Steel Authority of India Limited (SAIL) Earnings Call Transcript & Summary

A very good morning to the members of Steel Authority of India Limited. I welcome you all to this 52nd Annual General Meeting. Before we start off with the proceedings, I will request the members to kindly raise themselves for the National Anthem. Thank you very much. Starting the proceedings, the members we informed that in compliance with the circulars issued by the Ministry of [indiscernible] through the video conferencing and other audio visual means, pursuant to Article 62 of the Articles of Association of the company, Chairman SAIL shall assume the Chair of the AGM. Now I request Shri. Amarendu Prakash, Chairman SAIL to assume the Chair of this AGM. Thank you, sir. Chairman sir, the quorum of the meeting is complete. Pursuant to the provisions of the Companies Act 2013 and the circulars issued by the MCA, notice has been mailed within the prescribed time limit to all the members whose e-mail ID was available with us. Chairman sir, with your permission, we may take the notice as read.

Yes, the meeting is in order. We can take the notice as read. SAIL, thanks you for joining the meeting virtually. Before we commence with the regular business in the AGM, I request the company secretary to inform our members about the general advisory or instructions with respect to this AGM.

Since the meeting is being -- thank you, sir. Since the meeting is being held through the VC, in accordance with the applicable circulars issued by MCA and SEBI, physical presence of the members have been dispensed off with. Therefore, the facility for appointing a proxy is not available. It is an advisory for all the members who have joined this meeting virtually that the members by default are placed on mute mode by the host to avoid any kind of background disturbance and to ensure smooth and seamless conduct of this meeting. Once the name of the speaker is called out by the Chairman, the person shall be unmuted by the host to enable him or her to speak. Before speaking, the shareholder is requested to click on its audio and video button icon appearing on the screen to switch it on. If for some reason, the shareholder is not able to join through VC, he or she can speak through audio mode. Members are advised that while speaking, they may use earphones so that they are clearly audible -- clearly audible, any noise in the background is minimized. Ensure no other background applications are running in the laptop, mobile, Wi-Fi connection -- Wi-Fi is not connected to any other device, and the place is well illuminated. Broadband connection of good speed is suggested. Each speaker has been allotted time slot of 2 to 3 minutes to share his or her views. If there is any network or a connectivity problem at the speaker's end, the host will mute the speaker and the next speaker will be invited to speak. The earlier speaker having connectivity issue will be given a chance after all the registered speakers have been given a chance to speak. In case the connectivity network issue or any other assistance is needed, the member may seek the assistance through helpline number mentioned in the notice of the AGM. Thank you, sir. I'll now request you to address the members.

Thank you, Bala. Dear shareholders, good morning, [Foreign Language]. Me, Amarendu Prakash, Chairman, I would like to introduce the Board of Directors to you. On my right, Mr. V.S. Chakravarthy, Director Commercial; then Mr. K.K. Singh, Director of Personnel; Shri. A.K. Singh, Director Technical Project and Raw Materials. On my left, Mr. M.V. Balakrishnan, ED Finance and Company Secretary; and Mr. A.K. Tulsiani, Director of Finance. Now I'll just request the directors who have joined on VC to introduce themselves one by one. Anirban ji.

[Foreign Language] everyone. I'm Anirban Dasgupta, Director In-Charge, Bhilai Steel Plant.

Shri. A.K. Tripathy.

I'm Ashok Kumar Tripathy, Independent Director.

Shri. Sarda.

[Foreign Language]. I'm Kanhaiya Sarda, Independent Director, SAIL.

Raju sir?

I'm Kasi Viswanatha Raju, Independent Director; Chairman, Audit Committee, joining through VC from Visakhapatnam.

Dr. Bhati? Probably on mute. We have Mr. Atanu Bhowmick, Director In-Charge Rourkela Steel Plant is traveling. So he's not present currently. B.P. Singh saab?

I am B.P. Singh, Director In-Charge Burnpur and Durgapur Steel Plant, I'm joining through VC from Durgapur. Thank you.

