About
Tata Steel Ltd
Tata Steel is one of the world's largest steel companies with a steel production capacity of approximately 27.5 million tonnes per annum (MnTPA) as on 31 March 2017. The company is a diversified steel producer with major operations in India, Europe and South East Asia. The company has manufacturing units in 26 countries and a commercial presence in over 50 countries. Tata Steel is the second largest steel producer in Europe with a crude steel production capacity of over 12.1 million tonnes per annum.
The company together with its subsidiaries, is engaged in the manufacture and sale of steel products in India and internationally. They offer hot and cold rolled coils and sheets, galvanized sheets, tubes, wire rods, construction rebars and bearings. Tata Steel is one of the few steel companies that are fully integrated - from mining to the manufacturing and marketing of finished products.
The company also involves in prospecting, discovering, and mining iron ore, coal, ferro alloys, and other minerals; designing and manufacturing plants and equipment for steel, oil and natural gas, energy and power, mining, railways, ports, aviation, and space industries; and agricultural implements. Further, they offers alumina, dolomite, and monolithic refractories, as well as silica refractories for coke ovens and the glass industry; manufactures bricks; sponge iron lumps and fines; and rolls for applications in integrated steel plants, power plants, and government mint, as well as paper, textile, and food processing sectors.
Tata Steel's operations are grouped under six Strategic Business Units include Bearings Division, Ferro Alloys and Minerals Division, Agrico Division, Tata Growth Shop (TGS), Tubes Division and Wire Division. They have introduced several branded steel products, including Tata Steelium (the world's first branded Cold Rolled Steel), Tata Shaktee (Galvanised Corrugated Sheets), Tata Tiscon (rebars), Tata Pipes, Tata Bearings, Tata Structural, Tata Agrico (hand tools and implements) and Tata Wiron (galvanised wire products).
Tata Steel Ltd was incorporated in the year 1907 with the name Tata Iron & Steel Company Ltd. In the year 1911, the company commenced the operations of the first Blast Furnace or the 'A' Blast Furnace. In December 2, 1911, the fist collieries were obtained and the first cast of pig iron was produced. In they ear 1912, the first ingot of steel rolled out of the Sakchi Plant and in October 1912, the Bar Mills started their commercial production. Also, the B Blast Furnace became operational during the year. In the year 1918, India's first steel (coke) plant was established in Jamshedpur.
In the year 1925, the New Rail Mill, Merchant Mill and Sheet Mill went into operation. In the year 1931, they opened an apprentice shop. In the year 1941, they started manufacture of special steel for war purpose. They produced a wide variety of special steels required for defense purposes including armoured cars called 'Tatanagars'. In the year 1943, Howrah Bridge was constructed from steel supplied by the company. In the year 1955, the company signed an agreement with Kaiser Engineers for two million tonne expansion programme. In the year 1980, they started the first phase of the four-phased modernisation programme.
In the year 1984, the company introduced BOF steelmaking, which could produce liquid steel in forty five minutes when it took the old open hearth furnaces, close to five hundred under the first phase of modernisation. During the year 1984-85, Indian Tubes Company Ltd was amalgamated with the company. The second phase of modernisation was in the year 1988, which concentrated largely on the iron-making area. During the year 1993-94, the company commissioned the Hot Strip Mill with the capacity of one million tonne per annum which was the company's third modernisation programme. In the year 2000, the company inaugurated the 1.2 million tonnes Cold Rolling Mill Complex as a first step towards expansion and modernisation.
In January 2, 2004, The Indian Steel Wire Products Company was acquired at Jamshedpur. In June 4, 2005, the company signed an MoU for setting up a five-million tonne per annum Greenfield integrated steel plant in the Jagdalpur district of Chhattisgarh. In July 2005, they formed a joint venture with Blue Scope Steel Ltd, Australia for quoted steel manufacturing facility. In July 21, 2005, the company acquired stakes in the Australian coal mines. In August 2005, the company set up Met coke manufacturing facility in West Bengal.
In September 19, 2005, the company signed an MoU with the Government of Jharkhand for setting up a 12-million tonnes per annum Greenfield integrated steel plant in the Manoharpur and Chandil areas of Jharkhand. In December 14, 2005, they signed definite agreement with Cementhai Holding Company to acquire shares and invest equity in the Milennium Steel, Thailand. Also, the name of the company was changed from Tata Iron & Steel Company Ltd to Tata Steel Ltd with effect from May 19, 2005.
In the year 2006, the company inaugurated India's first automated Jigging and Hydrocyclone Plant, with a 1.6 MTPA throughput, at Noamundi Iron Mines. They commenced the work on Ferro Chrome Plant by acquiring Rawnet Ferrous Industries Pvt Ltd, in Orissa, a Ferro Alloys plant with a capacity of 50,000 tpa of high carbon chrome. They set up a Joint Venture Company with Larsen and Toubro Ltd for developing an all weather modern deep water port in the state of Orissa on the Eastern Coast of India. Tata NYK Shipping Pte Ltd, a joint venture shipping company between the company and Nippon Yusen Kabushiki Kaisha was set up to cater to dry and break bulk cargo and also the shipping activities. In August 7, 2006, the company inaugurated the Roll Forming and Pre-Engineered Building Facilities of Tata Bluescope Ltd at Pune.
In April 2, 2007, the company acquired Corus -- Europe's second largest steel producer for consideration of USD 12 Billion, which made Tata Steel the sixth largest steel producer globally and the second-most geographically diversified steel producer in the world. They also entered into an agreement for acquiring controlling equity stake in two rolling mills located in Haiphorg, Vietnam. Also, they signed a joint venture agreement with Riversdale Mining for Mozambique coal project. In December 2007, the company and SODEMI (state owned company for mineral development) entered into joint venture agreement for the development of Mount Nimba Iron ore deposits in Ivory Coast (West Africa).
In January 2008, the company and the members of the Al Bahja Group, a leading business house of Oman entered into a Joint Venture Agreement for the development of the Uyun Limestone deposits at Salalah in the Sultanate of Oman. Also, they entered an agreement with Steel Authority of India Ltd (SAIL) to establish a 50:50 joint venture company for coal mining in India. In February 2008, they opened their fourth retail outlet, 'steeljunction' at Behala.
During the year 2008-09, the company completed the expansion of crude steel capacity to 6.8 mtpa as part of their expansion programme. Also, they commissioned Sinter Plant No. 4, the 'H' Blast Furnace and the Continuous Caster No. 3 at LD Shop-1 during this expansion phase. In June 16, 2008, the company and their wholly owned subsidiary, Rawmet Ferrous Industries Ltd entered into an agreement with Jasper Industries Pvt Ltd for setting up a coal based power plant of 2 X 67.5 MW capacity in Orissa.
In September 2008, the company through their subsidiaries signed a Heads of Agreement memorandum with New Millennium Capital Corporation (NML), a Canadian listed mining company aiming to develop iron ore projects in Northern Quebec, Labrador and Newfoundland provinces. As part of the restructuring of the overseas holdings, the company transferred their stake in Tata Steel (Thailand) Public Company Ltd to Tata Steel Global Holdings Pte Ltd. The company subscribed 35,88,022 rights shares of Tayo Rolls Ltd and consequently, Tayo Rolls Ltd has become a subsidiary of the Company with effect from December 01, 2008.
In October 22, 2009, the company and Mineral and Metal Trading Company Ltd signed an agreement to establish a 74:26 joint venture company for acquiring, development and operation of mines and processing of minerals and metals.
Hooghly Met Coke and Power Company Ltd was amalgamated with the company with effect from April 1, 2009. The construction of a warehousing shed and a building for a power receiving sub-station had started at one corner of the plant area. They increased the production capacity of Crude Steel from 61,10,000 tonnes to 68,00,000 tonnes, Saleable Steel from 58,40,000 tonnes to 65,00,000 tonnes and Welded Steel Tubes from 2,84,000 tonnes to 2,88,000 tonnes.
In October 2009, the company entered into agreement with MMTC Limited, a Central Government undertaking and established a joint venture company for acquiring, developing and operating mines and processing of minerals and metals. In November 2009, they signed a Joint Venture Agreement with NML, to advance the development of the DSO Project. In January 2010, the company entered into an MoU with NMDC Ltd, to explore the possibility of acquisition, exploration and development of mines, extraction and processing of minerals, setting up integrated steel plants and other businesses of mutual interest.
In April 6, 2010, the company entered in an MoU with Nippon Steel Corporation (NSC), Japan for setting up a Continuous Annealing and Processing Line at Jamshedpur, India with 0.6 mtpa capacity. In June 2010, the company subscribed to a private placement of Canadian $20 million by NML pursuant to which Tata Steel Global Minerals Holding Pte Ltd holds a 27.4% stake in NML.
In June 2010, the company and Tata Metaliks Ltd entered into an MoU with the Government of Karnataka for setting up an integrated steel plant of 3 mtpa in Agadi and Boodagatti villages of Haveri District, Karnataka. In August 2010, the company's subsidiary Corus UK Ltd and Sahaviriya Steel Industries Public Company Ltd (SSI) signed an MOU which sets out the scope of a potential transaction whereby SSI would acquire from Corus the Teesside Cast Products (TCP) business in a transaction valued at approximately USD 500 million.
Tinplate Company of India Ltd became a subsidiary of the company with effect from April 01, 2011, consequent to increase in the company's shareholding in the Tinplate Company of India Ltd from 42.88% to 59.45%. This increase is due to automatic and compulsory conversion of 3% fully convertible debentures of Rs 100 each held by the company into equity shares on April 01, 2011.
In April 2011, the company and Krosaki Harima Corporation (KHC) signed definitive agreements to induct KHC as a strategic partner in Tata Refractories Ltd (TRL). Under this arrangement, KHC will acquire 51% equity stake out of TSL's current 77.46% stake in TRL. As per the scheme of amalgamation, Centennial Steel Company Ltd, a wholly owned subsidiary company was amalgamated with the Company with effect from September 27, 2011.
In January 2012, the company secured a contract from Siemens Wind Power to supply 25,000 tones of profiled steel plate for wind towers. Tata Steel will deliver 25,000 tones of profiled plate (cut into the desired shape) between April and September 2012.
On 19 April 2012, Tata Steel announced that it has been awarded a high eight-figure US dollar contract to supply pipe for Enterprise Products Partners L.P.'s new crude oil export pipeline in the Gulf of Mexico's Keathley Canyon area. The contract will see Tata Steel deliver more than 48,000 metric tonnes of steel pipe from its 42-inch mill in Hartlepool, England for the Lucius Development Project, which has the capacity to produce in excess of 80,000 barrels of oil per day.
On 22 June 2012, Tata Steel announced the completion of an important strategic project that makes it only the second vertically integrated producer of grain oriented electrical steels in the European Union.On 2 November 2012, Tata Steel unveiled 'Tata Astrum', a new brand of its Hot Rolled products range at an event in New Delhi. The Astrum product range will find application in the Automotive, Earth Moving Equipment, Railways, Fabrication, Construction and Industrial Machinery segments.
On 7 November 2012, Tata Steel announced the opening its second aerospace service centre in China at Xi'an. The new facility in Xi'an complements its existing operation in Suzhou, opened in 2009, and aims to serve the growing demand for aerospace materials in the region.
On 12 February 2013, Tata Steel announced that it has restarted its second blast furnace at the Port Talbot steelworks in the UK following the completion of a 185 million rebuilding project. The state-of-the-art new furnace is more efficient and will allow Tata Steel to continue to meet the demanding requirements of UK and European manufacturing industries.
On 19 February 2013, Tata Steel announced that it has been granted the core supplier status by French car manufacturer PSA Peugeot Citro. On 10 June 2013, Tata Steel announced the successful completion of an upgrade of its corrosion-resistant coating line in South Wales, UK to improve and expand the company's range of high-value, high-formability automotive steels.
On 19 June 2013, Tata Steel announced that it has secured a long-term agreement to supply aerospace steels to Safran Group, the world-class manufacturer of aircraft, rocket engines, propulsion systems and aircraft equipment. The initial value of the contract is in excess of 9 million per year, with prospects for this to grow during the life of the agreement.
On 8 August 2013, Tata Steel announced that it won an order to manufacture 60,000 tonnes of high-quality rail for a new high-speed line linking the two holy cities of Mecca and Medina in Saudi Arabia.
On 21 October 2013, Tata Steel announced that has won a contract to supply rail track and steel sleeper plate to Network Rail for at least five years. Network Rail, the company set up to operate and maintain Britain's rail infrastructure, has chosen to source more than 95% of its rail from Tata Steel until 2019, with the option to extend this until 2024.
On 22 October 2013, Tata Steel announced that it will build a Vacuum Induction Melting (VIM) furnace at its Stocksbridge site in South Yorkshire, UK, to enable it to tap into new market opportunities and develop innovative new products for the aerospace and oil & gas industries. The cutting-edge VIM furnace will allow Tata Steel's Speciality Steels business, which already supplies steel to aircraft engine and airframe makers, to further develop relationships with its customers and expand its product portfolio.
On 23 October 2013, Tata Steel announced the commissioning of a new heat treatment plant at its Hayange plant in the Lorraine region of France. The unit will produce train track capable of lasting up to three times longer than standard rail. The new facility will more than double the annual output of heat-treated rail from 55,000 to 125,000 tonnes. On 7 November 2013, Tata Steel UK announced the launch of dent-resistant steel for car makers in Britain that helps to further reduce vehicle weight.
On 8 January 2014, Tata Steel announced that it has won a two-year contract to supply more than 200,000 tonnes of track to French rail operator SNCF. The contract will see Tata Steel supply the majority of SNCF's rail requirements in lengths of up to 108 metres from its plant in Hayange, Northern France.
On 16 January 2014, Tata Steel announced the launch of India's First Ferro Manganese brand TATA FERROMAG and India's first Ferro Chrome brand TATA TISCROME. Tata Steel will sell these two branded products in Gujarat, Maharashtra, NCR, Rajasthan, Odisha and West Bengal, which are the major consumption centres. Ferro Chrome and Ferro Manganese are Ferroalloys widely used as alloying agents in production of Carbon & Stainless steel. Ferro Chrome provides corrosion resistance thus increasing the life of stainless steel, while Ferro Manganese provides the necessary toughness and hardness to steel.
On 8 April 2014, Tata Steel announced that New Zealand's Steel and Tube Ltd has agreed to acquire Tata Steel International (Australasia) Ltd. for a cash consideration of NZ$27.5 million. Tata Steel International Australasia Ltd. (TSIAL) is a New Zealand based company which is the leading supplier of stainless steel, engineering steels, and composite floor decks to the New Zealand and Pacific Island markets. The division also offers ex-mill sales of colour coated and packaging steels, railway tracks, and structural sections.
On 28 April 2014, Tata Steel announced the commissioning of new Coke Oven Battery at its Jamshedpur steel manufacturing facility, thereby making the steel facility self-sufficient in coke requirement for stable operation.
On 27 June 2014, Tata Steel Europe officially inaugurated new slitting line at its Ruhr-based Steel Service Center in Gelsenkirchen, Germany. The new slitting line is specially geared up to process advanced and ultra high-strength steels, which are used to manufacture demanding automotive applications used in chassis, suspension, wheels and seats. They include advanced high strength steels with unique forming capabilities for chassis and cold rolled advanced high strength steels for light-weight seat components.
On 1 July 2014, Tata Steel announced restructuring proposals to improve the competitiveness of its South Wales, UK steelmaking business. The proposed changes would enable the UK Strip Products business to compete in Europe's lower market demand era by reducing costs equivalent to the loss of about 400 jobs in Port Talbot.
On 25 July 2014, Tata Steel announced a successful dual tranche Reg S issuance of USD 1.5 billion of unsecured bonds in the international markets. It was Tata Steel's debut US dollar bond issuance and a part of the company's long term financing strategy to raise capital internationally.
On 4 August 2014, Tata Steel announced the launch of an innovative new product for automotive manufacturers in response to market requirements for stronger and lighter steels.
On 11 August 2014, Tata Steel announced that it has signed a series of contracts with Subsea 7 - one of the world's leading contractors in engineering, construction and subsea services to the offshore industry - to supply undersea pipes to four separate North Sea projects.
On 1 September 2014, Jamshedpur Continuous Annealing and Processing Company Private Limited (JCAPCPL) announced the inauguration of India's first Continuous Annealing & Processing Line, a 600,000 tonnes per annum facility for manufacturing high-quality cold rolled sheets exclusively for the automotive industry, including outer panels and high tensile sheets. JCAPCPL is a 51:49 Joint Venture between Tata Steel Ltd and Nippon Steel & Sumitomo Metal Corporation (NSSMC). JCAPCPL will source steel from Tata Steel.
On 18 September 2014, Tata Steel announced that it has opened a new finishing line at its IJmuiden steelworks in the Netherlands to strengthen the supply of high-value steels to the automotive sector and other markets. Tata Steel invested 12 million euros in Finishing Line 32, which will process up to 400,000 tonnes of galvanised (corrosion resistant) steel coil a year. The opening of the new finishing line has also freed up Tata Steel's Cold Rolling Plant in IJmuiden, which was responsible for finishing galvanised steel. This will enable the company to increase the supply of uncoated cold rolled steel to customers. The new finishing line follows the opening in IJmuiden of the third hot-dip galvanising line in 2009.
On 13 November 2014, Tata Steel announced that it has completed a major upgrade of the Hot Strip Mill at its Port Talbot steelworks in South Wales, UK enabling it to further improve the quality of its steel products used in a wide range of markets, including automotive, engineering, construction and domestic appliances. The upgrade of the Hot Strip Mill follows investments totalling more than 250 million in state-of-the-art steelmaking and processing technology at the South Wales operations.On 17 November 2014, Tata Steel announced that it has commenced commercial production of GGBS, world's most sustainable building material. GGBS is used as a part replacement of cement and has been the solution for high strength, cost effective concrete in the developed economies for last 50 years.
On 3 February 2015, Tata Steel announced that it has reached a significant milestone in the transformation of its European steel portfolio with the launch of the 100th new product in its revitalised new product development programme. On 2 February 2015, Tata Steel launched an innovative, stronger structural steel product which can reduce the construction time of new buildings.
