Steel Authority of India Limited
The Board of Directors has the pleasure of presenting the 46th Annual Reportof Steel Authority of India Limited (SAIL the Company) together with the AuditedStandalone and Consolidated Financial Statements for the Financial Year ended 31stMarch 2018.
A. FINANCIAL REVIEW
Your Company achieved sales turnover of '58297 crore during the Financial Year2017-18 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 Plantsby about 20%. However the net sales turnover of '56893 crore was higher by 30% over lastyear's net sales turnover of '43866 crore. The loss after tax of your Company for theFinancial Year 2017-18 was reduced to a level of '482 crore compared to loss after tax of'2833 crore in the previous Financial Year.
The loss of your Company during Financial Year 2017-18 has reduced mainly on account ofincrease in Saleable Steel Production Concast Production Saleable Steel Sales & NetSales Realization of 5 Integrated Steel Plants improved product mix higher usage of CDIin CDI furnaces reduction in Coke Rate improvement in BF Productivity improvement inSpecific Energy Consumption reduction in salaries & wages etc. However the same hasbeen partially offset due to provisions made towards various mining related issuesincrease in average imported and indigenous coal prices increase in stores & sparesrepair & maintenance security expenses higher usage of imported coal in the blenddue to lower availability of indigenous coal increase in average rate of purchased powerand increase in interest cost and depreciation etc.
SAIL continued its thrust on judicious fund management by timely repayment of loansincluding interest advance planning and action for future fund raising etc. to meet itsgrowth objectives. The Company had borrowings of '45409 crore as on 31stMarch 2018 vis-a-vis Rs.41396 crore as on 31st March 2017. The Company hasfully hedged the foreign currency risk on Buyers' Credit and repayment of ExternalCommercial Borrowings. The debt equity ratio of the Company increased to1.27:1 as on 31stMarch 2018 from 1.15:1 as on 31st March 2017 due to increase in borrowings aswell as reduction in net worth during the year. The net worth of Company declined fromRs.36009 crore as on 31st March 2017 to Rs.35714 crore as on 31stMarch 2018.
M/s. CARE Ratings M/s. India Ratings and M/s. Brickwork Ratings RBI approved creditrating agencies assigned Rs.CARE AA- Outlook: Negative' Rs.India Ratings AA- Outlook:Negative' and Rs.BWR AA Outlook: Negative' ratings respectively for SAIL's longterm-borrowing programme.
B. OPERATIONS REVIEW
Financial Year 2017-18 witnessed several landmark achievements through ramping up ofnew facilities and surpassing all previous records in physical performance. Your Companyachieved its highest ever production of Hot Metal of 15.982 million tonnes(MT) CrudeSteel of 15.020 MT and Saleable Steel of 14.074 MT.
Your Company achieved an all-time best performance of Continuous-Cast (CC) SteelProduction of 12.794 MT with a growth of 9% over previous best of 11.77 MT achievedduring 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 parameterssuch as Coke Rate BF Productivity and Specific Energy Consumption were also achieved.
Bhilai Steel Plant's new BF#8 Rs.Mahamaya' having an annual Hot Metal productioncapacity of 2.8 MT was blown-in on 2nd February 2018. SMS-III was alsostarted on 31st March 2018 with blowing of first heat from Converter- 1. TheFinancial Year 2017-18 has witnessed substantial increase in supply of rails to IndianRailways 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 lakhton) coupled with record long rail dispatch at 3.17 lakh ton.
Various new initiatives were undertaken at Durgapur Steel Plant to improve productivityand 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 BilletCaster m/c-1 and rolling of TMT bars with 125 sq. mm. billets at Merchant Mill willfurther increase the productivity.
At Rourkela Steel Plant by rolling more than 8 lakh tonnes of plates New Plate Millrecorded a growth of 48.1% over 2016-17. The Mill exported about 127000 tonnes of CEmarked plates to the European market during the Financial Year 2017-18. The Hot Strip Millrecorded all-time best performance of producing 16.8 lakh tonnes of HR coils during2017-18 which is a rise of 8% over previous fiscal.
With consistent efforts Bokaro Steel Plant registered record production of cast slabat 3.276 MT (previous best: 2.990 MT) and highest ever production of CR coil for sale at0.916 MT (previous best: 0.776 MT). Major Technoeconomic parameters at the Plant alsorecorded the best ever figures with Coke Rate at 470 kg/thm (previous best 480 kg/thmduring 2016-17) Blast Furnace Productivity at 1.70 T/cum/day (previous best 1.68T/cum/day during
2016-17) and Specific Energy Consumption at 6.68 Gcal/tcs (previous best 6.69 Gcal/tcsduring 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 MTduring 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 EnergyConsumption for the year with Coke Rate at 412 kg/thm (previous best 446 kg/thm during2016-17) CDI at 97 kg/thm (previous best 62 kg/thm during 2016-17) Blast FurnaceProductivity at 1.62 T/cum/day (previous best 1.43 T/cum/day during 2016-17) and SpecificEnergy 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 enhanceoperational efficiency and this has led to significant improvement in environmentalparameters as well as techno-economic efficiency. This enabled SAIL to produce greener andmore environmental friendly steel than ever before. SAIL recorded the best ever Coke Rateat 456 kg/thm BF Productivity of 1.70 t/m3/day and Specific Energy Consumptionat 6.49 Gcal/ TCS. Your Company was able to achieve this as a result of higher volume ofHot Metal produced through new state of art large volume Blast Furnaces (30% of total HotMetal up by 5% over CPLY) and increased Crude Steel Production through the energyefficient CC route (85% of total Crude Steel up by 9% over CPLY).
Your Company by supplying steel partnered with prestigious and projects of nationalimportance like Dhola-Sadiya Bridge Sardar Sarovar Project etc. to be a part ofCountry's growth story under the ambit of National Steel Policy 2017 and Rs.Make in India'movement.
Your Company in addition to supplying steel for various defence projects includingindigenously built Anti-Submarine Warfare (ASW) Stealth Corvette INS-Kiltan was alsoassociated with iconic projects such as Chandrayan and Mangalyan missions.
Your Company has always strived to optimally utilize its captive power resources toensure 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 MillionUnits(MU) was met from the captive Power Plants. SAIL has been the pioneer in utilizingopen access regulations to its advantage with one of the first enterprises in the Countryto start inter-regional wheeling of captive power. Continuing the legacy this year tooSAIL Plants procured about 435 MU of power through open access which is around 4% of totalpower 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 powerrequired after completion of ongoing expansion new captive power capacity of 290 MW is inadvanced stage of installation by Joint Venture Companies viz. NTPC-SAIL Power CompanyLimited (NSpCl) and Bokaro Power Supply Company Pvt. Limited (BPSCL) which own andoperate most of captive facilities of the Company.
