INNOVATE. GROW. EXCEL.
Integrated Report &
Annual Accounts 2017-18
111th Year
Our Approach
to Reporting
This is the third Integrated Report (IR)
of Tata Steel Limited (TSL). Through
this Report, we aspire to provide
to our stakeholders an all-inclusive
depiction of the organisation’s
value creation using both financial
and non-financial resources. The
Report provides insights into our key
strategies, operating environment,
material issues emanating from
key stakeholder concerns and the
respective mitigation strategies, the
operating risks and opportunities,
governance structure and the
Company’s approach towards
long-term sustainability.
Reporting Principle
Reporting Period
The financial and statutory data
presented in this Report is in line with the
requirements of the Companies Act, 2013
(including the rules made thereunder),
Indian Accounting Standards, the Securities
and Exchange Board of India (Listing
Obligations and Disclosure Requirements)
Regulations, 2015 and the Secretarial
Standards. The Report is prepared in
accordance with the framework of the
International Integrated Reporting Council
(IIRC) and discloses performance against
the Key Performance Indicators (KPIs)
relevant to Tata Steel, as per the Global
Reporting Initiative (GRI) G4 Guidelines, the
United Nations Global Compact (UNGC)
principles, the Securities and Exchange
Board of India (SEBI) and World Steel
Association (WSA).
To optimise governance oversight, risk
management and controls, the content
of this Report have been reviewed by
the senior executives of the Company,
including the Chief Executive Officer and
Managing Director, Executive Director
and Chief Financial Officer, Vice President
(VP) Safety, Health and Sustainability and
Company Secretary (CS).
The financial information is
reported for the period April 1, 2017 to
March 31, 2018. Some parts of the non-
financial information, including Directors’
Report, are provided as on May 16, 2018.
Comparative figures for last three to five
years have been incorporated in the
Report to provide a holistic view to the
stakeholders.
Scope and Boundary
This Report covers information on Tata Steel
India, including the Tata Steel plants (at
Jamshedpur, Jharkhand and Kalinganagar,
Odisha), Raw Material Divisions and Profit
Centres.
Our Approach to Materiality
The Report presents an overview of our
business and associated activities that help
in long-term value creation. The Report also
presents the issues that could substantively
affect the organisation’s ability to create
value in the short, medium or long-term
and the process by which we address them.
Independent Assurance
Assurance on financial statements
has been provided by independent
auditors Price Waterhouse & Co.
Chartered Accountants LLP and
non-financial statements by KPMG.
The certificate issued by KPMG is
available on our website at
www.tatasteel.com or can be
accessed at https://bit.ly/2HOMSaN
Forward-looking Statements
Certain statements in this Report regarding our business operations may constitute forward-looking
statements. These include all statements other than statements of historical fact, including those regarding the
financial position, business strategy, management plans and objectives for future operations.
Forward-looking statements can be identified by words such as 'believes', 'estimates', 'anticipates', 'expects',
'intends', 'may', 'will', 'plans', 'outlook' and other words of similar meaning in connection with a discussion of
future operational or financial performance.
Forward-looking statements are necessarily dependent on assumptions, data or methods that may be
incorrect or imprecise and that may be incapable of being realised, and as such, are not intended to be a
guarantee of future results, but constitute our current expectations based on reasonable assumptions. Actual
results could differ materially from those projected in any forward-looking statements due to various events,
risks, uncertainties and other factors. We neither assume any obligation nor intend to update or revise any
forward-looking statements, whether as a result of new information, future events or otherwise.
Contents
Integrated Report
Performance Highlights
About Tata Steel
Our Principal Activities and Revenue Streams
Key Products and Market Segments
Financial Performance
Our Footprint
Board of Directors
Chairman’s Message
A Dialogue with the CEO & CFO
Our Approach to Value Creation
Business Model
Stakeholder Engagement
Our Growth Drivers
Strategic Objectives and Enablers
Risk Governance and Management
People
Customer Focus
Operational Excellence
Innovation
Supply Chain
Responsible Behaviour
Environment
Community
Ethics and Governance
Sustainability
2-72
Statutory Reports
74-180
Directors’ Report
Annexures
74
93
Financial Statements
182-386
Financial Highlights
Standalone
Consolidated
Notice
182
186
275
388
2
4
6
7
8
9
10
12
14
18
20
22
26
28
30
32
38
42
46
50
54
60
66
70
Highlights FY 2017-18 (Consolidated)
25.27 MnT
Deliveries
65,000+
Employees
`17,763 Cr.
Profit After Tax (PAT)
`22,045 Cr.
EBITDA
29.5% increase y-o-y
About the Cover
`1,33,016 Cr.
Revenue
13% increase y-o-y
21%
Improvement in Lost-time
Injury Frequency Rate (LTIFR)
over FY 2016-17
Antwerp Port House
in Belgium
iGATE Skywalk in
Bengaluru
Louvre, Abu Dhabi
Aurangabad Airport
Tata Steel products have played a part in making of the structures featured on the
cover page. These structures embody the strength, innovation and futuristic outlook that
the Company represents.
Performance Highlights
(Tata Steel India)
Financial Capital
We generate our financial capital annually in the form of surplus arising from the current business operations as well as
through financing activities, which include restructuring of debts aligned with the market conditions and other investments.
`60,519 Cr.
Turnover
13.6% increase over FY 2016-17
on account of higher realisation,
higher deliveries due to ramp up of
operations at TSK* and increase in
the Ferro Chrome business
`4,170 Cr.
PAT
21% increase over FY 2016-17 primarily
due to higher realisations and deliveries
from TSK partially offset by higher
exceptional charges over the previous year
26%
EBITDA
4% increase over FY 2016-17 due to
better realisations and higher deliveries
`2,527 Cr.
Capex
Manufactured Capital
We continually invest in our integrated steel plants, consisting of our iron-making, steel-making and rolling facilities
and warehouses, along with the logistics operations, while ensuring the safety and reliability of the operations.
12.48 MnT
Total Crude Steel
Production
6.8% higher due to the stable
operations at Jamshedpur plant
and ramp up of Kalinganagar
plant
8.9 MnT
Flat Products Sales
New products and markets due to the
Kalinganagar plant production
`2,594 Cr.
Savings through improvement
projects
Across the value chain
3.3 MnT
Long Products Sales
6.5 MnT
Enriched / value-added products
sales
9.4% increase
Intellectual Capital
Our thrust on innovation and research is of paramount importance for our product development and it also reinforces our operational
efficiency and resource optimisation drive, while adhering to the Standard Operating Procedures (SOPs). We incorporate customer
requirement in our product development. We also collaborate with experts, academia and think tanks for our Research and
Development (R&D) efforts.
964
Patents Filed
Cumulative till FY 2017-18
418
Patents Granted
Cumulative till FY 2017-18
* TSK: Tata Steel Kalinganagar
22
`1,987 Cr.
Revenue from new products
2.7% higher
`181.64 Cr.
Spend on R&D
25% higher
`3,290 Cr.
Revenue from by-products
14% higher
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Human Capital
Our people form the core of our operations. We invest in employee welfare and happiness to drive performance excellence.
Our work culture ensures safety, health, competency enhancement and the overall well-being of our employees.
64
Lost-time
Injuries (LTIs)
20% reduction
3
Fatalities
0.29
LTIFR
21% reduction
diversity
6.11%
Women in the
workforce
6% higher
17.29%
Underprivileged
community in the
workforce
2% increase
738 tcs / employee / year
Productivity (at TSJ)
2.5% increase
918 tcs / employee / year
Productivity (at TSK)
Relationship Capital
We believe in building long-term, transparent and trust-based relationship with our partners, while adhering to applicable
norms and corporate ethics. We also invest in building our partners’ capabilities and sharing knowledge with them.
> 81
Customer
Satisfaction Index
(score out of 100)
Consistent
606 PPM
Customer complaints
(at TSJ)
20% reduction
> 5,000
Supplier Base
> 12,000
Channel Partners
34
Collaborations with
technical institutes
Natural Capital
We depend on the stock of natural resources such as iron ore, coal and other minerals, which constitute our key raw materials.
At the same time, resources such as land and water are indispensable for our operations. We also mitigate the impacts of our
operations on the natural environment.
2.30 tCO2e/tcs
CO2 emissions (at TSJ)
Sustained performance
3.68 m3/tcs
Specific Water Consumption (at TSJ)
3.9% reduction
2.65 tCO2e/tcs
CO2 emissions (at TSK)
16.9% reduction
4.75 m3/tcs
Specific Water Consumption (at TSK)
38% reduction
5.67 Gcal/tcs
Energy Intensity (at TSJ)
Sustained performance
7.29 Gcal/tcs
Energy Intensity (at TSK)
14% reduction
Social Capital
Harmonious presence among our neighbouring
communities bears a testimony to the value we place in
community development initiatives, while partnering
with them in their growth story.
> 1 Mn people
CSR Outreach
Consistent
`232 Cr.
Spend on CSR
19.6% higher
TSJ: Tata Steel Jamshedpur TSK: Tata Steel Kalinganagar PPM: Parts Per Million m3/tcs: Cubic metre per tonne of crude steel
tCO2e/tcs: Tonnes of carbon dioxide equivalent per tonne of crude steel Gcal/tcs: Giga calories per tonne of crude steel
tcs: Tonne of crude steel
33
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180 About Tata Steel
We aspire to create
value for all our
stakeholders
10th largest
Steel Manufacturer
in the World
(based on capacity)
Source: World Steel Association
Amongst the Top 3 global
steel companies and the
only company in India to be
gold rated in the Dow Jones
Sustainability Indices (DJSI)
Assessment 2017
Highlights FY 2017-18
(Standalone)
`60,519 Cr.