Dr. Jayaprasad is here -- we move on to see B.K. Tiwari, Director In-Charge of Bokaro Steel Plant. Then we have the President of India Nominee, Shri Gopalakrishnan Ganesan, Deputy Secretary Minister of Steel is also attending the meeting through VC. Gopal, if you are there, if you can introduce yourself -- okay. He is on mute. Mr. Gopalakrishnan Ganesan, Deputy Secretary Ministry of Steel is the President of India Nominee, who is attending this meeting through VC. Ms. Sukriti Likhi and Shri. Abhijit Narendra, Government of India Nominee on SAIL Board could not attend the AGM due to prior engagements. The representatives of joint secretary auditors and the secretarial auditors are also attending this meeting. Once again, I welcome all shareholders to the 52nd Annual General Meeting of your company. I hope and trust that you and your families are well and in high spirits. It is my privilege to share our achievements for the financial year '23-'24. And also, I'll try to outline a vision for the future that we are planning for the company. The past year, as you know, for the steel industry has been -- has seen various upheavals as well as good times and also challenges. This is primarily marked by geopolitical tensions. We have seen over the past 3 years, multiple countries at war, different relationships. So because of that, the world scenario has been a little volatile. As we see the world economy across the world, interest rates have been high and demands have fluctuated. Still, when we look at the Indian steel market, it has demonstrated remarkable resilience, while the whole world steel market, steel consumption grew by less than 1%, you know that in India, the demand for steel has grown by 13% during the financial year. This achievement has happened because of the investment which has come into manufacturing, infrastructure, construction engineering and transportation. While India looks for becoming the third largest economy in the world, we all are confident that this journey has just started and is going to continue for the times to come. That projects a very positive picture for the steel industry as far as demand growth in India is concerned. However, as a company, we also have to be aware that there can be headwinds, there can be challenges. This is a volatile world. So the supply chains of the company will have to be protected. They have to be resilient. Your company is working very proactively on making sure that the logistics and the supply chain remain secured. At SAIL, we are fully committed to the vision of the country and becoming a Viksit Bharat by 2047. In line with this, we are prioritizing to meet the local demand as well as expanding capacity to make sure that future growth of the demand is met in India from Indian sources. I'm happy to inform you, 7 years ago, when the per capita steel consumption in India was merely around 50 kg per capita, the last year, the calculation said that per capita consumption has grown to almost 95 kg per capita. This kind of a growth in merely 7 years has given us the confidence that in line with national steel policy of India, which envisages 300 million tonne production capacity built into India by 2030. It's not just a dream, but will very soon become a reality. All the major steelmakers in India are expanding. Similarly, your company, SAIL is also actively pursuing ambitious capacity enhancement schemes. During my talk today, in a while, I'll try to give you a flavor of what we are planning, what your company is trying to do on this field. However, I'd like to start with the fact that no company, no organization is bigger than the people who are associated with the company, be it the employees working in the company, be it the directors on the Board, be it all you shareholders who have posed your faith in this company, also various agencies with the Government of India, Ministry of Steel, the financial institutions, the media, our vendors who supply material to us, our customers who have been so loyal to us over so many years and also as we expand, new customers who we are getting into our fold, all of these people are important to this company. I'd just like to mention this that for our company, the #1 resource and the #1 stakeholder in this company are people. And we very firmly believe that taking steps to keep people motivated to ensure that all employees are capable and delivered to the best of their ability are going to be the top-most strategy for our company. If I reflect on our performance over the past year and looking ahead, I firmly believe that we can actually aspire to be #1, and when we say #1, #1 in any job that we take up. In your company, I'm happy to inform you that all our employees are motivated whatever job is assigned to them and whatever job they can think of. When they perform that job, they aspire to be #1 in their area, be it a small job or be it a big job. Your company is dedicated to maximizing capacity utilization and delivering exceptional value to the customers and also all stakeholders. For this, last year in '23-'24, we had taken certain strategic interventions. We have said that we will try to maximize our capacity utilization and also we will ensure that customer experience is enhanced to a greater level. I'm pleased to highlight some of the key achievements on this strategy in the financial year '23-'24. Your company yet again achieved a record sales turnover of INR 104,545 crores. This is the third consecutive year when your company has surpassed the revenue level of more than INR 1 lakh crore. Our integrated steel plants have recorded their highest ever production levels leading to an impressive crude steel capacity utilization of 98.6%. All the major steel plants together have delivered -- have been operating at 98.6% capacity utilization, which in the steel industry is wonderful, a very great benchmark. We have dynamically assessed customer demand and our product mix, we have been changing continuously to meet the customers' aspirations and also to handle the challenges of market volatility. The company has set new benchmarks. We have produced 19.24 million tonnes of crude steel and 18.44 million tonnes of saleable steel last year. This is a growth of 5% to 7% over the year '22-'23, which was already the best ever year for SAIL. In '23-'24, we broke our best-ever record by another 5% to 7%. I'd like to inform the house that for the next year, that is '24-'25, your company has decided to take a target of breaking this record once more, and we have a target of achieving 8% growth over the performance in '23-'24. If we look at our cost elements, any company can grow not just by increasing volume and by increasing revenue, but we keep a very