Steel Authority of India Ltd.
|BSE: 500113||Sector: Metals & Mining|
|NSE: SAIL||ISIN Code: INE114A01011|
|BSE LIVE 19:49 | 19 Oct||59.10||
|NSE 19:49 | 19 Oct||59.05||
|Mkt Cap.(Rs cr)||24,411|
|Mkt Cap.(Rs cr)||24411.43|
Steel Authority of India Ltd. (SAIL) - Director Report
Company director report
The Board of Directors has the pleasure of presenting the 44th Annual Reportof the Steel Authority of India Limited (SAIL the Company) together with Audited Accountsfor the Financial Year ended 31st March 2016.
A. FINANCIAL REVIEW
Your Company achieved a turnover of '43337 crore during the Financial Year 2015-16which is lower by 14% over previous year mainly due to decrease in Net Sales Realisationof Saleable Steel of 5 Integrated Steel Plants by about 20%. The prices of steel productskept falling throughout the year due to fall in Global Steel Prices leading to predatoryimports from China Japan Korea etc. However there has been an increase in pricerealisation after imposition of Minimum Import Price(MIP) w.e.f. 5th February2016. The loss after tax of your Company for the Financial Year 2015-16 was '4137 crorecompared to net profit after tax of ' 2093 crore in the previous Financial Year.
The performance of the Company during the year was adversely affected due to lower NetSales Realisation lower saleable steel production adverse financial impact of on accountof contribution to District Mineral Foundation and National Mineral Exploration Trustw.e.f. 12th January 2015 higher usage of relatively expensive imported coalin the blend due to lower availability of indigenous coal higher salaries & wageshigher repairs & maintenance expenditure higher interest charges and reduction ininterest earnings on term deposits higher depreciation due to
capitalisation of new facilities and non-availability of gain on sale of investment inBokaro Jaypee Cement Limited considered in the previous financial year. However theadverse factors have been partially offset by higher sales volume and lower imported &indigenous coal prices reduction in coke rate reduction in demurrage expenses reductionin 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 timelyrepayment of loans including interest strategic parking of surplus funds with scheduledbanks 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 onmarket conditions. The Company had borrowings of '33217 crore as on 31st March2016. The debt equity ratio of the Company increased to 0.85:1as on 31st March2016 from 0.69:1 as on 31st March 2015 due to increase in borrowings as well asreduction in net worth during the year. The net worth of Company declined from '43505crore as on 31st March 2015 to '39281 crore as on 31st March 2016.
M/s India Ratings & Research Pvt. Ltd. M/s CARE and M/s Brickwork Ratings RBIapproved 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
Financial Year 2015-16 witnessed several landmark achievements by your Company. TheCompany achieved highest ever Hot Metal production of
15.7 Million Tonne(MT) surpassing its previous best of 15.4 MT achieved in 2014-15 andcrude 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 beencommissioned in Durgapur Steel Plant. The Medium Section Mill(MSM) started trialproduction from January 2016. Production from new facilities is being ramped up to therated capacity. Total Hot Metal production from new facilities was 3.54 MT Crude Steelproduction was 1.86 MT and Saleable Steel production was 1.5 MT. SAIL has achieved alltime best performance in case of Continuously-Cast Steel and Sinter production with aproduction of 10.8 MT & 22.6 MT and growth of 4% & 10% respectively over lastyear.
SAIL's various initiatives to reduce environmental footprint and enhance operationalefficiency have led to a significant improvement in environmental parameters as well as intechno-economic efficiency. This has enabled your Company to produce steel in a greenerand more environmental friendly manner than ever before. SAIL Plants recorded the bestever Coke Rate at 489 kg/thm and Specific Energy Consumption of 6.51 Gcal/tcs. This wasachieved as a result of higher volume of Hot Metal produced through new state of the artBlast Furnaces (23% of total Hot Metal) and increased Crude Steel production throughenergy efficient CC route (up by 4% over corresponding period of last year). In additionSAIL 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 istheir lowest ever emission showing significant improvement over previous years.
Maintaining the fervor for continuous improvement your Company has developed severalnew products during the year including earthquake resistant structurals as perISI5962:20I2 and two new grades of TMT
rebars namely Fe 4155 and Fe 500S as per ISI786:2008 standard on "High strengthdeformed bars and wires for concrete reinforcement" further enhancing its extensiveproduct portfolio. A total of 24 new products were developed during the Financial Year2015-16 catering to industry sectors including automobiles construction engineeringdefense etc.
Average power requirement of SAIL Plants during the FinancialYear 201516 was 1180 MWwhich was higher by 40 MW compared to last year due to increased operations followingcommissioning 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% waspurchased from grid utilities. The percentage of power requirement met through captivepower generation in 2015-16 had increased to 67% from 6I% in the previous year due toenhanced power generation by captive facilities.
The practice of gainful utilization of surplus captive power through interplantwheeling of power was continued during the year. Rourkela Steel Plant Salem Steel Plantand Chandrapur Ferro Alloy Plant (CFP) received wheeled power of about I40MU from PowerPlant-3(PP-3) at Bhilai Steel Plant. Wheeling from PP-3 was started for the first time toCFP during the year which helped in replacing costly grid power and thereby resulting insubstantial cost savings.
For cost optimisation about I00 Million Units of cheaper power were purchased fromPower Exchange which contributed to substantial cost savings. Further various othermeasures for reducing the grid power costs including reduction of contract demand ofPlants with respective grid supply utilities to optimum levels were also undertakenduring the year resulting in cost savings.
Augmentation of the Company's captive power generation capacity by installation ofCaptive Power Plants as a part of ongoing expansion as well as new capacity additionthrough joint venture company NTPC- SAIL Power Company Pvt. Ltd.(NSPCL) is underway. Outof total 216MW envisaged capacity addition under ongoing expansion 160 MW capacity hasbeen added so far and balance is expected in the next year. Proposed installation of 290MW capacity through NSPCL is also in advanced stage.
With regard to Company's commitment towards renewable power sources actions have beeninitiated for development of 200 MW renewable capacity by the year 2019 through NSPCL.This includes 1MW capacity grid interactive Solar PV Plant at RSP which was commissionedduring the year.
During the Financial Year 2015-16 total requirement of iron ore was met from captivesources. The Company's captive iron ore mines produced about 24.83 million tonnes(MT).However in case of coking coal around 14% requirement was met from indigenous sources(Coal India Limited & captive sources) (2.08MT) and for the balance requirement ofcoking coal (13.30 MT) the Company has to depend on imports due to limitation ofavailability within the Country. In the FinancialYear 2015-16 production in captivecollieries of the Company was about 0.73 MT out of which 0.56 MT was raw coking coal andbalance 0.17MT being non coking coal. In case of fluxes around 1.28 MT of limestone and0.98 MT of dolomite were produced giving a production of 2.26 MT fluxes from captivesources. For thermal coal your Company depends entirely on purchases from Coal IndiaLimited except small quantity produced from captive mines.
The iron ore production at Barsua mine suspended since 17th May 2014 as per thedirection of the Hon'ble Supreme Court is yet to resume. In the matter of restartingoperations in ML-162 lease of Barsua mine the Hon'ble Supreme Court passed interim orderon 2nd March 2016 and directed to revert back after obtaining Stage-II FC fordiversion of forest land in ML-162 lease of SAIL Barsua mine.
In order to expedite capacity expansion projects of mines following environment andforest clearance have been obtained during the Financial Year 2015-16:
Environment clearance for setting up of 1 MTPA Pellet Plant with upstream slimebeneficiation facilities at Dalli-Rajhara Iron ore Complex Chhattisgarh was granted byMinistry of Environment Forests and Climate Change (MoEFCC) on 17th April2015.
Environment clearance for capacity expansion of Kuteshwar Limestone mine fromRight 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 ofKuteshwar Limestone mine was granted by MoEFCC on 17th August 2015.
Environment clearance for re-opening of Baraduar Dolomite mine with capacity of2 MTPA with a condition to obtain Stage-I Forestry Clearance within 18 months was grantedby MoEFCC on 2nd
Environmental Clearance for Topailore Iron Ore Mining Project has been grantedby Jharkhand SEIAA Ranchi vide letter dated 17.08.2015 for production of 0.6 MTPA ironore.
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 on7th August 2015.
Stage-II forest clearance for diversion of 37.66 Ha of Jungle Jhar land forcreating infrastructure for Gua capacity expansion project in Surface lease of Gua minewas granted by Regional office of MoEFCC on 4th March 2016.