On 9 February 2015, Tata Steel announced the signing of a prestigious contract to supply highly wear-resistant rail for the Crossrail project beneath the heart of London. Tata Steel said at that time that it had already commenced deliveries to the Crossrail project, and will ultimately supply the project with more than 57 km of its heat treated, wear-resistant rail. In total 7,000 tonnes of Tata Steel rail will be used to create one of Europe's largest railway and infrastructure projects.
On 1 April 2015, Tata Steel announced that it has completed the acquisition from SSAB of Sweden of two service centres in Halmstad, Sweden and Naantali, Finland as well as the entire remaining 50% stake in Norsk St l Tynnplater AS, another strip products service centre based in Frederikstad, Norway. The service centres offer cutting-to-length, slitting and recoiling services to customers in the automotive, construction and electrical supplies industries, as well as in heavy and light engineering.
On 1 April 2015, Tata Steel announced that it has divested its entire stake in Lanka Special Steels Limited (LSSL) to E.B. Creasy & Company PLC (EBCC) for a total consideration of LKR 433 million (around Rs 20.4 crore) in an all cash deal. LSSL was a wholly owned subsidiary of Tata Steel incorporated in Sri Lanka. It is engaged in the business of manufacturing and supplying hot dip galvanized wire and nail wire with an installed capacity of 14,400 metric tonnes per annum. It had an annual turnover of LKR 1,569 million (Rs 74.0 crore) in FY 14.
On 7 April 2015, Tata Steel announced that it has completed a series of investments at its Steelpark site at Wednesfield in the West Midlands that has strengthened the site's position as the UK's largest steel processing centre. The start-up of a further multi-strand blanking line has completed the expansion of Steelpark's new Light Gauge Service Centre, which operates cut-to-length, blanking and slitting lines processing hot rolled, cold rolled and galvanized steel coils. On 14 June 2015, Tata Steel UK announced that it has launched a new initiative in its efforts to resolve the pension dispute with its UK trade unions. The company has approached Acas (Advisory, Conciliation and Arbitration Service) to help facilitate the next phase in talks between the parties.
On 1 July 2015, Tata Steel announced that the European Union (EU) has agreed to contribute 7.4 million euro towards testing a groundbreaking new iron production process being developed at Tata Steel's IJmuiden steelworks in the Netherlands. The six-month test campaign of the HIsarna pilot plant in 2016 will establish whether the new technology can produce molten iron in a stable way over a sustained period of time.
On 5 August 2015, Tata Steel announced that negotiations about the potential sale of its European long products business and associated distribution facilities to Klesch Group have been discontinued. The company was in talks with Klesch following the signing of a memorandum of understanding in October 2014.
Tata Steel's Greenfield project at Kalinganagar in the state of Odisha achieved a major milestone on 4 September 2015 with start of coke production from its Coke Ovens. The heating of Coke Ovens was started on 19 May 2015.
On 20 October 2015, Tata Steel's Long Products Europe business announced proposals to stop production of steel plate. The decision was made in response to a shift in market conditions caused by a flood of cheap imports, particularly from China, a strong pound and high electricity costs.
On 28 October 2015, Tata Steel announced the opening of its new UK research centre at the University of Warwick's Science Park. The opening marks the first phase of Tata Steel's relocation of its UK R&D work to the University of Warwick campus.
On 18 November 2015, Tata Steel unveiled plans to create one of the world's largest solar energy projects of its kind in the Netherlands. The company said at that time that it will mount 80,000 solar panels on the factory roofs at its IJmuiden steelworks in Netherlands.
Tata Steel announced that its Kalinganagar steel plant was dedicated to Odisha on 18 November 2015. The Kalinganagar steel plant is the largest single-location greenfield steel project in India. The first phase (3 MnTPA) of 6 MnTPA will produce world-class flat, lighter, high-tensile strength steel and will augment Tata Steel's Indian production to around 13 MnTPA of crude steel in India.
T S Global Holdings Pte Ltd. (TSGH), a subsidiary of Tata Steel incorporated in Singapore, executed agreements on 2 December 2015 for loan facilities of US$1.5 billion comprising a 5 year loan of US$750 million and a 6 year loan of US$750 million. The proceeds of this loan will be used to repay existing term loan facilities in TSGH.
On 3 December 2015, Tata Steel announced that its Long Products Europe business will continue to supply French rail operator SNCF for at least five more years after a new deal was signed. Tata Steel will supply the bulk of SNCF's 750,000 tonne requirements of high-quality rail over the duration of the renewed contract in lengths of up to 108 metres from its Hayange facility.
On 22 December 2015, Tata Steel UK announced the signing of a letter of intent with Greybull Capital to enter exclusive negotiations for the potential sale of its Long Products Europe business. On 18 January 2016, Tata Steel UK announced cost-saving proposals to improve the competitiveness of its UK business.
On 22 March 2016, Tata Steel announced the first despatch of Tata Ferroshots from its Kalinganagar steel plant. The product was commercially launched in India for the first time. The end use of Tata Ferroshots is in electric arc furnaces, induction furnaces, cupolas, basic oxygen furnaces and foundries as a replacement of pig iron, scrap or DRI.
On 24 March 2016, Tata Steel UK announced that it has reached an agreement to sell its Clydebridge and Dalzell steel facilities in Scotland. The deal involves the sale of the two plants to the Scottish Government which would then sell them on to Liberty House. The Dalzell plate mill transforms a semi-finished steel slab into a steel plate, while the Clydebridge facility processes steel plate using a quench and tempering technique.
On 29 March 2016, Tata Steel board reviewed the performance of the European business of the company, more specifically, of Tata Steel UK. Following the strategic view taken by the Tata Steel board regarding the UK business, the Tata Steel board advised the board of its European holding company i.e. Tata Steel Europe, to explore all options for portfolio restructuring including the potential divestment of Tata Steel UK, in whole or in parts.
On 11 April 2016, Tata Steel Europe formally commenced the process of divestment of its entire shareholding in its subsidiary Tata Steel UK. On the same day, Tata Steel UK announced the signing of an agreement to sell its long products Europe business to the family investment office, Greybull Capital. The sale for a nominal consideration, would be in exchange for Greybull Capital taking on the whole of the business, including assets and relevant liabilities, and securing an appropriate funding package. The sale covers several UK-based assets including the Scunthorpe steelworks, two mills in Teesside, an engineering workshop in Workington, a design consultancy in York, and associated distribution facilities, as well as a mill in northern France.
On 9 May 2016, the Board of Tata Steel Europe announced that seven expressions of interest submitted for Tata Steel's UK business have been immediately taken forward to the next stage of the sale process. In the next phase of the sales process the progressing interested parties will be given access to further business information and management team presentations in order for them to rapidly progress their interest to a binding stage.On 17 May 2016, Tata Steel announced that it has decided not to go ahead with the proposed merger of Tata Metaliks Limited and Tata Metaliks DI Pipes Limited with Tata Steel. The Scheme of Amalgamation between Tata Metaliks Limited and Tata Metaliks DI Pipes Limited with Tata Steel was earlier recommended by the Committee of Directors of Tata Steel in April 2013 and approved by the company's shareholders on in May 2014. The decision not to go ahead with the proposed merger was taken due to inordinate delay in obtaining requisite regulatory and statutory approvals along with significant dilution in the intended synergies that were envisaged in April 2013. Tata Metaliks is a subsidiary of Tata Steel. On 14 September 2016, Tata Steel announced that its Kalinganagar, Odisha plant achieved yet another milestone with the flagging off of the first hot rolled steel export rake from the plant.
On 27 October 2016, Tata Steel announced that Government of Quebec has joined as a strategic equity partner in its Canadian iron ore mining venture Tata Steel Minerals Canada (TSMC). TSMC together with its parent companies signed definite agreements for concluding investments of C$ 125 million as equity and C$50 million as debt with Government of Quebec's investment entities, Resources Quebec (RQ) and Investment Quebec (IQ) respectively, totaling C$ 175 million. The investment will result in an 18% equity stake for RQ in TSMC in line with the carrying value of the investment in Canadian iron ore assets for Tata Steel. Consequently, the shareholdings of Tata Steel and New Millennium Iron will be adjusted to 77.68% and 4.32% respectively. TSMC is developing iron ore deposits in Quebec and Newfoundland & Labrador in Canada.
On 27 October 2016, credit rating agency Brickwork Ratings revised Tata Steel Limited's credit rating to BWR AA from BWR AA+ for NCD and BWR AA- from BWR AA for the perpetual debt, with a negative outlook. In a statement, Brickwork Ratings said that a sudden change of guard at Tata Steel's holding company Tata Sons and Tata Group has not only heightened the management risk for Tata Steel, but also has exposed the company to uncertainty over continuity of critical decisions on cost cutting and deleveraging the Balance Sheet concerning the unprofitable UK operations and restructuring its European business. Brickwork Ratings further said that unless Tata Steel takes appropriate measures in this regard, it may lead to further deterioration in the financial profile of the company, as also a rating action.
On 28 November 2016, Tata Steel UK announced the signing of a Letter of Intent with Liberty House Group to enter into exclusive negotiations for the potential sale of its speciality steels business for an enterprise value of 100 million subject to due diligence and corporate approvals. The Letter of Intent covers several South Yorkshire-based assets including the Rotherham electric arc steelworks, the steel purifying facility at Stocksbridge and a mill in Brinsworth as well as service centres in Bolton and Wednesbury, UK, and in Suzhou and Xi'an, China.
On 30 November 2016, Tata Steel announced the inauguration of its 55,000 tonne per annum (TPA) ferro-chrome plant in the Gopalpur Industrial Park in Ganjam district of Odisha.
On 7 December 2016, Tata Steel UK announced that it has reached an agreement with trade unions on a number of proposals that would structurally reduce risks and help secure a more sustainable future for its UK business. The company and trade unions have also agreed on the principle that subject to the structural de-risking and de-linking of the British Steel Pension Scheme fund from the business, Tata Steel UK will continue the existing blast furnace configuration in Port Talbot until 2021. Further, based on achieving the necessary financial performance and cash flows as per the transformation plan of the UK business, the company will continue to invest across the UK sites to enhance the competitive position of Tata Steel UK in the European steel industry.
On 7 December 2016, Tata Steel announced that its subsidiary, TM International Logistics (TMILL) has divested entire stake in its wholly owned step down subsidiary TM Harbour Services Private Limited (TMHSPL) to Adani Ports and Special Economic Zone Limited (APSEZ) for a total consideration of Rs 106 crore in an all cash deal. TMHSPL is engaged in the business of providing tug services at Dhamra Port and owns three tug boats.On 5 January 2017, Tata Steel inaugurated the second phase of Cold Rolling Mill (CRM) Complex BARA at its Jamshedpur unit. The phase II expansion of CRM BARA includes installation of 0.3 MnTPA hot rolled skin passing mill (HSPM) to meet the increased demand of Hot-Rolled, Pickled, Skin passed and Oiled products in the automotive sector for high-end customers. In order to cater to the input requirement of HSPM, the production capacity of the existing pickling line has also been increased to 0.68 MnTPA from the designed capacity of 0.5 MnTPA.
On 16 January 2017, Tata Steel announced that its Noamundi iron mine in Odisha conducted pilot launch of drone application in mine monitoring, thereby becoming the first mine in the country to introduce drones for mine monitoring.
On 25 January 2017, Tata Steel executed definitive agreements with Creative Port Development Private Limited (CPDPL) and their promoters for the proposed development of Subarnarekha port at Chaumukh village of Balasore district in Odisha. As per the agreements, Tata Steel will acquire majority equity stake in CPDPL, and the port development is envisaged through a wholly-owned subsidiary, Subarnarekha Port Private Limited (SPPL).
On 21 February 2017, Tata Steel announced that its Greenfield steel plant located in Kalinganagar Industrial Complex in Jajpur district of Odisha, has achieved yet another milestone with the hot metal production at its blast furnace crossing 2 million tonne on 19 February 2017. The blast furnace achieved the first million tonne production of hot metal on 9 October 2016.
On 28 February 2017, Tata Steel announced the completion of the commissioning of the ferro-chrome plant at Gopalpur Industrial Park in Ganjam district of Odisha. The plant has an installed capacity of 55,000 tonne per annum (TPA).
The Board of Directors of Tata Steel at its meeting held on 20 April 2017 approved issue of debt securities of up to Rs 9000 crore in one or more tranches. The funds will be primarily deployed towards re-financing the existing debt, capex/working capital requirements and general corporate purposes.
On 2 May 2017, Tata Steel UK announced the completion of the sale of its Speciality Steels business to Liberty House Group for a consideration of 100 million. The sale covers several South Yorkshire-based assets, including the electric arc steelworks and bar mill at Rotherham, the steel purifying facility in Stocksbridge and a mill in Brinsworth as well as service centres in Bolton and Wednesbury, UK, and in Suzhou and Xi'an, China.
On 23 June 2017, Tata Steel sold 8.35 crore shares of Tata Motors to the Tata Group holding company Tata Sons at a price of Rs 452.80 per share (excluding brokerage and STT).
On 11 July 2017, Tata Steel announced that it divested its entire equity stake in a 50% joint venture, viz, Tata Elastron S.A. in favour to the joint venture partner Elastron S.A. for a total consideration of euro 0.368 million.
On 14 July 2017, Tata Steel announced that it became the first steel company to enter into a long-term tariff contract (LTTC) with Indian Railways. LTTC has been introduced by Indian Railways to establish long-term contracts with customers with guaranteed incremental revenue for Indian Railways.
On 1 August 2017, Tata Steel UK announced the completion of the sale of its 42-inch and 84-inch pipe mills, also known as the Submerged Arc Weld (SAW) mills, in Hartlepool to Liberty House Group. Earlier, Tata Steel UK announced on 11 July 2017 that it had signed a definitive sale agreement to sell its 42-inch and 84-inch pipe mills in Hartlepool to Liberty House Group.
On 20 September 2017, Tata Steel announced that it has signed a Memorandum of Understanding (MoU) with Germany's Thyssenkrupp AG to create a leading European steel enterprise by combining the flat steel businesses of the two companies in Europe and the steel mill services of the Thyssenkrupp group. The proposed 50:50 joint venture - Thyssenkrupp Tata Steel - would be focused on quality and technology leadership, and on the supply of premium and differentiated products to customers, with annual shipments of about 21 million tonnes of flat steel products. The joint venture would have a pro forma turnover of about ?15 billion per annum (Rs 115,000 crore) and about 48,000 employees spread across various locations. The joint venture would be headquartered in Amsterdam, Netherlands. The proposed combination of businesses would be formed through a non-cash transaction framework, based on fair valuation, where both shareholders would contribute debt and liabilities to achieve an equal shareholding in the venture.
On 11 October 2017, Tata Steel announced the expiry of the share purchase agreement for the acquisition of 100% equity stake in Brahmani River Pellets Limited (BRPL). Earlier, on 23 December 2016, Tata Steel had announced the execution of definitive agreements to acquire 100% equity shares of BRPL from Aryan Mining and Trading Corpn Private Limited and other companies in the Moorgate Industries Group (MIG). BRPL owns a 4 mtpa Pellet plant in Jajpur, Odisha and 4.7 mtpa iron ore beneficiation plant in Barbil, Odisha connected through a 220 KM underground slurry pipeline. On 11 October 2017, Tata Steel announced that it has acquired Rio Tinto's smelter technology and intellectual property rights required to operate the HIsarna process. HIsarna is a completely new technology in the steelmaking process which combines Tata Steel's cyclone converter furnace with Rio Tinto's smelter.
On 6 November 2017, Tata Steel announced that it has established India's largest Coke Dry Quenching (CDQ) facility, capable of handling 200 metric tonnes per hour, at its state-of-the-art Greenfield steel plant located at the Kalinganagar Industrial Complex in Jajpur district of Odisha. CDQ is a heat recovery system to cool the hot coke from coke ovens. It is one of the most renowned energy-efficient and eco-friendly facilities in steel production where hot coke removed from coke ovens at a temperature of approximately 1,000x C is cooled and kept dry with inert gas and the resulting steam produced in a waste heat recovery boiler is used to generate electricity.
The Board of Directors of Tata Steel at its meeting held on 18 and 19 December 2017 approved the next phase of expansion of capacity at Kalinganagar, Odisha plant by 5 million tons per annum from 3 MTPA to 8 MTPA. The total capacity of Tata Steel India operations following the expansion will be 18 million tons per annum. The project will cost the company Rs 23500 crore and will be completed within 48 months. The Board also approved a rights issue for an amount not exceeding Rs 12800 crore for financing the expansion project, for de-leveraging the Balance Sheet and for general corporate purposes.
On 18 January 2018, Tata Steel announced the launch of two new products, Tata Aggreto and Tata Nirman, India's first branded LD slag products for applications in road, fly ash brick and clinker making.
On 19 January 2018, Tata Steel announced that the Executive Committee of the Board of the company at its meeting held on 19 January 2018 approved rights issue of equity shares up to Rs 12800 crore. The Committee approved simultaneous but unlinked issue of up to 15.53 crore fully paid-up ordinary shares not exceeding Rs 8000 crore and up to 7.76 crore partly paid-up ordinary shares not exceeding Rs 4800 crore. The rights issue of fully paid-up shares was priced at Rs 510 per share and the partly paid shares at Rs 615 per share. The rights entitlement ratio was fixed at 4 fully paid-up shares for every 25 shares and 2 partly paid shares for every 25 shares held on record date. On 19 January 2018, Tata Steel announced a successful dual tranche Reg S issuance of USD 1.3 billion of unsecured bonds in the international markets. The issue comprises USD 300 million 4.45 percent unsecured bonds due on 24 July 2023 and USD 1 billion 5.45 percent unsecured bonds due on 24 January 2028 by Abja Investment Co Pte Ltd, a wholly owned subsidiary of Tata Steel Incorporated in Singapore. The proceeds of the bonds will be used to refinance the offshore obligations of the company, which will help de-risk the balance sheet, enhance financial flexibility, diversify the investor base and improve the overall debt maturity profile.
