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Tata Steel Ltd.

BSE: 500470 Sector: Metals & Mining
NSE: TATASTEEL ISIN Code: INE081A01012
BSE 00:00 | 24 Apr 2020 Tata Steel Ltd
NSE 05:30 | 01 Jan 1970 Tata Steel Ltd

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OPEN 266.40
PREVIOUS CLOSE 270.35
VOLUME 639828
52-Week high 560.35
52-Week low 250.90
P/E 3.19
Mkt Cap.(Rs cr) 30,171
Buy Price 267.80
Buy Qty 136.00
Sell Price 268.95
Sell Qty 300.00
OPEN 266.40
CLOSE 270.35
VOLUME 639828
52-Week high 560.35
52-Week low 250.90
P/E 3.19
Mkt Cap.(Rs cr) 30,171
Buy Price 267.80
Buy Qty 136.00
Sell Price 268.95
Sell Qty 300.00

Tata Steel Ltd. (TATASTEEL) - Director Report


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Company director report

To the Members

Your Directors take pleasure in presenting the 4th Integrated Report (prepared as perthe framework set forth by the International Integrated Reporting Council) and the 112thAnnual Accounts on the business and operations of your Company along with the summary ofstandalone and consolidated financial statements for the year ended March 31 2019.

A. Financial Results

(Rs. crore)

Particulars Standalone Consolidated
2018-19 2017-18 2018-19 2017-18
Revenue from operations 70610.92 60519.37 157668.99 124109.69
Total expenditure before finance cost depreciation (net of expenditure transferred to capital) 50047.98 44740.41 128285.65 102676.50
Operating Profit 20562.94 15778.96 29383.34 21433.19
Add: Other income 2405.08 763.66 1420.58 881.10
Profit before finance cost depreciation exceptional items and taxes 22968.02 16542.62 30803.92 22314.29
Less: Finance costs 2823.58 2810.62 7660.10 5454.74
Profit before depreciation exceptional items and taxes 20144.44 13732.00 23143.82 16859.55
Less: Depreciation and amortisation expenses 3802.96 3727.46 7341.83 5741.70
Profit/(Loss) before share of profit/(loss) of joint ventures & associates exceptional items & tax 16341.48 10004.54 15801.99 11117.85
Share of profit/(loss) of Joint Ventures & Associates - - 224.70 239.12
Profit/(Loss) before exceptional items & tax 16341.48 10004.54 16026.69 11356.97
Add/(Less): Exceptional Items (114.23) (3366.29) (120.97) 9599.12
Profit before taxes 16227.25 6638.25 15905.72 20956.09
Less: Tax Expense 5694.06 2468.70 6718.43 3392.33
(A) Profit/(Loss) after taxes - from Continuing operations 10533.19 4169.55 9187.29 17563.76
Profit/(loss) before tax from Discontinued operations - - (98.60) 206.96
Less: Tax expense of Discontinued Operations - - (9.64) 13.06
Profit/(Loss) after tax from Discontinued Operations - - (88.96) 193.90
Profit/(Loss) on Disposal of Discontinued Operations - - - 5.15
(B) Net Profit/(loss) after tax - from Discontinued operations - - (88.96) 199.05
(C) Net Profit/(Loss) for the Period [ A + B ] 10533.19 4169.55 9098.33 17762.81
Total Profit/(Loss) for the period attributable to:
Owners of the Company - - 10218.33 13434.33
Non-controlling interests - - (1120.00) 4328.48
(D) Total other comprehensive income (50.22) (61.12) 7.79 (3078.01)
(E) Total comprehensive income for the period [ C + D ] 10482.97 4108.43 9106.12 14684.80
Retained Earnings: Balance brought forward from
18700.25 12280.91 7801.99 (11447.01)
the previous year
Add: Profit for the period 10533.19 4169.55 10218.33 13434.33
Less: Distribution on Hybrid perpetual securities 266.12 266.13 266.12 266.13
Add: Tax effect on distribution of Hybrid perpetual securities 92.99 92.70 92.99 92.70
Add: Other Comprehensive Income recognised in Retained Earnings 3.88 155.39 (425.92) (2780.05)
Add: Other movements within equity 1.49 3427.46 (1995.47) 9926.37
Balance 29065.68 19859.88 15425.80 8960.21
Which the Directors have apportioned as under to:
(i) Dividend on Ordinary Shares 1145.92 971.22 1144.76 970.05
(ii) Tax on dividends 224.86 188.41 224.61 188.17
Total Appropriations 1370.78 1159.63 1369.37 1158.22
Retained Earnings: Balance to be carried forward 27694.90 18700.25 14056.43 7801.99

Notes:

(1) On January 28 2019 T S Global Holdings Pte. Ltd. (‘TSGH') (anindirect wholly-owned subsidiary of the Company) executed definitive agreements to divestits entire equity stake in NatSteel Holdings Pte. Ltd. (‘NSH') and Tata Steel(Thailand) Public Company Ltd (‘TSTH'). As per the agreements the divestmentwill be made to a company to be formed in which 70% equity shares will be held by anentity controlled by HBIS Group Co. Ltd. and 30% will be held by TSGH.

The assets and liabilities of NSH and TSTH have been classified as ‘held for sale'as on March 31 2019 and have been presented separately in the Consolidated Balance Sheet.The results for the current period of NSH and TSTH have been disclosed within discontinuedoperations and results for the previous periods have been restated accordingly.

(2) During the year under review exceptional items (Consolidated Accounts) primarilyrepresents: a) Provision for demands and claims amounting to Rs. 329 crore relating tocertain statutory demands and claims on environment and mining matters at Tata SteelLimited (Standalone). b) Provision of Rs. 172 crore in respect of advances with publicbodies paid under protest by Tata Steel BSL Limited. c) Provision for Employee SeparationScheme (‘ESS') under Sunehere

Bhavishya Ki Yojana (‘SBKY') scheme amounting to Rs. 35 crore at Tata SteelLimited (Standalone). d) Impairment charges of Rs. 10 crore in respect of property plantand equipment (including capital work-in-progress and capital advances) and intangibleasset at Tata Steel BSL Limited.

Partly offset by: e) Profit on sale of non-current investments amounting to Rs. 180crore primarily in TRL Krosaki Refractories Limited (an associate of the Company) andcertain other subsidiaries and joint ventures. f) Restructuring and write back ofprovisions amounting to Rs. 245 crore which primarily includes write-back of liabilitiesno longer required at Tata Steel BSL Limited and arbitration settlement at JamshedpurUtilities & Services Company Limited partly offset by charge at Tata Steel Europe.

The exceptional items (Consolidated Accounts) in Financial Year 2017-18 primarilyinclude: a) Gains arising out of modification in benefit structure for members of the newpension scheme (‘NBSPS') versus their benefits under

Tata Steel Europe's British Steel Pension Scheme (‘BSPS') offset bysettlement charges for those members who did not join the NBSPS and one-o_ costs at TataSteel Europe amounting to Rs. 13851 crore.

Partly offset by: b) Provision of Rs. 3214 crore in respect of certain statutorydemands and claims relating to environment and mining matters net of liability writtenback towards District Mineral Fund at Tata Steel Limited (Standalone). c) Provision foradvances paid for repurchase of equity shares in Tata Teleservices Ltd. from NTT DoCoMoInc. amounting to Rs. 27 crore at Tata Steel Limited (Standalone). d) Provision forEmployee Separation Scheme (‘ESS') under Sunehere Bhavishya Ki Yojana (‘SBKY')Scheme Rs. 108 crore mainly at Tata Steel Limited (Standalone) and at Jamshedpur Utilities& Services Company Limited. e) Impairment charges Rs. 903 crore in respect ofProperty Plant and Equipment (including capital work-in-progress) and intangible assetsrelating to Global Mineral entities.

1. Dividend Distribution Policy

In terms of Regulation 43A of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 as amended (‘ListingRegulations') the Board of Directors of the Company (‘the Board')formulated and adopted the Dividend Distribution Policy (‘the Policy'). As perthe Policy the Company after considering various external factors that may have animpact on the business as well as internal factors such as the long-term growth strategyof the Company and the liquidity position including working capital requirements and debtservicing obligations will endeavour to pay dividend up to 50% of profit after tax of theCompany subject to the applicable rules and regulations. The Policy is annexed to thisreport (Annexure 1) and is also available on our website www.tatasteel.com

2. Dividend

The Board recommended a dividend of Rs. 13 per fully paid Ordinary Share on1126489680 Ordinary Shares of face value Rs. 10 each for the year ended March 312019. (Dividend for Financial Year 2017-18: Rs. 10 per fully paid Ordinary Share on1126484815 fully paid Ordinary Shares of face value Rs. 10 each).

The Board also recommended a dividend of Rs. 3.25 per partly paid Ordinary Share on77636705 partly paid Ordinary Shares of face value Rs. 10 each (paid up Rs. 2.504 pershare) for the year ended March 31 2019. [Dividend for Financial Year 2017-18: Rs. 2.504per partly paid Ordinary Share on 77634625 partly paid Ordinary Shares of face valueRs. 10 each (paid-up Rs. 2.504 per share)]. The Board recommended dividend based on theparameters laid down in the Dividend Distribution Policy.

The dividend on Ordinary Shares (fully paid as well as partly paid) is subject to theapproval of the Shareholders at the Annual General Meeting (‘AGM') scheduledto be held on Friday July 19 2019. The dividend once approved by the Shareholders willbe paid on and from Tuesday July 23 2019. If approved the dividend would result in acash outflow of Rs. 1795.87 crore inclusive of dividend distribution tax of Rs. 306.21crore. The dividend on Ordinary Shares (fully paid as well as partly paid) is 130% of thepaid-up value of each share. The total dividend pay-out works out to 17% (Previous Year:33%) of the net profit for the standalone results. The Register of Members and ShareTransfer Books of the Company (for fully paid as well as partly paid shares) will remainclosed from Saturday July 6 2019 to Friday July 19 2019 (both days inclusive) for thepurpose of payment of the dividend for the Financial Year ended March 31 2019 and theAGM.

3. Transfer to Reserves

The Board of Directors has decided to retain the entire amount of profit for FinancialYear 2018-19 in the statement of profit and loss.