Turnover
`4,170 Cr.
PAT
44
We are in the business of steel-making
for the last 111 years
Established in Jamshedpur, India in the year 1907, Tata Steel is part
of the 150-year-old Tata group. Bringing to reality the vision of its
founder, J. N. Tata, who inspired the steel and power industry in
India, the Tata Steel Group is the 10th largest steel manufacturer in
the world and is known to be the hallmark of corporate citizenship
and business ethics.
Resource-efficient blast furnaces with high productivity
Vision
We aspire to be the global steel industry benchmark for ‘Value Creation’ and
‘Corporate Citizenship’.
We make the difference through:
Our People
Our Policies
Our Offerings
Our Innovative Approach
Our Conduct
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR We are one of the world’s most
geographically diverse steel producers
We are driven by innovation, guided by
values and poised for the future
With operations in 26 countries and commercial presence in
50 countries, the Tata Steel Group has a steel production capacity
of 27.5 MnTPA (as on March 31, 2018). Tata Steel India has
manufacturing units at Jamshedpur, Jharkhand, with a production
capacity of 10 MnTPA and at Kalinganagar, Odisha, with a
production capacity of 3 MnTPA. In FY 2017-18, our Kalinganagar
unit received approvals for expansion to 8 MnTPA. Tata Steel
operates with a completely integrated value chain that extends
from mining to finished steel goods.
Our aspirations for growth are supported by our efforts of continual
improvements in our processes, building efficiency and adding
value to our products while meeting stakeholder expectations
across the value chain. Our approach to innovation is based on
identifying newer technologies and collaborating with innovative
people and organisations. In everything we do, we continue to
act responsibly by conserving our natural resources, while making
sustainable growth possible.
Cold rolled coils
Mission
Consistent with the vision and values of the founder Jamsetji Tata,
Tata Steel strives to strengthen India’s industrial base through
effective utilisation of staff and materials. The means envisaged to
achieve this are cutting-edge technology and high productivity,
consistent with modern management practices.
Tata Steel recognises that while honesty and integrity are the
essential ingredients of a strong and stable enterprise, profitability
provides the main spark for economic activity.
Overall, the Company seeks to scale the heights of excellence in all it
does in an atmosphere free from fear, and thereby reaffirms its faith
in democratic values.
Digitalisation for agility
Values
• Integrity
• Excellence
• Unity
• Responsibility
• Pioneering
55
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180 Our Principal Activities and Revenue Streams
The revenue streams of our business value chain are as shown below:
93% of Total Revenue
Steel Value Chain
From captive mining to downstream
steel businesses
6% of Total Revenue
Raw Materials Value Chain
From mining of chrome and manganese ore to the
production and sale of ferro-alloys and minerals
1% of Total Revenue
Other Businesses
Including manufacturing of agricultural
equipment and bearings
Leadership Structure
We have a well-defined operating structure to ensure that the Company is on track to achieve its
vision and strategic objectives. Our executive management rests with Mr. T. V. Narendran,
Chief Executive Officer and Managing Director, and Mr. Koushik Chatterjee, Executive Director
and Chief Financial Officer. We have a strong, diverse, highly qualified and richly experienced
leadership team with a track record of excellence and passion for performance.
Ownership Structure
Our ownership structure as on
March 31, 2018 (Combined for Fully
Paid and Partly Paid Ordinary Shares)
16%
Retail Shareholders
66
33%
Promoter and Promoter Group
51%
Institutions
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Key Products and Market Segments
Automotive
Agriculture
Sustaining the leadership position
in the Automotive segment, our
focus has been to continually
develop products for the
automotive sector. Today, steel from
Tata Steel is used for manufacturing
almost every vehicle in the country.
• Hot-rolled (HR), Cold-rolled (CR),
Coated Steel Coils and Sheets
• HR, CR, Coated Steel
Coils and Sheets
• Precision Tubes
• Tyre Bead Wires
• Spring Wires
• Bearings
With our focus on the development
of high-quality Galvanised Iron
(GI) wires, conveyance tubes and
agricultural tools and implements,
Tata Steel is maintaining its leadership
position in the fencing, farming and
irrigation spaces.
Auto OEMs (B2B)
•
Bearings
Agri equipments (B2B)
Auto ancillaries (B2B and
B2ECA)
• Galvanised Iron (GI) Wires
• Agri and Garden Tools
• Conveyance Tubes
Fencing, farming and
irrigation (B2C)
Construction
Industrial and General Engineering
We have a range of products
and services for infrastructure
development and construction.
Today, steel from Tata Steel is used in
two-thirds of the country’s metro rail,
flyovers and bridges. Our
value-added products serve approx.
4 million rural households in India.
• Tata Tiscon (Rebars)
• Pravesh (Steel Doors and Windows)
• Tata Shaktee (Roofing Sheets)
• Tata Pipes (Plumbing Pipes)
• Tata Structura (Tubes)
We develop products for several
industrial and engineering
applications, with significant
presence in different types of
industries.
Individual House
Builders (B2C)
•
Tata Steelium (CR)
• Galvano (Coated)
•
•
Tata Astrum (HR)
Tata Structura (Tubes)
• Nest-In (Habinest – Prefabricated houses,
AquaNest Water Kiosks, Ezynest Modular
Toilets, MobiNest – Office cabins, Nestudio –
Rooftop houses)
Corporates and
Government bodies
(B2B and B2G)
• HR
• Wire Rods
• TMT Rebars (Higher Dia Rebars and
Infrastructure (B2B)
Corrosion-resistance Steel)
• Tiscon Readybuild (Cut and Bend Bars)
• Tata Structura (Tubes)
• PC Strands (LRPC)
• Tata Nirman
• Tata Aggreto
• Ground Granulated Blast Furnace Slag (GGBS)
Housing and
commercial (B2ECA)
•
•
•
•
•
•
Tata Tiscrome (Ferro Chrome)
Tata Ferromag (Ferro Manganese)
Boiler Tubes
Tata Pipes
Tata Ferroshots
Blast Furnace (BF) Slag
• Metallics
Panel and appliances
(B2ECA)
Fabrication and capital
goods (B2ECA)
Furnitures (B2ECA)
LPG (B2B)
Welding (B2B)
Process industries (e.g.
cement, power and
steel) (B2B)
B2B: Business to Business
OEM: Original Equipment Manufacturer
B2C: Business to Customers
B2G: Business to Government
B2ECA: Business to Emerging Corporate Accounts
LRPC: Low Relaxation Prestressed Concrete
77
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180 Financial Performance
Our strong performance is due to supportive realisation and increase in deliveries due to faster
ramp-up of the Kalinganagar plant.
Key Performance Indicators (Tata Steel India)
EBITDA / Turnover
PBET / Turnover
Return on Average Capital Employed
(%)
4
8
1
3
.
(%)
3
6
3
2
.
1
1
6
2
.
4
4
2
2
.
8
1
4
2
.
5
2
8
1
.
(%)
0
6
2
1
.
.
0
1
3
1
0
8
9
.
1
4
8
.
7
5
5
.
4
8
5
1
.
3
5
6
1
.
8
3
1
1
.
8
4
7
.
FY14
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
Return on Average Net Worth
Basic Earnings per Share
Net Debt / Equity
(%)
1
6
0
1
.
3
7
9
.
` / Share
1
2
4
6
.
9
4
4
6
.
Times
0
5
0
.
4
4
0
.
1
4
0
.
0
4
0
.
3
8
6
.
1
2
7
.
9
8
1
.
7
5
8
3
.
4
7
1
3
.
5
0
8
.
5
1
0
.
FY14
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
Note: FY14 and FY15 as per I GAAP and FY16 to FY18 as per IndAS
Our Return on Capital Employed (ROCE) was 13.1%,
reflecting return from efficient usage of capital.
88
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
Our Footprint
We are primarily involved in the business of mining, steel-making and downstream value-added
products and solutions. Our operational footprint has been indicated on the map.
Steel Business
Steel Manufacturing and Finishing Mills
Location
Nature of Operations
Capacity
1
2
Jamshedpur
Kalinganagar
Flat Product
Manufacturing
Long Product
Manufacturing
Flat Product
Manufacturing
7 MnTPA
3 MnTPA
3 MnTPA
Raw Material Locations
Location
Nature of Operations
3
4
5
6
7
8
9
Noamundi
Joda East
Katamati
Khondbond
Iron Ore Mines and
Quarries
West Bokaro
Open Cast Coal Mines
Jamadoba
Group
Sijua Group
Underground Coal Mines
Downstream Operations
Location
1
Jamshedpur
10 Tarapur
11 Pithampur
12 Killa
Nature of Operations
Tubes Manufacturing
Industrial By-products
Management Division
Tata Growth Shop
Wire Manufacturing
13 Kharagpur
Bearings Manufacturing
Cut and Bend
(Rebar: tailor-made
shapes and sizes)
Agricultural Tools and
Equipment
Manufacturing
14 Bengaluru
Across the
country through
Agrico Processing
Partners (APPs)
Note: Map not to scale
S
S
S
12
11
S
10
S
S
9
8
S
1
1
13
5
S
4
6
7
3
S
2
S
14
S
Nature of
Operations
Nos.