On 2 February 2018, Tata Steel announced that it has concluded the acquisition of 74% equity stake in Bhubaneshwar Power Private Limited (BBPL) from JL Power Ventures Private Limited (JL Power). Tata Steel together with its 100% subsidiary TS Alloys already held 26% stake in BBPL. BBPL owns a 135 MW (2x67.5MW) thermal power plant at Anantapur Village in Cuttack District of Odisha. The acquisition of BBPL will allow Tata Steel to increase its captive source of power to meet its growing demand. Tata Steel had on 30 November 2017 executed definitive agreements to acquire 74% equity shares of Bhubaneshwar Power from JL Power Ventures for a consideration of Rs 255 crore. On 14 February 2018, West Bokaro division of Tata Steel commissioned the primary crushing plant 3 (PCP 3). PCP 3 has been set-up with an objective of augmenting coal beneficiation at the colliery.
On 7 March 2018, Tata Steel announced that it has received a formal communication from the Resolution Professional of Bhushan Steel Limited (BSL) that it has been identified as the highest evaluated complaint resolution applicant to acquire controlling stake of BSL under the Corporate Insolvency Resolution Process (CIRP) of the Insolvency and Bankruptcy Code 2016 (IBC), as decided in the meeting of the Committee of Creditors (CoC) of BSL on 6 March 2018.
Tata Steel Ltd
Company History
Tata Steel is one of the world's largest steel companies with a steel production capacity of approximately 27.5 million tonnes per annum (MnTPA) as on 31 March 2017. The company is a diversified steel producer with major operations in India, Europe and South East Asia. The company has manufacturing units in 26 countries and a commercial presence in over 50 countries. Tata Steel is the second largest steel producer in Europe with a crude steel production capacity of over 12.1 million tonnes per annum.
The company together with its subsidiaries, is engaged in the manufacture and sale of steel products in India and internationally. They offer hot and cold rolled coils and sheets, galvanized sheets, tubes, wire rods, construction rebars and bearings. Tata Steel is one of the few steel companies that are fully integrated - from mining to the manufacturing and marketing of finished products.
The company also involves in prospecting, discovering, and mining iron ore, coal, ferro alloys, and other minerals; designing and manufacturing plants and equipment for steel, oil and natural gas, energy and power, mining, railways, ports, aviation, and space industries; and agricultural implements. Further, they offers alumina, dolomite, and monolithic refractories, as well as silica refractories for coke ovens and the glass industry; manufactures bricks; sponge iron lumps and fines; and rolls for applications in integrated steel plants, power plants, and government mint, as well as paper, textile, and food processing sectors.
Tata Steel's operations are grouped under six Strategic Business Units include Bearings Division, Ferro Alloys and Minerals Division, Agrico Division, Tata Growth Shop (TGS), Tubes Division and Wire Division. They have introduced several branded steel products, including Tata Steelium (the world's first branded Cold Rolled Steel), Tata Shaktee (Galvanised Corrugated Sheets), Tata Tiscon (rebars), Tata Pipes, Tata Bearings, Tata Structural, Tata Agrico (hand tools and implements) and Tata Wiron (galvanised wire products).
Tata Steel Ltd was incorporated in the year 1907 with the name Tata Iron & Steel Company Ltd. In the year 1911, the company commenced the operations of the first Blast Furnace or the 'A' Blast Furnace. In December 2, 1911, the fist collieries were obtained and the first cast of pig iron was produced. In they ear 1912, the first ingot of steel rolled out of the Sakchi Plant and in October 1912, the Bar Mills started their commercial production. Also, the B Blast Furnace became operational during the year. In the year 1918, India's first steel (coke) plant was established in Jamshedpur.
In the year 1925, the New Rail Mill, Merchant Mill and Sheet Mill went into operation. In the year 1931, they opened an apprentice shop. In the year 1941, they started manufacture of special steel for war purpose. They produced a wide variety of special steels required for defense purposes including armoured cars called 'Tatanagars'. In the year 1943, Howrah Bridge was constructed from steel supplied by the company. In the year 1955, the company signed an agreement with Kaiser Engineers for two million tonne expansion programme. In the year 1980, they started the first phase of the four-phased modernisation programme.
In the year 1984, the company introduced BOF steelmaking, which could produce liquid steel in forty five minutes when it took the old open hearth furnaces, close to five hundred under the first phase of modernisation. During the year 1984-85, Indian Tubes Company Ltd was amalgamated with the company. The second phase of modernisation was in the year 1988, which concentrated largely on the iron-making area. During the year 1993-94, the company commissioned the Hot Strip Mill with the capacity of one million tonne per annum which was the company's third modernisation programme. In the year 2000, the company inaugurated the 1.2 million tonnes Cold Rolling Mill Complex as a first step towards expansion and modernisation.
In January 2, 2004, The Indian Steel Wire Products Company was acquired at Jamshedpur. In June 4, 2005, the company signed an MoU for setting up a five-million tonne per annum Greenfield integrated steel plant in the Jagdalpur district of Chhattisgarh. In July 2005, they formed a joint venture with Blue Scope Steel Ltd, Australia for quoted steel manufacturing facility. In July 21, 2005, the company acquired stakes in the Australian coal mines. In August 2005, the company set up Met coke manufacturing facility in West Bengal.
In September 19, 2005, the company signed an MoU with the Government of Jharkhand for setting up a 12-million tonnes per annum Greenfield integrated steel plant in the Manoharpur and Chandil areas of Jharkhand. In December 14, 2005, they signed definite agreement with Cementhai Holding Company to acquire shares and invest equity in the Milennium Steel, Thailand. Also, the name of the company was changed from Tata Iron & Steel Company Ltd to Tata Steel Ltd with effect from May 19, 2005.
In the year 2006, the company inaugurated India's first automated Jigging and Hydrocyclone Plant, with a 1.6 MTPA throughput, at Noamundi Iron Mines. They commenced the work on Ferro Chrome Plant by acquiring Rawnet Ferrous Industries Pvt Ltd, in Orissa, a Ferro Alloys plant with a capacity of 50,000 tpa of high carbon chrome. They set up a Joint Venture Company with Larsen and Toubro Ltd for developing an all weather modern deep water port in the state of Orissa on the Eastern Coast of India. Tata NYK Shipping Pte Ltd, a joint venture shipping company between the company and Nippon Yusen Kabushiki Kaisha was set up to cater to dry and break bulk cargo and also the shipping activities. In August 7, 2006, the company inaugurated the Roll Forming and Pre-Engineered Building Facilities of Tata Bluescope Ltd at Pune.
In April 2, 2007, the company acquired Corus -- Europe's second largest steel producer for consideration of USD 12 Billion, which made Tata Steel the sixth largest steel producer globally and the second-most geographically diversified steel producer in the world. They also entered into an agreement for acquiring controlling equity stake in two rolling mills located in Haiphorg, Vietnam. Also, they signed a joint venture agreement with Riversdale Mining for Mozambique coal project. In December 2007, the company and SODEMI (state owned company for mineral development) entered into joint venture agreement for the development of Mount Nimba Iron ore deposits in Ivory Coast (West Africa).
In January 2008, the company and the members of the Al Bahja Group, a leading business house of Oman entered into a Joint Venture Agreement for the development of the Uyun Limestone deposits at Salalah in the Sultanate of Oman. Also, they entered an agreement with Steel Authority of India Ltd (SAIL) to establish a 50:50 joint venture company for coal mining in India. In February 2008, they opened their fourth retail outlet, 'steeljunction' at Behala.
During the year 2008-09, the company completed the expansion of crude steel capacity to 6.8 mtpa as part of their expansion programme. Also, they commissioned Sinter Plant No. 4, the 'H' Blast Furnace and the Continuous Caster No. 3 at LD Shop-1 during this expansion phase. In June 16, 2008, the company and their wholly owned subsidiary, Rawmet Ferrous Industries Ltd entered into an agreement with Jasper Industries Pvt Ltd for setting up a coal based power plant of 2 X 67.5 MW capacity in Orissa.
In September 2008, the company through their subsidiaries signed a Heads of Agreement memorandum with New Millennium Capital Corporation (NML), a Canadian listed mining company aiming to develop iron ore projects in Northern Quebec, Labrador and Newfoundland provinces. As part of the restructuring of the overseas holdings, the company transferred their stake in Tata Steel (Thailand) Public Company Ltd to Tata Steel Global Holdings Pte Ltd. The company subscribed 35,88,022 rights shares of Tayo Rolls Ltd and consequently, Tayo Rolls Ltd has become a subsidiary of the Company with effect from December 01, 2008.
In October 22, 2009, the company and Mineral and Metal Trading Company Ltd signed an agreement to establish a 74:26 joint venture company for acquiring, development and operation of mines and processing of minerals and metals.
Hooghly Met Coke and Power Company Ltd was amalgamated with the company with effect from April 1, 2009. The construction of a warehousing shed and a building for a power receiving sub-station had started at one corner of the plant area. They increased the production capacity of Crude Steel from 61,10,000 tonnes to 68,00,000 tonnes, Saleable Steel from 58,40,000 tonnes to 65,00,000 tonnes and Welded Steel Tubes from 2,84,000 tonnes to 2,88,000 tonnes.
In October 2009, the company entered into agreement with MMTC Limited, a Central Government undertaking and established a joint venture company for acquiring, developing and operating mines and processing of minerals and metals. In November 2009, they signed a Joint Venture Agreement with NML, to advance the development of the DSO Project. In January 2010, the company entered into an MoU with NMDC Ltd, to explore the possibility of acquisition, exploration and development of mines, extraction and processing of minerals, setting up integrated steel plants and other businesses of mutual interest.
In April 6, 2010, the company entered in an MoU with Nippon Steel Corporation (NSC), Japan for setting up a Continuous Annealing and Processing Line at Jamshedpur, India with 0.6 mtpa capacity. In June 2010, the company subscribed to a private placement of Canadian $20 million by NML pursuant to which Tata Steel Global Minerals Holding Pte Ltd holds a 27.4% stake in NML.
In June 2010, the company and Tata Metaliks Ltd entered into an MoU with the Government of Karnataka for setting up an integrated steel plant of 3 mtpa in Agadi and Boodagatti villages of Haveri District, Karnataka. In August 2010, the company's subsidiary Corus UK Ltd and Sahaviriya Steel Industries Public Company Ltd (SSI) signed an MOU which sets out the scope of a potential transaction whereby SSI would acquire from Corus the Teesside Cast Products (TCP) business in a transaction valued at approximately USD 500 million.
Tinplate Company of India Ltd became a subsidiary of the company with effect from April 01, 2011, consequent to increase in the company's shareholding in the Tinplate Company of India Ltd from 42.88% to 59.45%. This increase is due to automatic and compulsory conversion of 3% fully convertible debentures of Rs 100 each held by the company into equity shares on April 01, 2011.
In April 2011, the company and Krosaki Harima Corporation (KHC) signed definitive agreements to induct KHC as a strategic partner in Tata Refractories Ltd (TRL). Under this arrangement, KHC will acquire 51% equity stake out of TSL's current 77.46% stake in TRL. As per the scheme of amalgamation, Centennial Steel Company Ltd, a wholly owned subsidiary company was amalgamated with the Company with effect from September 27, 2011.
In January 2012, the company secured a contract from Siemens Wind Power to supply 25,000 tones of profiled steel plate for wind towers. Tata Steel will deliver 25,000 tones of profiled plate (cut into the desired shape) between April and September 2012.
On 19 April 2012, Tata Steel announced that it has been awarded a high eight-figure US dollar contract to supply pipe for Enterprise Products Partners L.P.'s new crude oil export pipeline in the Gulf of Mexico's Keathley Canyon area. The contract will see Tata Steel deliver more than 48,000 metric tonnes of steel pipe from its 42-inch mill in Hartlepool, England for the Lucius Development Project, which has the capacity to produce in excess of 80,000 barrels of oil per day.
On 22 June 2012, Tata Steel announced the completion of an important strategic project that makes it only the second vertically integrated producer of grain oriented electrical steels in the European Union.On 2 November 2012, Tata Steel unveiled 'Tata Astrum', a new brand of its Hot Rolled products range at an event in New Delhi. The Astrum product range will find application in the Automotive, Earth Moving Equipment, Railways, Fabrication, Construction and Industrial Machinery segments.
On 7 November 2012, Tata Steel announced the opening its second aerospace service centre in China at Xi'an. The new facility in Xi'an complements its existing operation in Suzhou, opened in 2009, and aims to serve the growing demand for aerospace materials in the region.
On 12 February 2013, Tata Steel announced that it has restarted its second blast furnace at the Port Talbot steelworks in the UK following the completion of a 185 million rebuilding project. The state-of-the-art new furnace is more efficient and will allow Tata Steel to continue to meet the demanding requirements of UK and European manufacturing industries.
On 19 February 2013, Tata Steel announced that it has been granted the core supplier status by French car manufacturer PSA Peugeot Citro. On 10 June 2013, Tata Steel announced the successful completion of an upgrade of its corrosion-resistant coating line in South Wales, UK to improve and expand the company's range of high-value, high-formability automotive steels.
On 19 June 2013, Tata Steel announced that it has secured a long-term agreement to supply aerospace steels to Safran Group, the world-class manufacturer of aircraft, rocket engines, propulsion systems and aircraft equipment. The initial value of the contract is in excess of 9 million per year, with prospects for this to grow during the life of the agreement.
On 8 August 2013, Tata Steel announced that it won an order to manufacture 60,000 tonnes of high-quality rail for a new high-speed line linking the two holy cities of Mecca and Medina in Saudi Arabia.
On 21 October 2013, Tata Steel announced that has won a contract to supply rail track and steel sleeper plate to Network Rail for at least five years. Network Rail, the company set up to operate and maintain Britain's rail infrastructure, has chosen to source more than 95% of its rail from Tata Steel until 2019, with the option to extend this until 2024.
On 22 October 2013, Tata Steel announced that it will build a Vacuum Induction Melting (VIM) furnace at its Stocksbridge site in South Yorkshire, UK, to enable it to tap into new market opportunities and develop innovative new products for the aerospace and oil & gas industries. The cutting-edge VIM furnace will allow Tata Steel's Speciality Steels business, which already supplies steel to aircraft engine and airframe makers, to further develop relationships with its customers and expand its product portfolio.
On 23 October 2013, Tata Steel announced the commissioning of a new heat treatment plant at its Hayange plant in the Lorraine region of France. The unit will produce train track capable of lasting up to three times longer than standard rail. The new facility will more than double the annual output of heat-treated rail from 55,000 to 125,000 tonnes. On 7 November 2013, Tata Steel UK announced the launch of dent-resistant steel for car makers in Britain that helps to further reduce vehicle weight.
On 8 January 2014, Tata Steel announced that it has won a two-year contract to supply more than 200,000 tonnes of track to French rail operator SNCF. The contract will see Tata Steel supply the majority of SNCF's rail requirements in lengths of up to 108 metres from its plant in Hayange, Northern France.
On 16 January 2014, Tata Steel announced the launch of India's First Ferro Manganese brand TATA FERROMAG and India's first Ferro Chrome brand TATA TISCROME. Tata Steel will sell these two branded products in Gujarat, Maharashtra, NCR, Rajasthan, Odisha and West Bengal, which are the major consumption centres. Ferro Chrome and Ferro Manganese are Ferroalloys widely used as alloying agents in production of Carbon & Stainless steel. Ferro Chrome provides corrosion resistance thus increasing the life of stainless steel, while Ferro Manganese provides the necessary toughness and hardness to steel.
On 8 April 2014, Tata Steel announced that New Zealand's Steel and Tube Ltd has agreed to acquire Tata Steel International (Australasia) Ltd. for a cash consideration of NZ$27.5 million. Tata Steel International Australasia Ltd. (TSIAL) is a New Zealand based company which is the leading supplier of stainless steel, engineering steels, and composite floor decks to the New Zealand and Pacific Island markets. The division also offers ex-mill sales of colour coated and packaging steels, railway tracks, and structural sections.
On 28 April 2014, Tata Steel announced the commissioning of new Coke Oven Battery at its Jamshedpur steel manufacturing facility, thereby making the steel facility self-sufficient in coke requirement for stable operation.
On 27 June 2014, Tata Steel Europe officially inaugurated new slitting line at its Ruhr-based Steel Service Center in Gelsenkirchen, Germany. The new slitting line is specially geared up to process advanced and ultra high-strength steels, which are used to manufacture demanding automotive applications used in chassis, suspension, wheels and seats. They include advanced high strength steels with unique forming capabilities for chassis and cold rolled advanced high strength steels for light-weight seat components.
On 1 July 2014, Tata Steel announced restructuring proposals to improve the competitiveness of its South Wales, UK steelmaking business. The proposed changes would enable the UK Strip Products business to compete in Europe's lower market demand era by reducing costs equivalent to the loss of about 400 jobs in Port Talbot.
On 25 July 2014, Tata Steel announced a successful dual tranche Reg S issuance of USD 1.5 billion of unsecured bonds in the international markets. It was Tata Steel's debut US dollar bond issuance and a part of the company's long term financing strategy to raise capital internationally.
On 4 August 2014, Tata Steel announced the launch of an innovative new product for automotive manufacturers in response to market requirements for stronger and lighter steels.
On 11 August 2014, Tata Steel announced that it has signed a series of contracts with Subsea 7 - one of the world's leading contractors in engineering, construction and subsea services to the offshore industry - to supply undersea pipes to four separate North Sea projects.
On 1 September 2014, Jamshedpur Continuous Annealing and Processing Company Private Limited (JCAPCPL) announced the inauguration of India's first Continuous Annealing & Processing Line, a 600,000 tonnes per annum facility for manufacturing high-quality cold rolled sheets exclusively for the automotive industry, including outer panels and high tensile sheets. JCAPCPL is a 51:49 Joint Venture between Tata Steel Ltd and Nippon Steel & Sumitomo Metal Corporation (NSSMC). JCAPCPL will source steel from Tata Steel.