Besides captive generation the consumption of electricity in the processes is alsobeing emphasized through various measures which will result in lower power consumption pertonne of saleable steel production after the full-fledged operation of expansion units.
As a responsible corporate house your Company is committed for development and usageof renewable power sources. While 2MWp capacity of Solar Plants have already beeninstalled actions are under way for installation of another 198MWp solar capacity in nearfuture. Further your Company has entered into a JV agreement with Green EnergyDevelopment Corporation of Odisha(GEDCOL) to set up 10 MW Hydel Power at Mandira dam ofRourkela Steel Plant which will be utilizing the potential energy of the water beingdischarged from the dam for usage in the Steel Plant to generate electricity.
During Financial Year 2017-18 total requirement of iron ore was met from captivesources. Your Company's captive mines produced about 26.83 million tonnes (MT) of ironore. 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) theCompany had to depend on imports due to limitation in availability within the Country. Inthe Financial Year 2017-18 production in captive collieries of the Company was about 0.97MT out of which 0.60 MT was raw coking coal and balance 0.37 MT of noncoking coal. Incase of fluxes around 1.33 MT of limestone and 0.72 MT of dolomite were produced givinga production of 2.05 MT fluxes from captive sources. For thermal coal your Companydepends entirely on purchases from Coal India Limited except small quantity produced fromcaptive mines.
The iron ore production at Barsua mine remained suspended since 17th May2014 on the direction of Hon'ble Supreme Court. For resumption of iron ore productioncontinual efforts were made to get the clearance from Hon'ble Supreme Court for startingthe mining operations and after necessary clearances the iron ore production from Barsuamine resumed on 20th May 2018.
In order to expedite capacity expansion projects of mines following Environment andForest Clearances have been obtained during the Financial Year 2017-18:
Environment Clearance for setting up of 2 million tonnes per annum capacityDolomite Mine at Baraduar was recommended by Expert Appraisal Committee of Ministry ofEnvironment Forest and Climate Change (MoEFCC) on 22nd December 2017.
Stage-II Forest Clearance for ML-162 lease of Barsua was granted by MoEFCC on 23rdOctober 2017.
On 24th July 2017 MoEFCC had modified the Stage-I Forest Clearanceconditions of 6.9 Sq. Mile lease of Bolani Mine issued vide Order dated 24thFebruary 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 12thSeptember 2017.
Stage-I Forest Clearance for Jhillingburu-I lease of Gua Iron Ore Mine wasgranted by MoEFCC on 25th September 2017.
However the Stage-II Forest Clearances for the capacity expansions of Gua and Chiriamines and opening of South-Central Blocks in Kiriburu- Meghahatuburu mines in Sarandaforest in Jharkhand are yet to be granted by MoEFCC. In view of its criticality to thecapacity expansion projects the matter is being actively pursued with the Government.
Consequent to the approval of Ministry of Mines Government of India on 26thFebruary 2018 under Section 6(1)(b) of MMDR Act in respect of 12 Iron Ore Leases of SAILMines in Jharkhand Government of Jharkhand on 6th March 2018 has extended theLease period of Dhobil Mines upto 7th March 2038. This will facilitateextension of 12 Iron Ore Leases of SAIL Mines in Jharkhand.
Government of Karnataka vide letter dated 10th November 2017 has forwardedthe proposal for reservation of 150 acres of iron ore area in Ramandurga area in favour ofVISP/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 judgement dated 2nd August 2017 of the Hon'ble SupremeCourt in the matter of Common Cause States of Jharkhand and Odisha have issued demandnotices 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 Actfor EC violations related to iron ore flux and coal mines till date. These notices wereissued without giving any opportunity of being heard.
In order to mitigate the risk of closure of SAIL mines in Odisha and Jharkhand beyond31st December 2017 due to non-compliance of demand notices of respective StateGovernment SAIL has filed Writ Petitions before the Hon'ble High Courts challenging thedemands (not for coal) issued by Governments of Odisha and Jharkhand. As no stay wasprovided by Hon'ble Jharkhand and Odisha High Courts on the notices of State Governmentstherefore to avoid closure of mines SAIL under protest without prejudice to its rightsand contentions raised in the writ petitions filed in respective High Courts deposited asum of Rs.66.89 crore (Govt. of Odisha) and Rs.200.00 crore (Govt. of Jharkhand) on 30thDecember 2017.
The notices received for coal mines were challenged by SAIL before the RevisionalAuthority (RA) Ministry of Coal(MoC) Government of India on 1st February2018. Vide Order dated 14th March 2018 RA MoC has stayed the execution ofthe 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 recentlyallotted Coking Coal Blocks namely Parbatpur and Sitanala have become unviable.Therefore after due diligence your Company has returned these Coal Blocks to Ministry ofCoal(MoC) in March 2018. Sail has requested MoC to refund the amounts paidincluding bank guarantee submitted at the time of allocation of these Blocks and also forallotment of potential Coking Coal Blocks in lieu of the returned Blocks in line withrecommendations made by NITI Aayog.
Sales & Marketing
During the year 2017-18 your Company achieved its best ever sales volume of 14.1million tonnes (MT) registering a growth of about 8% over CPLY Continuing to maintain itspresence 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 KiOre" 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 theretail 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 highlydemanding high value auto segment.
With commencement of production at the Universal Rail Mill at Bhilai supply of longrail 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 reachthe highest ever levels at 0.87 MT.
Customization of supply is an important avenue for maximizing customer satisfaction andrevenue. Your Company supplied around 50000 tons of steel in customized sizes from itsservice centres in 2017-18 which represents a growth of 53% over the previous FinancialYear.
Your Company continues to be a major contributor to the infrastructure sector of theNation. Sales of Plate Mill Plates a major input reached highest ever levels at 2.12 MTa growth of 16% over the previous year. Large quantities of Plates were supplied toprestigious 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 theinformation on procurement from Micro & Small Enterprises during Financial Years2017-18 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 manymilestones. At Bhilai Steel Plant New Blast Furnace has been blown in and is underregular operation. First Heat from Coverter-1 at New Steel Melting Shop has been taken andHot trials are in progress. A capital expenditure of Rs.5130 crore has been incurredduring Financial Year 2017-18 and capex planned for 2018-19 is Rs.4000 crore.
The details of Addition Modification & Replacement (AMR) Schemes underimplementation 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 thecompetitive advantage. The Company has achieved its present level of excellence throughinvestment in its human resource where 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 344 TCS/Man/Year in 2017-18. Themanpower strength of the Company was 76870 nos. as on 31.3.2018 with manpowerrationalization of 6094 nos. achieved during the year. The enhanced productivity withrationalized manpower could be achieved as a result of judicious recruitments buildingcompetencies and infusing a sense of commitment and passion among employees to go beyondand excel.