However the Stage-II forest clearance for the Duargaiburu lease of Gua mine is yet tobe granted by MoEFCC. In view of its criticality to the Gua capacity expansion projectthe matter is being actively pursued at various levels in the Government.
In view of promulgation of MMDR Amendment Act 2015 Order of Ministry of MinesGovernment of India dated 6th February 2015 regarding extension of leases period forGovernment Companies till 31st March 2020 and Mineral (Mining by GovernmentCompany) Rules 2015 dated 3rd December 2015 following mining lease periods have beenextended by respective State Governments:
Government of Odisha vide Order dated 10th February 2016 has extended theperiod of the original grant of mining lease of ML-139 of Barsua-Kalta to 50 years i.e.from 17.01.1975 to 16.01.2025
Government of Odisha vide Order dated 14th March 2016 also extended thevalidity period of the Purnapani Limestone & Dolomite mining lease from the date ofexpiry of the last validity period of lease up to 31st March 2020.
Government of Chhattisgarh vide Order dated 14th March 2016 has extended theperiod of the original grant of mining lease of Kalwar-Nagur of Bhilai Steel Plant for 50years i.e. from 01.04.1975 to 31.03.2025.
Under notified coal blocks for allotment to Government Companies two coal blocksnamely Sitanala and Parbatpur Coking Coal Mines have been allocated to SAIL and Agreementsin this regard with the Nominated Authority for Sitanala and Parbatpur were signed on 31stAugust 2015 and 26th October 2015 respectively. Further Allotment Orders forthe Sitanala and Parbatpur Coking Coal Mines were issued by Nominated Authority Ministryof Coal on 31st August 2015 and 23rd March 2016 respectively.
Sales & Marketing
In-spite of the challenging market conditions your Company achieved a total salesvolume of 12.2 million tonnes during the Financial Year 201516 registering a growth ofabout 4% over the previous year. With regard to Dealer Sales the best ever sales of 0.79million tonnes were achieved during the Financial Year 2015-16 thereby registering agrowth of 29% over such sales during 2014-15. Stainless Steel Cold Rolled Coils wereexported to Brazil for the first time.
Your Company achieved highest ever sales of Plate Mill Plates of 1.79 million tonneswith a growth of 16% over previous year. Similarly sales of Long Products also registereda growth of 21% with best ever sales of TMT & WRC at 1.68 million tonnes & 0.41million tonnes respectively.
Public Procurement Policy for Micro and Small Enterprises
As required by the Public Procurement Policy of the Government of India theinformation on procurement from Micro & Small Enterprises during Financial Years2015-16 and 2014-15 is given below:
C. GROWTH PLAN AND MODERNISATION & EXPANSION PROGRAMME
To maintain its current dominance in the domestic market and to meet the futurechallenges your Company is working on a long term strategic plan 'Vision 2025' whichwill steer the Company towards a target of 50 million tonnes of Hot Metal capacitythereby meeting the strategic objectives of maintaining leadership in Indian Steel sectorand a position amongst the top Steel companies globally. The growth plan besidestargeting higher production also addresses the need for eliminating technologicalobsolescence achieving energy savings enriching product- mix reducing pollutiondeveloping mines and collieries introducing customer centric processes and developingmatching infrastructure facilities.
Modernisation & Expansion Programme
Your Company is nearing towards the last leg of implementation of current phase ofModernisation & Expansion Programme. At present the installed Hot Metal capacity ofthe Company is 19.73 million tonnes per annum and the envisaged Hot Metal capacity of23.46 million tonnes per annum will be achieved in 2017.
During the Financial Year 2015-16 your Company has achieved many milestones. At BokaroSteel Plant Roughing Mill Up-gradation of Hot
Strip Mill has been completed and has become operational. At Durgapur Steel Plant NewMedium Structural Mill has become operational. At Bhilai Steel Plant New Rail WeldingLine is in operation and Hot trials in Universal Rail Mill have been carried out. Acapital expenditure of '6034 crore has been incurred during FinancialYear 2015-16 andCapex planned for 2016-17 is '4000 crore.
The details of Addition Modification & Replacement (AMR) Schemes underimplementation are given in the Management Discussion & Analysis (MD&A) Reportwhich 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 thecompetitive advantage. The Company has achieved its present level of excellence throughinvestment in its human resource whose skill and knowledge constitute the basis of everyinitiative - be it technology or innovation. Developing skills and capabilities ofemployees to improve manpower utilization and labour productivity is the key thrust areaof Human Resource Management (HRM) in the Company.
Your Company provides an environment conducive for learning encourages adoption ofbest practices in every area and nurtures creativity and innovation among employees. HumanResource initiatives in SAIL are focused on developing team spirit employee empowermentand their involvement in various improvement activities. Strategic alignment of HRM tobusiness priorities and objectives has facilitated smooth transition to state-of-the-arttechnology in the Modernization and Expansion Projects.
Enhanced Productivity with Rationalized Manpower
Your Company achieved the Labour Productivity (LP) of 315 TCS/Man/ Year in 2015-16. Themanpower strength of the Company as on 31st March 2016 was 88655 nos. withmanpower rationalization of 4697 nos. achieved during the year. The enhanced productivitywith rationalized
manpower could be achieved as a result of judicious recruitments building competenciesand 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 isdepicted below:
Developing Employee Capabilities & Competencies
Your Company believes that training facilitates the development of employee's knowledgeand skills so that the resultant growth of competence contributes towards attainment oforganisation's goals and objective. SAIL has been making sustained efforts through varioustraining and development activities with focus on preservation transfer and improvementof skills knowledge technology in collaboration with reputed organizations anddevelopment of effective managerial competencies in association with premier institutes.
Preparing employees for tomorrow for effectively taking up challenges and dischargingnew roles and responsibilities was given a major thrust.
Overall 33563 employees were trained against target of 31049 employees during theyear on various contemporary technical and managerial modules.
Harmonious Employee Relations
SAIL has maintained its glorious tradition of building and maintaining a conducive andfulfilling employee relations environment. The healthy practice of sorting out andsettling issues through discussions with trade unions/workers' representatives enabled theCompany in ensuring workers' participation at different levels and maintaining a peacefulIR climate. Some of the bi-partite forums are functioning since early seventies and aresufficiently empowered to address different issues related to wage safety and welfare ofworkers arising from time to time thus helping in establishing a conducive workenvironment.
Bipartite forums like National Joint Committee for Steel Industry (NJCS) JointCommittee on Safety Health & Environment in Steel Industry (JCSSI) etc. withrepresentation from major central Trade Unions as well as representative Unions ofPlants/Units meet on a periodic basis and jointly evolve recommendations/ action plans forensuring a safe and harmonious work culture which gets substantiated from the harmoniousIndustrial Relations enjoyed over the years by SAIL Plants/Units marked with diverse workculture at multi-locations.
In addition Quality Circles Suggestion Schemes Shop Improvement Group workshops alsooffer multiple avenues for enhanced workers' participation. Workers are also kept abreastof 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 theCompany's performance as well as those related to employees' welfare is done in astructured 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 objectiveof the Company leading to not only higher production and productivity but also enhance thesense of belongingness of the employees.
Grievance Redressal Mechanism
Effective internal machinery for grievances redressal has been evolved and establishedin SAIL Plants and Units separately for executives and non-executives. Joint grievancecommittees 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 aregiven an opportunity at every stage to raise grievances relating to wage matters workingconditions leave work assignments and welfare amenities etc. Majority of grievances areredressed informally in view of the participative nature of environment existing in thePlants/ Units. The system is comprehensive simple and flexible and has proved effectivein promoting harmonious relationship between employees and management.
Against 7 staff grievances pending at the start of the year (i.e. as on 1.4.2015) and416 staff grievances received during the year SAIL disposed 422 staff grievances duringthe year 2015-16 achieving 99.76% fulfilment.
In SAIL pay and other benefits for executives are based on the Presidential Directivesissued by Ministry of Steel Government of India. The last pay revision effective from01/01/2007 was done in accordance with Presidential Directives dated 05/10/2009. As perthis variable pay in the form of Performance Related Pay (PRP) has been introduced forexecutives. The PRP is based on the performance / profitability of the Company as well asindividual performance rating which is aligned to the organization's objectives. In caseof Non-executive employees the salaries and wages are finalized / revised in bipartiteforum of National Joint Committee for Steel Industry (NJCS). The last NJCS agreement wasfinalized and signed on 01.07.2014 which resulted in pay revision of nonexecutiveemployees w.e.f. 01.01.2012. In terms of notification issued by the Government of Indiathe provisions of section 197 of the Companies Act 2013 are not applicable to GovernmentCompanies. As such the disclosures to be made in the Board's Report on the remunerationof Directors and other prescribed details are not included in this Report.