4. Capex and Liquidity

During the year under review the Company on a consolidated basis spent Rs. 9091crore on capital projects across India Europe and Canada largely towards essentialsustenance replacement and on-growth projects in India (Kalinganagar plant and Tata SteelBSL Limited) and in the Netherlands. Despite this significant spend the Company was ableto keep the gross debt level stable during the year. The Company's liquidity positionremains strong at Rs. 15284 crore as on March 31 2019 comprising Rs. 5937 crore incash and cash equivalent and Rs. 9347 crore in undrawn bank lines.

5. Management Discussion and Analysis

The Management Discussion and Analysis as required in terms of the Listing Regulationsis annexed to the report (Annexure 2) and is incorporated herein by reference andforms an integral part of this report.

B. Integrated Report

In keeping with the Company's commitment to society in 2016 we transitioned fromcompliance based reporting to governance based reporting by adopting the <IR>framework developed by the International Integrated Reporting Council.

We present to you our 4th Integrated Report which highlights the Company's effortsduring the year that contribute to long-term sustainability and value creation paving wayfor a better tomorrow.

C. External Environment

1. Macroeconomic Conditions

Following an upswing in the last two years global growth declined to 3.6% in 2018owing to various factors such as increase in trade tensions and tari_ hikes between theUnited States and China decline in business confidence tightening of financialconditions and higher policy uncertainty across many economies. While the first half of2018 witnessed strong growth at 3.8% the second half saw a deceleration in globaleconomic activity in light of the various factors affecting major economies. Growth inChina was at 6.6% its slowest pace since 1990 due to necessary domestic regulatorytightening slower domestic investment and tari_ hikes and trade tensions with the UnitedStates. The United States witnessed a growth of 2.9% the highest since 2015 with majorcontribution coming from personal spending fixed investment public expenditure andinventories. Growth in the Euro area economy slowed to 1.8% in 2018 owing to weakeningconsumer and business sentiments disruptions in car production in Germany due to delay inintroduction of new fuel emission standards fiscal policy uncertainty elevated sovereignspreads and declining investment in Italy and drop in external demand especially fromemerging Asia. Growing concerns about a no-deal Brexit also probably weighed on investmentspending within the euro area. Activity in Japan weakened mainly due to natural disasters.

Growth in India was 7.1% primarily due to growth in construction sector (8.9%) andmanufacturing sector (8.1%). The Gross fixed capital formation is estimated to haveincreased by 10% thereby contributing to 32.3% of GDP.

Overall increasing trade tensions took a toll on business confidence worseningfinancial market sentiments. Also tightening financial conditions for vulnerable emergingmarkets in early 2018 and for advanced economies later in the year showed its impact onglobal demand leading to a slowdown in global economic growth.

2. Economic Outlook

According to the International Monetary Fund (‘IMF') global economicgrowth is expected to further decline to 3.3% in 2019 but return to 3.6% in 2020. Whilethe slow paced growth in the second half of 2018 is likely to continue in the first halfof 2019 growth in the second half of 2019 is expected to gain momentum owing to anongoing build-up of policy stimulus in China improvements in global financial marketsentiment waning of some temporary drags on growth in the euro area and a gradualstabilisation of conditions in stressed emerging market economies. Improved momentum foremerging market and developing economies is projected to continue into 2020 primarilyreflecting developments in economies currently experiencing macroeconomic distress.

Growth in advanced economies is expected to slow down from 2.2% in 2018 to 1.8% in 2019to 1.7% in 2020. The United States is expected to grow at a slower pace of 2.3% in 2019down to a further 1.9% in 2020 as the impact of the fiscal stimulus fades. Growth in theEuro area is expected to decline to 1.3% in 2019 as the effect of the weakness in 2018 islikely to carry forward to the first half of 2019. China's economic growth is expected tobe at 6.3% in 2019 due to lingering impact of trade tensions with the US.

The Indian economy is expected to grow at about 7.3% in 2019 and further by 7.5% in2020 supported by the continued recovery of investment and robust consumption amid a moreexpansionary stance of monetary policy and some expected impetus from fiscal policy.Resolution of Non-Performing Assets (‘NPA') and other recoveries over the pastyear have been e_cacious. Large NPA accounts should continue to see resolution in 2019.The projected increase in growth rate can also be attributed to sustained rise inconsumption gradual revival in investments and greater focus on infrastructuredevelopment.

D. Steel Industry

1. Global Steel Industry

According to the World Steel Association (‘WSA') global crude steelproduction reached 1808.6 MnT in 2018 an increase of 4.6% over 2017. This increase isprimarily due to growth in steel consumption in infrastructure automotive manufacturingand equipment sectors. China continued to be the world's largest crude steel producercontributing to 51.3% of the global crude steel production. Crude steel production inIndia increased to 106.5 MnT. India's crude steel production increased by 4.9% over theprevious year making India the second largest crude steel producing country. Despiteslowdown in the economy global steel demand increased by 2.1% in 2018. The marginalincrease over 2017 was mainly supported by government stimulus in China and better thanexpected economic activity. However steel demand in developed economies slowed to 1.8% in2018 as compared to 3.1% in 2017. Steel demand in the European Union (‘EU')grew by 2.2% in 2018 as against 3.4% in 2017. Output growth in the steel consuming sectorsin the EU eased in the second half of 2018 especially in the automotive sector. Output ofpassenger cars was negatively impacted by the introduction of new emission testingprocedures and a slowdown in demand both inside and outside the EU. In 2018 the EU was anet importer of steel at 16.9 MnT. Exports from China to the rest of the world decreasedagain in 2018 to 68.8 MnT. Changing trade flows in the global steel market have caused anincrease in the amount of anti-dumping measures.

2. Outlook for Steel Industry

As per WSA global steel demand is forecasted to reach 1735 MnT in 2019 anincrease of 1.3% over 2018. In 2020 global steel demand is expected to reach 1752 MnTreflecting an increase of 1%. Although steel demand is expected to grow the rate ofgrowth will be lower owing to slowdown in global economy. Further China's decelerationuncertainty surrounding trade policies and the political situation in many regions suggesta possible moderation in business confidence and investment.

China plans for a major structural overhaul of the steel sector by 2020. Further itplans to reduce the steel output which would ease the uneven supply-demand situation inthe sector modernise the steel mills to achieve energy consumption and pollutantemissions within the nation standard by 2020. Steel demand in developing Asia excludingChina is expected to grow by 6.5% and 6.4% in 2019 and 2020 respectively making it thefastest growing region in the global steel industry. In the ASEAN region infrastructuredevelopment is expected to support demand for steel. Steel demand in advanced economies isexpected to grow at a slower pace owing to trade tensions and lower spend on constructionactivities.

Steel demand in India is expected to grow at 7% in 2019 as well as in 2020. Steeldemand in India will be driven by broad based growth across sectors. Construction isexpected to grow boosted by government spending on infrastructure. The automotive sectoris expected to grow at about 7.5% in 2019 which is lower than that of 2018 as sales slowedtowards the end of 2018 and early 2019. Policy to support real estate sector will lead tostronger growth in 2019. Recovery in the capital goods sector witnessed in 2018 isexpected to sustain in 2019. The sector is expected to grow above 7% aided by increasingdemand for construction and earthmoving equipment. Industry consolidation through theInsolvency and Bankruptcy Code 2016 is expected to lead to improved discipline in themarketplace and stable pricing. Change of ownership will also lead to improved capacityutilisation levels over the next 1-2 years.

E. Operations and Performance

1. Tata Steel Group

During the year under review Tata Steel Group (‘the Group') recorded totaldeliveries of 26.80 MnT (previous year: 22.89 MnT). Increase in deliveries was due toacquisition of Bhushan Steel Limited [renamed Tata Steel BSL Limited (‘TSBSL')]along with higher volumes from Tata Steel Kalinganagar. The turnover for the Group was at

Rs. 157669 crore (previous year: Rs. 124110 crore) an increase of 27% over theprevious year. This increase is primarily attributable to increase in deliveries andrealisations from domestic operations and increase in realisations at Tata Steel Europe.The Group EBITDA was Rs. 29770 crore (previous year: Rs. 21369 crore) an increase of39% over the previous year. EBITDA increased mainly at Tata Steel Limited (Standalone) onaccount of improved steel margins attributable to higher volumes higher realisations andacquisition of TSBSL. Increase in EBITDA at Tata Steel Europe is attributable to betterthan expected market conditions with higher selling prices in the European market.

During the year under review the Group reported a consolidated profit after tax(including discontinued operations) of Rs. 9098 crore (previous year: Rs. 17763crore) which translated into a basic Earning per share of Rs. 87.75. Profits were lowerthan previous year as previous year's profit included an exceptional gain of Rs.9599 crore primarily due to non-cash accounting surplus arising from the formation of newBritish Steel Pension Scheme as against a charge of Rs. 121 crore during the currentyear.

2. India

During the year under review total deliveries at Tata Steel Limited (Standalone) wereat 12.69 MnT (previous year: 12.15 MnT) recording an increase of 4.5% over the previousyear. Turnover was Rs. 70611 crore (previous year: Rs. 60519 crore) 16.7% higher thanthat of the previous year. EBITDA from Tata Steel Limited (Standalone) was Rs. 20744crore (previous year: Rs. 15800 crore) 31% higher than that of the previous year. Duringthe year under review crude steel production in India (including TSBSL) increased by 35%to 16.81 MnT. Total deliveries at Tata Steel India were at 16.26 MnT recording anincrease of 34% over the previous year due to the acquisition of TSBSL and a ramp up atboth Kalinganagar and TSBSL. Volumes from Indian operations account for more than 61% ofthe consolidated volumes. The turnover (excluding inter-company eliminations andadjustments) from Indian operations (including TSBSL) was Rs. 88987_crore 47% higherthan that of previous year. This was mainly due to higher steel realisation and volumes.Indian operations including TSBSL reported EBITDA (excluding inter-company eliminationsand adjustments) for the year was Rs. 23777 crore which has been highest ever inhistory. This has been achieved by strong operating and commercial performance. Company'sleadership position in chosen segments has been growing continuously and industrialproducts and project segments sales grew by 42% year-on-year. The branded products retailsand solutions business grew by 30% year-on-year the automotive segment sales increased by21% year-on-year and the automotive steel sales volume crossed 2.25 million mark inFinancial Year 2018-19. The Company is striving for a sustainable business model and hasundertaken a number of initiatives that will reduce its carbon footprint across the valuechain. The emission intensity at CO2 Jamshedpur plant improved to 2.28 tonnes of carbonper ton of steel in Financial Year 2018-19. The solid waste utilisation was in excess of99%. Tata Steel Kalinganagar Phase - II expansion is progressing as per plan and isscheduled for completion in Financial Year 2021-22.