Raw Materials Revenue
Stream
(Ferro Alloys and Minerals)
Location
Joda, Bamnipal and
Gopalpur
Sukinda
Joda West,
Bambebari, Malda
and Tiringpahar
Gomardih
Nature of
Operations
Ferro Alloys Plant
Chromite Mine
Manganese
Mines
Dolomite Mine
Zonal Hubs
Stockyards
Distributors
Dealers
S Steel
Processing
Centres
(SPCs)
6 [Delhi, Faridabad,
Nagpur, Kolkata, Chennai
and Vijayawada]
18 [not on map]
193 of which 124 are
the unique distribution
points selling multiple
brands [not on map]
11,883 [not on map]
24 SPCs across 11
locations
[Jamshedpur,
Kalinganagar, Chennai,
Kolkata, Faridabad,
Manesar, Pune, Mumbai,
Indore, Delhi and Nagpur]
Sales Offices 26
99
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180
Board of Directors (as on March 31, 2018)
Mr. Ratan N. Tata
Chairman Emeritus
Board Committees
1. Audit
2. Nomination and
Remuneration
3. Corporate Social
Responsibility and
Sustainability
4. Risk Management
5. Stakeholders' Relationship
6. Safety, Health and
Environment
Mr. Parvatheesam K
Company Secretary
1010
Standing (Left to Right)
Mr. T. V. Narendran
Chief Executive Officer and
Managing Director
3
4
6
Sitting (Left to Right)
Mr. D. K. Mehrotra
Non-executive Director
Dr. Peter Blauwhoff
Independent Director
1
6
Mr. O. P. Bhatt
Independent Director
3
4
5
1
2
3
4
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Mr. Deepak Kapoor
Independent Director
Mr. Saurabh Agrawal
Non-executive Director
Mr. Koushik Chatterjee
Executive Director and
Chief Financial Officer
3
4
6
1
4
5
3
4
5
Mr. Natarajan Chandrasekaran
Chairman of the Board
Non-executive Director
Ms. Mallika Srinivasan
Independent Director
Mr. Aman Mehta
Independent Director
2
2
1
4
Member
Chairperson
1111
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180 Chairman’s Message
The Board of your
Company approved
the expansion of the
Kalinganagar plant in
Odisha to a capacity
of 8 million tonnes per
annum
The acquisition of
Bhushan Steel is a
strategic investment
which has the
potential to enhance
Tata Steel’s product
portfolio and market
competitiveness in the
near future
1212
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Dear Stakeholders,
It is a privilege to write to you again as the Chairman of the
Board of Tata Steel. During 2018, the Tata group founded by
Jamsetji N. Tata is celebrating its 150 years. This is a proud moment
in history for all stakeholders of the Tata group and Tata Steel has
been an integral part of the rich heritage of the Group.
In terms of economic performance in the year under consideration,
India stood tall amongst its global peers and continues to have a
significant growth promise in the future. During the year under
review, there were several structural reforms implemented in
the country including the Goods and Services Tax (GST) and the
Insolvency and Bankruptcy Code amongst others. These structural
initiatives are important for enhancing the country’s future
competitiveness.
During the year gone by, your Company reviewed the long-term
strategy to leverage the growth potential of the Indian economy in
the future. The Company will continue to deploy capital in projects
and investments that have the potential to create long-term value
for its stakeholders. In line with these principles, the Board of your
Company approved the expansion of the Kalinganagar plant in
Odisha to a capacity of 8 million tonnes per annum. This project
will be completed in 48 months. The Kalinganagar expansion
will also include capability to produce value-added products
including cold rolled galvanised and annealed products to serve
the differentiated customer base. In addition to the organic growth
strategy, your Company has also expressed its interest and has bid
for multiple assets that were put up for sale under the Insolvency
and Bankruptcy Code. Following a rigorous and transparent
process, your Company was identified as the highest bidder for the
acquisition of controlling interest in Bhushan Steel Limited. The
acquisition of Bhushan Steel is a strategic investment which has
the potential to enhance Tata Steel’s product portfolio and market
competitiveness in the near future. Your Company will continue
to evaluate and pursue growth opportunities in India through
organic and inorganic options in the future to grow in line with the
underlying Indian economy.
In Europe, your Company has successfully restructured the
British Steel Pension Scheme including closing the scheme for
future accruals under the Regulated Apportionment Arrangements,
with the approval of the Pension Regulator in the UK. Tata Steel
has also signed a Memorandum of Understanding (MoU) with
thyssenkrupp AG in September 2017 to combine the European Steel
businesses of both companies and create a leading
pan-European steel enterprise. The proposed joint venture
will focus on driving cost synergies, technology and will have a
Tata Steel has also signed a
Memorandum of Understanding
(MoU) with thyssenkrupp AG in
September 2017 to combine the
European Steel businesses of both
companies and create a leading
pan-European steel enterprise.
differentiated product portfolio that will drive future value creation.
The process of creating the joint venture involves simultaneous
multi-stakeholder consultations which is currently at an advanced
stage.
As we continue our journey to create long-term value for our
stakeholders, I would like to thank all the shareholders for
reposing confidence in Tata Steel’s strategy and overwhelmingly
supporting the Rights Issue of the Company. I would also like to
thank the governments, customers, suppliers and lenders for their
relentless support to the Company. The employees, unions and
the Management team have worked very hard during the year
and I would like to thank them for their tireless commitment to the
Company. Finally, I look forward to your continued and valuable
support in the years to come.
Yours sincerely,
Natarajan Chandrasekaran
Chairman of the Board
1313
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180 A dialogue with the CEO and CFO
Where do you see the global economy and the global steel
market today? And where does India stand?
During the last 12 months, global economic growth has picked up and has been
broad-based. Many developed economies witnessed recovery in investments and domestic
demand and there was a general buoyancy in the labour markets with low level on
unemployment. Amongst the larger economies, China witnessed a gradual slowdown in
the economic activity but continued to grow in line with expectations. Global steel markets
continued their recovery in FY 2017-18 as the global steel demand grew by approximately
2% as compared to the previous year. Steel exports from China declined due to capacity
closures leading to a favourable demand-supply balance both in China as well as in the
international markets. This resulted in improved capacity utilisations in the industry, better
steel prices and spreads, resulting in an improved industry performance for the year.
India too witnessed growth in steel demand owing to growth across the steel consuming
sectors and the Government’s continuous push on infrastructure spending. We believe
that the steel demand in India will continue to increase in the future with increased capital
and infrastructure investments, including the Make in India initiative, higher urbanisation
trends, focus on a wider and more inclusive banking network and transition to a more formal
economy, including digital initiatives even in rural areas. The Government’s initiatives to
strengthen the domestic steel industry are also reflected in the National Steel Policy. The
Policy endeavours to make the Indian steel industry self-sufficient, sustainable, efficient,
cost efficient and internationally competitive. Tata Steel’s long-term strategy is to focus on
growing in India. This year has been particularly significant for the Indian steel industry, with
several ‘stressed’ steel assets being put under the insolvency and bankruptcy proceedings.
The outcome of the process is going to change the industry structure, resulting in
consolidation within the industry and/or entry of new players.
How has the Tata Steel Group performed in FY 2018?
The performance of the Tata Steel Group in FY 2017-18 has been quite satisfying. Our
consolidated revenues stood at ₹1,33,016 Cr. as against ₹1,17,420 Cr., reflecting an increase
of 13% over the previous year. The EBITDA for the year at ₹22,045 Cr. was 29.5% higher than
the previous year. During the year, we reported a consolidated PAT of ₹17,763 Cr. as against
a consolidated loss of ₹4,169 Cr. in the previous year. The profit includes an exceptional
gain due to non-cash accounting surplus arising from the formation of the new British Steel
Pension Scheme (BSPS).
What measures have you taken to optimise growth in India?
FY 2017-18 has been an important year for Tata Steel. We had, at the beginning of the year,
expressed our intentions to increase our capacity in India and significantly grow in line with
the market demands. We are happy to report that our efforts have shown a positive and
rewarding outcome. We were successful in our endeavour to ramp up operations at our
greenfield plant in Kalinganagar, Odisha. The plant has achieved its rated capacity and is in
its next phase of expansion, which is progressing well. We have also successfully completed
the acquisition of Bhushan Steel Limited under the Insolvency & Bankruptcy Code, 2016.
This acquisition will allow Tata Steel to make optimum utilisation of the facilities at Bhushan
Steel. This will help us to supplement our existing facilities and will also provide us with
the opportunity to scale-up our operations at a faster pace in India, thereby expanding our
footprint in the country.
Performance of the
Tata Steel Group in
FY 2017-18
Our consolidated
revenues stood at
`1,33,016 Cr.
as against
`1,17,420 Cr., reflecting
an increase of 13%
over the previous year
The EBITDA for the
year at
`22,045 Cr.
was 29.5% higher than
the previous year
1414
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
Mr. Koushik Chatterjee
Mr. T. V. Narendran
Executive Director and Chief Financial Officer
Chief Executive Officer and Managing Director
Can you comment on the restructuring
activities at Tata Steel Europe?
scheme. We expect that the new scheme will be more sustainable
for the future.
During the year, we successfully completed the restructuring of
the BSPS in Europe. The defined benefit plan has been closed and
we have introduced a new closed scheme. Approximately 69%
members of the erstwhile BSPS continue as members in the new
During the year, we also signed a Memorandum of Understanding
(MoU) with thyssenkrupp AG to form a 50:50 joint venture by
combining the flat product businesses of the two companies in
Europe. This is an important milestone for us, which we believe
1515
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180 will help us achieve our objective with regard to having a wider European portfolio
strategy and diversify our business in the region. Through this joint venture, we expect to
derive significant synergies and improve our capacity utilisations in Europe. We expect the
transaction to be completed by the end of this year.