Initiatives for Socio-economic Development of SCs /STs & Other Weaker Sections ofthe Society
Presidential Directives on Reservation for Scheduled Castes and Scheduled Tribes inAppointments in Public Enterprises continue to be implemented. As on 1.4.2016 out oftotal manpower of 88655 nos. 14454 belonged to SCs (16.30%) 12587 belonged to STs(14.20%) and 10768 belonged to OBCs (12.15%).
SAIL Plants and Units including Mines are situated in economically backward regions ofthe Country with predominant SC/ST population. Therefore your Company has contributed tothe overall development of civic medical educational and other facilities in theseregions. Some of the contributions are:
Recruitment of non-executive employees which comprise of over 84% of the totalemployees are carried out mainly on regional level and hence a large number of SCs/STsand 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 thevicinity of Steel Plants. This has created opportunities for local unemployed persons forjobs and development of entrepreneurship.
For jobs of temporary & intermittent nature generally contractors deployworkmen from the local areas which again provide an opportunity for employment of localcandidates of economically weaker section.
Establishment of SAIL Steel Plants in economically backward areas has given afillip to the economic activities thus benefiting the support population providingdifferent types of services.
Steel Townships developed by SAIL have the best of medical education and civicfacilities and are like an oasis for the local Scheduled Castes Scheduled Tribes andother 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 childrenat the five integrated Steel Plant locations. The facilities provided include freeeducation mid-day meals uniforms including shoes text books stationery items schoolbag water bottle and transportation in some cases.
No tuition fee is charged from SC/ST students studying in the Company runschools whether they are SAIL employees' wards or non-employees' wards.
Free medical health centres for poor have been set up at Bhilai DurgapurRourkela Bokaro Burnpur (Gutgutpara) providing free medical consultation medicinesetc. to the peripheral population mainly comprising of SC/ST and weaker sections ofsociety.
SAIL Plants have adopted tribal children. They are being provided freeeducation uniforms textbooks stationery meals boarding lodging and medicalfacilities for their overall growth at residential hostels such as Saranda SuvanChhatravas Gyanodaya Hostel and an exclusive Gyan Jyoti Yojana for nearly extinct BirhorTribe.
For Skill Development and better employability tribal school passouts have beensponsored for coaching in premier institutes for IIT/JEE entrance examinations and fortrainings along with monthly stipend accommodation transportation and fooding facilityat 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 duecompliance of the Orders and instructions pertaining to reservation for SCs/STs/OBCs atPlants/Units of SAIL.
SC/ST Cell is functioning in all of the main Plants/Units. A member belonging toSC/ST community is associated in all DPCs/Selection Committees. It is ensured to keepminimum one SC/ST category member on every selection panel. A sufficiently senior levelofficer of SC/ST category is nominated for the purpose as per the level of the RecruitmentBoard /Selection Committees/DPC.
Internal workshops for Liaison Officers for SC/ST/OBC and other dealing officersof SAIL Plants/Units are conducted at regular intervals through an external expert to keepthem updated on the reservation policy for SC/ST and other related matters.
Plants/Units of SAIL have SC/ST Employees' Welfare Associations which conductregular meetings with Liaison Officers on implementation of reservation policy & otherissues. In addition an Apex level umbrella body namely SAIL SC/ST Employees Federationalso exists in SAIL to represent the issues of SC/ST Employees in a coordinated manner. Ameeting with the Federation at the level of Director (Personnel) is organized on a regularbasis.
National Commission for ScheduledTribes reviewed position of SAIL w.r.t.implementation of reservation policy and CSR schemes in respect of Scheduled Tribes on 2ndFebruary 2016 at New Delhi.
Hon'ble Chairperson Dr. Rameshwar Oraon praised the efforts of SAIL towardsrehabilitation 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 toInformation (RTI) Act 2005 in letter and spirit. The Company has designated PublicInformation Officers (PIO) / Assistant Public Information Officers and AppellateAuthorities and Transparency Officer under Section 5 and Section 19(1) of RTI Act in eachPlant and Unit for speedy redressal of the queries received under the Act. The provisionsunder the Act are being complied with by all the Plants and Units of the Company. Allstatutory reports including Annual Report are sent to Ministry of Steel besides uploadingon website of the Company- www.sail.co.in. UnderSec.5(5) all the officers/ line managers responsible for providing information to the PIOare called Deemed PIO and are made equally responsible as PIO towards timely providing ofinformation to the applicant.
An exclusive RTI Portal has been developed with link being available on website of theCompany. All the Plants/Units of SAIL have listed 17 manuals and details of Authoritiesunder the Act are available on the website of the Company. Quarterly Returns and AnnualReturns on implementation of RTI Act are being submitted online through the CIC portal.Implementation of online request has been introduced from 1st May 2015 onwards. Acompilation of Record Retention Policy of various functions of Corporate Office has alsobeen uploaded on the website of the Company. In addition compilations of importantdecisions of CIC DOPT circulars and High Court cases have also been made available on thewebsite of the Company.
Workshops on 'Obligation of Public Authorities under RTI Act 2005 are being organisedat Corporate Office/Plants/Units and a Information Commissioner has been present in mostof these programs. Further awareness programmes on RTI Act are also held at Plants/ Unitsincluding Corporate Office on a regular basis.
A total of 3758 applications and 639 appeals were received under RTI Act during theFinancial Year 2015-16 all of them have been disposed off within the stipulated timeprescribed under the Act. 90 number of cases were taken up with the CIC and all of themwere disposed off in favour of the Company.
Your Company is totally committed to excellence in public service delivery through goodgovernance by a laid down process of identifying citizens our commitment to them inmeeting their expectations and our communication to them of our key policies in order tomake the service delivery process more effective.
SAIL's Citizen Charter has outlined commitment of SAIL towards its stakeholdersthereby empowering them to demand better products and services. The Citizen's Charter ofSAIL may be summarized in four objectives as given below:
Ensuring citizen-centric focus across all its processes by adopting TotalQuality Management principles for improvement of products and services.
Ensuring effective citizen communication channels.
Demonstrating transparency and openness of its business operations by hostingthe Citizen's Charter on the Corporate website.
Working towards delight of citizens by fail-safe processes and in case ofexigencies leveraging its service recovery processes like Grievance Redressal HandlingComplaints etc.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013:
The Company has in place a system of Complaints Committees (under SAIL ConductDiscipline and Appeal (CDA Rules 1977)) in line with the requirements of the SexualHarassment of Women at the Workplace (Prevention Prohibition and Redressal) Act20l3.These Committees have
been set up to redress complaints received regarding sexual harassment. All employeesof the Company are covered under this Policy.The following is a summary of sexualharassment complaints received and disposed off during the year 2015-16:
Number of complaints received : 5
Number of complaints disposed off : 4
E. AWARDS & ACCOLADES WON DURING THE YEAR
Your Company has won 4 Prime Minister's Shram Awards (involving 23 employees)for the year 2014.
Your Company has won 15 Vishwakarma Rashtriya Puraskar Awards (involving 86employees) for the performance year 2013.
Bhilai Steel Plant (BSP) bagged the Prime Minister's Trophy for the BestPerforming Integrated Steel Plant in the Country for the year 2011-12 declared in2014-15 for a record 11th time. Chairman SAIL and Chief Executive Officer BSP receivedthe trophy from Hon'ble Prime Minister Shri Narendra Modi at Rourkela on 1st April 2015.
Your Company won Dainik Bhaskar India Pride Award 2015-16 under Corporate SocialResponsibility award category.
Your Company won CII-ITC Sustainability 2015 Award for 'Corporate Excellence -Commendation for Significant Achievement' in recognition of its exemplary performance andcontribution in the economic social and environmental segment.
Your Company won India Today - MDRA CPSE Best HR Excellence Award - 2015.
Your Company was awarded with the prestigious EEPC India National Awards forEngineering Export Excellence as the Star Performer for the year 2013-14 in the Basic Ironand Steel - Large Enterprise product group category.