careful watch on the margins that we achieve. To this end, our plants have excelled in all the key techno-economic parameters. You know that for steel industry, main parameters are the coke rate, cold dust injection rates and blast furnace productivity, which determine the cost of steel that we produce. In this area, all our plants have achieved best-ever performance. And I promise you, in the years to come, we are moving towards national and international benchmarks. Your company is also fortunate to have captive iron ore and coal mines, I'm happy to inform you that our captive iron ore mines have produced 34.34 million tonnes of iron ore, which was -- which has met the complete demand of the country -- of the company for producing steel. Also, we have coal and flux mines, which are working and contributing towards self-sufficiency. I'm very proud to inform all members that your company has developed 25 new steel products in the year '23-'24. Its portfolio is expanding and value-added steel is becoming a norm in the company. We have developed steel in forging quality, automotive components for oil and gas pipelines and also supplied steel products to all the major infrastructure projects of national importance. I'm also very happy to inform the members that the company's branded TMT bars that is SAIL SeQR as we call it, and which is supposed to be an earthquake-resistant steel have seen remarkable growth. We have taken a strategy of increasing our presence in the retail market and getting down to the last customer on the ground. In the last year, our sales of TMT bars have increased to 8.44 lakh tonnes. This is more than 50% growth year-on-year for this product. Our sales network -- distribution network is now 5,200 dealers and distributors nationwide. The company commits to you that we are going to increase this further. As we can see, this 8.44 lakh tonnes of TMT bar sales in retail market is about 30% of the total TMT bar sales that has happened. In '24-'25, your company has taken a target of achieving 50% of its sales of TMT bars in the retail market. And in the next year, after '24-'25, we aim to target 70% of our products should be sold in the retail market. This strategically will give us a reach right down to the last customer, last user on the ground. At the same time, this will also improve the revenue that we can earn from this channel and the margins that we make from this channel. This particular market we are very keen on. And I assure you that all efforts are being made through our marketing team and the plant teams to achieve these targets. In the first 5 months that have passed in this year, we already see our sales have increased to 50%, in line with our targets. Your company was also recognized as the top CPSE buyer on government e-marketplace. GeM, as we call it, as you know, Government of India has come up with a GeM portal through which all the sourcing of inputs can be taken. Your company for financial year '22-'23 was the best CPSE for doing business on GeM portals. Also, our plants and different shops have been winning awards at national and international level. One of your cold rolling mill at Bokaro Steel brand received the first price in the CII production awards. SAIL was honored with the Golden Peacock Environment Management Award and also the McGibony Institutional Award for CSR activities. I'd like to assure all our stakeholders and all members here that SAIL does not just produce steel, but we are also a company which builds this nation. So our participation in the environment activities, our participation in building FX into our people, our participation in CSR in and around our plants are a cornerstone of our achievement, and I assure all members that your company is doing exceedingly well on this front. As all members are aware and I just mentioned that your company plans to grow as the Indian steel market, today, the capacity is around 165 million tonnes. And next 6 to 7 years, Indian steel making capacity is targeted to be at 300 million tonnes. That will be almost a growth of 80%. In similar lines, your company has taken a target of growing from 20 million tonnes per annum capacity to 36 million tonnes per annum capacity by 2030-'31. So in the next 7 years, you will see various plans by the company to expand its capacity from 20 million tonnes to 36 million tonnes. On this journey, I'm happy to inform you that projects of almost 8 million tonnes have already been put into pipeline. That means the detailed project reports are ready, the Board has seen it and approved it. And for the 7 million tonnes plants are getting ready, and we are actively engaged with the consultants to create the detailed project reports, which we will be doing. While we are growing organically, that is by putting up our own plants, I'd like to inform all members that your company is also keeping its eyes open look for any opportunities for inorganic growth. If we see an opportunity for some company, which can be taken over, which can be managed by SAIL, we'll keep our eyes open and sincerely explore it. Our target is to grow the size of the company to a level wherein we retain our market share in the Indian steel industry at the level of 13% to 14% as we are today. As the Indian market grows, we believe there will be opportunities, and we'll keep our eyes open and work continuously towards that. While I talked about capacity expansion, which will lead to top line growth, we are acutely aware that bottom line growth is just as important to a company of our size and to all our stakeholders and investors. I can assure you that during the past year in '23-'24, we have taken various steps to improve the bottom line of the company. As I just mentioned, one area of improving the bottom line is to focus on the techno-economic parameters of the plants. Last year, our plants have done well in techno-economic areas, and they are slowly moving towards achieving the national benchmarks and targeting international benchmarks in future. However, apart from the techno-economic parameters which are being worked on in the plants, one of the key strategic areas that we have taken, we know that coal is one of the major cost items for sale for any steel plant. Last year, the cost of coal was almost 40% to 45% of the cost of the -- total cost of operations of the business. So our sourcing team for coal has worked on strategies, and they're already making progress. As you know, almost 85% of the coal requirement of the company is imported. Our dependence earlier was on a few countries like Australia, America, Indonesia and Mozambique. Last year, we expanded to start sourcing from Russia. And also, we are actively looking at increasing our