3. Europe

During the year under review production at European operations was lower by 381ktonnes (4%) on account of operational issues at both the sites mainly due to overrun ofBF5 life extension works in the UK Pellet plant overhaul issues and fire at caster 22 inIJmuiden. Deliveries declined by 350k tonnes (4%) in line with lower production. Theturnover increased from Rs. 59985 crore in previous year to Rs. 64777 croreduring the year owing to increase in average revenue per tonne due to improved marketconditions. EBITDA increased by Rs. 1701 crore (46%) attributable to better than expectedmarket conditions with higher selling prices in the European market. The EuropeanOperations reported loss before tax as compared to profit reported in the previous yearwhich included gain of Rs. 13851crore relating to non-cash accounting surplus arisingfrom the formation of new British Steel Pension Scheme.

F. Strategy

The year under review has been quite rewarding for the Company in terms of meetingprofitability targets preparing for the future and witnessing progress on initiativescommenced in the previous years. The acquisition of Bhushan Steel Limited (renamed TataSteel BSL Limited) has enhanced the overall capacity of the Company by 5 MnT therebyproviding the structurally strong Indian business operations the required scale. TheCompany has further growth plans including growth of its long products business. Duringthe year the Company also entered into definitive agreements to divest majority stake inits South-East Asian operations in order to focus resources on growth in India.

The Company has also taken steps to establish a sustainable leadership position throughsimpli_cation of the organisation and building scale in capabilities and new businesses.As part of its strategy various teams have been set up to achieve certain goals for theorganisation. These teams include: (i) an integrated technology team to achieve the goalof being amongst the top 5 in steel technology globally; (ii) a One IT team to achieve thegoal of value creation through digital transformation by investing in the requiredinfrastructure and partnerships; and (iii) an integrated supply chain team to enablemulti-locational growth and greater efficiency. In the Services & Solutions portfolio‘Pravesh' (steel doors and windows) is making progress towards achieving the requiredscale.

The Graphene and Fibre Reinforced Polymer businesses have also established requiredenablers to scale up. The Steel Recycling Business is setting up the required businessmodel and capabilities. Going forward the Company aspires to further strengthen itsleadership position in the industry and is pursuing the following priorities in the mediumterm: Industry leadership in Steel: In the near future India given its proposedinfrastructure projects is expected to be one of the largest consumers of steel andstimulators of steel demand. In order to meet this increasing demand the Company has inplace plans to consistently grow through brownfield expansions as well as value creatingacquisitions. In order to attain leadership position in the steel industry key priorityfor the Company is to progress on implementation of TSK Phase - II. The Company is alsoworking towards creating a larger long products portfolio to participate in the growingmarket for long products driven by increase in urbanisation and infrastructuredevelopment. To achieve this objective integration of the steel business of Usha MartinLimited and a roadmap for growth in Long Products will be the areas of focus for thefuture. The Company also aspires to attain leadership position in new segments viz.Lifting and Excavation Oil and Gas Pre-Engineered Buildings etc. and to maintainleadership position in segments such as Automotive Emerging Corporate Accounts (Small andMedium Enterprises) Individual House Builders etc.

Consolidate position as global cost leader: The Company has consistently been oneof the most profitable and lowest cost producers of steel in the world. Cost of captiveiron ore and coal represents almost 50% of the operational cost base of the Company.Structural cost reduction projects in areas of operational efficiency employeeproductivity logistics digital-enabled efficiency enhancement etc. are being undertakento consolidate and to maintain the Company's position as a cost leader. Realisation of theplanned synergy benefits with Tata Steel BSL Limited is also a top priority in this area.

Insulate revenues from steel cyclicality: The steel industry is cyclical in nature.In order to insulate itself from this cyclicality the Company is focusing onstrengthening the branded consumer business and downstream product portfolio. Tata Steelhas embarked on Services & Solutions (‘S&S') business to reduce theimpact of steel cyclicality. Pravesh and Nest In are examples of our offering in S&S.These businesses are seeing significant growth. Leveraging our deep knowledge of customerneeds and ability to execute insight-driven innovation we believe that this portfoliowill provide us with significant competitive advantage in future. We are planning forstrong growth in S&S and these businesses can contribute 20% of our revenue goingforward.

Tata Steel is also scaling up a portfolio of new materials currently comprising ofGraphene and Fibre Reinforced Polymer. These new businesses have exciting possibilitiesand we will use technology to create differentiating value propositions and newapplications. S&S and new materials businesses will provide added impetus to ourdifferentiated play and provide a unique growth opportunity.

Industry leader in Corporate Social Responsibility and Safety Health and Environment:As one of the leading steel producers in the world the Company aspires to be a leader insustainable business practices in the industry. Towards this objective the Company istaking steps to reduce its environment footprint. Focusing on steel scrap recyclingbusiness to promote sustainable steel making and to create a circular economy for steel isone of the key elements of our business model for growth in Long Products. The Companyalso recognises the need to create a safe and healthy environment for all employees andstakeholders and desires to be an industry leader in Corporate Social Responsibility (‘CSR')and Safety Health & Environment (‘SHE'). This will be achieved throughenhanced focus on reducing unsafe incidents at the workplace carbon emissions andconsumption of natural resources such as water. The Company will continue to deepen theengagement with communities aiming to touch many more lives through its CSR initiatives.

Strategic enablers: Creation of a set of core capabilities in the organisation isessential for the Company to achieve its Strategic Objectives. People are the key tosuccess for any organisation and hence the Company continues to direct its effortstowards building a skilled engaged and diverse workforce. Along with this the Company isalso focussed on creating the right organisation culture that encourages agility andinnovation. The Company is also focussed on investing in various digital initiativesenabling new business models and enhancing the digital maturity of the organisation.During the year under review initiatives were taken to put in place an innovationframework. In the coming year the focus will be to put in place a structure andengagement mechanism for partnering with startups. The Integrated Technology Organisationwill focus on creating outcome-based external collaborations and developing deep expertisein identified strategic thrust areas.

G. Key Developments

Acquisitions and Investments

Acquisition of Bhushan Steel Limited (renamed Tata Steel BSL Limited)

During the year under review the Company through its wholly-owned subsidiary BamnipalSteel Limited (‘BNPL') completed the acquisition of controlling stake of72.65% in Bhushan Steel Limited (renamed Tata Steel BSL Limited) (‘TSBSL')pursuant to the Resolution Plan (‘RP') as approved by the National Company LawTribunal vide its Order dated May 15 2018 under Corporate Insolvency and ResolutionProcess (‘CIRP') of the Insolvency and Bankruptcy Code 2016 (‘IBC').In March 2019 the Company acquired 10700000000 – 11.09% Non-ConvertibleRedeemable Preference Shares of face value Rs. 10 each aggregating to Rs. 10700crore in two tranches and 9000000000 – 8.89% Optionally Convertible RedeemablePreference Shares of face value Rs. 10 each aggregating to Rs. 9000 crore in twotranches of TSBSL.

Further on April 25 2019 the Board of Directors of the Company approved theamalgamation of BNPL and TSBSL into and with the

Company by way of a composite scheme of amalgamation and have recommended a mergerratio of 1 equity share of Rs. 10 each fully paid up of the Company for every 15 equityshares of Rs. 2 each fully paid up held by the public shareholders of TSBSL. As part ofthe scheme the equity shares held by BNPL and the preference shares held by the Companyin TSBSL shall stand cancelled. The equity shares held by the Company in BNPL shall alsostand cancelled. The amalgamation is subject to shareholders and other regulatoryapprovals.

Acquisition of Creative Port Development Private Limited

In January 2017 the Company entered into definitive agreement to acquire 51% equitystake in Creative Port Development Private Limited (‘CPDPL') for thedevelopment of Subarnarekha Port at Odisha through a wholly-owned subsidiary SubarnarekhaPort Private Limited. On September 18 2018 the Company completed the acquisition of 51%equity stake in CPDPL a proposed greenfield port project.

Acquisition of Steel Business of Usha Martin Limited

On September 22 2018 the Company as a part of its strategy to grow in long productsexecuted definitive agreements for acquisition of steel business of Usha Martin Limited (‘UML')a special steel and wire rope manufacturer through a slump sale on a going concern basis.Tata Sponge Iron Limited (‘TSIL') a 54.5% subsidiary company engaged in thesponge iron business had been evaluating various strategic options to enhance its productportfolio and had identified an entry into steel manufacturing in long products as a routeto ensure sustainable value creation for its shareholders.

On October 24 2018 the Company extended support for TSIL's entry into steel businessand identified it as the strategic vehicle for acquisition of steel business of UML.

On April 9 2019 TSIL completed the acquisition of steel business undertakingincluding captive power plants for a cash consideration of Rs. 4094 crore which issubject to further hold backs of Rs. 640 crore pending transfer of some of the assetsincluding mines and certain land parcels.

Investment in TRF Limited

In March 2019 the Company acquired 250000000 12.5% Non-Convertible RedeemablePreference Shares of face value Rs. 10 each of TRF Limited on private placement basisaggregating to Rs. 250 crore.

Investment in Tata Metaliks Limited

In March 2019 the Company acquired 2797000 equity shares of face value Rs. 10 eachof Tata Metaliks Limited at a price of Rs. 642 per equity share aggregating to Rs. 179.57crore and 3492500 Warrants of face value Rs. 10 each at a price of Rs. 642 per Warrantwith a right exercisable by the Company to subscribe for one equity share per Warrant offace value of Rs. 10 each aggregating to Rs. 224.22 crore (25% paid on application).

Divestments

Divestment of stake in Black Ginger 461 Pty. Ltd.

On October 18 2018 T S Global Minerals Holdings Pte. Ltd. entered into an agreementwith IMR Asia Holding Pte Ltd a group company of IMR Metallurgical Resources AG a globalmetals and mining group headquartered in Switzerland to divest its entire stake in itswholly-owned step down subsidiary Black Ginger 461 Pty. Ltd. which in turn holds 64% inSedibeng Iron ore Pty Ltd South Africa the operating company. The divestment wascompleted on February 18 2019.