Town Official Language Implementation Committee (PSU) Delhi under theChairmanship of SAIL was been adjudged 3rd in Northern Region for commendable performancein implementing the Official Language Policy of the Union during the year 2014-15.
Hindi in-house journal of SAIL 'Ispat Bhasha Bharti' bagged Shiromani PatrikaPuraskar at town level.
Your Company was conferred with the first award in the 12th National Award forExcellence in Cost Management 2014 under the category of Public ManufacturingOrganization.
Your Company was awarded India Pride Awards 2014-15 for Excellence inEnvironment Protection and Conservation by Dainik Bhaskar Group.
Your Company won BT-STAR PSU Award 2015 for its R&D and innovations in theCategory of Maharatna and Navratna PSUs.
Bhilai Steel Plant
CREDA Energy Efficiency & Innovation Award for the year 2014-15 in thecategory of Integrated Steel Plants under Iron & Steel Sector in August 2015 byChhattisgarh State Renewable Energy Development Agency (CREDA)
CII Exim Bank Award 2015 - 'PRIZE' for exceptional business excellenceinitiatives.
Golden Peacock Environment Management Award 2015 in the category of Steel inJuly 2015.
NARAKAS Bhilai-Durg bagged the Rajbhasha Kirti Puraskar in September 2015.
Best Rajbhasha implementation award in Central Region for the third consecutiveyear in February 2016.
Businessworld HR Excellence Awards 2015 under award category of "BestInitiative for Connect with Family" in recognition of effective implementation of anInnovative workplace practice "Aap Bhi Janiye".
Durgapur Steel Plant
Greentech Environment Award - Gold for the year 2014-15 by Greentech FoundationNew Delhi in November 2015.
CII Exim Bank Award 2015 - 'Commendation for significant achievement'.
Greentech Safety Award 2015 - Certificate of Appreciation in Metal and MiningSector for the year 2014 in recognition of Safety by Greentech Foundation.
Greentech HR Award 2015 (Training Excellence) - Silver organized by GreentechFoundation New Delhi.
Ispat Suraksha Puraskar for No Fatal Accident in Rolling Mills during 2013 &2014 by JCSSI.
Srishti Good Green Governance Award 2015 - Certificate of Commendation inrecognition of Environment for the year 2013-14 organized by Srishti Publications.
Rourkela Steel Plant
CII National HR Excellence Award 2015-16 (Strong commitment to HR Excellence) on15th February 2016.
1st Prize in 'National Energy Conservation Award 2015' in IntegratedSteel Plant sector for fiscal year 2014-15.
5th Annual Greentech CSR Award 2015 - Gold Award under the category Metal &Mining organized by Greentech Foundation in November 2015.
CII Exim Bank Award 2015 - 'Commendation for significant achievement'.
OTV CSR Award in the Water and Sanitation Category for CSR initiatives inOctober 2015.
Bokaro Steel Plant
Green-Tech Award - 2015 to Environment Control Department of BSL from GreentechFoundation.
CII Exim Bank Award 2015 - 'Commendation for significant achievement'.
Greentech HR Award 2015 (Corporate Category of Training Excellence) - Goldorganized by Greentech Foundation.
Alloy Steels Plant
GreenTech Environment Award 2015 - Gold in Metal & Mining Sector foroutstanding contribution in Environment Management from Greentech Foundation.
Ispat Suraksha Puraskar 2015 for No Fatal Accidents for regular employees andcontract labour separately.
Salem Steel Plant
SSP won the Ispat Suraksha Puraskar - 2016 award under JCSSI for achieving"No Fatal Accident" during the calendar year 2015 for regular employees andcontract labour separately.
National Sustainability Award (First Prize) for the year 2014-15 from the IndianInstitute of Metals Kolkata in Secondary Steel Plants / Alloy Steel Plants category. SSPhas achieved this award for the 18th time since inception.
Raw Materials Division
Barsua Iron Mine bagged 1st Prize in "Installation & Use of MineralBeneficiation Equipments including Crushing" & 2nd Prize in "NoiseVibration & other Scientific Studies" in the category of fully Mechanized Minesin 17th Mines Environment and Mineral Conservation Week-2014-15 held on 17th May 2015 atPuri Odisha under the aegis of IBM Bhubaneswar.
The mines of RMD have won the following prizes in the Annual Safety Week-2015celebrations:
BOM - 1st Prize in Publicity & Propaganda 1st Prize in Survey & MiningSoftware 1st Prize in First Aid Trade Test 1st Prize in Mechanical Trade Test 2nd Prizein Illumination 3rd Prize in General Working.
GOM - 1st Prize in Mechanical Trade Test 2nd Prize in Dozer Operator TradeTest 2nd Prize in Survey & Scientific Study 2nd Prize in Workshop Facilities 2ndPrize in Statutory Provision & Compliances 3rd Prize in Overall Performance 3rdPrize in Publicity & Propaganda.
BIM - 1st Prize in Workshop Facilities 1st Prize in Poster 1st Prize in TradeTest(Drill) 2nd Prize in Safe Handling of Explosives.
KIOM - 2nd Prize in Plant & Equipment 2nd Prize in First Aid Trade Test2nd Prize in Trade Test(Drill) 3rd Prize in Survey & Scientific Study 3rd Prize inGVTC.
MIOM - 1st Prize in Trade Test(Shovel) 3rd Prize in Safe Handling ofExplosives 3rd Prize in Mechanical Workshop.
Chandrapur Ferro Alloy Plant
Ispat Suraksha Puraskar under Scheme-II & IV Group-B (amongst Special SteelPlants) for achieving "No Fatal Accident" involving regular employees andcontract labour separately during calendar years 2013 & 2014 from JCSSI.
Ispat Suraksha Puraskar under Scheme II Group - B (amongst Special SteelPlants) for achieving "NO FATAL ACCIDENT" during calendar years 2013 & 2014from 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 categoryMaharatna & Navratna.
2nd Prize for "Best IT Practices of Govt. organizations for the citizens/employees and students" in Digital India Week - 2015 Ranchi.
F. ENVIROMENT PROTECTION AND CONSERVATION
As a responsible Corporate Citizen your Company is committed to improve itsenvironmental footprint. With determined efforts the Company has been able to achieve thebest ever environmental performance indicators during the Financial Year 2015-16. Inaddition efforts for eco-restoration of mined-out areas greening of warehouses and otherenvironmental projects have yielded positive results.
Corporate Environmental Vision Policy and Responsibility
A comprehensive report on "Corporate Environmental Vision Policy andResponsibility" conceptualised and recommended by the Board Sub Committee on HealthSafety and Environment has been approved by
the Board of Directors in January 2016. As per the approved report to achieve theobjectives articulated under the strategic action points Unit- wise action plans are tobe prepared and implemented.
Improvement in Environmental Footprints and Operational Efficiency
The Company's commitment to "comply with applicable environmental regulations andstriving to go beyond" results from concerted efforts by the SAIL collective towardsenvironmental stewardship and protection of the environment in and around its operatingUnits leading to consistent improvement in the environmental indices over the years areshown below:
Major Pollution Control facilities installed during the year
Augmentation of ESPs with Boiler#! 2 & 5 of the Power Plant-I at BSP.
Sodium Hypochlorite dosing system at the BOD Plant outlet of DSP for furtherreduction of cyanide level.
Cast House De-fuming system at BF#4 at RSP
Primary emission control facility with the Converter#5 of SMS-! at RSP
Revival of the existing dust extraction and dust suppression system of theCrushing & 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
a. Use of Weathered LD Slag as Rail track Ballast
The physical properties of weathered LD slag (WLD Slag) meet the specification requiredfor stone ballast for use as rail track ballast. In response to a proposal by the CompanySouth Eastern Railway (SER) has agreed to conduct field trials at the Bokaro Rail Yardwith the weathered LD Slag from Bokaro Steel Plant. Field trials in association with SERhas started from June 2015 at Ispat Nagar Railway Yard Bokaro. Inspections of the trackparameters are being carried out jointly by the representatives of SER and SAIL onmonthly 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) therelevant IS code (IS: 383) has now been amended (Amendment- III) as a result of whichiron and steel slag can now be utilised as a replacement of sand upto the extent as hasbeen 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 2015 -16:
Vegetation survey by laying quadrats in and around RSP and in nearby forests.
Maintenance of plantation of twelve different selected tree species in thedesignated site for identification of high carbon sequestering species.
Submission of Biodiversity report Soil Organic Carbon report and SoilCharacterisation report.