Trend of enhanced productivity and manpower rationalization since 2007-08 onwards isdepicted below:
Developing Employee Capabilities & Competencies
Your Company believes that people's development is the key for overall growth andtraining facilitates the development of employee's knowledge and skills so that theresultant advancement of competence contributes towards attainment of organisation's goalsand objective. SAIL has been making sustained efforts through various training anddevelopment activities with focus on preservation transfer and improvement of skillsknowledge and technology in collaboration with reputed organizations and development ofeffective managerial competencies in association with premier institutes.
Preparing employees for tomorrow for effectively taking up challenges and dischargingnew roles and responsibilities is being given a major thrust. Overall 41355 employeeswere trained against target of 33533 employees during the year on various contemporarytechnical and managerial modules.
Harmonious Employee Relations
SAIL has maintained its glorious tradition of building and maintaining a conducive andfulfilling employer-employee relations environment. The healthy practice of sorting outand settling issues through discussions with trade unions/workers' representatives enabledthe Company in ensuring workers' participation at different levels and establishing apeaceful industrial relations climate. Some of the bi-partite forums are functioning sinceearly seventies and are sufficiently empowered to address different issues related towage safety and welfare of workers arising from time to time thus helping inestablishing a conducive work environment.
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 periodic basis and jointly evolve recommendations/ action plans forensuring a safe & harmonious work culture which gets substantiated from the harmoniousIndustrial Relations enjoyed over the years by SAIL Plant/Units marked with diverse workculture at multilocations.
In addition Quality Circles Suggestion Schemes Shop Welfare Committees SafetyCommittee Canteen Management Committee Productivity Committee etc. also offer multipleavenues for enhanced workers' participation. Workers are also kept abreast of strategicbusiness decisions and their views sought thereon through structured /interactiveworkshops.
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 ChiefExecutive Officer/Senior Officers' level involving structured discussion with large groupof employees. These interactive sessions help employees to align their working with thegoals and objective of the Company leading to not only higher production and productivitybut also enhance the sense of belongingness of the employees.
Grievance Redressal Mechanism
Effective internal grievances redressal machinery has been evolved and established inSAIL Plants and Units separately for Executives and
Non-executives. Joint grievance committees have been set up at Plant/Unit level foreffective redressal of grievances.
SAIL Plants/Units are maintaining 3 stage grievance handling mechanism and employeesare given an opportunity at every stage to raise grievances relating to wageirregularities working conditions transfers leave work assignments and welfareamenities etc. Majority of grievances are redressed informally in view of theparticipative nature of environment existing in the Steel Plants. The system iscomprehensive simple and flexible and has proved effective in promoting harmoniousrelationship between employees and management.
Against 376 staff grievances received during the Financial Year 2017-18 with 16grievance pending from previous year 366 staff grievances have been disposed of duringthe year achieving 97.34% fulfilment.
Further during Financial Year 2017-18 856 grievances have been received underCentralised Public Grievance Redress and Monitoring System(CPGRAMS) a National levelonline system managed by Department of Administrative Reforms and Public Grievance(DARpG) Government of India and 23 grievances had been carried forward from the previousFinancial Year. Total 864 grievances have been disposed of during Financial Year 201718thereby achieving fulfilment rate of 98.20%. During the year 92% grievances have beendisposed 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 PublicGrievances.
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 from 1stJanuary 2007 was done in accordance with Presidential Directives dated 5thOctober 2009. In case of Non-executive employees the salaries and wages arefinalized/revised in bipartite forum of National Joint Committee for Steel Industry(NJCS). The last NJCS agreement was finalized and signed on 1st July 2014effective from 1st January 2012. In terms of notification dated 5thJune 2015 issued by Ministry of Corporate Affairs Government of India the provisions ofsection 197 of the Companies Act 2013 are not applicable to Government Companies. Assuch the disclosures to be made in the Board's Report in respect of overall maximummanagerial remuneration and managerial remuneration in case of absence or inadequacy ofprofits are not included in this Report.
Initiatives for Socio-economic Development of SCs /STs & Other Weaker Sections ofthe Society
SAIL follows Presidential Directives on Reservation for Scheduled Castes and ScheduledTribes in the matter of recruitments and promotions. As on 1.4.2018 out of total manpowerof 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 ofthe Country with predominant SC/ST population. Therefore SAIL has contributed to theoverall 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 thetotal employees is carried out mainly on regional level and hence a large number ofSCs/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 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.
SAIL has undertaken several initiatives for the socio-economic development of SCs/STsand other weaker sections of the society which are mainly as under:
Special Schools have been started exclusively for poor underprivileged childrenat five integrated steel plant locations. The facilities provided include free educationmid-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 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 and Burnpur providing free medical consultation medicines etc. to theperipheral population mainly comprising of SC/ST and weaker sections of society.
SAIL Plants have adopted tribal children. They are being provided freeeducation uniforms text books stationery meals boarding lodging and medicalfacilities for their overall growth at residential hostels Saranda Suvan ChhatravasGyanodaya Hostel and an exclusive Gyan Jyoti Yojana for nearly extinct Birhor Tribe.
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. A sufficiently seniorlevel officer of SC/ST category is nominated for the purpose as per the level of theRecruitment Board/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.
Implementation of Right to Information Act 2005
The provisions under the Right to Information Act 2005(Act) are being complied by allthe Plants and Units of SAIL. All statutory reports including Annual Report are being sentto 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 InformationOfficers and Appellate Authorities and Transparency Officer under Sections 5 and 19(1) ofthe 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 tothe PIO are called Deemed PIO and are made equally responsible as PIO towards timelysubmission of information to the applicant.
An exclusive RTI Portal has been developed with link available on the website of theCompany. All the Plants/Units have listed 17 manuals and details of Authorities under theAct are uploaded on the website of the Company. Quarterly Returns and Annual Returns onimplementation of the Act are being submitted online through the CIC portal.Implementation of online request has already been introduced from 1st May2015. A compilation of Record Retention Policy of various functions of Corporate Officehas also been uploaded on the website of the Company. In addition to this compilations ofimportant decisions of CIC DOPT circulars and High Court cases are also available on thewebsite of the Company.
Awareness Programs/Workshops on Rs.Obligation of Public Authorities under RTI' arebeing organised across Plants/Units and Information Commissioner has been present in mostof these programs. Further Awareness Programmes on the Act are held at Plant Units andCorporate Office regularly.
