The Board of Directors has the pleasure of presenting the 45th Annual Report of Steel Authority of India Limited (SAIL, the Company) together with Audited Accounts for the Financial Year ended 31st March, 2017.
A. FINANCIAL REVIEW
Your Company achieved a turnover of 49,180 crore during the Financial Year 2016-17, which was higher by 14% over previous year due to increase in both sales volume (8%) as well as Net Sales Realisation (NSR) of Saleable Steel of 5 Integrated Steel Plants by about 6%. The loss after tax of your Company for the Financial Year 2016-17 has reduced to 2,833 crore as compared to loss after tax of 4,021 crore in the previous Financial Year.
The reduction in loss has been mainly on account of higher sales volume, higher Net Sales Realisation of 5 Integrated Steel Plants, higher production, increase in value added production, lower usage of imported coal in blend, higher usage of CDI in CDI furnaces, reduction in coke rate, improvement in BF productivity, reduction in salaries and wages, decrease in average purchase power rate, foreign exchange gain, etc. However, the same has been partially offset by increase in imported and indigenous coking coal prices, increase in interest cost and depreciation.
SAIL continued its thrust on optimum utilisation of funds by better fund management. This included replacement of high cost loans with low cost debts, timely repayment of loans including interest, action for future fund raising, etc. to meet our growth objectives. Further, the Company hedged the foreign currency risk on Buyers Credit and repayment of External Commercial Borrowings depending on market conditions. The Company had borrowings of 41,396 crore as on 31st March, 2017. The debt equity ratio of the Company increased to 1.15:1 as on 31st March, 2017 from 0.90:1 as on 31st March, 2016, due to increase in borrowings as well as reduction in net-worth during the year. The net-worth of Company declined substantially from 39,196 crore as on 31st March, 2016 to 36,009 crore as on 31st March, 2017.
M/s CARE Ratings and M/s Brickwork Ratings, RBI approved credit rating agencies, assigned CARE AA Outlook: Negative and BWR AA+ Outlook: Stable ratings respectively for SAILs long term borrowing programme.
B. OPERATIONS REVIEW
Financial Year 2016-17 has been a year full of challenges for your Company. The Company faced tough times amidst plunging steel prices, a flood of low- priced imports from China and other countries, unprecedented increase in input prices and a subdued demand of steel.
The new facilities already operational were ramped up during the year. New Blast Furnace at RSP achieved about 100% of its capacity, whereas, other facilities like New Caster and New Plate Mill were also in process of stabilization and achieved 84% and 80% of their respective capacities during the year. The new facilities at IISCO Steel Plant have also been ramped up and the capacity utilization in Hot Metal, Crude Steel and Saleable Steel production was in the range of 50-70% of capacity during this year. At Bhilai Steel Plant, Universal Rail Mill (URM) (with capacity to produce Worlds longest single-piece 130- meter long rail) along with Rail Welding Line for production of 260 meter Long
Rails, has been completed and the Mill has started regular production from Jan17. Other facilities like Ore Handling Plant Part-A, 2nd Sinter Machine in Sinter Plant-3 and Coke Oven Battery-11 are in regular operation. Further, Bar line of Bar and Rod Mill (BRM) has been completed and hot trial of BRM has started in Mar17. At IISCO, third converter(#1) in SMS was started in August16.
Financial Year 2016-17 also witnessed several landmark achievements. Your Company achieved highest ever Hot Metal production of 15.73 Million Tonnes(MT) surpassing its previous best of 15.72 MT achieved in 2015-16, highest ever Crude Steel production at 14.50 MT surpassing previous best of 14.29 MT achieved in 2015-16 and highest ever Saleable Steel production at 13.87 MT surpassing previous best of 13.04 MT achieved in 2007-08.
SAIL has achieved an all time best performance in case of Continuously-Cast Steel and Sinter production, with production of 11.77 MT and 23.1 MT registering a growth of 9% and 1% respectively over last year.
SAILs various initiatives to reduce environmental footprint and enhance operational efficiency have led to significant improvement in environmental parameters as well as techno-economic efficiency. This has enabled your Company to produce greener and more environmental friendly steel, than ever before. The Plants recorded the best ever Coke Rate at 473 kg/thm and BF productivity of 1.67 t/m3/day. This was achieved, as a result of higher volume of Hot Metal produced through new state of art Blast Furnaces (29% of total Hot Metal) and increased Crude Steel production through energy efficient Continuous Casting route (81%, up by 5% over CPLY).
SAIL became true force in transforming the Nation by supplying steel to ISRO for the launch of a record 104 satellites in a single rocket by way of providing high quality stainless steel for the fuel and oxidizer tanks used in the launch vehicle. SSP had earlier supplied steel for the iconic Chandrayan and Mangalyan missions too.
Captive Power Generation during the Financial Year 2016-17 increased to 820 MW from 785 MW in the previous year, with growth of 4.5%. About 68.3% of the Companys total power requirement of 1200 MW was supplied from Captive power generation, 30% by purchasing power from grid utilities and the balance 1.7% from Power Exchange through Open Access.
During the Financial Year 2016-17, with an objective to optimize power cost, SAIL Plants procured about 572 Million Units(MU) power through open access which was highest ever in any year since open access regulations came into effect in the Country. Your Company was the first non-power entity to have started wheeling of power in the year 2004 after enactment of Electricity Act, 2003. Out of the 572 MU, about 393 MU of captive power was wheeled from NTPC SAIL Power Company Limited(NSPCL), Bhilai, a joint venture of SAIL and NTPC Ltd. to RSP SSP and CFP and the remaining 179 MU were purchased from Power Exchange for RSP VISP and SSP Such power availed through open access helped in replacing costly grid power in the recipient Plants and resulted in substantial cost savings.
Grid power being the costliest source of power, there was continuous emphasis on reduction in purchase of power from grid and Contract Demand with grid was reduced by 48 MVA during the year, from the earlier level of 975 MW to 927 MW, reduction by about 5% on year-on-year basis, though there was substantial increase in the production of saleable steel and commissioning of new facilities. Continuous efforts were made towards improvement in the performance parameters of Captive Power Plants, both own as well as under joint ventures. The performance of some of the Captive Power Plants under Joint Venture was better than the performance norms in the Country and improvement in performance parameters helped in achieving considerable cost savings.
Your Company has always laid stress on reliability of power supply in its Plants and strengthening of the power distribution system. Connectivity of BSL with DVC grid at 220 KV level was commissioned during the year. With this, all the Integrated Steel Plants of SAIL are now connected with utility grids at 220 KV level, which enhances the reliability of grid power supply and lowers the tariff of grid power as well as open access charges for having grid connectivity at such high voltages.
Captive power generation capacity is being augmented by capacity addition of 290 MW through NSPCL. Orders for supply and installation of Power Plants of 1 x 250 MW at RSP and 2 x 20 MW at DSP were placed during the year. These Plants are expected to commence commercial operations during the Financial Year 2019-20.
As a part of commitment towards development of renewable energy, your Company has already installed a capacity of 1070 KWp rooftop solar plants at various locations and 1 MWp grid interactive solar plant at RSP Further actions for installation of 200 MWp capacity solar plants at various SAIL Plant locations have also been initiated.
During Financial Year 2016-17, total requirement of iron ore was met from captive sources. The Companys captive iron ore mines produced about 26.44 Million Tonnes(MT). However, in case of coking coal, about 19% requirement (2.91MT) was met from indigenous sources (Coal India Limited & captive sources) and for the balance requirement of coking coal (12.41 MT), the Company has to depend on imports due to limitation in availability within the Country. In the Financial Year 2016-17, production in captive collieries of the Company was about 0.68 MT, out of which 0.54 MT was raw coking coal and balance 0.14 MT of non coking coal. In case of fluxes, around 1.36 MT of Limestone and 0.72 MT of Dolomite was produced giving a production of 2.08 MT fluxes from captive sources. For thermal coal, your Company depends entirely on purchases from Coal India Limited (CIL) except for small quantity produced from captive mines.
In order to expedite capacity expansion projects of mines, following
environment and forest clearance have been obtained during the Financial Year 2016-17:
Environment Clearance(EC) for setting up of 3.5 million tonnes per annum (MTPA) capacity washery at Tasra was granted by MoEFCC on 30th March, 2017.
Environment Clearance of the Dhobil Iron Ore mine has been amended by MoEFCC on 19th April, 2017 for the limited purpose of continuation of transportation of iron ore for further period of 5 years beyond 24th January, 2017.