Scheduled completion of the project is by March 2019.
Use of Renewable Energy
MW Solar Power Plant has been commissioned. The Power Plant is connected withthe electrical grid system of the State Electricity Board.
6 nos. solar water heating systems have been installed at the Rourkela House andaction 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 installationof another seven nos. at various locations (inside and outside works premises) has beenplanned.
A total of 65 nos. Solar Street Lights have been installed at various locationsof the Plant.
Environmental Management System (EMS) linked with ISO- 14001:2004
Implementation of EMS which is essentially a voluntary initiative has become aneffective tool in your Company towards protection of the environment. It has helped thePlants and the Mines to ensure that their performance remain within the regulatoryrequirements and the ISO 14001 accredited Units have been able to minimise environmentalliabilities maximize the efficient use of resources reduce wastes build awareness ofenvironmental concern among employees improve environmental performance through moreefficient operations and demonstrate a good corporate image.
During the FinancialYear 2015-16 implementation of EMS-ISO 14001:2004 was completed atthe 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 upthrough collaboration with the Delhi University and Ambedkar University Delhi. During2015-16 (till end of the assigned time period i.e. Oct. 2015) 65000 saplings and 5000seeds of different native tree species were planted. Also more than 2500 saplings offruit yielding trees were planted to enrich the project site.
Long term maintenance of ecologically restored 250 acres Lime Stone mined outarea at Purnapani Lime Stone & Dolomite Quarry is a five year project started in Dec.2014 towards sustainability of the restored ecosystems while providing ecological servicesand goods to the local communities.
Extensive afforestation programme has been consistently followed in all the Plants andthe Mines over the last few decades. The green belt developed by afforestation adds notonly to aesthetic environment but also helps in watershed management soil protectionerosion control and landslide stabilization. Around 4.67 lakhs saplings were planted inand around SAIL Plants and Mines during the year 2015-16 thus bringing to a total of morethan 195 lakhs saplings since the initiation of such schemes.
Other Environmental Efforts
Continuous Emission Monitoring System (CEMS) and Effluent Quality MonitoringSystem (EQMS) have been installed at all the integrated steel Plants along with thefacility for up-linking of the real time data for onward visibility by the CentralPollution Control Board (CPCB) and the respective State Pollution Control Boards (SPCBs).
Corporate Sustainability Report 2014-15 has been published as per GRI G4Guidelines (New Guidelines of GRI) after having been confirmed by GRI to have successfullycompleted the GRI content index service and receiving the organisational mark of GRI.
For conducting Environmental Compliance Audit cum Consultancy Service at BSPthrough an external agency consultant has been selected during March 2016. This effortis first of its kind to be implemented in an integrated steel Plant in India.
SAIL is empanelled with the Delhi Pollution Control Committee (DPCC) forpreparation of adequacy reports for pollution control devices. EMD inspected and preparedAdequacy Reports for four bus depots of Delhi Transport Corporation during the FinancialYear 2015-16.
G. STRATEGIC INITIATIVES OF THE COMPANY
Your Company has adopted a multi-pronged approach that includes organic growthbrown-field projects technology leadership through strategic alliances ensuring rawmaterial security through acquisition and development of new mines diversifying in alliedareas R&D Master Plan and a Technology Plan. Such a strategy of investing indifferent areas will mitigate risk and help in maximizing returns.
Over a span of last few years SAIL has formed Joint Venture companies in differentareas viz. power generation rail transportation slag cement production securingsupplies of key input raw materials viz. coking coal (from indigenous as well as importedsources) etc. New joint venture in the area of production of specialized products tocater to automotive sector etc. is being envisaged. The Strategic Initiatives taken byyour Company include the following:
Ultra Mega Steel Project in Bastar Distt. Chhattisgarh : With the aim to develop largecapacity mega steel projects in the Country which would help India in achieving thecapacity growth of 300 million tonnes of crude steel by 2025-26 Ministry of Steel hasevolved a concept of developing Ultra Mega Steel Plants. SAIL is participating for settingup 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 ofSteel and Government of Chhattisgarh in May 2015 at Dantewada in the presence of Hon'blePrime Minister. Definitive Agreements amongst the Parties have been signed and action hasbeen 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 ofBastar region in Chhattisgarh and to further the industrial progress and mining activitiesof the region an MOU was signed amongst SAIL NMDC IRCON and Government of Chhattisgarhin May 2015 for development of a rail corridor from Rowghat to Jagdalpur. The railcorridor with a proposed length of 140 kms would also pass through Narayanpur andKondangaon in Chhattisgarh. A Shareholders Agreement (SHA) has been signed amongst theParties in January 2016 and a joint venture company has been incorporated under the name"Bastar Railway Private Limited". Survey work and feasibility study for Railwayline are being undertaken by IRCON.
Automotive steel joint venture in India: SAIL and ArcelorMittal are in discussions forexploring the possibility for setting up an automotive steel manufacturing facility undera Joint Venture (JV) arrangement in India. The two companies signed an MOU on May 22 2015to 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 technologicallyadvanced steel products to India's rapidly growing automotive sector. The input materialfor the CRM would come from SAIL's new Hot Strip Mill being set up at Rourkela SteelPlant with capacity of 3 Million Tonne Per Annum(MTPA). The annual capacity of the CRM istargeted at 1.5 MTPA. A task force comprising representatives from both SAIL andArcelorMittal will be completing a Feasibility Study and Business Model as a part ofcomprehensive due diligence for the proposed JV.
Business Excellence Initiatives Enterprise Scorecard
Fifth Enterprise Scorecard of SAIL was prepared for the Financial Year 2015-16comprising of 74 Strategic Objectives; 13 in Financial Perspective 9 in CustomerPerspective 29 in Internal Business Process Perspective and 23 in OrganisationalCapability Building Perspective. Enterprise Scorecard not only brings integration withMemorandum of Understanding with Government of India and Annual Business Plan of theCompany but also facilitates deployment of the strategy across organisation through UnitScorecards and individual Scorecards of top three leadership levels.
Your Company has adopted European Foundation of Quality Management (EFQM) Model whichis implemented in India through CII-EXIM Bank Award for Business Excellence. Four Plantsof your Company i.e. BSP DSP BSL and RSP participated in the process of CII-EXIM BankAward for Business Excellence 2015. The highlight of this year is BSP crossing 600 Scoreand receiving PRIZE. Amongst PSUs BSP is the second PSU Unit ever to achieve the Prize in23 years of Award history. All other participating Plants i.e. DSP RSP & BSL havescores of more than 500 and have received "Commendation Award for SignificantAchievement". Further all the four Plants have exhibited continuous improvement innine Award criteria.
Total Quality Management (TQM)
Most of Plants/Units of your Company are certified to ISO 9000 ISO 14000 OHSAS 18000and SA 8000 Management Systems. DSP & BSL have also implemented ISO 50000 (EnergyManagement System). DSP in addition has also implemented ISO 270000 (Information SecuritySystem). Some other Plants/Units have also started implementation of ISO 50000 & ISO27000. Following Certifications were achieved during 2015-16:
DSP - First SAIL Unit to achieve ISO : 50000 EnMS certification.
ISO 14000 EMS & OHSAS 18000 at ASP
ISO: 50000 EnMS at BSL
IT Related Initiatives
Your Company being a progressive and vibrant organization has always believed inkeeping pace with the changing times. The old business models and overall businessstrategy are being redefined by moving ahead in innovative usage of Information Technology(IT).
With the objective of bringing in efficiency & transparency in operations of theCompany SAIL with its consistent efforts has been able to cover the entire spectrum ofbusiness operations under the sphere of Enterprise Resource Planning (ERP). FourIntegrated Steel Plants at Bhilai Durgapur Bokaro and Rourkela and Central MarketingOrganization have already implemented ERP and are reaping its benefits. ERP implementationat 5th
Integrated Steel Plant i.e. IISCO Steel Plant at Burnpur and at Corporate Office fordata consolidation through integration of data of all Plants/ Units is in progress. Acomprehensive ERP Implementation Roadmap has been finalized for ERP implementation atother remaining Plants/Units.
The production data has its roots in the strong foundation of 'Manufacturing ExecutionSystems' (MES) which has benefitted the Plants in reducing steel defects improving orderdelivery and complete synchronized data for analysis and optimum utilization of mills.
Hospital facility automation with web-based IT interface has been done for streamliningprocurement of medicines viewing of on-line patient medical history prescription &lab test results.
