Corporate Jan 25, 2013
New Delhi: Vedanta group firm Sesa Goa has deferred 10-25 percent of salaries to its senior employees as it grapples with huge erosion in sales and profits on account of ban on mining in Goa and Karnataka, a top company official said today.
From 1 January, payment of 25 percent of salaries have been deferred for top management, including company's managing director and other Board members, and 10 percent for manager level employees.
"We have deferred 10 to 25 percent of the salaries of company's executives from 1 January but it is not a cut, only deferment and is applicable for non-unionised and managerial staff. I, myself, have gone for a 25 percent deferment in salary," said Sesa Goa managing director PK Mukherjee.
The country's largest private sector iron ore producer is going through possibly the worst period in its history due to mining ban in Goa, where it is based.
The company did not produce or sell iron ore in the last quarter from Goa, where the ban was first imposed by the state government in September and subsequently extended by the Supreme Court in October. The ban was imposed after a report by Justice MB Shah Commission, which pegged a Rs 35,000 crore loss to the exchequer due to illegal mining in the state.
Sesa Goa's operations in Karnataka are already closed for more than a year due to the apex court-imposed mining ban in the state.
It reported a whopping 91.26 percent fall in net sales to Rs 227.54 crore in the October-December quarter. The firm would have posted a consolidated net loss of Rs 172.25 crore for the quarter, had it not been aided by a Rs 669 crore profit from associate firm and oil major, Cairn India.
"It all depends on how the apex court decides the Goa mining issue. There have been many hearings but we all are waiting for a final outcome. I am definitely positive that Goa will not go Karnataka way," Mukherjee said when asked about the way forward for the iron ore mining firm.
Not only Sesa Goa but Goan economy in general has been hit hard by the mining ban, he said.
"The matter needs urgent attention of the authorities as about one third of the population is dependent on mining. With due respect to all the authorities, I don't find a sense of urgency to resolve the matter. I am open to discuss it at any forum," Mukherjee said.
On Karnataka, where Sesa Goa's capacity has been pruned to 2.29 million tonnes per annum (MTPA) from 6 MTPA, he said that the company is hopeful of resuming its operations soon but again it depends on apex court permission.
"Our Reclamation and Rehabilitation plan has already been cleared by the Central Empowered Committee (CEC). Now we are waiting for directions from the apex court," he said.
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