MoEFCC vide letter dated 29th November, 2016 has revalidated the earlier Environment Clearance of Sitanala Coal block in favour of the Company.
MoEFCC vide letter dated 06th December, 2016 transferred the Environment Clearance for Parbatpur Coal block to SAIL with a condition that "No mining shall be carried out till the washery is operational".
However, the Stage-II forest clearances for the capacity expansions of Gua and Chiria mines and opening of South-Central Blocks in Kiriburu- Meghahatuburu mines in Saranda forest in Jharkhand are yet to be granted by MoEFCC. In view of its criticality to the capacity expansion projects, the matter is being actively pursued with the Government.
In view of promulgation of MMDR Amendment Act, 2015 and further issuance of Mineral (Mining by Government Companies), Rules, 2015, lease period of the following leases have been extended:
Lease period of ML-162 mining lease of Barsua Iron Ore Mine for an area of 77.94 Ha. has been extended by Government of Odisha vide Order dated 5th July, 2016. Under the said Rules, the first lease is deemed to be granted for 50 years i.e. from 29th April, 1960 to 28th April, 2010 and further lease period is extended for another period of 20 years from 29th April, 2010 to 28th April, 2030. Lease Amendment Agreement in this regard was signed on 29th September, 2016.
Lease period of the Nandini Limestone Mine of BSP for the area of 526.34 Ha. has been extended by Government of Chhattisgarh till 31st March, 2028. Lease Amendment Agreement in this regard was signed on 22nd March, 2017.
Government of Chhattisgarh vide Order dated 25th June, 2016 has extended the lease period of Hirri Dolomite Mine of BSP for an area of 128.77 Ha. under Chhattisgarh Minor Minerals Rules, 2015 till 31st March, 2020. Lease Amendment Agreement in this regard was signed on 22nd March, 2017.
Sales & Marketing
In-spite of the challenging market conditions, your Company achieved a total sales volume of 13.1 million tonnes during the Financial Year 2016-17, registering a growth of about 13% over the previous financial year. With regard to Dealer Sales, record sales of around 0.82 million tonnes were achieved during the Financial Year 2016-17, thereby registering a growth of 3% over 2015-16. In respect of exports, 0.67 million tonnes were exported, which were higher by over 200% as compared to the previous year.
Your Company achieved highest ever despatches of Long Rails(260m panels) to Indian Railways with a growth of 11.1% over the previous year. Further, 181 numbers of Narrow Guage Forged wheels were specially manufactured and supplied for maintenance of the Kalka-Shimla Railway Line, a UNESCO declared World Heritage Site.
Your Company was the main supplier of steel in construction of the Countrys longest bridge "Dhola-Sadiya" built on river Lohit in Assam, connecting the States of Assam and Arunachal Pradesh. SAIL has supplied around 30,000 tonnes (90%) of steel comprising TMT, Structurals and Plates, for this prestigious project built under public private partnership. The bridge being 9.15 km in length, is 3.55 km longer than Mumbais Bandra-Worli Sea Link.
Public Procurement Policy for Micro and Small Enterprises
As required by the Public Procurement Policy of the Government of India, the information on procurement from Micro & Small Enterprises during Financial Years 2016-17 and 2015-16 is given below:
|Total Amount of Procurement||3246.42||3211.93|
|Total Procurement from MSE||767.04||677.53|
|%age Procurement from MSE||23.63||21.09|
Modernisation & Expansion Programme
Your Company is nearing towards the last leg of implementation of on-going Modernisation & Expansion Programme. During the Financial Year 2016-17, your Company has achieved many milestones. At Bhilai Steel Plant, New Universal Rail Mill for supply of 130 m rail, Worlds longest single piece rail, has been commissioned and welded 260 m rail panels are being dispatched to Railways. Hot trial in Bar & Rod Mill has been carried out. Heating of stoves of Blast Furnace-8 has also been started. A capital expenditure of 4,939 crore has been incurred during Financial Year 2016-17 and capex planned for 2017-18 is 3,500 crore.
The details of Addition, Modification & Replacement (AMR) Schemes under implementation are given in the Management Discussion & Analysis (MD&A) Report.
C. HUMAN RESOURCE MANAGEMENT REVIEW
Your Company recognizes contribution of its Human Resources in providing it the competitive advantage. The Company has achieved its present level of excellence through investment in its human resource, where skill and knowledge constitute the basis of every initiative - be it technology or innovation. Developing skills and capabilities of employees to improve manpower utilization and labour productivity is the key thrust area of Human Resource Management (HRM) in the Company.
Your Company provides an environment conducive for learning, encourages adoption of best practices in every area and nurtures creativity and innovation among employees. Human Resource initiatives in SAIL are focused on developing team spirit, employee empowerment and their involvement in various improvement activities. Strategic alignment of HRM to business priorities and objectives has facilitated smooth transition to state-of-the-art technology in the Modernization and Expansion Projects.
Enhanced Productivity with Rationalized Manpower
Your Company achieved the Labour Productivity (LP) of 320 TCS/Man/Year in 2016-17. The manpower strength of the Company was 82,964 nos. as on 31.3.2017 with manpower rationalization of 5,691 achieved during the year. The enhanced productivity with rationalized manpower could be achieved as a result of judicious recruitments, building competencies and infusing a sense of commitment and passion among employees to go beyond and excel. To give further thrust for enhancing productivity and manpower rationalization, your Company has recently introduced Voluntary Retirement Scheme-2017 w.e.f. 15th June, 2017. Trend of enhanced productivity and manpower rationalization since 2007-08 onwards is depicted below:
Developing Employee Capabilities & Competencies
Your Company believes that peoples development is the key for overall growth and training facilitates the development of employees knowledge and skills, so that the resultant advancement of competence contributes towards attainment of organisations goals and objective. SAIL has been making sustained efforts through various training and development activities with focus on preservation, transfer and improvement of skills, knowledge and technology in collaboration with reputed organizations and development of effective managerial competencies in association with premier institutes.
Preparing employees for tomorrow, for effectively taking up challenges and discharging new roles and responsibilities was given a major thrust. Overall 36,059 employees were trained against target of 34,822 employees during the year on various contemporary, technical and managerial modules.
Harmonious Employee Relations
SAIL has maintained its glorious tradition of building and maintaining a conducive and fulfilling employee-employer relations environment. The healthy practice of sorting out and settling issues through discussions with trade unions/workers representatives enabled the Company in ensuring workers participation at different levels and establishing a peaceful IR climate. Some of the bi-partite forums are functioning since early seventies and are sufficiently empowered to address different issues related to wage, safety, and welfare of workers, arising from time to time, thus helping in establishing a conducive work environment.
Bipartite forums like National Joint Committee for Steel Industry (NJCS), Joint Committee on Safety, Health & Environment in Steel Industry (JCSSI) etc. with representation from major central Trade Unions as well as representative
Unions of Plants/Units meet on periodic basis and jointly evolve recommendations/ action plans for ensuring a safe & harmonious work culture which gets substantiated from the harmonious Industrial Relations enjoyed over the years by SAIL Plant/Units, marked with diverse work culture at multilocations.
In addition, Quality Circles, Suggestion Schemes, Shop Welfare Committees, Safety Committee, Canteen Management Committee, Productivity Committee, etc. also offer multiple avenues for enhanced workers participation. Workers are also kept abreast of strategic business decisions and their views sought thereon through structured /interactive workshops.
Communication with employees at various levels on a wide range of issues impacting the Companys performance as well as those related to employees welfare is done in a structured manner across the Company. Mass communication campaigns are undertaken at CEO / Senior Officers level involving structured discussion with large group of employees. These interactive sessions help employees to align their working with the goals and objective of the Company leading to not only higher production and productivity but also enhance the sense of belongingness of the employees.
Grievance Redressal Mechanism
Effective internal grievances redressal machinery has been evolved and established in SAIL Plants and Units, separately for executives and nonexecutives. Joint grievance committees have been set up at Plant/Unit level for effective redressal of grievances.
SAIL Plants/Units are maintaining 3 stage grievance handling system and employees are given an opportunity at every stage to raise grievances relating to wage irregularities, working conditions, transfers, leave, work assignments and welfare amenities, etc. Majority of grievances are redressed informally in view of the participative nature of environment existing in the steel plants. The system is comprehensive, simple and flexible and has proved effective in promoting harmonious relationship between employees and management.