Continuous efforts are being made for paperless working to promote 'Digital IndiaInitiative'. Systems have been modified for generation of automatic SMS/e-mail facilityfor employees customers & suppliers.
Currently the Company is working on strengthening Network & Communicationfacilities throughVideo Conference for reduction in tour & travel expenses.
The Corporate communication activities for the year 2015 -16 have been centered onstrengthening the image of 'Brand SAIL' wherein your Company employed strategic tools ofcommunication while reaching out to stakeholders.
Your Company participated in a number of high profile events and exhibitions during theyear which included; Make in India Summit Indo African Summit Indian Maritime SummitRailway Summit IITF 2015 Steel Mart 2015 Bhopal Vigyan Mela India Industrial Fairamong others. These events generated business queries from India and abroad which infuture may lead to business opportunities for SAIL.
Media features in national and vernacular publications across India have helped inincreasing your Company's visibility among stakeholders. The prestigious events -"Dedication to the Nation of the modernized & expanded Rourkela and IISCO SteelPlants by Hon'ble PM - Shri Narendra Modi have also accounted for tremendous mediacoverage for SAIL.Your
Company continued to attract attention and interest of international media such asPlatts metal bulletin etc.
Your Company identified several sponsorship initiatives of various important events toenhance the image of SAIL brand and association of SAIL brand with worthwhile causes inthe interest of national and social development.
Advertisements released by your Company at Plants Corporate Office and CentralMarketing Organization during the year have a special focus on SAIL's productportfolio.These advertisements were released in leading publications with high readershipand circulation. Similarly radio jingles created by your Company also have a way ofconnecting deeply with core target audiences both in the rural and urban areas.
The Corporate Communications department also regularly holds internal communicationexercises in order to convey thoughts long term vision & strategy and expectations ofthe top management to employees present at various locations down to the last man on theshop floor level. Face to face interactions video conferences in house televisionprogrammes newsletters e-portal intranet web alerts essay and slogan competition aresome of the internal communication tools that your Company regularly utilizes to convey amessage to personnel.
SAIL website has been revamped with a new layout and design-introducing theme baseddisplays 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 SAILwebsite. Additionally your Company's foray into Digital and Social media has receivedwidespread attention during the year. Special efforts have been undertaken to enhanceSAIL's presence on sites such as Facebook Twitter Flickr and Slideshare. Otherinitiatives of communication of your Company during the year have been in line withvarious ongoing initiatives which include Swacch Bharat Abhiyan Make in India andDigital India.
H. VIGILANCE ACTIVITIES
The objective of SAIL Vigilance is to facilitate an environment enabling people to workwith integrity efficiency and in a transparent manner upholding highest ethicalstandards for the organization. To achieve this objective the Vigilance Departmentcarries out preventive proactive and punitive actions with greater emphasis in thepreventive and proactive functions. Following activities were undertaken during theFinancial Year 2015-16:
To increase vigilance awareness amongst employees vigilance awareness sessionsand workshops were regularly held at various Plants and Units. A total of 141 workshopsinvolving 2938 participants were organized for enhancingVigilance Awareness onWhistleBlower Policy Purchase/Contract procedures RTI Act Conduct & Discipline RulesSystem and Procedures followed in SAIL etc.
Periodic surprise checks including joint checks were conducted regularly invulnerable areas of the Company. A total of 2765 periodic checks including file scrutinyand joint checks were conducted at different Plants / Units. A saving of approx. ' 10.12crores accrued from the preventive vigilance activities mainly on account of thesesurprise checks.
Vigilance provides vital inputs to the operating authorities for improving theprevailing systems for bringing about more transparency. Accordingly eight major SystemImprovement 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 were scrutinizedcomprehensively and necessary recommendations were forwarded to concerned departments forimplementing suggestions for improvement.
As per the Guidelines of Central Vigilance Commission Vigilance Awareness Weekwas observed in all the Plants and Units during the
period 26.10.2015 to 31.10.2015 on the theme of "Preventive Vigilance as a toolof Good Governance".
The following three (3) thrust areas were identified by SAILVigilance:
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 purchasebasis) of value more than Rs 5 lakhs
iii) Surveillance in the areas of receipt sampling & testing of high value rawmaterials
Certain vulnerable points were identified in the Plants/Units such as weighbridges dispatch and unloading points entry and exit points for personnel and goodsplaces of chemical analysis of received materials etc. To monitor these areas closelyCCTV and allied data recording systems have been installed at these places which wouldhelp in curbing illegal activities at the above vulnerable points.
After incorporating the suggestions of Vigilance amongst others and vetting bySAIL Vigilance revised Recruitment Policy & Recruitment Manual was issued on12.05.2015.
'Inspiration- Prerna' an in-house publication of SAILVigilance is beingpublished regularly. The above publication contains case studies articles from eminentpersonalities quiz on policy matters etc. to enhance awareness of the readers.
The Company has adopted Vigil Mechanism for conducting the affairs in a fair andtransparent manner by adopting highest standards of professionalism honesty integrityand ethical behaviour. All employees of the Company and Directors on the Board of theCompany are covered under this Mechanism.This Mechanism has been established for employeesto report concerns about unethical behaviour actual or suspected fraud or violation ofCode of Conduct. It also provides for adequate safeguards against the victimization ofemployees who avail of the Mechanism and allows direct access to the Chairperson of theAudit Committee in exceptional cases.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As per the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015Management Discussion and Analysis Report covering the performance and outlook of theCompany is attached and forms part of the Annual Report.
The Statutory Auditors' Report on the Accounts of the Company for the Financial Yearended 31st March 2016 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 theCompany for the Financial Year ended 31st March 2016 under section 143(6) ofthe Companies Act 2013 and the Managements replies thereto are placed at Annexure-II.
Pursuant to the direction of the Central Government for audit of cost accounts theCompany 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 theFinancial Year 2016-17.
SECRETARIAL AUDITOR'S REPORT
In terms of the provisions of Section 204 of the Companies Act 2013 the Board ofDirectors have appointed M/s. Agarwal S. & Associates Company Secretaries as theSecretarial Auditor to conduct Secretarial
Audit of the Company for the Financial Year ended on 31st March 2016.Secretarial Audit Report is placed at Annexure-III.
With regard to the observation of the Secretarial Auditor that composition of the Boardof Directors of the Company was not in compliance with Regulation 17(1) of SecuritiesExchange Board of India (Listing Obligations & Disclosure Requirements) Regulations2015 (erstwhile Clause 49(II) (A) & (B) of the Listing Agreement) and Clause 3.1.4 ofthe DPE Guidelines on Corporate Governance for Central Public Enterprises it is statedthat appointment of Independent Directors on the Board of the Company is made by theCompany based on nomination by Government of India. The Company has requested Ministry ofSteel Government of India for nomination of requisite number of Independent Directors onits Board.
In terms of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 aReport on Corporate Governance and Auditors' Certificate thereon form part of the AnnualReport. In terms of the SEBI Regulations the Board has laid down a Code of Conduct forall Board Members and Senior Management of the Company. The Code of Conduct has beenposted on the website of the Company. All the Board Members and Senior ManagementPersonnel 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 bythe Company from Environmental Social and Governance perspective forms part of the AnnualReport.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATES
IISCO-Ujjain Pipe and Foundry Company Limited a wholly owned subsidiary of theerstwhile Indian Iron and Steel Company Limited (IISCO) was ordered to be wound up byBIFR. The Official Liquidator is continuing its liquidation process.
Your Company has four other wholly owned subsidiary Companies namely SAIL RefractoryCompany Limited (SRCL) SAIL Jagdishpur Power Plant Limited SAIL Sindri Projects Limitedand Chhattisgarh Mega Steel Limited. SRCL has taken over the Salem Refractory Unit of BurnStandard Company Limited on 16th December 2011 and is operating the same. SAIL JagdishpurPower Plant Limited incorporated for setting up of Gas based power Plant at Jagdishpurand SAIL Sindri Projects Limited incorporated for revival of Sindri Unit of FertilizerCorporation of India Limited are yet to commence operations pending relevant approvals.Chhattisgarh Mega Steel Limited which was incorporated as a Special Purpose Vehicle forsetting up of an Ultra Mega Steel Plant of 6 Million Tonnes per annum as a green fieldsteel project under JointVenture is yet to commence operation.