Sale of shares in NatSteel Holdings Pte. Ltd. (‘NSH') and Tata Steel (Thailand)Public Company Ltd. (‘TSTH')

T S Global Holdings Pte. Ltd. (‘TSGH') an indirect wholly-owned subsidiaryof the Company executed definitive agreements to divest its entire equity stake held inNSH (100%) and TSTH (67.9%) to a company in which 70% equity shares will be held by anentity controlled by HBIS Group Co. Ltd (‘HBIS') and the balance 30% will beheld by TSGH. The definitive agreements signed between the two companies is a significantmilestone in strategic relationship offering the South-East Asian business robustgrowth opportunities given the access to resources technical expertise and regionalunderstanding of HBIS. The Company remains committed through its shareholding to helpcreate a sustainable future for all stakeholders.

Joint Venture between Tata Steel and thyssenkrupp AG

Following the signing of a Memorandum of Understanding in September 2017 the Companyon June 30 2018 signed definitive agreements with thyssenkrupp AG to combine theEuropean Steel Business into a 50:50 joint venture named thyssenkrupp Tata Steel BVwhich will be positioned as a leading pan European high quality fiat steel producer with astrong focus on performance quality and technology leadership. The joint venture is builton the strong foundations of common value systems and a long heritage in the industry. Thetransaction is subject to merger control clearance in several jurisdictions including theEuropean Union. Tata Steel and thyssenkrupp have been engaging parallelly with theEuropean Commission (‘EC') to provide information in relation to thebusinesses which would be part of the proposed joint venture. Following pre-notificationengagement with the EC both parties notified the proposed joint venture to the EC onSeptember 25 2018. On October 30 2018 in line with the expected timelines of the mergerreview process the EC announced that it will undertake an indepth review of the mergerproposal and investigate certain areas of preliminary competition concern. The Company hasnoted the EC's concerns and will continue its discussions with the EC including providingfurther information and analysis especially in relation to sectors they have identifiedto secure approval for the proposed joint venture. Until completion of the JV processthyssenkrupp Steel Europe and Tata Steel Europe will continue to operate as separatecompanies.

Issue of Securities

Issue of Debt Securities

On March 1 2019 the Company allotted 43150 - 9.8359% Unsecured Redeemable RatedListed Non-Convertible Debentures (‘NCDs') having face value Rs. 10 lakh eachfor an amount aggregating to Rs. 4315 crore to identified investors on privateplacement basis. The NCDs are listed on the WDM segment of BSE Limited. The NCDs mature in4 equal instalments at the end of the 12th 13th 14th and 15th year from the date ofallotment. The last and final maturity date of NCDs is March 1 2034.

First and final call on Partly Paid Shares

In Financial Year 2017-18 the Board approved the simultaneous but unlinked issue of4:25 fully paid shares for an amount up to Rs. 8000 crore at a price of Rs. 510per share and 2:25 partly paid shares for an amount upto Rs. 4800 crore at price of Rs.615 per share (Rs. 154 paid-up) on rights basis. The shares were allotted to theshareholders on March 14 2018.

The first and final call on partly paid shares was to be made within 12 months from thedate of allotment. In terms of regulatory clarification(s) received the Company ispermitted to make the call on partly-paid shares beyond 12 months if (i) the issue sizeexceeds Rs. 500 crore and (ii) the Company complies with the requirement under theapplicable SEBI (Issue of Capital and Disclosure Requirements) Regulations regardingmonitoring agency. The Company is in compliance with both these conditions. Accordinglythe Board will make the first and final call on the partly paid shares of the Company atan appropriate time.

Credit Rating

During the year under review Moody's Investors Services upgraded long-term CorporateFamily Rating of the Company by one notch from Ba3 to Ba2 while S&P has revised itsratings outlook on the Company from ‘Stable' to ‘Positive' and afirmed thelong-term credit rating of ‘BB-'.

H. Sustainability

Stemming from our founder's belief that what comes from society should go back tosociety sustainability is deep rooted in the culture of the organisation. The belief isembedded in Company's Vision which balances the aspiration of value creation andcommitment to being a Corporate Citizen. The sustainability approach of the Company isarticulated in Sustainability Policy of the Company as well as in the Corporate SocialResponsibility Policy Environment Policy Energy Policy Climate Change PolicyBiodiversity Management Policy Afirmative Action Policy and Human Resource policy etcwhich reinforces the triple bottom-line approach in its systems and processes. The Companyalso has systems in place to capture the voice of stakeholders periodically and review itslong-term strategy in line with the stakeholder expectations.

Bracing itself for the future the Company is working towards integrating the keyissues on planet and people into its strategy and business practices across the valuechain. During the year Environment Social and Governance aspects of material issues wererevisited through a third party Materiality Study covering stakeholders across alllocations. This will further reinforce the Company's strategy for value creation acrossall stakeholders and capitals. Aspirations of taking our carbon emissions to less than 2tCO2/tcs zero waste and zero e_uent discharge and doubling our CSR reach by 2025 aresignificant facets of this strategy.

In order to mainstream sustainability in the decision making the Company organised aSustainability Immersion Programme designed and facilitated by Cambridge Institute ofSustainability Leadership for Board Members Senior Management Senior Executives andUnion Leadership Team. During the year the Company organised four batches of theprogramme covering majority of the Board Members entire senior Management team and morethan 100 senior executives and Union Leadership Team across locations. The Company iscommitted to serving its customers through a portfolio of eco-friendly products. Duringthe year the Company obtained CII's GreenPro eco-label for Tata Pravesh Steel Doors andWindows and Tata Structura and Tata Pipes. The third party eco-label certification ensurescustomers of minimal environmental impacts of the certified products in a transparent way.For the first time in India Steel Products have received the eco-label. Going forwardthe Company will adopt the global best practice of having Environmental ProductDeclaration of key products to enable a transparent declaration of the environmentalimpacts of its products and processes in order to enable informed purchasing by the endconsumer. The continued focus on ‘Sustainability' across the value chain has helpedthe Company in being adjudged as the Steel Industry Leader globally on Sustainability inDow Jones Sustainability Index in 2018 with a top score of 100 percentile in EnvironmentalDimension. The Company has also received the distinction of being recognized asSustainability Champion by World Steel Association for the second year in a row.

Environment

The Company aims to be the benchmark for environmental stewardship in the steelindustry by focusing on operational excellence aimed at resource efficiency through a‘Prevent Minimise Recover Reuse and Recycle' hierarchical approach to reduce itsecological footprint. The Company is committed to responsible use and protection of thenatural environment through conservation and sustainable practices. The Company hasimplemented environmental management systems that meet the requirements of internationalstandard ISO 14001:2015 at Jamshedpur Works and has initiated proceedings at KalinganagarWorks. These systems provide the Company with a framework for managing compliance andimproving environmental performance making it future ready to address stakeholderrequirements. The Company pursues responsible advocacy on policy and regulatory issues bybeing member of the World Steel Association Environment Committee the Central PollutionControl Board's National Taskforce the Indian Steel Association Confederation of IndianIndustries and various other organisations. The Company has in place a board level SafetyHealth & Environment Committee that provides necessary direction and guidance onmatters relating to environment and monitors the performance of the Company and its impacton the environment. During the year Tata Steel continued its efforts to reduce its carbonfootprint by adopting best available technologies for energy efficiency and heat recovery.The Plant at Jamshedpur is the benchmark in India for emissions intensity at 2.29 tonnesCO2 of CO2/tcs through BF-BOF route. The Company continues to use the internal CarbonPricing mechanism for evaluation of capital expenditure projects with shadow price ofcarbon @US$15/tCO2.

Contributing to national commitment towards the Paris agreement the Company has takenup aspirational goals to achieve global benchmark levels of less than 2 t/tcs emissions.Various cross CO2 functional projects have been undertaken to identify and reduceemissions. Recycling steel scrap is an important lever to reduce CO2 carbon footprint andthe Company has set up a Steel Recycling business unit which will facilitate formalisationof the scrap market in India and make more scrap available for conversion to steel.

In Europe the Company continues to invest in short to medium emission reduction andenergy efficiency improvements. term CO2

In addition to these improvements as a follow up to the ULCOS (Ultra-Low Steelmakingco-operative research initiative to CO2 achieve a step change in emissions fromsteelmaking) the CO2 Company is also working on a major long-term project to develop anew smelting reduction technology (‘HIsarna') to produce steel without theneed for coke making or agglomeration processes thereby improving efficiency reducingenergy consumption and emissions. The pilot plant is located at the Company's reducing CO2IJmuiden site in the Netherlands.

Climate Change

Climate change is one of the most pressing issues the world faces today and the Companyrecognises its obligation to minimise its contribution to climate change. The Company aimsto play a leadership role in addressing the challenge of climate change. The Companyrecognises that though steel is considered a ‘hard to abate' sector globally itwill be an integral part of the solution to climate change because of its infiniterecycling properties. Considering all these factors the Company has formulated a climatechange strategy based on 5 key themes as outlined below:

Emissions Reduction: The Company will continue to improve its current processes toincrease its energy efficiency and to reduce its carbon footprint. Investing inTechnology: The Company will continue to invest in long-term breakthroughtechnologies.

Market Opportunities: The Company endeavours to develop such new products andservices that reduce the environmental impact over its products' life-cycles and help itscustomers to reduce their carbon footprints.

Employee Engagement: The Company will actively engage its workforce and encourageeveryone to contribute to its strategy. Lead by Example: The Company will furtherdevelop its pro-active role in global steel sector initiatives through the World SteelAssociation.

Health and Safety

Health and Safety Management remains Tata Steel's foremost priority and we arecommitted to being a benchmark in the industry. To us Health and Safety is not just ametric but a part of our value system. The desire to being a benchmark is demonstratedthrough leadership commitment and is cascaded across the organisation in the form of longmedium and short-term action plans.

The Company has been working on six corporate level long-term strategies viz. Build(Safety) leadership capability at all levels to achieve zero harm improve competency andcapability for hazard identification & risk management contractor safety riskmanagement elimination of safety incidents on road & rail excellence in processsafety management and establishing industrial hygiene and improving occupational health.These strategies are enablers through which several initiatives are undertaken that aidthe Company in achieving its objective of ‘Committed to Zero'. For the Indianoperations one of the key initiatives undertaken during the year under review was tostrengthen Company's quality management system which is the foundation on which all othersystems are based. The company-wide IT based Generic Document Control System (GDCS) wasre-designed and re-launched to ensure availability of latest and controlled StandardOperating Procedures (‘SOPs') to employees for performing their tasks safely.The plant at Jamshedpur was re-certified for OHSAS 18001:2007 and a similar process hasbegun for the plant at Kalinganagar.