Against 402 staff grievances received during the Financial Year 2016-17 with 1 grievance pending from previous year, 387 staff grievances have been disposed off during the year, achieving 96.03% fulfilment.
Further, during Financial Year 2016-17, 1144 grievances have been received under Centralised Public Grievance Redress and Monitoring System (CPGRAMS) while 17 grievances had been carried forward from the previous financial year. Total 1139 grievances have been disposed off during Financial Year 2016-17, thereby achieving fulfilment rate of 98.10%. All the grievances have been disposed off within 30 days of its receipt against the stipulated time of 60 days.
In SAIL, pay and other benefits for executives is based on the Presidential Directives issued by Ministry of Steel, Government of India. The last pay revision effective from 01/01/2007 was done in accordance with Presidential Directives dated 05/10/2009. In aforementioned pay revision, variable pay in the form of Performance Related Pay (PRP) has been introduced for executives. The PRP is based on the performance / profitability of the Company as well as individual performance rating based on Key Performance Areas(KPAs) aligned to the organization objectives. In case of Non-executive employees, the salaries and wages are finalized / revised in bipartite forum of National Joint Committee for Steel Industry (NJCS). The last NJCS agreement was finalized and signed on 01.07.2014, effective from 01.01.2012. In terms of notification issued by the Government of India, the provisions of section 197 of the Companies Act, 2013 are not applicable to Government Companies. As such, the disclosures to be made in the Boards Report on the remuneration of Directors and other prescribed details are not included in this Report.
Initiatives for Socio-economic Development of SCs /STs & Other Weaker Sections of the Society
SAIL follows Presidential Directives on Reservation for Scheduled Castes (SCs) and Scheduled Tribes (STs) in the matter of recruitments and promotions. As on 1.4.2017, out of total manpower of 82964, 13604 belong to SCs (16.40%) and 12018 belong to STs (14.49%).
SAIL Plants and Units including Mines are situated in economically backward regions of the Country with predominant SC/ST population. Therefore, SAIL has contributed to the overall development of civic, medical, educational and other facilities in these regions. Some of the contributions are:
Over the years, a large group of ancillary industries has also developed in the vicinity of Steel Plants. This has created opportunities for local unemployed persons for jobs and development of entrepreneurship.
For jobs of temporary & intermittent nature, generally contractors deploy workmen from the local areas, which again provide an opportunity for employment of local candidates of economically weaker section.
Establishment of SAIL Steel Plants in economically backward areas has given a fillip to the economic activities thus benefiting the support population providing different types of services.
Steel Townships developed by SAIL have the best of medical, education and civic facilities and are like an oasis for the local Scheduled Castes, Scheduled Tribes and other population who share the fruits of prosperity along with SAIL.
SAIL has undertaken several initiatives for the socio-economic development of SCs/STs and other weaker sections of the society which are mainly as under:
Special Schools have been started exclusively for poor, underprivileged children at five integrated steel plant locations. The facilities provided include free education, mid-day meals, uniforms including shoes, text books, stationery items, school bags, water bottles and transportation in some cases.
No tuition fee is charged from SC/ST students studying in the Company run schools, whether they are SAIL employees wards or non-employees wards.
Free medical health centres for poor have been set up at Bhilai, Durgapur, Rourkela, Bokaro, Burnpur providing free medical consultation, medicines, etc. to the peripheral population mainly comprising of SC/ST and weaker sections of society.
SAIL Plants have adopted tribal children. They are being provided free education, uniforms, textbooks, stationery, meals, boarding, lodging and medical facilities for their overall growth at residential hostels, Saranda Suvan Chhatravas, Gyanodaya Hostel and an exclusive Gyan Jyoti Yojana for nearly extinct Birhor Tribe.
For Skill Development and better employability, tribal school passouts have been sponsored for coaching in premier institutes for IIT/JEE entrance examinations and for trainings along with monthly stipend, accommodation, transportation and fooding facility at various ITIs, Nursing and other vocational training institutes.
Implementation of Presidential Directives on Reservation for SC/ST
Liaison Officers have been appointed as per Presidential Directives for due compliance of the Orders and instructions pertaining to reservation for SCs/STs/OBCs at Plants/Units of SAIL.
SC/ST Cell is functioning in all of the main Plants/Units. A member belonging to SC/ST community is associated in all DPCs/Selection Committees. A sufficiently senior level officer of SC/ST category is nominated for the purpose as per the level of the Recruitment Board / Selection Committees/DPC.
Internal workshops for Liaison Officers for SC/ST/OBC and other dealing officers of SAIL Plants/Units are conducted at regular intervals through an external expert to keep them updated on the reservation policy for SC/ ST and other related matters.
Plants/Units of SAIL have SC/ST Employees Welfare Associations which conduct regular meetings with Liaison Officers on implementation of reservation policy & other issues. In addition, an Apex level umbrella body namely SAIL SC/ST Employees Federation also exists in SAIL to represent the issues of SC/ST Employees in a coordinated manner. A meeting with the Federation at the level of Director (Personnel) is organised on a regular basis.
Implementation of Right to Information Act, 2005
The provisions under the Right to Information Act, 2005 (RTI Act) are being complied by all Plants and Units of SAIL. All statutory reports including Annual Report are being sent to Ministry of Steel and also being uploaded on the website of the Company. Your Company has appointed Public Information Officers(PIO)/Asstt. Public Information Officers and Appellate Authorities and Transparency Officer under Section 5 and Section 19(1) of the RTI Act in each Plant and Unit for speedy redressal of the queries received under the Act. Under Sec.5(5), all the officers/ line managers responsible for providing information to the PIO are called Deemed PIO and are made equally responsible as PIO, towards timely provision of information to the applicant.
An exclusive RTI Portal has been developed with link available on the website of the Company. All the Plants/Units have listed 17 manuals and details of Authorities under the Act are uploaded on the website of the Company. Quarterly
Returns and Annual Returns on implementation of RTI Act are being submitted online through the CIC portal. Implementation of online request has already been introduced from 1st May 2015. A compilation of Record Retention Policy of various functions of Corporate Office has also been uploaded on the website of the Company. In addition to this, compilations of important decisions of CIC, DOPT circulars and High Court cases are also available on the website of the Company.
Awareness Programs/Workshops on Obligation of Public Authorities under RTI are being organised across Plants/Units and Information Commissioner has been present in most of these programs. Further, Awareness Programmes on RTI Act are held at Plant, Units and Corporate Office regularly.
SAIL received a total of 3,564 applications and 612 appeals under RTI Act, 2005 during the Financial Year 2016-17, all of which have been disposed off within the stipulated time frame under the Act. CIC has also taken up 82 cases and most of these cases were disposed off in favour of the Company.
Your Company is totally committed to excellence in public service delivery through good governance, by a laid down process of identifying citizens, our commitment to them in meeting their expectations and our communication to them of our key policies, in order to make the service delivery process more effective.
SAILs Citizen Charter has outlined commitment of SAIL towards its stakeholders, thereby empowering them to demand better products and services. Objectives of the Citizens Charter of SAIL may be summarized as below:
Ensuring citizen-centric focus across all its processes by adopting Total Quality Management principles for improvement of products and services.
Ensuring effective citizen communication channels.
Demonstrating transparency and openness of its business operations by hosting the Citizens Charter on the Corporate website.
Working towards delight of citizens, by fail-safe processes and in case of exigencies leveraging its service recovery processes, like Grievance Redressal, Handling Complaints, etc.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:
The Company has in place a system of Complaints Committees (under SAIL Conduct, Discipline and Appeal (CDA Rules, 1977) in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. These Committees have been set up to redress complaints received regarding sexual harassment. All employees of the Company are covered under these Rules. The following is a summary of sexual harassment complaints received and disposed off during the year 2016-17:
Number of complaints received : 5
Number of complaints disposed off : 6
(including 1 pending of previous year)
D. AWARDS & ACCOLADES WON DURING THE YEAR
Your Company has won 7 Prime Ministers Shram Awards (involving 26 employees) for the year 2015.
Your Company has won 10 Vishwakarma Rashtriya Puraskar Awards (involving 42 employees) for the performance year 2015.
Your Company has won Gold Trophy of "SCOPE Meritorious Award for Best Practices in Human Resource Management" for the year 2014-15.