volumes from Mozambique. We have just sent a team and the team is exploring sourcing from Mongolia. So as you can see, through these measures, idea is to geographically diverse sources should be tapped. And by doing this, we can see that we can bring down the purchase price of coal. On a rough estimate, I can say by expanding the geography from which we are sourcing the coal, we almost can add INR 500 crores to INR 1,000 crores per annum to the bottom line of the company. Last year, we also took up -- awarded a contract for operationalizing one of the coal mines in India which -- of a capacity of almost 4 million tonnes. In the next 2 years, as this project gets completed, you will see almost 1.8 million tonnes of coal getting sourced, which will be captive to us and give us a huge advantage in terms of cost of coal. We have -- we are also working on our mines, iron ore mines. As you know, improving the quality of iron ore, that is the Fe percentage content in the iron ore leads to huge savings in terms of productivity and also the coal consumption which happens. Last year, we have taken a strategic target of improving the Fe content of our iron ore by 1%, which should give us a saving of almost 2% in our cost. I'm happy to inform you that during the 8 months that have passed, our mines are achieving a 0.5% improvement in Fe content in our iron ore. So as you can see, apart from growing in volume, your company is very proactively working on making sure that the input material sourcing is done judiciously and cost savings are achieved there. Another challenge that the steel industry around the world faces today, and I'm sure all members are acutely aware of this. The whole world is talking about climate change today. And so decarbonization has become one of the top priorities across the world, especially in the steel industry, which today contributes about 12% of the total carbon emission in India. The target has been taken by the country to achieve net zero emission of the country by 2070. Your company has prepared a plan to cut down the carbon emission in our plants by almost 18% during the next 6 months. And to this end, a detailed road map, plant-wise road map has been created. We are currently at about 2.55 tonnes of CO2 per tonne of steel produced. We want to cut it down to 2.19 tonnes of CO2 per tonne of steel produced. To this end, many efficiency projects and also many best available technology projects are being taken across all plants. Your company last year joined leadership for environment transition, industry transition which is a group of Sweden -- Swedish Prime Minister and Indian Prime Minister had formed this group 3 years ago. SAIL is proud to have become a member of LeadIT last year. Also, we are participating in all the international forums where we are talking about decarbonization, and I want to assure all members that your company will be at the forefront of handling climate change in future. In line with this commitment, if we see last year, your company planted 2.5 lakh trees across our company. Overall, if you see in the history of SAIL, we have already planted more than 2.2 crores trees everywhere. An MOU has been signed with the Institute of Forest Productivity for equal restoration of our degraded ecosystems. I'm sure that such initiatives will keep your company as a responsible corporate citizen and contribute towards handling climate change across the world. The company also is committed to corporate governance. We have got almost 54,000 employees today. In the last year, we decided to participate in an activity called a Great Place to Work. As you all know, this is an agency which rates the companies about whether how the employees feel about the company, whether they like to work for the company. I'm happy to inform all members that in December 2023, your company was certified as a Great Place To Work by the Great Place To Work Institute of India. Your company celebrated surpassing a turnover of INR 1 lakh crore for the third consecutive year by declaring an interim dividend of 10% to the investors and also after the year ended, we recommended additional 10% final dividend. Going ahead, apart from the production and sales activity and cost activities, one critical area that your company has identified is digital. You all have heard of Industry 4.0, which is one of the latest technologies in the digital world and artificial intelligence, machine learning, these are the keywords we're getting into manufacturing today. Your company is planning to launch a program on digital transformation of SAIL with a target of adding INR 1,000 crores per annum. Every year, we will try to save INR 1,000 crores for the company by implementing various digital initiatives across the length and breadth of the company in our plants, in our townships in all areas, we'll be taking up digital initiatives. Before I conclude, I want to extend my heartfelt gratitude to all our shareholders for your unwavering trust and confidence. The management team that you have put into place here is committed, is capable and is looking to the future with a lot of energy and vigor. I appreciate our esteemed customers, our esteemed suppliers and also the financial institutions who have supported SAIL in its journey so far, and I'm confident that this support and confidence will continue. My thanks also goes to the Government of India, state governments and other statutory authorities for their ongoing assistance. A very special thanks to the Board members, my colleagues for their guidance and support. And also, I'll be failing in my duty if I don't thank on behalf of all of you, I want to thank the 54,000 employees that this company works with and also their extended family at home, which supports them in performing and keeping this company's performance at a very high level. Thank you so much. Thank you. Rest of Directors and key managerial personnel maintained under Section 170 of the Companies Act 2013, is available in electronic mode for inspection of the members. Any member who wants to inspect these records can request through the e-mail ID, [email protected]. I'm mentioning the mail ID again, this ID is mentioned also in the notice of the AGM, [email protected]. Copies of the financial statements for the year ending 31st March 2024, auditor's report and secretarial audit report, all of this has already been sent to all the members of the company. And these are also available in electronic mode for inspection of any members who wishes to do so. The representatives of the joint statutory auditors and secretarial auditors are also present today in the meeting. Now I request Company Secretary to read the auditor's report for all members.