On 18 September 2014, Tata Steel announced that it has opened a new finishing line at its IJmuiden steelworks in the Netherlands to strengthen the supply of high-value steels to the automotive sector and other markets. Tata Steel invested 12 million euros in Finishing Line 32, which will process up to 400,000 tonnes of galvanised (corrosion resistant) steel coil a year. The opening of the new finishing line has also freed up Tata Steel's Cold Rolling Plant in IJmuiden, which was responsible for finishing galvanised steel. This will enable the company to increase the supply of uncoated cold rolled steel to customers. The new finishing line follows the opening in IJmuiden of the third hot-dip galvanising line in 2009.
On 13 November 2014, Tata Steel announced that it has completed a major upgrade of the Hot Strip Mill at its Port Talbot steelworks in South Wales, UK enabling it to further improve the quality of its steel products used in a wide range of markets, including automotive, engineering, construction and domestic appliances. The upgrade of the Hot Strip Mill follows investments totalling more than 250 million in state-of-the-art steelmaking and processing technology at the South Wales operations.On 17 November 2014, Tata Steel announced that it has commenced commercial production of GGBS, world's most sustainable building material. GGBS is used as a part replacement of cement and has been the solution for high strength, cost effective concrete in the developed economies for last 50 years.
On 3 February 2015, Tata Steel announced that it has reached a significant milestone in the transformation of its European steel portfolio with the launch of the 100th new product in its revitalised new product development programme. On 2 February 2015, Tata Steel launched an innovative, stronger structural steel product which can reduce the construction time of new buildings.
On 9 February 2015, Tata Steel announced the signing of a prestigious contract to supply highly wear-resistant rail for the Crossrail project beneath the heart of London. Tata Steel said at that time that it had already commenced deliveries to the Crossrail project, and will ultimately supply the project with more than 57 km of its heat treated, wear-resistant rail. In total 7,000 tonnes of Tata Steel rail will be used to create one of Europe's largest railway and infrastructure projects.
On 1 April 2015, Tata Steel announced that it has completed the acquisition from SSAB of Sweden of two service centres in Halmstad, Sweden and Naantali, Finland as well as the entire remaining 50% stake in Norsk St l Tynnplater AS, another strip products service centre based in Frederikstad, Norway. The service centres offer cutting-to-length, slitting and recoiling services to customers in the automotive, construction and electrical supplies industries, as well as in heavy and light engineering.
On 1 April 2015, Tata Steel announced that it has divested its entire stake in Lanka Special Steels Limited (LSSL) to E.B. Creasy & Company PLC (EBCC) for a total consideration of LKR 433 million (around Rs 20.4 crore) in an all cash deal. LSSL was a wholly owned subsidiary of Tata Steel incorporated in Sri Lanka. It is engaged in the business of manufacturing and supplying hot dip galvanized wire and nail wire with an installed capacity of 14,400 metric tonnes per annum. It had an annual turnover of LKR 1,569 million (Rs 74.0 crore) in FY 14.
On 7 April 2015, Tata Steel announced that it has completed a series of investments at its Steelpark site at Wednesfield in the West Midlands that has strengthened the site's position as the UK's largest steel processing centre. The start-up of a further multi-strand blanking line has completed the expansion of Steelpark's new Light Gauge Service Centre, which operates cut-to-length, blanking and slitting lines processing hot rolled, cold rolled and galvanized steel coils. On 14 June 2015, Tata Steel UK announced that it has launched a new initiative in its efforts to resolve the pension dispute with its UK trade unions. The company has approached Acas (Advisory, Conciliation and Arbitration Service) to help facilitate the next phase in talks between the parties.
On 1 July 2015, Tata Steel announced that the European Union (EU) has agreed to contribute 7.4 million euro towards testing a groundbreaking new iron production process being developed at Tata Steel's IJmuiden steelworks in the Netherlands. The six-month test campaign of the HIsarna pilot plant in 2016 will establish whether the new technology can produce molten iron in a stable way over a sustained period of time.
On 5 August 2015, Tata Steel announced that negotiations about the potential sale of its European long products business and associated distribution facilities to Klesch Group have been discontinued. The company was in talks with Klesch following the signing of a memorandum of understanding in October 2014.
Tata Steel's Greenfield project at Kalinganagar in the state of Odisha achieved a major milestone on 4 September 2015 with start of coke production from its Coke Ovens. The heating of Coke Ovens was started on 19 May 2015.
On 20 October 2015, Tata Steel's Long Products Europe business announced proposals to stop production of steel plate. The decision was made in response to a shift in market conditions caused by a flood of cheap imports, particularly from China, a strong pound and high electricity costs.
On 28 October 2015, Tata Steel announced the opening of its new UK research centre at the University of Warwick's Science Park. The opening marks the first phase of Tata Steel's relocation of its UK R&D work to the University of Warwick campus.
On 18 November 2015, Tata Steel unveiled plans to create one of the world's largest solar energy projects of its kind in the Netherlands. The company said at that time that it will mount 80,000 solar panels on the factory roofs at its IJmuiden steelworks in Netherlands.
Tata Steel announced that its Kalinganagar steel plant was dedicated to Odisha on 18 November 2015. The Kalinganagar steel plant is the largest single-location greenfield steel project in India. The first phase (3 MnTPA) of 6 MnTPA will produce world-class flat, lighter, high-tensile strength steel and will augment Tata Steel's Indian production to around 13 MnTPA of crude steel in India.
T S Global Holdings Pte Ltd. (TSGH), a subsidiary of Tata Steel incorporated in Singapore, executed agreements on 2 December 2015 for loan facilities of US$1.5 billion comprising a 5 year loan of US$750 million and a 6 year loan of US$750 million. The proceeds of this loan will be used to repay existing term loan facilities in TSGH.
On 3 December 2015, Tata Steel announced that its Long Products Europe business will continue to supply French rail operator SNCF for at least five more years after a new deal was signed. Tata Steel will supply the bulk of SNCF's 750,000 tonne requirements of high-quality rail over the duration of the renewed contract in lengths of up to 108 metres from its Hayange facility.
On 22 December 2015, Tata Steel UK announced the signing of a letter of intent with Greybull Capital to enter exclusive negotiations for the potential sale of its Long Products Europe business. On 18 January 2016, Tata Steel UK announced cost-saving proposals to improve the competitiveness of its UK business.
On 22 March 2016, Tata Steel announced the first despatch of Tata Ferroshots from its Kalinganagar steel plant. The product was commercially launched in India for the first time. The end use of Tata Ferroshots is in electric arc furnaces, induction furnaces, cupolas, basic oxygen furnaces and foundries as a replacement of pig iron, scrap or DRI.
On 24 March 2016, Tata Steel UK announced that it has reached an agreement to sell its Clydebridge and Dalzell steel facilities in Scotland. The deal involves the sale of the two plants to the Scottish Government which would then sell them on to Liberty House. The Dalzell plate mill transforms a semi-finished steel slab into a steel plate, while the Clydebridge facility processes steel plate using a quench and tempering technique.
On 29 March 2016, Tata Steel board reviewed the performance of the European business of the company, more specifically, of Tata Steel UK. Following the strategic view taken by the Tata Steel board regarding the UK business, the Tata Steel board advised the board of its European holding company i.e. Tata Steel Europe, to explore all options for portfolio restructuring including the potential divestment of Tata Steel UK, in whole or in parts.
On 11 April 2016, Tata Steel Europe formally commenced the process of divestment of its entire shareholding in its subsidiary Tata Steel UK. On the same day, Tata Steel UK announced the signing of an agreement to sell its long products Europe business to the family investment office, Greybull Capital. The sale for a nominal consideration, would be in exchange for Greybull Capital taking on the whole of the business, including assets and relevant liabilities, and securing an appropriate funding package. The sale covers several UK-based assets including the Scunthorpe steelworks, two mills in Teesside, an engineering workshop in Workington, a design consultancy in York, and associated distribution facilities, as well as a mill in northern France.
On 9 May 2016, the Board of Tata Steel Europe announced that seven expressions of interest submitted for Tata Steel's UK business have been immediately taken forward to the next stage of the sale process. In the next phase of the sales process the progressing interested parties will be given access to further business information and management team presentations in order for them to rapidly progress their interest to a binding stage.On 17 May 2016, Tata Steel announced that it has decided not to go ahead with the proposed merger of Tata Metaliks Limited and Tata Metaliks DI Pipes Limited with Tata Steel. The Scheme of Amalgamation between Tata Metaliks Limited and Tata Metaliks DI Pipes Limited with Tata Steel was earlier recommended by the Committee of Directors of Tata Steel in April 2013 and approved by the company's shareholders on in May 2014. The decision not to go ahead with the proposed merger was taken due to inordinate delay in obtaining requisite regulatory and statutory approvals along with significant dilution in the intended synergies that were envisaged in April 2013. Tata Metaliks is a subsidiary of Tata Steel. On 14 September 2016, Tata Steel announced that its Kalinganagar, Odisha plant achieved yet another milestone with the flagging off of the first hot rolled steel export rake from the plant.
On 27 October 2016, Tata Steel announced that Government of Quebec has joined as a strategic equity partner in its Canadian iron ore mining venture Tata Steel Minerals Canada (TSMC). TSMC together with its parent companies signed definite agreements for concluding investments of C$ 125 million as equity and C$50 million as debt with Government of Quebec's investment entities, Resources Quebec (RQ) and Investment Quebec (IQ) respectively, totaling C$ 175 million. The investment will result in an 18% equity stake for RQ in TSMC in line with the carrying value of the investment in Canadian iron ore assets for Tata Steel. Consequently, the shareholdings of Tata Steel and New Millennium Iron will be adjusted to 77.68% and 4.32% respectively. TSMC is developing iron ore deposits in Quebec and Newfoundland & Labrador in Canada.
On 27 October 2016, credit rating agency Brickwork Ratings revised Tata Steel Limited's credit rating to BWR AA from BWR AA+ for NCD and BWR AA- from BWR AA for the perpetual debt, with a negative outlook. In a statement, Brickwork Ratings said that a sudden change of guard at Tata Steel's holding company Tata Sons and Tata Group has not only heightened the management risk for Tata Steel, but also has exposed the company to uncertainty over continuity of critical decisions on cost cutting and deleveraging the Balance Sheet concerning the unprofitable UK operations and restructuring its European business. Brickwork Ratings further said that unless Tata Steel takes appropriate measures in this regard, it may lead to further deterioration in the financial profile of the company, as also a rating action.
On 28 November 2016, Tata Steel UK announced the signing of a Letter of Intent with Liberty House Group to enter into exclusive negotiations for the potential sale of its speciality steels business for an enterprise value of 100 million subject to due diligence and corporate approvals. The Letter of Intent covers several South Yorkshire-based assets including the Rotherham electric arc steelworks, the steel purifying facility at Stocksbridge and a mill in Brinsworth as well as service centres in Bolton and Wednesbury, UK, and in Suzhou and Xi'an, China.
On 30 November 2016, Tata Steel announced the inauguration of its 55,000 tonne per annum (TPA) ferro-chrome plant in the Gopalpur Industrial Park in Ganjam district of Odisha.
On 7 December 2016, Tata Steel UK announced that it has reached an agreement with trade unions on a number of proposals that would structurally reduce risks and help secure a more sustainable future for its UK business. The company and trade unions have also agreed on the principle that subject to the structural de-risking and de-linking of the British Steel Pension Scheme fund from the business, Tata Steel UK will continue the existing blast furnace configuration in Port Talbot until 2021. Further, based on achieving the necessary financial performance and cash flows as per the transformation plan of the UK business, the company will continue to invest across the UK sites to enhance the competitive position of Tata Steel UK in the European steel industry.
On 7 December 2016, Tata Steel announced that its subsidiary, TM International Logistics (TMILL) has divested entire stake in its wholly owned step down subsidiary TM Harbour Services Private Limited (TMHSPL) to Adani Ports and Special Economic Zone Limited (APSEZ) for a total consideration of Rs 106 crore in an all cash deal. TMHSPL is engaged in the business of providing tug services at Dhamra Port and owns three tug boats.On 5 January 2017, Tata Steel inaugurated the second phase of Cold Rolling Mill (CRM) Complex BARA at its Jamshedpur unit. The phase II expansion of CRM BARA includes installation of 0.3 MnTPA hot rolled skin passing mill (HSPM) to meet the increased demand of Hot-Rolled, Pickled, Skin passed and Oiled products in the automotive sector for high-end customers. In order to cater to the input requirement of HSPM, the production capacity of the existing pickling line has also been increased to 0.68 MnTPA from the designed capacity of 0.5 MnTPA.
On 16 January 2017, Tata Steel announced that its Noamundi iron mine in Odisha conducted pilot launch of drone application in mine monitoring, thereby becoming the first mine in the country to introduce drones for mine monitoring.
On 25 January 2017, Tata Steel executed definitive agreements with Creative Port Development Private Limited (CPDPL) and their promoters for the proposed development of Subarnarekha port at Chaumukh village of Balasore district in Odisha. As per the agreements, Tata Steel will acquire majority equity stake in CPDPL, and the port development is envisaged through a wholly-owned subsidiary, Subarnarekha Port Private Limited (SPPL).
On 21 February 2017, Tata Steel announced that its Greenfield steel plant located in Kalinganagar Industrial Complex in Jajpur district of Odisha, has achieved yet another milestone with the hot metal production at its blast furnace crossing 2 million tonne on 19 February 2017. The blast furnace achieved the first million tonne production of hot metal on 9 October 2016.
On 28 February 2017, Tata Steel announced the completion of the commissioning of the ferro-chrome plant at Gopalpur Industrial Park in Ganjam district of Odisha. The plant has an installed capacity of 55,000 tonne per annum (TPA).
The Board of Directors of Tata Steel at its meeting held on 20 April 2017 approved issue of debt securities of up to Rs 9000 crore in one or more tranches. The funds will be primarily deployed towards re-financing the existing debt, capex/working capital requirements and general corporate purposes.
On 2 May 2017, Tata Steel UK announced the completion of the sale of its Speciality Steels business to Liberty House Group for a consideration of 100 million. The sale covers several South Yorkshire-based assets, including the electric arc steelworks and bar mill at Rotherham, the steel purifying facility in Stocksbridge and a mill in Brinsworth as well as service centres in Bolton and Wednesbury, UK, and in Suzhou and Xi'an, China.
On 23 June 2017, Tata Steel sold 8.35 crore shares of Tata Motors to the Tata Group holding company Tata Sons at a price of Rs 452.80 per share (excluding brokerage and STT).
On 11 July 2017, Tata Steel announced that it divested its entire equity stake in a 50% joint venture, viz, Tata Elastron S.A. in favour to the joint venture partner Elastron S.A. for a total consideration of euro 0.368 million.
On 14 July 2017, Tata Steel announced that it became the first steel company to enter into a long-term tariff contract (LTTC) with Indian Railways. LTTC has been introduced by Indian Railways to establish long-term contracts with customers with guaranteed incremental revenue for Indian Railways.
On 1 August 2017, Tata Steel UK announced the completion of the sale of its 42-inch and 84-inch pipe mills, also known as the Submerged Arc Weld (SAW) mills, in Hartlepool to Liberty House Group. Earlier, Tata Steel UK announced on 11 July 2017 that it had signed a definitive sale agreement to sell its 42-inch and 84-inch pipe mills in Hartlepool to Liberty House Group.
On 20 September 2017, Tata Steel announced that it has signed a Memorandum of Understanding (MoU) with Germany's Thyssenkrupp AG to create a leading European steel enterprise by combining the flat steel businesses of the two companies in Europe and the steel mill services of the Thyssenkrupp group. The proposed 50:50 joint venture - Thyssenkrupp Tata Steel - would be focused on quality and technology leadership, and on the supply of premium and differentiated products to customers, with annual shipments of about 21 million tonnes of flat steel products. The joint venture would have a pro forma turnover of about ?15 billion per annum (Rs 115,000 crore) and about 48,000 employees spread across various locations. The joint venture would be headquartered in Amsterdam, Netherlands. The proposed combination of businesses would be formed through a non-cash transaction framework, based on fair valuation, where both shareholders would contribute debt and liabilities to achieve an equal shareholding in the venture.
On 11 October 2017, Tata Steel announced the expiry of the share purchase agreement for the acquisition of 100% equity stake in Brahmani River Pellets Limited (BRPL). Earlier, on 23 December 2016, Tata Steel had announced the execution of definitive agreements to acquire 100% equity shares of BRPL from Aryan Mining and Trading Corpn Private Limited and other companies in the Moorgate Industries Group (MIG). BRPL owns a 4 mtpa Pellet plant in Jajpur, Odisha and 4.7 mtpa iron ore beneficiation plant in Barbil, Odisha connected through a 220 KM underground slurry pipeline. On 11 October 2017, Tata Steel announced that it has acquired Rio Tinto's smelter technology and intellectual property rights required to operate the HIsarna process. HIsarna is a completely new technology in the steelmaking process which combines Tata Steel's cyclone converter furnace with Rio Tinto's smelter.
On 6 November 2017, Tata Steel announced that it has established India's largest Coke Dry Quenching (CDQ) facility, capable of handling 200 metric tonnes per hour, at its state-of-the-art Greenfield steel plant located at the Kalinganagar Industrial Complex in Jajpur district of Odisha. CDQ is a heat recovery system to cool the hot coke from coke ovens. It is one of the most renowned energy-efficient and eco-friendly facilities in steel production where hot coke removed from coke ovens at a temperature of approximately 1,000x C is cooled and kept dry with inert gas and the resulting steam produced in a waste heat recovery boiler is used to generate electricity.
The Board of Directors of Tata Steel at its meeting held on 18 and 19 December 2017 approved the next phase of expansion of capacity at Kalinganagar, Odisha plant by 5 million tons per annum from 3 MTPA to 8 MTPA. The total capacity of Tata Steel India operations following the expansion will be 18 million tons per annum. The project will cost the company Rs 23500 crore and will be completed within 48 months. The Board also approved a rights issue for an amount not exceeding Rs 12800 crore for financing the expansion project, for de-leveraging the Balance Sheet and for general corporate purposes.
On 18 January 2018, Tata Steel announced the launch of two new products, Tata Aggreto and Tata Nirman, India's first branded LD slag products for applications in road, fly ash brick and clinker making.