During the year under review a concerted effort has been made to increase risksensitivity of the Company. A well articulated methodology to evaluate and assess safetyrelated risks has been developed with its associated mitigation techniques. This iscurrently being rolled out in phases and it has already helped in achieving 26% reductionof high potential incidences in comparison to last year. The initiative to roll outProcess Safety through a ‘Center of Excellence' methodology at Jamshedpur has beenappreciated by World Steel as the ‘best practice' of 2018 across the industry.Currently the process safety has been rolled out to 30 of 41 operating departments atJamshedpur and Kalinganagar. The balance departments will be covered by Fiscal 2020.

Contractor employees' fatality remains the topmost safety concern for the Company. Itis with deep regret that we report two fatalities in India and one fatality in Singaporeinvolving our contractor partners. The Company is continuously channelising its efforts toeliminate such incidents and achieve zero fatality. Apart from taking various initiativesto improve their safety performance the Company has also taken upon itself to ensure thatcontractor employees in India have the desired skills and competencies to perform theirjob safely. They are being tested and certified by Shavak Nanavati Technical Institute (‘SNTI')to ensure competence. In many cases they are also being trained to achieve desired skillsand competence. During the year under review the Company covered a large part of thecontractor employee workforce in India. It's an ongoing process and we expect to achieve100% coverage within a year.

The Company is leveraging state of the art digital technology at various places toimprove surveillance and analytics reduce hazardous man-machine interface and for variousother corrective and preventive actions.

On the health front during the year under review three distinct campaigns werelaunched for the Indian operations. A detailed ergonomic study has been undertaken inlabour intensive departments industrial hygiene projects have been undertaken indepartments where it has been assessed as a health risk and physical exercise has beenintroduced off duty hours facilitated by a professional agency at various locations ofthe Company at Kalinganagar Bhubaneswar Joda Jamshedpur etc. to improve employeehealth and wellness. This has helped to improve health index of the Company vis--visprevious year. These initiatives will continue with increased intensity in times to come.

At Tata Steel Europe the long-term strategies to focus on occupational health andprocess safety has facilitated in achieving zero fatality. Training for senior managersfocusing on their leadership role related to health & safety continued during theyear. The combined LTIFR in Financial Year 2018-19 for employees and contractorsdeteriorated to 1.45 as compared to 1.36 in the previous year. The recordable rate whichincludes lost time injuries as well as minor injuries also deteriorated from 4.13 inFinancial Year 2017-18 to 4.92 in Financial Year 2018-19. A campaign focusing on hazardidentification and risk minimisation continued during the year under review and there werevarious initiatives undertaken to accelerate deployment of standards understand themindset and behaviour and improve maturity of the Group's health & safety managementsystem

Research and Development

In line with the aspiration to be amongst the top five innovation driven companies inthe world the Company has put in place a new technology organisational structure. Thetechnology road map exercise has materialised and teams are formed to work on selectedprojects. The year has been rewarding on many fronts for Research & Development.During the year under review the Company became a leading player in the Indian Steelindustry in terms of patent _ling by crossing the 1000 mark. There is a progress inGraphene work from commercialisation perspective. Industrial solutions developed withgraphene doped composites have offered significant improvement in the operational costs ofthe process plants. Also Graphene anti corrosion coatings have been established towards agreen alternative to the current coating technologies. A number of breakthrough projectshave crossed the ‘proof-of concept' stage and ventured into advanced stages. TheCompany has successfully conducted trials on an innovative process to make use ofnon-coking coal along with coking coal. Amongst the notable new developments a newprocess to produce high purity iron powder using in-plant byproducts has been developed. Agrade of the said iron powder with high sinter ability and superior toughness propertieshas been tested and commercialised for Diamond cutting tools.

In Europe Research & Development has contributed to several new products. Therange of Prime Lubrication Treatment has been extended to the MagiZinc protectivegalvanising coating. XPF1000 has been launched as a new ultra-high strength steel gradefor the Chassis & Suspension market and a new range of hybrid sandwich panels is nowavailable for Construction via Building Systems. Further Research and Development hasalso been vital in getting many potential new products to reach higher TechnologyReadiness levels throughout the year.

In order to make technology development more effective and robust for the Company inthe future the cross-functional delivery of the TSE technology roadmap is now coordinatedvia a new committee the Central Technology Committee chaired by the Director R&DEurope and sponsored by the Chief Technology Officer. This Committee ensures thatpriorities and gaps in the delivery of technology are identified and dealt with in anappropriate manner. Research & Development continues to provide significant efforttowards various research and technology initiatives such as sustainable and moreenvironment friendly steel production through the HIsarna project that has progressed onthe maturity ladder with a formal move from the HIsarna pilot plant from an R&Denvironment to full integration with the MLE manufacturing hub. HIsarna is a novel andmore flexible reduction technology for iron production. In the past year the HIsarnapilot plant has set several new production records. R&D will continue to support thisdevelopment way forward.

New Product Development

In order to achieve the Company's endeavour to create superior customer experience theCompany has adopted best in class manufacturing practices invested in creating brandsdeveloped products keeping customers at the centre and focussed on environment andsafety. Furthermore the Company is steadily venturing into a new gamut of solutions andready to use products for further value creation. During the year under review theCompany developed 114 new products in India. Tata Steel Kalinganagar plant played a keyrole by developing 61 products such as high strength steel grades for global players inLifting & Excavation and Pre-Engineered Building (PEB) manufacturers approval uptoAPI 5L X60 grade from state owned Natural Gas Processing & Distribution company forOil & Gas pipelines and the first approvals of hi-tensile (590MPa) grades inautomotive applications. In addition the products developed have also helped ‘TataAstrum' to enter in the Transmission & Distribution segment with high strength gradeof ASTM A572 Gr 65.

Environment friendly products such as polysteel and chrome free passivation basedcoatings have been developed for the ECA (Emerging Corporate Accounts) business. Polysteelhas the potential to eliminate the dependency on 7 tank degreasing process which resultsin environmentally hazardous discharge. In addition polysteel also provides long-termcorrosion protection better surface finish anti-_ngerprint surface and high scratchresistance. Chrome free passivation in galvanised products is environment friendly andeliminates requirement of oiling. The trials are successful for clean room partitionpanels and supply for appliance segment will be initiated shortly. Services and solutiona new business vertical successfully launched Tata Pravesh vista windows an extension ofthe existing product Tata Pravesh doors. Vista windows were launched with 3 novel designelements: unique slide cum swing concealed spring loaded auto lock tower bolt and gasspring assist and hold providing comfort and safety. In Europe 22 new products werelaunched during the year. These launches include major developments for the automotiveconstruction and engineering markets. Notable example of product and service launchesincludes XPF1000. XPF1000 latest addition to Tata Steel's XPF hot rolled product familyfor the automotive chassis and suspension market combines ultra-high 1000MPa tensilestrength with excellent formability and fatigue properties. A new range of 25mm/1' gaugehot rolled products was developed for the engineering and yellow goods markets enablingcustomers to replace equivalent reversing mill plate offerings and to achieve better partyield and surface finish. Improved Colorcoat prepainted steels using Tata Steel's nextgeneration MagiZinc hot dip galvanised coating for optimised product longevity inconstruction building envelope applications was also developed. Packaging has continued tocommercialise its already launched Protact products including Protact for food.

Customer Relationship

During the year under review the Company undertook specially designed initiatives tocreate and maintain long-term relationship with channel partners and customers to be thefirst choice of producer. In India the Company largely caters to B2B B2C and B2ECA(Emerging Corporate Accounts) customer groups. These segments are further bifurcated intomicro segments based on application and buying behaviour. The Company focusses tounderstand the expectations and requirements of current and potential customers/marketsegments to deliver customer specific products and services and provide value-creatingsolutions.

During the year under review the Company organised its biennial ‘Driving Steel'summit on Automotive Steels. The summit brought together industry experts includingautomotive majors and ancillaries from around the globe as well as from India. Theknowledge summit facilitated the Company to develop insightful understanding of theemerging trends in the automotive industry and to help build new partnerships. TheCompany engages with B2B customers through cross-functional Customer Service Teams (‘CSTs')to work on new product development quality improvement and value-creating ideas whichhelp to achieve operational excellence. In addition the Company has collaborated with keyautomotive customers to provide cost and weight reduction solutions using the ValueAnalysis & Value Engineering (‘VAVE') platform and the Advanced ProductApplication support. This has also enabled the Company to partner with discerningcustomers for future product launches. Engagement through CST and VAVE is deployed to B2Bcustomers of Industrial Products and Projects Vertical. Senior leadership team activelyengaged with leading B2B customers by visiting premises of customers and attendingexclusive interacting sessions organised across regions. Collaborative Reform with ECA forAdvanced Technical Enhancement ‘CREATE' () was conceptualised to providesupport to various ECA customers by generating cost and weight savings via redesigning ofcomponents. Platforms such as APPLICON (Appliance segment) and PANORAMA (Panel segment)were conceived to gain deeper understanding and engagement with microsegments. Theseplatforms witnessed participation of Original Equipment Manufacturers (‘OEM')from consumer durable industry and provided an opportunity to engage with policy makingbodies such as CEAMA (Consumer Electronics & Appliance Manufacturers Association) andCOSMA (Control Panel and Switchgear Manufacturers' Association) and to enable allstakeholders to understand the upcoming technologies in the microsegments.

During the year under review the Company also rolled out various digital initiativesacross customer groups. ‘Aashiyana' an e-selling platform has been launched formultiple B2C brands and has crossed a turnover of Rs. 100 crore. ‘COMPASS' adigital supply chain visibility solution rolled out to select B2B customers generated122KT of sales this year. DigEca an initiative that captures lead management for ECAs hasachieved 659 KT sales enquiries and 375 KT purchase orders making the process convenientfor the customers.

In services & solutions space select platforms have been developed to understandthe consumer decision making such as the ‘Consumer Connect' programme wherein thelady of the house is invited to join the program visit exclusive retail outlet forexperience and have an option of display van carrying the product closer to the consumerand ‘consultative selling' wherein a sales expert helps in product demonstration.

