initiatives across organisation are involvement of
employees through 5-S and Quality Circles implementation.
There were 2350 Quality Circles projects implemented during the year.
IT Related Initiatives
Your Company has embraced Information Technology (IT) enabled services,
applications and tools in all its Plants & Units for improvement in
productivity, yield, quality, reduction in operational costs and
improvement in internal & external customer satisfaction.
As a step towards this, Enterprise Resource Planning (ERP) has been
implemented stage wise at 4 out of 5 Integrated Steel Plants i.e.
Bhilai Steel Plant (BSP), Durgapur Steel Plant (DSP), Bokaro Steel
Plant (BSL), Rourkela Steel Plant (RSP) and Central Marketing
Organization (CMO). 100% primary domestic sales are covered through ERP
System. ERP implementation at 5th Integrated Steel Plant i.e. IISCO
Steel Plant (ISP) and ERP implementation at Corporate Office for data
consolidation through integration of all Plants/Units is in progress.
ERP of BSP & BSL has been awarded Customer Centre of Excellence (CCOE).
The Manufacturing Execution System (MES) technology was implemented at
BSP. System has been ISO certified. Its deployment over marketing
network has facilitated customers in placement of optimal orders in
terms of quality, size and quantity.
Electronic facility of receiving online payment for collection of
medical insurance premium from ex-employees of SAIL has been
strengthened and extended to other receivables.
To ensure data & information security, steps have been taken at all
SAIL Plants/Units. DSP and RDCIS has obtained Information Security
Management System (ISMS):ISO certification.
Corporate Communication
The focus of Corporate Communications activities for the year has been
proactive and structured image building exercises of your Company.
Dissemination of information to the desired target audience through
effective communications to stakeholders by means of press releases,
press meets, one on one interaction with media personnel, etc. has
strengthened your Company''s image amongst key stakeholders.
Two prestigious events on Dedication to the Nation of the Modernized &
Expanded Rourkela Steel Plant and IISCO Steel Plant by Hon''ble Prime
Minister, Shri Narendra Modi have further strengthened brand image of
SAIL. These events have featured in all forms of media in India and
abroad such as print, electronic, online and social media (viz. twitter
and Facebook).
The multi-dimensional approach followed by SAIL has ensured that
information relating to it reaches the target audience in a cost-
effective manner. SAIL selectively identified and participated in
specialized exhibitions and events throughout the year. These include
the India International Trade Fair -IITF, Vibrant Gujarat, Indian
Conference of Mining & Metallurgy, Minerals Metals, Metallurgy &
Materials among others.
Your Company also undertakes sponsorship of important events and
promising sports persons. SAIL sponsored Wrestlers -Shri Yogeshwar Dutt
and Shri Sushil Kumar won gold medals for our Country at the
Commonwealth Games held in 2014. Yogeshwar Dutt also won the Gold Medal
at the Asian Games in 2014.
SAIL continued its thrust on reaching out to its target audience both
in rural and urban areas through its radio campaign, advertisements in
print media and through specialized product brochures, etc. SAIL has
also been recognized as an important player in Nation building and is
poised to play an important role in Hon''ble PM''s  "Make in India"
initiative.
In line with the Swachh Bharat Abhiyan initiative by the Hon''ble PM, a
''Swachh SAIL, Sundar SAIL'' campaign was launched and SAIL has also
developed a set of collateral''s such as SAIL Diary & Calendar, Flyers,
Posters, specifically highlighting the importance of Cleanliness
Activities in day to day life.
H. VIGILANCE ACTIVITIES
SAIL Vigilance lays emphasis on preventive and proactive vigilance
activities to curb corruption and malpractices with a view to safeguard
the interest of the Organization and to facilitate a conducive
environment enabling people to work with integrity, efficiency and in a
transparent manner, upholding highest ethical standards for the
Organization. Following activities were undertaken during the Financial
Year 2014-15:
- To increase vigilance awareness amongst employees,
vigilance awareness sessions and workshops were regularly held at
various Plants and Units. A total of 158 workshops involving 4006
participants were organized for enhancing Vigilance Awareness on
Whistle Blower Policy, Lokpal & Lokayukta Act, 2013, Purchase/Contract
Procedures, RTI Act, Conduct, Discipline & Rules, system and procedures
followed in SAIL, etc.
- Periodic surprise checks including joint checks were
conducted regularly in vulnerable areas of the Company. A total of
3174 periodic checks including file scrutiny and Joint Checks were
conducted at different Plants / Units. Saving of approx. Rs. 19.93
Crores accrued from the preventive vigilance activities mainly on
account of these Surprise Checks.
- Vigilance provides vital inputs to the operating authorities for
improving the prevailing systems for bringing about more transparency.
Accordingly, eight major System Improvement Projects (SIPs) were
undertaken at different Plants/Units of SAIL.
- 13 cases were taken up for Intensive Examination at different
Plants and Units. During Intensive Examination, high value procurement
/ contracts are scrutinized comprehensively and necessary
recommendations are forwarded to concerned departments for implementing
suggestions for improvement.
- As decided by the Central Vigilance Commission, Vigilance
Awareness Week was observed in all the Plants and Units of SAIL during
the period 27.10.2014 to 01.11.2014, on the theme of "Combating
Corruption  Technology as an enabler".
During the week, various events including Quiz, Debate & Essay
competition and workshops on revised Purchase/ Contract Procedure, 2014
(PCP-14) were organized across all Plants and Units. Further,
interactive awareness sessions with major customers /stakeholders were
also conducted. On the closing day, Chairman, SAIL released the 12th
issue of ''INSPIRATION'' in-house journal of SAIL Vigilance. Chairman,
SAIL also formally released the revised Purchase / Contract Procedure
of SAIL, 2014 (PCP-14) which has become effective from 01.09.2014.
- The following four (4) thrust areas were identified for SAIL
Vigilance:
i) Increase e-auction (Reverse Auction & Forward Auction) in all
spheres.
ii) Scrutiny of files pertaining to 13 high value projects being
undertaken at various Plants and Units, in line with the Guidelines of
Chief Technical Examiner of CVC.
iii) Scrutiny of the contracts awarded on single tender enquiry
(nomination basis)
iv) Increased surveillance in the areas of receipt, sampling & testing
of high value raw materials and installing auto analyzers & auto
samplers for raw material testing and sampling
- Revision of Purchase /Contract Procedure (PCP) 2009:
After incorporating the concepts of Expression of Interest (EOI) route
& pre-bid discussions for technically complex projects, freezing of
estimates before NIT, etc. along with the other CVC Guidelines issued
relating to tenders and procurement, the revised PCP-2014 was brought
out, which became effective from 1st September, 2014.
- Revision of Standard Bidding Document (SBD) 2009 of SAIL:
After incorporating the suggestions of Vigilance Department amongst
others, the updated SBD, was implemented w.e.f. October, 2014.
- Revision in the list of Sensitive Areas (2009):
The following three areas have been added to the existing list of 22
sensitive areas from 20th June 2014:
i. Corporate Social Responsibility Group.
ii. Contract Labour Cell.
iii. Section of Personnel Department dealing with the Appraisals and
Promotion of Executives
- Revision of SAIL Vigilance Manual 2011:
After incorporating new CVC Guidelines relating to tenders, whistle
blower complaints, disciplinary proceedings, Lokpal & Lokayukta Act
2013 and updating the existing clauses related to sanction of
prosecution, sensitive areas and job rotation, Quality Management
System, etc., SAIL Vigilance Manual - 2015 has been released on 23rd
March 2015.
- Vendors'' Meet:
A Vendors'' Meet was organized on "Implementation of Integrity Pact" on
24.02.2015. The last such Vendors'' meet was organised in the year 2009.
Around 30 renowned Indian and Foreign Vendors for Projects, Corporate
Material Management Group (CMMG) and Coal Import Group (CIG) attended
the programme. Chairman, SAIL, three Independent External
Monitors(IEMs), Functional Directors of SAIL and Chief Vigilance
Officer were present during the meet.
- ''Inspiration- Prerna'', an in-house publication of SAIL Vigilance is
being published regularly. The above publication contains case studies,
articles from the employees, quiz on policy matters, important CVC
circulars etc. to enhance awareness of the readers.
Vigil Mechanism
The Company has adopted Vigil Mechanism for conducting the affairs in a
fair and transparent manner by adopting highest standards of
professionalism, honesty, integrity and ethical behaviour. All
employees of the Company and Directors on the Board of the Company are
covered under this Mechanism. This Mechanism has been established for
employees to report concerns about unethical behaviour, actual or
suspected fraud or violation of Code of Conduct. It also provides for
adequate safeguards against the victimization of employees who avail of
the Mechanism and allows direct access to the Chairperson of the Audit
Committee in exceptional cases.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report covering the performance
and outlook of the Company is enclosed.
AUDITORS'' REPORT
The Statutory Auditors'' Report on the Accounts of the Company for the
Financial Year ended 31st March, 2015 along with Management''s replies
thereon is placed at Annexure-I. The Comments of Comptroller and
Auditor General of India (C&AG) on the accounts of the Company for the
Financial Year ended 31st March, 2015 under section 143(6) of the
Companies Act, 2013 and the Managements replies thereto are placed at
Annexure-II.
COST AUDITORS
Pursuant to the direction of the Central Government for audit of cost
accounts, the Company has appointed M/s. Sanjay Gupta & Associates,
M/s. K.C. Kohli & Co. and M/s. R.J. Goel & Co. as Cost Auditor(s) for
the Financial Year 2015-16.
SECRETARIAL AUDITOR''S REPORT
In terms of the provisions of Section 204 of the Companies Act, 2013,
the Board of Directors have appointed M/s. Agarwal S. & Associates,
Company Secretaries, as the Secretarial Auditor to conduct Secretarial
Audit of the Company for the Financial Year ended on 31st March, 2015.
Secretarial Audit Report issued by M/s. Agarwal S. & Associates is
placed at Annexure -III. With regard to the observation of the
Secretarial Auditor that composition of the Board of Directors of the
Company was not in compliance with Clause 49(II) of the Listing
Agreement, para 3.1.2 & 3.1.4 of the DPE Guidelines on Corporate
Governance and Section 149(4) of the Companies Act, 2013, it is stated
that SAIL is a Government Company and in terms of its Articles of
Association, the Directors on its Board are appointed by Government of
India or by the Board of Directors and Shareholders on nomination by
Government of India. The Company has requested Ministry of Steel,
Government of India for appointment/nomination of requisite number of
Independent Directors on its Board.
CORPORATE GOVERNANCE
In terms of Listing Agreement with the Stock Exchanges, a Report on
Corporate Governance is given at Annexure-IV. A certificate from
Auditors of the Company regarding compliance of conditions of Corporate
Governance is placed at Annexure-V. In terms of the Listing Agreement,
the Board has laid down a Code of Conduct for all Board Members and
Senior Management Personnel of the Company. The Code of Conduct has
been posted on the website of the Company. All the Board Members and
Senior Management Personnel have affirmed compliance with the Code.
Business Responsibility Report
In terms of Circular CIR/CFD/DIL/8/2012 dated August 13, 2012 issued by
SEBI, the Business Responsibility Report describing the initiatives
taken by the Company from Environmental, Social and Governance
perspective is placed at Annexure VI.
Subsidiaries, Joint Ventures and Associates
IISCO-Ujjain Pipe and Foundry Company Limited, a wholly owned
subsidiary of the erstwhile Indian Iron and Steel Company Limited
(IISCO), was ordered to be wound up by BIFR. The Official Liquidator is
continuing its liquidation process. The assets of the Company have been
realized and the settlement of claims is in process.
Your Company has four other wholly owned subsidiary Companies namely,
SAIL Refractory Company Limited (SRCL), SAIL Jagdishpur Power Plant
Limited, SAIL Sindri Projects Limited and Chhattisgarh Mega Steel
Limited. SRCL has taken over the Salem Refractory Unit of Burn Standard
Company Limited on 16th December, 2011 and is operating the same. SAIL
Jagdishpur Power Plant Limited, incorporated for setting up of Gas
based power Plant at Jagdishpur and SAIL Sindri Projects Limited,
incorporated for revival of Sindri Unit of Fertilizer Corporation of
India Limited are yet to commence operations pending relevant
approvals. Chhattisgarh Mega Steel Limited has been incorporated on
20th January, 2015, as a Special Purpose Vehicle for setting up of an
Ultra Mega Steel Plant of 6 Million Tonnes per annum as a green field
steel project under Joint Venture.
The Annual Accounts of the subsidiary Companies and related detailed
information shall be made available to the Shareholders of the holding
and subsidiary companies, seeking such information at any point of
time. Further, the Annual Accounts of the subsidiary companies are
available for inspection by any Shareholder in the Registered Office of
the Company and of the subsidiary companies concerned during the office
hours between 11 AM to 1 PM. A hard copy of the details of accounts of
subsidiaries shall be furnished to the shareholders on receipt of
written request.
During the year, Chhattisgarh Mega Steel Limited was incorporated as a
subsidiary company. Further, your Company sold its entire stake of 26%
in Bokaro Jaypee Cement Limited (BoJCL) on 26th November, 2014 and
consequently, BoJCL ceased to be a joint venture company of SAIL.
Consolidated Financial Statements
Pursuant to provisions of Section 129 (3) of the Companies Act, 2013,
the duly Audited Consolidated Financial Statements are placed at
Annexure-VII. The Statutory Auditors'' Report on the Consolidated
Financial Statements along with the Management''s replies thereon is
placed at Annexure-VIII. The Comments of Comptroller and Auditor
General of India (C&AG) on the Consolidated Financial Statements of the
Company for the Financial Year ended 31st March, 2015 and the
Management''s replies thereto are placed at Annexure-IX. Further, the
statement containing salient features of the financial statements of
the subsidiary, joint venture and associate companies in the prescribed
Form AOC-1 is placed at Annexure -X.
Extract of Annual Return
The Extract of Annual Return in Form MGT 9 as per the provisions of the
Companies Act, 2013 and Rules prescribed therein is placed at
Annexure -XI.
Board Meetings
During the year, 12 meetings of the Board of Directors of the Company
were held, the details of which are given in the Corporate Governance
Report placed at Annexure- IV.
Audit Committee
The Audit Committee of the Board was initially formed by the Company in
1998. The Audit Committee has been reconstituted from time to time and
as on 31.03.2015, it consisted of Dr. Atmanand, Shri J.M. Mauskar and
Shri S.S. Mohanty. During the last year, the Audit Committee met 10
times. The minutes of the Audit Committee meetings are circulated to
the Board, discussed, and taken note of.
Internal Financial Control System
The Company has an internal control system with reference to the
Financial Statements commensurate with the size and nature of its
business. The Audit Committee assists the Board of Directors in
fulfilling its oversight responsibilities by reviewing the Financial
Reports; the Company''s systems of internal controls regarding finance,
accounting and legal compliance that Management and the Board have
established; and the Company''s auditing, accounting and financial
reporting process generally. The Audit Committee reviews reports of the
Internal Auditors, meets Statutory Auditors, discusses their findings,
suggestions and other related matters and reviews major Accounting
Policies followed by the Company. The Audit Committee reviews with
management, the Quarterly and Annual Financial Statements before their
submission to the Board.
The Audit Committee in its meetings with the Company''s Statutory
Auditors also ascertains their views on the adequacy of internal
control systems in the Company and their observations on financial
reports. The Audit Committee''s recommendations are acted upon by the
Management.
Directors'' Responsibility Statement
Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors
state that:
(i) in the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed along with proper explanation
relating to material departures;
(ii) the Directors have selected such Accounting Policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the Financial Year and of the profit or
loss of the Company for that period;
(iii) the Directors have taken proper and sufficient care for the
maintenance of adequate Accounting Records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
(iv) the Directors have prepared the Annual Accounts on a Going-
Concern basis.
(v) the Directors have laid down internal financial control to be
followed by the Company and that such internal financial controls are
adequate and are operating effectively; and
(vi) the Directors have devised proper systems to ensure compliance
with the provisions of all applicable laws and that such systems are
adequate and operating effectively.
Independent Directors Declaration
In terms of section 149(7) of the Companies Act, 2013, necessary
declaration has been given by each Independent Director stating that he
meets the criteria of independence as provided in sub- section (6) of
Section 149 of the Companies Act, 2013.
Particulars of Loans, Guarantees or Investments under Section 186
The details of Loans, Guarantees, Investments given during the
Financial Year ended on 31st March, 2015 are given in Annexure- XII in
compliance with the provisions of Section 186 of the Companies Act,
2013 read with Companies (Meetings of Board and its Powers) Rules,
2014.
Particulars of Contracts or Arrangements with Related Parties Referred
to in Sub-Section (1) of Section 188
All the contracts / arrangements / transactions entered by the Company
during the financial year with related parties were in the ordinary
course of business and on an arm''s length basis. The transactions with
the related parties have been disclosed in the financial statements.
Therefore, particulars of contracts or arrangements with related
parties referred to in Section 188(1) along with the justification for
entering into such contract or arrangement in Form AOC-2 does not form
part of the report.
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
In accordance with the provisions of Section 134(3)(m) of the Companies
Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 the
particulars relating to Conservation of Energy, Technology Absorption
and Foreign Exchange Earnings and Outgo are given at Annexure-XIII.
Risk Management Policy
Your Company had envisaged the need and benefits of the Risk Management
at the enterprise level through a laid down procedure and rules as
early as in 2007. Risks are inherent as a result of the uncertainties
emerging from the business environment in which the Company operates.
It is critical that these risks are addressed by the Company to derive
sustainable value. Consequently, Risk Policy for SAIL was approved by
the SAIL Board in August 2009. The Policy provides guidance for the
management of the business and operational risks across SAIL. In line
with the same, the Enterprise Risk Management System (ERM) was rolled
out in 2009-10 and is now well established in the Company. The ERM in
SAIL focuses on ensuring that risks are identified, evaluated and
mitigated on a regular basis.
Currently, the "Enterprise Risk Management in SAIL"- a well designed,
multi-layered organization structure - exists for efficient monitoring
and mitigation of Risks. The risk management structure in SAIL starts
with the identification of risk at the Unit or at Corporate level
along-with outlining a detailed plan for addressing/ controlling the
risk within specified time schedule and through identified risk owners
and risk champions. At SAIL, Risks have been identified in wide ranging
areas and mitigations plans drawn up to address these risks.
The monitoring of the ERM function in SAIL, under the SAIL Board, lies
with the Audit Committee and the SAIL Risk Management Committee. In
line with the recent changes in the Listing Agreement, setting up of
the SAIL Risk Management Committee ( SRMC) had been approved by the
Board of Directors in December, 2014. The SRMC oversees the risk
management function in SAIL by addressing issues pertaining to policy
formulation as well as evaluation of the risk management function to
assess its continuing effectiveness. It is also to assist the Board in
framing and monitoring the Risk management system for the Company and
guiding the Risk Policy.
Corporate Social Responsibility
Your Company has adopted a balanced approach towards inclusive growth
consistent with socio-economic environment. The Company continued to
focus on helping the downtrodden and the underprivileged with its
development oriented Corporate Social Responsibility (CSR) projects in
the areas of Healthcare, Drinking water, Sanitation, Education, Women
Empowerment, Livelihood Generation, and many more.
Inspired by clarion call of the Hon''ble Prime Minister for construction
of toilets in schools under "Swachha Vidyalaya Campaign", a drive to
promote sanitation and hygiene in remote areas, SAIL has undertaken
construction of toilets in schools without toilets/having dysfunctional
toilets falling within the peripheral areas of SAIL Plants & Units
which have been allocated to SAIL by Ministry of HRD on its website.
In compliance of the provisions of the Companies Act, 2013 and Rules
framed thereunder, a Board level CSR Committee is functioning under the
Chairmanship of an Independent Director with Director (Finance),
Director (Technical) and Director (Personnel) as members. A CSR Policy
for the Company has been formulated with the approval of the Board and
displayed on website of the Company.
In view of changing CSR façade of the Country, SAIL has modified the
CSR focus of the Company to accommodate a few large scale CSR projects
in mission mode which are expected to have major impact on the
Socio-Economic Development of the targeted groups in peripheral areas.
These Mission Projects embark on the focus areas of education,
sanitation, environment conservation, watershed development and skill
development in line with Schedule VII of the Companies Act, 2013.
SAIL is providing specialized and basic healthcare to more than 39.11
million rural people through its well-established 53 Primary Health
Centers, 23 Hospitals, 7 Reproductive and Child Health Centers and 7
Special Hospitals.
Endeavoring to facilitate the free medical and health check-up, path
lab, treatment, medicine, immunization, etc. in remote areas, SAIL
approached the doorsteps of 1.5 lakh underprivileged populace through
its Mobile Medical Units (MMUs)/Ambulances and 2500 health camps in
2014-15. In 2014-15, more than 1 Lakh needy people availed free medical
care including medicines at our exclusive Seven Health centres (Kalyan
Chikitsalaya) for poor.
Over 80 lakh people across 450 villages have been connected to
mainstream India by SAIL since its inception by construction and repair
of roads. Over 10100 water resources have been installed during past
five years thereby providing easy access to drinking water and
benefitting over 43 lakh people living in far-flung areas.
Your Company envisions the aptitude and faculties of the learned,
enlightened citizens who can transform the society. The Company owns
and run over 129 schools in its townships to provide holistic education
to about 60,000 children and is providing assistance to another 629
schools having 95,000 students. Seven Special Schools (Kalyan
Vidyalaya), established at Steel Plants'' locations exclusively for BPL
families, are providing free education, mid-day meals, uniform
including shoes, text books, stationary items, school bags, water
bottles and transportation to around 1600 students. Scholarships to
1670 deserving undergraduate & postgraduate engineering students,
adoption of 152 tribal children in naxal affected areas, nearly extinct
Birhore tribes, sponsoring youths for Industrial Training & Nursing
course, etc. are the major steps taken for uplifting poor, including
OBC, SC, ST, etc. The Company, in association with Akshya Patra
Foundation, is providing mid-day meals to 63,000 students of 570 Govt.
schools every day in and around Bhilai and Rourkela.
In order to bridge the disparity between rural and urban areas and also
for comprehensive development of both physical and social
infrastructure, 79 villages have been developed as "Model Steel
Villages" across the Country (in eight States).
To promote use of renewable sources of energy, Solar street lights have
been installed, Solar Lanterns and smokeless chullahs have been
distributed among the rural people, over 20000 trees have been planted
and maintained at various locations.
In an effort to align the marginalized masses of remote Saranda forest
with the mainstream, SAIL provided ambulances, bicycles, transistors,
solar lanterns and has set up an Integrated Development Centre at Digha
village in Saranda.
SAIL, as a responsible Corporate Citizen, supported the rehabilitation
initiatives for the people affected by Natural Calamities like floods
in Jammu & Kashmir, Phylin cyclone in Odisha, Flash Floods in
Uttarakhand, etc.
Vocational and specialised skill development training targeted towards
sustainable income generation has been provided to 3000 village youths
and 7000 women folks of peripheral villages in 2014- 15, in areas such
as Nursing, Physiotherapy, LMV Driving, Computers, Mobile repairing,
Welder, Fitter & Electrician Training, Improved agriculture, Mushroom
cultivation, Goatery, Poultry, Fishery, Piggery, Achar/Pappad/Agarbati
making, Screen printing, Handicrafts, Sericulture, Yarn Weaving,
Tailoring, Sewing & embroidery, Smokeless chullah making, being a means
to live a dignified life. Vocational Training centre for rural and
unemployed youths  ''Bhilai Ispat Kaushal Kutir'' & Swayamsiddha at
Bhilai, Skill Development and Self Employment Training Institute
(SDSETI) at Durgapur, Garment Technician Training at Salem, JHARCRAFT
centre at Bokaro and Self employment centre "KIRAN" at Kiriburu Ore
Mines are benefitting common masses by way of financial inclusion/
SHG/training for income generation and then empowering them to bond
with mainstream. Over 800 youths have been sponsored for ITI training
at ITCs Bolani & Bargaon and Bokaro Pvt ITI, etc.
Over 20,000 rural youth/school students participated in varied events
organized by SAIL for promoting the local art, culture and sports at
different locations throughout the year. To elucidate Chhattisgarh Lok
Kala Mahotsav, Lok Samskrutik Mahotsav, Gramin Lokotsav, Samvardhan :
Rural Sports events, Gamin Athletics Competition, inter-village sports
tournaments, inter- school girls'' sports events and SAIL Khel Mela,
being the major events organized during 2014-15.
SAIL''s efforts as a responsible corporate citizen in Nation building
have been recognized by various organizations in the form of awards and
accolades during the year such as Golden Peacock Award, PHD Meritorious
Award : ''Best Companies for CSR, 2014''; Skoch Order-of-Merit for the
Skoch Renaissance Award-2014; Good Corporate Citizen Award-2014;
Greentech Gold Award for CSR-2015, etc..
In terms of provisions of the Companies Act, 2013, the Report on
Corporate Social Responsibility in the prescribed format is placed at
AnnexureÂXIV. The reasons for not spending the prescribed amount have
also been disclosed in the Report.
General Disclosures
i. During the year, the Company has not accepted any deposits under the
Companies Act, 2013.
ii. No significant or material orders were passed by the Regulators or
Courts or Tribunals impacting the going concern status and Company''s
operations in future. However, attention of members is drawn to the
statement on contingent liabilities in notes forming part of the
Financial Statements.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
- Shri N.C. Jha and Mrs. Parminder Hira Mathur resigned from the Board
of Directors of the Company w.e.f. 19.09.2014.
- Shri R.S. Sharma and Shri D.K. Mittal ceased to be Director of the
Company w.e.f. 23.09.2014.
- Shri U.P. Singh ceased to be Government Director of the Company
w.e.f. 29.09.2014.
- Dr. Isher Judge Ahluwalia resigned from the Board of Directors of the
Company w.e.f. 10.11.2014.
- Shri Sunil Barthwal has been appointed as Government Drector on the
Board of the Company on 22.12.2014.
- Shri Sujit Banerjee and CA Arun Kumar Srivastava ceased to be
Directors of the Company w.e.f. 15.01.2015.
- Shri Vinod Kumar Thakral ceased to be Government Director of the
Company w.e.f. 12.03.2015.
- Smt. Bharathi S. Sihag has been appointed as Government Director on
the Board of the Company on 16.03.2015.
- Shri H.S. Pati ceased to be Director of the Company w.e.f.
31.03.2015.
- Shri T.S. Suresh ceased to be Director of the Company w.e.f.
31.05.2015.
- Shri CS. Verma ceased to be Chairman & Managing Director of the
Company w.e.f. 10.06.2015(A/N)
- Shri Rakesh Singh, Secretary to the Government of India, Ministry of
Steel assumed Additional Charge as Chairman & Managing Director of the
Company w.e.f. 11.06.2015(F/N).
ACKNOWLEDGEMENT
The Board of Directors wish to place on record their appreciation for
the support and co-operation extended by every member of the SAIL
family. The Directors are thankful to the State Governments,
Electricity Boards, Railways, Banks, Suppliers, Customers and
Shareholders for their continued co-operation. The Directors also wish
to acknowledge the continued support and guidance received from the
different wings of the Government of India, particularly from the
Ministry of Steel.
For and on behalf of the Board of Directors
(Rakesh Singh)
Secretary, Ministry of Steel,
Government of India &
Chairman & Managing Director, SAIL
(Additional Charge)
Place: New Delhi
Dated: 14th August, 2015
Mar 31, 2014
The Members,
The Directors have pleasure of presenting the 42nd Annual Report of the
Company together with Audited Accounts for the Financial Year ended
31st March, 2014.
FINANCIAL REVIEW
Your Company achieved a turnover of Rs.51,866 crore during the Financial
Year 2013-14 (FY 14), which is higher by 5% over the turnover during
the previous Financial Year. The Company registered an increase of
20.6% in its Profit After Tax (PAT), to Rs. 2,616 crore in FY 14 up from
Rs.2,170 crore in Financial Year 2012-13 (FY 13). The net worth of
company improved substantially from Rs. 41,025 crore as on 31st March,
2013 to Rs.42,666 crore as on 31st March, 2014 and this helped in
generation of internal resources for funding expansion plans of
Company.
Higher production and sales along with lower cost of imported coal
helped improve the bottom line, offsetting more than Rs. 1000 crore of
additional wage provision made during the year on account of revision
of wages/perks of non-executives pending w.e.f. 1.1.2012. Profit for
the year includes receipt of Rs.1056 crore from M/s Vale, Australia on
account of a favourable arbitration/court award in case of a commercial
dispute with SAIL. The comparative performance of major financial
parameters during the Financial Years 2013-14 and 2012-13 is given in
Management Discussion and Analysis Report.
Your Company continued its thrust on optimum utilization of funds by
better fund management. This included replacement of high cost short-
term loans with low cost debts, timely repayment of loans including
interest, strategic parking of surplus funds with scheduled banks,
actions for future fund raising etc. to meet our growth objectives.
Further, your Company hedged the foreign currency risk on Buyer''s
Credit and repayment of External
Commercial Borrowings depending on market conditions. The Company had
liquid assets of Rs. 2500 crore as on 31st March, 2014 invested in
short-term deposits with scheduled banks against borrowings of Rs. 25281
crore as on 31st March, 2014. The debt equity ratio of the Company
increased to 0.59:1 as on 31st March, 2014 as against 0.53:1 as on 31
st March, 2013, mainly on account of increase in borrowings during the
year to meet the capital expenditure requirements of the Company.
Capital expenditure of Rs. 9,890 crore was made during the year, which
was higher than the previous Financial Year.
The Company paid Interim Dividend @ 20.20% of the paid-up equity share
capital during the year, which is marginally higher than the total
dividend of 20% paid in FY ''13. The Board has decided to treat this
Interim Dividend as the total dividend for the year 2013-14. A sum of
Rs.264 crore was transferred to the general reserves during the year
(previous year Rs. 163 crore).
Credit Rating
M/s India Ratings & Research Pvt. Ltd. and M/s CARE, RBI approved
credit rating agencies, maintained ''AAA'' ratings indicating the highest
safety, for SAIL''s long-term borrowing programme. The international
borrowings programme of the Company has been rated at ''BBB-'' by M/s
FITCH Ratings and M/s Standard & Poor''s, which is also the sovereign
rating of the country.
PRODUCTION REVIEW
Your Company produced 12.9 million tonnes (MT) of saleable steel in
FY''14, registering an improvement of 4% over FY''13. Production of 14.5
MT of hot metal and 13.6 MT of crude steel was also 1% higher each than
corresponding period of last year (CPLY) respectively. All-time best
production of special quality & value added products of 5.42 MT was
achieved, which was 6% higher than FY''13. Power Plants maintained the
best ever power generation of 699 MW during 2013-14, with a growth of
1% over last year.
During the year SAIL took a major step forward on the modernization &
expansion front, with the new 4060 m3 Blast
Furnace (largest in the country) at Rourkela Steel Plant becoming
operational since August, 2013. It marked a new chapter in the
modernization and expansion of the company. Thereafter, other upcoming
facilities at RSP have also been operationalized. From June, 2014, the
entire integrated process route comprising the new Ore Bedding &
Blending Plant, 360 sq.m. Sinter Plant, the 7 m tall Coke Oven Battery
No.6, the 4060 m3 Blast Furnace No.7, the 3rd BOF, 2500 mm Slab Caster
and the Plate Rolling facility in the New 1.0 Million tonne per annum
Plate Mill are operational at RSP. Work in the finishing mill of the
Plate Mill will be completed shortly. The production from these
facilities is being ramped up. BSP experienced an incidence of gas
leakage in the Pump House of Blast Furnace Gas Cleaning Plant on 12th
June, 2014 resulting in loss of six precious lives. Causes of incident
were thereafter analysed and remedial measures taken. The units were
re-started within 7 days and were stabilised soon.
Research & Development (R&D)
Several initiatives have been undertaken for implementation of the
ambitious R & D Master Plan of SAIL, initiated under three broad
categories namely, Centre of Excellence(CoE) Projects, High Impact
Projects (HIP) and Technology Missions (TM) Projects.
The successes achieved under CoE Projects include, introduction of Roll
Bite Lubrication System in all the finishing stands of Hot Strip Mill
at Bokaro, increase in the average campaign life of Steel ladle in
SMS-II, Bokaro Steel Plant from 80 to 89 heats using in-house SRU (SAIL
Refractory Unit) bricks.
Under High Impact Projects where headway has been made are,
beneficiation of iron ore fines/Slimes, modification in CDI and Coke
Ovens door system, Micro pelletisation of sludge and its re- use in
Sinter Plant. For use of BF slag for road making, studies are being
conducted with CRRI (Central Road Research Institute).
The Technology Missions being pursued by your Company are mainly, thin
strip casting and CRGO Steel production for which modalities for
technology transfer are being worked out.
Development of New Products
Your Company is proud to be a part of India''s Defence Indigenisation
initiatives, wherein its steel plants at Bhilai and Rourkela had
jointly developed and supplied DMR-249 grade steel for India''s first
indigenously developed aircraft carrier, "Vikrant". Maintaining this
fervour for continuous improvement, your Company has developed several
new products during the year, further enhancing its extensive product
portfolio. The new products developed at different Plants are as
follows:
- Bokaro Steel Limited and Research and Development Centre for Iron and
Steel (RDCIS) have jointly developed a Super Formable/High Strength
Formable Steel specifically designed for producing cylinders in various
shapes to service the export market. The new grade of steel will bring
about more than 15% reduction in blank cylinder weight leading to a
significant reduction in both manufacturing costs as well as the cost
incurred in transportation and handling.
- Bhilai Steel Plant has developed High Toughness Corrosion Resistant
Rails to provide improved hardness and elongation and better fracture
toughness in rails supplied to Indian Railways.
- Durgapur Steel Plant has produced Aluminium killed IS 2062 E 410
blooms to cater to the latest trend of using high strength steel
members in electrical transmission towers to reduce weight and improve
cost effectiveness.
- SAIL has also introduced Earthquake resistant Fe 415S and Fe 500S
grade TMT rebars complying with the IS 1786 standards, leading to TMT
bars with better ductility and toughness as compared to ordinary TMT.
Raw Materials
During Financial Year 2013-14, total requirement of iron ore was met
from captive sources. The Company''s captive iron ore mines produced
about 25.32 million tonnes (MT). However, in case of coking coal,
around 18% requirement was met from indigenous sources (Coal India
Limited & captive sources) and balance through imports (11.36 MT).
During 2013-14, production in captive collieries of the Company was
about 0.69 million tonnes, out of which 0.58 million tonnes was raw
coking coal and balance 0.11 million tonnes of non-coking coal. In case
of fluxes, around 1.13 million tonnes of limestone and 1.05 million
tonnes of dolomite was produced resulting in total production of 2.18
million tonnes fluxes from captive sources. For thermal coal, your
Company depends entirely on purchases from Coal India Limited except
small quantity produced from captive mines.
During 2013-14, production at Gua Iron Ore Mines resumed on 12th April,
2013, after a gap of about two years, after obtaining forest and
environment clearance from Ministry of Environment & Forest (MoEF),
Government of India (GoI). Further, on 4th March, 2014,
MoEF, GoI granted Stage-I forest clearance for additional diversion of
361.295 ha of forest land in Durgaiburu lease of Gua Mine, thereby
making total diversion as 635.986 ha. Grant of the forest clearance has
paved the way for capacity expansion of the Gua Mines from present
level of 2.4 million tonnes per annum to 10 Million tonnes per annum.
Letter of Acceptance (LoA) has been placed for main package of capacity
expansion project.
Approval of Odisha Govt. on the report of the Technical Committee
regarding status of Karo-Karampada Elephant Corridor, in context of 5.1
Sq. Mile lease of Bolani Mines in Feb''14, paved the way for continued
operations in core iron ore bearing area of the lease and capacity
expansion of Bolani Mine to 10 Million tonnes per annum (MTPA).
For ensuring regular supplies of iron ore, capacities of existing iron
ore mines are being expanded and new iron ore mines are being
developed. Process for selection of Mine Developer-cum-Operator for
development of Rowghat and Chiria iron ore mines has been initiated.