Your Company has won Golden Peacock Award for Corporate Governance, by the Institute of Directors, India, for the year 2016.
Your Company bagged the Governance Now PSU Award 2016 under the award category Relative Growth & Adaptation.
Your Company was awarded the Ispat Rajbhasha Trophy for the year 2014-15 for SAILs best official language implementation.
Bhilai Steel Plant
CII-Exim Bank Business Excellence Award 2016 organized by the CII Institute of Quality.
Excellence Award in the category of Integrated Steel Plants under Iron & Steel Sector for the year 2015-16, in the State Level Sustainable Energy Awards-2016 by Chhattisgarh State Renewable Energy Development Agency (CREDA).
Vayoshreshtha Samman for the "Best Public Sector Organization in Promoting the Well Being and Welfare of Senior Citizens" on the occasion of International Day for Older Persons at Vigyan Bhawan, New Delhi on 1st October, 2016.
NARAKAS Bhilai-Durg bagged the "Madhya Kshetriya Pratham Puraskar" for the year 2015-16.
Best Chapter Award for QCFI Bhilai Chapter in the event "NCQC-2016" held in Raipur for significant contribution towards Quality propagation.
17 Quality Circle Teams won awards (15 Par Excellence and 2 Excellence) from QCFI during their 30th National Convention on Quality Concepts.
Durgapur Steel Plant
10 Quality Circle Teams won awards (8 Par Excellence and 2 Excellence) from QCFI during their 30th National Convention on Quality Concepts.
Rourkela Steel Plant
CII EXIM Bank Business Excellence Award for Strong Commitment to Excellence for the year 2015-16.
Coal & Coke Zone and Steel and CCM Zone bagged Zero Fatality awards for the years 2015 and 2016 respectively from the Joint Committee on Safety, Health & Environment in the Steel Industry (JCSSI).
8 Quality Circle Teams won awards (6 Par Excellence and 2 Excellence) from QCFI during their 30th National Convention on Quality Concepts.
Bokaro Steel Plant
Golden Peacock HR Excellence Award for the year 2016
Gold Award in Training Excellence Category at the 6th Annual Greentech HR Award for the year 2015-16.
Energy Management Department, First Prize in CII (ER) Productivity Awards 2016.
6 Quality Circle Teams won awards (1 Par Excellence and 5 Excellence) from QCFI during their 30th National Convention on Quality Concepts.
Visvesvaraya Iron & Steel Plant
Ispat Suraksha Puraskar for No fatal accident occurred during the Calendar Years 2015 & 2016 under Scheme-II, Group (B) (Special Steel Plant) by Joint Committee on Safety, Health & Environment in the Steel Industry.
Ispat Suraksha Puraskar for No fatal accident occurred involving Contract Labour during the Calendar Years 2015 & 2016 under Scheme-II, Group (B) (Special Steel Plant)by Joint Committee on Safety, Health & Environment in the Steel Industry.
Salem Steel Plant
Ispat Suraksha Puraskar for No fatal accident during the Calendar Year 2016 under Scheme-II, Group (B) (Special Steel Plant).
Ispat Suraksha Puraskar for No fatal accident involving Contract Labour during the Calendar Year 2016 under Scheme-IV Group (B) (Special Steel Plant).
National Award for the Empowerment of Persons with Disabilities-2016. (Best Employee with Disabilities under Hearing Impairment Category) from Honble President of India on 03.12.2016 at Vigyan Bhawan, New Delhi.
Raw Materials Division
8 Quality Circle Teams won awards (5 Par Excellence and 3 Excellence) from QCFI during their 30th National Convention on Quality Concepts.
Research & Development Centre for Iron & Steel
National G-cube (Good Green Governance) Award 2016 at Delhi on Earth Day, 22nd April, 2016.
E. ENVIRONMENT MANAGEMENT
Your Company is commited to conduct operations in an environmentally responsible manner to comply with applicable legal and other requirements related to the environmental aspects. The environmental vision of the Company is drawn from the tenets of the Policy which not only stresses on the need to remain in compliance but also to strive to go beyond, address stakeholder concerns, and communicate Companys environmental philosophy to all the stake holders.
Improvement in Emissions and Discharges
Concerted efforts have been put over the last few years with a view to conduct various operations in an environment friendly manner. These have resulted in reduction of emissions and discharge levels, increase in utilization of solid wastes and green cover. The Plants are effectively maintaining the air pollution control devices and regularly up-grading them in order to maintain the norms which are becoming stringent day by day. Through continuous efforts, the specific Particulate Matter (PM) emission load from the major stacks has reduced by more than 12% in the last five years. Moreover, as a part of the on-going expansion cum modernisation projects, state of the art technologies are being installed to further bring down the pollution level and CO2 emission. During the last five years, the specific CO2 emission has been reduced by more than 5%.
Water pollution level at the Steel Plants are taken care by effective utilisation of the installed Effluent Treatment Plants (ETPs) at various shops, rejuvenation of the existing water re-circulation systems and recycling of used water for other operational purposes. The treated effluent from the ETPs, are then let out through the outfalls outside the Plant boundary only after meeting the stipulated
norms of effluent discharge. The specific effluent load of the discharges have reduced by more than 21% in the last five years. The quality of discharges through the outfalls has remained well within the stipulated norms at all the Plants.
Major Pollution Control facilities installed during the year
Secondary emission control facility, equipped with dog house and ESPs for new converter (#3) at SMS-2 of RSP
Comprehensive Effluent Treatment Plant at the existing Hot Strip Mill of RSP
Primary emission control facility with Converter#5 of SMS-1 at RSP
a. Use of Weathered LD Slag as Rail Track Ballast
The physical properties of Weathered LD Slag (WLD Slag) meet the specification required for stone ballast for use as rail track ballast. In response to a proposal by the Company, South Eastern Railway (SER) has agreed to conduct a field trial at the Bokaro Rail Yard with the WLD Slag from BSL. Field trial in association with SER has started from June 2015, at Ispat Nagar Railway Yard, Bokaro. Inspections of the track parameters are being carried out jointly by the representatives of the SER and SAIL, on monthly basis, which shall continue for a total period of about two years.
b. Bio-sequestration of CO2
Job assigned to M/s. Tropical Forest Research Institute, as the sequestration partner for the project which is being implemented at RSP The following activities have been completed till the Financial Year 2016 -17:
Vegetation survey, identification of high carbon sequestering species, training, development of nursery at site.
Submission of reports for Biodiversity, Soil Organic Carbon, Soil Characterisation and on quantification of existing total carbon stock in vegetation, deadwood and litter.
Scheduled completion of the project is by March 2019.
Environmental Management System linked with ISO-14001:2004
Environmental Management System (EMS) linked to ISO-14001 is a set of processes and practices that enable an organization to reduce its environmental impacts and increase its operating efficiency. Implementation of EMS has helped the Plants and Mines to ensure that their performance remain within the regulatory requirements.
During the Financial Year 2016-17, implementation of EMS-ISO-14001:2004 was completed at the CMO Warehouses at Bangalore and Bokaro.
Sustainable Development Projects
Eco-restoration of mined out areas: As a part of the on-going Sustainable Development Project on long term maintenance of ecologically restored 250 acre Limestone mined out area and 200 acre water body of mine void at PLDQ, Purnapani, more than 10,000 saplings of different native plant species and more than 2000 saplings of medicinal plants were planted during the year.
Training was provided to around 100 villagers (mostly from tribal community) from Purnapani and neighbouring villages on practicing of silviculture, apiculture, pisciculture, etc.
Your Company realizes the role of plantation in overall environmental management initiatives. It is a well-known fact that plants play an important role in the eco system and function as a carbon sink. Extensive afforestation programme has been religiously followed in all the Plants and Mines over the past few decades. Around 2.10 lakhs saplings were planted in and around SAIL Plant and Mines during the year 2016-17.
Other Environmental Efforts
Your Company observed January 2017 as Water Conservation Month, with the objective to reduce water consumption by 25%, through various awareness programmes and workshops.
Corporate Sustainability Report, 2015-16, in accordance with core option of GRIs G4 Guidelines has been published through in-house resources and has been up-loaded on the website of the Company.
For the first time a third party compliance audit for environmental performance was conducted at BSP The consultant M/s. Bhagvati Ana Labs Pvt. Ltd. Hyderabad (a Bureau Veritas Group Company), a NABET accredited agency, has submitted the report within the schedule time.