In Europe the Company partners with customers to help them excel in their marketco-creating more sustainable value throughout the entire value chain. ‘CustomerFocus' contains several company wide and local programmes such as Strategic AccountManagement programme that reinforce our mission and drive towards customer centricity.Improvements on this front have also been acknowledged in the Tata Business ExcellenceModel assessment. The Company also has a value chain transformation programme known as ‘FutureValue Chain' programme which focusses on driving service and quality improvements.European operations are also focusing on a balanced portfolio and differentiationstrategy which aims to increase the proportion of high-margin differentiated products. Aspart of the strategy the Company launched 22 new products in

Europe this year. These launches include major developments for the automotiveconstruction and engineering markets. Along with products the Company also offersservices such as Electronic Data Interchange Track and Trace Early Vendor InvolvementDesign and Engineering support Building Information Modelling Life Cycle Analysis andTechnical Support. In addition the Company has a commercial improvements programme called‘Future Commercial Excellence' which focusses on driving improvements for commercialterms.

Human Resources Management & Industrial Relations

Human resource has always been one of the most valued stakeholders for Tata Steel. TheCompany is committed towards creating and maintaining an ideal work culture for engagedand capable workforce to deliver for the future. Tata Steel has strong values pioneeringpractices a culture of working together through joint consultation between Union andManagement and a very strong commitment towards community development. Our peoplepractices have always been centered around employee welfare and wellness creating anenvironment of collaboration and connect which has aided us to achieve industrial harmonyof over 90 years.

Improving employee productivity is of utmost importance to the organisation andachieving benchmark performance in this area year-on-year is the goal for theorganisation. This led to an improvement in productivity from 769 tonnes of crudesteel/employee/year to 800 tonnes of crude steel/employee/year and the employees on rollmoving from 34072 to 32984. The year under review was a milestone year for the Companyas it embarked on major improvements in areas related to diversity and inclusion. Variousinitiatives such as Wings an employee resource group for LGBTQ+; Take Two a careeropportunity for women on a break; Step-up-to-success an in-house women's mentoringprogram; Deployment of women in B-shift operations; and Paternity leave for blue collaredworkforce were introduced to bring about a change in the culture and mindset of theworkforce with regard to the aspects of diversity and inclusion. The focus for the yearwas on Gender diversity and Di_erently Abled Persons. E_orts have been taken on hiring andcreating infrastructure for diverse workforce as well as retaining and developing womenleaders to create a pool of diverse talent in the organisation. Our continuous efforts inthis direction have led to the increase in gender diversity from 6.1% to 6.5% of the totalworkforce. Continuing the capability development journey the Capability Development wingduring the year started serving external clients as well as generating a revenue throughtheir products and services. The Management has been focusing on digitalisation since pastfew years. During the year under review the role of digitalisation in providing a richemployee experience has been immense. The Company launched the first HR Chat-bot –‘Amigo' to provide interactive resolutions to the queries pertaining to HR policies.The year has also been significant for Digital HR owing to the major involvement of teamsin designing and development of a customised HRM Talent Suite. Data analytics andreporting have become key inputs in formulating policies and strategies for the Company.

During the year under review the Company acquired Bhushan Steel Limited (renamed TataSteel BSL Limited). The seamless integration of the newly acquired organisation with TataSteel was ensured through deployment of the Company's employees in the key functionalareas such as Safety Ethics Supply Chain etc. and senior leadership positions and byadopting and implementing various policies and practices. Trust was built among theworkforce by bringing in transparency and openness in the system and by imbibing TataPhilosophy across the value chain. During the year under review Tata Steel was certifiedas Great Place to Work in the Great Place to Work study conducted for the year 2019. TataSteel was declared as one of the top 25 ‘India's Best Places to Work in theManufacturing sector' by Great Place to Work. Tata Steel also secured 8th rank in the‘Best Companies to work for' survey by Business Today and featured in the top 10companies for the 2nd year in a row. Tata Steel won the Golden Peacock Award for HRExcellence (Steel Sector) in 2019. This recognition was bestowed on the Company for the2nd year in a row. The Company was conferred with CII Eastern Region Productivity Awardfor overall improvement in productivity. In Europe the Company continues to invest in therecruitment engagement health and development of its employees. The Tata Steel Academyin Europe aims to strengthen the organisation's competitive advantage by enabling itspeople to achieve the highest standards of technical and professional expertise with acombined use of practical ‘on the job' virtual and classroom training to maximisetraining effectiveness. The Company aims to offer modern employment conditions that ensurehealthy long-term employability and are responsive to the needs of both current and futureemployees. In Europe the Company strives to ensure that the employees' motivation andcapabilities are enhanced by its leaders organisational structure operational protocolsincluding daily management and operational excellence programmes communication processes& business excellence and reward and recognition policies. The Company also focusseson promoting physical health through various central and local programmes and providestraining and support to promote mental health inside and outside the workplace.

Corporate Social Responsibility

The Company's vision is to be a global benchmark in ‘value creation' and‘corporate citizenship'. The objective of the Company's Corporate SocialResponsibility (‘CSR') initiatives is to improve the quality of life ofcommunities through long-term value creation for all stakeholders. For decades theCompany has pioneered various CSR initiatives. The Company continues to remain focussed onimproving the quality of life. During the year under review the Company impactedthe lives of more than a million children women and men from our communitiesthrough initiatives in health drinking water education livelihood sportsinfrastructure development etc.

The Company is working closely with tribal communities in its areas of operation inIndia. The Company has partnered with State Governments of Jharkhand and Odisha and withvarious reputed national and international development organisations in delivering itsprogrammes.

The Company has in place a CSR policy which provides guidelines to conduct CSRactivities of the Company. The CSR policy is available on the website of the Companywww.tatasteel.com During the year under review the Company spent Rs. 314.94 crore on CSRactivities. The Annual Report on CSR activities in terms of Section 135 of the CompaniesAct 2013 and the Rules framed thereunder is annexed to this report (Annexure 3).

In Europe the Company focusses on local Communities. The Company nurtures and sustainsthe communities close to its operational plants. The Company conducts regular dialogueswith these communities to understand and address their concerns. The Company istransparent with information on the environmental impact of its activities as well as itsgoals and improvement targets. Local communities are part of the sustainable economy as wehelp each other to co-exist successfully with a good understanding of the mutual benefitsthat we provide to one another. The Company runs regular programmes to invite the publicto see our work and also enjoy and see the important wildlife and _ora that _ourish on itssites. The Company sponsors local activities and support charities. In IJmond the Companycelebrated the annual Tata Steel Chess Tournament that attracts thousands of players andspectators and boosts the local tourism economy in the o_-season in January. We sponsorlocal sports teams and children's events most notably in recent years the Tata Kids ofSteel triathlons. We also engage with communities as an existing and potentialworkforce running programmes to involve young people and girls in particular so thatthey can discover the interesting career opportunities that our organisation offers.

I. Corporate Governance

At Tata Steel we ensure that we evolve and follow the corporate governance guidelinesand best practices dilligently not just to boost long-term shareholder value but also torespect minority rights. We consider it our inherent responsibility to disclose timely andaccurate information regarding the operations & performance leadership and governanceof the Company.

In accordance with the Tata Steel Group's Vision the Tata Steel Group aspires to bethe global steel industry benchmark for value creation and corporate citizenship. The TataSteel Group expects to realise its Vision by taking such actions as may be necessary inorder to achieve its goals of value creation safety environment and people.

Pursuant to the Listing Regulations the Corporate Governance Report along with theCertificate from a Practicing Company Secretary certifying compliance with conditions ofCorporate Governance is annexed to this report (Annexure 4).

Board Meetings

For seamless scheduling of meetings a calendar is prepared and circulated in advance.The Board met 7 times during the year under review the details of which are given in theCorporate Governance Report. The intervening gap between the meetings was within theperiod prescribed under the Companies Act 2013 and the Listing Regulations.

Selection of new Directors and Board Membership Criteria

The Nomination and Remuneration Committee (‘NRC') works with the Board todetermine the appropriate characteristics skills and experience for the Board as a wholeas well as for its individual members with the objective of having a Board with diversebackgrounds and experience in business government education and public service.Characteristics expected of all Directors include independence integrity high personaland professional ethics sound business judgement ability to participate constructivelyin deliberations and willingness to exercise authority in a collective manner. The Companyhas 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 ofdirectors.

• It contains guidelines for determining qualifications positive attributes fordirectors 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 ofappointment of an Independent Director The Policy was adopted by the Board on March 312015 and the same was revised on March 29 2019 to incorporate the changes in regulatoryrequirements pertaining to criteria for determining independence of a director.

The Policy is available on the website of the Company www.tatasteel.co m

Familiarisation Programme for Directors

All new Directors (including Independent Directors) inducted to the Board go through astructured orientation programme. Presentations are made by Senior Management giving anoverview of the operations to familiarize the new Directors with the Company's businessoperations. The new Directors are given an orientation on the products of the businessgroup structure and subsidiaries Board constitution and procedures matters reserved forthe Board and the major risks and risk management strategy of the Company. Visits toplant and mining locations are organised for the new Directors to enable them tounderstand 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 ofstrategy operations & governance safety health and environment industry &regulatory trends competition and future outlook are available on the website of theCompany www.tatasteel.com

Evaluation

The Board evaluated the effectiveness of its functioning that of the Committees and ofindividual Directors. The Board sought the feedback of Directors on various parametersincluding:

• Degree of fulfillment of key responsibilities towards stakeholders (byway of monitoring corporate governance practices participation in the long-term strategicplanning 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 Chairman of the Board had one-on-one meeting with the Independent Directors (‘IDs')and the Chairman of NRC had one-on-one meeting with the Executive and Non-ExecutiveNon-Independent Directors. These meetings were intended to obtain Directors' inputs oneffectiveness of the Board/Committee processes. The Board considered and discussed theinputs received from the Directors. Further the IDs at their meeting reviewed theperformance of the Non-Independent Directors the Board as a whole and Chairman of theBoard after taking into account views of Executive Directors and other Non-ExecutiveDirectors. The evaluation process endorsed the Board Members' confidence in the ethicalstandards of the Company cohesiveness amongst the Board Members constructiverelationship between the Board and the Management and the openness of the Management insharing strategic information to enable Board Members to discharge their responsibilities.In the coming year the endeavour is to enhance focus on de-leveraging Balance Sheet(Reduction of debt) and making the European Operations more sustainable.