SAIL received a total of 3364 applications and 625 appeals under the Act during theFinancial Year 2017-18 all of which have been disposed-off within the stipulated timeframe under the Act. CIC has also taken up 70 cases and most of these cases weredisposed-off in favour of the Company.
Since enactment of the Act SAIL has received a total of 38710 applications and 5760appeals upto 31st March 2018 which were disposed-off within the stipulatedtime. Out of these 736 cases were taken up by the CIC and most of these cases weredisposed-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. Objectives of theCitizen's Charter of SAIL may be summarized as below:
Ensuring citizen-centric focus across all its processes by adopting TotalQuality Management Principles for improvement of products and servicers.
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 set up Internal Complaints Committees in line with the requirement ofthe Sexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal)Act 2013. These Committees have been set up to redress complaints received regardingsexual harassment. All employees of the Company are covered under these Rules. The detailsof sexual harassment complaints received and disposed of during the year 2017-18 are asunder:
|Number of complaints received ||:2 |
|Number of complaints disposed off ||:2 |
D. AWARDS & ACCOLADES WON DURING THE YEAR
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 34employees) for the Performance Year 2015.
Your Company has won Gold Trophy of "SCOPE Meritorious Award for BestPractices in Human Resource Management" for the Year 2014-15.
Your Company has won Governance Now Award in the Turnaround (Financial) Categoryon 28th February 2018.
SAIL's "Ispat Bhasha Bharti" received first prize for the bestin-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 Bureauof Energy Efficiency (BEE) Ministry of Power Government of India at New Delhi onNational Energy Conservation Day on December 14 2017 in presence of the Hon'ble Presidentof India.
Raw Materials Division
Kiriburu Iron Ore Mines received 1st prize during 25thMines Environment and Mineral Conservation (ME&MC) week celebration 2018 by IndianBureau of Mines at Ranchi for its overall commendable performance in EnvironmentProtection and Sustainability Endeavour.
Alloy Steels Plant
Alloy Steels Plant received the Best Performance Vendor 2017 Award from OrdnanceFactory-Medak (OF-M) for indigenisation development and supply of import substitute steelplates.
E. ENVIRONMENT MANAGEMENT
Within the ambit of notified environmental standards applicable for emission anddischarge of pollutants into the environment and rules pertaining to ecofriendlymanagement of various wastes being generated inside the Plant Premises as well as in thetownships SAIL Plants and Mines operate their processes without disturbing the ecologicalbalance. Your Company has also drawn its environmental vision in consonance with theCorporate Environmental Policy which not only addresses the need for compliance ofstipulated norms but also emphasises on striving to go beyond. Besides your Company iscommitted to address the stakeholders' concerns and communicate its environmentalphilosophy 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 andalso up-grading them as and when required for the purpose of complying with theapplicable 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 thelast five years. During the expansion cum modernisation programs state of the arttechnologies along with latest pollution control facilities have been installed as aresult of which the pollution level and CO2 emission have also come down.
During the last five years the specific CO2 emission (T/tcs) has beenreduced by around 5%. The specific effluent load in the discharged effluent has reduced bymore than 25% in the last five years.
Adoption of Energy-Efficient Technologies and State-of-the-Art Pollution ControlEquipment/Facilities
Some of the major best available technologies adopted as steps towards implementationof clean technologies as well as latest pollution control facilities installed duringModernisation and Expansion Plan of the Company are as follows:
Higher capacity (tall) coke oven batteries equipped with Land based PushingEmission Control System Coke Dry Cooling Plant etc. at BSP RSP & ISP
Sinter Plant equipped with improved ignition system (multi-slit burners) WasteHeat 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-dustingSystem 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 RollingMill in reducing energy consumption as well as CO2 emission at all the Plants.
a. Environment friendly disposal of Poly Chlorinated Bi-Phenyls (PCBs) - a toxicenvironmental pollutant
Bhilai Steel Plant in partnership with the MoEF&CC and UNIDO has initiated aproject for setting-up a disposal facility for Polychlorinated Biphenyls (PCBs)categorized as Persistent Organic Pollutants (POPs) at its site. The project is likely tobe completed by December 2018.
b. Bio-sequestration of CO2
For the purpose of reduction of CO2 emission and sequestration of thegenerated carbon back into the system SAIL is assessing its carbon footprint in one handand potential of sequestration of CO2 through its existing biotic resourceson the other. A project on carbon sequestration through afforestation has been taken up atthe site of Rourkela Steel Plant. M/s. Tropical Forest Research Institute Jabalpur hasbeen engaged as the sequestration partner to carry out the project in February 2014. Theproject will continue till March 2019.
c. Enhancing utilization of wastes through application of 4Rs (Reduction ReuseRecycling and Recovery):
With a view to increase utilization of wastes being generated inside Plant boundary inthe recent years some R&D based initiatives like steam maturing of BOF slag drygranulation of BOF slag use of BOF slag as rail track ballast use of BF and bOf slag assubstitutes to natural aggregates use of BF/BOF slag in road making have been undertakenin 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 Plantsby 2019. Some of the major initiatives taken towards implementation of renewable energyprojects 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 SAILincluding warehouses.
e. A green initiative by Rourkela Steel Plant
Rourkela Steel Plant(RSP) has recently taken up a green initiative for using wasteplastics in the hot mix of road making. As a pilot project a stretch of one km road hasbeen constructed successfully. More roads in RSP and other Plants are planned to be takenup.
Environmental Management System (EMS) linked with ISO-14001:2015
Environmental Management System (EMS) linked to ISO 14001 is a set of processes andpractices that enable an organization to reduce its environmental impacts and increase itsoperating efficiency. Implementation of EMS has helped the Plants and Mines to ensure thattheir performance being always within the applicable regulatory requirements.
During the Financial Year 2017-18 implementation of EMS (ISO-14001:2015) has beentaken up at the Gua Ore Mines and the Collieries since this is a prerequisite forimplementation 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 toEnvironment Management System compliant to 14001:2015.
Sustainable Development Projects
Restoration and rehabilitation of degraded ecosystem is essential for maintaining andenhancing bio-diversity as well as replenishing the eco-system services. Mined out areaand water body of mine voids of Purnapani Limestone Mines have been taken up forecological restoration in association with Delhi University.