F. STRATEGIC INITIATIVES OF THE COMPANY
Your Company has adopted a multi-pronged approach that includes organic growth, brown-field projects, technology leadership through strategic alliances, ensuring raw material security by developing new mines, diversifying in allied areas, etc. In line with the above approach, SAIL has formed Joint Venture Companies in different areas viz. power generation, rail wagon manufacturing, slag cement production, securing coking coal supplies from indigenous as well as imported sources, etc. New initiatives are currently being explored in areas such as outsourcing of power distribution and educational facilities in SAIL townships, forged roll manufacturing, etc. The status of Strategic Initiatives taken by your Company in the recent past includes the following:
SAIL has undertaken a company-wide transformational and turnaround programme, "SAIL Uday", supported by M/s. Boston Consulting Group (BCG), one of the top global consulting firm, covering improvements for all functions in the Plants and Units, while reviewing and sharpening our business strategy and processes. BCG shall study the present health of the Company and suggest suitable measures for its turnaround. The "SAIL Uday" initiative is expected to drive the Company towards profitability as well as build for sustained market leadership.
Disinvestment of SAIL Plants:The Cabinet Committee on Economic Affairs (CCEA) in its meeting held on 27.10.2016 has in-principle decided for strategic disinvestment of Alloy Steels Plant (ASP), Durgapur; Visvesvaraya Iron and Steel Plant (VISP), Bhadrawati; and Salem Steel Plant (SSP), Salem. The process is being carried out with the help of Advisors (Transaction Advisor, Legal Advisor and Asset Valuer).
Development of Rowghat - Jagdalpur Rail Corridor in the State of Chhattisgarh:With the aim of bringing about greater socio-economic development of the backward areas of Bastar region in Chhattisgarh and to further the industrial progress and mining activities of the region, an MOU was signed amongst SAIL, NMDC Ltd., IRCON International Ltd. and Government of Chhattisgarh, in May 2015 for development of a rail corridor from Rowghat to Jagdalpur. This rail corridor shall be used for both freight and passenger services in the Southern part of Chhattisgarh. A new Joint Venture Company under the name "Bastar Railway Private Limited" has been incorporated in May, 2016. The survey work & feasibility study for Railway line is being undertaken by IRCON.
Rail Transportation:A Joint Venture Company(JVC) between SAIL and RITES viz. "M/s. SAIL RITES Bengal Wagon Industry Pvt. Ltd. (SRBWIPL)" has been formed for manufacture and rehabilitation of railway wagons. The JVC has commenced commercial operations at its factory at Kulti, West Bengal and Orders from Railways are being executed.
JV with ArcelorMittal for production of automotive steel:In line with Make in India programme of Govt. of India, SAIL and ArcelorMittal signed an MOU in May, 2015 to explore the possibility of setting up an automotive steel manufacturing facility under a Joint Venture (JV), in India. The proposed JV will construct a state-of-the-art Cold Rolling Mill (CRM) and other downstream finishing facilities in India that will offer technologically advanced steel products to Indias rapidly growing automotive sector. Joint Task Force of SAIL and ArcelorMittal is working on feasibility study, location of unit and business model for the alliance. Based on the outcome of Joint Study, definitive agreements for setting up the JV Company shall be entered into.
Ultra Mega Steel Project:With the aim to develop large capacity mega steel projects in the Country, which would help India in achieving the capacity growth of 300 million tonnes of crude steel, Ministry of Steel has evolved a concept of developing Ultra Mega Steel Plants. SAIL is participating for setting up of an Ultra Mega Steel Plant of capacity (3+3) or (4+2) MTPA (million tonnes per annum) in Bastar, Chhattisgarh. An MoU to this effect was signed amongst SAIL, NMDC, Ministry of Steel and Government of Chhattisgarh in May, 2015, at Dantewada in the presence of Honble Prime Minister. New Joint Venture Companies for Steel SPV and Mining SPV have been formed. MECON has submitted a report for probable sites for the steel plant. Activities related to land acquisition, land development, etc. would be initiated after the iron ore mine is leased to the Mining SPV by the State Government.
Business Excellence Initiatives
SAIL has adopted European Foundation of Quality Management (EFQM) Model which is implemented in India through CII-EXIM Bank Award for Business Excellence. BSP has been awarded the PRIZE (Score of 600+) consecutively for the second year. Amongst PSUs, BSP is only the second PSU ever to be awarded the Prize. It is also the only PSU to receive the PRIZE twice. In steel arena, BSP has been the only steel maker ever to have achieved this coveted distinction twice in a row.
Total Quality Management (TQM)
Most of SAIL Plants/Units of your Company are certified to ISO 9000, ISO 14000, OHSAS 18000 and SA 8000 Management Systems. DSP & BSL have also implemented ISO 50000 (Energy Management System). In addition to other Management Systems, DSP, BSL & RDCIS have also implemented ISO 270000 (Information Security System). Following Certifications were achieved during 2016-17:
BSL - ISO : 27000 ISMS certification.
RSP - New Plate Mill certified to ISO 9000 QMS.
The Certification Agencies for four Management Systems i.e. ISO 9000, ISO 14000, OHSAS 18000 & SA 8000 were empanelled in 2013 for three years for first time. The system resulted in reduction in cost, reduction in audit man- days, ease of operation in engaging Certification Agencies, improved quality of audits and reduced administrative hassles. Second cycle of empanelment for three years has been completed with an extended scope which includes Management System related to training, in addition to the Certification for the Management Systems mentioned above. With a view to enhance awareness of Business Excellence Initiatives, sharing of Knowledge and Best Practices 3rd Annual e-BE Journal was prepared and uploaded on Portal. The other ongoing initiatives across organisation are Quality Circles, 5-S, Six Sigma and TPM implementation.
IT Related Initiative
Your Company has embarked upon various Information Technology (IT) initiatives, duly aligned with its business goals and vision to maintain its competitive position in the marketplace.
Through Enterprise Resource Planning (ERP), the best global practices in all major functions like procurement, sales and distribution, production, finance, etc. have been implemented at 4 Integrated Steel Plants i.e. BSP DSP BSL & RSP and Central Marketing Organization. ERP implementation at IISCO Steel Plant and at Corporate Office for SAIL wide data consolidation through integration of all Plants/Units is in progress. Better market reach and transparency has been achieved through Supplier Relation Management (SRM)/ e-Procurement. SAIL has also been able to connect with customers through Customer Relationship Management. Seamless integration of IT driven automation applications has led to the evolution of an organisation-wide information backbone with better control and faster execution of various processes.
Production data has its roots in the strong foundation of Manufacturing Execution Systems (MES) which has benefitted SAIL in achieving the market expectations by making the production and the associated processes cost, quality and delivery efficient.
Various steps have been taken up to promote Digital India Initiative and systems are being upgraded to maximize paperless/cashless transactions in business/ employee welfare areas. As a step forward, various mobile applications are also being developed.
Utmost care is being taken for internal financial control for protection and security of data & information. To ensure data security, steps have been taken at all Plants/Units for Information Security Management System (ISMS):ISO certification.
For better face to face discussions and reduction in tour & travel expenses, existing Video Conference system has been upgraded to High Definition System along-with strengthening network bandwidth connecting all Plants & Units of the Company.
Your Company recognizing the need for continuous efforts required for brand building and maintaining streamlined internal and external communications, undertook various new and innovative efforts during 2016-17.
Your Company actively participated in a number of exhibitions & fairs including India Steel Expo, BRICS Summit, Vibrant Gujarat, India Maritime Summit, India International Trade Fair, CSR Fair, etc. Also, 2017 marks "70 years of Indo Russia Friendship" and in this regard, SAIL took part in the India Sourcing Fair which was held in St. Petersburg. These events saw massive participation of senior dignitaries of the Government of India, public & private sector, and industrial participants from around the globe. Brand building exercises also included a number of initiatives to connect with stakeholders through news, web, phone alerts, media features, daily news summaries, etc.
Advertising in different media formats including print, outdoor, television, mobile and internet has been a major focus of corporate communication activities at SAIL. In line with your Companys strategy, SAILs advertising and visibility efforts, across different formats, highlight use of SAIL steel in projects of national importance apart from showcasing the core features of SAILs products, which stand for quality, durability, endurance, dependability and nation building.