On 19 January 2018, Tata Steel announced that the Executive Committee of the Board of the company at its meeting held on 19 January 2018 approved rights issue of equity shares up to Rs 12800 crore. The Committee approved simultaneous but unlinked issue of up to 15.53 crore fully paid-up ordinary shares not exceeding Rs 8000 crore and up to 7.76 crore partly paid-up ordinary shares not exceeding Rs 4800 crore. The rights issue of fully paid-up shares was priced at Rs 510 per share and the partly paid shares at Rs 615 per share. The rights entitlement ratio was fixed at 4 fully paid-up shares for every 25 shares and 2 partly paid shares for every 25 shares held on record date. On 19 January 2018, Tata Steel announced a successful dual tranche Reg S issuance of USD 1.3 billion of unsecured bonds in the international markets. The issue comprises USD 300 million 4.45 percent unsecured bonds due on 24 July 2023 and USD 1 billion 5.45 percent unsecured bonds due on 24 January 2028 by Abja Investment Co Pte Ltd, a wholly owned subsidiary of Tata Steel Incorporated in Singapore. The proceeds of the bonds will be used to refinance the offshore obligations of the company, which will help de-risk the balance sheet, enhance financial flexibility, diversify the investor base and improve the overall debt maturity profile.
On 2 February 2018, Tata Steel announced that it has concluded the acquisition of 74% equity stake in Bhubaneshwar Power Private Limited (BBPL) from JL Power Ventures Private Limited (JL Power). Tata Steel together with its 100% subsidiary TS Alloys already held 26% stake in BBPL. BBPL owns a 135 MW (2x67.5MW) thermal power plant at Anantapur Village in Cuttack District of Odisha. The acquisition of BBPL will allow Tata Steel to increase its captive source of power to meet its growing demand. Tata Steel had on 30 November 2017 executed definitive agreements to acquire 74% equity shares of Bhubaneshwar Power from JL Power Ventures for a consideration of Rs 255 crore. On 14 February 2018, West Bokaro division of Tata Steel commissioned the primary crushing plant 3 (PCP 3). PCP 3 has been set-up with an objective of augmenting coal beneficiation at the colliery.
On 7 March 2018, Tata Steel announced that it has received a formal communication from the Resolution Professional of Bhushan Steel Limited (BSL) that it has been identified as the highest evaluated complaint resolution applicant to acquire controlling stake of BSL under the Corporate Insolvency Resolution Process (CIRP) of the Insolvency and Bankruptcy Code 2016 (IBC), as decided in the meeting of the Committee of Creditors (CoC) of BSL on 6 March 2018.
Tata Steel Ltd
Directors Reports
To the Members,
Your Directors take pleasure in presenting the 5th Integrated Report
(prepared as per the framework set forth by the International Integrated Reporting
Council) and the 113th Annual Accounts on the business and operations of Tata Steel
Limited ('Company'), along with the summary of standalone and consolidated
financial statements for the year ended March 31, 2020.
A. Financial Results
|
Standalone |
Consolidated |
|
2019-20 |
2018-19 |
2019-20 |
2018-19 |
| Revenue from operations |
60,435.97 |
70,610.92 |
1,39,816.65 |
1,57,668.99 |
| Total expenditure before finance cost,
depreciation (net of expenditure transferred to capital) |
45,574.40 |
50,047.98 |
1,22,353.59 |
1,28,285.65 |
| Operating Profit |
14,861.57 |
20,562.94 |
17,463.06 |
29,383.34 |
| Add: Other income |
404.12 |
2,405.08 |
1,843.49 |
1,420.58 |
| Profit before finance cost, depreciation,
exceptional items and taxes |
15,265.69 |
22,968.02 |
19,306.55 |
30,803.92 |
| Less: Finance costs |
3,031.01 |
2,823.58 |
7,533.46 |
7,660.10 |
| Profit before depreciation, exceptional items
and taxes |
12,234.68 |
20,144.44 |
11,773.09 |
23,143.82 |
| Less: Depreciation and amortisation expenses |
3,920.12 |
3,802.96 |
8,440.73 |
7,341.83 |
| Profit/(Loss) before share of profit/(loss) of
joint ventures & associates, exceptional items & tax |
8,314.56 |
16,341.48 |
3,332.36 |
15,801.99 |
| Share of profit/(loss) of Joint Ventures &
Associates |
- |
- |
187.97 |
224.70 |
| Profit/(Loss) before exceptional items
& tax |
8,314.56 |
16,341.48 |
3,520.33 |
16,026.69 |
| Add/(Less): Exceptional Items |
(1,703.58) |
(114.23) |
(3,752.05) |
(120.97) |
| Profit before taxes |
6,610.98 |
16,227.25 |
(231.72) |
15,905.72 |
| Less: Tax Expense |
(132.82) |
5,694.06 |
(2,568.41) |
6,718.43 |
| (A) Profit/(Loss) after taxes - from
Continuing operations |
6,743.80 |
10,533.19 |
2,336.69 |
9,187.29 |
| Profit/(loss) before tax from Discontinued
operations |
- |
- |
(1,120.74) |
(98.60) |
| Less: Tax expense of Discontinued Operations |
- |
- |
15.51 |
(9.64) |
| Profit/(Loss) after tax from Discontinued
Operations |
- |
- |
(1,136.25) |
(88.96) |
| Profit/(Loss) on Disposal of Discontinued
Operations |
- |
- |
(27.98) |
- |
| (B) Net Profit/(loss) after tax - from
Discontinued operations |
- |
- |
(1,164.23) |
(88.96) |
| (C) Net Profit/(Loss) for the Period [ A +
B ] |
6,743.80 |
10,533.19 |
1,172.46 |
9,098.33 |
| Total Profit/(Loss) for the period
attributable to: |
|
|
|
|
| Owners of the Company |
- |
- |
1,556.54 |
10,218.33 |
| Non-controlling interests |
- |
- |
(384.08) |
(1,120.00) |
| (D) Total other comprehensive income |
(648.87) |
(50.22) |
4,482.83 |
7.79 |
| (E) Total comprehensive income for the
period [ C + D ] |
6,094.93 |
10,482.97 |
5,655.29 |
9,106.12 |
| Retained Earnings: Balance brought forward
from the previous year |
27,694.90 |
18,700.25 |
14,056.43 |
7,801.99 |
| Add: Profit for the period |
6,743.80 |
10,533.19 |
1,556.54 |
10,218.33 |
| Less: Distribution on Hybrid perpetual
securities |
266.15 |
266.12 |
266.15 |
266.12 |
| Add: Tax effect on distribution of Hybrid
perpetual securities |
66.97 |
92.99 |
66.97 |
92.99 |
| Add: Other Comprehensive Income recognised in
Retained Earnings |
(345.18) |
3.88 |
4,459.24 |
(425.92) |
| Add: Other movements within equity |
- |
1.49 |
40.32 |
(1,995.47) |
| Balance |
33,894.34 |
29,065.68 |
19,913.35 |
15,425.80 |
| Which the Directors have apportioned as under
to:- |
|
|
|
|
| (i) Dividend on Ordinary Shares |
1,489.67 |
1,145.92 |
1,488.13 |
1,144.76 |
| (ii) Tax on dividends |
297.71 |
224.86 |
297.40 |
224.61 |
| Total Appropriations |
1,787.38 |
1,370.78 |
1,785.53 |
1,369.37 |
| Retained Earnings: Balance to be carried
forward |
32,106.96 |
27,694.90 |
18,127.82 |
14,056.43 |
Notes:
(1) On January 28, 2019, T S Global Holdings Pte. Ltd. ('TSGH')
(an indirect wholly-owned subsidiary of the Company) entered into definitive agreements
with HBIS Group Co. Ltd. ('HBIS') to divest its entire equity stake in NatSteel
Holdings Pte. Ltd. ('NSH') and Tata Steel (Thailand) Public Company Ltd. ('TSTH').
During the year under review, TSGH decided not to pursue the proposed transaction with
HBIS, for want of regulatory approvals.
As on March 31, 2020, active discussions and engagement with other
potential buyer(s) demonstrate that the Management of the Group is committed to sell the
disposal group and there is an active programme for completing the sale.
In accordance with Ind AS 105, "Non-current Assets Held for Sale
and Discontinued Operations", the assets and liabilities of businesses forming part
of the disposal group have been classified as held for sale.
(2) During the year under review, exceptional items (Consolidated
Accounts) primarily represent:
a) Impairment charges '3,197 crore in respect of property, plant and
equipment (including capital work-in-progress and capital advances, right of use assets
and intangible asset) primarily at Tata Steel Europe ('TSE'), Global mineral
entities, Tata Steel Special Economic Zone Limited, and at Tata Steel BSL Limited ('TSBSL')
along with impairment of Goodwill at Bhubaneshwar Power Private Limited.
b) Restructuring provisions amounting to '161 crore at TSE.
c) Expenses incurred on stamp duty and registration fees for a portion
of land parcels and mines acquired as part of business combination '27 crore and provision
for coal block performance guarantee '134 crore at Tata Steel Long Products Limited
(formerly Tata Sponge Iron Limited).
d) Provision for impairment of doubtful capital advances amounting to
'42 crore at TSBSL.
e) Fair valuation loss on investment in preference shares held at one
of the associate companies amounting to '250 crore at Tata Steel Limited (Standalone).
f) Provision for demands and claims amounting to '196 crore relating to
certain statutory demands and claims on environment and mining matters including '86 crore
relating to SVLDRS - Sabka Vishwas Legal Dispute Resolution Scheme at Tata Steel Limited
(Standalone).
g) Provision for Employee Separation Scheme ('ESS') under
Sunehere Bhavishya Ki Yojana ('SBKY') scheme amounting to '107 crore at Tata Steel
Limited (Standalone).
Partly offset by,
h) Restructuring and write back of provisions which primarily includes
write-back of liabilities no longer required at Tata Steel BSL Limited '154 crore and
settlement credit received at The Indian Steel & Wire Products Ltd. '18 crore.
i) Profit on sale of subsidiaries amounting to '149 crore and profit on
liquidation of group companies amounting to '41 crore at TSE.
j) Gain on recovery of advances earlier provided for amounting to '1
crore at Tata Steel Limited (Standalone).
The exceptional items (Consolidated Accounts) in Financial Year 2018-19
primarily include:
a) Provision of'172 crore in respect of advances with public bodies
paid under protest by Tata Steel BSL Limited.
b) Impairment charges '10 crore in respect of property, plant and
equipment (including capital work-in-progress and capital advances) and intangible assets
at TSBSL.
c) Provision for demands and claims amounting to '329 crore relating to
certain statutory demands and claims on environment and mining matters at Tata Steel
Limited (Standalone).
d) Provision for Employee Separation Scheme ('ESS') under
Sunehere Bhavishya Ki Yojana ('SBKY') scheme amounting to '35
crore at Tata Steel Limited (Standalone).
Partly offset by:
e) Profit on sale of non-current investments amounting to
'180 crore, primarily in TRL Krosaki Refractories Limited (an associate
of the Company) and certain other subsidiaries and joint ventures.
f) Restructuring and write back of provisions amounting to
'245 crore which primarily include write-back of liabilities no longer
required at TSBSL and arbitration settlement at Tata Steel Utilities and Infrastructure
Limited (formerly Jamshedpur Utilities & Services Company Limited), partly offset by
charge at TSE.
1. Dividend Distribution Policy
In terms of Regulation 43A of the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations, 2015, ('SEBI
Listing Regulations') the Board of Directors of the Company ('the Board')
formulated and adopted the Dividend Distribution Policy ('the Policy'). As per the
Policy, the Company, after considering various external factors that may have an impact on
the business as well as internal factors such as the long-term growth strategy of the
Company and the liquidity position including working capital requirements and debt
servicing obligations, will endeavour to pay dividend up to 50% of profit after tax of the
Company, subject to the applicable rules and regulations.
The Policy is annexed to this report (Annexure 1) and is also
available on our website at https://www.tatasteel.com/media/6086/dividend-
policy-final.pdf
2. Dividend
The Board has recommended a dividend of '10 per fully paid-up Ordinary
(equity) Share on 112,64,90,211 fully paid-up Ordinary Shares of face value '10 each, for
the year ended March 31, 2020. (Dividend for Financial Year 2018-19: '13 per fully paid-up
Ordinary Share on 112,64,89,680 fully paid-up Ordinary Shares of face value '10 each).
The Board has also recommended a dividend of '2.504 per partly paid-up
Ordinary (equity) Share on 7,76,36,788 partly paid-up Ordinary Shares of face value '10
(paid up '2.504 per share) each for the year ended March 31, 2020. [Dividend for Financial
Year 2018-19: '3.25 per partly paid-up Ordinary Share on 7,76,36,705 partly paid-up
Ordinary Shares of face value '10 each (paid-up '2.504 per share)].
The Board has recommended dividend based on the parameters laid down in
the Dividend Distribution Policy and will be paid out of profits for the year.
The dividend on Ordinary Shares (fully paid-up as well as partly
paid-up) is subject to the approval of the Shareholders at the Annual General Meeting ('AGM')
scheduled to be held on Thursday, August 20, 2020.
The dividend once approved by Shareholders will be paid on and from
Monday, August 24, 2020. If approved, the dividend would result in a cash outflow of
'1,145.93 crore. The dividend on Ordinary
Shares (fully paid-up as well as partly paid-up) is 100% of the paid-up
value of each share. The total dividend pay-out works out to 16.99% (Previous Year: 17%)
of the net profit of the standalone results.
Pursuant to the Finance Act, 2020, dividend income is taxable in the
hands of the shareholders effective April 1, 2020 and the Company is required to deduct
tax at source from dividend paid to the Members at prescribed rates as per the Income Tax
Act, 1961.
The Register of Members and Share Transfer Books of the Company (for
fully paid-up as well as partly paid-up shares) will remain closed from Saturday, August
8, 2020 to Thursday, August 20, 2020 (both days inclusive) for the purpose of payment of
the dividend for the Financial Year ended March 31, 2020.
3. Transfer to Reserves
The Board of Directors has decided to retain the entire amount of
profit for Financial Year 2019-20 in the statement of profit and loss.
4. Capex and Liquidity
During the year under review, the Company, on a consolidated basis
spent '10,398 crore on capital projects across India, Europe and Canada largely towards
on-going projects in India (Kalinganagar plant and Tata Steel BSL Limited), essential
sustenance, and replacement schemes.
The Company's liquidity position remains strong at '17,745 crore as on
March 31, 2020, comprising '11,549 crore in cash and cash equivalent and balance in
undrawn credit lines.
5. Management Discussion and Analysis
The Management Discussion and Analysis as required in terms of the SEBI
Listing Regulations is annexed to the report (Annexure 2).
B. Integrated Report
In keeping with the Company's valued tradition of "thinking about
society and not just the business", in 2016, we transitioned from compliance-based
reporting to governance-based reporting by adopting the <IR> framework developed by
the International Integrated Reporting Council.
We present to you our 5th Integrated Report which highlights the
measures taken by the Company that contribute to long-term sustainability and value
creation, while embracing different skills, continuous innovation, sustainable growth, and
a better quality of life.
C. Operations and Performance
1. Tata Steel Group
During the year under review, the Tata Steel Group ('the Group')
recorded total deliveries of 26.68 MnT (previous year: 26.80 MnT). The steel deliveries
decreased at Tata Steel Limited by 2.9% and at Tata Steel Europe by 4%. This decrease was
off-set by higher
deliveries at Tata Steel BSL Limited ('TSBSL') by 16%. The
increase at TSBSL is due to ramp-up of operations. Further, in the previous Financial Year
2018-19, deliveries prior to the acquisition of TSBSL on May 18, 2018 under Insolvency and
Bankruptcy Code were not included. Further, the acquisition of the steel business of Usha
Martin Limited by Tata Steel Long Products Limited ('TSLP') (formerly Tata Sponge
Iron Limited) on April 9, 2019, also increased the total deliveries of the Group by 0.51
MnT. The turnover for the Group was at '1,39,817 crore during the Financial Year 2019-20
(previous year: '1,57,669 crore), a decrease of 11% over the previous year due to decline
in realisations across geographies along with lower deliveries. Further, the EBITDA for
the Group was '17,735 crore during the Financial Year 2019-20 as compared to '29,770 crore
in the previous year.
During the year under review, the Group reported a consolidated profit
after tax (including discontinued operations) of '1,172 crore as against a profit of
'9,098 crore in the previous year. The decrease was mainly due to lower operating profits
attributable to decline in the steel prices during the year, higher exceptional charge,
partly offset by lower tax expenses primarily on account of re-measurement of deferred tax
liabilities based on the new lower rate of Income tax prescribed under Section 115BAA of
the Income Tax Act,1961, along with creation of deferred tax assets at some of its foreign
entities.
2. India
During the year under review, total deliveries at Tata Steel Limited
(Standalone) were at 12.32 MnT (previous year: 12.69 MnT), recording a decrease of 2.9%
over the previous year. Turnover was '60,436 crore (previous year: '70,611 crore),
decrease of 14.4% than that of the previous year. EBITDA from Tata Steel Limited
(Standalone) was '15,096 crore (previous year: '20,744 crore), 27.2% lower than that of
the previous year.
During the year under review, the crude steel production in India
increased by 8% to 18.20 MnT with ramp up at TSBSL and acquisition of steel business of
Usha Martin Limited by TSLP. TSBSL achieved best ever crude steel production and sales at
4.46 MnT and 4.14 MnT, respectively due to improved maintenance practices, higher capacity
utilisations, and marketing synergies. TSLP which acquired steel making facility of Usha
Martin Limited, during the year, achieved crude steel production of 0.58 MnT while
deliveries stood at 0.51 MnT.
Total deliveries of Tata Steel from its Indian operations (including
TSBSL and TSLP) stood at 16.97 MnT i.e. 4% higher than the previous year. The turnover and
EBITDA (excluding inter-company eliminations and adjustments) was '82,125 crore and
'17,650 crore, respectively.