Remuneration Policy for the Board and Senior Management

Based on the recommendations of the NRC the Board has approved the Remuneration Policyfor Directors Key Managerial Personnel ‘KMPs' () and all other employees ofthe Company. As part of the policy the Company strives to ensure that: • the leveland composition of remuneration is reasonable and sufficient to attract retain andmotivate Directors of the quality required to run the Company successfully;

• relationship between remuneration and performance is clear and meets appropriateperformance benchmarks; and • remuneration to Directors KMP and Senior Managementinvolves a balance between fixed and incentive pay reflecting short medium and long-termperformance objectives appropriate to the working of the Company and its goals.

The Remuneration Policy for Directors KMPs and other Employees was adopted by theBoard on March 31 2015. The salient features of the Policy are:

• It lays down the parameters based on which payment of remuneration (includingsitting fees and commission) should be made to Independent Directors (IDs) andNon-Executive Directors (NEDs).

• It lays down the parameters based on which remuneration (including fixedsalary benefits and perquisites bonus/ performance linked incentive commissionretirement benefits) should be given to whole-time directors KMPs and rest of theemployees.

• It lays down the parameters for remuneration payable to Director for servicesrendered in other capacity.

During the year under review there have been no changes to the Policy. The Policy isavailable on the website of the Company www.tatasteel.com

Particulars of Employees

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are annexed to this report (Annexure5). In terms of the provisions of Section 197(12) of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 a statement showing the names and other particulars of employeesdrawing remuneration in excess of the limits set out in the said Rules forms part of thisreport.

Independent Directors' Declaration

The Company has received the necessary declaration from each Independent Director inaccordance with Section 149(7) of the Companies Act 2013 read with Regulations 16 and25(8) of the Listing Regulations that he/she meets the criteria of independence as laidout in Section 149(6) of the Companies Act 2013 and Regulations 16(1)(b) and 25(8) of theListing Regulations.

Directors

The year under review saw the following changes to the Board of Directors (‘Board').

Inductions to the Board

On the recommendations of the Nomination and Remuneration Committee the Boardappointed Mr. Vijay Kumar Sharma as Additional (Non-Executive) Director of theCompany effective August 24 2018. Mr. Sharma brings to Board valued insights andperspectives on complex financial and operational issues.

The resolution for confirming the appointment of Mr. Vijay Kumar Sharma as Director ofthe Company forms part of the Notice convening the Annual General Meeting (‘AGM')scheduled to be held on July 19 2019.

Re-appointments

In terms of the provisions of the Companies Act 2013 Mr. Koushik Chatterjee retiresby rotation at the ensuing AGM and being eligible seeks re-appointment. During the yearunder review based on the recommendations of Nomination and Remuneration Committee (‘NRC')the Board re-appointed Mr. T. V. Narendran as Chief Executive Officer & ManagingDirector of the Company for a period of five years effective September 19 2018 notliable to retire by rotation. The Board approved the re-appointment of Mr. Narendran basedon his significant contributions to the Company and the same is subject to the approval ofthe Members of the Company. Based on the recommendations of the NRC and pursuant to theperformance evaluation of Ms. Mallika Srinivasan as a Member of the Board the Boardproposed to re-appoint Ms. Srinivasan as an Independent Director of the Company notliable to retire by rotation to hold office for a second term effective August 14 2019through May 20 2022. Also based on the recommendation of the NRC and pursuant to theperformance evaluation of Mr. O. P. Bhatt as a Member of the Board the Board proposed tore-appoint Mr. O. P. Bhatt as an Independent Director of the Company not liable to retireby rotation to hold office for a second term effective August 14 2019 through June9 2023. The necessary resolutions for re-appointments of Mr. Koushik Chatterjee Mr. T.V. Narendran Ms. Mallika Srinivasan and Mr. O. P. Bhatt form part of the notice conveningthe ensuing AGM scheduled to be held on July 19 2019.

The profile and particulars of experience attributes and skills of the above Directorsis disclosed in the Notice convening the AGM to be held on Friday July 19 2019.

Cessation

Mr. D. K. Mehrotra stepped down as a Member of the Board effective May 16 2018. Mr.Mehrotra joined the Board as a Non-Executive Director on October 22 2012.

The Board of Directors places on record its appreciation towards Mr. Mehrotra'scontributions during his tenure as Director of the Company.

Key Managerial Personnel

Pursuant to Section 203 of the Companies Act 2013 the Key ManagerialPersonnels of the Company as on March 31 2019 are – Mr. T. V. Narendran ChiefExecutive Officer & Managing Director Mr. Koushik Chatterjee Executive Director& Chief Financial Officer and Mr. Parvatheesam K Company Secretary & Chief LegalOfficer (Corporate & Compliance). During the year under review there has been nochange in the Key Managerial Personnels.

Audit Committee

The Audit Committee was constituted in the year 1986. The Committee has adopteda Charter for its functioning. The primary objective of the Committee is to monitor andprovide effective supervision of the Management's financial reporting process to ensureaccurate and timely disclosures with the highest levels of transparency integrity andquality of financial reporting.

The Committee met 5 times during the year under review the details of which are givenin the Corporate Governance Report. As on March 31 2019 the Committee comprises Mr. O.P. Bhatt (Chairman) Mr. Aman Mehta Dr. Peter Blauwho_ and Mr. Saurabh Agrawal.

Internal Control Systems and Internal Audit

The Board of Directors of the Company is responsible for ensuring that InternalFinancial Controls have been laid down in the Company and that such controls are adequateand operating effectively. The Internal Financial Controls (‘IFC') are basedon the Tata Code of Conduct (‘TCoC') policies and procedures adoptedby the Management corporate strategies annual business planning process managementreviews management system certifications and the risk management framework.

The Company has an IFC framework commensurate with the size scale and complexity ofthe Company's operations. The framework has been designed to provide reasonable assurancewith respect to recording and providing reliable financial and operational informationcomplying with applicable laws safeguarding assets from unauthorised use executingtransactions with proper authorisation and ensuring compliance with corporate policies.The controls based on the prevailing business conditions and processes have been testedduring the year and no reportable material weakness in the design or effectiveness wasobserved. The framework on Internal Financial Controls over Financial Reporting has beenreviewed by the internal and external auditors. The Company uses various IT platforms tokeep the IFC framework robust and our Information Management Policy governs these ITplatforms. The systems standard operating procedures and controls are implemented by theexecutive leadership team and are reviewed by the internal audit team whose findings andrecommendations are placed before the Audit Committee.

The scope and authority of the Internal Audit function is defined in the Internal AuditCharter. To maintain its objectivity and independence the Internal Audit function reportsto the Chairman of the Audit

Committee. The Internal Audit team develops an annual audit plan based on the riskprofile of the business activities. The Internal Audit plan is approved by the AuditCommittee which also reviews compliance to the plan.

The Internal Audit team monitors and evaluates the e_cacy and adequacy of internalcontrol systems in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company and its subsidiaries. Based on thereport of internal audit function process owners undertake corrective action(s) in theirrespective area(s) and thereby strengthen the controls. Significant audit observations andcorrective action(s) thereon are presented to the Audit Committee.

The Audit Committee at its meetings reviews the reports submitted by the InternalAuditor. Also the Audit Committee at frequent intervals has independent sessions with thestatutory auditor and the Management to discuss the adequacy and effectiveness of internalfinancial controls.

Risk Management

Given the uncertain and volatile business environment companies face continuouschanges in technology geo-politics financial markets regulations etc. which affect thevalue chain. To build a sustainable business that can weather these changes companiesneed to manage risk and opportunities on a pro-active basis. Keeping this in mind theCompany has adopted a robust Enterprise Risk Management (‘ERM') process acrossthe organisation. The objective of the ERM process is to develop a ‘risk intelligent'culture which drives informed decision making and builds resilience to adversedevelopments while ensuring that opportunities are exploited to create value for allstakeholders. In order to achieve this the Company focusses on 4 broad principles viz.risk oversight risk Infrastructure risk process and ownership and risk integration.

• The Risk oversight function consists of the Board of Directors Risk ManagementCommittee (‘RMC') and Group Risk Review Committee (‘GRRC') tooversee the risk management policy to provide guidelines for implementing the ERMframework and ERM process across the Company. The RMC also reviews the key risks that theCompany faces and the progress of the mitigation plans. GRRC is a Management Committeecomprising the Senior Management team as its members. The GRRC is responsible for theimplementation of ERM process across the Company and providing the necessary resourcesframework & structures to enable the ERM. The GRRC reviews the risks and the proposedmitigation plans and engages with risk owners regularly across the business to drivemitigation. A dedicated ERM team has been set up to deploy the ERM process across theBusiness Units. The ERM team is led by Group Head – Corporate Finance & RiskManagement who acts as the Chief Risk Officer (CRO) of the Company. The CRO regularlyreports to the RMC and the GRRC on the progress of the implementation of ERM and thevarious risks faced by the Company

• The Company has developed a 5 step ERM process (establish context riskidentification risk assessment & evaluation mitigation and monitor review &report) which takes inputs from international standards and references such as Committeeof Sponsoring Organisation of the Treadway Commission (‘COSO') ISO 31000 andbest practices from industries across the globe. For better e_cacy the process isdeployed using a ‘top down' and ‘bottom up' approach.

• The Company strives to integrate the ERM process with the existing managementprocesses and embed it across the Company. The top-down risks in conjunction with thebottom up risks identified by the Business Units drive the strategy and the capitalallocation of the Company. During the year under review the Company has been continuouslyworking on strengthening the ERM process including facilitating the top-down riskassessment process deploying various analytical tools to analyse the risks andstrengthening the integration with strategy capital allocation and internal audit. Thestrengthening has also enhanced coverage of ERM across the Company with the ERM roll outto new business units and domestic subsidiaries. During the year under review the Companywas declared as Winner of ‘Golden Peacock Award for Risk Management' for 2018 forattaining significant achievements in the field of Risk Management. The Company was alsoawarded the India Risk Management Awards for Best Risk Management Framework & Systemsunder the ‘Metals & Mining' and ‘Risk Governance' categories for the secondyear in a row.