G. VIGILANCE ACTIVITIES
The objective of SAIL Vigilance is to facilitate an environment enabling people to work with integrity, efficiency and in a transparent manner, upholding highest ethical standards for the organization. To achieve this objective, the Vigilance Department carries out preventive, proactive and punitive actions with greater emphasis in the preventive and proactive functions. Following activities were undertaken during the Financial Year 2016-17:
To increase vigilance awareness amongst employees, vigilance awareness sessions and workshops were regularly held at the various Plants and Units. A total of 143 workshops involving 2938 participants were organized for enhancing Vigilance Awareness on Whistle Blower Policy, Purchase/ Contract procedures, RTI Act, Conduct & Discipline Rules, System and Procedures followed in SAIL, etc.
Periodic surprise checks including Joint Checks were conducted regularly in vulnerable areas of the Company. A total of 2531 periodic checks including file scrutiny and Joint Checks were conducted at different Plants / Units. A saving of approx. 23.81 crores accrued from the preventive vigilance activities mainly on account of these surprise checks.
Vigilance provides vital inputs to the operating authorities for improving the prevailing systems for bringing about more transparency. Accordingly, eight major System Improvement Projects (SIPs) were undertaken at different Plants/Units of SAIL.
19 cases were taken up for Intensive Examination at different Plants / Units. During these Intensive Examinations, high value procurement / contracts are scrutinized comprehensively and necessary recommendations are forwarded to concerned departments for implementing suggestions for improvement.
As per the Guidelines of Central Vigilance Commission, Vigilance Awareness Week was observed in SAIL during 31st October to 5th November, 2016. On the opening day i.e. 31st October 2016, Pledge was administered to the employees by Chairman, SAIL and CVO, SAIL at Corporate Office and by respective Chief Executives at Plants / Units. During the week, a booklet on "Preventive Vigilance- Dos & Donts" and 16th edition of "Inspiration", the in-house journal of SAIL Vigilance were released. Various events including talk by eminent personalities, essay/ debate/quiz competitions, etc. for employees/ families, interaction with vendors/contractors were also organized across SAIL. In addition, as an outreach measure, essay/debate/poster competitions were organised amongst students of various schools / colleges located at various townships and the cities like Delhi, Kolkata, Chennai, etc. Events like Walkathon / March against Corruption were organised at DSP Durgapur & VISL, Bhadrawati, wherein general public, students, NGOs also participated. Detailed report on observance of Vigilance Awareness Week- 2016 has been sent to CVC.
The following three thrust areas were identified by SAIL Vigilance:
i) Implementation of e-procurement in Contract Cell (Works & Nonworks) including Township Contracts.
ii) Installation of CCTV cameras at sensitive areas.
iii) Surveillance in the areas of receipt, sampling & testing of high value raw materials.
With a view to introduce analytics in the areas of procurement & contracting, in order to generate exception alerts and red flags for corrective action / system improvements, Business Intelligence (BI) Modules have been developed in the existing SAP/ERP system in Integrated Steel Plants and Central Marketing Organisation.
A Vendors Meet was organized on "Success through Synergy" at New Delhi on 16th July, 2016. The programme was chaired by Chairman, SAIL where IEMs of SAIL, CVO SAIL and Functional Directors of SAIL were present. Around 33 senior Management Executives from global / indigenous Vendors for Projects and Corporate Material Management Group attended the programme.
Certain vulnerable points were identified in the Plants/Units such as weigh bridges, dispatch and unloading points, entry and exit points for goods, places of sampling and chemical analysis of received materials, etc., on the advice of SAIL Vigilance. CCTV and allied data recording systems have been installed at these places for monitoring and surveillance, which would help in preventing fraudulent activities at the above sensitive areas.
It has been decided to introduce GPRS/GPS system for monitoring the movement of tippers /dumpers which are to be used by contractors for transportation of Iron Ore to railway sidings which are at far-away locations. The fleet monitoring system has been introduced in Kalta Iron Ore Mines and is being extended to other mines.
Inspiration- Prerna, an in-house publication of SAIL Vigilance is being published regularly. The above publication contains case studies, articles from eminent personalities, quiz on policy matters, etc. to enhance awareness of the readers.
The Company has adopted Vigil Mechanism for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour. All employees of the Company and Directors on the Board of the Company are covered under this Mechanism. This Mechanism has been established for employees to report concerns about unethical behaviour, actual or suspected fraud or violation of Code of Conduct. It also provides for adequate safeguards against the victimization of employees who avail the Mechanism and allows direct access to the Chairperson of the Audit Committee in exceptional cases.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As per the SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis Report covering the performance and outlook of the Company is attached and forms part of the Annual Report.
The Statutory Auditors Report on the Accounts of the Company for the Financial Year ended 31st March, 2017 along with Managements replies thereon is placed at Annexure-I. The Comments of Comptroller and Auditor General of India (C&AG) on the accounts of the Company for the Financial Year ended 31st March, 2017 under Section 143(6) of the Companies Act, 2013 and the Managements replies thereto are placed at Annexure-II.
Pursuant to the direction of the Central Government for Audit of Cost Accounts, the Company has appointed M/s. Sanjay Gupta & Associates, New Delhi, M/s. Shome & Banerjee, Kolkata and M/s. R.J. Goel & Co., New Delhi as Cost Auditor(s) for the Financial Year 2017-18.
SECRETARIAL AUDITORS REPORT
In terms of the provisions of Section 204 of the Companies Act, 2013, the Board of Directors have appointed M/s. Agarwal S. & Associates, Company Secretaries, as the Secretarial Auditor to conduct Secretarial Audit of the Company for the Financial Year ended on 31st March, 2017. Secretarial Audit Report is placed at Annexure-III.
With regard to the observation of the Secretarial Auditor, that composition of the Board of Directors of the Company was not in compliance with Regulation 17(1) of Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015 and Clause 3.1.4 of the DPE Guidelines on Corporate Governance for Central Public Enterprises, it is stated that appointment of Independent Directors on the Board of the Company is made by the Company based on nomination by Government of India. The Company has requested Ministry of Steel, Government of India for nomination of requisite number of Independent Directors on its Board.
In respect of observation regarding performance evaluation of the Directors being not carried out as per the Regulation 17(10) & 25(4) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, it is mentioned that Ministry of Corporate Affairs has vide its notification dated 5th June, 2015 has exempted Government Companies from the provisions of the Companies Act, 2013 which, inter-alia, provides that Sub Sections (2), (3) & (4) of Section 178 regarding appointment, performance evaluation and remuneration shall not apply to Directors of the Government Companies. Further, the Ministry of Corporate Affairs vide notification dated 5th July, 2017 has notified certain amendments in Schedule IV of the Companies Act, 2013 relating to Code for Independent Directors. As per the notification, the clauses relating to evaluation of performance of NonIndependent Directors, Chairperson and Board in Schedule IV have been exempted for Government Companies.
In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance and Auditors Certificate thereon form part of the Annual Report. In terms of the SEBI Regulations, the Board has laid down a Code of Conduct for all Board Members and Senior Management of the Company. The Code of Conduct has been posted on the website of the Company. All the Board Members and Senior Management Personnel have affirmed compliance with the Code.
BUSINESS RESPONSIBILITY REPORT
As per Regulation 34(2)(f) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report describing the initiatives taken by the Company from Environmental, Social and Governance perspective forms part of the Annual Report. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES IISCO-Ujjain Pipe and Foundry Company Limited, a wholly owned subsidiary of the erstwhile Indian Iron and Steel Company Limited (IISCO), was ordered to be wound up by BIFR. The Official Liquidator is continuing its liquidation process.
Your Company has four other subsidiary Companies namely, SAIL Refractory Company Limited (SRCL), SAIL Jagdishpur Power Plant Limited, SAIL Sindri Projects Limited and Chhattisgarh Mega Steel Limited. SRCL is operating the Salem Refractory Unit which was acquired by SAIL from Burn Standard Company Limited on 16th December, 2011. SAIL Jagdishpur Power Plant Limited, incorporated for setting up of Gas based power Plant at Jagdishpur and SAIL Sindri Projects Limited, incorporated for revival of Sindri Unit of Fertilizer Corporation of India Limited have not taken off. Under present situation, the objectives with which these Companies were incorporated are difficult to achieve, hence the Board of Directors of your Company has decided to close SAIL Jagadishpur Power Plant Limited and SAIL Sindri Projects Limited. Further actions for closure of these Companies are being taken. Chhattisgarh Mega Steel Limited which was incorporated as a Special Purpose Vehicle for setting up of an Ultra Mega Steel Plant of 6 Million Tonnes per annum as a green field steel project under Joint Venture is yet to commence operation.