Thank you, sir. Going through the joint statutory auditors report -- independent auditors report on the stand-alone financial statements of the company. And the modified opinion to the extent it has been modified, they have mentioned that it has -- except for the effect of the matter described in the basis of the qualified opinion section in our report, the aforesaid stand-alone financial statements give the information required by the Companies Act 2013 in the manner required and give a true and fair view in conformity with the Companies Act, the Indian accounting standards and the generally accepted principles -- accounting practices. They have retained the 2 qualifications and the 1 relating to the entry tax matters, the constitutional validity of which has been decided by the Honorable Supreme Court. And pending decision by other aforesaid courts, the management is of the view that no adjustment is required in the accompanying stand-alone financial statements of the company for the disputed entry tax matters in various courts amounting to INR 724.02 crores as on 31st March '24. However, in the absence of sufficient appropriate evidence to support the management's view, the auditors are of the opinion that the provision of entry tax liability should be recognized in the stand-alone financial statements. India's second modified opinions as referred to in 47(2)(b) to the accompanying stand-alone financial statements. Current assets include advance of INR 587.72 crores paid under protest to Damodar Valley Corporation against the bills raised for supply of power for the period 2010-'11 to 2016-'17. The matter is under litigation and currently pending before the Jharkhand State Electricity Regulatory Commission for finalization of tariff. And however, in the absence of sufficient appropriate evidence to support the management's contention of recoverability of this balances, the auditors are aware of the opinion that an allowance for the possible nonrecoverability of such advance should be in the accompanying stand-alone financial statements. Impact of the above qualification of the stand-alone financial statements for the year ended 31st March '24 has been mentioned on Page 143 of the annual report in the Independent Auditors' Report section. The same 2 qualifications has been retained in the consolidated financial statements of the company and the auditors' report has been signed on behalf of Walker & Jocke Company LLP; firm registration #001076N/N500013. Shri. Nalin Jain, Partner, Membership #503498. For Jain Gupta and Company LLP, firm registration #006569C/W1892. C.A Devendra Upadhyay, partner membership #76727. For SPARK Associates Chartered Accountants, firm registration # 005313C/C400311. By C.A. Nilesh Gupta, partner membership #406020. For Vinod Singhal and Company LLP Chartered Accountants, firm registration #005826C/C400276. The report independent of [Technical Difficulty] May 2024 at New Delhi. The management's reply to the modified opinion of the [ JSS ] on the stand-alone financial statements are mentioned at Page 142 and 143 of the annual report. And management replies for the qualification contained at -- for the consolidated financial statements are contained at Page 313 and 314 of the annual report. Now going through the -- comments of the supplementary audit carried out by the Comptroller and Auditor General of India under Section 143(6)(b). The Comptroller Auditor General of India have conducted a supplementary audit under Section 143(6)(a) of the act of the financial statement of Steel Authority of India Limited for the year end the 31st March 2024. This supplementary audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and company personnel and a selective examination of some of the accounting records. I would like to highlight the following significant matters under Section 143(6)(b) of the act, which have come to my attention, and which, in my opinion, are necessary for enabling a better understanding of the financial statements of the related audit report. The comments on profitability, the observations have been classified under the 3 heads: one, comments on profitability. Number one, the employee benefit expenses, the above does not include INR 309.34 crores related to perks and allowances payable to the company's employees for 26th -- from 26 November 2008 to 4th October 2009 as for the DPE guideline. This has resulted in the understatement of current liabilities and employee expenses and an overstatement of profit to that extent. Note #41, other expenses, the above does not include INR 28.18 crores payable to Shapoorji Pallonji & Company Limited and Heavy Engineering Corporation Limited, HECL relating to work executed for [indiscernible] plant at Rourkela State Plant, which was completed in March 2015. Our 2-tier closure committee constituted to settle the dispute amicably recommended for payment of [ INR 144.47 crores ]. Out of the above, INR 26.17 crores was already paid to Shapoorji Pallonji till January '21. This has resulted in understatement of other expenses and overstatement of contingent liabilities and profit by INR 28.18 crores. The next one, the above does not include INR 37.39 crores incurred towards confidence building measures at Rowghat mines. The activities and the confidence building measures includes running of schools, Ramakrishna Mission Ashram, conducting Khel Mela, cetera. This has resulted in understatement of other expenses and overstatement of capital work-in-progress and profit by INR 37.39 crores. The next -- under the same head, the above does not include INR 9 crores towards differential property and consolidated tax for the year '22-'23 and '23-'24 payable at SAIL Bhilai Steel Plant. This has resulted in understatement of other current liabilities and overstatement of profit by INR 9 crores. Under the head, the other comprehensive income as per para 61A of Ind AS 12, current tax and deferred tax shall be recognized outside profit or loss if the tax relates to items that are recognized in the same or a different period outside profit and loss. Therefore, the current tax and deferred tax that relates to items that are recognized in the same or a different period in other comprehensive income shall be recognized in other comprehensive income. This has resulted in understatement of other comprehensive loss by INR 32.03 crores and thereby, understatement of other equity and overstatement of deferred tax liabilities by the same amount. Now come -- the next classification comments on disclosure, Note 49.10. The note discloses the details of subgrade iron ore fines amounting to INR 3932.35 crores, being the value of 40.88 million tonnes of such fines lying at different mines of SAIL. As on 31st March 2024, the note given by the management requires more clarity. The contingent liability, Note 47.1 above does not include INR 160.55 crores towards various claims for escalation, prolongation cost, delay in payment and interest payment by Bhilai Engineering Corporation against the work for Sinter Plant-II Package. The case has been referred by SAIL to the outside expert committee constituted in November 2022. Since the claim has been contested and lying in dispute resolution forum, the disputed amount should have been included in the contingent liability. Noninclusion of the above has resulted in understatement of contingent liability by INR 160.55 crores. The next one, the divisional forest office of Saranda raised a demand of INR 19.50 crores towards the forestation scheme of 38,710 trees and INR 4.29 crores towards the forestation scheme of 8,520 trees. Against the above demand, management filed a writ repetition in Honorable High Court, Ranchi. Since the demand raised by DFO Saranda is sub judice, the same was required to be disclosed under the contingent liability. Under 2C, the above does not include INR 759 crores being claimed by the consortium of Mistubishi Corporation Japan and M/s Larsen & Toubro Ltd. Kolkata towards additional costs incurred by the parties due to delay in completion of the Hot Strip Mill-2 of Rourkela Steel Plant. Nondisclosure of the above has resulted in understatement of contingent liability to that extent. Comments on the auditor's report -- the reference is invited 1.7(b) of the reporting of statutory auditors under company's auditors CARO '20 in respect to the Durgapur Steel Plant, alloy steel plant and central marketing audition. The reporting of statutory auditor under CARO 2020 is encouraged because Kolkata High Court has already dismissed this case on 18th February 2015. The reporting requires to be modified. Further the reporting under CARO made at Annexure 1.7(a) also needs modification. The report, the CAG supplementary comments on the consolidated financial statements also hold the same observation except the last one relating to the CARO. And the report is signed on behalf of the Comptroller and Auditor General of India by Shri. Jitendra Sudhakar Karape, Director General Audit, Steel, Ranchi, dated 30th August 2024. The management reply has been mentioned against each of the comment in the C&AG report contained at Page 162, 165 relating to stand-alone financial statements and 313 and 314 of the consolidated financial statements. Now coming to the secretarial audit report, the secretarial audit report has 3 observations relating to regulation 17.1(a). The number of -- the observation number -- observation number one, the number of non-executive directors on the Board were less than 50% during the period 1st of April '23 to 30th of April '23. Observation #2, regulation -- Clause 3.1.4 of the DPE guidelines on corporate governance for central public sector undertaking, the number of independent directors on the Board were less than 50% of the Board members during the period -- during the financial year 2024. Observation #3, in pursuant to Clause 3.1.2 of the DPE guidelines on corporate governance for central public sector undertaking, the number of functional directors on the Board of the company were exceeding 50% of the actual strength of the Board during the period 1st of April 2023 to 30th of April 2023, and thereafter from 1st of May '23 onwards. The secretarial audit report has been signed on behalf of Agarwal S. & Associates, Company Secretaries by Sachin Agarwal, Partner, FCS #5774, dated 18th of July '24. The management replies are given on Page 48 of the annual report of the company. Thank you.