During the year under review, Sukinda Chromite mine and Gomardih
Dolomite mine leases expired on March 31, 2020, as per the mining regulations . Tata Steel
Mining Limited (formerly T S Alloys Limited), a wholly-owned subsidiary of the Company,
has won the Sukinda Chrome ore mines in the auction and the lease grant process is
underway. Further, Tata Steel Mining Limited also signed 50 year
leases for Kamarda and Saruabil Chrome mines. With these mines, Tata
Steel Mining Limited is well placed to cater to its global customer base as well as
requirements of the Group.
3. Europe
During the year under review, liquid steel production from European
operations was 10.26 MnT (previous year: 10.31 MnT). Deliveries from European operations
decreased by 4% to 9.29 MnT primarily due to overall weakness in economic activities.
Turnover from operations was '55,939 crore (previous year: '64,777 crore). The decrease in
turnover was primarily due to sharp decline in European steel prices and lower deliveries,
resulting in loss of '664 crore at the EBITDA level.
The Company is committed to make its European operations simpler,
leaner, and sustainable. It has launched a transformation programme to generate savings
across multiple initiatives.
4. Impact of COVID-19
The outbreak of COVID-19 pandemic has led to an unprecedented health
crisis and has disrupted economic activities and global trade while weighing on consumer
sentiments. Consequently, the global steel demand is expected to be sharply lower in 2020.
The Government of India had imposed a stringent nationwide lockdown
with effect from March 25, 2020 which has severely impacted manufacturing activities.
Though the Steel and Mining sectors were exempt from the lockdown measures, they were
subject to certain guidelines. Steel demand was affected as key steel consuming sectors
struggled to operate amidst weakening economic activities, working capital constraints,
shortage of manpower, and logistical issues.
In Europe, the outbreak of COVID-19 has further accentuated the
sustained weak steel demand. The share of steel imports to total consumption in the
European Union continues to remain at elevated levels which is a cause of concern.
The risk-intelligent culture embedded across the Company has helped in
developing and adopting a multi-pronged strategy to effectively respond to the evolving
pandemic situation. The health and safety of our employees and the communities in which we
operate continues to be the foremost priority of the Company. The Company is focussed on
running operations safely and efficiently to service our customers. The operations have
been aligned with the prevailing market conditions by reducing upstream operations while
curtailing downstream operations. Cross-functional teams worked to manage supply chain and
logistics issues within the constraints imposed by the lockdown to ensure that plant could
operate as planned. With domestic markets closed due to the lockdown, there was a shift to
export sales which were ramped up sharply. The Company is also focussed on liquidity
management to face any future disruption in business conditions. Funds were raised to
manage liquidity considering the heightened uncertainty over the extent of impact on
underlying demand conditions.
D. Key Developments Amalgamation and Joint Venture
Amalgamation of Bamnipal Steel Limited and Tata Steel BSL Limited into
and with Tata Steel Limited
During the year under review, the Board of Directors of the Company, at
its meeting held on April 25, 2019, approved the amalgamation of Bamnipal Steel Limited
and Tata Steel BSL Limited, into and with the Company by way of a composite scheme of
amalgamation.
The Company received a 'no objection' to the scheme from the National
Stock Exchange of India Limited and BSE Limited on August 26, 2019 and has filed an
application before the National Company Law Tribunal, Mumbai Bench for necessary
directions. The amalgamation is subject to approval from shareholders and other regulatory
authorities.
Joint Venture between Tata Steel and thyssenkrupp AG
During the year under review, the Company and thyssenkrupp AG decided
not to pursue the proposed transaction to form a joint venture to combine their steel
businesses in Europe. The decision was taken after careful evaluation of the viability of
the proposal in light of the feedback received from the European Commission ('EC').
Thereafter, on June 11, 2019, EC formally announced its decision to prohibit the proposed
joint venture.
Acquisitions & Investments
Acquisition of Bhushan Energy Limited
During the year under review, Tata Steel BSL Limited ('TSBSL'),
an indirect subsidiary of the Company, completed the acquisition of controlling stake in
Bhushan Energy Limited (now Angul Energy Limited) ('BEL'), pursuant to the
Resolution Plan as approved by the National Company Law Tribunal (Principal Bench, New
Delhi) vide its Order dated May 30, 2019, under Corporate Insolvency and Resolution
Process of the Insolvency and Bankruptcy Code, 2016. Consequently, BEL became a subsidiary
of TSBSL effective June 1, 2019.
Investment in Tata Steel Long Products Limited
Pursuant to the Rights Issue of Tata Steel Long Products Limited
(formerly Tata Sponge Iron Limited) ('TSLP'), on July 24, 2019, the Company
acquired 2,58,43,967 Equity Shares of face value of '10 each of TSLP at a price of '500
per equity share (including a premium of '490 per equity share) aggregating to '1,292.20
crore. As a result of this, the Company's holding in TSLP increased from 54.50% to 75.91%.
The name change of TSLP from Tata Sponge Iron Limited to Tata Steel Long Products Limited
is effective August 20, 2019.
BOARDS RtrOR I (CON ID.)
Divestments
NatSteel Holdings Pte. Ltd. ('NSH') and Tata Steel (Thailand) Public
Company Ltd. ('TSTH')
During the year under review, T S Global Holdings Pte. Ltd. ('TSGH'),
an indirect wholly-owned subsidiary of the Company, for want of regulatory approvals,
decided not to pursue the proposed
transaction with HBIS Group Co. Ltd. ('HBIS'), to divest its
entire equity stake in NSH (100%) and TSTH (67.9%) to a company in which 70% equity stake
would be held by an entity controlled by HBIS and the balance 30% by TSGH.
The Company is in discussions with other investor(s) in continuation of
its strategy to find a partner for the South-East Asian business.
Financing
Issuances of Debt Securities
During the Financial Year 2019-20 and till date of the report, the
Company has allotted the following Unsecured, Rated, Listed, Redeemable, Non-Convertible
Debentures ('NCDs') of face value of '10,00,000 each to identified investors on
private placement basis:
| Particulars of Allotment |
Date of Allotment |
Tenure |
Date of Maturity |
| 6,700 - 7.70% NCDs aggregating to '670 crore |
March 13, 2020 |
5 years |
March 13, 2025 |
| 10,250 - 7.85% NCDs aggregating to '1,025
crore |
April 17, 2020 |
3 years |
April 17, 2023 |
| 5,100 - 7.85% NCDs aggregating to '510 crore |
April 22, 2020 |
3 years |
April 21, 2023 |
| 10,000 - 7.70% NCDs (floating coupon)
aggregating to '1,000 crore |
April 27, 2020 |
3 years |
April 27, 2023 |
| Series A: 5,000 - 7.85% NCDs (floating coupon)
aggregating to '500 crore; Series B: 5,000 - 7.95% NCDs aggregating to '500 crore |
April 30, 2020 |
3 years 3 years 6 months |
April 28, 2023 October 30, 2023 |
| 10,000 - 8.25% NCDs aggregating to '1,000
crore |
May 20, 2020 |
3 years |
May 19, 2023 |
| 4,000 - 8.08% NCDs (floating coupon)
aggregating to '400 crore |
June 3, 2020 |
3 years |
June 2, 2023 |
Refinancing at Tata Steel Netherlands
During the year under review, Tata Steel Netherlands Holdings B.V. ('TSNHBV'),
an indirect wholly-owned subsidiary of the Company, executed agreements for the
refinancing of its bank debt. TSNHBV has raised term loan facilities of EUR 1.75 billion.
This represents a reduction of EUR 500 million versus the external debt outstanding in
Tata Steel Europe as of March 2019, enabling the standalone European business to have a
more robust balance sheet while it is also putting in significant efforts at restructuring
and improving its operating performance.
Credit Rating
In April 2020, S&P Global Ratings ('S&P') revised the
issuer credit rating of the Company as well as the long-term foreign currency issuer
credit rating for ABJA Investment Co. Pte. Ltd., a wholly-owned subsidiary of the Company,
from 'BB-'/Outlook: Stable to 'B+'/Outlook: Negative. S&P also revised the issuer
credit rating of Tata Steel UK Holdings Ltd., an indirect subsidiary of the Company from
'B+'/Outlook: Stable to 'B'/Outlook: Negative. The revision in ratings was primarily on
account of COVID-19 pandemic related disruptions and the consequent economic effects.
Similarly, in April 2020, Moody's Investor Service ('Moody's')
revised the outlook for the Company's Corporate Family Rating from Stable to Review for
Downgrade and affirmed the rating 'Ba2'. Moody's has also revised the Corporate Family
Rating of Tata Steel UK Holdings Ltd. from 'B2'/Outlook: Stable to 'B3'/Outlook: Review
for Downgrade. The revision was also triggered in anticipation that the Company would face
challenges due to the COVID-19 pandemic led economic downturn coupled with the weak credit
profile of the Company.
E. Sustainability
The Company is committed to steel production using the most efficient
routes, minimising waste generation and mitigating impact on natural capital. The
sustainability approach of the Company emphasises integrated thinking and balances the
impact and outcome of six capitals viz. Financial, Manufactured, Intellectual, Human,
Social and Relationship, and Natural. Aspirations of taking our carbon emissions to <2
tCO2/tcs, attaining zero waste, reducing specific water consumption to <3 m3/tcs,
and doubling our CSR reach by 2025 are significant facets of this strategy.
New initiatives undertaken by the Company in the Financial Year 2019-20
find their genesis in our aspiration of minimising the carbon footprint. The Company
undertook third party studies which helped in identifying a renewable energy potential of
~180 MW across locations. This will help the Company in increasing the proportion of the
renewable energy in its power mix.
The Company is a signatory to the Task Force of Climate Related
Financial Disclosure for climate change and is in the process of identifying transition
risks to decarbonise its operations over a period. Several transition risks and
opportunities have been identified as part of this assessment. Specific mitigation and
contingency plans for each of the identified risks are being integrated with Company's
long-term strategy.
The Company is committed to serve its customers through a portfolio of
eco-friendly products and disclosure of the impact of the products on environment by using
Life Cycle Assessment ('LCA') methodology. In Europe, almost entire product range
of the European operations is certified to be at the BES 6001 sustainable sourcing
standard. During the year under review,
Tata Steel Europe received a 'Steelie' award from World Steel
Association for 'Excellence in Life Cycle Assessment' in recognition of its development of
a sustainability development tool for use in the new product development processes in its
European operations. Tata Steel Europe has also published Environmental Product
Declarations ('EPD'), setting out the environmental characteristics of products
throughout their life-cycle, for a large number of its products manufactured in Europe.
Further, the Company will strive to maintain its global leadership by publishing EPDs on
an increased proportion of its global product offering.
The Company identified supply chain sustainability as a key material
issue in the materiality exercise conducted in the Financial Year 2018-19. In order to
take this forward, the Tata Steel Responsible Supply Chain Policy was adopted in February
2020. The expectations with respect to sustainability from supply chain partners, viz.
vendors, Steel Processing Centres and distributors, as well as the way the Company would
engage with them on the subject have been laid down in the aforesaid policy.
In order to augment the effort of the Company towards conservation of
biodiversity at its operational sites, the Company constituted a Centre of Excellence for
Biodiversity Management to strategically formulate and implement Biodiversity Management
Plan. During the year under review, more than 4 lakh trees were planted across locations
using eco-restoration methodology and Miyawaki plantation techniques.
The continued focus on 'Sustainability' has helped the operations of
the Company, in India as well as Europe, to be recognised as two of the six Sustainability
Champions by World Steel Association for three consecutive years. Also, the Jamshedpur
Works was awarded the 'GreenCo Star Performer' award for sustained excellence in
environmental management and the Global Wires division of the Company was awarded the
'GreenCo Gold Rating' for excellence in environmental management, by the CII Green
Business Centre.
Environment
The Company is committed to responsible use and protection of
environment through resource conservation, pollution control, and sustainable practices
for waste management. The Company focusses on operational excellence through
"Prevent, Minimise, Recover, Reuse and Recycle" approach. The Company continues
its pursuit of establishing best-in-class facilities and channelising its investment to
upgrade manufacturing and distribution facilities to improve operational and environmental
performance.
The Company has implemented environmental management systems in
accordance with international standard ISO 14001, which provides the necessary framework
for managing compliance and improving environmental performance. The Company maintains
accredited laboratories for environmental performance assessment.
The Safety, Health, & Environment Committee of the Board provides
oversight and necessary guidance on environmental matters. The Company has dedicated
Environment Management teams at all its
operating locations. The Company endeavours to practice responsible
advocacy on regulatory issues and actively participates in World Steel Association
Environment Policy Committee, World Economic Forum, Central Pollution Control Board's
National Taskforce in India, Eurofer (the European Confederation of Iron and Steel
Producers), and various other organisations. The Company engages with various
organisations such as Confederation of Indian Industry-Centre of Excellence for
Sustainable Development, Confederation of Indian Industry-Sohrabji Godrej Green Business
Centre, the Indian Institute of Metals, The Energy and Resources Institute, The Federation
of Indian Chambers of Commerce and Industry, Federation of Indian Mineral Industries, and
Insolvency and Bankruptcy Board of India amongst others on diverse issues.
Climate Change
Climate change is one of the most pressing issues the world faces today
and the Company recognises its obligation to work towards mitigation of climate change
related risks and strives to address the challenges of transitioning to a lower carbon
regime. The Company firmly believes that, steel is an integral part of the solution for
transitioning to lower carbon economy because of its unique property of infinite
recyclability.
The Company aspires to achieve global benchmark levels of < 2 tCO2/tcs
emissions by 2025 for Indian operations and to become carbon neutral by 2050 in Europe.
The Company's site in IJmuiden in the Netherlands is one of the most carbon efficient
integrated steelworks in the world while, the Company's integrated steelworks at
Jamshedpur is the most efficient steel plant in India. The Company has established Energy
Efficiency and Carbon Reduction programmes at all its Steel Plants in the Netherlands, UK,
and India to pursue short-term energy efficiency initiative and to work on long-term
decarbonisation initiatives. The Research & Development team is collaborating with
technology companies and academia to work on wide range technologies which, inter alia,
includes carbon capture, use and storage ('CCUS'), hydrogen-based steelmaking and
new smelting technologies. The Company has set up a Steel Recycling business in an
endeavour to bring good practices in Indian scrap market and make more scrap available for
conversion to steel.
The Company continues to work on developing HIsarna, a new smelting
reduction technology to produce steel without the need for coke making or agglomeration
processes, thereby improving efficiency, reducing energy consumption and reducing CO2
emissions. The pilot plant is located at the Company's IJmuiden site in the Netherlands.
The Company is exploring to scale up HIsarna in India to pursue the development of a
strategic roadmap to achieve quantum reduction over 2030 and 2050 horizons.
Health and Safety
Health and Safety Management remains the Company's foremost priority
and we are committed to achieve 'Zero Harm' by 2025. In pursuit of this objective, the
Company has been working on six strategies viz. build safety leadership capability at all
levels to achieve zero harm, achieve zero harm to contract employees
by strengthening deployment of contractor safety management standard,
improve competency and capability for hazard identification & risk management, improve
road & rail safety across the Company, excellence in process safety management, and
establish industrial hygiene and improve occupational health.
During the year under review, the Company undertook several initiatives
to improve the health and safety standards of its employees, including rolling out a
reward and recognition policy for Indian operations to encourage positive safety behaviour
among employees, commissioning a 'safety leadership development centre' to enhance the
competency of the workforce and provide safety induction training, and establishing
'Tactical Centre' for business continuity management during emergency situations. Group
companies including Tata Steel Europe formed HSE Performance Improvement Teams to improve
safety at workplace through learning and sharing of best practices.
A focussed effort was also made to improve the deployment of competent
contract workforce in high hazard operations. For effective learning and deployment of
Safety Standard across organisation, ten Safety Standards were simplified and e-learning
modules were developed.
Contractor employee's fatality remains the topmost safety concern for
the Company. It is with deep regret that the Company reports three fatalities in India
involving our contractor partners. During the year under review, three distinct Safety
campaigns viz. 'Zero Harm', ECAUP (Elimination of Commonly Accepted Unsafe Practice) and
'Fall from Height' were launched across locations to address gaps and improve safety
awareness. Monthly review of red risk incidents by the Senior Leadership helped in
achieving ~44% reduction of high potential incidents vis-a-vis previous year. Further, the
initiative to roll out Process Safety through 'Centre of Excellence' methodology gained
momentum. Currently, the process safety has been rolled out to 46 departments and the
balance departments will be covered in the Financial Year 2020-21. The Company has been
awarded for the best practice on 'Managing Process Safety Critical Equipment for Barrier
Effectiveness' at the World Steel Safety and Health Recognition function held at Mexico in
2019.
The Company is leveraging digital technology through usage of Smart
Safety Wearable' developed in-house, in collaboration with Tata Communications, for online
tracking of health parameters of workers who are in isolated workplaces at Jamshedpur. In
order to improve safe behaviour on road, a video analytic system was installed at
Jamshedpur including the first Automatic Number Plate Recognition ('ANPR') system.
Further to strengthen CCTV visualisation, local command centres were established across
various locations.
Towards Occupational Health, the Company has implemented Industrial
Hygiene hazard control measures to minimise the exposure level at Jamshedpur. Theme based
health awareness campaigns on heat stress, hypertension, diabetes, and obesity were
organised
across India covering 15,000 employees and contract employees. In order
to develop competency in first-aid and Cardiopulmonary resuscitation (CPR) ~7,600
employees were trained across India. High risk cases of about 52%, relating to life style
diseases, have been transformed to moderate or low risk category.
During the year under review, the Company has also undertaken other
initiatives such as leadership coaching and site interventions at both integrated sites,
putting in place new governance and review structures, accelerating the deployment of
standards and codes of practices around coil banding, and initiative towards a more
digital approach to support site health and safety teams and the development of management
systems in line with ISO 45001.
At Tata Steel Europe, Health and safety continues to be of utmost
priority. It is with deep regret that the Company reports two fatalities in Europe during
the year. In consultation with the senior leadership, several measures including a health
and safety transformation plan which focusses upon five key areas viz. transformational
leadership, collaborative development and deployment, digitally enabled, company wide
support, standards and integration, and workforce engagement, have been developed.
Research and Development
I n line with the aspiration to be amongst the top five innovation
driven steel companies globally, the Company has ushered in Technology Leadership Areas ('TLAs').
