CHAPTER 3

TATA STEEL LIMITED

The world of Tata Steel is one without boundaries - growing, changing and
challenging every day. A world that embraces different skills, continuous
innovation, financial investment, responsible use of natural resources. And
above all, there is the enduring commitment of giving back to society that helps
make the vision of sustainable growth a reality, operations in 26 countries.
Commercial presence in over 50 countries, 80,000 employees across five
continents. The Tata Steel Group Established in 1907 as Asia's first integrated
private sector steel company, Tata Steel Group is among the top-ten global steel
companies with an annual crude steel capacity of nearly 30 million tonnes per
annum. It is now the world's second-most geographically-diversified steel
producer. Over the years Tata Steel has enriched the glorious legacy handed
over by its Founder J.N. Tata, by placing equal emphasis on stakeholder value
creation and corporate citizenship. Underpinning this vision is a performance
culture committed to aspiration targets, safety and social responsibility,
continuous improvement, openness and transparency. What binds together
every member of the global Tata Steel family today is a shared corporate
culture, shaped by value-based guiding principles and the lineage of some of the
world’s most pioneering and respected entities - the Tata group itself, British
Steel, Koninklijke Hoogovens and NatSteel.

3.1 INDIAN OPERATIONS:

Tata Steel founded India’s first industrial city, now Jamshedpur, where it
established India’s first integrated steel plant in 1907. The Jamshedpur Works
currently comprises of a 9.7 MTPA crude steel production facility and a variety
of finishing mills. Mines and collieries in India give the Company a distinct
advantage in raw material sourcing. Looking further into the future, the

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company plans to continue to increase its capacity significantly through both
brown field and green field developments. The first phase of the 6 million
tonnes per annum green field project in Kalinganagar, with stage-wise
commissioning expected to start in Financial Year 2015-16. The Company is
focussed not only on the execution of the plant facilities but also on addressing
the socio-economic infrastructure needs of an industrial enterprise of this scale.
The Company has plans for two new Greenfield steel projects in the states of
Jharkhand and Chattisgarh.

3.2 EUROPEAN OPERATIONS:

Tata Steel Europe (erstwhile Corus) has a crude steel production capacity of 18
MTPA. Tata Steel Europe has manufacturing operations in Mainland Europe,
plants in UK, Netherlands, Germany, France and Belgium, and is backed by a
sophisticated global network of sales offices and service centres.

3.3 SOUTH EAST ASIAN OPERATIONS:

Tata Steel started its operations in SEA in 2004 with investments in NatSteel
Holdings and Millennium Steel (now Tata Steel Thailand). With over 40 years
of Steel making experience, NatSteel is one of the most prominent steel
producers in the Asia Pacific region. It caters to the growing construction
industry through its manufacturing presence in Singapore, Thailand, China,
Malaysia, Vietnam and Australia.

3.4 PRODUCTION AND REVENUE:

Tata Steel Ltd., incorporated in the year 1907, is a Large Cap company (having
a market cap of Rs 25746.92 Cr.) operating in Iron and Steel sector. Tata Steel
Ltd key Products/Revenue Segments include Saleable Steel which contributed
Rs 36108.46 Cr to Sales Value (77.97% of Total Sales), Other Raw Materials
which contributed Rs 3179.13 Cr to Sales Value (6.86% of Total Sales),

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Welded Steel Tubes which contributed Rs 2095.56 Cr to Sales Value (4.52% of
Total Sales), Semi Finished Steel And Scrap which contributed Rs 1376.20 Cr
to Sales Value (2.97% of Total Sales), Charge Chrome which contributed Rs
1103.72 Cr to Sales Value (2.38% of Total Sales), Power which contributed Rs
897.99 Cr to Sales Value (1.93% of Total Sales), Other Operating Revenue
which contributed Rs 439.79 Cr to Sales Value (0.94% of Total Sales), By
Products which contributed Rs 427.02 Cr to Sales Value (0.92% of Total Sales),
Ferro Manganese which contributed Rs 210.95 Cr to Sales Value (0.45% of
Total Sales), Bearings which contributed Rs 187.77 Cr to Sales Value (0.40% of
Total Sales), Other Agro Products which contributed Rs 159.52 Cr to Sales
Value (0.34% of Total Sales), Other Services which contributed Rs 86.96 Cr to
Sales Value (0.18% of Total Sales), Metallurgical Machinery which contributed
Rs 36.27 Cr to Sales Value (0.07% of Total Sales), for the year ending 31-Mar-
2014.For the quarter ended 31-Mar-2015, the company has reported a
Standalone sales of Rs. 10522.68 Cr., up 7.15% from last quarter Sales of Rs.
9820.70 Cr. and down -12.62% from last year same quarter Sales of Rs.
12041.92 Cr. Company has reported net profit after tax of Rs. 814.09 Cr. in
latest quarter.

3.5 MANAGEMENT COMMITEE:

The operations and successes of the Tata Steel Group are taken care of by its
capable management and Board of Director. The company’s management
includes Dr.Karl-Ulrich Koehler, Mr.Andrew Robb, Mr.Cyrus P Mistry, Mr. K
Mehrotra, Mr.Ishaat Hussain, Mr.Jacobus Schraven, Mr.Koushik Chatterjee,
Mr.Nusli Wadia, and Mr.O. Bhatt, Mr.Parvatheesam Kanchinadham,
Mr.Subodh Bhargava, Mr.T .V. Narendran, Mrs.Mallika Srinivasan,
Mr.Parvatheesam Kanchinadham.

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The Company has Deloitte Haskins & Sells as its Auditors. Tata Steel has
always believed that the principle of mutual benefit – between countries,
corporations, customers, employees and communities – is the most effective
route to profitable and sustainable growth.