Can you provide your views on the financing strategy of the
Company?
As we mentioned earlier, the Company is pursuing organic as well as inorganic growth
prospects. We are continuously reviewing our financing requirements to fund the
Company’s growth projects and capital expenditure programmes and to maintain a strong
liquidity position.
During the year, the Board approved the overall financing plan for the Tata Steel Group.
Accordingly, the Company issued fully and partly paid ordinary shares by way of rights
issue aggregating to ₹12,800 Cr., being one of the largest issues in the country. Also, ABJA
Investment Co., a wholly-owned subsidiary of Tata Steel, issued a dual tranche of
USD1.3 billion unsecured bonds in the international markets. The success of both these
issues are a testimony to the investors’ confidence in the long-term strategy of the Company.
We also periodically review our investment portfolio. During the year, we realised
approximately ₹3,500 Cr. through portfolio divestment.
What are the new initiatives of the Tata Steel Group?
While our primary focus is on growth and expansion, our focus over the next decade will
also be to work towards becoming an industry leader in research and development. We have
commenced work in India as well as in Europe to develop a roadmap and achieve this goal.
We have also started work on developing the alternate/new materials business, including
Innovate
We are making
good progress in
the area of services
and solutions
and the revenue
streams have
now crossed
USD150 million.
Primary focus is on
growth and
expansion
Our focus over the
next decade will
also be to work
towards becoming
an industry leader
in research and
development
1616
Prime Minister’s Trophy for ‘Best Integrated Steel Plant’
for the assessment years 2014-15 and 2015-16
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR graphene and fibre-reinforced polymers. We expect to commence
work on ceramics soon.
joint effort of all major steel manufacturers in Europe and is in the
final stages of testing.
We have also launched a digital transformation programme across
the Company to embed and leverage digital technologies to drive
greater cost effectiveness and to enhance stakeholder experience.
We are making good progress in the area of services and solutions
and the revenue streams have now crossed USD150 million.
What steps are you taking towards
sustainability and climate change?
We have always aimed to grow in a sustainable manner and are
putting in place policies that support this endeavour. We are a
signatory to the United Nations Global Compact (UNGC) and we
submit to UNGC’s Communication of Progress on the ten principles
of sustainability.
We are committed to reducing the impact of our operations on the
environment and reducing our carbon footprint. We aspire to be
the industry benchmark in terms of improving our CO2 performance
and are putting in efforts to achieve the same. Our endeavour is
to play a leadership role in addressing the challenges of climate
change. We have formulated a climate change strategy based on
key themes. In Europe, we have undertaken various initiatives
such as HIsarna & Carbon Capture and Utilisation. The objective of
developing this technology is to reduce the CO2 emissions. It is a
In India, we have also launched a steel recycling business. We
aim to shape the steel recycling industry in India and leverage
opportunities in this space. Over the next few years, we expect the
regulatory environment to unlock opportunities in this area.
The health and safety of people working at our various site locations
is our topmost priority and we are committed to building a safer and
healthier working environment for people to work in our operating
locations. We have enhanced our focus to ensure safety in the areas
of Organizational Safety Competency & Capability Improvement
and Contractor Safety Risk Management, among others.
What role do you play in the development
and upliftment of communities?
We have always been mindful of the impact of our operations on
the communities around us and have taken steps to ensure the
health and economic prosperity of our neighbouring communities.
During the year, we undertook various Corporate Social
Responsibility (CSR) initiatives in the areas of health, education,
livelihood, sports and infrastructure development with indigenous
communities in the areas of operations of the Company. We have
partnered with various organisations to work for the upliftment of
our communities and will continue to put in efforts to bring about
their sustainable development.
Grow
We were successful
in our endevour
to ramp up
operations at our
greenfield plant
in Kalinganagar,
Odisha. The plant
has achieved its
rated capacity
and is in its
next phase of
expansion, which is
progressing well.
Capacity Expansion at State-of-the-art
Kalinganagar Steel Plant
Excel
We aspire to
be the industry
benchmark
in terms of
improving our
CO2 performance
and are putting in
efforts to achieve
the same. Our
endeavour is to
play a leadership
role in addressing
the challenges of
climate change.
Amongst the top 3 global steel companies and the only
company in India to be gold rated in the Dow Jones
Sustainability Indices (DJSI) Assessment 2017
1717
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180 Our Approach to Value Creation
Our approach to value creation is based on our vision, which
lays equal emphasis on creating value for our business and our
stakeholders as well as on being a responsible corporate citizen.
and Health, Environment, Climate Change and Corporate Social
Responsibility. The Corporate Policies are available on our website at
http://www.tatasteel.com/corporate/our-organisation/policies/
At Tata Steel, corporate governance and ethical business practices
are guided by the Tata Code of Conduct (TCoC). We have
documented policies that provide direction on various aspects of
Sustainability such as Quality, Research, Human Resources, Safety
Guided by our policies, we aspire to create value for all our
stakeholders through focus on judicious use of resources, mitigating
the negative impacts of our business and having an agile business
model to respond to the changes in the external environment. We
During FY 2017-18, we examined the key Sustainable Development Goals (SDGs) which are material to us and
prioritised them based on our dependency and impacts:
SDG
Dependencies
Steel
•
Natural resources –
Iron ore and coal
• Water consumption
• Energy
Natural
MINING
Skilled, motivated,
productive, diverse
and healthy
workforce
Human
Intellectual
STEEL
MAKING
Efficient supply
chain, supplier base
and collaborations
Manufactured
Relationship
CUSTOMERS
Key SDGs for
Tata Steel
1818
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR have a structured way of engaging with all our key stakeholders to
capture their evolving needs and concerns. These inputs are then
used in our strategic planning process.
Our business model showing the various capitals as inputs,
a snapshot of our processes, their output and outcomes is depicted
on Page 20.
Our strategic themes objectives and enablers are balanced across
all stakeholders in the entire value chain, resulting in long-term
sustainability for the organisation.
Value Chain
Impact
SDG
IRON
MAKING
FLAT AND LONG
PRODUCT ROLLING
Natural
Social
Social
• Emissions – CO2 and dust
• Liquid effluent discharge
• Solid waste generation
• Biodiversity at mines
Communities in the area of
operations
Safety and health of
employees
Human
Impact on the communities in the area of operations
1919
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180 Business Model
Key Inputs
Manufactured Capital
Key Performance Indicator
UoM
TSJ Capacity –CS
MnT
MnT
TSK Capacity–CS
Steel Processing Centres–Own Nos.
Nos.
Pan-India Stockyards
FY18
10
3
24
18
FY17
10
3
19
18
Business Activities
Strategic Planning Process Overview
VISION
MISSION
VALUES
Natural Capital
Key Performance Indicator
TSJ –Energy Intensity
TSK –Energy Intensity
TSJ – Specific Water
Consumption
TSK – Specific Water
Consumption
UoM
Gcal/tcs
Gcal/tcs
FY18
5.67
7.29
FY17
5.67
8.49
m3/tcs
3.68
3.83
Material
issues
Internal
context
Strength and
Weakness
Strategy
Development
Strategic Objectives
and Enablers /
Long-term Strategy
Leadership
direction
External
context
Opportunities
and Threats
Captive Iron Ore
Captive Coal
Inbound Raw Materials
TSI –Trees Planted
Capital Spend on Environment ` Cr.
m3/tcs
%
%
MnTPA
’000 nos
4.75
7.66
100.00 100.00
30.00
~40
400
605
29.00
~40
390
544
Strategy Deployment
(including resource allocation)
Long-term
Plan
Annual
Business Plan
Key Result
Areas
Tata Steel Value Chain
Financial Capital
Key Performance Indicator
Capex
UoM
` Cr.
FY18
2,527
FY17
3,173
In-bound Logistics
Iron Ore
Coal
Human Capital
Key Performance Indicator
Employees on Rolls
Investment in Employee Training
and Development
UoM
Nos.
` Cr.
Relationship Capital
Key Performance Indicator
Pan-India Dealers
Pan-India Distributors
Pan-India Sales Offices
Application Engineers Working
Jointly with Customers
Customer-facing Processes
Customer Service Teams
UoM
Nos.
Nos.
Nos.
Nos.
Nos.
Nos.
MINING
IRON
MAKING
STEEL
MAKING
FY18
FY17
34,072 34,989
60.17
52.55
FY17
FY18
11,883 11,550
186
26
193
26
41
8
34
38
8
33
Agglomerate
(Sinter and Pellet Plant)
Coke Plant
Blast Furnaces
Hot Metal
Steel Melting Shops
Crude Steel
Intellectual Capital
Key Performance Indicator
Collaborations/Membership
(Technical Institutes)
Patents Filed
(Cumulative till FY)
R&D Spend
Social Capital
Key Performance Indicator
CSR Spend
UoM
FY18
FY17
ROLLING
Long Product
Flat Product
Long Product Mills
Flat Product Mills
Nos.
Nos.
` Cr.
34
42
964
870
181.64 144.58
UoM
` Cr.