The Annual Accounts of the subsidiary Companies and related detailed information shall be made available to the Shareholders of the holding and subsidiary companies, seeking such information at any point of time. Further, the Annual Accounts of the subsidiary companies are available for inspection by any Shareholder in the Registered Office of the Company and of the Subsidiary Companies concerned between 11 AM to 1 PM on working days. A hard copy of the details of accounts of subsidiaries shall be furnished to the shareholders on receipt of written request.
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to provisions of Section 129 (3) of the Companies Act, 2013, the duly Audited Consolidated Financial Statements are placed at Annexure-IV. The Statutory Auditors Report on the Consolidated Financial Statements along with the Managements replies thereon is placed at Annexure-V. The Comments of Comptroller and Auditor General of India (C&AG) on the Consolidated Financial Statements of the Company for the Financial Year ended 31 st March, 2017 and the Managements replies thereto are placed at Annexure-VI. Further, the statement containing salient features of the financial statements of the subsidiary, joint venture and associate companies in the prescribed Form AOC- 1 is placed at Annexure -VII.
EXTRACT OF ANNUAL RETURN
The Extract of Annual Return in Form MGT-9 as per the provisions of the Companies Act, 2013 and Rules prescribed therein is placed at Annexure-VIII.
During the year, 12 meetings of the Board of Directors of the Company were held, the details of which are given in the Corporate Governance Report forming part of the Annual Report.
The Audit Committee of the Board was initially formed by the Company in 1998. The Audit Committee has been reconstituted from time to time in terms of the SEBI Regulations and Companies Act, 1956/2013. The minutes of the Audit Committee meetings are circulated to the Board, discussed, and taken note of. The composition and other details pertaining to the Audit Committee are included in the Corporate Governance Report.
INTERNAL FINANCIAL CONTROLS (IFCs) AND ITS ADEQUACY
The Company has well established and documented policies and procedures for ensuring the orderly and efficient conduct of business, including adherence to various policies and procedures for safeguarding its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures. Further, the Company has adopted a corporate governance structure, various management processes, controls, policies and guidelines that drive the organization towards its business objective, while also satisfying various stakeholders needs. Some of your Companys robust protocols such as independent internal audit, well drafted and documented policies, guidelines, procedures, regular review by Audit Committee / Board, etc. helps in compliance of Internal Financial Controls under the Companies Act, 2013, SEBI (LODR) Regulations, 2015, etc. Your Company is commited to the highest standards of Corporate Governance where the Board is accountable to all stakeholders for reporting effectiveness of Internal Financial Controls (IFCs) and its adequacy. Corporate Governance has been carried out in accordance with the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, etc.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors state that:
(i) in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;
(ii) the Directors have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit or loss of the Company for that period;
(iii) the Directors have taken proper and sufficient care for the maintenance of adequate Accounting Records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) the Directors have prepared the Annual Accounts on a Going-Concern basis;
(v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
(vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
INDEPENDENT DIRECTORS DECLARATION
In terms of Section 149(7) of the Companies Act, 2013, necessary declaration has been given by each Independent Director stating that he/she meets the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
The details of Loans, Guarantees, Investments given during the Financial Year ended on 31st March, 2017 are given in Annexure-IX. in compliance with the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUB-SECTION (1) OF SECTION 188
All the contracts / arrangements / transactions entered by the Company during the Financial Year 2016-17, with the related parties were in the ordinary course of business and on an arms length basis. The transactions with the related parties have been disclosed in the financial statements. Therefore, particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such contract or arrangement in Form AOC-2 do not form part of the Report.
DIVIDEND DISTRIBUTION POLICY
In terms of the Regulation 43A of SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company has adopted Dividend Distribution Policy and the same is given at Annexure-X to this Report. The Policy has also been uploaded on the website of the Company www.sail.co.in.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
In accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies(Accounts) Rules, 2014, the particulars relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in Annexure-XI to this Report.
RISK MANAGEMENT POLICY
Enterprise Risk Management (ERM) is a strategic business discipline that supports the organizations objectives by addressing full spectrum of its risks and managing the combined impact of those risks as an inter-related risk portfolio. The Risk Management Policy of your Company was approved by the Board much before the same became a statutory requirement and since then, the risk management in SAIL has grown and developed in line with internal and external requirements. The Policy provides guidance for the management of the business risks across the organisation. It focuses on ensuring that the risks are identified, evaluated and mitigated within a given time frame on a regular basis.
Currently, the architecture of Enterprise Risk Management in SAIL comprises a well-designed multi-layered organization structure, with each Plant/Unit having its own perceived Risks which are under the constant monitoring by the Risk Owners / Risk Champions who frame and implement the mitigation strategy and take it to its logical conclusion. Risk Management Committee of
the Plant/Unit Chaired by the Head of the Plant /Unit periodically reviews the risks and its mitigation status and reports the same to Chief Risk Officer (CRO) of SAIL. SAIL Risk Management Committee (SRMC) oversees the Risk Management function in the Company by addressing issues pertaining to the policy formulation as well as evaluation of risk management function to assess its continuing effectiveness. Risks identified by the Risk Champion/Risk Officer are deliberated in the Risk Management Committee, escalated and draw the mitigation strategy. Roles and responsibility of Board, Audit Committee, SAIL Risk Management Committee, Risk Management Steering Committee, CRO, Risk Officer/Risk Champion related to risk management are defined under the Policy and duly approved by the Board.
CORPORATE SOCIAL RESPONSIBILITY
SAILs Social Objective is synonymous with Corporate Social Responsibility (CSR). Apart from the business of manufacturing steel, the objective of the Company is to conduct business in ways that produce social, environmental and economic benefits to the communities in which it operates. For any organization, CSR begins by being aware of the impact of its business on society. With the underlying philosophy and a credo to make a meaningful difference in peoples lives, your Company has been structuring and implementing CSR initiatives right from the inception. These efforts have seen the obscure villages, where SAIL Plants are located, turn into large industrial hubs today.
The CSR initiatives of your Company have always been undertaken in conformity to the Companies Act, 2013, Companies (Corporate Social Responsibility Policy) Rules, 2014 and DPE Guidelines on CSR & Sustainability, 2014. SAIL carries out CSR projects in and around periphery of steel townships, mines and far flung location across the Country in the thrust areas falling in line with the Schedule-VII of the Companies Act, 2013, namely, Education, providing Medical and Health Care facilities, village development, access to water facilities, infrastructural development in peripheral rural areas, environment conservation, women empowerment, assistance to people with disabilities, sustainable income generation through self help groups, promotion of sports, art, culture & heritage conservation, etc.
The details of various CSR initiatives taken by the Company alongwith the Report on CSR in prescribed format are placed at Annexure-XII. The CSR Policy of the Company is available on the website of the Company- www.sail.co.in.
Swachh Bharat Abhiyaan-Swachh Vidyalaya Abhiyaan:Your Company has been actively participating in the "Swachh Bharat Abhiyan" initiated by the Honble Prime Minister of India. Under the campaign, construction of 672 toilets in schools falling within the periphery of its Plants & Mines in the States of Chhattisgarh, West Bengal, Odisha, Jharkhand, Madhya Pradesh and Tamil Nadu; as allocated to SAIL by Ministry of HRD, had been undertaken and completed. Facilities like squatting units, urinals, washbasin and overhead water storage have also been provided.
Healthcare:SAILs extensive and specialised healthcare infrastructure provided specialized and basic healthcare to 99 lakh people living in the vicinity of its Plants and Units during the period 2011-16. In order to deliver quality healthcare at the doorsteps of the needy, regular health camps in various villages on fixed days are being organized for the people living in the periphery of Plants/Units, mines and far-flung areas. During the Financial Year 2016-17, 6,240 Health Camps have been organized benefitting over 1,25,000 villagers. 7 Mobile Medical Units (MMUs) running in the Plants peripheries have benefitted 28,000 villagers at their doorsteps.
24 exclusive Health centres at Plants/Units provided free medical care and medicines to 1,10,000 villagers during the Financial Year 2016-17.