In addition, new iron ore deposits in the States of Rajasthan,
Chhattisgarh, MP, Maharashtra, Odisha and Karnataka are being explored.
In this regard, Ministry of Mines, GoI, vide order dated 2.9.2013
accorded its approval for grant of mining lease for iron ore associated
mineral over 871.38 ha in village Dhul Khera, district Bhilwara,
Rajasthan in favour of SAIL for a period of 30 years.
Efforts are being made for allotment of new coking coal and thermal
coal blocks under Government dispensation route.
Hon''ble Supreme Court in its judgement passed on 16th May, 2014 in
respect of the PIL regarding illegal mining in Odisha has expressed
that in respect of mines where second and subsequent renewals are
pending with State Government, the mining operations cannot be allowed
without any express orders passed by State Government in terms of
Section 8(3), MMDR Act, 1957. In view of this order, the mining
operations of the mines of SAIL in Odisha viz. Bolani, Barsua & Kalta
running under the deemed extension provisions of Rule 24(A)(6) of MCR,
1960 were suspended by Odisha Government during the period 17th May,
2014 to 31st May, 2014, till the required express orders were issued by
State Government of Odisha.
Power Production and Consumption:
SAIL met about 67% of its total average power requirement of 1050 MW
through its own captive generation and the balance 33% power was
purchased from outside, mainly from grid utilities. With an aim to
reduce cost, the opportunity of cheaper power available in the Power
Exchange was utilised and total 19.7 MU was purchased for Salem Steel
Plant (SSP) from Indian Energy Exchange. This practice will be
continued.
The practice of gainful utilisation of surplus captive power available
at one Plant through wheeling to other Plants was also continued during
the year and about 25 MU was wheeled to Visvesvaraya Iron & Steel Plant
(VISL) in Karnataka from Bhilai Steel Plant (BSP) in Chhattisgarh
resulting in substantial cost benefits.
With an aim to ensure the availability of enhanced requirement of
reliable power after the completion of ongoing expansion, your Company
is in the process of augmenting its captive generation facilities and
Transmission & Distribution infrastructure. Power receiving substation
at Rourkela Steel Plant (RSP) was upgraded to 220 KV GIS during the
year and similar projects are under execution at Bokaro Steel Plant
(BSL) and Chandrapur Ferro Alloy Plant (CFP). Additional captive
generation capacity of 216 MW is under installation at various SAIL
Plants. In addition, expansion of capacity by 1x250 MW at RSP and 2x20
MW at Durgapur Steel Plant (DSP) is being carried out by NTPC-SAIL
Power Company Private Limited (NSPCL), a JV Company of SAIL and NTPC.
SALES AND MARKETING REVIEW
Notwithstanding the challenging market conditions during the year in
which the demand of steel in the country remained suppressed, your
Company achieved a total sales volume of 12.07 million tonnes during
the Financial Year 2013-14 registering a growth of 8.6% over Financial
Year 2012-13. Product categories where major growth were recorded in
domestic sales included: Plates: 12.7%, HR Coils: 7.8%, GP/GC: 23%.
The Company exported 0.47 million tonnes of steel during FY''14,
registering a growth of 28% over the previous year. New export markets
were developed, such as Saudi Arabia for Blooms, Canada for Plates and
Indonesia and Thailand for Slabs.
The Company''s Rural Dealer network was further expanded to 1004 number
of Rural Dealers, as on 31st March, 2014. With this, total number of
SAIL dealers stood at 2,948 as on 1st April, 2014. Records Retail sales
were achieved at 0.62 million tonnes, registering an increase of 14%
over 2012-13.
GROWTH PLAN
Keeping in view the projected demand for steel in the country, your
Company is currently implementing growth plan to enhance its Hot Metal
production from the level of 14.4 million tonnes during the Financial
Year 2013-14 to 23.5 million tonnes after expansion. The growth plan,
besides targeting higher production, also addresses the need for
eliminating technological obsolescence, achieving energy savings,
enriching product-mix, reducing pollution, developing mines and
collieries, introducing customer centric processes and developing
matching infrastructure facilities.
To maintain its current dominance in the domestic market and to meet
the future challenges, your Company is working on a long- term
strategic plan ''Vision 2025'', which will steer the Company towards a
target of 50 million tonnes of Hot Metal production, thereby meeting
the strategic objectives of achieving leadership in Indian Steel sector
and a position amongst the top Steel companies globally.
MODERNISATION AND EXPANSION PROGRAMME
Your Company is implementing Modernisation & Expansion Plan of its five
Integrated Steel Plants at Bhilai, Bokaro, Rourkela, Durgapur &
Burnpur. The modernization & expansion plan envisages increase in
production capacity of Hot Metal from 14.4 million tonnes per annum to
23.5 million tonnes per annum.
Orders for about Rs. 59,288 crore have been placed (till Mar''14) under
the current Modernisation & Expansion Plan of SAIL and a capital
expenditure of Rs.53,270 crores has been made under this program till
Mar''14. Facilities of about Rs.20,000 crore have been already
operationalized till Mar''14. This includes facilities at SSP, Raw
Material Handling Plant, Sinter Plant, COB-11 Complex, Wire Rod Mill at
ISP and New Sinter Plant-3 at RSP.
Further, during FY''14, production commenced from several new facilities
such as New Ore Bedding & Blending Plant, New Coke Oven Battery No.6
Complex including Coal Handling Plant, 3rd Single Strand Caster at RSP;
Coke Oven Battery No.2 at DSP; 2nd Sinter Machine in SP-3 at BSP. A
major achievement was recorded with the new 4060 m3 blast furnace
(largest in the country) at RSP operationalized from August''13. The
production has been ramped up from the furnace since then.
SAIL Board accorded ''in-principle'' approval during the year for various
new Projects with an estimated total outlay of around Rs. 7,862 crore
during the year.
A capital expenditure of Rs. 9,890 crore was incurred during the
Financial Year 2013-14 on this account and capex planned during 2014-15
is Rs. 9,000 crore.
The details of the Additions, Modification & Replacement (AMR) Schemes
under implementation are given in the Management Discussion & Analysis
(MD&A) Report.
HUMAN RESOURCE MANAGEMENT REVIEW
Your Company recognizes contribution of its Human Resources (HR) in
providing the competitive advantage. SAIL has achieved its present
level of excellence through investing in its human resource, whose
skill and knowledge constitute the basis of every initiative  be it
technology or innovation. Developing skills and capabilities of
employees to improve manpower utilization and labour productivity is
the key thrust area of Human Resource Management (HRM) in SAIL.
Enhanced Productivity with Rationalized Manpower
Your Company achieved the highest ever Labour Productivity (LP) of 278
tonnes of crude steel (TCS)/Man/Year in 2013-14. The manpower strength
of SAIL was 97897 nos. (as on 31.03.2014) with manpower rationalization
of 3981 nos. achieved during the year. The enhanced productivity with
rationalized manpower could be achieved as a result of judicious
recruitments, redeployment strategies, multi-skilling, building
competencies and infusing a sense of commitment and passion among
employees to excel. Trend of enhanced productivity and manpower
rationalization since 2003-04 onwards is depicted below:
Developing Employee Capabilities & Competencies
In order to develop its human resources for harnessing their potential
and for according ample opportunity to employees for realizing
individual as well as organizational goals, your Company has been
making sustained efforts through various training and development
activities with focus on preservation of skills, transfer of skills and
knowledge, training in specialized/advanced skills and technology in
collaboration with reputed organizations and development of effective
managerial competencies through association with premier institutes.
Preparing employees for tomorrow, for effectively taking up challenges
and discharging new roles and responsibilities was given a major
thrust. Overall, 47187 employees were trained against target of 41340
employees during the year on various contemporary technical and
managerial modules.
Harmonious Employee Relations
- Your Company has a glorious tradition of conducive and fulfilling
employee relations environment. The healthy practice of settling the
issues through discussions with trade unions/workers'' representatives
enabled workers'' participation at different levels and facilitated in
establishing a peaceful IR climate. The Company has an established
system of worker''s participation at different levels right from
National level upto Shop-floor level. Some of these forums are
functioning since early seventies and are sufficiently empowered to
address different issues related to wage, safety, and welfare of
workers, arising from time to time thus helping in establishing a
conducive work environment.
- Bipartite forums like National Joint Committee for Steel Industry
(NJCSI), Joint Committee on Safety, Health & Environment in Steel
Industry (JCSSI) etc. with representation from major central trade
unions as well as representative Unions of Plants/Units meet on a
periodic basis and jointly evolve recommendations/ action plans for
ensuring a safe & harmonious work culture which gets substantiated from
the harmonious Industrial Relations enjoyed over the years by SAIL
Plants/Units, marked with diverse work culture at multi-locations.
- In addition, Quality Circles, Suggestion Schemes, Shop specific
Performance Improvement Workshops also offer multiple avenues for
enhanced workers'' participation. Workers are also kept abreast of
strategic business decisions and their views sought through
structured/interactive workshops.
- Communication with employees at various levels concerning wide range
of issues impacting the Company''s performance as well as those related
to employees'' welfare is carried out in a structured manner across the
Company. Mass communication campaigns are undertaken at the level of
Chief Executive Officers (CEO)/Senior Officers'' of the Plants involving
structured discussion with large group of employees. These interactive
sessions help employees to align their working with the goals and
objective of the Company leading to higher production & productivity
and enhanced employee engagement.
Grievance Redressal Mechanism
- Effective internal grievances redressal machinery exists in SAIL
Plants and Units, separately for executives and non- executives. The
grievance procedure in SAIL has been evolved after sustained
deliberations and involvement of employees, trade unions and
associations. Joint grievance committees have been set up at Plant/Unit
level for effective redressal of grievances.
- The grievances are dealt through a 3 stage grievance handling system
and employees are given an opportunity at every stage to raise
grievances relating to wage irregularities, working conditions,
transfers, leave, work assignments and welfare amenities etc. Majority
of grievances are redressed informally in view of the participative
nature of environment existing in the steel plants. The system is
comprehensive, simple and flexible and has proved effective in
promoting harmonious relationship between employees and management.
- There were 44 grievances pending for redressal as on 31.03.2013.
Number of grievances received during the period from 01.04.2013 to
31.03.2014 were 1127. During the year, 1157 grievances were disposed
off and 14 grievances were pending for redressal as on 31.03.2014.
INITIATIVES FOR SOCIO-ECONOMIC DEVELOPMENT OF SCs /STs and OTHER WEAKER
SECTIONS OF SOCIETY
Your Company follows Presidential Directives on Reservation for
Scheduled Castes (SCs) and Scheduled Tribes (STs) in the matter of
recruitments & promotions. As on 31st March, 2014, out of total
manpower of 97897, 15.95% belong to SC category and 13.77% belong to ST
category.
SAIL steel plants and units including mines are located in economically
backward regions of the country with predominantly SC/ST population.
SAIL has contributed to the overall development of civic, medical,
educational, recreational and other facilities in these regions.
SAIL has undertaken several initiatives for the socio-economic
development of SCs/STs and other weaker sections of the society which
are mainly as under:
- No tuition fee is charged from SC/ST students studying in the
Company run schools, irrespective of whether they are SAIL employees''
wards or non-employees'' wards.
- Free medical health centres for poor have been set up at Bhilai,
Durgapur, Rourkela, Bokaro, Burnpur (Gutgutpara) providing free medical
consultation, medicines, etc. to the peripheral population mainly
comprising of SC/ST and weaker sections of society.
- SAIL Plants have adopted 15 children from nearly extinct Birhor
Tribe. They are being provided free education, boarding, lodging and
medical facilities for their overall growth.
- Villagers are given free outdoor and indoor treatment in the SAIL
hospitals located at Kiriburu, Gua & Chiria Mines after recommendations
by Manki / Munda (Local Tribal Village Heads) of the peripheral
villages.
Initiatives towards propagating awareness about Reservation Policy
- Internal workshops for Liaison Officers for SC/ST and other dealing
officers of SAIL Plants/Units are conducted at regular intervals
through an external expert to keep them updated on the reservation
policy for SC/ST and other related matters.
- A meeting with SAIL SC/ST Employees'' Federation under the
Chairmanship of Director (Personnel) was organized on 18th June, 2013
at Rourkela. Federation members were apprised about the position and
the challenges faced by the Company. Meeting was followed by a two-day
workshop on reservation matters for the members of the Federation.
- A Workshop on reservation for SC/ST/OBC/PWD was organized on 20th and
21st of June, 2013 at Rourkela. The workshop was attended by 40
executives from different Plants and Units of SAIL and it has assisted
in disseminating the nuances of implementation of guidelines on
reservation policy.
- Dr. Rameshwar Oraon, Hon''ble Chairperson, National Commission for
Scheduled Tribes visited RSP during 9th -11th September, 2013 and
reviewed implementation of Reservation Policy in respect of STs. He
appreciated the efforts of SAIL/RSP towards the overall development of
peripheral population which predominantly comprises of SC/ST.
IMPLEMENTATION OF RTI ACT, 2005
Your Company has been a front runner in implementation of Right to
Information Act, 2005 in true spirit. The Company has designated Public
Information Officers(PIO)/Asstt. Public Information Officers (APIO),
Appellate Authorities and Transparency Officer under Section 5 &
Section 19(1) of RTI Act in each Plant and Unit for speedy redressal of
the queries received under the Act.
The provisions under the Act are being complied with by all Plants and
Units of SAIL. All statutory reports including Annual Report are sent
to Ministry of Steel and are also posted on SAIL website. Under Sec.
5(5), all the officers/ line managers responsible for providing
information to the PIO, called Deemed PIO, have been made equally
responsible as PIO towards timely providing of information to the
applicant.
All Plants/Units of SAIL have listed 17 manuals and details of
designated officials in line with the provisions of the RTI Act has
been uploaded on SAIL website. Your Company has also institutionalised
an exclusive RTI Portal for better awareness and knowledge sharing. In
all, a total number of 4940 applications and 942 appeals were received
under RTI Act, during the Financial Year 2013-14 and all of them have
been disposed off within the timelines. Efforts towards spreading
awareness about RTI amongst general public as also for PIOs/Deemed PIOs
continued throughout the year.
AWARDS &ACCOLADES WON DURING THE YEAR
- Your Company has been conferred with "Excellent" MoU Rating for the
year 2012-13 for the 11th consecutive year.
- Chairman, SAIL has been adjudged ''CEO of the year'' by Platts at the
2014 Platts Global Metal Award.
- SAIL employees won 18 out of 28 Viswakarma Awards declared in 2013,
which is the highest for any organization amongst both private and
public sector. In terms of number of employees, 76% awardees in the
country were from SAIL.
- 6 out of 16 Shram Awards declared in the country in 2013 for Public
Sector were won by SAIL employees. This was also the highest number for
any organization amongst both private and public sector. In terms of
number of employees, 50% awardees in the country were from SAIL.
- In the international Quality Meet at Taipei, Taiwan during October,
2013, 5 Quality Circle teams consisting of 29 SAIL employees won Gold
Medals.
- BSP/SAIL was awarded the prestigious PM''s trophy for the Best
integrated Steel Plant (2011-12) for the 11th time (out of 20 times
awarded).
- SAIL bagged Indira Gandhi Rajbhasha Shield for best implementation of
official language in ''A'' (Hindi-speaking) region by Ministry of Home
Affairs, Government of India. This award was conferred by Hon''ble
President of India on Hindi Diwas i.e. 14th Sept''13.
- SAIL bagged the Gold Trophy for "SCOPE Meritorious Award for
Environmental Excellence & Sustainable Development" for the year
2012-13.
- SAIL was conferred with ''Employer Federation of India National Award
2013'' for Excellence in Industrial Relations at Mumbai on 25th October,
2013.
- SAIL has been awarded with ''Commendation Certificate for Strong
Commitment to HR excellence'' by CII in the 4th CII National HR
Excellence Award 2013 held on 24th September, 2013 at New Delhi.
- Top prize in the ''National Energy Conservation Awards 2013'' was
awarded by Hon''ble President of India Shri Pranab Mukherjee on 16th
December, 2013 in recognition of ''Systematic and serious efforts made
by BSP for efficient utilization and conservation of energy during the
last two years''.
- Town Official Language Implementation Committee (NARAKAS), PSU-Delhi,
under the Chairmanship of SAIL has been awarded the Ist prize for the
best performance in implementation of Rajbhasha in northern region. The
award was presented by Hon''ble Governor of Punjab Mr. Shivraj Patil on
31st March, 2014 at Chandigarh.
- Ispat Rajbhasha Shield (Ist prize) awarded by Hon''ble Minister of
Steel on 24th February, 2014 at Lucknow for best implementation of
Official Language in SAIL.
- In recognition of excellent implementation of Official Language in
SAIL, NARAKAS Rajbhasha Shield (IInd prize) was awarded by Secretary,
Rajbhasha, Govt of India on 21st February, 2014 at New Delhi.
- Ispat Bhasha Bharati, the Hindi House Journal of SAIL has been
adjudged as the best magazine among all PSUs for the year 2012-13 by
Town Official Language Implementation Committee, Delhi on July 29,
2013.
- India Pride Award 2013-14 for Excellence in CSR under Central Public
Sector Undertakings was awarded by Union Minister of Human Resource
Development on 19th December, 2013 at New Delhi.
- ''Company with Best CSR & Sustainability Practices Award - 2013''
conferred upon SAIL by Asian Centre for Corporate Governance &
Sustainability.
- SAIL won the ''ICC PSE Excellence Awards 2013'' under Corporate Social
Responsibility & Sustainability in Maharatna & Navratna Award Category.
The award was conferred upon SAIL by Advisor to the Prime Minister and
Secretary, DPE on 16th December, 2013 at New Delhi.
- ''SKOCH Corporate Leadership trophy'' was awarded to Chairman, SAIL by
Union Finance Minister in the 34th SKOCH Summit held on 12th November,
2013 at New Delhi.
- SAIL won ''SKOCH Order-of-merit Award'' in 3 award categories i.e. HRD,
Environment Management and Sustainability on 11th November, 2013 at New
Delhi.
- Jury award for ''Lasting Impact on Indian Economy'' at Governance (Now
PSU Awards-2013) conferred upon SAIL
Chairman by Union Minister of Heavy Industries, Sh. Praful Patel on
July24, 2013 at New Delhi.
- SAIL bagged ''e-INDIA PSE Awards-2013'' in the field of Education for
the project "Special Schools for the Underprivileged" on 23rd July,
2013.
- SAIL has been awarded "Responsible Business Awards-2013" in the
category ''CSR Leadership Award'' by World CSR Day in June, 2013.
- Chairman, SAIL has been conferred with ''Star PSU CMD of the year
Award'' for outstanding performance under the Maharatna category in
BT-Star PSU Excellence Awards-2013.
- SAIL has won ''Randstad Award 2013" at Bangalore on 18th April, 2013.
- SAIL bagged two prizes in Regional Rajbhasha Conference held by MoH
in Chandigarh on 5th June, 2013; one for best implementation of
Rajbhasha at regional level and another for conducting the activities
of the NARAKAS in excellent manner.
Bhilai Steel Plant
- INSAAN Award  First prize for "Excellence in Suggestion Scheme"
(Theme: Institutionalizing innovation) for the year 2013.
- BSP, SAIL won ''Commendation Certificate'' for significant role played
in promoting Business Excellence in India for the year 2013 in the 21st
CII National Quality Summit at Bangalore on 8th November, 2013.
- Nandini Mines of BSP won 5 prizes for Mineral conservation and
Environment.
- Greentech Environment Award (Gold) for the year 2012-13 by Greentech
Foundation.
- Bhilai/Durg TOLIC won first prize in the central region for best
implementation of Rajbhasha during 2012-13 by Rajbhasha Deptt. Central
Region.
- Golden Peacock Sustainability Award for sustainability initiatives
during Assessment Year 2012-13 by Institute of Directors  New Delhi.
- ''IIM National Sustainability Award'' for 2012-13 by Indian Institute
of Metals, Kolkata.
Bokaro Steel Plant
- BSL was conferred with Commendation for Strong Commitment to Excel by
CII-Exim Bank.
- CII (ER) Productivity Award 2013-14 in Group ''C'' by CII (ER).
- Second prize for implementation of Rajbhasha Hindi in ''D'' Category
States in Eastern Region by Deptt. of Official Languages, Govt. of
India in March 2014.
- Greentech Environment Award (Gold) and Greentech CSR Award (Silver)
for the year 2012-13 by Greentech Foundation.
Durgapur Steel Plant
- DSP was conferred with Commendation for Strong Commitment to Excel by
CII Exim Bank.
- Certificate of Merit awarded to DSP by CII Eastern Region for Energy
Conservation
- Greentech Environment Award (Gold) and Greentech CSR Award (Silver)
for the year 2012-13 by Greentech Foundation.
- Greentech Safety Award 2013 (Silver) for year 2012-13 by Greentech
Foundation, New Delhi.
- Srishti Good Green Governance Award 2012 for Environment (Runner up)
by Srishti Publications, New Delhi for the year 2012-13.
- ''Commendation Certificate'' under the ''Large Scale Manufacturing Â
Metallurgical'' category of Rajiv Gandhi National Quality Awards, 2011
on 26th April at New Delhi.
- Greentech HR Award 2013 (Silver) for training excellence at 3rd
Annual Greentech HR Awards ceremony held at Goa.
Rourkela Steel Plant
- Award in three categories viz. Best CSR Practices, Women''s
Empowerment and Support & Improvement in Quality of
Education was awarded to RSP at the World CSR Congress & World CSR Day
held at Mumbai in Feb.''14 during Global CSR Excellence and Leadership
Award Presentation Ceremony.
- Certificate of Commendation was awarded to RSP in the ''CII ITC
Sustainability Award 2013'' for significant achievement in the journey
towards Sustainable Development.
- Greentech Environment Award (Gold) for the year 2012-13 by Greentech
Foundation at Chandigarh on 29th-30th January, 2014.
- Golden Peacock Environment Management Award 2012.
- CII-EXIM Bank Award 2012-13 for strong commitment towards excellence
in November, 2013.
- CSR Leadership Award in the Think CSR Forum jointly organized by
Telfa''s, the Times of India and Think Foundation in August, 2013.
- Champion''s Award for Employee Engagement in June, 2013 by INSAAN.
- Srishsti Good Green Governance Award, 2011 received 4th times in a
row in June''13.
- Ispat Suraksha Puraskar-2010 for no fatal accident in two areas,
namely, Coal, Coke & Chemicals Zone and the Blast Furnace, Slag
Granulation Plant, Sinter Plants & Raw Materials Department Zone by
Joint Committee on Safety, Health and Environment of the Steel Industry
in June, 2013
Raw Materials Division
- Greentech CSR Award (Gold) was awarded to RMD for the year 2012-13 by
Greentech Foundation at Chandigarh on 29- 30th January, 2014.
- Quality circle team of Bolani Ores Mines bagged the Quality Circle
Award at Taipei, Taiwan in October, 2013 for its innovative project on
''Eliminating overloading problem of conveyor LC-2 at Bolani Ore Mines
- Barsua Iron Mines was awarded with 2nd Prize in Use of Mechanized
Beneficiation Equipments and 3rd Prize in SAIL''s in house magazine
Ispat Bhasha Bharti awarded Rajbhasha Shield in a function of TOLIC in
New Delhi, where Chairman SAIL Mr CS Verma and Ms Nita Chowdhury,
Secretary (Rajbhasha), Govt of India, honouring senior Hindi writer and
critic Professor Kedarnath Singh with NARAKAS Sahitya Samman
Publicity & Propaganda in the Mines Environment & Mineral Conservation
Week 2013-14
Alloy Steels Plant
- Greentech Environment Award (Silver) was won by ASP for the year
2012-13 by Greentech Foundation at Chandigarh on
29th-30th January, 2014.
Salem Steel Plant
- 26 employees of Salem Steel Plant have won State Shram Award
announced by Directorate Safety and Health, Govt. of Tamil Nadu
recognizing outstanding suggestions implemented in the work area. SSP
also bagged 3 safety awards.
- SSP won National Sustainability Award (Second Prize) for the year
2012-13 from Indian Institute of Metals, Kolkata amongst the Secondary
Steel Plants/Alloy Steel Plants category consecutively for the 10th
time and 17th time since inception.
SAIL Refractory Unit
- 2nd Prize in Official Language Implementation in Eastern Region.
CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT
Steel Authority of India Limited - the Maharatna Steel Company, has
adopted a balanced approach towards inclusive growth, consistent with
socio-environment. Your Company, during 2013-14, continued to focus on
helping the downtrodden, the underprivileged with its development
oriented CSR projects in the area of Medical and Healthcare, Education,
livelihood generation etc.
Specialized and basic healthcare facilities either completely free or
at very nominal charges are being provided to needy and underprivileged
living in the vicinity of Pants/Units through 57 Primary Health
Centres, 21 Hospitals, 7 Reproductive & Child Health Centres and 7
Super-Specialty Hospitals created by SAIL. More than 38.61 million
people have benefited so far by availing the healthcare facilities
being provided by SAIL.
Seven health centres (Kalyan Chikitsalaya) have been established
exclusively for BPL families at Plants location which provide free OPD
facilities & medicines to poor and needy families. Over 90,000 people
were treated at these Kalyan Chikitsalayas in 2013-14.
SAIL has continuously been providing basic medical services to the
rural populace residing in its peripheral villages. Around 3000
medical camps were organized during 2013-14 in the vicinity of its
Plants/Units to provide medical facilities to such people in their
neighbourhood itself. More than 2 lakh people received the medical
facilities in these camps in 2013-14.
SAIL has created infrastructure for enhancing availability of safe
drinking water for people living in far-flung areas, by installing over
7625 water sources. By virtue of these facilities created by SAIL,
42.70 lakh people have gained access to drinking water through
improvement in availability of potable water resources at rural and
water deficit locations.
In order to promote sanitation and hygiene in peripheral villages, RSP
has completed the project ''Comprehensive Water & Sanitation Facilities''
in five peripheral villages  Chutiatola, Dumerjore, Ushra Colony,
Baniguni & Jagdishpur benefiting 621 households.
Your Company firmly believes that only an enlightened and well informed
citizen can play a constructive role in the progress of society.
Company owns and maintains over 129 schools in its Steel townships for
providing modern education to more than 59,000 children, besides
actively providing assistance to over 629 schools with over 92,000
students. Seven Special Schools (Kalyan Vidyalaya), exclusively for BPL
families established at Steel Plants locations, are providing free
education, mid-day meals, uniform including shoes, text books,
stationery items, school bags, water bottles and transportation to
around 1,600 students. Scholarships to deserving undergraduate and
postgraduate engineering students, adoption of tribal children from
Maoist insurgency affected areas, nearly extinct Birhore tribes,
sponsoring youth for Industrial Training and Nursing course, etc. are
some of the major steps taken for uplifting poor, OBC, SC, ST, etc.
Saranda Suvan Chhatravas - a fully residential complex at Kiriburu
Mines has been set up for providing education and residential
facilities to students belonging to areas affected by Maoist
insurgency.
SAIL in association with Akshya Patra Foundation is providing Mid-Day
Meal to students of Govt. schools in and around Bhilai and Rourkela.
Under this scheme, healthy & nutritious meal is being provided to more
than 73000 students of around 550 Govt. schools every day.
SAIL has carried out construction of new roads/pathways and also
undertaken repairs of damaged road/pathways in rural areas thereby
providing connectivity for facilitating reach of education and
healthcare amenities to over 77.04 Lakh people across 435 villages.
In order to bridge the disparity between rural and urban areas and
bring about holistic development of both physical and social
infrastructure, 79 villages have been developed as "Model Steel
Villages" across the country (in eight states).
To promote renewable sources of energy, Solar street lights were
installed and Solar Lanterns and smokeless chullahs, have been
distributed among the poor and needy in different parts of Country.
People of remote forest areas are deprived of basic infrastructural
i.e. medical care, education and other essential requirements of
livelihoods. The dense reserve forest of Saranda wherein SAIL''s mines
are situated is one of such deprived region where people face real
hardships of life. Being a responsible corporate entity and to bring
the marginalized masses of this remote forest area to the mainstream of
development, SAIL in association with Ministry of Rural Development,
Govt. of India has undertaken a developmental plan for the benefit of
habitants of Saranda forest region.
Under the Saranda Development Plan, SAIL has distributed bicycles,
transistors, solar lanterns (seven thousand each) to the people of
region and established an Integrated Development Centre (IDC) at Digha
village in Saranda forest, West Singhbum District, Jharkhand consisting
of a Hospital, Anganwadi Centre, Bank, Forest & Agriculture office,
Ration shop, Community Hall, Accommodation Complex for civil official
and a Community kitchen.
SAIL, as a responsible corporate citizen, supported the rehabilitation
initiatives for the people affected by Flash Floods in Uttarakhand and
Phylin cyclone in Odisha by contributing Rs.1 Crore and Rs.20 Crore,
respectively.
Vocational training has been provided in areas such as Improved
agriculture, Mushroom cultivation, Goatery, Poultry, Fishery, Piggery,
Achar/Pappad/Agarbatti making, Welder, Fitter and Electrician Training,
Sewing and embroidery, Smoke less chullah making etc. as a means to
livelihood in a dignified manner.
Vocational Training centre for rural and unemployed youths  ''Bhilai
Ispat Kaushal Kutir'' and ''Swayamsiddha'' at Bhilai, Skill Development
and Self Employment Training Institute (SDSETI) at Durgapur, Garment
Technician Training at Salem, JHARCRAFT centre at Bokaro and Self
employment centre "KIRAN" at Kiriburu Ore Mines are benefitting common
masses by way of financial inclusion/SHG/training for income generation
and then empowering them to be part of main stream.
Besides running Vocational Training Institutes (VTI), SAIL is
supporting vocational training of the local youth at other ITIs/ITCs/
VTIs. RSP, ISP & RMD supported ITI/ITC training of more than 700 youths
at ITC, Bargaon, (under the rehabilitation/prevention program for the
left wing extremists ) & ITCs at Rourkela.
For promoting the local art and culture, Chhattisgarh Lok Kala Mahotsav
and Gramin Lokotsav are being organised every year. To promote local
culture and games, Gramin Lokotsavas and Gramin Athletics Competition
were organised by SAIL at different locations throughout the year.
SAIL''s efforts as a responsible corporate citizen in Nation building
have been recognized at various forums in the form of numerous awards
and accolades received by the Company which are tabulated along with
other awards in Awards & Accolades Section reported earlier.
CITIZEN CHARTER
SAIL''s Citizen Charter has outlined commitment of SAIL towards its
stakeholders, thereby empowering them to demand better products and
services. The Citizen''s Charter of SAIL may be summarized in four
objectives, as given below:
- Ensuring citizen-centric focus across all its processes by adopting
Total Quality Management principles for improvement of products and
services.
- Ensuring effective citizen communication channels.
- Demonstrating transparency and openness of its business operations by
hosting the Citizen''s Charter on the Corporate website.
- Working towards delight of citizens, by fail-safe processes and in
case of exigencies leveraging its service recovery processes, like
Grievance Redressal, Handling Complaints, etc. The Management of your
Company is totally committed to excellence in public service delivery
through good governance, by a laid down process of identifying
citizens, our commitment to them in meeting their expectations and our
communication to them of our key policies, in order to make the service
delivery process more effective.
STRATEGIC INITIATIVES OF THE COMPANY
During the Financial Year 2013-14, your Company continued to give
impetus towards taking new business initiatives, including mergers and
acquisitions, establishing new strategic alliances with renowned
companies, ensuring raw material security through acquisition of
potential opportunity, as well as diversifying in allied areas for
meeting its long-term strategic objectives. Your Company has
established communication with renowned international technology
providers for forging strategic alliances, in alternative iron and
Steel technologies, as well as production of sophisticated spares and
assemblies etc. The Company is continuously adopting the path of
entering into Joint Ventures with public/ private entities, to attain
its strategic goals of maximizing gains, with optimal utilization of
resources.
The strategic initiatives taken by your Company include: Merger and
Acquisitions (M & As):
Your Company has taken up with Ministry of Commerce/ Government of
India for possibility of acquiring majority stake in Neelachal Ispat
Nigam Limited (NINL) in Jajpur, Odisha. SAIL has reiterated its plan to
develop NINL into a 5 million tonne per annum (mtpa) Steel Plant, in
phases, from the current capacity of 0.9 mtpa.
Joint Ventures / Memorandum of Understanding (MOU) :
1. Development of Hajigak Iron Ore Deposits in Afghanistan:
The SAIL-led consortium AFISCO (Afghan Iron and Steel
Consortium) comprising of SAIL, NMDC, RINL, JSW Limited, JSPL, JSW
Ispat Limited and Monnet Ispat and Energy Limited was selected as the
''Preferred Bidder'' for blocks B, C and D of the Hajigak Iron Ore mines
with an estimated reserve of 1.28 billion tonnes of high-grade
magnetite iron ore (with 62-64% Fe content) and invited for negotiation
of Hajigak Mining Contract. The consortium is carrying out contract
negotiations with the Ministry of Mines and Petroleum of the Islamic
Republic of Afghanistan.
2. Alternate technologies in Iron and Steel Making : Your Company is
jointly exploring with Kobe Steel, Japan for installation of an ITmK3
technology based 0.5 MTPA Iron Nugget Plant at ASP, Durgapur. A Joint
Venture Company "SAIL-Kobe Iron India Private Limited" has already been
incorporated. The Detailed Project Report is under preparation.
3. Revival of operation of SAIL SCL Kerala Ltd. (SSKL), Kozhikode :
The management of erstwhile Steel Complex Limited, a BIFR registered
Company was taken over by SAIL, after its release from BIFR, in 2010,
and converted into a Joint Venture Company, namely "SAIL-SCL Kerala
Limited" with SAIL and Government of Kerala having equal shareholding.
The Joint Venture Company has initiated the process for installing
65000 tpa TMT rolling mill in the premises.
4. In pursuance to signing of the Joint Venture Agreement with Burn
Standard Company Limited (BSCL), a Public Sector Unit under Ministry of
Railways, for setting up a Wagon Components Manufacturing Facility at
the premises of BSCL at Jellingham, Purba Medinapore District, in West
Bengal, with capacity to produce 10,000 bogies and couplers per annum,
a new Joint Venture Company "SAIL Bengal Alloy Castings Private
Limited" was incorporated on 12th February, 2013. Work for preparation
of Detailed Project Report (DPR) for the Project has been initiated.
5. SAIL had formed a Joint Venture Company (JVC) with RITES viz. SAIL
RITES Bengal Wagon Industry Pvt. Ltd. (SRBWIPL), to manufacture 1200
wagons and undertake rehabilitation of 300 number of wagons per year at
Kulti, West Bengal. Project related activities are under progress,
including installation and erection of equipment. The JVC is likely to
start commercial production by this year end.
6. Your Company has signed an MOU with Industrial Development
Corporation of Odisha Ltd. (IDCOL) for exploring the possibility of
acquisition of/Joint Venture with its wholly owned subsidiaries IFCAL
(IDCOL Ferro Chrome Alloys Ltd.) and IKIWL (IDCOL Kalinga Iron Works
Ltd.). Based on detailed due-diligence and approval by the SAIL Board,
financial bid for acquisition of 100% equity stake in IKIWL and 51%
equity stake in IFCAL has been submitted on 30.08.2013. Negotiations
are ongoing with Inter Departmental Core Group (IDCG) of Govt. of
Odisha.
BUSINESS EXCELLENCE Â INITIATIVES
Enterprise Score Card (ESC)
Third Enterprise Scorecard (ESC) of SAIL was prepared for the Financial
Year 2013-14 comprising of 75 Strategic Objectives; 17 in Financial
perspectives, 9 in Customer perspectives, 29 in Internal Business
Process perspectives and 20 in Organisational Capability Building
perspectives. Enterprise Scorecard not only brought integration with
Memorandum of Understanding (MOU) with Government of India and Annual
Business Plan (ABP) of the Company; but also facilitated deployment of
these across various leadership through Strategic Objectives and Key
Initiatives. Enterprise Scorecard was deployed downwards through Unit
Scorecards, Functional Scorecards and Departmental Scorecards and
addressed the long-term and short-term issues. Enterprise Scorecard for
2014-15 has also been completed.
