sponge iron india ltd Management discussions

SPONGE IRON INDIA LIMITED ANNUAL REPORT 2008-2009 MANAGEMENT DISCUSSION AND ANALYSIS OPERATIONS: Production during the year was only 30,489 MT, which is 51% of installed capacity. The production was low due to non-availability of good iron ore for its production needs. Your Company procured iron ore from Karnataka and Andhra Pradesh and also from NMDC Ltd and coal from Manuguru mines of M/s. Singareni Colleries Company Limited. The specific consumption of coal was 1.88 MT per tonne of sponge iron and the specific consumption of iron ore 2.87 MT per ton. MARKETING: The Company sold 25,203 MT of sponge iron during the year. The market remained good for sponge iron during the first half of the year. The Average Sales Realization (ASR), which was around Rs.17,461 per MT in the beginning of the year, rise to more than Rs.19,537 per MT in August, 2008. Thus an average ASR of Rs.15,507/- was realized during the year. PROJECT IMPLEMENTATION: No project was under taken-up by the Company during the year. SUB-MERGED ARC FURNACE: During the year, your Company made efforts to operate the Submerged Arc Furnace Plant (SAF) but could not continue due to un-economical market conditions. In accordance with the Accounting Standard-28 on impairment asset, the Company had assessed the value of the SAF based on the Valuation Report submitted by M/s. Axis Bank Ltd, the Merchant Banker appointed for Valuation of shares for the purpose of Merger of the Company with NMDC Limited. Considering, the value assessed from the said Report and no further impairment loss noticed during the year except normal depreciation. Accordingly, an amount of Rs.43.82 lakhs have been provided as normal depreciation to cover the diminution / deterioration of the asset during the year. RESEARCH & DEVELOPMENT: During the year the Company has carried out the tests on iron ores from various regions of Karnataka and based on their test results, procurement action for Iron Ore was taken. INDUSTRIAL RELATIONS: During the year Industrial Relations under review continued to remain peaceful and no single man-day was lost. Harmonious Industrial Relations were maintained during the year. MANPOWER TRAINING: During the year regular training programmes of Company were conducted to meet the requirements of the Company. Your Company also provided practical job training to the students as in the past sponsored by the following colleges: - Government Polytechnic, Kothagudem, Government Industrial Training Institute, Kothagudem (Apprentice training) and to the students of MBA and B. Tech sponsored by various institutions for preparation of project reports. MANPOWER: The Permanent Manpower position as on 31.03.2009 was as under: Male/ Non-Executives Total Female Executives Jr. Workmen Sub-total Officer Male 55 48 181 229 284 Female 1 1 18 19 20 Total 56 49 199 248 304 RESERVATION OF SC/ST/PH CANDIDATES: The Directives issued by the Government from time to time in the matter of reservations of posts for SC/ST/OBC/PH persons have been complied with by the Company. There was no backlogs of vacancies reserved for SC/ST candidates in the Non-Executive Cadres. The category-wise details of SC/ST/OBC/PHC permanent employees are furnished below: Total Reserved Categories Group No. of SC ST PHC TOTAL Employees A 56 16 2 1 19 B 49 9 3 NIL 12 C 127 23 6 3 32 D 66 8 11 NIL 19 D1 6 5 1 - 6 Total 304 61 23 4 88 ADMINISTRATION: National Integration Day, Martyrss Day, Anti-Terrorism Day, Dr. BR Ambedkars Birthday were observed and pledge was administered by the employees on the above occasions. Vigilance Awareness Week also observed as per the Government directives. Apart from the above, SIIL Foundation Day was celebrated on 31st December, 2008 and Service Medals/Mementos were awarded to employees, who have completed 25 years of service and they were suitably honored on this occasion and service medals also awarded to two employees, who have completed 10 years of service. EMPLOYEES PARTICIPATION IN MANAGEMENT: During the year, under review regular meetings were held to discuss various problems through the Committees constituted including the workers representatives. The members of the Non-recognized Trade Unions were also in various committees besides Recognized Union. As directed by the Government of India and in order to increase induction of women at various levels in the Management the women employees were also included in statutory and non-statutory committees. The Committees have functioned systematically and the suggestions made by the members were noted which resulted improvement of over all performance of the plant. SAFETY: During the year, efforts were made to take measures required for