Cross-functional teams have been constituted and projects have commenced based on TLAs.
During the year under review, the Research and Development ('R&D') conducted by
the Company has demonstrated a process at lab scale for rapid heating of non-coking coal
to coke, through microwave energy. The Company also targets to upscale the technology for
continuous coke making. Further, with an aim to create 'Value from Waste', the Company
established a process for using water-cooled and air-cooled ferrochrome slag material in
applications such as bitumen road, concrete, and fly ash slag bricks.
Conservation of the environment and sustainability has always been an
important area for the Company. Accordingly, the Company has installed a pilot plant of
the scale 5 Tonnes per Day (TPD) at one of our steelmaking plants to capture CO2 from
Blast Furnace gas. Further, the Company has also developed an advance oxidation process
for cyanide removal and the fabrication and installation of the commercial plant of the
capacity @ 100 m3/hr is under progress. Amongst the notable customer
collaborations, the Company has worked jointly with a leading automotive player in
designing the tipper body using a new grade of high strength steel which has resulted in
reduction of the weight of the tipper body by 200 kg without compromising on its strength.
In Europe, R&D has contributed to various new products and
implementation of new process control models and other process improvements. The Company
has introduced the Valast range
of abrasion resistant grades, the new Cr6+ free TCCT (Trivalent
Chromium Coating Technology) as replacement for ECCS (Electrolytic Chrome Coated Steel)
and CFPA (Chromium Free Passivation Alternative) products for packaging, and MagiZinc full
finish. The Company also worked towards continuously optimising coal blending, improving
safety and preventing damage by prediction of coiling through a new model CISCA (Cooling
Induced Shape Change Algorithm), and automatically detecting of stickers in the casters at
an early stage. Further, R&D has also been vital in getting many potential new
products to reach higher Technology Readiness Levels throughout the year and to support
the customer interactions on a technical level.
R&D continues to help the Company in its drive to become more
sustainable and environmentally friendly. The HIsarna project has demonstrated its
potential to solve certain issues faced by the steel industry in dealing with circularity
and climate change. R&D will continue to support this development and be heavily
involved in the technical discussions for upscaling the process in India and IJmuiden.
New Product Development
During the year under review, the Company developed 155 new products in
India, which inter alia include the JSH440WN & JSH590RN grades and S420MC for
high strength automotive structural applications. The new grades of steel are targeted to
be used in upcoming automotive models. The Company was awarded the "Innovative
Supplier of the year 2019" for its customer centric approach and innovation in the
product development.
In the long products segment, the Company commercialised high strength,
high ductility rebar grade - Fe600 HD. Further, the Company also developed low N2 Steel
grade [WR3M] wire rod for welding electrode wire application through Electric Arc Furnace
(EAF) route.
I n Europe, 22 new products were launched during the year. These
launches include major developments for engineering, automotive and construction markets.
A notable example of product launch includes the Valast450, XPF 800 Tubes and
Celsius460. Valast450 hot rolled abrasion resistant product offers the widest strip
product with superior surface quality, guaranteed impact strength and flexible length
sheets at a competitive price to the yellow goods and heavy vehicles market. The XPF800
Tubes, offers customers a cost-effective alternative for manufacturing automotive
components such as twist beams. The Celsius460 NH Tube is the strongest hot formed
structural hollow section ever produced by the Company, offering customers up to 20%
weight saving with no weldability penalty. Further, Packaging department has further
developed and commercialised its already launched polymer laminated steel Protact range
of products.
Customer Relationship
During the year under review, the Company continued to enhance its
relationship with automotive manufacturers and their large value chain partners. In
addition, the Company also revived its
Customer Service Team ('CST') approach of nurturing
relationships with automotive manufacturers and continued to provide value upliftment
across the Original Equipment Manufacturers ('OEM') supply chain ecosystem. The
Company also extended its Early Vendor Involvement ('EVI') partnership for the
upcoming models of the OEMs. The Company has offered solutions on weight reduction, crash
worthiness, and vehicular design from material perspective to its customers through its
equipped Research and Development setup. In addition, the Company continued to roll out
its Value Analysis & Value Engineering ('VAVE') module and advanced material
data for existing models and in-production support.
During the year under review, 'Tata Tiscon', the Company's rebar brand,
increased its footprint in the rural hinterland through active engagement with Mason
Community under the MITR programme. The programme has over 25,000 Active Masons in the
Community who contribute to more than 25% volume for the brand. The Company, through Tata
Tiscon's Innovative Discovery programme, engaged with over 7,500 architects and engineers.
These engagements were aimed at enhancing the Individual House Building construction
ecosystem of the country.
During the year under review, Tata Shaktee, the Company's flagship
brand in the field of galvanised corrugated sheets, completed 20 years. The Company
reached out to almost 2,00,000 people across more than 4,000 villages across 16 states and
65 districts of rural India, through its on-ground bike campaign 'Gaon Gaon Shaktee Ki
Chaon'. The campaign, aimed at category conversion of 'Kachcha House' owners to Tata
Shaktee GC Sheets, and garnered over 1,500 leads and registrations of over 55,000 people.
Tata Shaktee reached out to over 5,000 farmers across 120 districts in India via 127 Kisan
Meets conducted on the occasion of Kisan Diwas. This programme also helped the Company to
enhance its relationship with the fabricator community via Shakteeman, the digital
Fabricator Loyalty Scheme. The Company has introduced a reward based programme with the
aim to increase the fabricator loyalty for Tata Shaktee.
The Company's e-selling platform 'Aashiyana' which caters to multiple
B2C brands crossed a turnover of '316 crore as against '100 crore in the previous year.
B2ECA (Business to Emerging Corporate Accounts) consisting of brands such as Tata Astrum
(HR), Tata Steelium (CRCA) and Galvano (coated) is a ~4 MnTPA business and continues to
grow. During the year under review, the Company partnered with various institutions to
bring together various thought leaders and ECAs to understand the upcoming technologies in
the microsegments we serve. Collaborative Reform with ECA for Advanced Technical
Enhancement ('CREATE') was conducted with over 25 ECA customers to generate cost
and weight savings ideas via redesigning of components. A knowledge sharing platform
ECA-Talks was conceptualised where the senior leadership team of key ECA customers shared
current trends and future expectations for their respective micro-segments. Further, under
the Skilling India Initiative, training programmes were organised for the workforce of
ECA customers to develop technical capabilities. Fabricators were
identified as key influencers to scale up Tata Astrum Super (unique laser marked Hot
Rolled coils) and several fabricator meets were conducted to strengthen brand awareness.
Both, COMPASS a digital supply chain visibility solution rolled for B2B and DigEca, an
initiative that captures lead management for ECAs received traction from distributors
& customers. DigEca has been rolled out to all ECAs to drive supply chain agility and
improve visibility to customers. The Company has also completed digital analytics based
projects named Paras, Amrit, and Ascend pertaining to a digital method of market demand
assessment and improvement in product value realisation.
In the B2B sector, the Company has launched #Converse to Construct-
Conversations that builds Tomorrow - a platform to interact and share ideas with different
stakeholders of the construction sector that would enable adoption of faster, sustainable
and modern construction practices in line with global benchmarks. The Company has also
collaborated with the World Steel Association (through ConstructSteel forum) and Indian
Steel Association to support them in their efforts to improve steel intensity in
construction in India. In the Engineering Segment (Pre-Engineered Building, Lifting &
Excavation, Construction & Projects and Oil & Gas), 'Building India Together' was
rolled out to drive customer engagement initiatives such as CST, VAVE, Technology Day and
Joint Milestones celebration across key customer accounts across India.
During the year under review, the Company's "Tata Pravesh
Pioneers" programme was launched to capture customer testimonials encapsulating their
experiences with the products and service. The Company also launched 'Griha Pravesh', an
Influencer Management Programme, to build a web of influencers such as architects,
interior designers, civil and structural engineers and to create Tata Pravesh footprint
across India.
The Company appointed dedicated Key Account Managers for Nest-in
offerings, for repeat customers in order to understand and meet customised requirements,
as well as receive and implement their feedback. The Company has installed over 1,800
EzyNest (modular toilets) units for repeat customers as part of their CSR initiatives
across India with an AMC contract for many of them. Further, the Company has also received
AquaNest (water ATMs) orders from such customers. Nest-In effectively uses demo units and
open house visits to clear any customer concerns on quality and guide them on the
aesthetics of Nestudio - a premium prefabricated living solution. The Company has listed
all Nest-In offerings on the Government e-Marketplace portal where procurements are made
by Government Officers.
In Europe, the Company partners with customers to help them excel in
their market, co-creating more sustainable value throughout the entire value chain. As
part of its Transformation Programme, the Company has integrated its existing initiatives
on 'Customer Excellence' and 'Future Value Chain' and undertaken initiatives to optimise
the mix, and identify and capture additional opportunities
in the market. 'Commercial Excellence' improvements have been
acknowledged in the Tata Business Excellence Model assessment. The Company also has a
value chain transformation programme previously known as 'Future Value Chain' which
focusses on driving service and quality improvements. European operations are increasing
its focus on business development to achieve a balanced portfolio in terms of both
products and customer setup. The Company maintains its differentiation strategy, which
aims to increase the proportion of high margin differentiated products. As part of the
strategy, the Company has launched 22 new products in Europe during the year. These
launches include major developments for the engineering, automotive, packaging, and
construction markets. Along with products, the Company also offers services such as
Electronic Data Interchange, Track and Trace, Early Vendor Involvement, Design and
Engineering support, Building Information Modelling, Life Cycle Analysis, and Technical
Support.
Corporate Social Responsibility
The objective of the Company's Corporate Social Responsibility ('CSR')
initiatives is to improve the quality of life of communities through long-term value
creation for all stakeholders. The Company has in place a CSR policy which provides
guidelines to conduct CSR activities of the Company. The CSR policy is available on the
website of the Company at https://www.tatasteel.com/media/11804/tata-
steel-csr-policy-latest-2019.pdf
For decades, the Company has pioneered various CSR initiatives. The
Company continues to remain focussed on improving the quality of life. During the year
under review, the Company addressed key development challenges faced by communities we
serve, thus reaching out to the lives of over 1.4 million people through innovative
initiatives in health, drinking water, education, livelihood, sports, infrastructure
development, amongst others. The Company's signature CSR programmes have been recognised
as models of positive change that address critical development issues at a greater scale
in areas of school education, maternal and neonatal health, tribal identity, and building
of a multi thematic corridor of well-being connecting its areas of operations in Jharkhand
and Odisha. The Company is working closely with tribal communities in its areas of
operation in India. The Company has partnered with the State Governments of Jharkhand and
Odisha and with various reputed national and international development organisations in
delivering its programmes.
The Company's CSR efforts have been recognised through various awards
conferred on it. The most significant achievement has been the Maternal And Newborn
Survival Initiative receiving recognition in the inaugural National CSR Awards instituted
by the Ministry of Corporate Affairs, Government of India at New Delhi. During the year
under review, the Company spent '192.99 crore on CSR activities. The Annual Report on CSR
activities, in terms of Section 135 of the
Companies Act, 2013 ('the Act') and the Rules framed thereunder,
is annexed to this report (Annexure 3).
Tata Steel Europe conducts regular dialogues with local communities to
understand and address their concerns relating to their activities and its impact on the
environment as well as our sustainability goals and improvement targets. Local communities
are part of the sustainable economy, as we help each other to coexist and collaborate
successfully with a good understanding of the mutual benefits that we provide to one
another. The Company runs regular programmes to invite the community to see our work as
well as enjoy and see the important wildlife and flora that flourish on its sites. The
Company sponsors local activities and support charities. In IJmond, the Company celebrated
the annual Tata Steel Chess Tournament that attracts thousands of players and spectators
and boosts the local tourism economy in the off-season in January. The Company also
sponsors local sports teams and children's events, most notably in recent years the Tata
Kids of Steel triathlons that enthuse kids to be physically proactive. The Company also
engages with communities as an existing and potential workforce, running programmes to
involve young people, and girls in particular, so that they can discover the interesting
career opportunities that our organisation offers.
F. Corporate Governance
At Tata Steel, we ensure that we evolve and follow the corporate
governance guidelines and best practices diligently, not just to boost long-term
shareholder value, but also to respect the interests of the minority. We consider it our
inherent responsibility to disclose timely and accurate information regarding the
operations and performance, leadership, and governance of the Company.
I n accordance with our Vision, the Group aspires to be the global
steel industry benchmark for value creation and corporate citizenship. The Group expects
to realise its Vision by taking such actions, as may be necessary in order to achieve its
goals of value creation, safety, environment and people.
Pursuant to the SEBI Listing Regulations, the Corporate Governance
Report along with the Certificate from a Practicing Company Secretary, certifying
compliance with conditions of Corporate Governance, is annexed to this report (Annexure
4).
Meetings of the Board and Committees of the Board
The Board met five times during the year under review. The intervening
gap between the meetings was within the period prescribed under the Act and the SEBI
Listing Regulations. The Committees of the Board usually meet the day before or on the day
of the formal Board meeting, or whenever the need arises for transacting business. Details
of composition of the Board and its Committees as well as details of Board and Committee
meetings held during the year under review are given in the Corporate Governance Report.
Selection of New Directors and Board Membership Criteria
The Nomination and Remuneration Committee ('NRC') works with the
Board to determine the appropriate characteristics, skills and experience for the Board as
a whole as well as for its individual members with the objective of having a Board with
diverse backgrounds and experience in business, finance, governance, and public service.
Characteristics expected of all Directors include independence, integrity, high personal
and professional ethics, sound business judgement, ability to participate constructively
in deliberations, and willingness to exercise authority in a collective manner. The
Company has in place a Policy on appointment & removal of Directors ('Policy').
The salient features of the Policy are:
• It acts as a guideline for matters relating to appointment and
re-appointment of directors
• It contains guidelines for determining qualifications, positive
attributes of directors, and independence of a Director
• It lays down the criteria for Board Membership
• It sets out the approach of the Company on board diversity
• It lays down the criteria for determining independence of a
director, in case of appointment of an Independent Director
During the year under review, there has been no change to the Policy.
The Policy is available on the website of the Company at https://www.
tatasteel.com/media/6816/policy-on-appointment-and-removal- of-directors. pdf
Familiarisation Programme for Directors
As a practice, all new Directors (including Independent Directors)
inducted to the Board go through a structured orientation programme. Presentations are
made by the Senior Management giving an overview of the operations, to familiarise the new
Directors with the Company's business operations. The new Directors are given an
orientation on the products of the business, group structure and subsidiaries, Board
constitution and procedures, matters reserved for the Board, and the major risks and risk
management strategy of the Company. Visits to plant and mining locations are organised for
the new Directors to enable them to understand the business better.
During the year under review, no new Independent Directors were
inducted to the Board. Details of orientation given to the existing independent directors
in the areas of strategy, operations & governance, safety, health and environment, and
industry trends, are available on the website of the Company at
https://www.tatasteel.com/investors/corporate-governance/ compliance/
Evaluation
The Board evaluated the effectiveness of its functioning, that of the
Committees and of individual Directors, pursuant to the provisions of the Act and SEBI
Listing Regulations.
The Board sought the feedback of Directors on various parameters
including:
• Degree of fulfillment of key responsibilities towards
stakeholders (by way of monitoring corporate governance practices, participation in the
long-term strategic planning, etc.);
• Structure, composition, and role clarity of the Board and
Committees;
• Extent of co-ordination and cohesiveness between the Board and
its Committees;
• Effectiveness of the deliberations and process management;
• Board/Committee culture and dynamics; and
• Quality of relationship between Board Members and the
Management.
The above criteria are broadly based on the Guidance Note on Board
Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.
The Chairman of the Board had one-on-one meetings with each Independent
Director and the Chairman of NRC had one-on-one meetings with each Executive and
Non-Executive, Non-Independent Directors. These meetings were intended to obtain
Directors' inputs on effectiveness of the Board/ Committee processes.
In a separate meeting of Independent Directors, performance of
Non-Independent Directors, the Board as a whole, and the Chairman of the Company was
evaluated, taking into account the views of Executive Directors and Non-Executive
Directors.
The Nomination and Remuneration Committee reviewed the performance of
the individual directors and the Board as a whole.
In the Board meeting that followed the meeting of the independent
directors and the meeting of Nomination and Remuneration Committee, the performance of the
Board, its committees, and individual directors was discussed.
The evaluation process endorsed the Board Members' confidence in the
ethical standards of the Company, the resilience of the Board and the Management in
navigating the Company during challenging times, cohesiveness amongst the Board Members,
constructive relationship between the Board and the Management, and the openness of the
Management in sharing strategic information to enable Board Members to discharge their
responsibilities and fiduciary duties.
In the coming year, the Board intends to enhance focus on
sustainability and digital interventions.
Remuneration Policy for the Board and Senior Management
Based on the recommendations of NRC, the Board has approved the
Remuneration Policy for Directors, Key Managerial Personnel ('KMPs'), and all other
employees of the Company. As part of the policy, the Company strives to ensure that:
• the level and composition of remuneration is reasonable and
sufficient to attract, retain, and motivate Directors of the quality required to run the
Company successfully;
• relationship between remuneration and performance is clear and
meets appropriate performance benchmarks; and
• remuneration to Directors, KMPs, and Senior Management involves
a balance between fixed and incentive pay, reflecting short, medium, and long-term
performance objectives appropriate to the working of the Company and its goals.
The salient features of the Policy are:
• It lays down the parameters based on which payment of
remuneration (including sitting fees and remuneration) should be made to Independent
Directors and Non-Executive Directors.
• It lays down the parameters based on which remuneration
(including fixed salary, benefits and perquisites, bonus/ performance linked incentive,
commission, retirement benefits) should be given to whole-time directors, KMPs, and rest
of the employees.
• It lays down the parameters for remuneration payable to Director
for services rendered in other capacity
During the year under review, there has been no change to the Policy.
The Policy is available on the website of the Company at https://www.
tatasteel.com/media/6817/remuneration-policv-of-directors -etc.pdf
Particulars of Employees
Disclosures pertaining to remuneration and other details as required
under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 are annexed to this report (Annexure
5).