The businesses to be transacted at this AGM and the objectives and implications of the resolutions to be passed have been detailed in the notice of the AGM. Members may have gone through this. I will just request Company Secretary to explain the process of voting.

The business in the AGM have 9 -- 11 resolutions. The ordinary business regulation include: number one, to receive, consider and adopt the audited standalone financial statements of the company for the financial year ended 31st March '24 together with the reports of the Board of Directors and auditors thereon. The audited consolidated financial statements of the company for the financial year ended 31st March '24 and the report of the auditors thereon. The item #2, ordinary business to appoint a director in place of Shri. Brijendra Pratap Singh, DIN #08665585, who retires by rotation at this Annual General Meeting and is eligible for reappointment. Item #3 to appoint a director in place of Shri. Anil Kumar Tulsiani, DIN #08742907, who retires by rotation at this Annual General Meeting and is eligible for reappointment. Four, to authorize the Board of Directors to fix the remuneration of the statutory auditors of the company appointed by the Comptroller and Auditor General of India for the financial year '24-'25. To confirm the -- Item #5, to confirm the payment of interim dividend at the rate of INR 1 per equity share of INR 10 each for the financial year '23-'24 and to declare a final dividend for the financial year '23-'24 at the rate of INR 1 per equity share of the face value of INR 10 each. Now coming to the special business. Item #6, to appoint Shri. Birendra Kumar Tiwari, DIN 09699855, as a whole time director of the company. To obtain -- Item #7, to obtain the consent to borrow the issue of secured nonconvertible bond debentures and consent to create charge on the assets of the company. Item #8, to authorize the Board to carry out material related party transaction with NTPC SAIL Power Supply Company for an aggregate value of INR 9,000 crores from 1st April '24 till the completion of the AGM for the financial year '25-'26 at arm length basis and ordinary course of business of the company. Item #9, to authorize the Board to carry out material related party transaction with Bokaro Power Supply Company Private Limited for an aggregate value of up to INR 4,000 crores from 1st of April '24 till AGM to be completed in financial year '25-'26 at arm length basis and an ordinary course of business of the company. Item #10, to authorize the Board to carry out the material related party transaction with Minas de Benga Limitada, Mozambique for an aggregate value of INR 6,000 crores from 1st April '24 till the AGM to be held in '25-'26 at an arm length basis in ordinary course of business of the company. Item #11, to ratify the remuneration of the cost auditors of the company for the financial year '24-'25. Now coming to the procedure. In compliance with the SEBI Regulations and Companies Act 2013, the company has offered remote e-voting facility to all its members through NSDL in respect of the items to be transacted at this AGM. The details regarding user ID and password including instruction for e-voting were provided to the members in the notice. The remote e-voting was opened from 9:00 a.m. on September 22, '24 to 5:00 p.m. on 25th September '24. Members who have voted electronically are allowed to participate in this AGM, but not to vote again. Members who have not voted electronically and attending the AGM may cast their vote through e-voting facility in the meeting as the voting is being done through electronic means. Voting by show of hands is not required. The company has appointed Shri. Sachin Agarwal, Practicing Company Secretary present in this meeting as scrutinizer to scrutinize the remote e-voting process and e-voting procedure -- e-voting during the AGM in a fair and transparent manner as it will take some time to compile the votes casted. The results of the voting, both through remote e-voting and e-voting during the AGM along with the scrutinizer's report will be made available on the website of the company and the agency, that is NSDL -- within the -- NSDL within the prescribed time line. The details are also available in the notice to this AGM. I now request Chairman, sir, to carry forward this.