Your Company realizes the role of plantation in overall environmental managementinitiatives. It is a well-known fact that plants play an important role in balancing theeco system and function as a carbon sink. Keeping the enormous contribution of the plantsin mind SAIL has long been adopting extensive afforestation program religiously in itsPlants and Mines since its nascent stage. More than 20.1 million saplings have beenplanted across SAIL Plants and Mines till date. Giving special thrust for plantation morethan 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 growthbrown-field projects technology leadership through strategic alliances ensuring rawmaterial security by developing new mines diversifying in allied areas etc. In line withthe above approach SAIL has formed Joint Venture Companies in different areas viz. powergeneration rail wagon manufacturing slag cement production securing coking coalsupplies from overseas sources etc. New initiatives are currently being explored in areassuch as outsourcing of power distribution and educational facilities in SAIL townshipsetc. The status of Strategic Initiatives taken by your Company in the recent past includesthe following:
In order to meet the challenges of adverse business environment a Companywideturnaround program was initiated during 2016-17. The program was taken up with an aim toreview and sharpen SAIL's business strategies and processes build for sustained marketleadership and drive the Company towards profitability. Towards this your Company engagedM/s. Boston Consulting Group (BCG) a leading Global Management Consultant to study thehealth of the Company suggest suitable measures for its turnaround and provide handholding support and assistance to SAIL for implementation of approved road map for turnaround. The study phase of this program named Rs.SAIL Uday' culminated in October 2017with the submission of the Rs.Comprehensive Turnaround Roadmap' Report by BCG. The Roadmapcontains over 260 recommendations encompassing various functional areas of the Companyincluding Raw Materials Production Sales & Marketing Supply Chain & LogisticsManpower & Productivity etc. Your Company has now embarked upon the next phase of"SAIL Uday" program involving implementation of the recommendations which wouldcontribute towards achieving the Company's turnaround.
Disinvestment of SAIL Plants: On 27th October 2016 the Government ofIndia (GoI) accorded Rs.in-principle' approval for Strategic Disinvestment of three Unitsof SAIL viz. Salem Steel Plant (SSP) Salem Visvesvaraya Iron and Steel Plant (VISP)Bhadrawati and Alloy Steels Plant (ASP) Durgapur. The entire process of StrategicDisinvestment is being overseen by an InterMinisterial Group(IMG) constituted by theMinistry of Steel(MoS) and chaired by the Secretary Steel.
SAIL Board has accorded Rs.in-principle' approval for the Strategic Disinvestment ofthese Steel Plants. To carry out the process the Company has appointed TransactionAdvisor(TA) Legal Advisor (LA) Asset Valuer(AV) and Tax cum Accounting Consultant (TCA).
Upon receipt of approval of the GoI/MoS Preliminary Information Memorandum(PIM)/Expression of Interest request (EoI) for disinvestment of ASP on 1stFebruary 2018 Public Notice for inviting EoI for ASP Durgapur was issued on 14thFebruary 2018. The EoIs received are under evaluation.
PIM/EoI Requests for Strategic Disinvestment of VISP and SSP have been sent to Ministryof Steel on 2nd May 2018 and 9th May 2018 respectively forobtaining approval of the GoI for issuance of Public Notice inviting EoI for StrategicDisinvestment. Clearance from GoI is awaited.
Outsourcing of the Company operated schools in townships of five Integrated SteelPlants.
Outsourcing Policy of SAIL lays down the objectives and framework for outsourcing ofnon-core activities. Based on the overall framework provided by the Outsourcing Policyoptions for outsourcing of non-core activities like maintenance of townships Companyowned schools power distribution in steel townships coal handling plants trafficsystems loco and wagon repairs are being evaluated. Actions are also being initiatedtowards rationalisation of contracts and identification of new areas for outsourcing.
Development of Rowghat - Jagdalpur Rail Corridor in the State of Chhattisgarh: Withthe 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 International Ltd. andGovernment of Chhattisgarh in May 2015 for development of a rail corridor from Rowghat toJagdalpur. This rail corridor shall be used for both freight and passenger services in theSouthern part of Chhattisgarh. A Joint Venture Company under the name "Bastar RailwayPrivate Limited" has been incorporated in May 2016. Pre project activities are beingundertaken by the Joint Venture Company.
JV with Arcelor Mittal for production of automotive steel: SAIL and Arcelor Mittalsigned an MoU on May 22 2015 to explore the possibility of setting up an automotive steelmanufacturing facility under a Joint Venture (JV) in India. The proposed JV willconstruct a state-of-the-art cold rolling mill with a capacity of about 1.5 mtpa and otherdownstream finishing facilities in India that will offer technologically advanced steelproducts to India's rapidly growing automotive sector. The input material for the CRMshall 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 IndianAutomotive Sector. In this effect a legally non-binding Term Sheet has been signed bySAIL and Arcelor Mittal which lays down the fundamental principles based on which SAILand 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 whichare either non-operational or non-performing. Further options to monetize SAIL'sinvestment 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 8000Management Systems. BSP was the latest addition to DSP and BSL which have implemented ISO50000 (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 HandlingPlant 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 withinthe organization for enabling SAIL's competitiveness in the market place.
Your Company is implementing and expanding the coverage of its business operationsunder the sphere of Enterprise Resource Planning (ERP). Four Integrated Steel Plants atBhilai Durgapur Bokaro and Rourkela and Central Marketing Organization (CMO) havealready implemented ERP and have been benefitted by this. ERP implementation at IISCOSteel Plant and at Corporate Office is under progress.
SAIL has also implemented Supplier Relation Management (SRM)/e- Procurement. This hasresulted in greater transparency and better market reach. The online customer enquirysystems and CRM are providing better interface between customers and manufacturingprocesses thereby transcending customer experience.
Manufacturing Execution Systems (MES) have benefitted your Company in achieving themarket expectations by making the production and the associated processes cost qualityand delivery efficient.
Goods and Services Tax (GST) has been implemented across SAIL and IT applications havebeen made GST compliant. The process for filing GST returns has been automated throughApplication Service Provider (ASP) & GST Suvidha Provider (GSP).
In pursuit of implementing Rs.Digital India Initiative' of the Government of Indiapaperless office approach is being adopted by resorting to automated e- communicationsthrough sms/e-mail and usage of various mobile applications in business/employee welfareareas. Further cashless transactions have been implemented wherein almost all paymentsand receipts are being done through cashless digital mode thereby your Company hasensured full compliance of Government of India's Guidelines with regard to Rs.Promotion ofPayments 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 forInformation Security Management System (ISMS):ISO certification.
Your Company has upgraded to High Definition Video Conference System which is usedextensively and it has facilitated strategic planning and decision making and also hasproved to be cost effective and time saving.