Excellence Model
Your Company has adopted European Foundation of Quality Management
(EFQM) Model which is implemented in India through CII-EXIM Bank Award
for Business Excellence. Four SAIL Plants, i.e., BSP, DSP, BSL and RSP
participated in the process for CII-EXIM Bank Award for Business
Excellence 2013. These Plants got following Recognition awards:
BSP Â Commendation award for Strong Achievement.
DSP Â Commendation award for Strong Commitment to Excel.
RSP Â Commendation award for strong Commitment to Excel.
BSL Â Commendation award for Strong Commitment to Excel.
Your Company was also conferred a Special Award by CII for "Significant
role played in promoting Business Excellence in India" during the
National Quality Summit organized by CII.
Total Quality Management (TQM)
Most of our Plants and Units are certified to ISO 9000, ISO 14000,
OHSAS 18000 and SA 8000 Management Standards. During the Financial Year
2013-14, three Certification Agencies have been empanelled through open
tender for three years for audit across SAIL Plants/Units for ISO 9000,
ISO 14000, OHSAS 18000 and SA 8000. This would also facilitate gradual
implementation of Integrated Management System in Plants.
IT RELATED INITIATIVES
Your Company has embraced Information Technology (IT) enabled services,
applications and tools in all its Plants and Units for improvement in
productivity, yield, quality, reduction in operational costs and
improvement in internal and external customer satisfaction.
As a step towards this, Enterprise Resource Planning (ERP) has been
implemented stage wise in 4 Integrated Steel Plants i.e. Bhilai Steel
Plant, Durgapur Steel Plant, Bokaro Steel Plant, Rourkela Steel Plant
and the process of ERP implementation has been initiated at
5thIntegrated Steel Plant i.e. IISCO Steel Plant. Central Marketing
Organisation (CMO) ERP has already covered 100% primary domestic sales
by 2013.
The Manufacturing Execution System (MES) technology was implemented at
Bhilai Steel Plant and its deployment over marketing network has
facilitated customers in placement of optimal orders in terms of
quality, size and quantity.
Electronic facility of receiving online payment has been launched with
collection of medical insurance premium from ex-employees of SAIL and
is being extended to other receivables.
Provision of centralized visibility of bill payment status of all
external vendors/suppliers is made available through SAIL Corporate
Portal.
To ensure data and information security, steps have been taken at all
SAIL Plants/Units and Durgapur Steel Plant has obtained ISO 27001:2005
Information Security Management System (ISMS) certificate.
ENVIRONMENT MANAGEMENT
Your Company assumes its responsibility to honour and adhere to the
applicable laws of the land pertaining to environment. In order to
attain the compliance with environmental laws, your Company has
established separate department on environment at all the Plant/Units.
Besides, it has an Environment Management Division at the corporate
level.
The Company is also complying with all the forestry laws as per the
laid down conditions. In addition to this, conditions imposed by the
State Government(s) are also complied with.
The ongoing Modernization and Expansion programme of the Company, apart
from increasing the production capacity, also envisages installation of
more efficient & environment friendly technologies and incorporation of
latest pollution control technologies and equipment. The Company is
spending about Rs.5000 crore on pollution control scheme out of the total
outlay of about Rs.72000 crore for the on-going Modernization and
Expansion programme. Various environmental protection and conservation
measures being undertaken by the Company are mentioned in MD&A Report.
CORPORATE COMMUNICATION
Corporate Communications initiatives for the year 2013-14 have been
strategically aligned with objectives of your Company for the year. A
number of new activities and projects have been taken up this year in
order to enhance and strengthen the image of "Brand SAIL" amongst the
various stakeholders.
Your Company''s communication with the various target audience was
strengthened through various channels by regularly informing our
stakeholders about various initiatives through press releases, press
meets, one-to-one interactions with media within India and
internationally. Key highlights of SAIL''s achievements throughout the
year, such as your Company''s Modernization and Expansion plan, higher
volumes of production and sales, development of value added products,
engaging our customers, etc. were some of the news items that generated
positive coverage for your Company.
Your Company made focused efforts to engage and interact with the
employees across our Plant/Unit locations as matter of strategy, to
build a sustainable organization. The objectives and achievements of
the organization were communicated to the employees through
multilayered framework like messages of Management, in-house television
channels, video-conferencing, face-to-face communication and
newsletters etc. In order to instill a greater feeling of ownership,
drive and sense of pride amongst employees of your Company, a new
initiative  "My SAIL My Pride" has been launched.
The advertising strategy of your Company focused its activities to
target present and potential customers panÂIndia, besides pan- India
audience involving multiple stakeholders. New corporate and product
advertisements were designed and developed to enhance the image of your
Company.
As part of our overall strategy of strengthening the image of your
Company, number of sponsorship initiatives were identified and taken up
this year by your Company. Your Company, along with SBI, organized the
SAIL Â SBI Open 2014 which was presented by Incredible India, Ministry
of Tourism. The SAIL Open Golf Tournament has helped in strengthening
the SAIL Brand, besides being the second longest running national Golf
championship after Indian Open. Football being a very popular in the
neighbourhood of our Plants, we have collaborated with Baichung Bhutia
Football School for providing training to the cadets as well as the
coaches of the Football Academies of your Company.
VIGILANCE ACTIVITIES
SAIL Vigilance lays emphasis on preventive and proactive vigilance
activities to facilitate an environment enabling people to work with
integrity, efficiency and in a transparent manner, upholding highest
ethical standards for the organization.
Following activities were undertaken during the Financial Year 2013-14:
- To increase vigilance awareness amongst employees, vigilance
awareness sessions and workshops were regularly held at the various
Plants and Units. A total of 147 workshops involving 3179 participants
were organized for enhancing Vigilance Awareness on Whistle Blower
Policy, Purchase/Contract Procedures, RTI Act, Conduct and
Discipline Rules, System and Procedures followed in SAIL, etc.
- Periodic surprise checks including joint checks were conducted
regularly in vulnerable areas of the Company. A total of 3296 periodic
checks including file scrutiny and Joint Checks were conducted at
different Plants/Units. Saving of approx. Rs. 23.22 crore accrued from
the preventive vigilance activities mainly on account of these Surprise
Checks.
- Vigilance provides vital inputs to the operating authorities for
improving the prevailing systems for bringing about more transparency.
Accordingly, eight major System Improvement Projects (SIPs) were
undertaken at different Plants/Units of SAIL.
- 13 cases were taken up for Intensive Examination at different
Plants/Units. During Intensive Examination, high value
procurement/contracts are scrutinized comprehensively and necessary
recommendations are forwarded to concerned departments for implementing
suggestions for improvement.
- As decided by the Central Vigilance Commission, Vigilance Awareness
Week was observed in all the Plants and Units of Steel Authority of
India Limited (SAIL) during the period 28.10.2013 to 2.11.2013. The
theme of Vigilance Awareness Week this year was "Promoting Good
Governance  Positive Contribution of Vigilance". Based on the above
theme, a number of seminars/workshops were organized during the week,
to emphasize the need of greater transparency in commercial dealings
with the stakeholders. Various events like debate competition, essay
writing, quiz competition, talk by eminent personalities were also
organized for the employees as well as school children. Further,
interactive awareness sessions with major customers/stakeholders were
conducted.
- The following four (4) thrust areas were identified for SAIL
Vigilance:
i) Increase e-auction (Reverse Auction and Forward Auction) in all
spheres of the activity and to achieve 100% e-payment in time bound
manner.
ii) Scrutiny of files pertaining to 21 high value projects being
undertaken at various Plants/Units, in line with the guidelines of
Chief Technical Examiner of CVC.
iii) Scrutiny of the contracts awarded on single tender enquiry
(nomination basis).
iv) Increased surveillance in the areas of receipt, sampling and
testing of high value raw materials and installing auto analyzers and
auto samplers for raw material testing and sampling.
- A study on Conversion Agents / Wet Leasing Agents appointed by SAIL
for conversion of semis into finished products was conducted by SAIL
Vigilance Department, which brought out certain deficiencies in the
system. A number of systemic improvement measures were recommended to
prevent misuse of SAIL Logo/Brand as well as to streamline the
conversion process through regular monitoring/periodic checks by the
concerned authorities.
- The Purchase/Contract Procedure (PCP) 2009 was issued by the
Vigilance Department based on the feedback obtained from different
stake holders. On the initiative of SAIL Vigilance, PCP is being
revised to include the guidelines issued from time to time by various
authorities such as CVC after discussions with stakeholders and the
revised PCP is expected to be issued shortly.
- ''Inspiration-Prerna'', an in-house publication of SAIL Vigilance is
being published regularly. The above publication contains case studies,
articles from eminent personalities, quiz on policy matters, etc. to
enhance awareness of the readers.
PUBLIC PROCUREMENT POLICY FOR MICRO AND SMALL ENTERPRISES
As required by the Public Procurement Policy of the Government of
India, the information on procurement from Micro and Small Enterprises
during Financial Years 2013-14 and 2012-13 is given below:
(Rs. crore)
Particulars 2013-14 2012-13
Total Amount Procurement 3862.69 4142.00
Total Procurement from MSE 789.64 942.00
% of Procurement from MSE 20.44 22.74
CONSULTANCY SERVICES
SAIL has one of the largest pool of qualified and experienced
engineers, technologists, Finance professionals and professionally
qualified HR and training experts. Based on its large and varied
expertise and experience acquired over the last five decades, SAIL,
through SAILCON, provides design, engineering, training, technical and
management consultancy services in Iron and Steel and related areas and
offers a wide range of services to clients globally. Technical and
Management Training Services are its forte and these services have been
availed of by several organizations in private and public sector within
India and abroad. To scale up the activities and to further reinforce
the brand image of SAIL as a consultant, SAILCON is continuously
exploring the market, both within and outside the Country for possible
business opportunities as well as joint ventures with Global
consultants for commercialization of SAIL''s expertise.
"SAILCON" has executed assignments within India and abroad covering
countries like Egypt, Saudi Arabia, Iran, Qatar, Thailand, Nepal,
Philippines etc.
During the Financial Year 2013-14, SAILCON laid enhanced focus on
taking up training assignments along with technical consultancy in
setting up of Steel Plants for some leading organizations. Consultancy
is also being extended for setting up of Power Plants, based on waste
heat recovery from the flue gases released out of Blast Furnace and
non-recovery type of Coke Oven batteries, as an environment friendly
measure and as a step to combat Global warming.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report covering the performance
and outlook of the Company is enclosed.
AUDITORS'' REPORT
The Statutory Auditors'' Report on the Accounts of the Company for the
Financial Year ended 31st March, 2014 along with Management''s replies
thereon is placed at Annexure-I. The comments of Comptroller and
Auditor General of India (C&AG) on the accounts of the Company for the
Financial Year ended 31st March, 2014 under Section 619(4) of the
Companies Act, 1956 and the Management''s replies thereto are placed at
Annexure-II.
COST AUDITORS
Pursuant to the direction of the Central Government for audit of cost
accounts, your Company has appointed M/s Sanjay Gupta & Associates, New
Delhi for Rourkela Steel Plant (RSP) & Bokaro Steel Plant (BSL), M/s
K.C. Kohli & Co, Delhi for Bhilai Steel Plant (BSP), Durgapur Steel
Plant (DSP) & IISCO Steel Plant (ISP) and M/s R J Goel & Co., New Delhi
for Alloy Steels Plant (ASP), Salem Steel Plant (SSP) & Visvesvaraya
Iron & Steel Plant (VISP) as Cost Auditor(s) for the Financial Year
2013-14.
REPORT ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, ETC.
In accordance with the provisions of Section 217 (1)(e) of the
Companies Act, 1956 read with the Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988 regarding Conservation
of Energy, Technology Absorption and Foreign Exchange Earnings and
Outgo is given at Annexure-III to this Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies Act, 1956, it is hereby
confirmed:
(i) that in the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed along with proper explanation
relating to material departures;
(ii) that the Directors have selected such Accounting Policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the Financial Year and of the
profit or loss of the Company for that period;
(iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate Accounting Records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
(iv) that the Directors have prepared the Annual Accounts on a going
concern basis.
CORPORATE GOVERNANCE
In terms of Listing Agreement with the Stock Exchanges, a Compliance
Report on Corporate Governance is given at Annexure-IV. A certificate
from Auditors of the Company regarding compliance of conditions of
Corporate Governance is placed at Annexure-V. In terms of Listing
Agreement, the Board has laid down a Code of Conduct for all Board
Members and Senior Management of the Company. The Code of Conduct has
been posted on the website of the Company. All the Board Members and
Senior Management Personnel have affirmed compliance with the Code.
BUSINESS RESPONSIBILITY REPORT
SEBI vide its Circular CIR/CFD/DIL/8/2012 dated August 13, 2012, has
mandated the top 100 listed entities, based on market capitalization of
BSE and NSE, to include Business Responsibility Report describing the
initiatives taken by the companies from Environmental, Social and
Governance perspective.
Accordingly, the Business Responsibility Report is attached at Annexure
VI and forms part of the Annual Report.
CONSOLIDATED FINANCIAL STATEMENTS
In terms of Listing Agreement with the Stock Exchange(s), the duly
Audited Consolidated Financial Statements are placed at Annexure-VII.
SUBSIDIARIES
IISCO-Ujjain Pipe and Foundry Company Limited, a wholly owned
subsidiary of the erstwhile Indian Iron and Steel Company Limited
(IISCO), was ordered to be wound up by BIFR. The Official Liquidator is
continuing its liquidation process. The assets of the Company have been
realized and the settlement of claims is in process.
The Company has three other wholly owned subsidiary companies namely,
SAIL Refractory Company Limited (SRCL), SAIL Jagdishpur Power Plant
Limited and SAIL Sindri Projects Limited. SRCL has taken over the
Salem Refractory Unit of Burn Standard Company Limited on 16th
December, 2011 and is operating the same. SAIL Jagdishpur Power Plant
Limited, incorporated for setting up of Gas based power Plant at
Jagdishpur and SAIL Sindri Projects Limited, incorporated for revival
of Sindri Unit of Fertilizer Corporation of India Limited are yet to
commence operations pending relevant approvals.
A Statement pursuant to Section 212 of the Companies Act, 1956 is
attached to the Accounts. In terms of general exemption granted by
Ministry of Corporate Affairs vide Circular No.5/12/2007-CL-III dated
8.2.2011, the Audited Balance Sheet, Profit and Loss Account,
Report of the Board of Directors and Auditors of our subsidiaries need
not be attached with the Balance Sheet of the Company as the Company
has satisfied the conditions stipulated in the Circular. However, the
requisite information as prescribed in the above Circular of Ministry
of Corporate Affairs in respect of the subsidiary companies has been
disclosed in the Statement.
The Annual Accounts of the subsidiary companies and related detailed
information shall be made available to the Shareholders of the holding
and subsidiary companies, seeking such information at any point of
time. Further, the Annual Accounts of the subsidiary companies are
available for inspection by any Shareholder in the Registered Office of
the Company and of the subsidiary companies concerned during the office
hours between 11 AM to 1 PM. A hard copy of the details of accounts of
subsidiaries shall be furnished to the shareholders on receipt of
written request.
DIRECTORS
Dr. Jagdish Khattar and Prof. Subrata Chaudhuri ceased to be Directors
w.e.f. 20.08.2013 (A.N.)
Shri Binod Kumar has been appointed as Director (Commercial) on
02.12.2013 and joined SAIL Board on 03.12.2013.
Shri P.K. Sengupta and Shri P.C Jha ceased to be Directors w.e.f.
12.01.2014 (AN).
Shri R.S. Sharma, Shri N.C Jha, Shri D.K. Mittal and Mrs. Parminder
Hira Mathur have been appointed as Directors w.e.f. 19.02.2014.
ACKNOWLEDGEMENT
The Board of Directors wish to place on record their appreciation for
the support and cooperation extended by every member of the SAIL
family. The Directors are thankful to the State Governments,
Electricity Boards, Railways, Banks, Suppliers, Customers and
Shareholders for their continued cooperation. The Directors also wish
to acknowledge the continued support and guidance received from the
different wings of the Government of India, particularly from the
Ministry of Steel.
For and on behalf of the Board of Directors
(CS. Verma)
Chairman
New Delhi
Dated: 14th August, 2014
Mar 31, 2013
To, The Members,
The Directors have pleasure in presenting the 41st Annual Report of the
Company together with Audited Accounts for the Financial Year ended
31st March, 2013.
FINANCIAL REVIEW
Your Company achieved a turnover of Rs.49,350 crore during the
Financial Year 2012-13 which was almost at the same level as that of
last year (Rs.50348 crore). The profit after tax of your Company for
the Financial Year 2012-13 was Rs.2170.35 crore compared to Rs.3542.72
crore in the previous Financial Year. Net profit was down largely due
to the lower Net Sales Realization resulting from a subdued market.
Higher usage of external inputs like BF Coke & pellets and higher
salary & wages were other key factors impacting profitability
adversely. The comparative performance of major financial parameters
during the FinancialYears 2012-13 and 2011-12 is given in Management
Discussion and Analysis Report. SAIL continued its thrust on optimum
utilisation of funds by better fund management. This included
replacement of high cost short term loans with low cost debts, timely
Repayment of loans including interest, strategic parking of surplus
funds with scheduled banks, actions for future fund raising etc. to
meet our growth objectives. Further, the Company hedged the foreign
currency risk on Buyer''s Credit and repayment of External Commercial
Borrowing depending on market conditions. The Company had liquid assets
of Rs.3,400 crore as on 31st March, 2013 invested in short term
deposits with scheduled banks against borrowings of Rs.21,597 crore as
on 31st March, 2013. The debt equity ratio of the Company was 0.53:1 as
on 31st March, 2013 as against 0.41:1 as on 31st March, 2012 which went
up on account of increase in borrowings during the year to fund the
ongoing capital expenditure.
The net worth of your Company improved from Rs.39,811 crore as on 31st
March, 2012 to Rs.41,025 crore as on 31st March, 2013 and this helped
in generation of internal resources for funding expansion plans of
SAIL. During the Financial Year 2012-13, SAIL''s relentless drive to
fast track its modernization & expansion plan resulted in commissioning
of projects worth Rs. 5500 crore. A capital expenditure of Rs. 9,731
crore was made during the year.
Your Company paid interim dividend @ 16% of the paid-up equity share
capital during the year. The Board of Directors has further recommended
a final dividend @ 4%, subject to approval of shareholders, thus making
the total dividend @ 20% of the paid up equity share capital for the
Financial Year 2012-13. A sum of Rs.163 crore has been transferred to
the general reserves during the Financial Year 2012-13 (previous year
Rs.275 crore).
Credit Rating:
M/s. FITCH and M/s. CARE, RBI approved credit rating agencies,
maintained ''AAA'' ratings, indicating the highest safety, for SAIL''s
long term borrowing programme. The International Borrowings programme
of the Company has been rated at ''BBB-'' by M/s Fitch ratings and M/s
Standard & Poor''s, which is also the sovereign rating of the Country.
PRODUCTION REVIEW
Notwithstanding the challenging market conditions in 2012-13 arising
from demand stagnation, your Company produced 13.4 million tonnes (MT)
of crude steel by operating at 103% of its capacity, marking an
improvement of 1% over CPLY. In line with its long term objective of
increasing the proportion of value added steel in the overall product
basket of SAIL, the production of special steels was scaled up to 5 MT,
up by 4% over last Financial Year. Best ever power generation of 690 MW
was achieved during the Financial Year 2012-13, with a growth of 4%
over last year. Improvement was also achieved in the production of Hot
Metal, Finished Steel and Continuous Cast Steel with a growth of 1%
each over last year.
SAIL plants have taken various initiatives to enhance production
processes, by improving operational discipline and minimizing equipment
downtime. This has led to a significant improvement in operating
parameters, leading to best ever techno-economic efficiency. SAIL
Plants recorded the best ever specific energy consumption of 6.68
Gcal/tcs, an improvement of 3% over last year.This was achieved, as
production through energy efficient CC route went up by 1% as compared
to last year. Lowest ever coke rate at 512 kg/thm was achieved, with an
improvement of 1% over last year. This was possible primarily because
of higher usage of CDI (Coal Dust Injection) at 54 kg/thm as compared
to 51 kg/thm achieved last year. Best ever BF-Productivity of 1.58
T/m3/day was achieved, with an improvement of 5% over last year, by
consistent operation of Blast furnaces at BSP, DSP and RSP where 2%, 8%
and 3% growth was achieved in BF-Productivity. Your Company has
strived to enhance its product basket by developing several new
products during the year. Bhilai Steel Plant developed special soft
iron magnetic plates for the prestigious India-based Neutrino
Observatory (INO) Project of Bhabha Atomic Research Centre (BARC). Our
Plants at Bokaro and Salem started production of IS 2062 E450 and E 350
HR Coils, tailor-made for wagons used by the Indian Railways. For the
petrochemicals industry, Bhilai and Rourkela developed a new grade of
ASTM 537 plates, which finds application in pressure vessels. Another
product which caters to petrochemical industry is the NACE quality
plate developed by SAIL Bhilai. These crack-resistant plates are ideal
for transportation of gases having high Hydrogen-Sulphide content. SAIL
Bokaro came out with ultra high strength HR and CR steel with Mn-B,
especially for auto body components, thereby enhancing our presence in
that sector. Besides catering to large scale industry, our penetration
also improved in the medium and small scale industries with 31 CrV3
grade billets rolled out in Durgapur Steel Plant for the first time in
India; a product which finds a growing market among makers of spanners
and hand tools.
Several initiatives have been undertaken for implementation of R&D
Master Plan of SAIL. An exhaustive Master Plan for R&D was prepared
aiming at integrating R&D activities towards business and operational
goals of your Company. The implementation of this Master Plan; besides
giving a competitive advantage to SAIL by improving efficiencies,
reducing costs, meeting market demands and upgrading current steel
technologies; will also help in gradually increasing R&D expenditure to
a level of 1% of sales turnover, which is an international benchmark.
R&D Master Plan is envisaged to have positive impact on the existing
operations through implementation of centralized and decentralized
projects. Centralized projects consist of High Impact Projects (HIP)
and Technology Mission Projects (TMP). The projects which are of common
interest to all integrated steel Plants viz. coal & coke beneficiation,
pelletisation, environmental projects etc. will come in the category of
HIP, Development/acquisition of radically new technologies which are of
strategic importance for SAIL viz. thin strip casting and inline
rolling, CRGO etc. will be pursued throughTM Projects. Under the
decentralized category, all the Plants/Units of SAIL have Centres of
Excellence (CoE) in selected areas/products. Centre of Excellence
projects mainly focus on augmenting product volume and product
attribute.
Centres of Excellence have been created at all plants and RDCIS. 13
projects have been identified as CoE Projects, 2 each at BSP, RSP, ISP
and SSP and one each at BSL, DSP, ASP, VISL and RDCIS. These projects
have taken shape in terms of formulation of objective, scope, duration,
budget and deliverables. A few examples are better quality plates and
rails at Bhilai, high performance Cold Rolled Sheets at Bokaro, CRNO
and API pipes at RSP etc. Three HIPs are being pursued with specific
objectives of beneficiation and pelletisation of iron ore at mines,
assimilation of new technologies for coke oven, sinter making and blast
furnace at ISP and identification of new uses of BF and BOF sludge &
slag for improving solid waste utilisation. Under the Technology
Mission (TM) projects, discussions have been initiated with technology
suppliers for acquiring technology for Thin Slab Casting & Direct
Rolling (TSCDR) and CRGO Steel production.
Raw Materials
During the Financial Year 2012-13, total requirement of iron ore was
met from captive sources. The Company''s captive iron ore mines produced
about 21.48 million tonnes. However, in case of coking coal, around 24%
requirement was met from indigenous sources and balance through
imports. During the FinancialYear 2012-13, production in captive
collieries of the Company was about 0.82 million tonnes. In case of
fluxes, around 1.26 million tonnes of limestone and 0.96 million tonnes
of dolomite was produced resulting in total production of 2.22 million
tonnes from captive sources. For thermal coal, your Company depends
entirely on purchases from Coal India Limited (CIL) except small
quantity produced from captive mines.
During the Financial Year 2012-13, your Company got the final forest
clearance for Bolani, Barsua and Stage-I forest clearance for Gua Iron
Ore Mines. Environment clearance for the capacity expansion of Gua and
Bolani Iron Ore Mines and renewal of Dhobil mine were also obtained
from MoEF, Government of India (GoI). Two mining leases of Kuteshwar
Limestone mines got renewed for further period of twenty years.
For ensuring regular supplies of iron ore, capacities of existing iron
ore mines are being expanded and new iron ore mines are being
developed. In addition, new iron ore deposits in the States of
Rajasthan, Chhattisgarh, MP, Maharashtra, Odisha and Karnataka are
being explored.
For improving coking coal security, your Company is also making efforts
for development of new coking coal blocks at Tasra and Sitanala. At
Tasra Coal Block, Letter of Acceptance (LoA) has been issued to the M/s
Lanco Infratech on 26th July''13 for development of 4 MTPA (ROM) coal
capacity mine through open cast mining and production of washed coal
through establishing a washery of 3.5 MTPA input capacity and further,
setting up of 200-300 MW Power Plant through JV route based on
secondary product available from Tasra Washery. Production is likely to
start by mid 2015 after completing pre-development activities such as
land acquisition, R&R, setting up infrastructure like Coal Handling
Plant, Heavy Earth Moving Machineries (CHP, HEMM), etc. M/s Lanco
Infratech was selected as the H-I bidder (on Net Present Value basis)
for development of Tasra coking coal block as Mine developer cum
operator (MDO).
For allotment of new thermal coal blocks applications have been
submitted to Ministry of Coal, GoI and for coking coal Ministry of
Coal, GoI has been approached for allotment of 2-3 coking coal blocks
under Government dispensation route.
SALES & MARKETING REVIEW
- SAIL achieved a total sales volume of 11.35 million tonnes during
the Financial Year 2012-13. Exports during the year at 0.368 million
tonnes achieved 10.1% growth over previous year. Major categories where
growth was recorded in home sales included: HR Coils: 2.1%, CR
Coils/Sheets: 4.6%, GP/GC: 5.3%, Wire Rods: 1.7% and Electrical Steel
Sheets: 16.8%. New records were also set in supplies of Wheels to
Indian Railways during the year.
- Highest ever sales of LPG grade HR Coils were achieved at 2.07 lac
tonnes during the Financial Year 2012-13 registering 6.8% growth over
the previous best achieved during 2011-12.
- Supplies were started to rural dealers appointed under "SAIL Rural
Dealership Scheme" which was launched in the year 2011-12 with the
primary objective of meeting the steel demands of the small rural
consumers at block, tehsil and taluka levels. Under this scheme 562
rural dealers were appointed during the Financial Year 2012-13.
Process for further appointments is under progress. As on 1st April,
2013 SAIL has a wide network of 2896 dealers spread over 629 districts
of the country.
- The Company maintained its presence in neighbouring and traditional
markets and exported 0.368 million tonnes steel during the year. DSP
Blooms and Chequered Coils were exported for the first time by the
Company.
GROWTH PLAN
Keeping in view the projected demand for steel in the Country, your
Company is currently implementing growth plan to enhance its hot metal
production from the level of 14.3 million tonnes during the Financial
Year 2012-13 to 23.5 million tonnes after expansion in a phased manner.
The growth plan, besides targeting higher production, also addresses
the need for eliminating technological obsolescence, achieving energy
savings, enriching product-mix, reducing pollution, developing mines
and collieries, introducing customer centric processes and developing
matching infrastructure facilities.
To maintain its current dominance in the domestic market and to meet
the future challenges, your Company is working on a long term strategic
plan ''Vision 2025'', which will steer the Company towards a target of 50
million tonnes of hot metal production, thereby meeting the strategic
objectives of achieving leadership in Indian steel sector and a
position amongst the top steel companies globally.
MODERNISATION & EXPANSION PROGRAMME
Steel Industry requires continuous Capital Investments for
technological up-gradation and Addition/Modification/Replacement of its
capital assets which are essential to maintain market competitiveness
and meet the challenging need of customers. The market is becoming
increasingly competitive making it imperative for Steel Authority of
India Ltd. (SAIL) to make determined efforts to bring about substantial
improvement in production, techno-economic parameters and
profitability. Accordingly, the Modernisation & Expansion Program of
SAIL aims towards almost doubling its production capacity with energy
efficient and environment friendly technology and a wider product
range.
SAIL is currently implementing a Modernisation & Expansion Programme
simultaneously at its five integrated steel plants at Bhilai, Durgapur,
Rourkela, Bokaro & Burnpur and special steels plant at Salem including
augmenting raw material resources and other related facilities. The
Modernisation & Expansion Programme, apart from increasing the
production capacity addresses the vital issues of elimination of
technological obsolescence, installation of energy efficient &
environment friendly technologies, value addition/ product-mix
improvement/ sustenance of existing assets of the plants and
introduction of customer- centric processes such as Enterprise Resource
Planning (ERP) and Manufacturing Execution System (MES). At Salem Steel
Plant, the production facilities envisaged under Expansion Program have
already been installed and units are in regular production. At other
Plants/Units, the expansion programmes are at advanced stage of
implementation. SAIL Board accorded ''in-principle'' approval for
various new Projects with an estimated total outlay of around Rs. 1,641
crore during the year. Orders for about Rs. 58,151 crore have been
placed (till Mar''13) under the current phase of Modernisation &
Expansion Plan of SAIL. A capital expenditure of Rs.9,731 crore has
been incurred during the financial year 2012-13 on this account and
till Mar, 2013, the capital expenditure of Rs. 44,112 has been incurred
under this program. The capital expenditure planned to be incurred
during 2013-14 has been planned at Rs.11,500 crore. Current status of
progress of implementation of Modernisation & Expansion Plan is given
in Management Discussion and Analysis Report. AMR Schemes:
A number of capital projects costing Rs. 2556.28 crore are under
implementation which include Augmentation of Grinding Facilities for
Coal Dust Injection Unit in BF-6 & 7, Installation of Oxygen Evacuation
Facilities for 2x1250 TPD New Oxygen Plant, Appointment of consultant
for development of Rowghat Iron Ore Deposit, Cold Repair of COB-9 and
Up-gradation of Stoves of BF-4 at BSP; Coal Dust Injection in BF-4,
Battery Proper Pkg for Rebuilding of COB-3, Installation of Additional
Heat Treatment Facilities in SPP, Re-habilitation of Mandira Dam,
Installation of 125 tpd Sulphuric Acid Plant and Replacement of 2 nos
of Process ESPs in SP-1 at RSP; Installation of Bell Less Top Charging
System (BLT) in BF-3 & Re-building of COB-5 at DSP; Replacement of
Converter Shell trunion ring and Pedestal Assembly in SMS-2 at BSL;
Installation of One 45 Sub-merged Arc Furnace, 4 MW Power Plant and 220
KV Sub-station at Chandrapur Ferro Alloy Plant and Projects for
Development of Mines. HUMAN RESOURCE MANAGEMENT REVIEW SAIL recognizes
contribution of its Human Resources (HR) in providing the competitive
advantage. SAIL has achieved its present level of excellence through
investing in its human resource, whose skill and knowledge constitute
the basis of every initiative - be it technology or innovation.
Developing skills and capabilities of employees to improve manpower
utilization and Labour Productivity is the key thrust area of Human
Resource Management (HRM) in SAIL.
SAIL provides an environment conducive for learning, encourages
adoption of best practices in every area and nurtures creativity and
innovativeness among employees. HR initiatives in SAIL are focused on
developing team spirit, employee empowerment and their involvement in
various improvement activities. Strategic alignment of Human Resource
Management to business priorities and objectives has facilitated smooth
transition to state-of-the-art technology in the modernization and
expansion projects.
Enhanced Productivity with Rationalized Manpower
SAIL achieved the highest ever Labour Productivity (LP) of 258 TCS/
Man/Year in the Financial Year 2012-13. The manpower strength of SAIL
was 101878 nos. (as on 31.03.2013) with manpower rationalization of
4126 nos. achieved during the year, The enhanced productivity with
rationalized manpower could be achieved as a result of judicious
recruitments, redeployment strategies, building competencies and
infusing a sense of commitment and passion among employees to go beyond
and excel. Trend of enhanced productivity and manpower rationalization
since 2001-02 onwards is depicted below:
Developing Employee Capabilities & Competencies
In order to develop its human resources for harnessing their potential
to the fullest and for according ample opportunity for realizing
individual as well as organizational goals, your Company has been
making sustained efforts through various training and development
activities with focus on preservation of skills, transfer of skills and
knowledge, training in specialized/advanced skills and technology in
collaboration with reputed organizations and development of effective
managerial competencies through association with premier institutes.
Preparing employees for tomorrow, for effectively taking up challenges
and discharging new roles and responsibilities was given a major
thrust. Overall, 54810 employees were trained against target of 44958
employees during the year on various contemporary technical and
managerial modules.
Harmonious Employee Relations
- Your Company has a glorious tradition of conducive employee
relations scenario. There has been a healthy tradition of settling the
issues through discussions with trade unions/workers'' representatives
and this has helped in establishing a peaceful IR climate.The Company
has an established system of workers'' participation at different levels
right from National level upto shop-floor level. Some of these forums
are functioning since early seventies and are sufficiently empowered to
address different issues related to wage, safety, and welfare of
workers, arising from time to time thus helping in conducive work
environment.
- Bipartite forums, like National Joint Committee for Steel Industry
(NJCS), Joint Committee on Safety, Health & Environment in Steel
Industry (JCSSI), etc. with representation from major central trade
unions as well as representative unions of Plants/Units meet on a
periodic basis and jointly evolve recommendations/ action plans for
ensuring a safe & harmonious work culture which gets substantiated from
the harmonious industrial relations enjoyed over the years by SAIL
Plant/Units, marked with diverse work culture at multi-locations.
- In addition, Quality Circles, Suggestion Schemes, Shop Improvement
Workshops also offer multiple avenues for enhanced workers''
participation. Workers are also kept abreast of strategic business
decisions and their views sought thereon through structured /
interactive workshops.
Grievance Redressal Mechanism
- Effective internal grievances redressal machinery exists in SAIL
Plants and Units, separately for executives and non-executives. The
grievance procedure in SAIL has been evolved after sustained
deliberations and consent of employees, trade unions and associations.
- The grievances in SAIL Plants/Units are dealt in 3 stages and
employees are given an opportunity at every stage to raise grievances
relating to wage irregularities, working conditions, transfers, leave,
work assignments and welfare amenities, etc. Such issues are
effectively settled through the time-tested system of grievance
management. However, majority of grievances are redressed informally in
view of the participative nature of environment existing in the steel
Plants. The system is comprehensive, simple and flexible and has proved
effective in promoting harmonious relationship between employees and
management.
- A total of 1900 employee grievances were settled during the
Financial Year 2012-13.
INITIATIVES FOR SOCIO-ECONOMIC DEVELOPMENT OF SCs /STs & OTHER WEAKER
SECTIONS OF SOCIETY
SAIL follows Presidential Directives on Reservation for Scheduled
Castes and Scheduled Tribes in the matter of recruitments & promotions.
As on 31st March 2013, out of total manpower of 101878, 15.98% belong
to SC category and 13.56% belong to ST category.
SAIL steel Plants and Units including mines are located in economically
backward regions of the country with predominant SC/ST population.
SAIL has contributed to the overall development of civic, medical,
educational, recreational and other facilities in these regions.
National Commission for Scheduled Castes (NCSC) under Chairmanship of
Dr. P. L. Punia, visited SAIL Corporate Office on 17th September, 2012.
Vice Chairman, 3 members, Secretary and other senior officials of the
Commission also accompanied Chairman, NCSC. Commission interacted with
SAIL SC/ST Employees Federation and SAIL Management. Deliberations
were held on various initiatives of SAIL for welfare of SCs/ STs.