FY18
232
FY17
194
Out-bound Logistics
Zonal Hubs, Stock Yards, Distributors and Dealers
MARKETING
& SALES
Key Support Functions: Strategy and Planning, Project Management, Asset Management,
Financial Management, Risk Management, Improvement Management, Investor Relations,
Supply Chain Management, Human Resource Management, Safety Health & Sustainability,
Regulatory Affairs, Corporate Social Responsibility, Urban Community Management,
R&D and Technology,
Legal, Secretarial,
Information Technology,
Corporate Communications.
No Change/New
Positive trend
Negative trend
2020
CS – Crude Steel TSJ – Tata Steel Jamshedpur TSK – Tata Steel Kalinganagar TSI – Tata Steel India
CSR – Corporate Social Responsibility
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
Outputs
Outcomes
13.86 MnT
Hot Metal Production
12.48 MnT
Crude Steel Production
12.2 MnT
Total Sales
8.9 MnT
Flat Product Sales
3.3 MnT
Long Product Sales
Key Segments and Products
• Automotive
Hot Rolled, Cold Rolled, Coated Coils
& Sheets, Precision Tubes, Tyre Bead
Wires, Spring Wires, Bearings
• Industrial and General Engineering
Hot Rolled, Cold Rolled, Coated Coils,
Rebars, Wire Rods, Boiler Tubes, Pipes
• Construction
Re-bars, Doors & Windows, Roofing
sheets, Plumbing Pipes, TMT Rebars,
Tubes, Cut & Bend Bars
• Agriculture
Bearings, GI Wires, Conveyance Tubes
Key Segments and By-products
• Power Plants, Brick Kilns
Coal Rejects (middlings, tailings, rejects)
• Cement Industry
Granulated Blast Furnace Slag, Steel Slag
• Construction Industry (Road and Civil)
Weathered Steel Slag, Ground
Granulated Blast Furnace Slag
• Foundry, Pencil Ingot Makers
Ferro-shots, Pooled Iron, High-
Phosphorus Pig Iron, Slag Scrap
• Aluminum Smelters, Graphite Industry
Coal Tar
• White Goods
HR and CR Scrap
Enterprise Risk
Management
• Identification
• Assessment
• Mitigation
• Review and Monitoring
t
n
e
m
e
g
a
n
a
M
t
c
u
d
o
r
p
-
y
B
l
e
e
t
S
d
n
a
m
a
e
r
t
s
n
w
o
D
s
e
r
t
n
e
C
g
n
i
s
s
e
c
o
r
P
s
r
e
m
o
t
s
u
C
Financial Capital
Key Performance Indicator
Turnover
EBITDA
PAT
TSI – Revenue from By-products
Revenue through Services and Solutions
Business (incl. Profit Centre)
Revenue from New Products
Savings through Improvement Projects
(Shikhar 25)
UoM
` Cr.
%
` Cr.
` Cr.
` Cr.
` Cr.
` Cr.
Relationship Capital
Key Performance Indicator
Customer Satisfaction Index
Quality/Customer Complaints – TSJ
NPS – Tata Tiscon
NPS – Tata Shaktee
Enriched/Value-added Products Sales MnT
Repeat Customers
UoM
Score
PPM
NPS-100
NPS-100
%
Natural Capital
Key Performance Indicator
TSJ – GHG Emissions Intensity
TSK – GHG Emissions Intensity
TSJ – Dust Emissions Intensity
TSK – Dust Emissions Intensity
TSJ – Effluent Discharge Intensity
TSK – Effluent Discharge Intensity
TSJ – Solid Waste Utilisation
TSK – Solid Waste Utilisation
Total Raw Material Sites Covered under
Biodiversity Management Plan (BMP)
UoM
TCO2e/tcs
TCO2e/tcs
kg/tcs
kg/tcs
m3/tcs
m3/tcs
%
%
FY18
FY17
60,519 53,261
22
3,445
2,882
26
4,170
3,290
1,188
1,987
954
1,935
2,594
3,400
FY18
81.40
606
71
77
6.50
96
FY18
2.30
2.65
0.41
0.64
1.01
0.59
84.40
87.22
FY17
81.30
759
-
-
5.94
97
FY17
2.29
3.08
0.44
1.30
1.02
-
82.40
66
%
100
100
UoM
Nos.
Nos.
Score out of 16
Human Capital
Key Performance Indicator
Fatality
LTI
Health Index
Diversity – % Women in the Workforce %
%
Diversity – % SC/ST in the Workforce
Score
Employee Engagement – Officers
Score
Employee Engagement – Unionised
TCS/ Employee
Employee Productivity – TSJ
/ Year
TCS/ Employee
/ Year
Employee Productivity – TSK
FY18
3
64
12.47
6.11
17.29
66
77
FY17
5
80
12.59
5.75
16.90
-
-
738
720
918
653
Social Capital
Key Performance Indicator
Lives Touched in Communities
Intellectual Capital
Key Performance Indicator
Patents Granted
(Cumulative till FY)
New Products Launched
UoM
Mn nos.
FY18
1.00
FY17
1.10
UoM
Nos.
Nos.
FY18
FY17
418
133
360
48
Key Support Functions: Strategy and Planning, Project Management, Asset Management,
Financial Management, Risk Management, Improvement Management, Investor Relations,
Supply Chain Management, Human Resource Management, Safety Health & Sustainability,
Regulatory Affairs, Corporate Social Responsibility, Urban Community Management,
R&D and Technology,
Legal, Secretarial,
Information Technology,
Corporate Communications.
HR – Hot Rolled CR – Cold Rolled LTI – Loss Time Injury SC/ST – Scheduled Caste/Scheduled Tribe TCO2: Tonne of CO2
TCS: Tonne of crude steel TSI – Tata Steel India PPM – Parts per Million NPS – Net Promoter Score
2121
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180
Stakeholder Engagement
At Tata Steel, all stakeholders are treated as partners in our
value-creation process. These stakeholders are vital to the business
operations of Tata Steel and including their material feedback into
our strategy and planning forms the backbone of our value-creation
process. Tata Steel seeks feedback from its stakeholders on a regular
basis, which is incorporated in the organisation’s overall strategy
and planning exercises.
Active stakeholder engagement mechanisms are in place at all
stakeholder-sensitive functions, e.g. Investor Relations (Investors),
Human Resource Management (Employees), Marketing and
Sales (Customers), Procurement (Suppliers), Corporate Social
Responsibility (Community), Corporate Communication (Media)
and the Resident Executive (Government and Regulatory Bodies).
The frequency and forum of engaging with the stakeholders is
customised to the needs of the stakeholder and the pertinent
business issues of the Company.
The various forums and nature of engagements with our key
stakeholders have been listed on (Refer Page 23-25), while the
engagement with employees has been discussed in the section on
people. (Refer Page 32-37).
Our sustainability strategy is founded on a sound understanding
of our stakeholders’ issues and concerns and to lend credibility
to this, our stakeholder engagement processes were reviewed
by independent third-party auditors, PwC, during the materiality
exercise of FY 2012-13. The material issues identified during
that exercise have been largely addressed. In keeping with
the developments in the external environment and evolving
stakeholder expectations, we have identified some additional
material issues, which are shown in the table alongside. A similar
review exercise has been undertaken in the current financial year
to capture key elements of our stakeholder engagement processes
based on the principles of inclusiveness, transparency and
accountability.
Such reviews are essential to enhance the current engagements
with our stakeholders and helps in setting in context the
most material Environmental, Social and Governance aspects
of the business.
Material Economic Issues
Growth to meet customers’ expectations
Long-term profitability
Material Social Issues
Health and safety
Capability building
Diversity and inclusion in the workforce
Impact-based Corporate Social Responsibility (CSR) in
community areas in Jharkhand and Odisha
Material Environment Issues
Greenhouse Gas (GHG) emissions
Water consumption and effluent discharge
Resource efficiency
Biodiversity
Thousand Schools Project, Odisha
2222
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Investors
Why Are They Important
Provide funds for business and
growth
The Company is committed to excellence in governance and in creating long-term sustainable value.
Engagement Forum
Investor and analyst meets
Frequency: Quarterly
Annual General Meeting
Key Issues
Strategy, operational and financial performance
and outlook
Community
Our Founder believed that the community is not just another stakeholder in our business, but the very
purpose of our existence. Hence, we not only aim to mitigate the negative impacts of our operations on
the society, but continuously strive to be a benchmark of corporate citizenship.
Why Are They Important
Engagement Forum
Key Issues
Community is directly impacted by
our operations
Public hearings, meetings with community leaders and the CSR
Advisory Council
Health, Education, Livelihood and
Infrastructure
Frequency: Need Based
Suppliers
The Company ensures a strong relationship with the suppliers across the value chain by engaging with
them through satisfaction surveys and issues such as safety, health, ethical practices and environment.
There is a focus on developing new and small businesses for suppliers from the underprivileged
community and the population that got displaced due to our expansion and to further enable and
empower them through training and education. There is a specialised team in procurement called ‘Sathis’
who handhold these vendors for the initial couple of years to help them compete with the other vendors.
Safety, ethics and human rights are the main decisive factors for us to enter into business with suppliers.
For ease of doing business and for improving transparency, electronic modes for transactional tasks, such
as E-Proc, Easy Buy and Vessel Traffic Service (VTS) Indent System, have been implemented.