In terms of the provisions of Section 197(12) of the Act read with
Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, a statement showing the names and other particulars of employees
drawing remuneration in excess of the limits set out in the said Rules forms part of this
report.
Directors
Re-appointments of Independent Directors
The shareholders of the Company at the AGM held on July 19, 2019,
approved the re-appointment of Ms. Mallika Srinivasan (DIN:00037022) as Independent
Director of the Company, to hold office for a second term effective August 14, 2019
through May 20, 2022. At the said AGM, the shareholders also approved the re-appointment
of Mr. O. P. Bhatt (DIN:00548091) as Independent Director of the Company, to hold office
for a second term effective August 14, 2019 through June 9, 2023.
Re-appointment of Director retiring by rotation
In terms of the provisions of the Act, Mr. N. Chandrasekaran
(DIN:00121863), Director of the Company, retires at the ensuing AGM and being eligible,
seeks re-appointment.
The necessary resolution for re-appointment of Mr. N. Chandrasekaran
forms part of the Notice convening the ensuing AGM scheduled to be held on August 20,
2020.
The profile and particulars of experience, attributes, and skills that
qualify Mr. Chandrasekaran for Board membership, are disclosed in the said Notice.
Independent Directors' Declaration
The Company has received the necessary declaration from each
Independent Director in accordance with Section 149(7) of the Act and Regulations 16(1)(b)
and 25(8) of the SEBI Listing Regulations, that he/she meets the criteria of independence
as laid out in Section 149(6) of the Act and Regulations 16(1)(b) of the SEBI Listing
Regulations.
In the opinion of the Board, there has been no change in the
circumstances which may affect their status as independent directors of the Company and
the Board is satisfied of the integrity, expertise, and experience (including proficiency
in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent
Directors on the Board. In terms of Section 150 read with Rule 6 of the Companies
(Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the
Company have undertaken requisite steps towards the inclusion of their names in the data
bank of Independent Directors maintained with the Indian Institute of Corporate Affairs.
Key Managerial Personnel
In terms of Section 203 of the Act, the Key Managerial Personnel of the
Company are Mr. T. V. Narendran, Chief Executive Officer & Managing Director, Mr.
Koushik Chatterjee, Executive Director & Chief Financial Officer, and Mr. Parvatheesam
Kanchinadham, Company Secretary & Chief Legal Officer (Corporate & Compliance).
During the year under review, there was no change in the Key Managerial Personnel.
Audit Committee
The Audit Committee was constituted in the year 1986. The Committee has
adopted a Charter for its functioning. The primary objective of the Committee is to
monitor and provide effective supervision of the Management's financial reporting process,
to ensure accurate and timely disclosures, with the highest levels of transparency,
integrity and quality of financial reporting.
The Committee comprises Mr. O. P. Bhatt (Chairman), Mr. Aman Mehta, Dr.
Peter Blauwhoff, Mr. Saurabh Agrawal, and Mr. Deepak Kapoor. The Committee met 7 times
during the year under review, the details of which are given in the Corporate Governance
Report.
During the year under review, there were no instances when the
recommendations of the Audit Committee were not accepted by the Board.
Internal Control Systems
The Company's internal control systems are commensurate with the nature
of its business, the size, and complexity of its operations and such internal financial
controls with reference to the Financial Statements are adequate.
Risk Management
The Enterprise Risk Management ('ERM') process, which is based
on international standards such as Committee of Sponsoring Organisation of the Treadway
Commission ('COSO') and ISO 31000, is an integral part of the Company's strategy.
The ERM framework includes identification of risks and risk owners for regular tracking,
mitigation, and reporting of risks to help the Company meet its business objectives.
Communication and training is an essential part of the framework. The framework also
requires an integrated approach towards managing risks.
Risk governance is driven by the Board of Directors through the Risk
Management Committee ('RMC') of the Board. The RMC is responsible for reviewing and
strengthening the risk management policies and processes adopted by the Company. It also
reviews the potential risks facing the Company and the progress of the mitigation plans.
The Company has also set up a management committee called the Group Risk Review Committee
('GRRC') which is responsible for the implementation of ERM process across the
Company. The GRRC is focussed on enhancing the risk culture within the Company and driving
the mitigation of identified risks in an optimal manner.
A dedicated ERM team has been set up to ensure deployment of the ERM
process across the organisation, including Tata Steel Group Companies. The ERM team is led
by Group Head - Corporate Finance & Risk Management who acts as the Chief Risk Officer
('CRO') of the Company. The CRO regularly reports to the RMC and the GRRC on the
progress of the implementation of ERM and the status of the potential risks based on the
assessment of risks and the mitigation strategies.
The Company has adopted a bottom up and top-down approach to drive
enterprise risk management. The bottom-up process includes identification and regular
assessment of risks by respective business units and cross-functional teams across the
Company and planning of mitigation strategies in a structured manner. This is complemented
by a top-down approach where the senior management identifies and assesses long-term,
strategic and macro risks for the Company. Risks are consolidated under major risk themes
at the organisational level to create focus areas and prioritise mitigation strategies.
The ERM process is integrated with core processes such as Corporate Audit, Corporate
Strategy and Planning, and Capital Allocation. Regular training and communication is
carried out across the Company to develop a uniform understanding of the risk process and
risk terminology. An in-house built IT system has been deployed across the organisation to
enable recording and review of risks through live dashboards and real-time monitoring of
data. The ERM process has matured over the years and is today embedded across the Company.
Over the years, Tata Steel has made significant progress in its journey
towards risk intelligence. We are pleased to report that the Company has been adjudged
'Firm of the Year - Metals & Mining' at the 6th CNBC-TV18 India Risk Management
Awards.
Vigil Mechanism
The Company has a Vigil Mechanism that provides a formal channel for
all its Directors, employees, and vendors to approach the Chairman of the Audit Committee
and make protected disclosures about the unethical behaviour, actual or suspected fraud or
violation of the Tata Code of Conduct ('TCoC'). No person is denied access to the
Chairman of the Audit Committee. In addition, Directors, employees, and vendors, may
approach the Chief Ethics Counsellor to make any such protected disclosure.
The Vigil Mechanism includes policies viz. the Whistle-blower Policy
for Directors & Employees, the Whistle-blower Policy for Business Associates, the
Whistle-blower Protection Policy for Business Associates (vendors/customers), the Policy
for Receipts of Gift and Hospitality, the Conflict of Interest Policy for Employees, the
Anti-Bribery & Anti-Corruption ('ABAC') policy, and Anti-Money Laundering ('AML')
policy.
The Whistle-blower Policies for Directors & Employees and Business
Associates are an extension of the TCoC that encourage every Director, employee, and
Business Associate to promptly report any actual or possible violation of the TCoC or any
event that he or she becomes aware of that could affect the business or reputation of the
Company. During the year under review, the Company revised the Whistle-blower policy for
Directors and Employees to include 'reporting of incidents of leak or suspected leak of
Unpublished Price Sensitive Information (UPSI)' as required in terms of the provisions of
the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations,
2015, as amended.
The Whistle-blower Protection Policy for Business Associates including
vendors and customers provides protection to Business Associates from any victimisation or
unfair trade practices by the Company.
During the year under review, ABAC and AML policies were adopted. The
key elements of the policies are risk assessment, third party due diligence, training
& awareness, and audit & reporting.
The Policy for Receipts of Gift and Hospitality requires its employees
to take the right decisions when they are offered gifts or hospitality while conducting
business or official transactions on behalf of the Company. The Policy is in consonance
with ABAC and AML policies.
The Company has also adopted a Conflict of Interest policy that
requires employees to act in the best interest of the Company without any conflicts and
declare conflicts, if any (real, potential or perceived).
The Whistle-blower Reward and Recognition Guidelines for employees has
been implemented to encourage employees to genuinely blow the whistle on any misconduct or
unethical activity taking place in the Company. The disclosures reported are addressed in
the manner and within the time frames prescribed in the Whistle-blower Policy.
During the year under review, the Company undertook a series of
communication and training programmes for internal stakeholders and vendors, with the aim
to create awareness amongst them about the Company's values, TCoC and other ethical
practices of the Company. An e-learning module on ABAC Policy was launched by the Company
in February, 2020 to sensitise the employees on the relevant laws and policies. The
Company also introduced a structured yet informal platform "Stay in Touch" for
its employees to interact with Chief Ethics Counsellor to understand the issues and
integrate employees with the Company's Culture through an open discussion. The Company
also undertook various theme based campaigns, town hall, and departmental events. 'Neeti
Katha' i.e. story-telling through snippet series on scenarios of 'The ethics of travel'
and 'Prevention of Sexual Harassment' were mailed to employees as part of the awareness
campaign. The Company also celebrates the month of July as Ethics Month with all
communication and programmes centered around the theme "Integrity Matters". This
practice has helped in reinforcing employee involvement in driving the Management of
Business Ethics.
The Company has developed a robust system to raise concerns on
unethical behaviour, taken efforts to make stakeholders aware of such systems as well as
of their responsibility to report such concerns and practice non-retaliation. The strong
mechanism to address such concerns instills in our stakeholders the confidence to report
ethical violations. The Company has also leveraged digitalisation for training and
communication, thereby resulting in greater clarity on the subject and system amongst the
stakeholders.
The Company takes pride in winning the World's Most Ethical Companies ('WME')
award for the 9th time.
During the year under review, the Company received 881 whistle-blower
complaints of which as on March 31, 2020, 602 complaints were investigated and appropriate
actions were taken and investigations were underway for the remaining 279 complaints.
Disclosure as per the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013
The Company has zero tolerance towards sexual harassment at the
workplace. The Company has adopted a policy on prevention, prohibition and redressal of
sexual harassment at workplace in line with the provisions of the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made
thereunder.
The Company has complied with the provisions relating to the
constitution of the Internal Complaints Committee as per the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013.
During the year under review, the Company received 34 complaints of
sexual harassment, of which 26 complaints have been resolved by taking appropriate actions
and 8 complaints are under investigation.
Related Party Transactions
In line with the requirements of the Act and the SEBI Listing
Regulations, the Company has formulated a Policy on Related Party Transactions and the
same can be accessed on the Company's website at
https://www.tatasteel.com/media/5891/policy-on-related-party- transactions.pdf
During the year under review, all related party transactions entered
into by the Company, were approved by the Audit Committee and were at arm's length and in
the ordinary course of business. Prior omnibus approval is obtained for related party
transactions which are of repetitive nature and entered in the ordinary course of business
and on an arm's length basis. The Company did not have any contracts or arrangements with
related parties in terms of Section 188(1) of the Act. Also, there were no material
related party contracts entered into by the Company. Accordingly, the disclosure of
related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is
not applicable to the Company for FY 2019-20 and hence does not form part of this report.
Details of related party transactions entered into by the Company, in
terms of Ind AS-24 are disclosed in notes to the standalone/consolidated financial
statements forming part of this Integrated Report.
Directors' Responsibility Statement
Based on the framework of internal financial controls and compliance
systems established and maintained by the Company, work performed by the internal,
statutory, cost, and secretarial auditors and external agencies including audit of
internal financial controls over financial reporting by the statutory auditors and the
reviews performed by Management and the relevant Board Committees, including the Audit
Committee, the Board is of the opinion that the Company's internal financial controls were
adequate and effective during Financial Year 2019-20.
Accordingly, pursuant to Section 134(5) of the Act, the Board of
Directors, to the best of its knowledge and ability confirms that:
a) in the preparation of the annual accounts, the applicable accounting
standards have been followed and that there are no material departures;
b) they have selected such accounting policies and applied them
consistently and made judgements 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 of the Company for that period;
c) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the Companies Act, 2013
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls to be followed by
the Company and that such internal financial controls are adequate and are operating
effectively;
f) they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems are adequate and operating
effectively.
Business Responsibility Report
The Securities and Exchange Board of India ('SEBI') requires
companies to prepare and present to stakeholders a Business Responsibility Report ('BRR')
in the prescribed format. SEBI, however, allows companies to follow an internationally
recognised framework to report on the initiatives undertaken by the Company on
environmental, social, and governance perspective. Further, SEBI has on February 6, 2017,
advised companies that are required to prepare BRR to transition towards an Integrated
Report.
As stated earlier in the Report, the Company has followed the
<IR> framework of the International Integrated Reporting Council to report on all
the six capitals that are used to create long-term stakeholder value. Our Integrated
Report has been assessed and KPMG has provided the required assurance. We have also
provided the requisite mapping of principles between the Integrated Report, the Global
Reporting Initiative ('GRI') and the BRR as prescribed by SEBI. The same is
available on our website www.tatasteel.com
Subsidiaries, Joint Ventures and Associates
We have 220 subsidiaries and 50 associate companies (including 28 joint
ventures) as on March 31, 2020. During the year under review,the Board of Directors
reviewed the affairs of material subsidiaries.
We have, in accordance with Section 129(3) of the Act prepared
Consolidated Financial Statements of the Company and all its subsidiaries, which form part
of the Integrated Report. Further, the report on the performance and financial position of
each subsidiary, associate, and joint venture and salient features of their Financial
Statements in the prescribed Form AOC-1 is annexed to this report (Annexure 6).
I n accordance with the provisions of Section 136 of the Act and the
amendments thereto, and the SEBI Listing Regulations the audited Financial Statements,
including the consolidated financial statements and related information of the Company and
financial statements of the subsidiary companies are available on our website
www.tatasteel.com
The names of companies that have become or ceased to be subsidiaries,
joint ventures and associates during the year under review are disclosed in an annexure to
this report (Annexure 7).
Auditors
Statutory Auditors
Members of the Company at the AGM held on August 8, 2017, approved the
appointment of Price Waterhouse & Co Chartered Accountants LLP (Registration No.
304026E/E300009), Chartered Accountants, as the statutory auditors of the Company for a
period of five years commencing from the conclusion of the 110th AGM held on August 8,
2017 until the conclusion of 115th AGM of the Company to be held in the year 2022.
In terms of the provisions relating to statutory auditors forming part
of the Companies Amendment Act, 2017, notified on May 7, 2018, ratification of appointment
of Statutory Auditors at every AGM is no more a legal requirement. Accordingly, the Notice
convening the ensuing AGM does not carry any resolution on ratification of appointment of
Statutory Auditors.
The report of the Statutory Auditor forms part of the Integrated Report
and Annual Accounts 2019-20. The said report does not contain any qualification,
reservation, adverse remark or disclaimer. During the year under review, the Auditors did
not report any matter under Section 143(12) of the Act, therefore no detail is required to
be disclosed under Section 134(3)(ca) of the Act.
Cost Auditors
I n terms of Section 148 of the Act, the Company is required to
maintain cost records and have the audit of its cost records conducted by a Cost
Accountant. Cost records are prepared and maintained by the Company as required under
Section 148(1) of the Act. The Cost Audit Report of the Company for the Financial Year
ended March 31, 2019 was filed by the Company in XBRL mode, on August 30, 2019.
The Board of Directors of the Company has, on the recommendation of the
Audit Committee, approved the appointment of M/s. Shome & Banerjee as the cost
auditors of the Company (Firm Registration No. 000001) for the year ending March 31, 2021.
M/s. Shome & Banerjee have vast experience in the field of cost
audit and have been conducting the audit of the cost records of the Company for the past
several years.
I n accordance with the provisions of Section 148(3) of the Act read
with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable
to the Cost Auditors as recommended by the Audit Committee and approved by the Board has
to be ratified by the Members of the Company. Accordingly, appropriate resolution forms
part of the Notice convening the AGM. We seek your support in ratifying the proposed
remuneration of '20 lakh plus applicable taxes and reimbursement of out-of-pocket expenses
payable to the Cost Auditors for the Financial Year ending March 31, 2021.
Secretarial Auditors
Section 204 of the Act inter alia requires every listed company
to annex to its Board's report, a Secretarial Audit Report, given in the prescribed form,
by a Company Secretary in practice.
The Board had appointed Parikh & Associates, (Registration No.
P1988MH009800) Practicing Company Secretaries, as the Secretarial Auditor to conduct
Secretarial Audit of the Company for the Financial Year 2019-20 and their report is
annexed to this report (Annexure 8). There are no qualifications, observations,
adverse remark or disclaimer in the said Report.
Extract of Annual Return
The extract of the Annual Return in Form MGT-9, as per provisions of
the Act and Rules thereto, is annexed to this report (Annexure 9).
The extract of Annual Return in Form MGT-9 as per provisions of the Act
and Rules thereto is also available on the Company's website at
https://www.tatasteel.com/media/12336/mgt-9.pdf
Significant and Material Orders passed by the Regulators or Courts
There has been no significant and material order passed by the
regulators or courts or tribunals impacting the going concern status and the Company's
future operations. However, Members' attention is drawn to the statement on contingent
liabilities, commitments in the notes forming part of the Financial Statements.
Particulars of Loans, Guarantees or Investments
Particulars of loans, guarantees given, and investments made during the
year under review in accordance with Section 186 of the Act is annexed to this report (Annexure
10).
Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo
Details of the energy conservation, technology absorption and foreign
exchange earnings and outgo are annexed to this report (Annexure 11).
Deposits
During the year under review, the Company has not accepted any deposits
from public in terms of the Act. Further, no amount on account of principal or interest on
deposits from public was outstanding as on the date of the balance sheet.
Secretarial Standards
The Company has in place proper systems to ensure compliance with the
provisions of the applicable Secretarial Standards issued by The Institute of Company
Secretaries of India and such systems are adequate and operating effectively.
G. Acknowledgements
We thank our customers, vendors, dealers, investors, business
associates, and bankers for their continued support during the year. We place on record
our appreciation of the contribution made by employees at all levels. Our resilience to
meet challenges was made possible by their hard work, solidarity, co-operation and
support.
We thank the Government of India, the State Governments, and the
Governments in the countries where we have operations and other regulatory authorities and
government agencies for their support and look forward to their continued support in the
future.
|
On behalf of the Board of
Directors |
|
sd/- |
|
N. CHANDRASEKARAN |
| Mumbai |
Chairman |
| June 29, 2020 |
DIN: 00121863 |