Commission appreciated Socio Economic Schemes initiated by SAIL.
SAIL has undertaken several initiatives for the socio-economic
development of SCs/STs and other weaker sections of the society which
are mainly as under:
- Special schools opened exclusively for poor & underprivileged
children at integrated steel plant locations.These schools are
presently providing education to more than 1500 children. Free
education, mid-day meals, transportation, text books & stationery
items, school bags, water bottles, etc. are provided to the students in
the school.
- 188 SC/ST students belonging to BPL families/ primitive tribes have
been adopted by our plants/mines. They are being provided free
education, boarding, lodging, uniform, etc. for their overall growth.
- No tuition fee is being charged from SC/ST students studying in the
Company run schools, irrespective of whether they are wards of SAIL
employees or non-employees.
- Free medical health centres for poor have been set up at Bhilai,
Durgapur, Rourkela, Bokaro, Burnpur (Gutgutpara) providing free medical
consultation, medicines, etc. to the peripheral population mainly
comprising of SC/ST and weaker sections of society.
- Villagers are given free outdoor and indoor treatment in the mines
hospitals of Kiriburu, Gua & Chiria after recommendations by Manki/
Munda (Local Tribal Village Heads) of the peripheral villages.
IMPLEMENTATION OF RTI ACT, 2005
Your Company has been a front runner in implementation of Right to
Information Act, 2005, in true spirit. The Company has designated
Public Information Officers / Asstt. Public Information Officers,
Appellate Authorities and Transparency Officers under Section 5 &
Section 19(1) of RTI Act in each Plant & Unit for speedy redressal of
the queries received under the Act.
All Plants/Units of SAIL have listed, 17 manuals, and details of
designated officials, in line with the provisions of the RTI Act, on
SAIL website.Your Company has also institutionalized an exclusive RTI
Portal for better awareness and knowledge sharing. In all, a total
number of 3653 applications and 525 appeals were received under RTI
Act, during the Financial Year 2012-13 and all of them have been
disposed off within the timelines. Efforts towards spreading awareness
about RTI, amongst general public as also for PIOs / deemed PIOs
continued throughout the year.
AWARDS & ACCOLADES WON DURING THE YEAR
- Your company has been conferred with "Excellent" Rating for the
year 2011-12 for the 10th consecutive year.
- SAIL bagged SCOPE Award for Best Practices in Human Resource
Management for the year 2011-12 presented by the Hon''ble President of
India on Public Sector Day function held on 26th April''13.
- SAIL won 13 out of 28 Viswakarma Awards declared in the country,
which is the highest for any organization amongst both private and
public sector.
- SAIL employees were awarded 11 out of 32 Prime Minister''s Shram
Awards declared in the country. This is also the highest number for any
organization amongst both private and public sector.
- Two out of the five Olympics medal winners of the country were
supported by SAIL (Sushil Kumar andYogeshwar Dutt). In recognition of
SAIL''s initiatives, Rashtriya Khel Protsahan Puraskar - 2012 was
conferred to the Company by Hon''ble President of India.
- Indira Gandhi Rajbhasha Award for the best implementation of
official language in ''A'' (Hindi-speaking) region was conferred to SAIL.
SAIL''s Hindi magazine ''Ispat Bhasha Bharti'' was also adjudged First
prize winner amongst the in-house journals published in ''A'' region in
the country. These awards were conferred by Hon''ble President of India
on Hindi Diwas i.e. 14th Sept''12.
- In the International Convention on Quality Circle 2012 held at
Kuala Lumpur, Malaysia during 14th-17th October, 2012, all the six
participating teams from SAIL won the highest honour (3-star awards) in
their respective categories.
- SAIL was awarded CII - Sustainability Award 2012 [Certificate of
Commendation], which was given by Hon''ble President of India on 14th
January, 2013.
- Adjudged as most efficient and largest Maharatna employer at the
Dalal Street Investment Journal PSU Awards-2012.
- SKOCH Financial Inclusion Award for 2013 for initiatives in
corporate social responsibility.
- Institution of Engineers (India)- Industry Excellence Award -2012
under the award category A-"Manufacturing & Processing".
- Indira Gandhi Award (First prize) for excellence in implementation
of Rajbhasha.
- ''Ispat Bhasha Bharti''- in-house Rajbhasha journal, won the first
prize under the Home Ministry''s All India House Journal Award Scheme.
- ''Sahasrabdi Rajbhasha Shield'' from Rashtriya Hindi Academy,
Rupambara, Kolkata.
- It is also noteworthy to mention that Chairman, SAIL was conferred
SCOPE Award for Excellence and Outstanding contribution to the Public
Sector Management - Individual Leadership Category-I
(Maharatna/Navratna PSEs) for 2010-11.
Bhilai Steel Plant (BSP)
- Prime Minister''s Trophy for the tenth time for emerging as the best
performing steel plant in the country.
- Steel Minister''s Trophy for the year 2010-11 and 2008-09.
- CII-ITC Sustainability Awards-2012 - Certificate of commendation
for significant achievement in its category.
Bokaro Steel Plant (BSL)
- Greentech HR Awards 2013 (Gold) under the Category of Training
Excellence.
- Golden Peacock National Training Award 2012 in steel sector for
excellence in training practices.
- "Jharkhand CSR Award" in the category of "Regulation of Corporate
Social and Environment Behaviour".
- ''Golden Peacock HR Excellence Award'' for the year 2012.
Durgapur Steel Plant (DSP)
- Certificate of Strong Commitment to Excel from CII-EXIM Bank under
Business Excellence Award.
- Rajiv Gandhi National Quality Award 2011 - Certificate of
Commendation.
- Greentech Safety Award 2012 (Gold) and Greentech CSR Award 2012
(Silver) in Metal & Mining Sector.
- Greentech HR Award 2013 (Silver Trophy).
Rourkela Steel Plant (RSP)
- Award for "Best Practices in Training and HRD-2012" from ISTD,
Hyderabad Chapter.
- ''Greentech Environment Gold Award'' in the field of eco-friendly
steel making.
- Awards under three categories - Best CSR Practices, Concern for
Health and Women Empowerment in the World CSR Day Global CSR Leadership
& Excellence Awards.
Raw Materials Division (RMD)
- "No Fatal Accident in Collieries / Mines" Award by the Annual Joint
Committee on Safety, Health & Environment (JCSSI).
- National Safety Awards (Mines) won by Kalta Iron Mine for Lowest
Injury Frequency Rate and by Tulsidamar & Dalli mines for Longest
Accident Free period.
Alloy Steels Plant (ASP)
- Ispat Suraksha Puraskar from JCSSI for no fatalities for two
consecutive years.
- Green Tech Environment Excellence (Silver) Award 2012.
Salem Steel Plant (SSP)
- Award for "Excellence in Suggestion Scheme 2012" from INSSAN- SIC.
- National Sustainability Award (First Prize) for the year 2011-12
from IIM, Kolkata amongst the Secondary Steel Plants / Alloy Steel
Plants category.
RDCIS
- Golden Peacock Innovation Management Award for the year 2012.
CORPORATE SOCIAL RESPONSIBILITY & SUSTAINABLE DEVELOPMENT
Your Company''s focus on social responsibility remains unwavering. The
pivotal role of education, health, income generation and sustainable
development (SD) is the cornerstone of our Corporate Social
Responsibility and SD initiatives.
On the health front, the Company has established 53 Primary Health
Centres, 23 Hospitals, 7 Reproductive & Child Health Centres and 7
Super-Specialty Hospitals to provide specialized and basic healthcare
to more than 34 million people living in the vicinity of its Plants and
Units. In order to reach out to the underprivileged, over 4300 camps
have been organized across the country benefitting more than 2 lakh
people by providing free health check-up, path lab treatment, medicine,
immunization, etc. in financial year 2012-13. 90 numbers of Mobile
Medical Units (MMUs)/ Ambulances are being run or have been provided to
various NGOs since 2007-08. Seven Health Centres (Kalyan Chikitsalaya)
are being run at plants exclusively for providing free medical care
including medicines to poor and needy families. In the Financial Year
2012-13, healthcare was provided to more than 87,000 people through
these exclusive health centres.
Education has always been a priority area for SAIL. Company owns and
maintains over 148 schools in its steel townships to provide modern
education to over 55,000 children and is providing assistance to over
492 schools. Seven Special Schools for BPL (Kalyan Vidyalaya) at five
steel plants with facilities of free education, mid-day meals, uniform
including shoes, text books, stationery items, school bag, water
bottles and transportation in some cases are running under CSR. The
strength of students in these schools is more than 1500 students.
Scholarships to deserving undergraduate & postgraduate engineering
students, adoption of naxal affected tribal children, nearly extinct
Birhore tribes, sponsoring youths for Industrial Training & Nursing
course, etc. are the major steps taken for uplifting poor, OBC, SC, ST,
etc. SAIL is providing Mid-Day Meal to more than 22000 students in
different schools of Bhilai everyday through Akshya Patra Foundation.
This scheme is being replicated at Bokaro and Rourkela in Financial
Year 2013-14.
SAIL has provided access to over 75.56 lakh people across 435 villages
since inception by constructing and repairing of roads. It has provided
access to water infrastructure to people living in far-flung areas by
installing over 7381 water sources, thereby providing drinking water
access to around over 41.38 lakh people.
In order to bridge the disparity between rural and urban areas as also
to provide comprehensive development of both physical and social
infrastructure, 79 villages have been identified & developed as "Model
Steel Villages" across the country (in eight states). The developmental
activities undertaken in these villages include medical & health
services, education, roads & connectivity, sanitation, community
centres, livelihood generation, sports facilities, etc.
To promote renewable sources of energy, Solar street lights were
installed and Solar Lanterns and smokeless chullahs have been
distributed among the poor and needy in different parts of country.
In an effort to bring the marginalized masses of the remote forest
areas to the mainstream of development, SAIL in association with Govt.
of Jharkhand and Ministry of Rural Development, GoI actively
participated in the development process of Saranda forest, Jharkhand.
SAIL provided ambulances, bicycles, transistors, solar lanterns and set
up an Integrated Development Centre at Digha village in Saranda forest.
Vocational training has been provided in areas such as Improved
agriculture, Mushroom cultivation, Goatery, Poultry, Fishery, Piggery,
Achar / Pappad/ Agarbati making, Welder, Fitter & ElectricianTraining,
Sewing & embroidery, Smokeless chullah making etc. as a means to
livelihood in a dignified manner. Vocational Training centre for rural
and unemployed youths - ''Bhilai Ispat Kaushal Kutir'' & Swayamsiddha at
Bhilai, Skill Development and Self Employment Training Institute
(SDSETI) at Durgapur, Garment Technician Training at Salem, JHARCRAFT
centre at Bokaro and Self Employment centre "KIRAN" at Kiriburu Ore
Mines are benefitting common masses by way of financial inclusion/
SHG/training for income generation and then empowering them to be part
of main stream.
The Sustainable Development Performance Report (SDPR) for the year
2011-12 has been adjudged to have met the criteria of Application Level
"A" by the Global Reporting Initiative (GRI), Amsterdam.
As per the DPE Guidelines on Sustainable Development (SD), SAIL took up
Sustainable Development (SD) projects under the MoU with GOI for the
year. These SD projects include carbon and water foot printing at SAIL
plants, bio-diversity conservation at Bolani Iron Ore Mine, rain water
harvesting and sustainability training.
SAIL''s efforts as a responsible corporate citizen in Nation building
have been recognized by various organizations in the form of awards and
accolades. In the year, SAIL was awarded with Skoch Financial Inclusion
Award-2013 by Skoch foundation for CSR, Golden Peacock National Award -
2012 to Bhilai Steel Plant, Greentech Award for CSR - 2011 & 2012 to
Durgapur Steel Plant, Jharkhand Sustainability Award in October, 2012
to BSL and Global CSR Excellence & Leadership Award in categories: Best
CSR practices, Women Empowerment & Concern for health to Rourkela Steel
Plant.
In compliance of DPE guidelines on CSR & Sustainability- 2013, the
Company has identified Gonda district in Uttar Pradesh as ''Backward
District'' for taking up CSR projects during 2013-14.
CITIZEN CHARTER
SAIL''s Citizen Charter has outlined commitment of SAIL towards its
stakeholders thereby empowering them to demand better products and
services. The Citizen''s Charter of SAIL may be summarized in four
objectives as given below:
- Ensuring citizen-centric focus across all its processes by adopting
Total Quality Management principles for improvement of products and
services.
- Ensuring effective citizen communication channels.
- Demonstrating transparency and openness of its business operations
by hosting the Citizen''s Charter on the corporate web site.
- Working towards delight of citizens by fail-safe processes and in
case of exigencies leveraging its service recovery processes, like
Grievance Redressal, Handling Complaints, etc.
The Management of your Company is totally committed to excellence in
public service delivery through good governance by a laid down process
of identifying citizens, our commitment to them in meeting their
expectations and our communication to them of our key policies in order
to make the service delivery process more effective.
STRATEGIC INITIATIVES OF THE COMPANY
During the Financial Year 2012-13, your Company continued to give
impetus towards taking new business initiatives, including
incorporation/ formation of new JointVentures (JVs), mergers &
acquisitions and entering into Memorandum of Understanding (MOUs) for
its long term strategic objectives.Your Company has established
communication with renowned international technology providers for
forging strategic alliances in alternative iron & steel technologies,
production of sophisticated spares and assemblies etc. The Company is
continuously adopting the path of entering into Joint Ventures with
public / private entities to attain its strategic goals of maximizing
gains with optimal utilization of resources. These include:
(A) Joint Ventures:
i) Development of Hajigak Iron Ore Deposits in Afghanistan: The
SAIL-led consortium AFISCO (Afghan Iron & Steel Consortium) comprising
of SAIL, NMDC, RINL, JSW Limited, JSPL, JSW Ispat Limited and Monnet
Ispat and Energy Limited which had submitted its bid for development of
Hajigak Iron Ore deposits, has been selected as the ''Preferred Bidder''
for blocks B, C and D of the mines with an estimated reserve of 1.28
billion tonnes of high-grade magnetite iron ore (with 62- 64% Fe
content) and invited for negotiation of Hajigak Mining Contract. The
consortium has held contract negotiation discussions with Ministry of
Mines of Islamic Republic of Afghanistan. The contract is likely to be
finalized in 2013-14.
ii) Revival of Sindri unit of Fertilizer Corporation of India Limited
(FCIL) :Your Company has envisaged a plan for revival of Sindri unit of
FCIL by setting up a 5.6 mtpa steel plant, a 1.15 mtpa fertilizer plant
and a suitable sized power plant, through the SPV "SAIL-Sindri Projects
Ltd" which has already been incorporated. Department of Fertilizers
(DoF) / FCIL have initiated the process for obtaining approval of
revised Draft Rehabilitation Scheme (DRS) from Cabinet Committee of
Economic Affairs (CCEA), for making its net worth positive, enabling
FCIL to be discharged from Board for Industrial and Financial
Reconstruction (BIFR). DoF/FCIL will get the land at its Sindri unit,
free from all encroachment and encumbrances, before handing it over to
SAIL.
iii) Alternate technologies in Iron & Steel Making : A Memorandum of
Agreement (MOA) was signed with Kobe Steel Limited, Japan in July''12
for ITmK3 technology for iron making.A JointVenture Company "SAIL-Kobe
Iron India Private Limited" has been incorporated with Kobe Steel,
Japan for installation of an ITmK3 technology based 0.5 MTPA Iron
Nugget plant at ASP, Durgapur. The detailed project report is under
preparation.
iv) Revival of operation of Steel Complex Limited: The management of
Steel Complex Limited, a BIFR registered Company was taken over by SAIL
in 2010 and converted into a JV Company namely "SAIL-SCL Kerala
Limited" with SAIL and Government of Kerala (GoK) having equal
shareholding. Steps have been taken for the revival of the Company,
and it has been discharged from BIFR after infusion of equity by SAIL
and GOK. The JV Company has embarked on installation of 65000 MTPA
rolling mill for TMT bars, to improve its performance. An EOI has been
issued for selection of a party for execution of the project.
v) SAIL, on May 25, 2012 signed a joint venture agreement with Burn
Standard Company Limited (BSCL), a PSU under Ministry of Railways, for
setting up aWagon Components Manufacturing Facility at the premises of
BSCL at Jellingham, Purba Medinapore district, in West Bengal, with a
capacity to produce 10,000 bogies and couplers per annum.A joint
venture Company "SAIL Bengal Alloy Castings Private Limited" between
SAIL and BSCL has been incorporated. Work for preparation of Detailed
Project Report (DPR) for the project has been initiated.
(B) Strategic Alliances and Memorandum of Understanding (MOU):
i) Your Company has been in talks with Chhattisgarh Mineral Development
Corporation Ltd. (CMDC), an Undertaking of Govt. of Chhattisgarh for
having a captive source of iron ore. In this respect, SAIL has signed
an MOU with CMDC on November 2, 2012 for development of Eklama Iron Ore
deposit in Chhattisgarh which as per preliminary estimates have
resources of around 100 million tonne. The Joint Venture Agreement is
under finalization.
ii) In order to promote industrialization in the State of MP where SAIL
is interested in setting up iron ore beneficiation and pelletisation
plant and has submitted five applications for grant of Prospecting
Licence (PL) for iron ore bearing area in Chhatarpur district of MP, a
MoU between SAIL and MP Trade and Investment Facilitation Corporation
Ltd (TRIFAC) was executed on 15th October, 2012 at Bhopal.
iii) Your Company is also in discussions with Industrial Development
Corporation of Odisha Ltd. (IDCOL) for exploring the possibility of
acquisition / JV with its wholly owned subsidiaries IFCAL (IDCOL Ferro
Chrome Alloys Ltd.) and IKIWL (IDCOL Kalinga Iron Works Ltd.). IFCAL is
engaged in production of High Carbon Ferro Chrome and sources raw
material from its chromite mines at Tailangi (Sukinda Valley). The
other facility at IKIWL, currently engaged in production of Pig Iron,
is planned to be utilized for iron ore beneficiation and pelletization
facility. An MOU in this regard was signed between SAIL and IDCOL on
2nd May, 2012. Due diligence and Valuation of IFCAL and IKIWL are in
progress.
iv) SAIL signed an MOU on 5th March, 2013 with Power Grid Corporation
of India Limited (PGCIL) for working together to set up Joint Venture
Company at a mutually agreed location for fabrication & galvanizing of
Transmission line Tower and Tower parts and tubular structures
including research and development facility.
v) Titanium Project: SAIL has accepted Government of Kerala''s offer to
jointly explore the possibility of developing a Titanium Project in
joint venture in the state of Kerala. An MOU has been signed on 4th
April, 2013 amongst SAIL, Kerala State Industrial Development
Corporation (KSIDC) and Kerala Minerals and Metals Limited (KMML) to
this effect.
vi) Your Company is planning to set up engineering shops in joint
venture to improve its capabilities in production of sophisticated
spares and assemblies. This will meet its future requirement of
engineering spares and assemblies which is bound to increase
post-expansion of SAIL steel plants, both qualitatively and
quantitatively. An MOU with Danieli & C of Italy has been signed on
28th May, 2012 to assess and explore the technical and economic
viability of installing and operating an Engineering Workshop Facility
in JointVenture between SAIL and Danieli & C at SAIL Plant locations.
BUSINESS EXCELLENCE - INITIATIVES Enterprise Scorecard (ESC)
Enterprise Scorecard (ESC) of SAIL was prepared for the Financial Year
2012-13. Enterprise Scorecard not only brought integration with
Memorandum of Understanding (MoU) with Government of India and Annual
Business Plan (ABP) of the Company but also facilitated deployment of
these across various leadership levels. It facilitated deployment of
organisational strategy through Strategic Objectives and Key
Initiatives. ESC 2012-13 was aligned upwards with ABP & MOU; deployed
downwards through Unit Scorecards, Functional Scorecards and
Departmental Scorecards and addressed the long term and short term
issues. Process for formulation of Enterprise Scorecard for 2013-14 has
also been commenced.
Excellence Model
Your Company has adopted European Foundation of Quality Management
(EFQM) Model which is implemented in India through CII EXIM Bank Award
for Business Excellence. Four SAIL plants i.e. BSP, DSP, BSL and RSP
participated for CII-EXIM Bank Award for Business Excellence 2012.
Three of these plants i.e. BSP, DSP and RSP got following Recognition
awards:
- BSP - Commendation award for Strong Achievement
- DSP - Commendation award for Strong Commitment to Excel
- RSP - Commendation award for Strong Commitment to Excel
Total Quality Management (TQM)
Most of our Plants and Units are certified to ISO 9000, ISO 14000,
OHSAS 18000 and SA 8000 Management Standards. During the financial year
2012-13, RSP was certified to Social Accountability Standard (SA 8000)
and DSP was certified to Information Security Standard (ISO 27000).
IT RELATED INITIATIVES
Your Company has been moving ahead in innovative usage of Information
Technology (IT). As a step towards this, Enterprise Resource Planning
(ERP) has been implemented stage wise at BSP, DSP, BSL, CMO and RSP
during 2009-2012.
Manufacturing Execution System (MES) has been implemented at BSP''s 3
shops, namely SMS-2, Plate Mill and Rail Mill with the help of M/s
POSDATA. MES implementation has enabled detailed planning, scheduling
and status monitoring of orders at these shops.
Your Company has ensured that almost all payments are done through
e-payment mode and steps are being taken to establish a formal system
for e-receipts.
Capacities of digital network among SAIL''s Plants/Units have been
doubled in view of increased usage.
Your Company is currently taking steps to implement the following:-
- Centralized Mail Messaging for SAIL
- ERP at ISP, Burnpur
- Business Intelligence / Dashboards
- Centralized HR & Payroll on ERP Platform
ENVIRONMENT MANAGEMENT
SAIL along with production and profitability gives emphasis on
environment protection and considers clean environment practices a must
for its every activity. SAIL Corporate Environmental Policy emphasizes
''conducting our operations in an environmentally responsible manner to
comply with applicable regulations and striving to go beyond''. A
number of proactive environmental initiatives were taken by SAIL during
the year, yielding noteworthy improvements. The highlights are:
- Notable improvements in respect of the following Environmental
Indices:
- PM emission load has reduced to 0.88 kg/tcs from 1.6 kg/tcs in
2008-09 which is a reduction of 45% in the last 5 years.
- Specific Water Consumption has reduced to 3.73 m3/tcs from 3.95
m3/tcs in 2008-09 which is a reduction of more than 5% in the last 5
years.
- Specific effluent discharge from SAIL Plants has reduced to 2.22
m3/tfs from 2.56 m3/tfs in 2008-09 which is a reduction of more than
13% over the last 5 years.
- Utilisation of Blast Furnace (BF) Slag enhanced to 96% in the
financial year 2012-13, an enhancement of 16% utilisation of the BF
slag achieved over the last 5 years.
- As a part of Greening of Warehouses Initiative, Hyderabad Warehouse
and BTSO, Vizag were taken up for implementation of ISO 14001
Environment Management System during the year and have been awarded the
EMS Certification.
- The MoEF, SAIL and UNIDO have joined hands to implement a
Polychlorinated Biphenyls (PCB) management and disposal project at
Bhilai. PCBs are highly toxic chemicals. Under this project, the PCB in
electric transformers will be treated using appropriate technology to
be brought in by UNIDO.
CORPORATE COMMUNICATION
Corporate Communication at SAIL helped the organization to achieve its
planned objective of building ''Brand SAIL'' by creating and maintaining
a vibrant, dynamic and responsive communication framework. Towards this
end, SAIL communication team undertook relation building with its
stakeholders by fostering dialogue between the Company and its
audience, both through internal and external communication.
Besides informing the stakeholders about the Company''s strategic plan,
your Company also took into account their feedback and suggestions,
thereby bridging a vital connect between the organization and its
stakeholders.Your Company maintained harmonic and transparent media
relation through organizing regular press conferences, interviews and
informal media meets.
While the Company reached out to its customers and vendors through
focused advertising, exhibitions, events and mutually beneficial meets,
its sponsorship and aid was governed by the motto of largest common
good. SAIL website stood unrivalled in the iron and steel industry,
grabbing as many as 6 lakh hits per month! The Company also sponsored
wrestlers like Sushil Kumar and Yogeshwar Dutt from their formative
years, who won the Silver and Bronze medals respectively at London
Olympics 2012. In March, 2013, SAIL along with SBI organized the 6th
edition of SAIL-SBI Open GolfTournament presented by Incredible
India,Ministry ofTourism, also the second longest running national Golf
Championship after Indian Open.
Your Company''s greatest asset, however, remained those thousands of
steel men and women who we call the SAIL family. Communication teams at
SAIL, along with respective HR divisions, arranged mass contact
exercise to facilitate free-wheeling discussion between employees and
management. The Company successfully launched an electronic version of
its monthly journal, e-SAILNews, which reaches out to maximum employees
at the least cost. Through tie-ups with local TV channels, employees''
families in township were kept abreast of daily happenings in Plant and
outside. In order to benchmark the communication practices with other
PSUs, regular interactions were organized with their PR Chiefs.
Posters, fliers, brochures, wall painting, wall-sheets, intranet,
journals etc were other conventional ways in which the Company went
SAILing with fellow employees and their universe. Because at SAIL, we
are many, but we are one.
VIGILANCE ACTIVITIES
SAILVigilance lays emphasis on preventive and proactive vigilance
activities to facilitate an environment enabling people to work with
integrity, efficiency and in a transparent manner, upholding highest
ethical standards for the organization.
Following activities were undertaken during the Financial Year 2012-13:
- To increase vigilance awareness amongst employees, vigilance
awareness sessions and workshops were regularly held at various Plants
and Units. 47 workshops involving 2945 participants were organized for
enhancing Vigilance Awareness on Purchase/Contract procedures, RTI Act,
Conduct & Discipline Rules, System and Procedures followed in SAIL,
etc.
- Periodic surprise checks including joint checks were conducted
regularly in vulnerable areas of the Company. A total of 3338 periodic
checks including file scrutiny and Joint Checks were conducted at
different Plants / Units. Savings of Rs.2556.95 lakhs accrued from
preventive vigilance activities mainly on account of Surprise Checks.
- Vigilance provides vital inputs to the operating authorities for
improving the prevailing systems for bringing about more
transparency.Accordingly,eight major System Improvement Projects (SIPs)
were undertaken at different Plants/Units of SAIL.
- 13 cases were taken up for Intensive Examination at different
Plants/ Units. During Intensive Examination, high value procurement /
contracts are scrutinized comprehensively and necessary recommendations
are forwarded to the concerned departments for implementing suggestions
for improvement.
- Various initiatives have been taken by SAIL Vigilance to increase
leveraging of technology in vigilance function. On-line submission of
Property Returns has been extended for all executives of SAIL in all
the Plants / Units during the year 2012. Further, on-line facility for
submission of Results Framework Documents (RFDs) for System Improvement
Projects (SIPs), Intensive Examination (IE) & Thrust Areas of SAIL
Vigilance and Preventive/Administrative recommendations of CVC/CVO has
been created. This helps in real time monitoring of these activities.
- On-line facility for submission of complaints has been created on
SAIL website. Facility of on-line feedback to the complainants along
with status of their complaints has also been created.
- To increase the impact of preventive vigilance activities in
improvement of overall functioning of organization, it has been decided
to improve the effectiveness and quality of surprise checks and file
scrutiny. Accordingly, Quality Management System Index followed
inVigilance departments of SAIL has been revised to include these
areas.
- ''Inspiration- Prerna'', an in-house publication of SAILVigilance is
being published regularly. The above publication contains case studies,
articles from eminent personalities, quiz on policy matters, etc. to
enhance awareness of the readers.
CONSULTANCY SERVICES
Based on its large and varied expertise and experience acquired over
the last five decades, SAIL, through SAILCON, provides design,
engineering, training, technical & management consultancy services in
Iron & Steel and related areas and offers a wide range of services to
clients Globally. Technical and Management Training services are its
forte and these services have been availed of by several organisations
in private and public sector within India and abroad. To scale up the
activities and to further reinforce the brand image of SAIL as a
consultant, SAILCON is continuously exploring the market, both within
and outside the Country for possible business opportunities as well as
joint ventures with Global consultants for commercialization of SAIL''s
expertise.
''SAILCON'' has executed assignments within India and abroad covering
countries like Egypt, Saudi Arabia, Iran, Qatar, Thailand, Nepal,
Philippines, etc.
During the Financial Year 2012-13, SAIL Consultancy Division, SAILCON
laid enhanced focus on taking up training assignments for some leading
organizations in the area of Steel making, by providing consultancy
services to UNDP/GEF, Project Management Cell, Ministry of Steel for
energy efficiency and productivity improvement in Steel re-rolling
mills.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
The Management Discussion & Analysis Report covering the performance
and outlook of the Company is enclosed.
AUDITORS'' REPORT
The Statutory Auditors'' Report on the Accounts of the Company for the
Financial Year ended 31st March, 2013 along with Management''s replies
thereon is placed at Annexure-I. The Comptroller & Auditor General of
India (C&AG) vide its letter dated 9th July, 2013 has given ''nil''
comments on the accounts of the Company for the Financial Year ended
31st March, 2013 under Section 619(4) of the Companies Act, 1956. A
copy of the above letter of C&AG is placed at Annexure-II.
COST AUDITORS
Pursuant to the direction of the Central Government for audit of cost
accounts, your Company has appointed M/s. Jugal K. Puri & Associates,
Gurgaon for Rourkela Steel Plant (RSP) & Bokaro Steel Plant (BSL), M/s.
K.C. Kohli & Co, Delhi for Bhilai Steel Plant (BSP), Durgapur Steel
Plant (DSP) & IISCO Steel Plant (ISP) and M/s. Mani & Co, Kolkata for
Alloy Steels Plant (ASP), Salem Steel Plant (SSP) & Visvesvaraya Iron &
Steel Plant (VISP) as Cost Auditor(s) for the Financial Year 2012-13.
REPORT ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, ETC.
Information in accordance with the provisions of Section 2l7(l)(e) of
the Companies Act, 1956 read with the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, l988 regarding
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo is given at Annexure-III to this Report.
PARTICULARS OF EMPLOYEES
There was no employee of the Company who received remuneration in
excess of the limits prescribed under Section 2l7(2A) of the Companies
Act, l956 read with the Companies (Particulars of Employees) Rules,
1975.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 2l7(2AA) of the Companies Act, 1956, it is hereby
confirmed:
(i) that in the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed along with proper explanation
relating to material departures;
(ii) that the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the Financial Year and of the
profit or loss of the Company for that period;
(iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
(iv) that the Directors have prepared the annual accounts on a going
concern basis.
CORPORATE GOVERNANCE
In terms of listing agreement with the Stock Exchanges, a compliance
report on Corporate Governance is given at Annexure-IV. A certificate
from Auditors of the Company regarding compliance of conditions of
Corporate Governance is placed at Annexure-V. In terms of Listing
Agreement, the Board has laid down a Code of Conduct for all Board
Members and Senior Management of the Company.The Code of Conduct has
been posted on the website of the Company. All the Board Members and
Senior Management Personnel have affirmed compliance with the Code.
BUSINESS RESPONSIBILITY REPORT
SEBI vide its Circular CIR/CFD/DIL/8/2012 dated August 13, 2012, has
mandated the top l00 listed entities, based on market capitalization of
BSE and NSE, to include Business Responsibility Report describing the
initiatives taken by the companies from Environmental, Social and
Governance perspective.
Accordingly, the Business Responsibility Report is attached at Annexure
VI and forms part of the Annual Report.
CONSOLIDATED FINANCIAL STATEMENTS
In terms of listing agreement with the Stock Exchange(s), the duly
audited Consolidated Financial Statements are placed at Annexure-VII.
SUBSIDIARIES
IISCO-Ujjain Pipe & Foundary Company Limited, a wholly owned subsidiary
of the erstwhile Indian Iron & Steel Company Limited (IISCO), was
ordered to be wound up by BIFR. The Official Liquidator is continuing
its liquidation process. The assets of the Company have been realized
and the settlement of claims is in process.
The Company has three other wholly owned subsidiary companies namely,
SAIL Refractory Company Limited (SRCL), SAIL Jagdishpur Power Plant
Limited and SAIL Sindri Projects Limited. SRCL has taken over the Salem
Refractory Unit of Burn Standard Company Limited on 16th December, 2011
and is operating the same. SAIL Jagdishpur Power Plant Limited,
incorporated for setting up of Gas based power plant at Jagdishpur and
SAIL Sindri Projects Limited, incorporated for revival of Sindri Unit
of Fertilizer Corporation of India Limited are yet to commence
operations pending relevant approvals.
A Statement pursuant to Section 212 of the Companies Act, 1956 is
attached to the Accounts. In terms of general exemption granted by
Ministry of Corporate Affairs vide Circular No.5/l2/2007-CL-III dated
8.2.2011, under Section 212(8) of the Companies Act, 1956, the Audited
Balance Sheet, Profit and Loss Account, Report of the Board of
Directors and Auditors of our subsidiaries need not be attached with
the Balance Sheet of the Company as the Company has satisfied the
conditions stipulated in the Circular. However, the requisite
information as prescribed in the above Circular of Ministry of
Corporate Affairs in respect of the subsidiary companies has been
disclosed in the Statement.
The Annual Accounts of the subsidiary companies and related detailed
information shall be made available to the shareholders of the holding
and subsidiary companies seeking such information at any point of time.
Further, the Annual Accounts of the subsidiary companies are available
for inspection by any shareholder in the Registered Office of the
Company and of the subsidiary companies concerned during the office
hours between ll AM to l PM. A hard copy of the details of accounts of
subsidiaries shall be furnished to the shareholders on receipt of
written request.
DIRECTORS
Prof. Deepak Nayyar and Shri A.K. Goswami ceased to be Directors w.e.f.
10.02.2013 (A.N.)
Shri A.K. Pandey, Director (Raw Material & Logistics) ceased to be
Director w.e.f. 28.02.2013.
Shri Kalyan Maity has been appointed as Director (Raw Material &
Logistics) w.e.f. 01.03.2013.
Shri E.K. Bharat Bhushan, Special Secretary & Financial Advisor,
Ministry of Steel has resigned from the Directorship of the Company
w.e.f. 29.04.2013.
Shri S. Mukherjee, Director (Commercial) ceased to be Director w.e.f.
01.05.2013.
Shri Vinod Kumar Thakral, Additional Secretary & Financial Advisor,
Ministry of Steel has been appointed as Director w.e.f. 04.06.2013.
Dr. Atmanand and Shri J.M. Mauskar have been appointed as Directors
w.e.f. 18.07.2013.
ACKNOWLEDGEMENT
The Board of Directors wish to place on record their appreciation for
the support and cooperation extended by every member of the SAIL
family. The Directors are thankful to the State Governments,
Electricity Boards, Railways, Banks, Suppliers, Customers and
Shareholders for their continued cooperation. The Directors also wish
to acknowledge the continued support and guidance received from the
different wings of the Government of India, particularly from the
Ministry of Steel.
For and on behalf of the Board of Directors
(C.S.Verma)
Chairman
New Delhi
Dated: 16th August, 2013
Mar 31, 2012
The Directors have pleasure in presenting the 40th Annual Report of the
Company together with audited accounts for the year ended 31st March,
2012.