Your Company recognizing the need to evolve new and innovative ways to engage with itsemployees has conducted a series of large group interactions at its Plants and Unitswherein the top management comprising Chairman and Directors of the Company held two-waycommunication with employees apprising them of the challenges before the Company andencouraging them towards better performance. Apart from this the Company following acomprehensive approach in its communication initiatives engaged in internal communicationutilizing 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 informationpertaining to the Company provides interactive forums to partake in variouscompetitions/quizzes and let them share their feedback on various issues. SAIL News-ourinternal newsletter with its informative motivational employee and product focusedcontent not only effectively communicates but also fosters a sense of pride in theemployees for the Company.
In order to build your Company's brand image promote its products and theirapplications highlight its role in nation building Make in India drive and toeffectively communicate with external stakeholders your Company participates in eventsand exhibitions releases advertisements maintains its website and presence on socialmedia sponsors various events etc.
Your Company participated in a number of domestic exhibitions and fairs throughout theyear including Vision Jammu & Kashmir 2018 International Engineering Sourcing Show2018 (Chennai) Emerging North East 2018 held at Guwahati Assam exhibitions in JaipurVisakhapatnam) etc. SAIL has also been successfully participating in India InternationalTrade Fair regularly for over two decades. The Rs.SAIL Lion'-a figurine specially craftedout of SAIL Salem Stainless steel showcasing different products and applications of steelwas a major draw at IITF-2017. Your Company also took part in major internationalexhibitions namely INDEE (Indian Engineering Exposition) Bangladesh MSV InternationalEngineering Fair (Czech Republic) India Sourcing Fair 2018 (Russia) and Hanover Messe2018 in Germany. In addition the Company has sponsored a number of sports cultural andeducational events that provided extensive visibility for SAIL.
Your Company has created visually appealing crisp trendy and emotional connectgenerating advertisements which were successful in conveying the meaning of Rs.Brand SAIL'to society at large while commemorating SAIL's 60th year of production. Theyprovided visibility to your Company across different formats such as print electroniconline mobile etc. SAIL advertisements with rural focus support the organization's ruralmarketing initiatives. SAIL website serves as an important source of information to ourinvestors and other important stakeholders. Your Company has also created a number offilms on a diverse range of subjects including steel making safety swachhta vigilancesteel applications environment conservation initiatives etc. which have been showcasednationally and internationally at various events.
G. 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 2017-18:
To increase vigilance awareness amongst employees vigilance awareness sessionsand workshops were regularly held at various Plants and Units of the Company. A total of145 workshops involving 2838 participants were organized for enhancing Vigilance Awarenesson Whistle Blower Policy Purchase/Contract Procedures RTI Act Conduct & DisciplineRules System and Procedures followed in SAIL etc.
Periodic surprise checks including Joint Checks were conducted regularly invulnerable areas of the Company. A total of 2490 periodic checks including file scrutinyand Joint Checks were conducted at different Plants/Units. A saving of approx. Rs.18.45crores 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 these Intensive Examinations high value procurement/contracts are scrutinizedcomprehensively and necessary recommendations are forwarded to concerned departments forimplementing suggestions for improvement.
As per the Guidelines of Central Vigilance Commission Vigilance Awareness Weekwas observed in SAIL during 30th October to 4th November 2017. Theweek started with administrating the Integrity pledge and reading out of messages ofdignitaries on 30th October 2017 at SAIL Corporate Office as well as allPlants/Units of SAIL. During the week Workshops/ sensitization programmes talks byeminent speakers like Ex-Secretary Government of India SP CBI etc. Customers meetAnticorruption March/Walkathon involving common people events like quiz essay slogan& drawing/ poster debate competition were organized for the employees and theirfamilies. The activities conducted during the week were posted on social media liketwitter handle and facebook account of SAIL for wider publicity. During the weekemployees their families students customers vendors etc. were encouraged to takeE-pledge.
The following four (4) thrust areas were identified by SAIL Vigilance:
i) Surveillance in the areas of receipt sampling & testing of high value rawmaterials.
ii) Use of analytics from Business Intelligence (BI)/ERP Central Component (ECC) Modulewhile identifying areas of scrutiny of files and surprise checks at Bhilai BokaroRourkela 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 fromCentral Vigilance Commission (CVC) during the XIV anniversary celebrations of VigilanceStudy Circle Hyderabad held on 14th July 2017.
SAIL Vigilance also received two VIGILANCE EXCELLENCE AWARDs one each for Rs.VigilanceInnovation' and Rs.Excellence in Investigation' from the Hon'ble Vice President of Indiain the inaugural function of Vigilance Awareness Week organized by CVC on 30thOctober 2017 at Vigyan Bhawan New Delhi.
Rs.Inspiration- Prerna' an in-house publication of SAIL Vigilance is beingpublished regularly. The above publication contains case studies articles from eminentpersonalities quiz on policy matters etc. to enhance awareness of the readers.
Summary of processing of vigilance cases during 2017-18 is as under:
|Source || |
| ||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 |
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 foremployees to report concerns about unethical behaviour actual or suspected fraud orviolation of Code of Conduct. It also provides for adequate safeguards against thevictimization of employees who avail of the Mechanism and allows direct access to theChairperson of the Audit 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 this Report.
The Statutory Auditors' Report on the Accounts of the Company for the Financial Yearended 31st march 2018 along with Management's replies thereon is placed at Annexure-Ito this Report. The Comptroller & Auditor General of India (C&AG) vide itsletter dated 31st July 2018 has given "Nil" comments on theStandalone Financial Statements of the Company for the Financial Year ended 31stMarch 2018 under Section 143(6)(a) of the Companies Act 2013. A copy of the above letterof C&AG is placed at Annexure-II to this Report.
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 2017-18.
SECRETARIAL AUDITOR'S REPORT
In terms of the provisions of Section 204 of the Companies Act 2013 the Board ofDirectors has appointed M/s. Agarwal S. & Associates Company Secretaries as theSecretarial Auditor to conduct Secretarial Audit of the Company for the Financial Yearended on 31st March 2018. Secretarial Audit Report is placed at Annexure-IIIto this Report.
With regard to the observation of the Secretarial Auditor that composition of theBoard of Directors of the Company was not as per requirements during a part of theFinancial Year 2017-18 it is stated that appointment of Independent Directors on theBoard 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 ofrequisite number of Independent Directors on its Board.
In respect of observation regarding performance evaluation of the Directors not beingcarried out pursuant to the Regulation 17(10) & 25(4) of Securities Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 it is mentionedthat Ministry of Corporate Affairs has vide its Notification dated 5th June2015 notified the exemptions to Government Companies from the provisions of the CompaniesAct 2013 which inter-alia provides that Sub Sections (2) (3) & (4) of Section 178regarding appointment performance evaluation and remuneration shall not apply toDirectors of the Government Companies. Further the Ministry of Corporate Affairs videNotification dated 5th July 2017 has notified certain amendments in ScheduleIV of the Companies Act 2013 relating to Code for Independent Directors. As per theNotification in Schedule IV the clauses relating to evaluation of performance ofNon-Independent Directors Chairperson and Board have been exempted for GovernmentCompanies.