Safety and Security of workforce in all areas. A Safety Committee was constituted and National Safety Day was celebrated on 4th March in order to inculcate Safety discipline among the employees of the Company with a view to educate them and create awareness to develop safe working practices to avoid accidents. Various competitions like essay writing, elocution, songs and safety poster, painting competitions etc. were conducted on the eve of Safety Day and prizes were distributed to the winners in the competitions. The employees were given gifts on the eve of Safety Day Celebrations. Safety slogans displayed in the plant area through safety boards and wall painting to promote the safety campaign. Except one fatal accident, no other reportable accident occurred during the year. WELFARE: The Company continued its welfare measures for welfare of the employees and their families like in the past during the year. Annual games and sports were conducted to the employees and their families and prizes were awarded to the successful winners. SIIL ball badminton team has won the Zonal Level Labour Welfare games and participated in the state meet at Hyderabad. Women employees have also participated at Zonal Level games conducted by Dy. Commissioner of Labour. Annual Complete Health Check up was carried out to all the employees. Medical Scheme, Group Insurance Scheme, Personal Accident Policy for both Executives and JOs, EDLI and other Welfare Schemes were continued. PUBLIC GRIEVANCES REDRESSAL: A Committee comprising of 4 (four) Senior Officers of the Company was constituted to redress the public staff grievances relating to the Company matters. The Committee has been constantly attending to the Public Grievances. VIGILANCE: The Vigilance Department is headed by Shri N.V. Raja Shekar, IFS, Chief Vigilance Officer. The vigilance personnel of the Company had conducted surprise and regular checks during the year. The directives issued by the Central Vigilance Commission (CVC) from time to time were followed. As per the directives of CVC, Vigilance Awareness Week was celebrated and the suggestions of CVC / MOS received from time to time were implemented. RAJBHASHA IMPLEMENTATION: During the period from 01.04.2008 to 31.03.2009, 188 documents were released in bilingual form as per Section 3(3) of Official Languages Act, 1963. Hindi Salahkar Samithi meeting was convened by Ministry of Steel and Ispat Rajbhasha Shield was awarded to the Company for excellent work done in Hindi during 2006-07. All the Schemes like Learn Hindi Word, Noting & Drafting and competitions for progressive use of Hindi are continued. Apart from the above all the provisions mentioned in the Annual Programmes issued by the Department of Official Language, Ministry of Home Affairs was also kept in progress. Subjects of 153 files were prepared in bilingual form for progressive use of Hindi. Despatch Section and Documentation Centre were advised to act as check point for the purpose of correspondence. Employees in different Sections specified to work in Hindi were advised to use Hindi terminology in official transaction. All the members of Official Language Implementation Committee were advised to improve the official transactions in Hindi to fulfill the assurance given to Parliamentary Committee on Official Language. All Sectional Heads were informed to prepare the forms available with them in bilingual. An examination was organized on 25.06.2008 under the Scheme of Learn Hindi Word. Prizes along with Certificates were declared and distributed among the students of New Indira Priyadarshini School and employees and for other items such as story writing, poems etc. in connection with 15th August, 2008. Independence Day Celebrations, Hindi Workshops were organized for giving training to employees in Hindi and Certificates were also distributed to the participants. Hindi Day was celebrated on 15.09.2008 and prizes along with Certificates were distributed among the winners of Competitions organized for employees at Plant Office and Regd. Office. Shri C.V. Ramana Rao, Sr. Manager (RM) was nominated to participate in the All India Official Language Technical Seminar organized by NMDC Ltd, Bacheli on 27.9.2008. Hindi songs Competition was organized and prizes were distributed among the winners on 26th January, 2009 on the eve of Republic Day Celebrations. MERGER: During the year under review your company had continued its efforts required to complete merger of SIIL with NMDC Limited. The total process is likely to be completed during the current financial year. After merger there is a proposal of expansion of the existing Sponge Iron plant at Paloncha by NMDC to increase its capacity from 60,000 TPY to 2,60,000 TPY.