FINANCIAL REVIEW
Your Company set a new record by achieving the highest ever sales
turnover of Rs.50348 crore during 2011-12, a growth of 7% over previous
year. The Company earned Profit before Tax of Rs.5150.87 crore and Profit
after Tax of Rs.3542.72 crore for the year 2011-12. The profit of your
Company for the year 2011-12 was affected adversely, mainly due to
adverse impact of higher prices of inputs with the average price of
imported Hard Coking Coal going up to US $ 288/T (FOB) in FY'12 as
compared to US $ 213/T (FOB) in corresponding period of last year
(CPLY). Another key factor affecting the profitability was the impact
of foreign exchange variation to the tune of about Rs.900 crore during
the year due to the US $ appreciating from a level of Rs.44.68 as on
31.3.2011 to Rs.50.88 as on 31.3.2012. However, the adverse impact on
profitability was partially offset by several initiatives taken by the
Company. The comparative position of major financial parameters is given
as under:
(Rs. in crore)
Particulars 2011-12 2010-11
Sales Turnover 50,348.40 47,040.50
Profit before interest, depreciation, 7,657.62 9,029.63
exceptional items and tax (EBIDTA)
Less: Interest and Finance Charges 677.70 474.95
Less: Depreciation 1,567.03 1,485.80
Profit before tax (PBT) and exceptional 5,412.89 7,068.88
items
Exceptional items : Loss(-)/Gain( ) -262.02 125.43
Profit before tax (PBT) 5,150.87 7,194.31
Less: Provision for taxation 1,608.15 2,289.57
Profit after tax (PAT) 3,542.72 4,904.74
Dividend (as a % of Equity) :
Interim Dividend (%) 12 12
Final Dividend proposed (%) 8 12
Net Worth 39,811 37,069
EBIDTA to Net sales (%) 16.8 21.1
Return (PAT) on Net worth (%) 8.9 13.2
EBIDTA to average capital employed (%) 21.0 21.7
Earning per share (Rs. 10/- each) 8.6 11.9
Debt Equity Ratio 0.41:1 0.52:1
Your Company continued its thrust on optimum utilisation of funds by
better fund management. This included replacement of high cost short
term loans with low cost debts, timely repayment of loans including
interest, strategic parking of surplus funds with scheduled banks,
actions for future fund raising, etc. to meet growth objectives.
Further, the Company hedged the foreign currency risk on short-term
Buyer's Credit and External Commercial Borrowings depending upon market
conditions. The Company had liquid assets of Rs.5900 crore as on 31st
March, 2012 invested in short term deposits with scheduled banks
against borrowings of Rs.17107 crore as on 31st March, 2012. The debt
equity ratio of the Company reduced to 0.41:1 as on 31st March, 2012
from 0.52:1 as on 31st March, 2011 mainly on account of decrease in
borrowings during the year. The net worth of the Company improved from
Rs.37069 crore as on 31st March, 2011 to Rs.39811 crore as on 31st March,
2012. During the year 2011-12, the capital expenditure incurred was
Rs.11021 crore, which was financed by a mix of internal resources
(including proceeds from maturity of deposits) and borrowings from the
market.
The Company paid interim dividend @ 12% of the paid-up equity share
capital during the year. The Board of Directors has further recommended
a final dividend @ 8% subject to approval of the shareholders, thus
making the total dividend @ 20% of the paid up equity share capital for
the year 2011-12. A sum of Rs.275 crore has been transferred to the
General Reserves during the year (previous year Rs.500 crore).
Credit Rating:
M/s FITCH and M/s CARE, RBI approved credit rating agencies, have
assessed and accorded 'AAA' ratings indicating the highest safety on
principal and interest for SAIL's long term borrowing programme. To
facilitate international borrowing, long term corporate credit rating
has been obtained from FITCH and Standard & Poor, international rating
agencies. Based on SAIL's competitive position, Sovereign rating
['BBB-' outlook stable (investment grade)] was granted to the company.
However, stable outlook has since been downgraded to negative outlook
in line with the Sovereign Rating.
PRODUCTION REVIEW
In the year 2011-12, the SAIL Plants took various initiatives to deal
with the impending challenges by optimizing operations, better value
addition in downstream units, taking measures to reduce coke
consumption by enhancing alternate fuels like Coal Dust Injection (CDI)
in blast furnaces, etc. Record CDI of about 51 kg/tonne of Hot Metal
(thm) was achieved during 2011-12 as against 34 kg/thm in last year.
Further, your Company, in its endeavour to become energy and cost
efficient in the year 2011-12, increased production of crude steel
through continuous casting route and achieved production of 9.4 million
tonnes with a growth of 1% over corresponding period of last year.
Production of hot metal at 14.1 million tonnes, crude steel at 13.4
million tonnes and saleable steel at 12.4 million tonnes was 102%, 104%
and 112% of the rated capacity respectively. Lower availability of Coke
Ovens at BSP, DSP and BSL and resultant Coke Oven gas shortage,
however, affected production during the year adversely.
Your Company produced value added products to the tune of 4.83 million
tonnes thus increasing the share of value-added products in its product
basket to around 39 per cent in the current year. During the year, your
Company has taken various measures to improve processes, including
marketability of products through improved packaging. Higher production
of special quality & value added products resulted in further
improvement of the product-mix. Several new products were developed
which have significant demand, ready market, and good contribution
margin. Some of the major new products developed to meet the customers'
requirement and enhance market share are End Forged Thick Web
Asymmetric Rail for Indian Railways, Atmospheric corrosion resistance
steel plates in JIS 3114 SMA 490BWN for manufacture of bogie frame by
BEML for use in Delhi Metro Project, ASTM A 537 class 1 plates with
impact test in transverse direction for petro chemical industry,
SAIL-TMT Fe 550 EQR/IS 1786 Fe 550 D - High Strength Earth Quake
Resistance Quality Bars for construction of tall towers, BSEN 10025-2 S
275J2 N-Moderate strength with low temperature impact toughness for
railway passenger bogie, DIN EN 10028-3: P355 NL1 - Weldable fine grain
Pressure Vessel Plates for manufacturing of light wagon, 5mm thick 2
Pie Grade Steel Plates for defense application, etc. A large number of
innovations were also carried out in Plants for process improvements
and cost competitiveness.
An exhaustive Master Plan for R&D has been prepared aiming at
integrating R&D activities towards business and operational goals of
your Company. The implementation of this Master Plan; besides giving a
competitive advantage to SAIL by improving efficiencies, reducing
costs, meeting market demands and upgrading current steel technologies;
will also help in gradually increasing R&D expenditure to a level of 1%
of sales turnover, which is an international benchmark.
R&D Master Plan will have positive impact on the existing operations
through implementation of centralised and decentralised projects.
Centralised projects consist of High Impact Projects (HIP) and
Technology Mission Projects (TMP). The projects which are of common
interest of all integrated steel Plants viz. coal & coke beneficiation,
pelletisation, environmental projects etc. will come in the category of
HIP. Development/acquisition of radically new technologies which are of
strategic importance for SAIL viz. thin strip casting and inline
rolling, CRGO etc. will be pursued through TM Projects. Under the
decentralized category, all the Plants/Units of SAIL will have Centre
of Excellence (CoE) in selected areas/products. Centre of Excellence
projects will mainly focus on augmenting product volume and product
attribute. Nine Units of SAIL have selected 14 nos. of projects in
different areas with the aim to be the Centre of Excellence in the
particular field.
Champions of the projects, who are the key drivers, and Research
Councils (RC), the approving authority of CoE projects, are already in
place. In order to facilitate faster communication and sharing of
information, a dedicated web portal in respect of R&D Master Plan has
already been launched on SAIL Net.
Raw Materials:
During 2011-12, total requirement of iron ore was met from captive
sources. The Company's captive iron ore mines produced about 22.35
million tonnes. However, in case of coking coal, around 25% requirement
was met from indigenous sources and balance through imports. During
2011-12, production in captive collieries of the Company was about 0.64
million tonnes. In case of fluxes, around 1.15 million tonnes of
limestone and 0.95 million tonnes of dolomite was produced resulting in
total production of 2.10 million tonnes fluxes from captive sources.
For thermal coal, your Company depends entirely on purchases from Coal
India Limited (CIL) except small quantity produced from captive mines.
To develop a state-of-art mine at Chiria, your Company is in the
process of compliance of Stage I forest clearance conditions. The
Company has deposited the Net Present Value of the forest land and has
acquired the certificate required under the Forest Rights Act, 2006.
During 2011-12, your Company got the final environment clearance for
the Dhobil Lease of the Manoharpur Iron Ore Mines, Chiria.
During the year, Ministry of Mines, Government of India reserved 140 ha
of area having iron ore reserves of 11 million tonnes in NEB range in
Bellary District of Karnataka for undertaking prospecting / mining
operations. Further, Government of Rajasthan has forwarded the proposal
for grant of iron ore mining lease covering an area of 871.38 ha in
Bhilwara District of Rajasthan in favour of your Company to Ministry of
Mines, Government of India.
S&T Mining Company Pvt. Ltd., a Joint Venture Company of SAIL and Tata
Steel Limited, is making efforts to develop Bhutgoria mine of BCCL.
The mine is estimated to produce 0.36 Mtpa coking coal at full capacity
which will be shared between SAIL and Tata Steel. The Joint Venture
Company is also making efforts for establishment of stand alone coal
washery of 1.8 Mtpa at Bhelatand.
Your Company is also making attempts for obtaining allocation of coking
coal and thermal coal blocks under Government dispensation route for
captive mining to enhance indigenous coal availability.
SALES & MARKETING REVIEW
Your Company achieved a total sales volume of 11.8 million tonnes
during FY'11-12. Exports during the year at 0.33 million tonnes were
maintained at previous year's level. Major categories where growth was
recorded in home sales included: HR Coils - 7.1%, Plates>20mm - 4.7%,
Heavy Structurals - 3% and Tin Plates - 10.8%. New records were also
set in supplies of Long Rails, "S" Profile BG Loco Wheels and Loose
Axles to Indian Railways during the year.
During the year 2011-12, your Company started operations at a new
Warehouse at Gorakhpur. With this, SAIL's marketing network has
expanded to 37 Branch Sales Offices (BSOs), 27 Customer Contact Offices
(CCOs) and 67 Warehouses.
A new "SAIL Rural Dealership Scheme" was launched during FY'11-12 with
the primary objective of meeting the steel demands of the small rural
consumers at block, tahsils and taluka levels. Under this scheme, LOIs
were issued to 476 rural dealers during 2011-12. Process for more such
appointments is under progress. Your Company expanded its dealer
network by 517 numbers (including rural dealers) during the year. As
on 1st April, 2012, your Company has a wide network of 3138 dealers
spread over 629 districts of the country.
Your Company maintained its presence in neighbouring and traditional
markets and exported 0.33 million tonnes steel during the year. Exports
of Plates were 5% higher as compared to the previous year. Highest ever
quantity of Rails of 28,700 tonnes was also exported during FY'11-12.
GROWTH PLAN
Keeping in view the acceleration in demand for steel in the country,
your Company is currently implementing growth plan to enhance its hot
metal production from the level of 14.1 million tonnes during 2011-12
in a phased manner. Under the ongoing modernization and expansion plan,
hot metal production capacity will get expanded to 23.46 million
tonnes. The growth plan, besides targeting higher production, also
addresses the need for eliminating technological obsolescence,
achieving energy savings, enriching product-mix, reducing pollution,
developing mines and collieries, introducing customer centric processes
and developing matching infrastructure facilities.
To maintain its current dominance in the domestic market and to meet
the future challenges, your Company is working on a long term strategic
plan 'Vision 2020', which will steer the Company towards meeting its
strategic objectives of achieving profitability through organic and
inorganic growth.
MODERNISATION & EXPANSION PROGRAMME
Steel Industry requires continuous capital investments for
technological up-gradation and addition/modification/replacement of its
capital assets which are essential to maintain market competitiveness
and meet the challenging need of customers. The market is becoming
increasingly competitive making it imperative for your Company to make
determined efforts to bring about substantial improvement in
production, techno- economic parameter and profitability.
Accordingly, the Modernization & Expansion Programme of the Company
aims towards almost doubling the production capacity with energy
efficient and environment friendly technology and a wider product
range.
The current modernization & expansion programme of the Company is being
implemented simultaneously in all Plants/Units, through various
schemes. These include new Raw Material Handling Plants, Sinter Plants,
Coke Oven Batteries, Blast Furnaces, Steel Melting Shops and Finishing
Mills, etc. All the Schemes are at various stages of implementation and
are planned to be completed largely by 2012-2013. At Salem Steel Plant,
the production facilities envisaged under Expansion Programme have
already been installed.
SAIL Board accorded 'in-principle' approval during the year for various
new projects with an estimated total outlay of around Rs.2,187 crore.
The proposal for development of Tasra Coal Block has been approved
'in-principle' along with the option of setting up of a Power Plant in
joint venture for utilization of the secondary products from Tasra
Washery. Orders for about Rs.56,605 crore have been placed under current
Modernisation & Expansion Programme of SAIL. A capital expenditure of
Rs.11,021 crore has been made during 2011-12 on Modernisation and
Expansion Programme and till March'12, the total capital expenditure
incurred was Rs.35,120 crore. The capital expenditure planned to be
incurred during 2012-13 has been kept at Rs.12,000 crore. The current
status of completion of facilities at various Steel Plants is as under:
At IISCO Steel Plant, 220 KV DVC Power Supply has commenced in Jul'11.
Radhanagar Loop line for receipt of Raw Materials and Up-graded West
Yard for dispatch of Coke, Sinter, and Finished Steel & Granulated Slag
has been completed in Nov/Dec'11. Power & Water Supply to major
completed facilities has been started. For Oxygen Plant, hot trials
have been started in Jan'12. For Coke Oven Battery #11 Complex, after
start of Heating of Chimney in Mar'12, Battery heating has also been
started on 30th May, 2012. Unit Functional Test at Wire Rod Mill and
Firing of first Boiler at Power Blowing Station has also started in
Mar'12.
Raw Material Handling System, Sinter Plant and Blast Furnace have been
completed and are ready for commissioning.
At Rourkela Steel Plant, HT power for Ore Bedding & Blending Plant
(OBBP) has been received and hot trials of main units have been
completed. The base mix is being transported regularly from OBBP to
Sinter Plant-3. For Sinter Plant-3, after lighting-up of the Ignition
Furnace, hot trial with sinter making on bed was successfully started
in Apr'12. Other facilities like Coal Handling Plant, New Coke Oven
Battery-6, BF-5, 3rd BOF Converter, 3rd Single Strand Slab Caster, and
New Plate Mill are at various stages of implementation.
At Bhilai Steel Plant, Online Eddy Current Testing (ECT) M/c & Optico-
Visual Inspection System(OVIS) in RSM have been commissioned in Nov'11.
Coke Oven Battery-6, has been commissioned in Jun'11. For Ore Handling
Plant- Part A, Wagon Tippler erection and trial run has been completed
in Dec'11. Installation of 700 TPD Air Separation Unit at Oxygen
Plant-II has been completed. Other facilities like Coke Oven
Battery-11, Coke Dry Cooling Plant, Blast Furnace-8, Steel Melting
Shop- III and finishing mills are under various stages of
implementation.
At Bokaro Steel Plant, Coke Oven Battery No.1 and Coke Oven Battery
No.2 have been commissioned in Jun'11 and Feb'12 respectively.
Installation of new Turbo-blower-8 has been completed in Jan'12 &
hooked-up with BF-2. For Cold Rolling Mill-III, in Pickling Line Tandem
Cold Mill, Manual Strip Threading has been done in Dec'11, Coil
Packaging Line-2 has been completed. For BF-5, after completion of Cold
repair, blowing has been started with up-graded stoves in Mar'12.
At Durgapur Steel Plant, the major packages envisaged under
Modernisation & Expansion Plan, like Bloom-cum-round Caster, Medium
Structural Mill & Reheating Furnace for Medium Structural Mill, New
Dolomite Plant, Re-building of COB-2, De-bottlenecking of Coal Handling
Plant & Raw Material Handling Plant, Ladle Furnace, New Slag Yard and
Civil & Structural works for Medium Structural Mill, are at various
stages of implementation.
At Alloy Steels Plant, the 60 T Ladle Furnace No.2 has been
commissioned in Mar'12.
At Kiriburu Iron Ore Mines, the project for Installation of Bucket
Wheel Re-claimer and Slime Beneficiation has been completed in Aug'11.
For development of Chiria Iron Ore Deposits to 7.0 Mtpa of finished
product, DPER has been submitted by the Consultant M/s Hatch. For
Taldih and Rowghat Iron Ore Deposits, Consultants have been appointed
for preparation of DPER.
AMR SCHEMES
A number of AMR Schemes costing around Rs.676 crore are under
implementation, which include augmentation of Grinding Facilities for
Coal Dust Injection Unit in BF-6 & 7, installation of Oxygen Evacuation
Facilities for 2x1250 TPD New Oxygen Plant at BSP; Coal Dust Injection
in BF-4 at RSP; Installation of Bell Less Top charging System (BLT) in
BF-3 at DSP; Installation of one 1x45 Sub-merged Arc Furnace at CFP and
projects for Development of Mines.
HUMAN RESOURCE MANAGEMENT REVIEW
Your Company recognizes the potential of human resources in providing
competitive advantage and considers its employees as most valuable
resource. The Company has achieved its present level of excellence
through investing in its human resource, which are at the back of every
activity, every technology and every innovation. Your Company continues
to work for developing capabilities and realization of best potential
of its people.
The thrust on achieving higher growth coupled with optimal utilization
of manpower continued. The focus on improving productivity and adoption
of best practices in every area are being pursued relentlessly.
Efforts for active participation by employees, implanting a conducive
ambience for exhibiting creativity and innovation by employees and
ensuring a climate that reflects synergy and contagious enthusiasm has
been at the core of Human Resource (HR) initiatives and interventions.
Strategic alignment of Human Resource Management (HRM) to business
priorities and objectives facilitated steps for ensuring a smooth
transition for upcoming new facilities in the Modernization and
Expansion Programme. HR initiatives also aided in building competent
teams with cross functional expertise leading to further enriching of
the repositories of competencies in the Company.
Enhanced Productivity with Rationalized Manpower:
Your Company achieved its highest ever labour productivity of 241
tonnes of crude steel (tcs) /man/year in 2011-12 with all the five
integrated steel Plants recording their best ever labour productivity
for the year. Bhilai Steel Plant achieved highest ever labour
productivity at 346 tcs/ man/year in the month of March'12. The
manpower of SAIL reached a level of 1,06,004 as on 31.3.2012 from
1,11,475 as on 1.4.2011, thereby achieving rationalization of 5471
during the year. The enhanced productivity with rationalized manpower
could be achieved as a result of judicious recruitment, correct
deployment and redeployment strategies, multi-skilling and zeal of
employees to go beyond and excel.
Developing Employee Capabilities & Competencies :
In order to develop its human resources for harnessing their potential
to the fullest and for according ample opportunity for realizing
individual as well as organizational goals, your Company has been
making sustained efforts through various training and development
activities with focus on preservation of skills, transfer of skills and
knowledge, training in specialized/advanced skills and technology in
collaboration with reputed organizations and development of effective
managerial competencies through association with premier institutes.
Preparing employees for tomorrow, for effectively taking up challenges
and discharging new roles and responsibilities was given a major
thrust. Overall, 52,967 employees were trained against target of 39,016
employees during the year on various contemporary technical and
managerial modules and 141 employees were trained against target of 100
employees on Project Management. Your Company once again achieved Level
-I of performance evaluation in the two parameters under Memorandum of
Understanding (MoU) with Government of India for the Financial Year
2011-12.
Harmonious Employee Relations:
- Your Company has a glorious tradition of conducive employee relations
scenario. There has been a healthy tradition of settling the issues
through discussions with trade unions/workers' representatives and this
has helped in establishing a peaceful IR climate. The Company has an
established system of workers' participation at different levels right
from National level upto shop-floor level. Some of these forums are
functioning since early seventies and are sufficiently empowered to
address different issues related to wage, safety, and welfare of
workers, arising from time to time thus helping in conducive work
environment.
- Bipartite forums, like National Joint Committee for Steel Industry
(NJCS), Joint Committee on Safety, Health & Environment in Steel
Industry (JCSSI), etc. with representation from major central trade
unions as well as representative unions of Plants/Units meet on a
periodic basis and jointly evolve recommendations/ action plans for
ensuring a safe & harmonious work culture which gets substantiated from
the harmonious industrial relations enjoyed over the years by SAIL
Plants/Units, marked with diverse work culture at multi-locations.
- In addition, Quality Circles, Suggestion Schemes, Shop Improvement
Workshops also offer multiple avenues for enhanced workers'
participation. Workers are also kept abreast of strategic business
decisions and their views sought thereon through structured /
interactive workshops.
Grievance Redressal Mechanism:
- Effective internal grievances redressal machinery exists in SAIL
Plants and Units, separately for executives and non-executives. The
grievance procedure in SAIL has been evolved after sustained
deliberations and consent of employees, trade unions and associations.
- The grievances in SAIL Plants/Units are dealt in 3 stages and
employees are given an opportunity at every stage to raise grievances
relating to wage irregularities, working conditions, transfers, leave,
work assignments and welfare amenities, etc. Such issues are
effectively settled through the time-tested system of grievance
management. However, majority of grievances are redressed informally in
view of the participative nature of environment existing in the steel
Plants. The system is comprehensive, simple and flexible and has proved
effective in promoting harmonious relationship between employees and
management.
- The Company disposed off 2650 Staff Grievances during 2011- 12.
Initiatives for Socio-Economic Development of SCs/STs & Other Weaker
Sections of Society:
Presidential Directives on Reservation for Scheduled Castes and
Scheduled Tribes in Appointments in Public Enterprises are continued to
be implemented. As on 31st March, 2012, out of total manpower of
1,06,004, 15.77% were SC and 13.19% were ST. During the year 2011, out
of total recruitments of 1929 made by your Company, 394 belonged to SC
category and 201 belonged to ST category.
SAIL Steel Plants and Units including mines are located in economically
backward regions of the Country with predominant SC/ST population.
Therefore, your Company has contributed to the overall development of
civic, medical, educational and other facilities in these regions.
Your Company has undertaken several initiatives for the socio-economic
development of SCs/STs and other weaker sections of the society, which
are mainly as under:
- Special Schools have been started exclusively for poor,
underprivileged children at five Integrated Steel Plant locations. The
facilities provided include free education, mid-day meals, uniforms
including shoes, text books, stationery items, school bags, water
bottles and transportation in some cases. The schools now provide
education to nearly 1500 children.
- SAIL Plants have adopted 188 SC/ST students belonging to BPL
families/ primitive tribes. They are being provided free education,
boarding, lodging and medical facilities for their overall growth.
- No tuition fee is being charged from SC/ST students studying in the
Company run schools, whether they are SAIL employees' wards or
non-employees' wards.
- Free medical health centers for poor have been set up at Bhilai,
Durgapur, Rourkela, Bokaro, Burnpur (Gutgutpara) providing free medical
consultation, medicines, etc. to the peripheral population mainly
comprising SC/ST and weaker sections of society.
- Villagers are given free treatment - outdoor and indoor-in the mines
hospitals of Kiriburu, Gua & Chiria when recommended by Manki / Munda
(Local Tribal Village Heads) of the peripheral villages which mainly
helps the ST community people and other weaker sections of society.
IMPLEMENTATION OF RTI ACT, 2005
Your Company has implemented Right to Information (RTI) Act, 2005,
which empowers the common citizen by providing access to information
with a view to maintain accountability and transparency. The Company
has always endeavoured to ensure that various enabling provisions of
the RTI Act, 2005 are implemented in letter and spirit. The manual of
17 items, details of Appellate Authority, Public Information Officer
and
Assistant Public Information Officer have been updated and hosted on
SAIL website. A total of 3775 applications were received under RTI Act,
2005 in the Company during the financial year 2011-12, all of which
have been disposed off within the stipulated timeline under the Act.
SAIL has also organized Workshop on "Obligation of Public Authorities
under RTI" and conducted several programmes for spreading awareness.
AWARDS AND ACCOLADES
The excellent performance of Company as well as that of employees won
laurels and appreciation from several quarters during the year 2011-12.
Some of the Awards won by your Company are mentioned below:
- Your Company has been conferred with "MoU Excellence Award" for the
year 2010-11 for the 9th consecutive year. Chairman, SAIL received the
Award from Hon'ble Prime Minister on 31st January, 2012.
- SAIL bagged 11 out of 33 Prime Minister's Shram Awards conferred in
the country to both public & private sector organizations in July'11.
In terms of no. of employees, 59% of the total awardees in the country
were from SAIL.
- 14 out of total 28 Vishwakarma Rashtriya Puraskar given in the
country were bagged by SAIL employees in 2011. In terms of number of
employees, 62% (73 Award winner out of 117) were from SAIL family.
- 10 teams involving 63 SAIL employees participated in International
Convention on Quality Circle 2011 held at Yokohama, Japan in September,
2011. 7 teams won Excellent and 3 won Distinguished QC Award, which was
the highest for any single organsiation.
- 57 teams from SAIL Plants/Units participated in National Convention
on Quality Concepts-2011 held at Hyderabad in December, 2011. 33 teams
won Par Excellence, 2 teams won Excellent and 3 teams won Distinguished
Award.
- SCOPE Meritorious Award-2010-11 for "Corporate Governance" has been
conferred upon SAIL. Chairman SAIL received the award from Her
Excellency Smt. Pratibha Devisingh Patil, the then President of India,
on 13th April'2012 at Vigyan Bhawan in New Delhi.
- 13 Awards (6 winners and 7 runner up) out of total 123 "National
Safety Awards-2009" announced by Ministry of Labour and Employment.
- "SCOPE Meritorious Award for Environment Excellence & Sustainable
Development" for the Year 2009-10. Chairman received the Award from the
then President of India, Her Excellency Smt. Pratibha Devisingh Patil
on 11th April, 2011.
- Indian Institution of Industrial Engineering's "Performance
Excellence Awards - 2010" and received a Gold plaque with certificate
of excellence. The Awards were presented by Hon'ble Minister of Goa on
16th May, 2011.
- "Golden Peacock Environment Management Award 2011" in recognition of
initiatives and achievements in the field of environment management.
Chairman received the Award from Shri P. Chidambaram, Hon'ble Union
Minster for Home Affairs, Govt. of India on 24th June, 2011.
- Prestigious 'Randstad Award -2011' under 'Manufacturing Industries'
category. Director (Personnel) received the award from Dr. Bimal Jalan,
former RBI Governor on 29th June, 2011.
- "Dainik Bhaskar India Pride Gold Award-2011" in the category "Metals
& Minerals & Trade including Mining, for Central PSUs". Chairman
received the Award from Dr. Montek Singh Ahluwalia, Dy. Chairman,
Planning Commission, GOI, on 21st October, 2011.
- 'IEI Industry Excellence Award 2011'.Chairman received the Award on
16th December, 2011 at Bangalore during the Inaugural Session of the
26th Indian Engineering Congress.
- In promoting use of Rajbhasha, SAIL's efforts have been recognized in
the form of 1st prize at Town Level by TOLIC for Best Official Language
implementation by Govt. of India.
- Your Company has been awarded with the Skoch Award for Financial
inclusion under the category of "Women Empowerment" in recognition of
multifold initiatives for inclusive growth. Chairman, SAIL received
the Award from Shri C. Rangarajan, ex- Governor RBI on 5th January,
2012.
In addition to above, SAIL Plants/Units have also excelled in various
areas and have won Awards for excellent performance; salient ones are
listed as under:
Bhilai Steel Plant (BSP)
- "Golden Peacock Eco Innovation Award - 2011" from World Environment
Foundation, New Delhi.
- "Golden Peacock HR Excellence Award for the Year 2011" from Institute
of Directors, New Delhi.
- Prime Minister's Trophy for the Best Integrated Plant in India for
the Year 2009-10.
- "Greentech HR Excellence Award - 2011" under the award category
"Employee Services" from Greentech Foundation.
Durgapur Steel Plant (DSP)
- "Greentech Safety Award (Gold) - 2009" in Metals and Mining Sector
from Greentech Foundation, New Delhi on 29th April, 2011.
- "Indian Achiever's Award - 2010" on Corporate Leadership from Indian
Achievers Forum, New Delhi.
- "Greentech Environment Excellence Award (Gold) - 2010" in Metals and
Mining Category for environmental preservation from Greentech
Foundation, New Delhi.
- "Greentech CSR Award (Gold)-2010" in Metals & Mining Category by
Greentech Foundation, New Delhi on 19th October, 2011.
- "Golden Peacock National Quality Award-2011". The Award has been
conferred by the Institute of Directors.
Rourkela Steel Plant (RSP)
- "Rajbhasha Gaurav Samman" from the Bhartiya Rajbhasha Vikas
Sansthaan, Dehradun for its outstanding contribution in implementing
Rajbhasha. The Award was conferred during the Akhil Bharatiya Rajbhasha
Sangosthi held at Madurai from 12th to 14th October, 2011.
- "Greentech Environment Excellence (Gold) Award" in the Environment
Management front. The Award was given during the 12th Annual Greentech
Environment & CSR Global Conference, 2011 at Srinagar, Jammu & Kashmir
on 20th October, 2011.
Bokaro Steel Plant (BSL)
- "Golden Peacock Award - 2011" for Innovative Product/ Services from
Institute of Directors.
Salem Steel Plant (SSP)
- 2nd Prize of National Sustainability Award in the Secondary Steel
Plants / Alloy Steel Plant Category from Indian Institute of Metals,
Kolkata for the Year 2010-11.
RDCIS
- "Most Innovative Energy Saving Product" Award institutionalized by
CII for Curtain Flame Ignition System.
- "NRDC Meritorious Invention Award-2010" for Curtain Flame Ignition
Technology for Sinter Machine in Steel Plants from NRDC.
CORPORATE SOCIAL RESPONSIBILITY
Your Company's focus on social responsibility remains unwavering. The
pivotal role of education, health, income generation and sustainable
development is the cornerstone of our Corporate Social Responsibility.
On the health front, your Company is operating 54 Primary Health
Centres, 12 Reproductive and Child Health Centres, 17 Hospitals and 7
Super-Specialty Hospitals which provide specialized healthcare to more
than 30 million people living in the vicinity of its Plants and Units.
In the year 2011-12, in order to reach to the underprivileged, over
2400 camps have been organized across the Country benefiting around
1.80 Lakh people providing free health check-up, path-lab treatment,
medicine, immunization, etc. To help the poor and downtrodden, 12
numbers of MMUs /Ambulances, etc. provided to various NGOs like
Wockhardt, HelpAge India, Bharat Sewashram Sangha, etc. in 2011-12.
Special project AKSHAYA for providing free investigation to TB patients
of under privileged section of society and Project CHETNA for the
treatment of Sickle Cell & Anemia are being run at Rourkela.
In the field of education, your Company has opened over 146 schools in
the Steel Townships to provide modern education to about 70,000
children. Besides adopting and providing free education and facilities
to tribal children, SAIL is providing assistance to over 286 schools.
In this endeavor, SAIL has achieved a Girl: Boy ratio of 1:1 for all
levels of education and a survival rate, i.e. rate of retaining
enrolled students of 93% in SAIL Primary Schools and 90% in SAIL
Secondary Schools. Seven Special Schools for BPL (Kalyan Vidyalaya) at
five steel Plants with facilities of free education, mid-day meals,
uniform including shoes, text books, stationery items, school bags,
water bottles and transportation in some cases are running under CSR.
Scholarships to deserving undergraduate & postgraduate engineering
students, adoption of 180 tribal children at Bhilai & fourteen of
nearly extinct Birhore Tribes at Bokaro, 4 girl students for Nursing
Course, etc. are the major steps taken for uplifting poor, OBC & SC,
ST. With the help of Akshay Patra Foundation, SAIL is providing Mid-Day
Meal to more than 18000 students in different schools of Bhilai
everyday.
SAIL has provided access to around 75 lakh people across 450 villages
since inception by constructing and repairing of roads. It has provided
access to water infrastructure to people living in far-flung areas by
installing over 6000 water sources, thereby providing drinking water
access to around 50 lakh people.
In order to bridge the gap between rural and urban areas and to provide
comprehensive development of both physical and social infrastructure,
79 villages have been identified as "Model Steel Villages" across the
country (in eight states). The developmental activities being
undertaken in these villages include medical & health services,
education, roads & connectivity, sanitation, community centers,
livelihood generation, sports facilities, etc. Work at 71 villages have
been completed till 2011-12. Vocational training has been provided to
in areas such as improved Agriculture, Mushroom Cultivation, Goatery,
Poultry, Fishery, Piggery, Achar / Papad/ Agarbati making, Welder,
Fitter & Electrician Training, Sewing and Embroidery, Smoke less
Chullah Making, etc. Vocational Training centre for rural and
unemployed youths - 'Bhilai Ispat Kaushal Kutir' at Bhilai, Skill
Development and Self Employment Training Institute (SDSETI) for the
benefit of the women and girls at Durgapur and Self employment centre
"KIRAN" at Kiriburu Ore Mines are benefiting common masses by way of
financial inclusion/ SHG and then empowering them to be part of main
stream.
For promoting the tribal culture, a 5 day Chattisgarh Lok Kala Mahotsav
was celebrated in which around 600 artists participated and more than
10,000 people attended. To promote local culture and games, various
Gramin Lokotsavas and Gramin Athletics Competitions were organised by
SAIL at different locations throughout the year.
Your Company's efforts as a responsible corporate citizen in Nation
building have been recognized by various organizations in the form of
awards and accolades. In year 2011-12, SAIL won Global CSR Awards 2012
for Education and Health, by World CSR Day Organization and Financial
Inclusion Award-2012 for "Women Empowerment" by SKOCH Foundation.
CITIZEN CHARTER
SAIL's Citizen Charter has outlined commitment of SAIL towards its
stakeholders thereby empowering them to demand better products and
services. The Citizen's Charter of SAIL may be summarized in four
objectives as given below:
- Ensuring citizen-centric focus across all its processes by adopting
Total Quality Management principles for improvement of products and
services.
- Ensuring effective citizen communication channels.
- Demonstrating transparency and openness of its business operations
by hosting the Citizen's Charter on the corporate web site.
- Working towards delight of citizens by fail-safe processes and in
case of exigencies leveraging its service recovery processes, like
Grievance Redressal, Handling Complaints, etc.
The Management of your Company is totally committed to excellence in
public service delivery through good governance by a laid down process
of identifying citizens, our commitment to them in meeting their
expectations and our communication to them of our key policies in order
to make the service delivery process more effective. The Citizen
Charter is a dynamic commitment which is reviewed continually to
improve the effectiveness of the Document.
STRATEGIC INITIATIVES OF THE COMPANY
During the Year 2011-12, your Company continued to give impetus towards
taking new business initiatives including incorporation/ formation of
new Joint Ventures (JVs), mergers & acquisitions and entering into
Memorandum of Understandings (MOUs) for its long term strategic
objectives. Your Company has established communication channels with
renowned international technology providers for forging strategic
alliances for production of value added products. The Company is
continuously adopting the path of entering into Joint Ventures with
public / private entities to attain its strategic goals of maximizing
gains with optimal utilization of resources. These include:
(A) Mergers & Acquisitions (M&As) :
(i) Merger of Maharashtra Elecktosmelt Limited (MEL) with Steel
Authority of India Limited (SAIL): The Ministry of Corporate Affairs
(MCA), New Delhi vide its letter dated 14.6.2011 forwarded the Order of
the Central Government sanctioning the Scheme of amalgamation of
Maharashtra Elektrosmelt Ltd (MEL) with Steel Authority of India
Limited (SAIL) under Section 391-394 of the Companies Act, 1956. The
appointed date of amalgamation was 01.04.2010. Consequent to
amalgamation, MEL became a Unit of SAIL and renamed as Chandrapur Ferro
Alloy Plant (CFP).
(ii) Transfer of Salem Refractory Unit of Burn Standard Company Limited
(BSCL) to SAIL Refractory Company Limited (SRCL), a wholly owned
subsidiary of SAIL: The process of transfer of BSCL's Salem Refractory
Unit as a subsidiary of SAIL was initiated on 10th June, 2010, when the
Cabinet Committee on Economic Affairs (CCEA) approved the financial
restructuring of BSCL and also authorised the Department of Heavy
Industries and Ministry of Steel to work out operational steps for the
transfer. Subsequently, SAIL Refractory Company Limited (SRCL), a
wholly owned subsidiary of SAIL was incorporated at Coimbatore, Tamil
Nadu on 23rd August, 2011 for this purpose. A Deed of Transfer was
signed on 16th December'2011 with Burn Standard and Co. Ltd. (BSCL) for
the transfer of BSCL's Refractory Unit at Salem to the newly formed
subsidiary of SAIL, namely SAIL Refractory Company Limited (SRCL).