Thank you. Now we come to the good part of this meeting where -- and most welcome part of this meeting, wherein all the members may put forward their queries if they have any, me and the team of directors that we have here, we will try to answer your queries. My only request is these queries should be related to the business of the AGM, accounts or performance of the company. Each member can take 2 to 3 minutes so that we can have more members talking and interacting. No personal issue shall be entertained in this AGM. As you can understand, we are here for business. So we talk business. So with this, we can start with the -- we have 12 registered speakers in the AGM. It is my pleasure to welcome [ Mr. Santosh Kumar Saraf ]. Saraf, if you are connected.

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[Foreign Language], welcome.

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[Foreign Language] Director of Personnel [Foreign Language]

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[Foreign Language] [ Shri. Bimal Krishna Sarkar ]. [Foreign Language] [ Shri. Ajay Kumar Jain ] [Foreign Language]

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[Foreign Language] [ Shri. Praveen Kumar ] [Foreign Language]. Praveen ji?

Respected Chairperson, good morning. Esteemed, Board of Directors, fellow shareholders, myself, Praveen Kumar, joining this meeting from New Delhi. Wish you all the luck and all the best, dedicated employee of our company. It was the most excellent address to the shareholders. I'm with the company for years and years now. And I have the deepest respect for [ me ]. It's not about the company. It's truly a legacy, you are #1. I'm so proud this is an initiative which is taken by Government of India, deeply respected, excellent CSR activities, future look bright. I have the deepest respect for you, your dedication, devotion to bring sustainable growth for a retail investor like me. Yes, I also love to met you in the month of November and December, please for at least speaker shareholder have a get together, I truly appreciate. And I wish you all the luck and all the best, and thank you for this opportunity, sir. Excellent initiative by CS department, real-time communication and god bless you with all the opportunity.

Thank you, Praveen ji. [Foreign Language] [ Gagan Kumar ] [Foreign Language]

Yes. Good morning, Mr. Chairman, Board of Directors and fellow shareholders, myself, Gagan Kumar, I'm joining this meeting from Delhi. First of all, I would like to mention that I had requested for a hard copy of annual report, which I received well in time. And my general question to the management is that how our company performing vis-a-vis with the competitors? And what is our value creation road map for next 2 months? And last but not the least, I would like to thank our CS and CFO for maintaining higher standard of corporate governance throughout the year. If we have any query, we are just a mail away. Thank you.