Education:To develop the society through education, SAIL is supporting over 145 schools which are providing modern education to more than 55,000 children in the steel townships. 20 Special Schools (Kalyan & Mukul Vidyalayas) are benefitting over 3,100 BPL category students at integrated steel plant locations with facilities of free education, mid-day meals, uniform including shoes, text books, Stationary items, school bag, water bottles, etc. are running under CSR.
Your Company in association with Akshya Patra Foundation is providing midday meals to 68,000 students of over 500 Government schools in Bhilai and Rourkela.
Women Empowerment & Sustainable Income Generation:Vocational and specialised skill development training targeted towards sustainable income generation has been provided to 2,070 youth and 2,461 women of peripheral villages in areas such as Nursing, Physiotherapy, LMV Driving, Computers, Mobile repairing, Welder, Fitter & Electrician Training, Improved agriculture, Mushroom cultivation, Goatery, Poultry, Fishery, Piggery, Achar/Pappad/ Agarbati/Candle making, Screen printing, Handicrafts, Sericulture, Yarn Weaving, Tailoring, Sewing & embroidery, Gloves, Spices, Towels, Gunny- bags, Low-cost-Sanitary Napkins, Sweet Box, Soap, Smokeless chullah making, etc. 683 youths have been sponsored for ITI training at ITCs Bolani, Bargaon, Baliapur, Bokaro Pvt. ITI and Rourkela, etc. and 31 youths in Plastic Engineering through CIPET at Bokaro.
Connectivity & Water facilities in Rural Areas:Over 77.88 lakh people across 435 villages have been connected to mainstream by SAIL since its inception by constructing and repairing of roads. Over 7,940 water sources have been installed during last five years thereby enabling easy access to drinking water to 46.46 lakh people living in far-flung areas.
Environment Conservation:Maintenance of parks, water bodies & botanical gardens in its townships and plantation and maintenance of over 4 lakh trees at various locations has been undertaken.
Support to Differently Abled & Senior Citizens:Differently abled children/ people are being supported through provision of equipments like- tricycle, motorized vehicles, calipers, hearing aids, artificial limbs, etc. Your Company supports various schemes and centres at Plants under CSR like "Sneh Sampada", "Prayas"and Muskaan" at Bhilai, "Schools for blind, deaf & mentally challenged children" and Home and Hope" at Rourkela, "Ashalata Viklang Kendra" at Bokaro, various programs like "Handicapped Oriented Education Program" and "Durgapur Handicapped Happy Home" at Durgapur, "Cheshire Home" at Burnpur. Support has also been provided to NGOs working in this field like TAMANNA, Deepalaya, etc. Old age homes are being supported at different Plant townships like "Siyan Sadan" at Bhilai, Acharya Dham and Badshah at Durgapur, etc.
Sports, Art & Culture and Heritage Conservation:SAIL is regularly organizing inter-village sports tournaments, extending support to major national sports events & tournaments. Also, supporting and coaching aspiring sportsmen and women through its residential sports academies at Bokaro (football), Rourkela (Hockey) - with world class astro-turf ground, Bhilai (Atheletics for boys), Durgapur (Athletics for girls) and Kiriburu, Jharkhand (Archery). Cultural events like Chhattisgarh Lok Kala Mahotsav, Gramin Lokotsav are organised every year.
Disaster Relief:Your Company, as a responsible corporate citizen, supported the rehabilitation initiatives for the people affected by Natural Calamities, the recent being flood ravaged Jammu & Kashmir, Phylin cyclone in Odisha, Flash Floods in Uttarakhand, etc.
SARANDA Forest Development:In an effort to bring the marginalized masses of the remote forest areas to the mainstream of development, SAIL in association with Govt. of Jharkhand and Ministry of Rural Development, Govt. of India actively participated in the development process of Saranda forest, Jharkhand. SAIL provided ambulances, 7000 each of bicycles, transistors, solar lanterns and established an Integrated Development Centre (IDC) at Digha village in Saranda forest. IDC comprises of facilities like Bank, Panchayat Office, Ration shop, Telecom office, Anganwadi Centre, Meeting room, etc. for the local populace.
In an effort to align the marginalized masses, a project to promote comprehensive Water Supply and Sanitation has been initiated by Rourkela Steel Plant covering 897 households in 10 villages of Kuarmunda block. Each household is being provided potable water through a ground water source, storage tank and supply network of pipelines with 3 tap points and Sanitation unit with RCC roof on partnership model. The villagers have been mobilized and empowered for their active participation in the project. Village level committees have been formed for long-term sustenance of the project.
SAIL/Bolani Ore Mines has initiated a project to provide continuous drinking water supply and sanitation facility in the remote village of Barik Sahi (Kuni Sahi) under Bolani Panchayat connecting it with the water source: Jhinkaria Spring, on south of Bolani through a network of G.I. pipelines. All the 300 natives of Barik Sahi (Kuni Sahi), who had to travel upto 2 kms daily to fetch water from the springs, have been benefitted with this facility.
SAIL Bio-Diversity Environment Theme Park VASUNDHARA near JC Bose Avenue of DSP Township, Durgapur:The development of a 409 acres BioDiversity Environment Theme Park with a large water body and plantation of 400 varieties of trees to attract migratory birds facilitating avian diversity, propagation of rare and medicinal plants, rainwater harvesting and soil conservation for maintaining ecological balance and environmental sustainability has been carried out. The park site is enriching the environs for 75,000 natives year on year.
i. During the year, the Company has not accepted any deposits under the Companies Act, 2013.
ii. No significant or material orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and Companys operations in future. However, attention of Members is drawn to the statement on contingent liabilities in notes forming part of the Financial Statements.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Shri S.S. Mohanty ceased to be Director on superannuation from services of the Company on 30th June, 2016(A/N).
Shri Raman has been appointed as Director w.e.f. 1st July, 2016(F/N).
Dr. Atmanand and Shri J.M. Mauskar, Independent Directors have ceased to be Directors w.e.f. 18th July, 2016 on completion of their tenure.
Smt. Bharathi S. Sihag ceased to be Director w.e.f. 30th November, 2016 (A/N).
Shri Nilanjan Sanyal and Dr. Samar Singh have been appointed as Independent Directors w.e.f. 4th February, 2017.
Shri Saraswati Prasad, Additional Secretary and Financial Adviser, Ministry of Steel has been appointed as Government Nominee Director on the Board of the Company on 8th February, 2017.
Shri Binod Kumar has ceased to be Director on superannuation from services of the Company on 28th February, 2017(A/N).
Ms. Soma Mondal has been appointed as Director w.e.f. 1st March, 2017 (F/N).
Dr. N. Mohapatra has ceased to be Director on superannuation from services of the Company on 30th June, 2017(A/N).
The Board of Directors wish to place on record their appreciation for the support and value contributed by every member of the SAIL family. The Directors are thankful to the State Governments, Electricity Boards, Railways, Banks, Suppliers, Customers and Investors for their continued co-operation. The Directors also wish to acknowledge the continued support and guidance received from the different wings of the Government of India, particularly from the Ministry of Steel.
|For and on behalf of the Board of Directors|
|Place: New Delhi|
|Dated: 11th August, 2017|
The cold and windy days of January saw a series of cultural celebrations at Deepalaya as two of its babies- Deepalaya School Gole Kuan (DSGK) and Ramditti J R Narang Deepalaya (RJRND) School celebrated their Annual Day of 7th January and 14th January, 2012.
The ceremonies began in a traditional way by lighting of the lamp by the chief guests and other dignitaries present. With a pleasant nip in the air, the students exhibited the various facets of their talents with dance, drama, music and other cultural activities. It seemed like a festive celebrations as the auditorium was filled with parents who took out time from their busy schedule and gathered in a large number to support and encourage their children as they performed.
While the students of RJRND enthralled everyone with their dance moves, the students of DSGK amazed everyone as they paid tribute to the Bollywood legendaries by performing on their famous numbers.
The Chief Guest of DSGK Annual Day, Ms Virpi Salovaara-a sponsor parent, was thrilled to see the performances of the young ones. She added her gratification by saying, “I am really happy to be here and would like to congratulate the teachers, students for presenting such great performances”.
“Looking at these presentations by the students, it makes me realize that it is our responsibility to provide overall development to our children by educating them and finding out their latent talents. This can help us get a bright future”, said Mrs Asha Narang, , Chairperson, Narang Trust and Chief Guest of RJRND Annual Day.
The celebrations included an award ceremony where in the students were awarded for excelling under various heads-both academic and co-curricula. The event ended with a vote of thanks and National Anthem.