Your Company has already initiated action towards manpower deployment
and undertaken operational improvement projects, capex plans, etc., at
the newly acquired refractory unit. A previously declared
non-operational Shaft Kiln has also been brought under operation.
(B) Joint Ventures:
(i) A Joint Venture Company "SAIL RITES Bengal Wagon Industry Pvt.
Ltd." has been incorporated to manufacture 1500 wagons per annum
(manufacture of 1200 wagons and rehabilitation of 300 wagons) which
will include BOXN-type wagons, specialized high-end wagons and modern
stainless steel wagons at Kulti, West Bengal. Construction activities
and procurement of machinery are in progress.
(ii) The Steel Complex Limited (SCL), a Government of Kerala
undertaking, was converted into a Joint Venture Company between your
Company and Government of Kerala in February' 2011 by acquisition of
50% of the shares held by the Government of Kerala (GoK) in SCL.
Management Control of the Joint Venture Company (JVC) was vested with
SAIL for synergizing the resources and optimizing production process at
SCL. Towards accomplishing the intent to bring an early turnaround and
revival of the JVC, your Company has sanctioned working capital
assistance to the JVC and GoK has issued directives to the State PSUs
to provide necessary raw material (i.e. scrap) and order for the
finished product (TMT 500 and above grade) to SCL. These interventions
have resulted in improving the performance of the Joint Venture
Company.
(iii) Power: Power requirement of SAIL Plants and Mines is expected to
increase from present 1000 MW to nearly 1800 MW after completion of the
ongoing expansion plan. Feasibility Report is under preparation by
NTPC SAIL Power Company Private Limited (NSPCL), a 50:50 JV of SAIL and
NTPC, for setting up of 2x250 MW Power Plant at Bhilai & 1x250 MW Power
Plant at RSP to meet enhanced power requirement post completion of
expansion schemes.
(iv) Renewable Energy Purchase: In line with Electricity Act, 2003 and
National Electricity Policy, various State Electricity Regulatory
Commissions have notified that certain minimum percentage of
electricity consumed by various users of captive power should come from
renewable energy sources. Your Company is taking action to meet this
obligation by having long term arrangements for such power from
renewable energy based power plants in Joint Venture. A long term
strategy to meet renewable energy purchase obligation has been worked
out for installing captive power generation through Joint Venture route
based on renewable energy sources.
(v) Titanium Project: Your Company is contemplating to diversify into
new and related areas as its growth strategy and as a step towards this
direction has accepted Government of Kerala's offer to jointly explore
the possibility of working on a Titanium Sponge Project. A joint
committee of senior officials of both SAIL & GoK shall undertake a
feasibility study for setting up a 10,000 tpa project in collaboration
with Govt. of Kerala at Kollam, Kerala.
(C) Strategic Alliances:
(i) Kobe Steel Limited, Japan: In pursuance to signing of Memorandum of
Understanding between SAIL and M/s Kobe Steel Limited, Japan (KSL) in
March, 2010, a pre- feasibility study has been jointly carried out to
assess the economic and technical viability for setting up an ITmK3
(Iron making Technology mark Three) Plant in Joint Venture for
production of Iron Nuggets from Iron Ore Fines. SAIL has signed a Term
Sheet with M/s Kobe Steel for preparing DPR for setting up a 0.5
million tonnes ITmk3 technology based plant at ASP, Durgapur for which
a Joint Venture Company "SAIL-Kobe Iron India Private Limited" has been
incorporated on 25th May, 2012.
(ii) Revival of Sindri Project: Cabinet Committee on Economic Affairs
(CCEA) in its meeting held on 4th August, 2011 has approved the
proposal for revival of the closed unit of Fertilizer Corporation of
India Limited (FCIL) with the stipulation that the BIFR proceedings be
expedited and, thereafter, the matter including changes, if any,
required in bid parameters, be placed before the Committee for a final
decision. As per the Cabinet approval, the consortium of SAIL and
National Fertilizers Limited (NFL) has been nominated for revival of
the Sindri Unit of FCIL. A new Special Purpose Vehicle (SPV) Company
namely "SAIL-Sindri Projects Ltd" has already been incorporated on
November 8, 2011 as a subsidiary of the Company. A firmed-up proposal
on revival of Sindri Unit has been submitted to Ministry of Fertilizer
(MOF) detailing the business plan & structure for the SPV.
(iii) Hajigak Iron Ore Deposits owned by Government of Afghanistan: The
SAIL-led consortium AFISCO (Afghan Iron & Steel Consortium), which had
submitted its bid for mining exploration rights at Hajigak, has won the
status of 'Preferred
Bidder' for Blocks B, C and D of the mines with an estimated reserve of
1.28 billion tonnes of high-grade magnetite iron ore (with 62-64% Fe
content). The Consortium will now have the opportunity to enter into a
Hajigak Project Contract with the Ministry of Mines of the Islamic
Republic of Afghanistan after formal negotiations, and to receive a
licence to further explore, develop and exploit the Hajigak iron ore
deposits.
(D) Memorandum of Understanding (MOU) / Commercial Agreements entered
into with various companies:
(i) On 16th June, 2011, SAIL signed an MOU with M/s Mishra Dhatu Nigam
Limited (MIDHANI) for exploring synergetic business opportunities in
production of value-added products, enhanced research & development
activities, exchange of technical know-how and joint investment between
the two companies. A Joint Task Force Team (TFT) has been constituted
to identify special steel products which can be jointly developed by
utilizing the R&D facilities of both companies based on assessment of
market demand and subject to techno-economic viability and commercial
prudence.
(ii) On 23rd May 2011, SAIL and Burn Standard Co. Ltd. (BSCL), a PSU
under the Ministry of Railways, entered into an MOU for setting up a
Wagon Components Manufacturing Facility (WCMF) as a 50:50 Joint Venture
(JV) for the manufacture of Cast Steel Bogies, Couplers and related
products for use on the Wagons running on Indian Railways. The project
is planned to be set up on leasehold land under the possession of M/s
Burn Standard Co. Ltd. (BSCL) at Jellingham, West Bengal. The Techno
Economic Feasibility Report (TEFR) has been prepared by M/s RITES
(Consultant) & the project activities have commenced.
ENTERPRISE SCORE CARD (ESC)
First Enterprise Score Card (ESC) of SAIL was prepared for 2011-12.
Enterprise Score Card not only brought integration with Memorandum of
Understanding (MoU) with the Government of India and Annual Business
Plan (ABP) of the Company but also facilitated deployment of these
across various leadership levels. It facilitated deployment of
organisational strategy. ESC 2011-12 was aligned upwards with Vision,
ABP & MOU; deployed downwards through Unit Score Cards, Functional
Score Cards and Departmental Score Cards and addressed the long term
and short term issues. Process for formulation of Enterprise Score Card
for 2012 -13 has also been initiated.
IT RELATED INITIATIVES
Your Company has been moving ahead in innovative usage of Information
Technology (IT). As a step towards this, Enterprise Resource Planning
(ERP) has been implemented stage wise at BSP, DSP, BSL and CMO during
2008-2011. RSP went live on ERP on 01/04/2012 and is in the process of
stabilization.
Manufacturing Execution System (MES) has been implemented at BSP's 3
shops, namely SMS 2, Plate Mill and Rail Mill with the help of M/s
POSDATA. The system is getting stabilized. MES implementation would
enable detailed planning, scheduling and status monitoring of orders at
these shops.
Your Company is currently revisiting its IT Strategy for alignment of
IT to achieve One SAIL IT Vision and for better IT & business synergy.
ENVIRONMENT MANAGEMENT
SAIL is committed to a sustainable environment and is continuously
enhancing its environmental performance as an integral part of its
business philosophy and values. A number of environmental initiatives
have been taken by your Company during the year yielding positive
results. The highlights of this area are as under:
- Best ever achievements were made during the year 2011-12 in respect
of the following Environmental Indices:
- Particulate Matter (PM) emission load has reduced from 2.3 kg/tcs in
2006-07 to 1.01 kg/tcs in the year 2011-12, a reduction of 56% in the
last 6 years.
- Specific Water Consumption has reduced from 4.58 m3/tcs in 2006-07 to
3.86 m3/tcs in the year 2011-12; a reduction of more than 15% in the
last 6 years.
- Specific effluent discharge from SAIL Plants has reduced from 2.73
m3/tfs in 2006-07 to 2.26 m3/tfs in the year 2011-12; a reduction of
more than 17% over the last 6 years.
- Utilisation of Blast Furnace (BF) Slag and LD Slag was 91% and 85%
respectively in 2011-12. An enhancement of 15% utilisation of the BF
and 19 % utilisation of the LD slag has been achieved over the last 6
years.
- 2.81 lakh saplings have been planted in and around SAIL Plants and
Mines during the year.
- VISL, Bhadravati has been accredited to ISO 14001 Environment
Management System.
- As a part of Greening of Warehouses Initiative, to start with,
Warehouses of CMO at Faridabad, Chennai, Kalamboli and Dankuni were
accredited to ISO 14001 Environment Management System.
- Sustainable Development Policy for the Company has been formulated
and released.
- "Golden Peacock Environment Management Award, 2011" was conferred
upon SAIL in recognition of SAIL's initiatives and achievements in the
field of environment management.
CORPORATE COMMUNICATION
Corporate Communication across SAIL has played a key role in enhancing
the brand image and brand equity of the organisation. Internal
communication through print, electronic and web tools enabled better
employee engagement and motivation. External communication aimed at
information-sharing with the stakeholders and brand building for the
Company. Media was leveraged in the best possible manner to this end.
Online medium was harnessed to spread brand awareness. SAIL website
popularity increased as evidenced by more than one lakh average hits
per day. Extensive efforts were made for positive communication about
the Company. Through such initiatives, brand visibility has increased
significantly.
For regular media interaction, structured press conferences and
Chairman interviews were organised, coupled with sustained
communication with the media through press releases. Focus on major
sports events was strengthened during the year. The 5th version of SAIL
Open Golf Tournament organized in Feb.'12 as part of Asian Tour of
Professional Golf Tournament received wide publicity. Validating the
branding potential of the event, State Bank of India (SBI) and Ministry
of Tourism joined as partners this year.
VIGILANCE ACTIVITIES
SAIL Vigilance has been focusing on preventive and proactive vigilance
activities to facilitate a conducive environment for enabling people to
work with integrity, impartiality and efficiency, in a fair and
transparent manner, upholding highest ethical standards to enhance
reputation and create value for the organization.
SAIL Vigilance has undertaken the following major activities during the
year:
To enhance awareness amongst employees, vigilance awareness sessions
and workshops on systems and procedures followed in SAIL were regularly
held at various Plants and Units. A total of 140 such workshops
involving 2937 participants were held on Purchase/Contract procedures,
Conduct & Discipline Rules, RTI Act, etc.
A total of 3755 periodic checks, including surprise checks and the file
scrutiny were conducted in the vulnerable areas / departments of
different Plants & Units. Further, 21 major system improvement projects
were undertaken over and above the system improvements recommended on
the basis of vigilance investigations and checks. Savings of Rs.2361.97
lakh approx. has accrued from Vigilance measures taken during the
period April 2011 to March 2012.
Various initiatives have been taken by SAIL Vigilance to increase
leveraging of technology in vigilance function. These include provision
for on-line submission of Property Returns, provision for generating
on-line Vigilance Status, augmentation of on-line submission of
Management Information System reports by vigilance departments of
Plants & Units of SAIL, online File Tracking System, Knowledge Portal,
Vigilance Blog for discussions relating to vigilance related issues
etc.
For effective implementation of the Integrity Pact, review meetings
were conducted periodically with the Independent External Monitors
(IEMs).
To inculcate ethics amongst the Children at their formative stage, an
initiative has been taken by SAIL Vigilance for nurturing ethics
amongst the School Children. As a part of this initiative, Ethics Club
have been launched in BSP, BSL and RSP. To propagate above activities,
a committee comprising senior executives has been formed at Plants /
Units level.
A case study forwarded by SAIL Vigilance on " Use of Sub-Standard Grade
Roofing Sheets in Construction of Bloom Caster Shop' has been awarded
the "National Vigilance Excellence Award 2011" by Vigilance Study
Circle, Hyderabad.
CONSULTANCY SERVICES
Based on its large and varied expertise and experience acquired over
the last five decades, SAIL, through SAIL Consultancy Division
(SAILCON), provides design, engineering, training, technical &
management consultancy services in Iron & Steel and related areas and
offers a wide range of services to clients Globally. Technical and
Management Training services are its forte and these services have been
availed of by several organisations in private and public sector within
India and abroad. To scale up the activities and to further reinforce
the brand image of SAIL as a consultant, SAILCON is continuously
exploring the market, both within and outside the Country for possible
business opportunities as well as joint ventures with Global
consultants for commercialization of SAIL's expertise.
During the Financial Year 2011-12, SAILCON, an ISO: 9001:2008 certified
quality organization and the single window consultancy division of the
Company recorded the highest ever order booking.
'SAILCON' has executed assignments within India and abroad covering
countries like Egypt, Saudi Arabia, Iran, Qatar, Thailand, Nepal,
Philippines, etc.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
The Management Discussion & Analysis Report covering the performance
and outlook of the Company is enclosed.
AUDITORS' REPORT
The Statutory Auditors' Report on the Accounts of the Company for the
Financial Year ended 31st March, 2012 along with Management's replies
thereon is placed at Annexure-I. The Comptroller & Auditor General of
India (C&AG) vide its letter dated 26th June, 2012 has given "nil"
comments on the accounts of the Company for the year ended 31st March,
2012 under Section 619(4) of the Companies Act, 1956. A copy of the
above letter of C&AG is placed at Annexure-II.
COST AUDITORS
Pursuant to the direction of the Central Government for audit of cost
accounts, your Company has appointed M/s Jugal K Puri & Associates,
Gurgaon for Rourkela Steel Plant (RSP) & Bokaro Steel Plant (BSL), M/s
K.C. Kohli & Co, Delhi for Bhilai Steel Plant (BSP), Durgapur Steel
Plant (DSP) & IISCO Steel Plant (ISP) and M/s Mani & Co, Kolkata for
Alloy Steels Plant (ASP), Salem Steel Plant (SSP) & Visvesvaraya Iron &
Steel Plant (VISP) as Cost Auditor(s) for the financial year 2011-12.
The report of the Cost Auditors is under finalization and will be
submitted to the Ministry of Corporate Affairs within the prescribed
period.
REPORT ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, ETC.
Information in accordance with the provisions of Section 217(1)(e) of
the Companies Act, 1956 read with the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988 regarding
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo is given at Annexure-III to this Report.
PARTICULARS OF EMPLOYEES
There was no employee of the Company who received remuneration in
excess of the limits prescribed under Section 217(2A) of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules,
1975.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, it is hereby
confirmed:
(i) that in the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed along with proper explanation
relating to material departures;
(ii) that the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the Financial Year and of the
profit or loss of the Company for that period;
(iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
(iv) that the Directors had prepared the annual accounts on a going
concern basis.
CORPORATE GOVERNANCE
In terms of listing agreement with the Stock Exchanges, a compliance
report on Corporate Governance is given at Annexure-IV. A certificate
from Auditors of the Company regarding compliance of conditions of
Corporate Governance is placed at Annexure-V. In terms of Listing
Agreement, the Board has laid down a Code of Conduct for all Board
Members and Senior Management of the Company. The Code of Conduct has
been posted on the website of the Company. All the Board Members and
Senior Management Personnel have affirmed compliance with the Code.
CONSOLIDATED FINANCIAL STATEMENTS
In terms of listing agreement with the Stock Exchange(s), the duly
audited Consolidated Financial Statements are placed at Annexure-VI.
SUBSIDIARIES
IISCO-Ujjain Pipe & Foundary Company Limited, a wholly owned subsidiary
of the erstwhile Indian Iron & Steel Company Limited (IISCO), was
ordered to be wound up by BIFR. The Official Liquidator is continuing
its liquidation process. The assets of the Company have been realized
and the settlement of claims is in process.
During the year, three new wholly owned subsidiary companies were
incorporated namely, SAIL Refractory Company Limited (SRCL), SAIL
Jagadishpur Power Plant Limited and SAIL Sindri Projects Limited as
Special Purpose Vehicles. SRCL has taken over the Salem Refractory Unit
of Burn Standard Company Limited on 16th December, 2011. While SAIL
Jagadishpur Power Plant Limited has been incorporated for setting up of
Gas based power plant at Jagadishpur, the SAIL Sindri Projects Limited
has been incorporated for revival of Sindri Unit of Fertilizer
Corporation of India Limited. These two companies are yet to commence
operations pending relevant approvals.
A Statement pursuant to Section 212 of the Companies Act, 1956 is
attached to the Accounts. In terms of general exemption granted by
Ministry of Corporate Affairs vide Circular No.5/12/2007-CL-III dated
8.2.2011, under Section 212(8) of the Companies Act, 1956, the Audited
Balance Sheet, Profit and Loss Account, Report of the Board of
Directors and Auditors of our subsidiaries need not be attached with
the Balance Sheet of the Company as the Company has satisfied the
conditions stipulated in the Circular. However, the requisite
information as prescribed in the above Circular of Ministry of
Corporate Affairs in respect of the subsidiary companies has been
disclosed in the Statement.
The Annual Accounts of the subsidiary companies and related detailed
information shall be made available to the shareholders of the holding
and subsidiary companies seeking such information at any point of time.
Further, the Annual Accounts of the subsidiary companies are available
for inspection by any shareholder in the Registered Office of the
Company and of the subsidiary companies concerned during the office
hours between 11 AM to 1 PM. A hard copy of the details of accounts of
subsidiaries shall be furnished to the shareholders on receipt of
written request.
DIRECTORS
Shri Soiles Bhattacharya, Director (Finance) ceased to be Director
w.e.f. 31.08.2011 (A.N.) on attaining the age of superannuation.
Shri Anil Kumar Chaudhary has been appointed as Director (Finance)
w.e.f. 01.09.2011.
Dr. Isher Judge Ahluwalia, Shri Sujit Banerjee and Shri Arun Kumar
Srivastava have been appointed as Independent Directors on 16.01.2012.
Shri S.S. Mohanty has been appointed as Director (Technical) w.e.f.
15.03.2012.
Shri B.B. Singh, Director (Personnel) ceased to be Director w.e.f.
30.04.2012 (A.N.) on attaining the age of superannuation.
Shri H.S. Pati has been appointed as Director (Personnel) w.e.f.
01.05.2012.
Shri T.S. Suresh has been appointed as Director (Projects & Business
Planning) w.e.f. 04.05.2012.
Shri A.K. Pandey has been appointed as Director (Raw Material &
Logistics) w.e.f. 24.05.2012.
Shri S. Machendra Nathan, Additional Secretary & Financial Advisor (AS
& FA), Ministry of Steel ceased to be Director w.e.f. 16.07.2012.
Shri E.K. Bharat Bhushan, AS&FA, Ministry of Steel has been appointed
as Director w.e.f. 23.07.2012.
ACKNOWLEDGEMENT
The Board of Directors wish to place on record their appreciation for
the support and cooperation extended by every member of the SAIL
family. The Directors are thankful to the State Governments,
Electricity Boards, Railways, Banks, Suppliers, Customers and
Shareholders for their continued cooperation. The Directors also wish
to acknowledge the continued support and guidance received from the
different wings of the Government of India, particularly from the
Ministry of Steel.
For and on behalf of the Board of Directors
(C.S. Verma)
Chairman
New Delhi
Dated: 9th August, 2012
Mar 31, 2011
The Members,
The Directors have pleasure in presenting the 39th Annual Report of the
company together with audited accounts for the year ended 31st March,
2011.
FINANCIAL REVIEW
Your company increased production of value added steel and achieved the
saleable steel production of 12.9 MT representing 116% of capacity
utilisation. With the help of various management initiatives taken,
your company achieved a turnover of Rs. 47,041 crore during 2010-11,
which is higher by 7% over last year. Your company has also undertaken
expansion and modernisation plan, which is expected to be completed by
2012-13, with focus on higher production of value added products.
The profit of your company for the year 2010-11 was affected adversely,
mainly due to adverse impact of input prices consisting of imported
coal, indigenous coal, limestone, nickel, ferro alloys, aluminium,
boiler coal, purchase power, increase in royalty on minerals, salaries
& wages, higher interest & depreciation. However, the adverse impact on
profitability was partially off set by higher volume of saleable steel
production, increase in net sales realisation of saleable steel, better
product mix and higher value added steel production. The comparative
performance of major financial parameters is given as under:
(Rs.In crore)
2010-11 2009-10
Sales Turnover 47,040.50 43,934.70
Profit before interest, depreciation and
tax (EBIDTA) 9,155.06 11,871.28
Less: Interest and Finance Charges 474.95 402.01
Less: Depreciation 1,485.80 1,337.24
Profit before tax (PBT) 7,19431 10,132.03
Less: Provision for taxation 2,289.57 3,377.66
Profit after tax (PAT) 4,90474 6,754.37
Net Worth 37,069 33,317
EBIDTA to Net sales (%) 21.4 29.3
Return (PAT) on Net worth (%) 13.2 20.3
EBIDTA to average capital employed (%) 22.0 31.1
Earning per share (Rs.10/- each) 11.9 16.4
Debt Equity Ratio 0.54:1 0.50:1
The continued thrust on optimum utilisation of funds by better fund
management included replacement of high cost short term loans with low
cost debts, strategic parking of surplus funds with scheduled banks,
actions for future fund raising etc. to meet our growth objectives. The
company had liquid assets of Rs.17,142 crore as on 31st March, 2011
invested in short term deposits with scheduled banks against borrowings
of Rs. 20,165 crore as on 31st March, 2011. The debt equity ratio of the
company increased to 0.54:1 as on 31.03.2011 from 0.50:1 as on
31.03.2010 mainly on account of increase in borrowings for capital
expenditure. The net worth of company improved substantially and this
helped in generation of internal resources for funding expansion plans
of SAIL.
The company paid interim dividend @ 12% of the paid-up equity share
capital during the year. The Board of Directors has further recommended
a final dividend @ 12% subject to approval of shareholders, thus making
the total dividend @ 24% of the paid up equity share capital for the
year 2010-11. A sum of Rs. 500 crore has been transferred to the general
reserves during the year (previous year Rs. 680 crore).
Credit Rating:
M/s FITCH and M/s CARE, RBI approved credit rating agencies, maintained
"AAA" ratings indicating the highest safety, to your company's long
term borrowing programme. Standard and Poor's, an International Rating
Agency, has reaffirmed Rating of "BBB-" with stable outlook for the
company.
PRODUCTION REVIEW
In the year 2010-11, the plants of the company continued with their
journey of relentless improvement in production, product- mix and
efficiency parameters. Your company recorded higher volume of saleable
steel production at 12.9 million tonnes, registering a growth of 2%
over corresponding period of last year (CPLY), with capacity
utilization of 116% during the year. Production of hot metal at 14.9
million tonne and crude steel at 13.8 million tonne, registered a
growth of 3% and 2% respectively over CPLY. In line with market demand,
SAIL produced 10.5 million tonne of finished steel which also
registered a growth of 4% over CPLY. The production growth was achieved
with better utilization of existing facilities since your company has
not added any capacity in the year 2010-11.
Higher production of special quality and value added products at 4.8
million tonnes, a growth of 3% over CPLY, resulted in further
improvement of the product-mix. Several new products were developed
which have significant demand, ready market, and good contribution
margin. Improvement in quality of products has remained an important
imperative. Some of the major new products developed to meet the
customer's requirement and enhance market share were - High Tensile
thicker plates in Normalized condition with sub-zero impact toughness
and Ultra- sonic soundness for construction of sluice gate for Hydel
Power Project in Uttaranchal, HT plates in grade 450E with improved
toughness and corrosion resistance for steel super-structure of
rail-cum-road bridge for the construction of steel super-structure of
the two rail-cum-road bridges being built over the river Ganges at
Patna and Munger, 45E1 Grade R260 Rails in Euronorm Specification (EN
13674-4) for export to Sri Lanka, Killed quality structurals with low
temperature impact toughness for construction of the superstructure of
the rail-cum-road bridges of Ganges, High Strength 100 mm thick
pressure vessel quality
SA537Cl-1 plates with ultrasonic soundness for hydel power projects,
for the first time, EMU wheels for Indian Railways.
The Research & Development wing of your company provided innovative
technological inputs to different units of your company with special
emphasis on productivity and quality improvement, product development
and commercialization, energy conservation and automation. The major
projects completed are: Improvement of cast structure in blooms through
optimization of EMS parameters at Bhilai Steel Plant (BSP); Development
of a reliable position display system of screw down in Tandem Mill #1,
CRM at Bokaro Steel Plant (BSL); Improving processing of low Nickel
stainless steel through simulation studies at Salem Steel Plant (SSP).
Your company in its endeavor to become energy and cost efficient, in
the year 2010-11 increased production of crude steel through continuous
casting route and achieved highest ever crude steel production through
continuous casting route at 9.32 MT with a growth of 3% over CPLY. A
large number of innovations are being carried out in plants for process
improvements and cost competitiveness. In the area of Specific Energy
Conservation, the projects completed were: Introduction of Energy
Efficient Ignition System in machine #2, SP-1 and the single machine in
SP-2 at Durgapur Steel Plant (DSP); Improving thermal efficiency of
ladle heating system of BF at BSL; Selection and design of combustion
system for new in-house built normalizing furnace of Plate Mill at BSP;
Introduction of new BF gas burner in place of existing old BF gas
burner in one Russian boiler of PBS and Power Plant-I at BSP. Your
company witnessed highest ever Power Generation from captive and JV
power plants at 671 MW during 2010-11 registering a growth of 1% over
CPLY
Raw Materials
During 2010-11 almost total requirement of iron ore was met from
captive sources, the company's captive iron ore mines have produced
about 24.45 million tonne. However, in case of coking coal, around 25%
requirement was met from indigenous sources and balance through
imports. During 2010-11, production in captive collieries of Steel
Authority of India Limited (SAIL) resulted in annual production of
about 1.10 million tonne. In case of flux, around 35% requirement of
limestone and 41% requirement of dolomite were met through captive
sources resulted in production of fluxes from captive sources of about
2.33 million tonnes. For thermal coal, SAIL depends entirely on
purchases from Coal India Limited (CIL) except small quantity produced
from captive mine.
Grant of Stage-I forest clearance & final environment clearances for
the Ajitaburu & Budhaburu leases of Manoharpur Iron Ore Mines, Chiria
by MoEF in Mar'11 have paved the way for early development of 7 Mtpa
state-of-the-art mechanized mines at these leases. During 2010-11,
Stage-I forest clearance for Barsua, Kalta, Bolani & South-Central
Blocks of Kiriburu- Meghahatuburu mines have also been granted by MoEF.
Your company has also received final environment clearance for
integrated Barsua-Taldih-Kalta iron ore mining, beneficiation and
pelletisation plant for 8.05 Mtpa (ROM) capacity and also for
development of Sitanala coking coal mine of 0.3 Mtpa capacity by MoEF
in Oct'10 & Dec'10 respectively.
Chhattisgarh Government has accorded its approval for renewal of
Baraduar Dolomite lease in Sep'10. This will enable SAIL to develop
Baraduar dolomite mine for the securitization of low silica dolomite
availability for SAIL.
"S&T Mining Company Pvt. Ltd.," a joint venture company of SAIL & Tata
Steel Limited, has been engaged to develop Bhutgoria mine of BCCL. The
mine is estimated to produce 0.36 Mtpa (ROM) coking coal at full
capacity which will be shared between SAIL & Tata Steel. The company
has submitted tender to BCCL for construction of washery at Dugda for
Non Linked Washery (NLW) coal. The JV company is also considering
establishment of a stand alone NLW coal washery at Bhelatand with an
investment of Rs. 196 crore.
Your company is also making attempts for allocation of coking coal and
thermal coal blocks under Government dispensation route for captive
mining to enhance indigenous coal availability.
India is dependent on imports for meeting the increasing requirement of
metallurgical coal as its indigenous availability is short, both in
quantity and quality. International metallurgical coal market is
controlled by few producers who regulate production to maintain high
prices extracting large margins from steel producers. After increase of
FOB price of metallurgical hard coking coal from US $ 128 per tonne in
2009-10 to US $ 213 per tonne in 2010-11, it has further gone up to US
$ 330 per tonne in the first quarter of 2011-12 reaching historic high
and impacting returns on steel business. Further, since 2010-11, the
suppliers have imposed quarterly pricing in place of annual pricing,
exposing the steel producers to vagaries of market volatility too.
To achieve Raw material security, import of Low Silica Limestone is now
established and regular imports are being done so as to have cost
advantage/alternate source. Similarly, International source of Low
Silica Dolomite is also being identified.
SALES & MARKETING REVIEW
Your company achieved a total sales volume of 11.9 million tonnes
during FY'10-11 with sales of Long products in the home market at a
record level of 4.62 million tonnes. Exports at 0.33 million tonnes
registered a growth of 2.3% over FY'09-10. Major categories where
growth was recorded in the sales included: Wire Rods- 12.1%; TMT Bars-
3.8%;
Structurals- 4%; Plates >20mm- 7.1% and Railway products- 8.5%. New
records were also set in supplies of Loco wheels and Loose Axles to
Indian Railways during the year.
- During the year 2010-11 SAIL started operations at a new Warehouse at
Jagdishpur. With this, SAIL's marketing network has expanded to 37
Branch Sales Offices (BSOs), 26 Customer Contact Offices (CCOs) and 67
Warehouses. SAIL also expanded its dealer network by 145 numbers
during the year. As on 1st April, 2011, SAIL has a wide network of 2653
dealers spread over 637 districts of the country.
- The company strengthened its presence in neighbouring and traditional
markets and exported 0.33 million tonnes steel during the year. The
main products exported were Billets, Plates, HR Coils, GC Sheets, CR
Coils and Rails. Exports were undertaken to Syria for the first time.
System of E- bidding was also implemented in exports during the year.
SAIL re-entered the export market for its high quality rails after a
gap of over 5 years and has exported rails to Sri Lanka.
GROWTH PLAN
Keeping in view the acceleration in demand for steel in the country,
the company is currently implementing growth plan to enhance its Hot
Metal capacity from the level of 13.8 million tonnes in a phased
manner. Under the ongoing phase-I of modernization and expansion plan,
hot metal production capacity will get expanded to 23.46 million tonnes
by 2012-13. The growth plan, besides targeting higher production, also
addresses the need for eliminating technological obsolescence,
achieving energy savings, enriching product-mix, reducing pollution,
developing mines and collieries, introducing customer centric processes
and developing matching infrastructure facilities.
To maintain its current dominance in the domestic market and to meet
the future challenges, your company is working on a long term strategic
plan 'Lakshya 2020', which will steer the company towards meeting its
strategic objectives of achieving profitability through growth and
customer satisfaction.
MODERNISATION & EXPANSION PROJECTS
The modernisation & expansion plan of your company aims at taking up
capital projects related to 'Expansion', 'Value Addition/ Product Mix
improvement', 'Technological Upgradation/ Modernisation of existing
assets', and 'Sustenance including Debottlenecking, Additions,
Modifications, Replacements and Environment' related projects.
The modernisation & expansion plan envisages installation of New Coke
Oven Batteries, New Sinter Plants, New Blast Furnaces of bigger
capacity with up-gradation of existing Blast Furnaces, New Steel
Melting Shops / addition of Convertor in existing shop, installation of
New Mills etc. which will increase share of finished steel in salable
steel. Along with addition of new facilities, most of the existing
facilities are also being up graded to enable production of value added
steel , reduce energy consumption and for improvement in productivity,
etc.
The expansion plan is being implemented simultaneously in all the
Plants including mines and requires matrix planning, involvement/
coordination with a large number of agencies, prudent fund management,
selection of right technology etc. SAIL has already initiated actions
and progressing smoothly towards handling this vast complex task.
SAIL Board accorded 'in-principle' approval during the year for the
Rebuilding of Coke Oven Battery No.3 and Installation of Additional
Heat Treatment facilities at Special Plate Plant at RSP, Replacement of
Converter Shell & its Assembly in SMS-2 at BSL, Installation of
additional 45 MVA Sub-merged Arc Furnace at MEL with an estimated total
outlay of around Rs. 650 crore.
SAIL incurred a capital expenditure of Rs. 11,280 crore, including Rs.
10,210 crore on modernisation and expansion plan, during 2010-11.
Orders have been placed for about Rs. 52,750 crore under modernization
and expansion plan of SAIL. An expenditure of Rs. 25,060 crore has been
spent on modernisation and expansion plan of SAIL till 31st March,
2011. Further, the capital expenditure planned to be incurred for the
year 2011-12 is Rs. 14,337 crore including Rs. 12,642 crore for ongoing
modernisation and expansion plan.
At Salem Steel Plant, all major production facilities envisaged under
Expansion Plan have been installed and units are now in regular
production.
For Chiria Iron Ore Mines the Forestry clearance has been accorded by
Ministry of Environment and Forest in Feb'11 and Consultants have been
appointed for preparation of DPR for Chiria as well as Taldih Iron Ore
Deposits.
At Bhilai Steel Plant, Up-gradation facilities under Plate Mill have
been completed. Further, the linked facilities like Compressed Air
Station-4 and installation of CNC Roll Grinding Machine have been
completed. The Coke Oven Battery-6 has been re-built, in compliance
with pollution control norms of Govt. of India and Oven Pushing has
started in June'11.
At IISCO Steel Plant, COB-10 has been re-built in Aug'10 in compliance
with pollution control norms of Govt. of India and is in regular
operation. Facilities like Sinter Plant, Pig Casting Machine, Main
Receiving Station and Oxygen Plant, under expansion plan are ready for
commissioning. Other facilities envisaged are at various stages of
implementation.
At Rourkela Steel Plant, 700 tpd Oxygen Plant and Simultaneous Blowing
of Converters in SMS-II have been completed in Oct'10 and other
facilities envisaged under Modernisation & Expansion Plan are at
various stages of implementation.
At Bokaro Steel Plant, Up-gradation of Blast Furnace No-2 has been
completed in Jul'10. This will meet the enhanced Hot Metal requirement
by the down stream facilities, post modernisation. Further, the Coal
Dust Injection System for BF-2 & 3 have been completed in Dec'10. This
will lead to reduction in coke rate and improvement of the furnace
productivity. The 2nd Ladle Furnace in SMS-II has been completed in
Jul'10. The COB-1 & 2 which are being re-built in compliance with
pollution control norms of Govt. of India, the Oven Pushing has been
started in COB-1 in June'11. Other facilities under Modernization &
Expansion Plan are at various stages of implementation.
At Durgapur Steel Plant, the major packages envisaged under
Modernisation & Expansion Plan, like, Bloom-cum-round Caster, Medium
Structural Mill & Reheating Furnace for Medium Structural Mill, New
Dolomite Plant, Re-building of COB-2, De- bottlenecking of Coal
Handling Plant & Raw Material Handling Plant, Ladle Furnace, New Slag
Yard and Civil & Structural works for Medium Structural Mill, are at
various stages of implementation.
For Raw Material Projects, in addition to mines expansion, the
beneficiation facilities and pelletization facilities have also been
envisaged to meet the post expansion raw material requirement.
AMR SCHEMES
A number of capital projects above Rs. 100 crore each are under
implementation which include Installation of 700 T / day Air Separation
Unit, Re-building of COB-1 & 2 at BSL; Enhancement of Loading Capacity
at Bolani Iron Ore Mine; enhancement production capacity at Megathaburu
Iron Ore Mines; installation of SPU at Bettiah and revival of
Jagdishpur SAIL Unit.