Why Are They Important
Engagement Forum
Key Issues
Provide critical materials and
services for our production and
delivery
Act as our brand ambassadors
Vendor satisfaction survey, Vendor Capability Advancement
Programme (VCAP), Vendor Grievance Redressal Committee
(VGRC), Speak UP – Toll-free number, transporters’ workshops and
meets
Frequency: As per team plan/ Weekly/ Monthly/ Quarterly/ Annual
Joint improvement projects for strategic vendors,
ethical practices, safety, health and environment,
among others
Investor meet in Kolkata
Samvaad Tribal Conclave 2017: Enabling conversations
with the community
Vendor meet: Strengthening partnerships
2323
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180 Customers
Business-to-Business (B2B),
Business-to-Customer (B2C),
Emerging Corporate Accounts
(ECAs) and Channel Partners
We have customised engagement plans with the different segments of our customers focussed not only
on relationship building, capturing business and environmental issues, but also for training, awareness
and familiarisation with the Tata Steel culture.
Why Are They Important
Engagement Forum
Key Issues
Market for our products and
revenue generation
Specific projects carried out by Customer Service Teams for
addressing specific issues on cost, price, delivery or value
engineering, multi-stakeholder platforms such as Conference,
Construction Conclave, Zonal Meets, Ecafez, Gen Y, ‘Suraksha’
Meet, ‘Parivaar’ Meet, and ‘Wired to Win’, among others.
Frequency: Need based/ As per team plan/ Annual/ Bi-annual
Price, quality, cost and delivery, awareness on
specific steel business related trends, safety, and
environment, among others.
Ecafez: Training and awareness programmes for emerging corporate accounts (ECAs)
2424
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Government and
Regulatory Bodies
Tata Steel has always been conscious of being compliant with laws and regulations. We have been ahead
of the laws in many people-related initiatives and constantly strive to perform better than the regulatory
requirements.
Why Are They Important
Engagement Forum
Key Issues
Develop legislation and policies
that affect our business and
have the ability to grant or
revoke the licence to operate
Media and
Industry Bodies
Meetings and dialogues
Frequency: As per plan
Sanctions, approvals and clearances
Integrity is a core value of our Company and is reflected in the transparent and timely manner in which
we disclose our performance and other developments to all our stakeholders. We support the steel
industry and the country’s development agenda through active participation in national and
industry-level activities, policy advocacy and sharing of best practices.
Why Are They Important
Engagement Forum
Key Issues
Media influences the Company’s
brand image and reputation
Industry associations are the route
to interact with the industry and
the Government
Press conferences, media meets, sports tournaments, media
dinner events, one-on-one interactions and familiarisation visits
Frequency: Monthly, Quarterly, Annual
Updating stakeholders on corporate
performance
Regional and national events such as conclaves and conferences
of industry bodies
Support towards industry and country-level
problems through participation, funding, etc.
Senior Management members of Tata Steel as chairs/co-chairs of
various verticals
Frequency: As per plan
Gurukul: Training and capability development programmes for channel partners
Media meet: Building relationships
2525
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180
Our Growth Drivers
Business Environment FY 2017-18
3.8%
Growth in Global GDP
Growth recovery primarily driven by :
• Increase in global manufacturing activity
• Resilient growth in China driven by
supply side reforms
• Pickup in commodity prices
• Favourable financing conditions globally
1,587* MnT
Global Steel Demand
Grew at nearly 2% driven by
• Growth in India (5%)
• Growth in ASEAN and MENA (5-6%)
• Growth in China (2.9%)
Macro-economic Indicators
6.7%
Growth in India’s GDP
Consumption led growth influenced by
Government policies and investments.
Finished Steel Demand
82 MnT
Indian Steel Demand
Grew at 7.8% fuelled by growth in Auto
(14.8%) and Construction (5.7%).
69 ($/t)
Iron ore fine price
198 ($/t)
Hard Coking coal - QBM Price
Cost and Freight (CFR) China
Free on Board (FoB) Australia
Led by resilient growth in China’s steel
demand due to supply side reforms.
Chinese policies and environmental
restrictions led to increased seaborne trade
of coking coal and firmed up prices.
Raw Materials
Implications for Steel industry during FY 2017-18
• Global macro environment was conducive to stability of steel industry
• Steel demand growth and higher raw material prices led to nearly 20% increase in steel price in FY18
QBM: Quarterly Benchmark, GDP: Gross Domestic Product, ASEAN: Association of Southeast Asian Nations, MENA: Middle East and North Africa
Source: IMF, World Bank, OECD, WSA, RBI, JPC, CMIE, Team Analysis
* Data for calendar year CY 2017
2626
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Outlook for FY 2018-19
3.9-4%
Growth in Global GDP
Extension of policy stimulus to
sustain growth and increase in
commodity prices especially in
metals and crude oil expected.
7 - 7.5%
Growth in India’s GDP
Driven by increased Government
spending on infrastructure and thrust
on developmental projects as well as
consumption led growth coupled with
strong growth in service sector.
1,616** MnT
Global Steel Demand
India, ASEAN and MENA – expected
to grow at 5-6% to be a key driver.
87 MnT
Indian Steel Demand
Expected to revive with recovery
in construction and capital goods
sectors.
70 ($/t)
Iron Ore Fine Price
Cost and Freight (CFR) China
Prices expected to be range bound,
Fe premiums to remain at high levels.
198 ($/t)
Coking coal - QBM Price Australia
Free on Board (FoB)
Price volatility expected to remain due
to supply uncertainties arising from
unpredictable extreme weather.
Demand from China will continue to be a
key driver for seaborne prices.
Outlook for the Steel Industry for FY 2018-19
• Growth in demand and price stability expected for steel industry
** Data for calendar year CY 2018
Factors that make India
an attractive region for
steel
•
Low per capita consumption
of approximately 65 kgs (world
average of 214 kgs, China 522 kgs)
• Conducive government stance
towards the steel industry
through policies focusing on
‘Make in India’, smart cities and
infrastructure.
• Rapidly growing steel demand -
Indian steel demand is expected
to grow at a healthy rate of 6 – 7%
with an expected GDP growth of
7-8% in the next decade
• Growth expected for some steel
consuming sectors like Auto and
Construction
• Contraction of domestic steel
demand and cut in steel capacity
in China expected over the next
decade
2727
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180 Strategic Objectives and Enablers
A snapshot of our strategic objectives and enablers are depicted below. The performance against these objectives
and enablers is detailed in the subsequent sections of this Report.
Strategic Objectives
SO1
SO2
SO3
SO4
Industry
leadership in
steel: Meet
the growth
aspirations of
customers
Consolidate
position as a
global cost
leader
Insulate
revenues
from steel
cyclicality
Industry
leader in CSR
and SHE
SE1
Employer of choice
Capability for global steel
technology leadership
SE2
Strategic Enablers
SE3
Leverage digital
technologies –
steel industry leader
Industry leading
capability in agility and
innovation
SE4
CSR: Corporate Social Responsibility
SHE: Safety Health and Environment
2828
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
SUSTAINABILITY GOALS
SG1
Benchmark in CO2
emissions –
< 2 TCO2 / TCS by 2025
SG2
Zero effluent
discharge by 2025
SG3
Safety leadership –
committed to zero
SG4
Create a lasting impact on
the communities in our
operating areas – impacting
2 million lives by 2025
The link between our initiatives (People, Customer
Focus, Operational Efficiency, Innovation,
Supply Chain, Environment and Communities),
Strategic Objectives and Sustainability Goals is
shown in the subsequent sections of this Report.
TCO2: Tonne of CO2
TCS: Tonne of crude steel
29
Risk Governance and Management
Tata Steel operates in an interconnected world with stringent
regulatory and environmental requirements, increased geopolitical
risks and fast-paced technological disruptions that could have a
material impact across the value chain of the organisation. Tata Steel
has implemented an Enterprise Risk Management (ERM) process
to provide a holistic view of aggregated risk exposures as well as to
facilitate more informed decision-making.
In its journey towards risk intelligence, a robust governance structure
has been developed across the organisation. The Board of Directors
has constituted a Committee of the Board called the Risk Management
Committee. At the Senior Management level, a Group Risk Review
Committee has been constituted to drive the ERM process across the
Tata Steel Group.
Information regarding key risks facing Tata Steel and their mitigation
strategies is given here:
Macroeconomic Risks
• Appropriate foreign exchange
• Overcapacity and oversupply in the
hedging policies
global steel industry as well as increased
levels of imports may adversely affect
steel prices, impacting profitability.
• Integration of business planning
and cashflow projections with
liquidity management
• Newer developments in the competitive
global business environment and
potential consolidation among
competitors may adversely impact the
Company’s financial condition and
prospects.
• Slower than expected pace of growth
in India, coupled with expansion in
domestic steel capacity, may result in
lower than expected realisations.
key mitigation strategies
• Diversification of product portfolio
• Development of alternate markets
• Participation in industry
consolidation
Financial Risks
• Fluctuation in foreign exchange rates
Regulatory Risks
• Non-compliance to increasing stringent
regulatory environmental norms may
result in liabilities and damage to
reputation.
• The Company operates leased mines.
Non-renewal of mining leases may result
in the Company having to purchase
minerals at higher prices from the open
market, impacting its profitability.
• Removal of favourable trade
measures such as anti-dumping laws,
countervailing duties, etc. may impact
the Company’s business and prospects.
key mitigation strategies
• Focus on compliance
• Dialogue with regulatory
due to volatility in financial markets may
impact the Company’s debt servicing
and create uncertainties in accessing the
financial markets.
authorities for greater clarity and
availing legal consultations for
timely clearances
• Working with industry associations
• Substantial amount of debt on the
balance sheet may have an adverse
impact on the Company’s ability to raise
finance at competitive rates.
towards simplification of rules,
a predictive policy regime and
transition time for regulatory
changes
• Changes in assumptions underlying the
Operational Risks
carrying value of certain assets may result
in the impairment of such assets.
key mitigation strategies
• Maximising operational cashflow
• Terming out debt and refinancing
debt with favourable covenants
• The steel industry is prone to high
proportion of fixed costs and volatility in
the prices of raw materials and energy.