In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the Corporate Governance Report and Auditors' Certificate on compliance of conditions ofCorporate 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 allBoard Members and Senior Management of the Company. The Code of Conduct has been posted onthe website of the Company. All the Board Members and Senior Management Personnel haveaffirmed 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 thisAnnual Report.
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 subsidiary Companies namely SAIL Refractory CompanyLimited (SRCL) SAIL Jagdishpur Power Plant Limited SAIL Sindri Projects Limited andChhattisgarh Mega Steel Limited. SRCL is operating the Salem Refractory Unit which wasacquired by SAIL from Burn Standard Company Limited on 16th December 2011. SAILJagdishpur Power Plant Limited incorporated for setting up of Gas based power Plant atJagdishpur and SAIL Sindri Projects Limited incorporated for revival of Sindri Unit ofFertilizer Corporation of India Limited have not taken off. Under present situation theobjectives with which these Companies were incorporated are difficult to achieve hencethe Board of Directors of your Company has decided to close SAIL Jagadishpur Power PlantLimited and SAIL Sindri Projects Limited. Further actions for closure of these Companiesare being taken. Chhattisgarh Mega Steel Limited which was incorporated as a SpecialPurpose Vehicle for setting up of an Ultra Mega Steel Plant of 6 Million Tonnes per annumas a green field steel project under Joint Venture 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 the Subsidiary Companies concerned between 11 AM to 1 PM on working days. Ahard 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-V to this Report. TheStatutory Auditors' Report on the Consolidated Financial Statements along with theManagement's replies thereon is placed at Annexure-VI to this Report. TheComptroller & Auditor General of India (C&AG) vide its letter dated 31stJuly 2018 has given "Nil" comments on the Consolidated Financial Statements ofthe Company for the Financial Year ended 31st March 2018 under Section143(6)(a) read with Section 129(4) of the Companies Act 2013. A copy of the above letterof C&AG is placed at Annexure-VII to this Report. Further the statementcontaining salient features of the financial statements of the subsidiary joint ventureand associate companies in the prescribed Form AOC-1 is placed at Annexure-VIII tothis Report.
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-IX to this Report.
During the year 11 meetings of the Board of Directors of the Company were held thedetails of which are given in the Corporate Governance Report.
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 given in the Corporate Governance Report.
INTERNAL FINANCIAL CONTROL (IFC) 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 the Company has adopted a corporate governance structurevarious management processes controls policies and guidelines that drive theorganization towards its business objective while also satisfying various stakeholders'needs.
Some of your Company's robust protocols such as independent internal audit welldrafted and documented policies guidelines procedures regular review by AuditCommittee/Board etc. helps in compliance of Internal Financial Controls under theCompanies Act 2013 SEBI (LODR) Regulations 2015 etc. Your Company is committed to thehighest standards of Corporate Governance where the Board is accountable to allstakeholders for reporting effectiveness of Internal Financial Control (IFC) and itsadequacy. Corporate Governance has been carried out in accordance with the Companies Act2013 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 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
In terms of the provisions of Section 186 of the Companies Act 2013 read withCompanies (Meetings of Board and its Powers) Rules 2014 the details of LoansGuarantees Investments given during the Financial Year ended on 31st March2018 are given in Annexure-X to this Report.
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 the FinancialYear 2017-18 with the related parties were in the ordinary course of business and on anarm's length basis. The transactions with the related parties have been disclosed in thefinancial statements. Therefore particulars of contracts or arrangements with relatedparties referred to in Section 188(1) along with the justification for entering into suchcontract 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 DisclosureRequirements) Regulations 2015 the Board of Directors of the Company has adoptedDividend 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 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-XI to this Report.
RISK MANAGEMENT POLICY
Enterprise Risk Management (ERM) is a strategic business discipline that supports theorganization's objectives by addressing full spectrum of its risks and managing thecombined impact of those risks as an inter-related risk portfolio. The Risk ManagementPolicy of your Company was approved by the Board much before the same became a statutoryrequirement and since then the risk management in SAIL has grown and developed in linewith internal and external requirements. The Policy provides guidance for the managementof the business risks across the organisation. It focuses on ensuring that the risks areidentified evaluated and mitigated within a given time frame on a regular basis.
Currently the architecture of Enterprise Risk Management in SAIL comprises awell-designed multi-layered organization structure with each Plant/Unit having its ownperceived Risks which are under the constant monitoring by the Risk Owners/Risk Championswho 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 /Unitperiodically reviews the risks and their mitigation status and reports the same to ChiefRisk Officer (CRO) of SAIL. SAIL Risk Management Committee (SRMC) oversees the RiskManagement function in the Company by addressing issues pertaining to the policyformulation as well as evaluation of risk management function to assess its continuingeffectiveness. Risks identified by the Risk Champion/Risk Officer are deliberated in theRisk Management Committee escalated and draw the mitigation strategy. Roles andresponsibility of Board Audit Committee SAIL Risk Management Committee Risk ManagementSteering Committee CRO Risk Officer/Risk Champion related to risk management are definedunder the Policy and duly approved by the Board.
M/s. Grant Thornton India LLP has been appointed to review and update the existing ERMPolicy in SAIL to meet the statutory requirements of Companies Act 2013 and SEBIRegulations.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
SAIL's Social Objective is synonymous with Corporate Social Responsibility. Apart fromthe business of manufacturing steel the objective of the Company is to conduct businessin ways that produce social environmental and economic benefits to the communities inwhich it operates. For any organization CSR begins by being aware of the impact of itsbusiness on society. With the underlying philosophy and a credo to make a meaningfuldifference in people's lives your Company has been structuring and implementing CSRinitiatives right from the inception. These efforts have seen the obscure villages whereSAIL Plants are located turn into large industrial hubs today.
The CSR initiatives of your Company have always been undertaken in conformity to theCompanies Act-2013 Companies (Corporate Social Responsibility Policy) Rules 2014 and CSRPolicy. SAIL carries out CSR projects in and around periphery of steel townships minesand far flung location across the Country in the thrust areas falling in line withSchedule-VII of the Companies Act-2013 namely education 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 CSR initiatives taken by the Company along with the Report onCSR in prescribed format are placed at Annexure XII to this Report. The CSR Policyof the Company is available on the website of the Company- www.sail.co.in.