The Annual Accounts of the subsidiary Companies and related detailed information shallbe made available to the Shareholders of the holding and subsidiary companies seekingsuch information at any point of time. Further the Annual Accounts of the subsidiarycompanies are available for inspection by any Shareholder in the Registered Office of theCompany and of the subsidiary companies concerned during the office hours between 11 AM to1 PM. A hard copy of the details of accounts of subsidiaries shall be furnished to theshareholders on receipt of written request.
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to provisions of Section 129 (3) of the Companies Act 2013 the duly AuditedConsolidated Financial Statements are placed at Annexure-IV. The StatutoryAuditors' Report on the Consolidated Financial Statements along with the Management'sreplies 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 Yearended 31st March 2016 and the Managements replies thereto are placed at Annexure-VI.Furtherthe statement containing salient features of the financial statements of thesubsidiary joint venture and associate companies in the prescribed Form AOC-1 is placedat Annexure -VII.
EXTRACT OF ANNUAL RETURN
The Extract of Annual Return in Form MGT-9 as per the provisions of the Companies Act2013 and Rules prescribed therein is placed at Annexure-VIII.
During the year 12 meetings of the Board of Directors of the Company were held thedetails of which are given in the Corporate Governance Report forming part of the AnnualReport.
The Audit Committee of the Board was initially formed by the Company in 1998. The AuditCommittee has been reconstituted from time to time in terms of the SEBI Regulations andCompanies Act 1956/2013. The minutes of the Audit Committee meetings are circulated tothe Board discussed and taken note of.The composition and other details pertaining tothe 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 ensuringthe orderly and efficient conduct of business including adherence to various policies andprocedures for safeguarding its assets prevention and detection of frauds and errorsaccuracy and completeness of the accounting records and timely preparation of reliablefinancial disclosures. Further in order to enable the Statutory Auditors of the Companyto report on adequacy of IFCs as per the Companies Act 2013 the Company has engaged M/sGrant Thornton India LLP to study the existing framework of IFCs in the Company andsuggest improvement thereon and design a suitable framework for IFCs covering FinancialReporting and Operational Controls.
First phase of exercise involving Financial and Financial Reporting Controls includingTest of Design and Test of Operating Effectiveness was taken up in Feb 2016 and has beensuccessfully completed by the Consultant in March 2016. Based on the control gapsemerging from Test of Design and Test of Operating Effectiveness the Management hasinitiated the remedial measures.
Similarly the Operational Control reporting exercise has been taken up in the secondphase starting from June 2016 which inter alia covers review of operational sub areaswithin the processes viz. Fixed Assets Management Financial Reporting InventoryManagement Order to Cash Procurement to Pay HR & Payrolls Project & CapitalExpenditure Cash Management Production Shipping & Logistics Operations and QualityAssurance Safety Security and Environment. Based on the control gaps mitigation planwill be drawn by the respective Plant/Unit for remediation.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section I34(3)(c) of the Companies Act 2013 the Directors state that:
(i) in the preparation of the Annual Accounts the applicable Accounting Standards havebeen followed along with proper explanation relating to material departures;
(ii) the Directors have selected such Accounting Policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the Financial Year and ofthe profit or loss of the Company for that period;
(iii) the Directors have taken proper and sufficient care for the maintenance ofadequate Accounting Records in accordance with the provisions of the Act for safeguardingthe 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 theCompany and that such internal financial controls are adequate and are operatingeffectively; and
(vi) the Directors have devised proper systems to ensure compliance with the provisionsof 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 beengiven by each Independent Director stating that he/ she meets the criteria of independenceas 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 on31st March 2016 are given in Annexure-IX in compliance with theprovisions of Section 186 of the Companies Act 2013 read with Companies (Meetings ofBoard and its Powers) Rules 2014.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO INSUB-SECTION (1) OF SECTION 188
All the contracts / arrangements / transactions entered by the Company during theFinancial Year 2015-16 with the related parties were in the ordinary course of businessand on an arm's length basis. The transactions with the related parties have beendisclosed in the financial statements. Therefore particulars of contracts or arrangementswith related parties referred to in Section 188(1) along with the justification forentering 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 134(3)(m) of the Companies Act 2013 readwith Rule 8 of the Companies(Accounts) Rules 2014 the particulars relating toConservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo aregiven in Annexure-X to this Report.
RISK MANAGEMENT POLICY
Your Company is conscious and sensitive to the challenges posed to its business by theevents unfolding in global and domestic business environment including competitors whichcould give rise to substantive risks. With this in view the Company has instituted arobust Enterprise Risk Management(ERM) System to help the organization to efficientlymanage risk sustain growth and create value for the stakeholders. The Risk ManagementPolicy of SAIL was approved by the Board in August 2009 and since then the risk managementhas matured in SAIL. The Policy provides guidance for the management of the business risksacross SAIL. It focuses on ensuring that the risks are identified evaluated and mitigatedwithin 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 perceivedRisks which are under the constant monitoring of Risk Owners / Risk Champions who frameand implement the mitigation strategy and take it to its logical conclusion. RiskManagement Committee (RMC) of the Plants/Units chaired by the Head of the Plant /Unitperiodically reviews the risks and its mitigation status and reports the same to ChiefRisk Officer (CRO) of SAIL.
Due to the changing operational requirements and greater emphasis on ERM outlined inthe Companies Act 2013 and SEBI Regulations and in accordance with the SEBI Regulationsa SAIL Risk Management Committee (SRMC) has been constituted. SRMC oversees the RiskManagement function in SAIL by addressing issues pertaining to the policy formulation aswell as evaluation of risk management function to assess its continuing effectiveness. Italso assists the Board in framing and monitoring risk management systems for the Companyand guiding the Risk Policy. It is a high level committee Chaired by Chairman AuditCommittee and has Independent Directors Functional Directors and CEOs of some IntegratedPlants 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 RiskManagement Committees at Plant/Unit level. Communication is being maintained across theorganization 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). Apartfrom the business of manufacturing steel the objective of the Company is to conductbusiness in ways that produce social environmental and economic benefits to thecommunities in which it operates. For any organization CSR begins by being aware of theimpact of its business on society.With the underlying philosophy and a credo to make ameaningful difference in people's lives your Company has been structuring andimplementing CSR initiatives right from the inception. These efforts have seen the obscurevillages where SAIL Plants are located turn into large industrial hubs today.
CSR initiatives of your Company have always been undertaken in conformity to theprevalent guiding principles issued by Government like applicable DPE GuidelinesCompanies Act 2013 and Companies(Corporate Social Responsibility Policy) Rules 2014.SAIL's CSR projects are carried out in and around steel townships mines and far flunglocations across the Country in the areas of education providing medical and health carefacilities village development access to water facilities infrastructural developmentin peripheral rural areas environment conservation women empowerment assistance topeople with disabilities sustainable income generation through self help groupspromotion of sports art culture & heritage conservation etc.
The details of various Corporate Social Responsibility (CSR) initiatives taken by theCompany alongwith the Report on CSR in prescribed format are placed at Annexure-XI.The CSR Policy of the Company is available on SAIL website-
Swachha Bharat Abhiyaan-Swachha Vidhyalaya Abhiyaan: Your Company has been activelyparticipating in the "Swachh Bharat Abhiyan" initiated by the Hon'ble PrimeMinister of India. Under the campaign construction of 672 toilets falling within theperiphery of its Plants & Mines in the States of Chhattisgarh West Bengal OdishaJharkhand Madhya Pradesh andTamil Nadu as allocated to SAIL by Ministry of HRD wereundertaken and completed. Facilities like squatting units urinals washbasin and overheadwater storage have been provided. Apart from toilet construction cleanliness campaignshave been undertaken all across the Organisation. Cleanliness drive is going on at variouslocations including the works premises awareness campaigns are being run and properhousekeeping is being practiced throughout the Company.
Healthcare: SAIL's extensive and specialised healthcare infrastructure providedspecialized and basic healthcare to 96 lakh people living in the
vicinity of its Plants and Units during the period 2011-16. Surgeries like Cataract andlens 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 & tuberculosispatients is provided free of cost.
In order to deliver quality healthcare at the doorsteps of the needy regular healthcamps in various villages on fixed days are being organized for the people living in theperiphery of Plants/Units Mines and far-flung areas. During the year 2015-16 more than3800 Health Camps have been organized benefitting over 97000 villagers. 36 Mobile MedicalUnits running in the Plant's peripheries have benefitted around one lakh villagers attheir doorsteps.