Limitations or disruptions in the supply
of raw materials could adversely affect
the Company’s profitability.
3030
• Failure of critical information systems/
servers that control the Company’s
manufacturing plants may adversely
impact business operations.
• Violation of safety standards, unsafe acts
and conditions may lead to Lost Time
Injuries (LTIs) or fatalities, resulting in
stoppage of operations, loss of personnel,
and damage to assets and reputation.
key mitigation strategies
• Enhancing in-house capability and
leveraging from past learnings and
expertise
• Establishing sources of supplies
from alternate geographies
• Enhancing in-house capability in
rail logistics and developing Deep
Sea Port capacity
• “Committed to Zero” - Safety drives
across the Company
Market Related Risks
• Steel is a cyclical industry and excess
volatility in the steel and raw material
markets may adversely impact the
Company’s financial condition.
• Competition from substitute materials,
or changes in manufacturing processes,
may lead to a decline in product demand,
resulting in loss of market share.
• Product liability claims could have
an adverse impact on the Company’s
finances.
key mitigation strategies
• Development of value-added
products and enhanced services
and solutions
• Strengthening contractual
agreements
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR R6 Climate Change Risks
• As of May 2018, 195 United Nations Framework Convention
on Climate Change (UNFCCC) members have signed the Paris
Agreement and 176 countries, including India, have become party
to it. The Agreement aims to keep a check on the rising global
temperatures and intensify actions required for a sustainable
low-carbon future. Going forward, the steel industry will face
stringent international and domestic regulations relating to
Greenhouse Gas (GHG) emissions. Increasingly stringent climate
control regulations may impact the Company’s operations
and prospects.
key mitigation strategies
• Continued investment in environment related projects
• Collaboration with academic/research institutes for
projects on climate change issues
The material issues mapped to key risks and long-
term strategies have been detailed below.
Material
Issues
Risks
Long-term
Strategies
Economic
Growth to
meet customer
aspirations
Profitability
• Organic and inorganic growth options
(Refer Page 44)
• Global benchmark in operational efficiency
• Downstream focus - Service & solutions (S&S),
Tubes, Wires
• Revenue generation through enriched products
• New materials business (Refer Page 39, 40, 42, 47)
People Risks
• Any labour dispute or social unrest in regions where the Company
Environment
operates may adversely affect its operations and financial condition.
GHG emissions
• Loss of one or more members of the Senior Management, or
inability to attract and retain employees, may affect the Company’s
business and prospects.
key mitigation strategies
• Build relations with key stakeholders including
local/regional influential people, interest groups and
bureaucracy across levels of administrative machinery
(taluka to state level) to address labour or social unrest
• Succession planning for Senior Management to ensure
continuity in business
• People related policies for attracting and retaining talent
Strategic Risks
• The Company is growing its Indian operations through organic
and inorganic routes. The Company may be unable to realise the
anticipated benefits of these growth plans which could have a
material adverse impact on its financial condition and reputation.
• The Company may be subject to business risk relating to proposed
joint venture with thyssenkrupp AG, including potential delays
in completing the proposed transaction and/or the proposed
transaction not consummating successfully.
key mitigation strategies
• Strong engineering and project team to commission the
expansion project within budgeted time and cost
• Ensuring that learnings from previous projects are applied
for improved execution and faster ramp-up of production
• Deputation of experienced team from Tata Steel along
with strong review and governance to accelerate the
performance of the acquired assets
• Integrate the management of the acquired company to
drive synergies. Bring Tata Steel expertise to the acquired
assets in operations, maintenance and marketing to
ensure high capacity utilisation, cost competitiveness and
better product mix
• Experienced team driving focussed consultations with the
relevant stakeholders in Europe
• Waste gas utilisation
• Reduction in fossil fuel based power consumption
• Carbon rate reduction in blast furnace
(Refer Page 55)
Water
consumption
• Minimise effluent discharge
• Augment intake through recycling/ harvesting
(Refer Page 56)
Resource
efficiency
Biodiversity
Safety &
Health
Capability
building
Impact
based CSR
Diversity &
Inclusion
Social
• Enhance value from circular economy system- LD
slag, By-product gas & Scrap
• Global benchmark in operational efficiency
(Refer Page 58)
Sustainable Mining through focused initiatives
around prevention, recovery, reuse and recycle
to minimize ecological footprint
(Refer Page 57)
• Eliminate of incidents on rail and road
• Improve competency for hazard identification
and risk management
• Contractor safety risk management
• Excellence in process safety management
(Refer Page 32)
• Build capability of contractor workforce, suppliers,
dealers, distributors and other business partners
• Benchmark with reputed institutes for seeding
alternative learning methods
• Augment management training resources/
infrastructure in line with new age digital
technologies (Refer Page 36)
Address core development gaps for significant
betterment in the well-being of communities in
Jharkhand and Odisha through signature programs
around key focus areas of Health, Education, Skill
development, Sustainable livelihood, Sports &
Ethnicity - Maternal & Newborn Survival Initiatives
(MANSI), Right to education – Thousand schools
project, Samvaad, etc. (Refer Page 60)
• Make manufacturing appeal to diverse talent
& attract more women
• Attract & recruit PwDs and improve accessibility for all
• Develop women leaders through mentoring &
training programs (Refer Page 36)
3131
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180
People
People are one of the most valued
stakeholders for Tata Steel and we have
institutionalised policies that lay the
ground for right opportunities for our
workforce, while ensuring their health,
safety and well-being. We aim to nurture
the future leadership of the Company.
The megatrends shaping up the global
workspace are around enhancing
employee experience, learning and
innovation, diversity at the workplace
and digitalisation. Our efforts are to
work towards tapping these trends and
leveraging our immense human capital
to make the best use of these emerging
trends and add value to the processes
and the organisation at large.
Tata Steel has been a front-runner in
people practices. The impetus now is to
take the legacy forward, while the intent
is to bring in new practices and keep
ahead of the changing demography and
needs of the future workforce. Safety
and health of our employees is our top
priority.
Promoting diversity
0.29
LTIFR
34,072
Employees on Rolls
66%
Employee
Engagement -
Officers
77%
Employee
Engagement -
Non-Officers
3232
Safety line walk by the leadership team: Making safety part of our culture
Safety and Health
Safety and Health
SO4, SG3
KEY
AREAS
Contractor safety risk management
•
• Excellence in process safety
management
• Eliminating incidents on rail and road
• Competency for hazard identification
and risk management
By its very nature, the steel industry is hazardous due to hot processes
and moving equipments. Hence, leadership at Tata Steel gives top
priority to the safety and health of the entire workforce. Safety and
Health Management is integrated into our Annual Business Plan
(ABP) and cascaded into the annual Key Result Areas (KRAs) of each
executive, which is linked to remuneration, to place accountability
and responsibility at all levels. Linking safety targets to remuneration
and visible commitment from the Senior Management has led to the
inclusion of safety into our culture and behaviour. We are ‘Committed to
Zero’ harm. Our safety systems also focus on the contractor workforce
who are semi-literate, less skilled and more exposed to safety hazards.
We have a Safety and Health Governance structure for guiding and
reviewing the Safety and Health performance, both at the Board and
Company levels. The SHE Committee of the Tata Steel Board (chaired
by an Independent Director) and the Apex Safety Council (chaired by
the Chief Executive Officer and Managing Director) meet on a quarterly
basis. The Apex Safety Council Meeting is attended by the relevant Vice
Presidents (VPs) for key decision making on our ‘Commitment to Zero’
harm. These directives are cascaded through six Apex Safety Sub-
Committees chaired by the VPs of all the relevant functions, through
monthly reviews. Divisional Implementation Committees (DICs) and
Area Implementation Committees (AICs) facilitate the implementation
of policy decisions at the grassroots level across all functions in the
organisation.
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Key Enablers and Initiatives
1. Build (safety) leadership capability at all levels to
4. Elimination of safety incidents on road and rail
achieve zero harm
As part of the Safety Leadership Development, Felt Leadership
Training has been completed for 4,060 officers so far. Felt
Leadership Training has also started for Tata Steel’s associated
companies for improving their safety culture.
For deployment of traffic segregation and density reduction,
infrastructure improvement projects have been deployed.
Heavy vehicle simulators have been installed to facilitate
improvement in the competency of heavy vehicle drivers
operating within Tata Steel, Jamshedpur.
impact created
impact created
• 20% reduction in LTI cases –Improvement in safety
performance
Sustaining zero fatality on roads across Tata Steel
India for three consecutive years
• Departments with more than 100 employees
recording zero LTI have increased to 50 in FY 2017–18
from 42 in FY 2016–17 for Tata Steel India
2. Improve competency and capability for hazard
identification and risk management
To ensure the engagement of trained front-line leaders in
identifying hazards and mitigating the risks, a new Job Cycle
Check (JCC) system has been developed on the existing
Company-wide IT-based ‘Ensafe’ platform. It aids the revision
of Standard Operating Procedures (SOPs) for critical hazardous
activities, which are known as Red SOPs. As part of skill
development of contractor employees, focussed training
programmes have been started.
impact created
• 1,223 (67%) out of 1,818 identified SOPs for critical
hazardous activities have been revised to ensure a
safe workplace
• 183 contractor supervisors and 1,372 contractor
workers have been trained and certified in various
categories as part of skill development
3. Contractor safety risk management
To ensure the deployment of competent vendors for high-risk
jobs, Star-rating assessment was conducted for all high-risk
vendors.
impact created
• 40% reduction in contractor fatalities and 21%
reduction in LTI cases of contractor employees as a
result of multiple initiatives
5. Excellence in Process Safety Management (PSM)
Five high-hazard departments - namely two steel melting
shops (LD1 and LD2), one blast furnace (IBF) and the Cold
Rolling Mill and By-Product Plant at Jamshedpur - have
demonstrated excellence in PSM. These departments have
been declared as Centres of Excellence (CoEs) based on internal
assessments.