Healthcare: SAIL's extensive and specialised healthcare infrastructure providedspecialized and basic healthcare to 1.70 crore people living in the vicinity of its Plantsand Units during the period 2011-18. In order to deliver quality healthcare at thedoorsteps of the needy regular health camps in various villages on fixed days are beingorganized for the people living in the periphery of Plants/Units Mines and far-flungareas. During the Financial Year 2017-18 about 4130 Health Camps have been organizedbenefitting over 76000 villagers. 7 Mobile Medical Units (MMUs) running in the Plant'speripheries have benefitted 44000 villagers at their doorsteps.
27 Primary Health centres at Plants exclusively provided free medical care andmedicines to 3.43 lakh villagers during the Financial Year 2017-18.
Education: To develop the society through education SAIL is supporting over 77schools which are providing modern education to more than 40000 children in the steeltownships. 19 Special Schools (Kalyan & Mukul Vidyalayas) are benefitting over 4270BPL category students at integrated steel plant locations with facilities of freeeducation mid-day meals uniform including shoes text books stationary items schoolbag water bottles and transportation.
Your Company in association with Akshya Patra Foundation is providing midday meals to68000 students of over 630 Government schools in Bhilai and Rourkela.
Women Empowerment & Sustainable Income Generation:
Vocational and specialised skill development training targeted towards sustainableincome generation have been provided to 600 youths and 1468 women of peripheral villagesin areas such as Nursing Physiotherapy LMV Driving Computers Mobile repairing WelderFitter & Electrician Training Improved Agriculture Mushroom Cultivation GoateryPoultry Fishery Piggery Achar/Pappad/ Agarbati/Candle Making Screen PrintingHandicrafts Sericulture Yarn Weaving Tailoring Sewing & Embroidery GlovesSpices Towels Gunny- bags Low-cost-Sanitary Napkins Sweet Box Soap Smokeless Chullahmaking etc. 845 youths have been sponsored for ITI Training at ITCs Bolani BargaonBaliapur Bokaro Pvt. ITI and Rourkela etc. and 31 youths in Plastic Engineering throughCIPET at Bokaro.
Connectivity & Water facilities in Rural Areas:
Over 79.03 lakh people across 450 villages have been connected to mainstream by SAILsince its inception by constructing and repairing of roads. Over 8100 water sources havebeen installed during last five years thereby enabling easy access to drinking water to50 lakh people living in far-flung areas.
Over 3 lakh trees have been planted and maintained at Bhilai Bokaro Rourkela &Mines areas. A 409 acres Bio-Diversity Environment Theme Park Rs.VASUNDHARA' with a waterbody and plantation of 400 varieties of trees medicinal plants rainwater harvestingsoil conservation for maintaining ecological balance has been developed at Durgapur. Thepark is enriching the environment for approx. 75000 natives year on year.
Support to Differently Abled & Senior Citizens:
Differently abled children/ people are being supported through provision of equipmentslike- tricycle motorized vehicles calipers hearing aids artificial limbs etc. YourCompany supports various schemes and centres at Plants under CSR like "SnehSampada" "Prayas"and Rs.Muskaan" at Bhilai "Schools for blinddeaf & mentally challenged children" and "Home and Hope" at Rourkela"Ashalata Viklang Kendra" at Bokaro various programs like "HandicappedOriented Education Program" (Hope) and "Durgapur Handicapped Happy Home" atDurgapur and "Cheshire Home" at Burnpur. Support has also been provided to NGOsworking in this field like TAMANNA Deepalaya etc. Old age homes are being supported atdifferent Plant townships like "Siyan Sadan" at Bhilai Acharya Dham and Badshahat Durgapur etc.
Sports Art & Culture and Heritage Conservation:
SAIL is regularly organizing inter-village sports tournaments extending support tomajor national sports events & tournaments. Also supporting and coaching aspiringsportsmen and women through its residential sports academies at Bokaro (Football) andRourkela (Hockey)- with world class astro-turf ground Bhilai (Atheletics for boys)Durgapur (Athletics for girls) and Kiriburu Jharkhand (Archery). Cultural events likeChhattisgarh Lok Kala Mahotsav and Gramin Lokotsav are organised every year.
Your Company as a responsible corporate citizen supported the rehabilitationinitiatives 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 SAILinitially established an Integrated Development Centre (with 26 shops/offices) at Dighavillage. At the hostel facility setup viz. Saranda Suvan Chhatravas 24 Tribal childrenhave been adopted and accommodated and facilitated with free of cost educationaccommodation meals & uniforms textbooks etc. An Ambulance/MMU is running andproviding healthcare at doorsteps of villagers in Saranda Forest.
Ladies Cricket Coaching Club Bolani has been set up by RMD. About 30 young triballadies who were daily wage-earners as Rs.load-lifters' devoid of basic amenities havebeen motivated counselled provided free of cost healthy food cricket coach and sportskits/tools and training/practice sessions etc. Today the Champions are representingOdisha & Jharkhand States in National State and District level cricket tournamentswherein their performance has been adjudged as Rs.Women of the Tournament' etc.
SAIL has converged its CSR endeavours by developing sustainable tap water source andconstructing useable toilets for each of the 1854 households in 19 villages of KuarmundaBlock Rourkela in a comprehensive manner. Village level committees have been formed forlong-term sustenance of the project.
Bolani Ore Mine is facilitating drinking water supply and sanitation facility for 300natives of Barik Sahi (Kuni Sahi) Bolani connecting the village with Jhinkaria Springsthrough G.I. pipelines.
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
Dr. N. Mohapatra has ceased to be Director w.e.f. 30th June2017(A/N).
CA K.S. Chauhan and Prof. N.K. Taneja have been appointed as IndependentDirectors w.e.f. 22nd September 2017.
Shri PK. Dash has resigned from the Board w.e.f. 3rd October2017(A/N).
Shri Sunil Barthwal has ceased to be Director w.e.f. 11th October2017.
Ms. Urvilla Khati was Director from 11th October 2017 to 28thFebruary 2018.
Shri Kalyan Maity has resigned from the Board w.e.f. 28th February2018(A/N).
Shri Atul Srivastava has been appointed as Director w.e.f. 12thMarch 2018 (A/N).
Shri Puneet Kansal Joint Secretary to the Govt. of India Ministry of Steel hasbeen appointed as Director w.e.f. 7th May 2018.
Shri PK. Singh has ceased to be Chairman and Managing Director of the Companyw.e.f. 30th June 2018(A/N).
Shri Saraswati Prasad Special Secretary & Financial Adviser to theGovernment of India Ministry of Steel assumed Additional Charge as Chairman and ManagingDirector 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 August2018 (F/N).
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 |
| ||(Saraswati Prasad) |
| ||Chairman & Managing Director |
|Place: New Delhi || |
|Dated: 13th August 2018 || |