3.6 FINANCIAL STRATEGY OF TATA STEEL GROUP:

TATA STEEL is currently implementing their growth strategy in their preferred

and more profitable Indian market. The 3 million tonnes per annum brown field
expansion at Jamshedpur is now fully ramped up and they are now targeting to
commission the 3 million tonnes per annum first phase of the Odisha Project by
the end of the current financial year. So, their capital expenditure requirement
would remain elevated until then. While the project finance has been tied up,
until now they have funded it largely from their internal sources. The company
have also kept a close eye on our investment portfolios and have been
monetising them opportunistically. Overall, the intention is to keep monitoring
the capital structure so that it remains within a comfortable level and reduces
overall financing costs. The working capital cycle is being monitored very
closely and they are implementing various working capital management
programmes across the Group. The free cash flow from operations in India has
been very robust and has funded our growth opportunities. Therefore Tata’s
financing strategy is primarily focussed on our internal cash generations to
fund organic capital expenditure while ensuring that there is funding
certainty through financing closure of projects.

3.7 SHAREHOLDING PATTERN:

Steel is an essential material used in many industries – it’s the backbone to

countless products, structures and services that shape the everyday lives of
people throughout the world. Tata Steel serves customers in all the major
market sectors globally, and recognises that each sector, such as automotive or

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construction or packaging, requires different solutions to meet its specific needs.
Depending on market, region and specification of the product, we serve our
customers directly or through various steel service centres. For Tata Steel, the
constant focus is on delivering total dependability, assured quality, responsive
service and added value to customers in every market sector.

3.8 TATA STEEL LTD SHARE HOLDING:

CATEGORY NO. OF SHARES PERCENTAGE

Promoters 304,514,362 31.35

Financial Institutions 231,303,499 23.82

General Public 220,442,684 22.70

Foreign Institutions 120,015,232 12.36

NBFC and Mutual Funds 47,779,972 4.92

Other Companies 27,745,977 2.86

Central Government 121,659 0.01

Others 5,625 0.00

3.9 TATA STEEL GROUP PERFORMANCE (2013-14):

The global weak underlying economic conditions and the structural challenges
faced by steel sector, the Tata Steel Group deliveries increased by 10% to 26.6
million tonnes in 2013 from 24.1 million tonnes in the previous year. The
increase in deliveries came across all geographies with Tata Steel India, Tata
Steel Europe, Nat Steel Holding, and Tata Steel Thailand increasing their

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deliveries by 14%, 6%, 39% and 10%, respectively. Higher deliveries at Tata
Steel India during Financial Year 2013-14 were the outcome of full ramp up of
the production facilities under the 3 mtpa expansion programme during in 2013.
Higher deliveries at Tata Steel Europe were contributed by the Stabilisation of
the Blast Furnace 4 at Port Talbot, which was re-started in February 2013. The
operating entities of Nat Steel Holdings in Vietnam and China also showed
significant growth in sales volume. Growth in deliveries in Tata Steel Thailand
was achieved through higher rebar sales to the construction sector and exports
to neighbouring countries. Consequently, the Group’s operations across
geographies registered an increase in turnover which was Rs 1,48,614 crores in
Financial Year 2013-14, 10% higher than the turnover in Financial Year 2012-
13 (Rs 1,34,712 crores). The EBITDA for the Group in the Financial Year
2013-14 was RS.16, 377 crores as compared to Rs 12,654 crores in the
Financial Year 2012-13.The Group reported a consolidated profit after tax (after
minority interest and share of profit of associates) of RS.3, 595 crores during
Financial Year 2013-14 as against a loss of Rs 7,058 crores (after considering
the non-cash impairment charge of Rs 8,356 crores) in Financial Year 2012-13.

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3.10 AWARDS AND RECOGNITIONS:
Tata Steel’s commitment to excellence, to stakeholders and to the society at
large endures. And it is this commitment that will take us into the future.
Tata Steel has, over the years, been conferred several awards that have stood
witness to its commitment to excellence across its various lines. Some of
these include:

CORPORATE AWARDS:

 The Deming Application Prize in 2008.

 One of the world’s top ten “Most Admired Companies” by FORTUNE

Magazine and the Hay Group in the Industry-Metal category.

AWARD FOR EXCELLENCE IN KNOWLEDGE:

 The Most Admired Knowledge Enterprise (MAKE) Asia Award 2009 for
the sixth time.

AWARDS FOR EXCELLENCE IN CSR:

 The Golden Peacock Global Award.

 Recognition from World Steel Association for demonstrating excellence

in safety and health programmes in 2009.

 The UKTI India Business Award in 2009.

 Awards for Talent Management, Best HR Strategy in line with Business

and Excellence in Training by Asia’s Best Employer Brand Awards 2010.

 The Rashtriya Khel Protsahan Puraskar from the President of India for
the second consecutive year in 2010 for excellence in sports.

 TSTH received Prime Minister Award 2014, Thailand.

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 Tata Steel felicitated for its excellence in Corporate Governance,
Jamshedpur, 2014.

 Tata Steel conferred the IEI Industry Excellence Awards, 2014.

 Tata Steel conferred the prestigious "Business of the Year" award.

 Tata Steel, Jamshedpur and Lucinda mines has won Green tech Award in
Gold category in Metal and Mining sector.

 Tata Steel (Thailand) receives CSR Recognition Awards.

 Tata Steel wins Asian CSR Leadership Award for Community

Development Jamshedpur, Friday, September 26, 2014.

 Tata Steel bags the JSPCB awards for Environment Protection

Jamshedpur, 2014

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