Projects completed/likely to be completed during 2011-12:
Till date, Coke Oven Battery no.6 at Bhilai Steel Plant and Coke Oven
Battery no.1 at Bokaro Steel Plant have been completed during the
current financial year. The completion of these batteries will augment
BF coke production for respective plants. These batteries are equipped
with state of art equipments to meet the latest emission norms of Govt
of India.
Further, 700 tpd Air Separation Unit-4 in Oxygen Plant-II at Bhilai
Steel Plant; 7m tall Coke Oven Battery Complex, Sinter Plant - 3, 4060
m3 Blast Furnace at Rourkela Steel Plant along with associated
facilities; Turbo Blower-8 in Turbo Blower Station, Rebuilding of Coke
Oven Battery - 2, New CRM complex (Major facilities) at Bokaro Steel
Plant; Installation of one no. new 60 T Ladle furnace at Alloy Steels
Plant; Main Receiving Station, Power and Blowing Station, Raw Material
Handling System, Sinter Plant, Coke Oven Battery, Wire Rod Mill under
Expansion of IISCO Steel Plant and Enhancement of Loading capacity at
Bolani Iron Ore Mines are likely to be completed in the remaining
period of current financial year.
HUMAN RESOURCE MANAGEMENT
Your company recognizes the potential of human resources in providing
competitive advantage and considers its employees as most valuable
resource. The company has achieved its present level of excellence
through investing in its human resource, which are at the back of every
activity, every technology and every innovation. Your company continues
to work for developing capabilities and realization of best potential
of its people.
The thrust on achieving higher growth coupled with optimal utilization
of manpower continued. The focus on improving productivity and adoption
of best practices in every area was relentlessly pursued. Efforts for
active participation by employees, implanting a conducive ambience for
exhibiting creativity and innovation by employees and ensuring a
climate that reflects synergy and contagious enthusiasm has been at the
core of HR initiatives and interventions. Strategic alignment of HRM to
business priorities and objectives facilitated steps for ensuring a
smooth transition for upcoming new facilities in the modernization and
expansion projects.
Enhanced Productivity with Rationalized Manpower
SAIL achieved its highest ever labour productivity of 241 T/man/ year
in 2010-11 with all the five integrated steel plants recording their
best ever labour productivity for the year. During 2010-11, the
manpower of SAIL reached a level of 110794 (as on 31.3.2011) from
116950 (as on 1.4.2010), thereby achieving rationalization of 6156. The
enhanced productivity with rationalized manpower could be achieved as a
result of judicious recruitments, correct deployment and redeployment
strategies, multi-skilling and zeal of employees to go beyond and
excel.
Developing Employee Capabilities & Competencies
In order to develop its human resources for harnessing their potential
to the fullest and for according ample opportunity for realizing
individual as well as organizational goals, company has been making
sustained efforts through various training and development activities
with focus on preservation of skills, transfer of skills and knowledge,
training in specialized/advanced skills and technology in collaboration
with reputed organizations and development of effective managerial
competencies through association with premier institutes. Preparing
employees for tomorrow, for effectively taking up challenges and
discharging new roles and responsibilities was given a major thrust.
Overall, 84973 employees were trained during the year on various
contemporary technical and managerial modules. SAIL once again achieved
level -I of performance evaluation parameter under MoU with Government
of India for the financial year 2010-11.
Harmonious Employee Relations
SAIL prides itself in having a glorious tradition of conducive employee
relations scenario marked by industrial harmony. The various
participative forums functioning at different levels within your
company have ensured employee's involvement with the business
priorities while implanting an organizational climate high on
motivation and mutual trust.
The VIIIth NJCS Agreement for wage revision of non executive employees
was signed on 29th April, 2010. The agreement is for a period of five
years w.e.f. 1.1.2007. Company's resolve to implant performance
orientation amongst employees was further strengthened with the
implementation of concept of Performance Related pay (PRP) for
executives for the first time for the year 2007-08, 2008-09 and
2009-10. Payments under the said PRP scheme have been linked to the
profitability of company with physical and financial performance of
Company and Unit as well as individual performance as per DPE
guidelines.
Effective Grievance Redressal Mechanism
Effective internal grievance redressal machinery exists in SAIL plants
and units, both for executives and non-executives. The grievance
procedure characterized by three stages in SAIL has evolved after
sustained deliberations and consent of employees, trade unions and
associations and has been effective in addressing concerns relating to
service conditions, wage, work assignments and welfare amenities etc.
Majority of grievances are redressed informally in view of the
participative nature of environment existing in the steel plants. The
system is comprehensive, simple and flexible and has promoted
harmonious relationship between employees and management. SAIL
disposed off 3474 employees' grievances during 2010-11.
Initiatives for Socio-economic development of SCs/STs & Other Weaker
Sections
Presidential Directives on Reservation for Scheduled Castes and
Scheduled Tribes in Appointments in Public Enterprises have been
meticulously followed. As on 31st March, 2011, out of total manpower,
15.58% were SC and 12.98% were ST. During the year 2010, out of total
recruitments of 1543 made by SAIL, 238 belonged to SC category and 170
belonged to ST category. SAIL continued to invest resources and
contribute towards the overall development of civic, medical,
educational and other facilities in the economically backward regions
of the country where SAIL steel plants and mines are located and which
are predominantly inhabited by SC/ST population.
SAIL has undertaken several initiatives for the socio-economic
development of SCs/STs and other weaker sections of the society which
are mainly as under:
Special School started exclusively for poor, underprivileged children
at five integrated steel plant locations which provide for free
education, mid-day meals and uniform including shoes, text books,
stationery items, school bag, water bottles and transportation in some
cases. The schools now provide education to around 1400 children.
SAIL plants have also adopted over 245 SC/ST students belonging to BPL
families/ primitive tribes. They are being provided free education,
boarding, lodging and medical facilities for their overall growth. No
tuition fee is charged from SC/ST students studying in the company run
schools, whether they are SAIL employees' wards or non-employees'
wards. Scholarships are also awarded to Meritorious and deserving SC/ST
wards of employees as well as non-employees.
IMPLEMENTATION OF RTI ACT, 2005
SAIL has implemented Right to Information Act, 2005 which empowers the
common citizen by providing access to information with a view to
maintain accountability and transparency. SAIL has always endeavoured
to ensure that various enabling provisions of the RTI Act,2005 are
implemented in letter and spirit. The manual of 17 items, details of
Appellate Authority, Public Information Officer, Assistant Public
Information Officer have been updated and hosted on SAIL website. A
total of 3639 applications were received under RTI Act,2005 in SAIL
during the financial year 2010-11, all of which have been disposed off
within the stipulated timeline under the Act. SAIL has also organized
Workshop on "Obligation of Public Authorities under RTI" and conducted
several programmes for spreading awareness.
AWARDS AND ACCOLADES
The excellent performance of company as well as that of employees won
laurels and appreciation from several quarters during the year 2010-11.
SAIL employees continued to win maximum number of Prime Minister's
Shram Awards and Vishwakarma Rashtriya Puraskar declared by Govt. of
India which recognizes the creativity and innovative abilities of our
employees. Employees of SAIL once again proved their mettle. Of the 33
Prime Minister's Shram Awards announced for 2010 by the Ministry of
Labour, Government of India, 17 of which went to PSUs, SAIL employees
bagged 11 awards. Of the total number of 76 awardees for the year, 45
belong to SAIL - a remarkable distinction for any organisation. Adding
to SAIL's jubilation, all the 7 Shram Vir/ Veerangana Awards announced
in the PSU category have been bagged by its employees. Out of a total
128 awardees who have won the prestigious Vishwakarma Rashtriya
Puraskar (VRP), 74 are from SAIL. The 15 out of 28 awards won by SAIL
went to our 74 employees for the performance year 2008, once again
establishing the zeal of our employees to excel with their creativity.
SAIL employees in the International Convention on Quality Concept
Circles-2010 held at Hyderabad bagged 18 gold, 6 silver and 2 bronze
awards. In addition, SAIL employees also had a rich haul of awards in
the 24th National convention on Quality Concepts (NCQC 2010) held at
Visakhapattnam.
Organisational excellence of SAIL garnered recognition and accolades at
various prestigious forums. Some of the notable awards won by SAIL are
"SCOPE Meritorious Awards" for Environment Excellence and Sustainable
Development for 2009- 10, and Corporate Social Responsibility for
2008-09, "Asia Best Employer Award" for 'continuous innovation in HR
Strategies at work', "PSU Excellence Awards 2010" for "Best Human
Resource Management" and "Research & Development, Technology
Development & Innovation" by Indian Chamber of Commerce, "India Pride
Award" under Metals and Minerals & Trade Award Category, "Trail blazer
leader of the year" at Global HR Excellence Awards 2010-11 and
"Wockhardt Shining Star CSR Award" in the Iron & Steel sector category,
to name a few.
SAIL's efforts in promoting use of Rajbhasha have been recognized in
the form of 1st prize at Town level by TOLIC for
best official language implementation by Govt. of India. 'Rashtriya
Rajbhasha Shield' was also awarded to SAIL for best official language
implementation by Rashtriya Hindi Academy. The in- house Hindi journal
of SAIL, "Ispat Bhasha Bharati" bagged the 1st prize at national level.
SAIL Plants/Units have also excelled in various areas and have won
awards for their performance, salient ones are listed as under:
- BSP was awarded the "CII Sustainability Award-2010" under independent
unit category for performance year 2009-10 from CII-ITC in recognition
of Excellent performance in the various areas of economic,
environmental and social activities.
- BSP was recognized by Greentech Foundation in the form of "Greentech
Safety Gold Award-2010", "Greentech HR Excellence Award" & "Greentech
Environment Excellence Platinum Award" in Metal & Mining Sector.
- BSP has won "INSSAN Award" from INSSAN Eastern India Chapter, in
recognition of Excellence in Suggestion Scheme besides winning the
"Golden peacock eco- innovation award- 2010" for installation of energy
efficient curtain flame burners in SP-2 for the year 2009-10 by World
Environment Foundation.
- DSP bagged the "INSSAN Award" for the year 2009-10 from INSSAN
Northern Region Chapter, in recognition of effective implementation of
suggestion scheme. It also won the "Greentech Safety Award" for the
year 2008-09 "Greentech HR Excellence Award" for the year 2009
,"Greentech HR Excellence Award for young Managers" for the year 2009 &
"Greentech Environment Excellence Award" for the year 2009 from
Greentech Foundation.
DSP was awarded the "Rajiv Gandhi National Quality Award" for the year
2008-09 by Bureau of Indian Standards, New Delhi and "Golden Peacock
National Training Award" for the year 2009-10 by Institute of
Directors, New Delhi besides winning the "Safety Innovation Award" for
the year 2009 by Institution of Engineers.
RSP was conferred with "Greentech Environment Excellence Gold
Award-2009" for the year 2008-09 from Greentech Foundation in
recognition of Excellence in Environment Management and also won the
"Shrishti Good Green Governance Award-2009" for the year 2009-10 in
recognition of Excellence in Innovative Management of Environment.
BSL's improvement in productivity was recognized by "CII
(ER)Productivity Award" as HSM Group of BSL bagged the 1st position and
CCS won the 2nd position.
BSL team won the national competition for Business Management
Simulation by All India Management Association at 'AIMA National
Management Games-2010'. Team from BSL also won the Rs.AIMA National
Management Quiz-2010 - Northern Zone Championship' for the year 2010.
- SSP made SAIL proud by winning the "Greentech Safety Award - Gold"
for Best Safety Performance and "Outstanding Contribution Award" for
the year 2010 from Quality Circle Forum of India (QCFI), Chennai
Chapter.
CORPORATE SOCIAL RESPONSIBILITY
SAIL as a corporate entity is fully aware of the obligation that it has
towards planet earth, the country and the society. CSR in SAIL has
enlarged the ambit of work being done earlier under Peripheral
Development. In addition to Health, Education and development of
Infrastructure, SAIL has focused on ensuring sustainable development
and equitable growth. Credo of SAIL specifically highlights the
commitment towards society at large which states inter-alia "Make a
meaningful difference in people's lives".
To meet the above objective, Corporate Social Responsibility (CSR)
Groups have been formed at Corporate level and Plants/ Units in SAIL.
As a matter of policy, the Budget allocated for Corporate Social
Responsibility [CSR] is 2% of budgeted distributable surplus (after
Dividend and Dividend Tax).
CSR activities of SAIL are focused in the areas of Health & Medical
care, Education, Access to potable water, Connectivity / roads, Income
generation through Self Help Groups (SHGs) etc. These services to
society are provided by SAIL through specific and targeted
interventions like Health Camps, special drives, exclusive
infrastructure for the underprivileged etc.
Company also focused on Income Generating Schemes (through
Self Help Groups), Education & Health issues. SAIL is working for
establishing a Technical University at Bhilai, Chattisgarh. Besides
these, Special Schools have been started exclusively for poor,
underprivileged children at five integrated steel plant locations viz
Bhilai, Durgapur, Rourkela, Bokaro & Burnpur. The facilities provided
in these schools include free education, mid- day meals, uniform,
stationary items, school bags etc. A number of benefits are being
provided to the children from SC/ST communities, such as scholarships
to deserving SC/ST undergraduate engineering students and adoption of
225 tribal children at Bhilai for providing free education, boarding
and lodging facilities, etc. More than 25000 children studying in
schools in and around Bhilai are provided mid-day meals in association
with Akshay Patra Foundation.
In the field of health care, free medical health centres have been set
up exclusively for the underprivileged at Bhilai, Durgapur, Bokaro,
Rourkela, Burnpur which provided free medical consultation, medicines,
immunisation etc. Over 3800 camps were organised in 2010-11,
benefitting around 2.64 lakh people. 24 number of Ambulances etc. were
provided to various NGOs like HelpAge India, Bharat Sewashram Sangha,
Anugraha Drishtidaan etc in 2010-11.
SAIL's role as a responsible corporate citizen in nation building has
been appreciated at various forums in the form of prestigious awards,
honours and accolades. SAIL was conferred with "India Shining Star CSR
Award-2010" by Wockhardt Foundation in the Iron & Steel Category,
"SCOPE Meritorious Award for Corporate Social Responsibility &
Responsiveness for the year 2008-09", Annual FICCI Awards 2008-09 in
the category of "The Vision Corporate Triple Impact - Business
Performance : Social & Environmental Action and Globalisation Award",
CSR Award of the Ministry of Rural Development, Government of India;
Golden Peacock Award - 2008, 2009 & 2008-09 for CSR to Bhilai
Steel Plant of SAIL ; CSR Award of Tamil Nadu Government to Salem Steel
Plant for the year 2008-09 etc.
CITIZEN CHARTER
SAIL's Citizen Charter has outlined commitment of SAIL towards its
stakeholders thereby empowering them to demand better products and
services. The Citizen's Charter of SAIL may be summarised in four
objectives, as given below:
- Ensuring citizen-centric focus across all its processes by adopting
Total Quality Management principles for improvement of products and
services
- Ensuring effective citizen communication channels
- Demonstrating transparency and openness of its business operations by
hosting the Citizen's Charter on the corporate web site
- Working towards delight of citizens by fail-safe processes and in
case of exigencies leveraging its service recovery processes, like
Grievance Redressal, Handling Complaints etc.
The Management of SAIL is totally committed to excellence in public
service delivery through good governance by a laid down process of
identifying citizens, our commitment to them in meeting their
expectations and our communication to them of our key policies in order
to make the service delivery process more effective. The Citizen
Charter is a dynamic commitment which is reviewed continually to
improve the effectiveness of the document.
STRATEGIC INITIATIVES OF THE COMPANY
During the year 2010-11, your company continued its focus towards
taking new business initiatives including incorporation / formation of
new JVs, mergers & acquisitions and entering into Memorandum of
Understandings (MOUs) for its long term strategic objectives. Your
company has established communication channels with renowned
international technology providers for forging strategic alliances in
production of value added products. Your company is continuously
adopting the path of entering into Joint Ventures (JV) with public /
private parties to attain its strategic goals of maximizing gains with
optimal utilization of resources. These include:
(a) Merger & Acquisitions (M&A) :
(i) Merger of Maharashtra Elecktosmelt Limited (MEL) with SAIL: The
approval of the shareholders for the Scheme of Amalgamation of
Maharashtra Elektrosmelt Limited ("MEL") was obtained in a meeting held
on 30th September, 2010. Subsequently a petition was submitted to the
Ministry of Corporate Affairs (MCA) for sanctioning the scheme of
amalgamation of MEL with SAIL. The Ministry of Corporate Affairs (MCA),
New Delhi vide its letter dated 14.6.2011 has forwarded the Order of
the Central Government sanctioning the scheme of amalgamation of
Maharashtra Elektrosmelt Limited (MEL) with Steel Authority of India
Limited (SAIL) under Section 391-394 of the Companies Act, 1956. The
appointed date of amalgamation is 1.4.2010. MEL has now become a unit
of SAIL and it has been renamed as Chandrapur Ferro Alloy Plant.
(ii) Transfer of Salem Refractory Unit of Burn Standard Company Limited
to SAIL: Cabinet Committee on Economic Affairs (CCEA) in June'10
approved transfer of Refractory Unit of BSCL at Salem and authorized
Ministry of Steel (MoS) and Department of Heavy Industries (DHI) to
work out operational steps for transfer of Refractory Unit of BSCL at
Salem in consultation with Ministry of Corporate Affairs (MCA). The
outstanding issues for the take over are being worked out by DHI before
operationalization of CCEA decision.
(b) Joint Ventures:
(i) After signing an MOU with M/s RITES for undertaking a feasibility
study for setting up the Wagon Manufacturing Factory in Joint Venture,
a Joint Venture Company "SAIL RITES Bengal Wagon Industry Pvt. Ltd."
has been incorporated in Decmber'2010. The work on the newly
incorporated JV Company between SAIL and RITES has already commenced.
The unit will have the capacity to manufacture 1500 wagons per annum
(manufacture of 1200 wagons and rehabilitation of 300 wagons) which
will include BOXN-type wagons, specialized high-end wagons and modern
stainless steel wagons.
(ii) SAIL has formally acquired 50% of the shares held by the
Government of Kerala (GoK) in Steel Complex Limited (SCL), Kozhikode
and taken over the operations of SCL on 13th February '11. SAIL-SCL
Limited, the joint venture company resulting from the acquisition, will
work towards the revival of SCL. The JV is in line with the
Government's policy of bringing together synergies of PSUs and
strengthening them to be competitive in the market.
(c) Strategic Alliances:
(i) SAIL is simultaneously jointly working with Kobe Steel Limited
[KSL], a renowned Japanese Steel maker, for ascertaining the
feasibility of using ITmK3 technology [Iron Making Technology Mark
Three] developed by KSL for producing premium grade iron in the form of
nuggets using iron ore fines and non-coking coal. The annual production
capacity of ITmk3 Plant is envisaged to be around 0.5 million tonnes to
produce premium grade Iron nuggets. The pre-feasibility report is in
the final stages of completion.
(ii) SAIL and M/s Burn Standard Company Limited (BSCL), a PSU under the
charge of Ministry of Railways signed an MOU for setting up a factory
which will manufacture cast steel bogies, couplers and other related
products. The unit will come up in approximately 128 acres of
leasehold land under the possession of M/s BSCL at Jellingham, West
Bengal. Railways will provide an average assured off-take of 5,000
bogies and equal number of couplers per annum for a period of ten
years.
(iii) Hajigak Iron Ore Deposits Owned by Government of Afghanistan:
Your company has been short-listed along with 21 other companies (13
Indian companies) for the bidding process of multiple exploration
concessions of Hajigak Iron Ore Deposits invited by Islamic Republic of
Afghanistan, Ministry of Mines. SAIL has formed a consortium with five
other companies for Joint Bidding.
(iv) Expansion of Captive Power Plants of SAIL: SAIL is planning to
expand the captive power generating capacity at BSP and RSP through its
Joint Venture with NTPC by installing 2x250 MW Units at BSP and 1x250
MW Units at RSP. NSPCL is conducting feasibility studies for these
power projects and has applied for various statutory clearances like
Environment Clearance and allocation of coal and water.
(v) Installation of Renewable Energy Based Power Plants: In line with
policy framework provided by Electricity Act, 2003 and National
Electricity Policy, Electricity regulatory Commissions of various
states which mandates all users of captive power generation to either
purchase / generate a specified minimum percentage of captive power
generated from renewable energy sources (Solar, Bio Mass, Wind , Small
Hydro etc). A long term strategy to meet renewable energy purchase
Obligation has been worked out and options are being evaluated for
installing Captive Power generation based on renewable energy sources.
(d) Memorandum of Understanding [MoU]/Commercial Agreements entered
into with various companies:
(i) MoU signed with Kobe Steel Ltd. of Japan for comprehensive
strategic collaboration producing high value products. Discussions are
ongoing with M/s Kobe Steel Ltd. for a steel plant at Jagdishpur which
shall utilize technology of Direct Reduced Iron making (Gas based) and
Electric Arc Furnace steel making for manufacture of value added
products.
(ii) SAIL and M/s Severstal have agreed to work jointly on Operational
Benchmarking. This would open opportunities in areas of productivity
improvement, energy efficiency and other collaborative research.
(iii) MoU signed with IRCON International Limited, a PSU under the
Ministry of Railways for jointly working on rail infrastructure
projects both in India and abroad.
(iv) Another MoU signed with Hindustan Prefab Limited (HPL), a PSU
under the Ministry of Housing & Urban Poverty Alleviation, for carrying
out business of prefabricated structures in steel and cement. Actions
have already been initiated in this regard for forming a joint venture
company which may undertake study in the prefabricated structures in
steel and cement. INSDAG has been appointed as a Consultant for
undertaking pre-feasibility study which will be completed by June'11.
IT RELATED INITIATIVES
SAIL has been moving ahead in innovative usage of Information
Technology (IT). Enterprise Resource Planning (ERP) is being
implemented in the company. After implementation of ERP in BSP, DSP,
BSL and CMO, its implementation is in progress at RSP.
Keeping pace with the technological trend in the field of IT
communications, SAIL has installed & commissioned layer 3 distributed
Local area network along with Wi-Fi connectivity with latest network
security systems. Also a secure internet connectivity of 8 Mbps
bandwidth through optical fiber has been commissioned at Corporate
Office in SAIL.
In house software implementations includes: a) online system for filing
of Annual Immovable Property Return by executives of SAIL, b) system
for 'Balanced Score Card' for GMs and EDs of SAIL, c) system to view
SAIL manpower details, labour productivity and award details .
ENTERPRISE SCORE CARD
For the first time in your company, Balanced Scorecard system has been
introduced for evaluation/appraisal of performance management and
strategy deployment. The Balanced Scorecard initiative was launched in
August, 2010, and after deliberations by the top management in the
Annual Business Plan meeting in March'11, Enterprise Scorecard of the
company has been framed. Based on the Enterprise Scorecard, exercise
for preparation of Unit Scorecard and Individual Scorecards up to the
rank of Executive Directors and General Managers is being undertaken.
An IT portal has been launched under the name "BUSINESS EXCELLENCE"
where areas like Scorecards, Excellence, TQM, Articles and On- line
QUIZ are uploaded for enhancing awareness amongst the employees.
ENVIRONMENT MANAGEMENT
Corporate Environmental policy of SAIL emphasizes on conducting our
operations in an environmentally responsible manner to comply with
applicable regulations and striving to go beyond. SAIL plants have
attained improvement in major environmental parameters by continuous
efforts :
PM emission load has reduced from 2.3 kg/ tcs in 06-07 to 1.11 kg/tcs
in 2010-11, a reduction of 52% in the last 5 years.
Specific effluent discharge from SAIL Plants has reduced to 2.49m3/tfs
in 2010-11; a reduction of around 9% over the last 5 years.
- Specific Water Consumption of 4.06 m3/tcs was achieved in 2010-11; a
reduction of 11% in the last 5 years.
- Kuteswar Limestone Mines was accredited to ISO 14001.
- Over 1.7 lakh saplings were planted in plants and mines during
2010-11.
CORPORATE COMMUNICATION
Communication, both internal and external, plays a pivotal role in
keeping us well connected to our stakeholders and in brand building
exercises of organization. We have upheld the confidence of our
stakeholders by proactively sharing organization's achievement,
utilizing the media optimally and innovatively. SAIL, a Maharatna
Company has continually taken diverse initiatives in communication
strategies to increase its brand visibility and highlight the brand
SAIL. The approach for external communication included dynamic media
interaction with print, electronic & online media through:
- Structured press conferences & press interactions.
- Chairman's interview on organization's expansion & modernization
targets, future strategies including joint ventures.
- Sustained communication with media for ensuring publication of press
releases.
- Outdoor publicity modes of hoardings, banners, posters, ad clips
reinforced our existing image building exercise.
- Ensured publication of advertisements in major dailies.
- Maintenance of an updated SAIL website which features our current
accomplishments, production record, overview of all units, major
information.
- Newsletters, printed folders, brochures, annual report.
The company lays great emphasis on keeping the employees informed about
the strategies being adopted for growth and future of the organization.
Publication of in-house journals like SAIL News & other journals, daily
telecast of news bulletins in various Plants - DSP, RSP & BSL, short
films & documentaries on Units /Plants are some of the regular modes of
information & interaction. SAIL sponsored CWG medal winners' wrestler
Sushil Kumar, Yogeshwar Dutt and shooter Deepak Sharma who bagged gold
and silver respectively were felicitated by Steel Minister. Asian Tour
level Golf tournament organized for 4th consecutive year in March 2011
which saw participation of many international players from various
countries.
VIGILANCE ACTIVITIES
SAIL Vigilance is laying emphasis on preventive and proactive
activities to facilitate a conducive environment for enabling people to
work with integrity, impartiality and efficiency, in a fair and
transparent manner, upholding highest ethical standards to enhance
reputation and create value for the organization.
SAIL Vigilance has undertaken the following major activities during the
year:
With a view to increase transparency and competition in commercial
areas, Vigilance has initiated process for review of guidelines like
manuals for Handling / Contract and Consignment Agency Contracts of
Central Marketing Organization (CMO).
To enhance awareness amongst employees, vigilance awareness sessions
and workshops on systems and procedures followed in SAIL were regularly
held at the various plants and units. A total of 123 such workshops
involving 2923 participants were held on Purchase/Contract Procedures,
Conduct & Discipline Rules, RTI Act etc. This also included special
programme on Purchase Contract Procedure including case studies
conducted for executives of SAIL Refractory Unit (SRU) (erstwhile
Bharat Refractory Limited).
A total of 4008 periodic checks, including surprise checks and the file
scrutiny were conducted in the vulnerable areas / departments of
different Plants & Units. Further, 13 major system improvement projects
were undertaken by SAIL Vigilance over and above the system
improvements recommended on the basis of vigilance investigations and
checks. Vigilance measures have resulted in savings to the tune of Rs.
1429.05 lacs during the year. Savings of Rs. 1743 lacs approx. accrued
from Vigilance measures during the period April 2010 to March 2011.
For effective implementation of the Integrity Pact, review meetings
were conducted periodically with the Independent External Monitors
(IEMs). Based on the recommendations of IEMs, the threshold value for
implementing Integrity Pact for tenders / contracts/ long term
agreements has been reduced from Rs. 50 crore to Rs. 20 crore to cover more
such contracts/ tenders under the ambit of Integrity Pact.
As a step towards addressing the issue of corruption at grass roots
level by reinforcing ethical values in society, a pilot project has
been launched in the schools at Bhilai to inculcate ethics amongst
children in their formative stage. It is envisaged to emulate the
project at schools of other plant locations as well.
The Results Framework Document (RFD), a tool for monitoring and
evaluating performance, has been implemented in Vigilance for
monitoring key activities such as System Improvement Projects,
Intensive Examinations and Thrust Areas identified for Vigilance.
Implementation of the RFD will enable timely completion of these
activities and facilitate realization of envisaged benefits.
Various initiatives have been undertaken by SAIL Vigilance to enhance
leveraging of technology in vigilance functions. These include making
provision for on-line submission of Property Returns, generating
on-line vigilance status, augmentation of on-line submission of
management information system reports by vigilance departments of
plants / units of SAIL etc.
SAIL vigilance manual published in 2003 has been revised to include
latest CVC guidelines / circulars etc. The revised version has been
published as SAIL Vigilance Manual 2011.
CONSULTANCY SERVICES
Based on its large and varied expertise and experience acquired over
the last five decades, SAIL, through its Consultancy Division
(SAILCON), the single window provider of design, engineering, training,
technical & management consultancy services in Iron & Steel and related
areas, offers a wide range of services to clients globally.
During the year, SAILCON laid enhanced focus on taking up training
assignments for some leading organizations in the area of Steel making,
thereby strengthening the knowledge base of personnel associated with
Steel Industry.
SAILCON is providing consultancy services to UNDP/GEF, Project
Management Cell, Ministry of Steel for energy efficiency and
productivity improvement in Steel re-rolling mills. Consultancy is
also being extended for setting up of Power Plants, based on waste heat
recovery from the flue gases released out of Blast Furnace and
non-recovery type of Coke Oven batteries, as an environment friendly
measure and as a step to combat global warming.
So far, SAILCON has served clients in Egypt, Saudi Arabia, Iran, Qatar,
Bangladesh, Oman, Philippine, Nepal, Taiwan, Thailand, Georgia,
Azerbaijan and Nigeria. This is besides the long list of Indian clients
for whom SAILCON has extended a wide range of consultancy services.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
The Management Discussion & Analysis Report covering the performance
and outlook of the Company is enclosed.
AUDITORS' REPORT
The Statutory Auditors' Report on the Accounts of the Company for the
financial year ended 31st March, 2011 along with Management's replies
thereon is enclosed at Annexure-I. The Comptroller & Auditor General of
India (C&AG) vide its letter dated 26th July, 2011 has given 'nil'
comments on the accounts of the company for the year ended 31st March,
2011, under Section 619 (4) of the Companies Act, 1956. A copy of the
above letter of C&AG is enclosed at Annexure - II.
REPORT ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, ETC.
Information in accordance with the provisions of Section 217(1)(e) of
the Companies Act, 1956 read with the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988 regarding
Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo is given at Annexure-III to this report.
PARTICULARS OF EMPLOYEES
There was no employee of the company who received remuneration in
excess of the limits prescribed under Section 217(2A) of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules,
1975.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, it is hereby
confirmed:
(i) that in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
(ii) that the directors had selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the company at the end of the financial year and of the
profit or loss of the company for that period;
(iii) that the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
(iv) that the directors had prepared the annual accounts on a going
concern basis.
CORPORATE GOVERNANCE
In terms of listing agreement with the Stock Exchanges, a compliance
report on Corporate Governance is given at Annexure-IV. A certificate
from Auditors of the company regarding compliance of conditions of
Corporate Governance is placed at Annexure-V. In terms of Listing
Agreement, the Board has laid down a Code of Conduct for all Board
Members and Senior Management of the company. The Code of Conduct has
been posted on the website of the company. All the Board Members and
Senior Management Personnel have affirmed compliance with the code.
CONSOLIDATED FINANCIAL STATEMENTS
In terms of listing agreement with the Stock Exchanges, the duly
audited consolidated financial statements are placed at Annexure-VI.
SUBSIDIARY
The Maharashtra Elektrosmelt Limited (MEL) recorded a turnover of Rs.
395.70 crore. The Net Profit after Tax (PAT) for the year was Rs.40.18
crore after charging depreciation of Rs.2.58 crore, interest/ finance
charges of Rs.0.28 crore and tax of Rs.12.59 crore. MEL produced 88904
tonnes of High Carbon Ferro Manganese and 21784 tonnes of Silico
Manganese during the year. MEL has since been amalgamated with SAIL,
the appointed date of amalgamation being 1.4.2010.
IISCO-Ujjain Pipe & Foundary Company Limited, a wholly owned subsidiary
of the erstwhile Indian Iron & Steel Company Limited (IISCO), was
ordered to be wound up by BIFR. The Official Liquidator is continuing
its liquidation process. The assets of the Company have been realized
and the settlement of claims is in process.
DIRECTORS
Shri V.K. Gulhati, Director (Technical) ceased to be Director w.e.f.
31.08.2010 on attaining the age of superannuation.
Shri S.N. Singh, MD, RSP, Shri P.K. Bajaj, MD, DSP and Shri S.S.
Mohanty, MD, BSL ceased to be Directors w.e.f. 28.10.2010 on
rightsizing of SAIL Board.
Shri S.S. Ahmed, Director (Commercial) ceased to be Director w.e.f.
31.10.2010 on attaining the age of superannuation.
Shri Shuman Mukherjee, Director (Commercial) has been appointed as
Director w.e.f. 23.12.2010.
Shri P.K. Sengupta and Shri PC. Jha have been appointed as Directors
w.e.f. 13.01.2011.
Shri G. Elias, Joint Secretary, Ministry of Steel has resigned from the
Directorship of the Company w.e.f. 20.01.2011.
Shri Upendra Prasad Singh, Joint Secretary, Ministry of Steel has been
appointed as Director of the Company w.e.f. 4.5.2011
ACKNOWLEDGEMENT
The Board of Directors wish to place on record their appreciation for
the support and cooperation extended by every member of the SAIL
family. The Directors are thankful to the State Governments,
Electricity Boards, Railways, Banks, Suppliers, Customers and
Shareholders for their continued cooperation. The Directors also wish
to acknowledge the continued support and guidance received from the
different wings of the Government of India, particularly from the
Ministry of Steel.
For and on behalf of the Board of Directors
(C.S. Verma)
Chairman
New Delhi
Dated: 5th August, 2011
Mar 31, 2010
The Directors have pleasure in presenting the 38th Annual Report of the
company together with audited accounts for the year ended 31st March,
2010.
At the outset, it is heartening to note that with consistent good
performance, your company has achieved the rare distinction of becoming
Maharatna Public Sector Undertaking.
FINANCIAL REVIEW
After witnessing a worldwide downturn in all spheres of business
including in the steel industry in second half of 2008-09, your company
remained focused on its fundamentals including eRs.pansion plans. It was
the result of concerted and collective action that during the calendar
year 2009, SAIL emerged as the second highest net profit earning
company amongst all steel companies of the world. In January, 2010,
SAILs overall ranking was second in the list of World-Class
Steelmaker Rankings by World Steel Dynamics, a leading steel
information services provider.
Your company re-oriented its production in line with market demand,
substantially increased production of value added steel and achieved
saleable steel production of 12.6 Million Tonnes achieving 114%
capacity utilisation. Sales volume of saleable steel also improved by
7% at 12.1 Million Tonnes as against 11.3 Million Tonnes in 2008-09.
The steel prices which were at its low during October-December08,
started recovering gradually from January 2009 onwards, but at a slow
pace. However, the average steel prices in 2009-10 were lower than
those in 2008- 09. Your company achieved a turnover of Rs. 43,935 crore
during 2009-10, which is lower by 10% over previous year, mainly on
account of lower selling price.
The profitability of your company improved by 8% during current year
over previous year, mainly due to higher saleable steel production &
sales volume; improved production of value added products; reduction in
coke rate, improvement in BF productivity & specific energy
consumption, favourable impact of input prices particularly of imported
coal, nickel, ferro-manganese, silico- manganese, aluminum etc; higher
interest earnings and impact of estimated provision for salaries &
wages. However, the profitability has been affected due to reduction in
average net sales realization of saleable steel, increase in royalty on
minerals, higher interest cost and depreciation. Several strategic
actions were taken by the management to improve profitability viz.
increase in production and sales of value added products, improved
techno-economic parameters (coke rate, blast furnaces productivity,
specific energy consumption etc.), optimization in procurement,
continuous emphasis on cost reduction and prudent fund management etc.