Thank so much Gagan ji, very pertinent questions. Thanks for praising our CS team. They have been working very hard on meeting any query from you. And I assure you that in future also, they will meet anything -- any facilities that you require. About the competitor landscape in India, we see. Currently, the challenge that we face is more from external -- abroad -- competition from other countries than the competition in India. As you are aware, India has got a free trade agreement with ASEAN countries, also with Japan and South Korea. Recent times, China, because of the slowing market consumption in their country has been very aggressive in exporting. So though India is a growing market for steel. Last year, as I mentioned, the growth in consumption was 13%. And this year, again, in the first 5 months, we see a growth of almost 7% to 8%. However, we are very conscious of the fact that steel getting dumped at very cheap price in India is affecting the markets, eating away the volume share as well as driving down prices to very poor levels. We have been engaging with the Government of India to take a look. We all know that if we look at other countries like Canada, U.S., European Union, everybody has put anti-dumping duty. We have requested Government of India also to take a look at the condition and take suitable tariff measures on it. As far as within India, our stand vis-à-vis our competitors, I can assure you that we continuously benchmark ourselves on the cost parameters and efficiency parameters with our competitors. I'm happy to tell you that your company in the current year has taken a strategy wherein we have said last year, as I told you, we performed at 98% capacity utilization. This year, we are planning a growth of 8% over that. That means your company will be, if achieved, if these targets are achieved, your company will be performing at 104% of the capacity. So that will be as good as any competitor. On the cost front also, we are working on parameters to be benchmarked as the best in the country. The value creation road map for sale, 2 initiatives I'd like to mention, one, I had mentioned in my speech, where I said we have taken a digital transformation road map. And with implementation of Industry 4.0 technologies over the next 2 years, we wish to add INR 1,000 crore to the bottom line. So that's majorly the project on which we are working. And you will see good results as we go forward. Thank you so much, Gagan. We have the next speaker, [ Mr. Surinder Kumar Arora ].

[Foreign Language] very great job.

Thank you, Arora saab. The team here is always at your service, and we'll continue to do this. [Foreign Language]

[Foreign Language]

Singh saab [Foreign Language] [ Harpreet Singh saab ] [Foreign Language]. Harpreet ji? Harpreet ji [Foreign Language] [indiscernible] [Foreign Language].

[Foreign Language] what competition facing with these companies. And there are so many other steel in this company, sir. What competition we're facing I'd like to know. [Foreign Language] Goregaon, I met your sale people. They were very polite and they are very -- sir, [Foreign Language]. No more question. I support all the resolutions. [Foreign Language] I would like to meet you, sir. [Foreign Language]

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[Foreign Language] Thank you so much. I think you have. [Foreign Language] I think after the completion of the replies to queries of the shareholders, I think we have come to an end. However, members who have not voted earlier through e-voting, we can -- we will keep the voting open for the next 15 minutes. You can now vote through electronic means in the next 15 minutes only. And since there is no other business, I will now request Shri. A.K. Tulsiani, our Director of Finance, to propose a vote of thanks.

Thank you, sir. Dear shareholders, it is a matter of great privilege for me to propose a vote of thanks for the 52nd Annual General Meeting of Steel Authority of India Limited. I, on behalf of the company and self to extend a very hearty vote of thanks to all who have contributed in one way or another into making this event a huge success. I begin by thanking the esteemed shareholders of the company for the continuous faith you posed in us and we value your gracious presence in this e-AGM. I also thank Mr. Gopalakrishnan Ganesan, Deputy Secretary, Ministry of Steel, who is attending this AGM through videoconferencing as nominee of the President of India. I would also like to take this opportunity to thank our customers, vendors, suppliers, contractors, bankers and all others who have made it possible for the company to sustain its growth momentum despite the demanding business environment, which has been highly volatile in the last few years due to inflationary pressures, supply chain issues, geopolitical situations in different parts of the globe, et cetera. On behalf of entire SAIL collective, I acknowledge and thank the Government of India, state government and the statutory authorities for their guidance and collaborative and enduring support. I thank our Chairman, Shri. Amarendu Prakash, for the warm welcome extended to us by him. He has shared valuable insights on the performance of the company and vision shown by him for our future, will set the tone in the coming times. We assure you, sir, that we will take all the measures and work wholeheartedly towards achievement of the goals set for the company. I also take this opportunity to thank my colleagues on the Board, statutory auditors, C&AG auditors, cost auditors and secretarial auditors for their valuable guidance and support. The company deeply appreciates all our employees for the resilience, sincerity and the dedication displayed and even beyond. I also thank our registrar and transfer agent, MCS Share Transfer Agent Limited and NSDL for providing e-voting and VC platform and others who have contributed to the success of the meeting. I conclude here with an assurance to all our stakeholders towards continuing with our best efforts with all the very best to all for the future. Jai Hind.

Thank you. And since there is no other business, we shall now conclude the meeting. Thank you, everybody.