24 exclusive Health Centers at Plants are providing free medical care and medicines toaround 100000 poor and needy beneficiaries every year. During 2015-16 more than 1.32lakh villagers have availed free healthcare at these Health Centers.
Education: To develop the society through education your Company is supporting over145 schools in the steel townships to provide modern education to more than 55000children and is assisting over 636 Government schools in Bhilai and Rourkela with about75000 students by providing Mid-day meals in association with Akshya Patra Foundation. 21Special Schools (Kalyan & Mukul Vidyalayas) are benefitting over 3600 BPL categorystudents at Integrated Steel Plant locations with facilities of free education mid-daymeals uniform including shoes text books stationary items school bag water bottlesand transportation in some cases. 335 number of Tribal children are getting freeEducation Accommodation Meals & Uniforms textbooks etc. at Saranda SuvanChhatravas Kiriburu; RTC Residential Public School Manoharpur; Gyanodaya Chhatravas BSPSchool Rajhara Bhilai; Kalinga Institute of Social Sciences Bhubaneswar; GyanjyotiYojna Bokaro.
Over 2100 school students have been awarded annual scholarships in Plant peripheries.
Bokaro Steel Plant has introduced "Gyan JyotiYojana" scheme for providingeducation and holistic development for the children of Birhor tribe which is at the vergeof extinction. 15 Birhor children were adopted and provided free education along withboarding lodging nourishing and wholesome food clothing free medical treatment sportsand cultural opportunities in a conducive atmosphere. They are the first Matriculates and12th pass from their community. Inspired from their achievements another batch of 15 newBirhor children have been adopted who are all set to begin their life in newsurroundings. For Skill Development and better employability 9 Matriculate Birhor Boysadopted under Gyan Jyoti Yojana have been sponsored for ITI training in "Weldertrade" alongwith stipend of '2500/- each accommodation and food facility at BokaroPvt. ITI.
Women Empowerment & Sustainable Income Generation:Vocational and specialised skilldevelopment training targeted towards sustainable income generation has been providedduring the year 2015-16 to 947 youths and 1785 women of peripheral villages in areas suchas Nursing Physiotherapy LMV Driving Computers Mobile repairing Welder Fitter &Electrician Training Improved agriculture Mushroom cultivation Goatery PoultryFishery Piggery Achar/Pappad/Agarbati/Candle making Screen printing HandicraftsSericulture Yarn Weaving Tailoring Sewing & embroidery Gloves Spices TowelsGunny-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 thePlants/Mines locations. Your Company is also instrumental in marketing of the productsmanufactured at such centres.
Infrastructure Development in Rural Areas: Over 77.84 lakh people across 435 villageshave been connected to mainstream by your Company since its inception by constructing andrepairing of roads. It has installed over 7907 water sources during last four yearsthereby enabling easy access to drinking water to over 45.96 lakh people living infar-flung areas.
Environment Conservation: To promote renewable sources of energy Solar street lightshave been installed in rural areas Solar Lanterns and smokeless chullahs have beendistributed among the rural people of Saranda and other locations. Maintenance of parkswater bodies and botanical gardens in its townships and plantation & maintenance ofover 3.85 lakh trees at various locations has also been undertaken. Further your Companyhas also supported setting up and operation of 100 KW Capacity Solar Power Plant at JariGumla in Jharkhand.
Support to Differently Abled & Senior Citizens: Differently abled children/ peopleare being supported through provision of equipments like- tricycle motorized vehiclescalipers hearing aids artificial limbs etc.Your Company supports various schemes andcenters at Plants like "Sneh Sampada" "Prayas"and 'Muskaan" atBhilai "Schools for blind deaf & mentally challenged children" and Homeand Hope" at Rourkela "Ashalata Viklang Kendra" at Bokaro variousprograms like "Handicapped Oriented Education Program" and "DurgpaurHandicapped Happy Home" at Durgapur "Cheshire Home" at Burnpur. Supporthas also been provided to NGOs like TAMANNA DEEPALAYA etc. Old age homes are beingsupported at different Plant townships like "Siyan Sadan" at Bhilai AcharyaDham and Badshah at Durgapur etc. Besides your Company has also adopted developed andis maintaining a Lepers Colony at Kajora through Durgapur Steel Plant wherein all thesocial and infrastructure facilities have been maintained.
Sports Art & Culture and Heritage Conservation: SAIL is regularly organizinginter-village sports tournaments extending support to major national sports events &tournaments. Also supporting and coaching aspiring sportsmen and women through itsresidential sports academies at Bokaro (football) Rourkela (Hockey) - with world classastro-turf ground Bhilai (Athletics for boys) Durgapur (Athletics for girls) andKiriburu Jharkhand (Archery). Musical Instruments were distributed in 6 PeripheralVillages of Gua (Lipunga Thakura Guasai Baihatu Jojogutu & Rajabera) to improvethe Tribal Culture in Villages. Cultural events like Chhattisgarh Lok Kala MahotsavGramin Lokotsav are organised every year. Conservation and maintenance of Nationalheritage 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 rehabilitationinitiatives 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 remoteforest areas to the mainstream of development your Company in association with Governmentof Jharkhand and Ministry of Rural Development Government of India actively participatedin the development process of Saranda forest Jharkhand. SAIL provided ambulances 7000each of bicycles transistors solar lanterns and established an Integrated DevelopmentCentre (IDC) at Digha village in Saranda forest. IDC comprises of facilities like BankPanchayat Office Ration shop Telecom office Anganwadi Centre Meeting room etc. forthe local populace.
Model Steel Villages: In order to bridge the gap between rural and urban areas and toprovide comprehensive development of both physical and social infrastructure 79 villageswere identified as "Model Steel Villages"(MSV) across the Country (in eightStates). The developmental activities undertaken in these villages include medical &health services education roads & connectivity sanitation community centerslivelihood generation sports facilities etc. The facilities developed at these MSVs arebeing run and maintained regularly.
SAIL's efforts as a responsible corporate citizen in Nation building have beenrecognized by various organizations in the form of awards and accolades during the yearsuch as Dainik Bhaskar India Pride Award for CSR 'Greentech Gold Award for CSR-2015' forDurgapur and Rourkela Steel Plants etc.
i. During the year the Company has not accepted any deposits under the Companies Act2013.
ii. No significant or material orders were passed by the Regulators or Courts orTribunals impacting the going concern status and Company's operations in future. Howeverattention of Members is drawn to the statement on contingent liabilities in notes formingpart of the Financial Statements.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Shri C.S. Verma ceased to be Chairman of the Company w.e.f. 10th June2015(A/N).
Shri Rakesh Singh Secretary to the Government of India Ministry of Steelassumed Additional Charge as Chairman of the Company from 11th June 2015 to 30thSeptember 2015(A/N).
Dr. Anup K. Pujari Secretary to the Government of India Ministry of MSMEassumed Additional Charge as Chairman of the Company from 1st October 2015 to10th December 2015 (F/N).
Shri P.K. Singh has been appointed as Chairman of the Company w.e.f.10.12.2015(F/N).
Shri T.S. Suresh ceased to be Director of the Company w.e.f. 31.05.2015(A/N).
Shri P.K. Das Prof. Ashok Gupta Shri Parmod Bindal and Mrs. Anshu Vaish havebeen appointed as Independent Directors w.e.f. 18.11.2015.
Dr. N. Mohapatra has been appointed as Director w.e.f. 27.11.2015 (F/N).
Shri G. Vishwakarma has been appointed as Director w.e.f. 31.12.2015(F/N).
Shri S.S. Mohanty ceased to be Director w.e.f. 30.06.2016(A/N).
Shri Raman has been appointed as Director w.e.f. 01.07.2016(F/N).
Dr. Atmanand and Shri J.M. Mauskar Independent Directors have ceased to beDirectors w.e.f. 18th July 2016 on completion of their tenure.
Government of India has extended the tenure of Shri A.K. Chaudhary Director(Finance) beyond 31st August 2016 till 31st December 2020 i.e. thedate of his superannuation or until further orders whichever is the earliest.
The Board of Directors wish to place on record their appreciation for the support andvalue contributed by every member of the SAIL family. The Directors are thankful to theState Governments Electricity Boards Railways Banks Suppliers Customers and Investorsfor their continued co-operation. The Directors also wish to acknowledge the continuedsupport and guidance received from the different wings of the Government of Indiaparticularly from the Ministry of Steel.
For and on behalf of the Board of Directors
Place: New Delhi
Dated: 11th August 2016