The comparative performance of major financial parameters is given as
under:
Rs. in crore
2009-10 2008-09
Sales Turnover 43,934.70 48,738.11
Profit before interest, depreciation and
taRs. (EBIDTA) 11,871.28 10,946.06
Less: Interest and Finance Charges 402.01 259.41
Less: Depreciation 1337.24 1,287.77
Profit before taRs. (PBT) 10132.03 9398.88
Less: Provision for taRs.ation 3,377.66 3,228.48
Profit after taRs. (PAT) 6,754.37 6,170.40
Net Worth 33317 28148
Key ratios :- EBIDTA to Net sales (%) 29.3 25.3
Return (PAT) on Net worth (%) 20.3 21.9
EBIDTA to average capital employed (%) 31.1 34.7
Earning per share (Rs. 10/- each) 16.4 14.9
Debt Equity Ratio 0.50:1 0.27:1
The Company continued its thrust on optimum utilisation of funds by
better fund management. This included replacement of high cost short
term loans with low cost debts, strategic parking of surplus funds with
scheduled banks, actions for future fund
raising etc. to meet our growth objectives. The Company had liquid
assets of Rs. 22,023 crore as on 31st March 2010 invested in short term
deposits with scheduled banks. Considering borrowings of Rs.16511
crore, the company maintained its virtual debt free status. The debt
equity ratio of the company increased to 0.50:1 as on 31st March, 2010
from 0.27:1 as on 31st March, 2009, mainly on account of increase in
borrowings for capital eRs.penditure. The net worth of company improved
substantially. Higher cash profits helped in higher generation of
internal resources for funding eRs.pansion plans.
The Company has paid interim dividend @ 16% of the paid-up equity share
capital during the year. The Board of Directors has further recommended
a final dividend @ 17% subject to approval of shareholders, thus making
the total dividend @ 33% of the paid up equity share capital for the
year 2009-10. A sum of Rs. 680 crore has been transferred to the
general reserves during the year (previous year Rs. 625 crore).
The Annual Report of SAIL was adjudged by South Asian Federation of
Accountants (SAFA) as the Best Presented Accounts under Public Sector
entities and was awarded 2nd Runner up (Joint) position for the year
2007-2008.
Credit Rating
M/s FITCH and M/s CARE, RBI approved credit rating agencies, maintained
"AAA" ratings, indicating the highest safety, to SAILs long term
borrowing programme. Standard and Poors, an International Rating
Agency, has assigned initial Issuer Rating of "BBB-" with stable
outlook to the company in line with the sovereign rating.
PRODUCTION REVIEW
The steel market in India showed great resilience, improving every
quarter. In line with market requirement the production was ramped up
in SAIL and two blast furnaces, which were taken for shutdown for
repairs last year, were started. As a result, the production in the
current year was higher than the production in the previous year,
despite the fact that the year 2009-10 started with uncertainty due to
market slowdown in the previous year.
Your Company recorded higher volume of saleable steel production at
12.6 million tonnes, registering a growth of 1% over corresponding
period of last year (CPLY), with capacity utilisation of 114% during
the year. Production of hot metal at 14.5 million tonnes and crude
steel at 13.5 million tonnes was also at 105% of rated capacity each.
SAIL plants achieved highest ever continuous cast production of 9.1
million tonnes - a growth of 3% over last year.
The product-miRs. was further improved during the year with highest ever
special quality & value added products at 4.63 million tonnes - a
growth of 24% over previous year. In 2009-10, your Company achieved the
highest ever production of Plates in BQ/SAILMA/IS-2062/ASTM etc. grades
at 401,000 tonnes, recording a growth of 47%, highest ever production
of special quality semis at Durgapur steel plant at 886,000 tonnes and
highest ever Long Rail production of about 1.20 lakh tonnes, a growth
of 13% over CPLY. Your company is now producing almost 100% of TMT in
special earthquake resistant (EQR) grade to make quality steel
available for the infrastructure segment.
Several products were developed during the year viz. Creep Resistant
plates for use in the construction of shell plates of Blast Furnaces,
Boiler Quality thicker gauge plates for use in high capacity boilers,
High Tensile plates with improved corrosion resistance for manufacture
of railway coaches, Z quality DMR
249 A plates for defence sector at BSP; Micro alloyed wheel & aRs.le for
railways at DSP; Quenching & Tempering plates for Gun carriage, API Rs.
65 ERW pipes at RSP & High strength formable quality steel & thin gauge
high strength HR Coils for chassis manufacturing & pre-fabricators,
auto, cylinders application (EN 10120 P 265/P310 Nb) at BSL.
SAIL plants improved operational efficiency in major techno- economic
parameters by achieving best ever coke rate at 517 Kg/thm; highest ever
BF productivity of 1.57 T/m3/day; highest ever converter lining life at
11,036 blows in converter at Bhilai steel plant; best ever Coal Dust
Injection (CDI) rate; highest ever power generation at 568 MW and the
best ever Specific energy consumption at 6.72 Gcal/tcs during 2009-10.
Raw Materials
Slow down in the global steel industry during 2009-10 also witnessed
general decline in raw materials prices. In order to reduce adverse
impact of costly imported coking coal on cost of production, your
company has taken measures for reduction of imported coking coal in the
overall coal blend. The company has fulfilled the requirement of iron
ore from its captive mines for its steel plants by producing about
23.44 million tonnes during 2009-10. The production of fluRs.es from
captive mines was 2.31 million tonnes. During 2009-10, continued thrust
on production in SAILs captive collieries resulted in record annual
production of over 1.36 million tonnes, registering a growth of 34%.
After obtaining all statutory clearances, small scale production from
Tasra coking coal mine has been started in November, 2009. Action for
engagement of Mine Developer cum Operator (MDO) for Tasra and Sitanala
coking coal mines is in progress.
The iron ore requirement is estimated to go up to about 43 million
tonnes after completion of modernization and eRs.pansion plan of SAIL.
For continuation of mining operation, stage-I forestry clearance/
temporary forestry clearance has been obtained for Gua, Barsua,
Kiriburu & Meghahatuburu iron ore mines. The matter for grant of
forestry clearances is also being actively pursued with the respective
state governments of Jharkhand and Orissa for other mines. State
Government of Jharkhand has accorded in-principle approval for
renewal of Budhaburu lease of Chiria iron ore mine. However, delay in
renewal of balance leases of Chiria & Gua and delay in grant of
Prospecting License for Thakurani mines are affecting the security of
enhanced requirement of iron ore for steel plants. As a mid-course
correction, steps have been initiated for eRs.pansion of capacity of
eRs.isting mines with beneficiation facilities. Lease for Rowghat "F"
deposit has been granted and action for development of state- of-the
art mine of 14 mtpa ROM capacity is in progress as an alternative
source of iron ore to Bhilai Steel Plant (BSP). The land acquisition
and construction of rail link between Dalli- Rajhara and Rowghat are
also under progress.
"S&T Mining Company Pvt. Ltd." a joint venture company of SAIL & Tata
Steel Limited, is eRs.ploring various opportunities for acquisition and
development of coal mines and setting up coal washeries. Your company
is also making attempts for allocation of new coking coal as well as
thermal coal blocks to it for captive mining to enhance indigenous coal
availability.
SALES & MARKETING REVIEW
Your company has recorded domestic sales of 11.78 million tonnes during
FY09-10 registering over 6% growth over previous year. ERs.ports at 0.33
million tonnes also grew by 31% over
FY08-09. Sales of value added steel grew to 4.5 million tonnes and
constituted 37% of total domestic sales. Major categories recording
growth over previous year were: Wire Rods-13.9%; Plates-10.5%; Hot
Rolled Coils-10.2%; Medium Structurals- 17.6%; Heavy Structurals-35.8%.
During the year supply of Long Rails (130m/260m) to Indian Railways
were increased by 13.7% over previous year. Supply of 26 meter Long
Rails also registered a growth of 8.1% over previous best achieved in
FY08-09. New records were also set in supplies of Loco wheels and
Loose ARs.les to Indian Railways during the year.
During the year 2009-10, your company added two Warehouses and two
Customer Contact Offices to its distribution network. With this,
SAILs marketing network has eRs.panded to 37 Branch Sales Offices
(BSOs), 26 Customer Contact Offices (CCOs) and 67 Warehouses. Your
company also eRs.panded its dealer network in 2009-10 by appointing 700
dealers during the year. As on 1st April, 2010 SAIL has a wide network
of 2508 dealers spread over 630 districts of the country. Sales to
dealers at 6.04 lakh tonnes in FY09-10 registered a growth of 17.3%
over previous year.
The company strengthened its presence in neighbouring and traditional
markets and eRs.ported 3.27 lakh tonnes steel during the year. The main
products eRs.ported were Billets, Plates, HR Coils, GC Sheets and
Structurals. New markets to which eRs.ports were undertaken during the
year were Ethiopia and Gulf countries. ERs.port of Structurals was
started from ISP. ERs.ports of Plates were resumed to South America after
a gap of almost 5 years. Initiatives were put in place to reduce
congestion related problems at Nepal border for eRs.ports. ERs.port of Loco
Wheels was also undertaken after a long gap.
Improvements in logistics were also undertaken during FY09- 10 for
better customer service and 1.33 million tonnes steel items were
transported and delivered at customers premises by SAIL. This was an
improvement of 25% over FY08-09.
PROSPECTS
Indications for global recovery have gained strength with IMF
projecting growth in World Output at 4.6% and 4.3% for 2010 and 2011
respectively. The rebound in world trade volume is eRs.pected to be even
stronger at 9% after a negative growth of 11% in 2009. IMF is also
optimistic about performance of Indian economy and has revised its
projection of 8.8% for 2010, forecast in April, 2010 to 9.4% in the
July, 2010 update.
After a dip in growth in 2008-09, Indian economy is showing signs of
recovery with inflation being the only cause of concern. Robust
industrial growth in the initial months of fiscal 2010-11 has raised
hope of a strong recovery for the Indian economy for 2010-11. Economic
Advisory Council to the Prime Minister has projected a growth of 8.5%
for 2010-11, which is eRs.pected to touch 9% in 2011-12. The buoyancy in
growth is eRs.pected to be on account of manufacturing sector growing at
double digit, and recovery in agriculture projected to grow at more
than 4%. Services are eRs.pected to maintain their trend rate of growth
at 9% and above. The general economic environment in India hence augurs
well for rebounding of steel consumption growth upwards. WSA has
projected a growth of more than 13% per annum for India during 2010 and
2011, with the overall consumption reaching 72 million tonnes by 2011.
GROWTH PLAN
Considering the fast growing demand for steel in the country, the
Company is currently implementing growth plan to enhance its Hot Metal
capacity from the level of 13.8 million tonnes in a phased manner.
Under the ongoing phase-I of modernization and eRs.pansion plan, hot
metal production capacity will get eRs.panded to 23.46 million tonnes by
2012-13. The growth plan, besides targeting higher production, also
addresses the need for eliminating technological obsolescence,
achieving energy savings, enriching product-miRs., reducing pollution,
developing mines and collieries, introducing customer-centric processes
and developing matching infrastructure facilities.
To maintain its current dominance in the domestic market and to meet
the future challenges, SAIL is working on a long term strategic plan
Lakshya 2020, which will steer the company towards meeting its
strategic objectives of achieving profitability through growth and
customer satisfaction.
MODERNISATION & ERs.PANSION PROJECTS
SAILs modernisation & eRs.pansion plan comprises capital projects
relating to ERs.pansion, Value Addition/Product-miRs. improvement,
Technological Upgradation/ Modernisation of eRs.isting assets and
Sustenance including Debottlenecking, Additions, Modifications,
Replacements & Environment related projects.
The modernization & eRs.pansion plan includes installation of new Coke
Oven Batteries, new Sinter Plants, new Blast Furnaces of bigger
capacity with upgradation of eRs.isting blast furnaces, new Steel Melting
Shops/ addition of Converter in old shop, installation of new Mills
etc. which will increase share of finished steel in saleable steel.
Along with the addition of new facilities, most of the eRs.isting
facilities are also being upgraded to enable production of value added
steels, reduce energy consumption and for improvement in productivity,
etc.
The eRs.pansion plan is being implemented simultaneously in all the
Plants including mines and requires matriRs. planning, involvement/
coordination with a large number of agencies, prudent fund management,
selection of right technology etc. SAIL has already initiated actions
in all these areas to prepare the organization accordingly.
SAIL Board gave Rs.in-principle approval during the year for New
Normalising Furnace, On-line eddy current testing machine and
replacement of gas holder at BSP; enhancement of production capacity at
Gua Iron Ore Mine along with beneficiation facilities & Installation of
4MTPA capacity Pellet Plant and Installation of Tertiary Crusher at
Meghahatuburu Iron Ore Mine at RMD; Development of Sitanala Coal block
at ISP and Revival of Jagdishpur unit of SAIL with an estimated outlay
of about Rs. 3350 crore. Further, cumulative approval of about Rs.
45,000 crore has been accorded by SAIL Board for modernization &
eRs.pansion plan till date.
Hot Trials have started at Salem Steel Plant (SSP) in August, 2010
after eRs.pansion. For ISP, BSP, DSP, RSP and BSL ERs.pansion, eRs.ecution of
various packages is in progress.
AMR SCHEMES
A number of capital projects have been commissioned during the year and
several major projects valuing above Rs. 100 crore each are under
implementation at various Plants which include Rebuilding of Coke Oven
Battery No.6,700 tpd Air Separation Unit at BSP; 700 tpd ORs.ygen Plant
and Simultaneous Blowing at SMS-II at RSP; Coal Dust Injection in Blast
Furnaces-2 & 3, New Turbo Blower, Upgradation of Blast Furnace No.2,
Rebuilding of Coke Oven Batteries-1&2 at BSL, Rebuilding of Coke Oven
Battery No.10 at ISP and enhancement of loading capacity at Bolani Iron
Ore mines.
HUMAN RESOURCES MANAGEMENT REVIEW
Human Resource is one of the greatest assets for the Company. SAIL has
believed in the ideology of achieving eRs.cellence through investing in
people and technology simultaneously. Company continues to work for the
development and realization of best potential of its people. To promote
motivational climate and achieve growth, thrust on optimal utilization
of manpower with focus on improvement in productivity continued.
Efforts were made for promoting better employee participation. Steps
were taken to make sure a smooth transition for upcoming production
facilities and preparations to work with a leaner workforce for
enhanced productivity. HR initiatives kept focus on building teams with
wider spectrum with reference to skill and knowledge.
During the fiscal 2009-10, all the five integrated steel plants
recorded their best ever labour productivity. An overall labour
productivity of 226 Tonnes/man/year was achieved by SAIL, with Bhilai
Steel Plant touching a new peak at 340 T/man/year in Jan10. Overall
manpower figure at the year end was 1,16,950 (after 1585 employees of
BRL joined SAIL family as a part of merger of BRL with SAIL) comprising
15,704 eRs.ecutives and 1,01,246 non-eRs.ecutives; registering a net
reduction of 5930, achieved by way of judicious recruitments,
redeployment strategies and multi-skilling.
Thrust continued on developing employees for a better role. Over 60
eRs.ecutives at GM/DGM level were nominated to participate in
Specialized/Advance management programmes, conducted by Premier
Management Institutes for eRs.posure to best business practices and
leadership development. Overall, nearly 46,180 employees were trained
during the year on different contemporary technical and managerial
modules; achieving level-1 of Performance Evaluation Parameter under
MOU with Government of India for the financial year 2009-10.
Also, SAIL HR ERs.cellence Awards initiated with IIM-Ahemdabad as the
knowledge and process partner with an objective to provide a platform
to share proven HR Practices / systems across the industry and thereby
enrich our knowledge in the field and spur new innovations.
Implementation of Presidential Directives on reservation for SC/STs
Presidential Directives on Scheduled Castes and Scheduled Tribes
continued to be implemented. As on 31st March 2010, out of total
manpower 15.39% were SC and 12.76% were ST.
During the year 2009, out of total recruitment of 594 made by SAIL, 136
candidates belonged to SC category and 40 candidates belonged to ST
category. Besides, Company has undertaken several initiatives for the
socio-economic development of SCs/STs and other weaker sections of the
society, such as providing free education, boarding, loadging and
medical facilities to 128 SC/ST students belonging to BPL
families/primitive tribes, awarding 132 scholarships to encourage
meritorious and deserving SC/ST students and not charging tuition fee
from SC/ST students studying in the Company run schools.
GRIEVANCE REDRESSAL MECHANISM
Effective internal grievances redressal machinery eRs.ists in SAIL plants
and units, separately for eRs.ecutives and non-eRs.ecutives. Grievances in
SAIL plants/units are dealt in 3 stages and employees are given an
opportunity at every stage to raise grievances relating to wage
irregularities, working conditions, transfers, leave, work assignments
and welfare amenities etc. The system is comprehensive, simple and
fleRs.ible and has proved effective in promoting harmonious relationship
between employees and management.
IMPLEMENTATION OF RTI ACT, 2005
Right to Information Act 2005 (RTI) empowers the common citizen by
providing access to information held by the Public authorities
pertaining to any period, in any form, including inspection of records.
SAIL has always endeavored to see that
Award" for the year 2008 from Indian National Suggestion Scheme
Association.
SSP won "Greentech Safety Award" - silver award under Metal sector
for the year 2007-08 from Green Tech Foundation, New Delhi in
recognition for Best Safety Performance on May2009; "CSR Award" for
the year 2008 from Govt. of Tamil Nadu in recognition for Best CSR
activities.
VISL got selected for "International Quality Award" in the gold
category by Business Initiative Direction, at Madrid, Spain.
CITIZEN CHARTER
SAILs Citizen Charter has outlined commitment of SAIL towards its
stakeholders thereby empowering them to demand better products and
services. The Citizens Charter of SAIL may be summarised in four
objectives, as given below:
Ensuring citizen-centric focus across all its processes by adopting
Total Quality Management principles for improvement of products and
services
Ensuring effective citizen communication channels
Demonstrating transparency and openness of its business operations by
hosting the Citizens Charter on the corporate web site
Working towards delight of citizens by fail-safe processes and in case
of eRs.igencies leveraging its service recovery processes, like Grievance
Redressal, Handling Complaints etc.
The Management of SAIL is totally committed to eRs.cellence in public
service delivery through good governance by a laid down process of
identifying citizens, our commitment to them in meeting their
eRs.pectations and our communication to them of our key policies in order
to make the service delivery process more effective. The Citizen
Charter is a dynamic commitment which is reviewed continually to
improve the effectiveness of the document.
STRATEGIC INITIATIVES OF THE COMPANY
During the year 2009-10, your Company Continued to give impetus towards
taking new business initiatives including incorporation / formation of
new JVs, mergers & acquisitions and entering into Memorandum of
Understandings (MoUs) for its long term strategic objectives. Your
company is continuously adopting the path of entering into Joint
Ventures (JV) with public / private parties to attain its strategic
goals of maRs.imizing gains with optimal utilization of resources. These
include:
Mergers & Acquisitions:
l Consequent upon Ministry of Corporate Affairsà Order dated 28th July,
2009, Bharat Refractories Ltd (BRL) has been amalgamated with SAIL
w.e.f. 1.4.2007. The appointed date of amalgamation being 1st April,
2007, Company has revised the accounts of SAIL for the financial year
ended 31st March, 2008 and 31st March, 2009, which are enclosed for
approval of the shareholders. After amalgamation, erstwhile BRL, has
become a unit of SAIL and renamed as SAIL Refractory Unit (SRU). The
revival of the unit is under progress and its performance has improved
after coming into the fold of SAIL.
l Merger of Maharashtra Elektrosmelt Ltd. (MEL) with SAIL : After
obtaining "No Objection Certificate" (NOC) from Government of
Maharashtra (GOM) for transfer of land to SAIL, the process of the
merger has since been initiated, and the Scheme of Amalgamation
submitted to Ministry of Corporate Affairs and one hearing on the
matter has already taken place. As directed by Ministry of Corporate
Affairs, the approval of the shareholders is being obtained for the
Scheme of Amalgamation.
The process of acquisition of refractory unit of Burn Standard
Company Ltd.(BSCL), as a subsidiary company of SAIL is at its
preliminary stage.
After acquisition of the assets of erstwhile Malvika Steel, SAIL is
in the process of developing the Jagdishpur Steel unit in a phased
manner, starting with an annual production capacity of 1,50,000 tonnes
of TMT Bars, 13,000 T of Crash Barriers Steel and 10,000 T Galvanised
Corrugated Sheets. Also, efforts are being made to set up a 475 MW Gas
based power plant at this location.
Joint Ventures:
After entering into a Joint Venture Agreement with Shipping Corporation
of India (SCI) a joint venture shipping company has been incorporated
in May, 2010 for bulk transportation of SAILs cargo initially for 1.2
million tonnes per annum, which would further scale upto 4 million
tonnes per annum.
l MOU has been signed with NMDC Limited to jointly develop the
limestone mine at Arki located in Solan district of Himachal Pradesh
with envisaged production capacity of 3 million tonnes per annum. After
development of the Arki limestone mine, SAIL will have a captive source
of limestone with the advantage of assured supplies of this critical
raw material of good quality at reasonable price.
Towards achieving the Governments decision of making PSUs self reliant
in the area of coking coal, International Coal Ventures Private Limited
(ICVL) has been set up as a Joint Venture Company with SAIL, CIL, RINL,
NMDC and NTPC as its promoter companies. ICVL was incorporated on 20th
May, 2009 and is actively scouting for coal assets and coal companies
in Australia, USA, Indonesia, South Africa and Mozambique. Apart from
above, following strategic initiatives are taken to augment
technological interventions on a long term basis: l MoU signed with
POSCO and a detailed feasibility study is being conducted to eRs.plore a)
Manufacture and commercialization of CRNO steel; and b) ERs.ploration of
upstream and downstream opportunities in utilizing FINERs. technology. l
MOU has been signed with M/s Kobe Steel Limited (KSL) for eRs.ploring the
technical and economic feasibility of ITmK3 technology for producing
premium grade iron in the form of nuggets. l Dialogue on technology
intervention in steel and related areas has been initiated with Japans
Nippon Steel Corporation (NSC).
Enterprise Risk Management
Enterprise Risk Management (ERM) policy has been framed for
identification of key risk areas and formulate appropriate risk
mitigation plans for taking corrective action in a time bound manner.
IT RELATED INITIATIVES
SAIL is continuously moving ahead in innovative usage of Information
Technology (IT). Enterprise Resource Planning (ERP) is being
implemented in the company. ERP has gone live in BSP, DSP & BSL from
01/04/2009, 01/10/2009 & 01/04/2010 respectively. ERP implementation is
in progress at CMO & RSP with scheduled Go-live dates as 01/11/2010 &
01/04/2011 respectively. Manufacturing ERs.ecution System (MES) is being
implemented at BSP with scheduled commissioning in July 2011.
Keeping pace with the technological trend in field of IT
communications, SAIL has installed and commissioned MPLS - VPN based
Wide Area Network on fibre optics at its 30 locations across India. The
plants and units are connected to secure and reliable MPLS - VPN with
bandwidth ranging from 512 Kbps to 8 Mbps. Various applications such as
Primavera, ERs.ecutive Performance Management System (EPMS) and other
applications developed for SAIL. Video Conferencing system at all 33
locations in SAIL, now is being conducted using the IP protocol through
MPLS-VPN network with improved performance, clarity & quality and for
longer durations without any interruption or breakdown.
Other IT initiatives include: Online Mediclaim system for retired
employees of SAIL to ease the process of renewing the policy every
year.
ENVIRONMENT MANAGEMENT
l SAIL reaffirms its commitment to contribute towards a clean
sustainable environment and continually enhancing its environmental
performance as an integral part of its business philosophy and values.
l As a responsible corporate citizen, SAIL is fully committed towards
Corporate Responsibility of Environment Protection (CREP) target.
Plants have taken lot of measures in the field of reducing fugitive
emission, specific water consumption, specific energy consumption and
enhancing solid waste utilisation. All these actions are continuous in
nature so that SAIL strives to go beyond the targets set, wherever
possible. Modernisation and ERs.pansion plan of SAIL is taking care of
(a) 100% production of steel making through Basic ORs.ygen Furnace (BOF)
route, (b) 100% processing of steel through continuous casting, (c)
auRs.iliary fuel injection system in all Blast Furnaces, (d) energy
saving schemes and (e) adherence to environmental norms. In fact, one
of the guiding principles of SAIL is to make positive impact on the
environment and promote good environmental practices. Areas of
improvement during 2009-10 over 2008-09 are :
l Air emission reduced to 1.55 kg/tcs, an improvement of more than 3%.
l Solid waste utilization increased to 80%, an improvement of more than
1%.
l Specific effluent discharge reduced to 2.53 m3/tfs, an improvement of
more than 1%.
l Energy consumption reduced to 6.72 Gcal/tcs, an improvement of 0.1%.
1 More than 2.1 lakh saplings have been planted during 2009- 10 at
plants, mines and townships with accumulative plantation of 175 lakh
till date.
CORPORATE SOCIAL RESPONSIBILITY
For any organization, CSR begins by being aware of the impact of its
business on society. The Credo of SAIL specifically highlights the
commitment towards society at large which states, inter-alia "Making a
meaningful difference in peoples life". SAILs Social Objective is
synonymous with Corporate Social Responsibility (CSR). Apart from the
business of manufacturing steel, the objective of the company is to
conduct business in ways that produce social, environmental and
economic benefits to the communities in which it operates.
To meet the above objective, specific Corporate Social Responsibility
(CSR) Groups have been formed at Corporate Level and at all
plants/units in SAIL. As a matter of policy, the Budget allocated for
Corporate Social Responsibility [CSR] is
2 % of budgeted distributable surplus (after Dividend and Dividend
TaRs.).
SAIL has established 61 Primary Health Centres, 8 Reproductive and
Child Health Centres, 18 Hospitals and 6 Super-Specialty Hospitals for
specialized healthcare to almost 26.7 million people since inception.
138 schools have been set up in the steel townships for modern
education to about 74,000 children. Assistance has been provided to
over 260 schools of villages surrounding its units for free education
of more than 55,000 tribal students. SAIL has achieved a Girl:Boy ratio
of 1:1 for all levels of education and a survival rate of 95.8% in SAIL
Primary Schools and 90% in SAIL Secondary Schools.
Since inception, SAIL has provided roads in 435 villages helping around
56 lakh people and has been undertaking their construction and repairs
on a regular basis. SAIL has also provided access to water
infrastructure to people living in far- flung areas by installing 4714
water sources, thereby providing drinking water access to around 37
lakh people.
SAIL has been awarded Annual SCOPE Award-"SCOPE Meritorious Award for
Corporate Social Responsibility & Responsiveness for the year 2008-09"
by Honble President of India. The Annual FICCI Awards 2008-09 in the
category of "The Vision Corporate Triple Impact - Business Performance
: Social & Environmental Action and Globalisation Award : 2008-09" by
the Honble Finance Minister of India, Shri Pranab Mukherjee. Bhilai
Steel Plant (BSP) -SAIL has been short listed for "Golden Peacock Award
for CSR- 2008-09".
79 villages have been adopted for developing them as Model Steel
Villages across eight states. The developmental activities being
undertaken in these villages include medical & health services,
education, roads & connectivity, sanitation, community centers,
livelihood generation, sports facilities, etc. By March, 2010, 54 Model
Steel villages have been completed.
The Company is also working towards preserving culture and heritage.
Some of the key activities include assistance to maintenance of
monuments in Lodhi Garden, New Delhi.
CORPORATE COMMUNICATION
To enhance the confidence of stakeholders in SAIL, the companys
corporate image was strengthened through various eRs.ternal and internal
communication initiatives. The year kicked off with the SAIL Award for
ERs.cellence in HR practices in Manufacturing Industry which received
full attention of the Communications team of SAIL.
Focus on major sports events was the highlight of the year. With SAIL
as the Presenting Partner of World Cup Hockey held in India during
Feb-Mar 10, the companys brand visibility increased manifold with
several communication collaterals built around the event. In-stadia
branding resulted in SAIL getting eyeballs around the world, wherever
World Cup matches were telecast. In India alone, more than four crores
viewers watched the matches on television. The SAIL Man of Steel
award presented at the end of every match reinforced SAILs image as
the leading steel- maker of India while participation of school
students as mascots carried the companys values to budding citizens.
SAIL also sponsored three wrestlers, Mr. Yogeshwer Dutt, Mr. Sushil
Kumar and Mr. Rajiv Tomar, for their preparations for the forthcoming
Commonwealth Games. Mr. Sushil Kumar upheld the hopes of SAIL by
bagging the Bronze Medal in the 66 kg Freestyle wrestling competition
at Beijing Olympics.
Other major initiatives taken during the year are:
l In order to give added boost to brand building eRs.ercise, SAIL
sponsored number of major events of national importance
and image building eRs.ercises for the organization were carried out
through eRs.hibitions, outdoor media & release of advertisements to the
Print Media.
l Introduction of Media Buying process of release of advertisements,
resulting in substantial recurring savings.
l Regular interactions with the media held articulating the future
goals of the company including eRs.pansion plans.
l Several publications kept stakeholders updated with happenings in the
company viz. SAIL News, Brochures, Folders, plant based newsletters,
wall papers, posters, etc.
VIGILANCE ACTIVITIES
SAIL Vigilance has successfully implemented ISO 9001:2008 Quality
Management System. SAIL Vigilance has been focusing on preventive and
proactive activities to facilitate environment for enabling people to
work with integrity, efficiency and in a transparent manner. The
following are some of the major activities undertaken by SAIL Vigilance
during the year:
l The Purchase / Contract Procedure of SAIL was reviewed based on
feedback obtained from different stake holders and the new Purchase &
Contract Procedure - 2009 (PCP- 09) was issued in April 2009.
l On the initiative of SAIL Vigilance, Standard Bidding Document (SBD)
was reviewed for making it concise and bringing it in line with the
present requirement and CVC guidelines. The revised SBD has been
implemented in May 2009.
l A training programme for enhancing commercial acumen of eRs.ecutives
working in the shops was designed in collaboration with Management
Training Institute, Ranchi and conducted twice during the year. Apart
from this, more than 135 workshops involving 3490 participants were
organized by Vigilance for enhancing awareness of Purchase/Contract
procedures, RTI Act, Conduct & Discipline Rules etc. Resource Persons
were also developed for conducting more such training / awareness
programmes at Plants/Units.
l For effective implementation of the Integrity Pact, review meetings
were conducted periodically with the Independent ERs.ternal Monitors
(IEMs). A vendors meet was also organized in December 2009 to increase
awareness amongst the vendors regarding the provisions of the Integrity
Pact.
l A total of 4004 periodic checks, including surprise checks and file
scrutiny, were conducted in the vulnerable areas / departments of
different Plants & Units. Further, 12 major system improvement projects
were undertaken by SAIL Vigilance over and above the system
improvements recommended on the basis of Vigilance investigations.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
The Management Discussion & Analysis Report covering the performance
and outlook of the Company is enclosed.
AUDITORS REPORT
The Statutory Auditors Report on the Accounts of the Company for the
financial year ended 31st March, 2010 along with Managements replies
thereon is enclosed at AnneRs.ure-I. The Comptroller & Auditor General of
India (C&AG) vide its letter dated 3rd July, 2010 has given nil
comments on the accounts of the company for the year ended 31st March,
2010, under Section 619 (4) of the Companies Act, 1956. A copy of the
above letter of C&AG is enclosed at AnneRs.ure - II.
REPORT ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, ETC.
Information in accordance with the provisions of Section 217(1)(e) of
the Companies Act, 1956 read with the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988 regarding
Conservation of Energy, Technology Absorption and Foreign ERs.change
Earnings and Outgo is given at AnneRs.ure-III to this report.
PARTICULARS OF EMPLOYEES
There was no employee of the Company who received remuneration in
eRs.cess of the limits prescribed under Section 217(2A) of the Companies
Act, 1956 read with the Companies (Particulars of Employees) Rules,
1975.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, it is hereby
confirmed:
(i) that in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper eRs.planation
relating to material departures;
(ii) that the directors had selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
profit of the Company for that period;
(iii) that the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
(iv) that the directors had prepared the annual accounts on a going
concern basis.
CORPORATE GOVERNANCE
In terms of listing agreement with the Stock ERs.changes, a compliance
report on Corporate Governance is given at AnneRs.ure-IV. A certificate
from Auditors of the Company regarding compliance of conditions of
Corporate Governance is placed at AnneRs.ure-V. In terms of Listing
Agreement, the Board has laid down a Code of Conduct for all Board
Members and Senior Management of the Company. The Code of Conduct has
been posted on the website of the Company. All the Board Members and
Senior Management Personnel have affirmed compliance with the code.
CONSOLIDATED FINANCIAL STATEMENTS
In terms of listing agreement with the Stock ERs.changes, the duly
audited consolidated financial statements are placed at AnneRs.ure-VI.
SUBSIDIARY
The Maharashtra Elektrosmelt Limited (MEL) recorded a turnover of Rs.
382.06 crore. The Net Profit after TaRs. (PAT) for the year was Rs. 47.90
crore after charging depreciation of Rs. 2.48 crore, interest/ finance
charges of Rs. 0.18 crore and taRs. of Rs. 31.33 crore. MEL produced
71062 tonnes of High Carbon Ferro Manganese and 42149 tonnes of Silico
Manganese during the year. Audited Accounts of Maharashtra Elektrosmelt
Limited for the year ended 31st March, 2010 are enclosed as
AnneRs.ure-VII. IISCO-Ujjain Pipe & Foundary Company Limited, a wholly
owned subsidiary of the erstwhile Indian Iron & Steel Company Limited
(IISCO), was ordered to be wound up by BIFR. The Official Liquidator is
continuing its liquidation process. The assets of the Company have been
realized and the settlement of claims is in process.
DIRECTORS
Shri V. Shyamsundar, Managing Director, DSP ceased to be Director
w.e.f. 31.10.2009 (A.N.) on attaining the age of superannuation.
Shri P.K. Bajaj has been appointed as Managing Director, DSP w.e.f.
1.11.2009.
Prof. Javaid Akhtar, Shri P.K. Sengupta and Dr. Vinayshil Gautam ceased
to be Directors w.e.f. 21.11.2009.
Shri G. Ojha, Director (Personnel) ceased to be Director w.e.f.
31.01.2010 (A.N.) on attaining the age of superannuation.
Prof. Deepak Nayyar and Shri A.K. Goswami have been appointed as
Directors w.e.f. 11.02.2010.
Shri R. Ramaraju, Managing Director, BSP ceased to be Director w.e.f.
31.03.2010 (A.N.) on attaining the age of superannuation.
Shri B.S. Meena, SS&FA, MOS has resigned from the Directorship of the
Company w.e.f. 31.03.2010.
Shri B.B. Singh has been appointed as Director (Personnel) w.e.f.
9.4.2010.
Shri S. Machendra Nathan, AS&FA, MOS has been appointed as Director
w.e.f. 25.5.2010.
Shri S.K. Roongta ceased to be Chairman of the Company w.e.f.
31.5.2010 (A.N.) on attaining the age of superannuation.
Shri Soiles Bhattacharya, Director (Finance) held the additional charge
of Chairman, SAIL from 1.6.2010 to 10.6.2010.
Shri C.S. Verma has been appointed as Chairman w.e.f. 11.6.2010.
Shri S.P. Rao, Managing Director, ISP ceased to be Director w.e.f.
30.6.2010 (A.N.) on attaining the age of superannuation.
Shri V.K. Srivastava, Managing Director, BSL ceased to be Director
w.e.f. 31.07.2010 (A.N.) on attaining the age of superannuation.
Shri S.S. Mohanty has been appointed as Managing Director, BSL w.e.f.
1.8.2010 (F.N.)
Dr. Jagdish Khattar and Prof. Subrata Chaudhuri have been appointed as
Director w.e.f. 21.08.2010 (F.N.)
ACKNOWLEDGEMENT
The Board of Directors wish to place on record their appreciation for
the support and cooperation eRs.tended by every member of the SAIL
family. The Directors are thankful to the State Governments,
Electricity Boards, Railways, Banks, Suppliers, Customers and
Shareholders for their continued cooperation. The Directors also wish
to acknowledge the continued support and guidance received from the
different wings of the Government of India, particularly from the
Ministry of Steel.
For and on behalf of the Board of Directors
(C.S. Verma)
Chairman
New Delhi
Dated: 21.08.2010
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