Vigil Mechanism

Commitment towards highest moral and ethical standards in the conduct of business is ofutmost importance to the Company. To advance standards of ethical practices the Companyhas deployed the Management of Business Ethics (‘MBE') across the organisationthrough a well-defined framework.

The Company also has a Vigil Mechanism that provides a formal channel for all itsDirectors employees and vendors to approach the Ethics Counselor/Chairman of the AuditCommittee and make protective disclosures about the unethical behaviour actual orsuspected fraud or violation of the Tata Code of Conduct (‘TCOC'). In order toadhere to the highest of the ethical standard the vigil Mechanism includes policies viz.the Whistle Blower Policy for Directors & Employees the Whistle Blower Policy forBusiness Associates the Whistle Blower Protection Policy for Business Associates(vendors/customers) the Policy for Receipts of Gift and Hospitality and the Conflict ofInterest Policy for Employees. The Whistle Blower Policies for Directors & Employeesand Business Associates are an extension of the TCoC that encourage every Directoremployee and Business Associate to promptly report to the Management any actual orpossible violation of the TCoC or any event wherein he or she becomes aware of any eventthat could affect the business or reputation of the Company. The Whistle Blower Reward andRecognition Guidelines for employees has been implemented to encourage employees to reportgenuine misconduct or unethical activity taking place in the Company. The disclosuresreported are addressed in the manner and within the time frames prescribed in the WhistleBlower Policy. The Whistle Blower Protection Policy for Business Associates includingvendors and customers provides protection to Business Associates from any victimisation orunfair trade practices by the Company. The Company has adopted a Policy for Receipts ofGift and Hospitality that requires its employees to take the right decisions when they areoffered gifts or hospitality while conducting business or o_cial transactions on behalf ofthe Company. The Company has also adopted a Conflict of Interest policy. The policyrequires employees to act in the best interest of the Company without any conflicts anddeclare conflicts if any (real potential or perceived).

During the year under review the Company undertook a series of communication andtraining programmes for internal stakeholders and vendors with the aim to createawareness about Tata values TCoC and other ethical practices of the Company. The Companyundertook various theme based campaigns town hall and departmental events. ‘NeetiKatha' i.e. storytelling through snippet series on scenarios of ‘The ethics ofsafety' and ‘Trust Behaviour' were mailed to employees as part of the awarenesscampaign. The Company also celebrates the month of July as Ethics Month. Allcommunications and programmes are theme based. This practice has helped in reinforcingemployee involvement in driving the MBE.

The Company's robust system to raise concerns on unethical behaviour effortsundertaken to make stakeholders aware of such systems as well as of their responsibilityto report such concerns practice of non-retaliation and strong mechanism to address suchconcerns instills in our stakeholders the confidence to report any ethical violations.

Related Party Transactions

During the year under review the Company did not have any contracts or arrangementswith related parties in terms of Section 188(1) of the Companies Act 2013.Accordingly particulars of contracts or arrangements with related parties referred to inSection 188(1) of the Companies Act 2013 along with the justification for entering intosuch contracts or arrangements in Form AOC-2 does not form part of the report as the sameis not applicable.

Disclosure as per the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013

The Company has zero tolerance towards sexual harassment at the workplace. The Companyhas adopted a Policy on Prevention Prohibition and Redressal of Sexual Harassment atWorkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules thereunder.

The Company has complied with the provisions relating to the constitution of theInternal 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 20 complaints of sexual harassmentout of which 19 complaints have been resolved by taking appropriate actions. The 1 pendingcomplaint is under investigation as on the date of this report.

Directors' Responsibility Statement

Based on the framework of internal financial controls established and maintained by theCompany work performed by the internal statutory cost and secretarial auditors andexternal agencies including audit of internal financial controls over financial reportingby the statutory auditors and the reviews performed by Management and the relevant BoardCommittees including the Audit Committee the Board is of the opinion that the Company'sinternal financial controls were adequate and effective during Financial Year 2018-19.Accordingly pursuant to Section 134(5) of the Companies Act 2013 the Board ofDirectors to the best of its knowledge and ability confirms: a) that in the preparationof the annual accounts the applicable accounting standards have been followed and thatthere were no material departures; b) that we have selected such accounting policies andapplied them consistently and made judgements and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company at theend of the financial year and of the profit of the Company for that period; c) that properand sufficient care has been taken for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities; d) that theannual accounts have been prepared on a going concern basis; e) that proper internalfinancial controls were laid down and that such internal financial controls were adequateand were operating effectively; and e) that proper systems to ensure compliance with theprovisions of all applicable laws were in place and that such systems were adequate andoperating effectively.

Business Responsibility Report

The Securities and Exchange Board of India (‘SEBI') requires companies toprepare and present to stakeholders a Business Responsibility Report (‘BRR')in the prescribed format. SEBI however allows companies to follow an internationallyrecognized framework to report on the environmental and social initiatives undertaken bythe Company. Further SEBI has on February 6 2017 advised companies that are required toprepare BRR to transition towards an Integrated Report. As stated earlier in the Reportthe Company has followed the <IR> framework of the International IntegratedReporting Council to report on all the six capitals that are used to create long-termstakeholder value. Our Integrated Report has been assessed and KPMG has provided therequired assurance. We have also provided the requisite mapping of principles between theIntegrated Report the Global Reporting Initiative (‘GRI') and the BRR asprescribed by SEBI. The same is available on our website www.tatasteel.com.

Subsidiaries Joint Ventures and Associates

We have 237 subsidiaries and 54 associate companies (including 28 jointventures) as on March 31 2019. During the year under review the Board of Directorsreviewed the affairs of material subsidiaries. We have in accordance with Section 129(3)of the Companies Act 2013 prepared the consolidated financial statements of the Companyand all its subsidiaries which form part of the Integrated Report. Further the report onthe performance and financial position of each subsidiary associate and joint venture andsalient features of their Financial Statements in the prescribed Form AOC-1 is annexed tothis report (Annexure 6).

In accordance with the provisions of Section 136 of the Companies Act 2013 and theamendments thereto read with the Listing Regulations the audited Financial Statementsincluding the Consolidated Financial Statements and related information of the Company andfinancial statements of the subsidiary companies will be available on our websitewww.tatasteel.com. These documents will also be available for inspection during businesshours at the Registered Office of the Company and will also be kept open at the venue ofAGM till the conclusion of AGM.

The names of companies that have become or ceased to be subsidiaries and associates(including joint venture companies) are disclosed in an annexure to this report (Annexure7).

Auditors

Statutory Auditors

Members of the Company at the AGM held on August 8 2017 approved the appointment ofPrice Waterhouse & Co Chartered Accountants LLP (‘PW') CharteredAccountants as the statutory auditors of the Company for a period of five yearscommencing from the conclusion of the 110th AGM held on August 8 2017 until theconclusion of 115th AGM of the Company to be held in the year 2022. The report of theStatutory Auditor forms part of the Annual Report. The said report does not contain anyqualification reservation adverse remark or disclaimer. During the year under reviewthe Auditors did not report any matter under Section 143 (12) of the Act therefore nodetail is required to be disclosed under Section 134(3)(ca) of the Act.

Cost Auditors

In terms of Section 148 of the Companies Act 2013 (‘Act') the Company isrequired to maintain cost records and have the audit of its cost records conducted by aCost Accountant. Cost records are made and maintained by the Company as required under Section148(1) of the Act. The Board of Directors of the Company has on the recommendation of theAudit Committee approved the appointment of M/s Shome & Banerjee as the cost auditorsof the Company (Firm Registration No. 000001) for the year ending March 31 2020. Inaccordance with the provisions of Section 148(3) of the Act read with Rule 14 of theCompanies (Audit and Auditors) Rules 2014 the remuneration payable to the Cost Auditorsas recommended by the Audit Committee and approved by the Board has to be rati_ed by theMembers of the Company. Accordingly appropriate resolution forms part of the Noticeconvening the AGM. We seek your support in ratifying the proposed remuneration of Rs. 20lakh plus applicable taxes and reimbursement of out-of-pocket expenses payable to the CostAuditors for the Financial Year ending March 31 2020. M/s Shome & Banerjee have vastexperience in the field of cost audit and have been conducting the audit of the costrecords of the Company for the past several years.

The Cost Audit Report of the Company for the Financial Year ended March 31 2018 wasfiled by the Company in XBRL mode on August 21 2018.

Secretarial Auditors

Section 204 of the Companies Act 2013 inter alia requires every listed companyto annex to its Board's report a Secretarial Audit Report given in the prescribed formby a Company Secretary in practice. The Board appointed Parikh & AssociatesPracticing Company Secretaries as the Secretarial Auditor to conduct Secretarial Audit ofthe Company for the Financial Year 2018-19 and their report is annexed to this report (Annexure8). There are no qualifications observations adverse remark or disclaimer in thesaid Report. The Board has also appointed Parikh & Associates as Secretarial Auditorto conduct Secretarial Audit of the Company for Financial Year 2019-20.

Extract of Annual Return

The extract of the Annual Return in Form MGT-9 as per provisions of the Companies Act2013 and Rules thereto is annexed to this report (Annexure 9).

The extract of Annual Return in Form MGT 9 as per provisions of the Companies Act 2013and Rules thereto is available on the Company's website athttps://www.tatasteel.com/media/9083/mgt-9.pdf

Significant and Material Orders passed by the Regulators or Courts

There have been no significant and material orders passed by the regulators or courtsor tribunals impacting the going concern status and the Company's future operations.However Members' attention is drawn to the statement on contingent liabilitiescommitments 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 underreview in accordance with Section 186 of the Companies Act 2013 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 earningsand outgo are annexed to this report (Annexure 11).

Deposits

During the year under review the Company has not accepted any deposits from public interms of the Companies Act 2013. Further no amount on account of principal or intereston 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 theapplicable secretarial standards issued by The Institute of Company Secretaries of Indiaand such systems are adequate and operating effectively.

J. Acknowledgements

We thank our customers vendors dealers investors business associates and bankersfor their continued support during the year. We place on record our appreciation of thecontribution made by employees at all levels. Our resilience to meet challenges was madepossible by their hard work solidarity co-operation and support. We thank the Governmentof India the State Governments where we have operations Governments of various countriesand other government agencies for their support and look forward to their continuedsupport in the future.

On behalf of the Board of Directors

sd/-

N. CHANDRASEKARAN

Chairman

DIN: 00121863

Mumbai April 25 2019


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