Achieving sustenance of CoE departments and rolling out of
CoEs in other high-hazard departments, while improving the
deployment of the Management of Change standards, are the
key strategies under excellence in PSM.
impact created
7% reduction in total process incidences in FY 2017-18
over FY 2016-17
6. Establish industrial hygiene competency and improve
occupational health
During the year, we upgraded our Occupational Health and
Safety (OHS) IT system, implemented 12 hazard-control
projects, strengthened the follow-up system through the
Doctor @ Doorstep programme and enhanced focussed
awareness and intervention programmes such as Doctor on
line, theme-based awareness campaign, lifestyle management
and stress management. To improve the competency among
employees about emergency life support, refreshers training
on first-aid and Cardio-Pulmonary Resuscitation has been
initiated and 7,550 employees have been trained. 12,000
employees and contract employees have been covered in a
theme-based health awareness campaign. During the year, we
saw a 0.95% reduction in the health index over FY17 for which
data has been analysed and corrective actions are being taken.
impact created
12 hazard-control projects implemented
3333
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180 Our Performance
12
10
8
6
4
2
0
200
150
100
50
3
64
FY14
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
Fatality
(Nos.)
LTI
(Nos.)
1.0
0.8
0.6
0.4
0.2
0.0
15
14
13
12
11
10
0.29
12.47
FY14
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
LTIFR
(Rate)
Health Index
(Score out of 16)
Safety and Health
Way Forward
• Leadership training on updated risk
matrix in India and South-East Asia
facilities planned in FY 2018-19
• Skill improvement of contractor
workforce and further improvement
in the Star rating of high-risk
job service providers to aid their
employability and overall quality of
life
•
Implementing video analytics
surveillance across the organisation
in India along with road infrastructure
improvement and introducing
technology/digitalisation initiatives
• Strengthening Process Safety
Management (PSM) – rolling out of
PSM CoEs to nine new departments
•
Implementation of identified
industrial hygiene control measures
in FY 2018-19 to achieve excellence
in industrial hygiene – achieving 2%
improvement in health index y-o-y
Joint Departmental Councils: A culture of working together
3434
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR People
Employer of Choice
Employer of Choice
SE1
KEY
AREAS
• Productivity
• Diversity
• Capability Development
Tata Steel has been a front-runner in people practices
with many pioneering policies. Our people practices
are based on the Tata Values, with emphasis on respect,
dignity and unity, fostering a culture of working
together. These values have contributed in getting
us to the top position in the core sector in the ‘Best
Companies to Work for’ study for two consecutive years.
We are now trying to leverage the diverse demography
in the country through inclusion of women,
underprivileged sections of the community and
specially-abled people. Industrial harmony of almost
90 years is a testimony to our commitment towards
working together.
Key Enablers and Initiatives
1. Improvement in Employee Productivity
We strive to improve employee productivity of our
workforce without compromising on industrial
harmony. Our key enablers to improve productivity
are adopting automation and technological
interventions, reorganisation, restructuring and
rationalisation. Revision in the voluntary separation
scheme, Sunhere Bhavishya Ki Yojna (SBKY) with
multiple options and Job for Job scheme are some of
the key initiatives undertaken in this direction in
FY 2017–18.
impact created
Increase in employee productivity from
720 tcs/ employee/ year in FY 2016-17 to
738 tcs/ employee/ year in FY 2017-18 at
Jamshedpur and from 653 tcs/ employee/ year
to 918 tcs/ employee/ year at Kalinganagar.
Gender inclusiveness
Heavy vehicle simulation training at safety excellence centre
tcs: Tonnes of Crude Steel
Enabling employee productivity
3535
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180 2. Diversity and Inclusion
MOSAIC – The Diversity and Inclusion initiative by Tata Steel defines the path we follow to celebrate and encourage diversity and
inclusion through a five-pillar approach:
i) Recruitment
In the context of hiring underprivileged
and female candidates, the hiring
authorities are encouraged to recruit
the underprivileged or female
candidate in the interest of diversity.
Also, while sourcing CVs for hiring,
incentives are given to head hunters
who can source more diverse CVs for a
particular position, all credentials and
qualifications being the same. These
efforts have also shown an increase in
the numbers and percentage of women
and underprivileged over the years.
To encourage female employees
especially in technical fields, a
scholarship programme ‘Women of
Mettle’ has been implemented. ‘Tata
Steel Scholars’ is a programme for
underprivileged candidates in which
undergraduate students are chosen
and mentored. Many of these trainees
are then absorbed in the organisation.
iii) Sensitisation
We have sensitisation programmes
ii) Development of Women Workforce
Several initiatives across the
organisation have been implemented,
with our focus on developing the
women workforce and nurturing them
as future leaders. These include, Tata
Mentors, a programme for cross-
company mentoring for high-potential
women executives trained by C-suite
executives of other Tata companies,
Reach Out, an opportunity for women
leaders to learn and assimilate from
leaders across India Inc., Tata Steel
Engage, an internal women leaders
programme, Tata Steel Ignite for
emerging women leaders and Step Up
to Success, a mentoring programme for
female officers.
for C-suite executives, which include
workshops on diversity for senior
leadership, workshop on Power of
Inclusive Management for middle
management professionals and
Zubaani, a platform for experience
sharing by eminent speakers.
iv) Supporting infrastructure
We have in place creches and rest
rooms for female employees and
accessible washrooms and other
infrastructure for Persons with
Disabilities (PwDs).
v) Celebration
We celebrate International Women’s
Day and International Day for PwDs.
Inclusion of Persons with Disabilities (PwD) – Our efforts are directed towards establishing norms and practices that help create a
more inclusive work environment for PwDs, with the first batch being inducted in FY 2017-18.
impact created
• Employees from the
• Increase in the percentage of
underprivileged communities form
17.29% of the total employees
women workforce at all levels and
overall from 5.21% to 6.11%
• Around 40% of management
• Decrease in female attrition from
trainees from top business schools
are females
9% to 6% from FY17 to FY18
3. Capability Development
The capability development function has
revamped its entire gamut of learning
resources using digital technology and
redesigned its training programmes to
cater to the desired competencies of
the entire workforce as per the business
needs. E-learning modules have been
rolled out with an aim to connect with
approximately 80%
3636
of the workforce. Some key initiatives
in this direction are:
i) Design of 41 new programmes for
contractor skilling, covering > 2,100
contractor workforce.
ii) Formation of Innovation Club, with
120 members, which provides
financial and other support and
covers more than 40 projects in
areas spanning robotics, Internet
of Things (IoT), waste management
and alternative fuels.
iii) JN Tata Vocational Training
Institute, which is run jointly by the
Workers’ Union and the Company,
aims to provide vocational training
in various sectors to the youth of
Jharkhand. The initiative intends to
cover 3,000 youth by 2020.
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
Our Performance
6
4
2
5.62
75
60
45
30
15
0
56
100
95
90
85
80
75
93.10
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
Training per employee
(Man-days)
Unique employees trained
(%)
Employees involved in
improvement activities
(%)
75
63
51
39
27
15
60.17
7.5
7.0
6.5
6.0
5.5
5.0
4.5
6.11
20
19
18
17
16
15
17.29
FY14
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
Investment in employee
training and development
(` in Cr.)
Diversity – Women in the workforce (%)
Diversity – SC/ST in the workforce
(Affirmative Action)
(%)
953
Employer of Choice
900
750
600
450
300
738
1000
900
800
700
600
FY14
FY15
FY16
FY17
FY18
FY17
FY18
Employee
productivity - TSJ*
(TCS/ Employee/ Year)
Employee
productivity - TSK*
(TCS/ Employee/ Year)
* Productivity calculations are based on the EOR of only the production departments, not the total EOR
Capability development: Training programmes for contractor employees
Awards
• We won the Avatar Award for top
100 organisations for women to
work in 2016 and 2017.
• Tata Steel’s affirmative action has
been appreciated many times by the
Tata group’s Tata Affirmative Action
Programme Award for its work in this
domain.
• We won the Golden Peacock Award
for HR Excellence in FY18.
Way Forward
Continuing our efforts to provide equal
opportunities to a diverse workforce
and nurture future leaders. To achieve
this, we have set certain time-bound
objectives for ourselves:
• Be an employer of choice in the top
•
quartile across industries
Increase productivity from 738
tcs/employee/ year to 900 tcs/
employee/year at Jamshedpur
• Aim to bring about 25% diversity in
the workforce by 2025
3737
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180
Customer
Focus
It is imperative that we keep pace with
the growing needs of our customers,
primarily those in the Automotive
and Construction sectors. We aim to
deliver enhanced benefits through
customised services and solutions and
value-added products throughout the
customer’s purchase journey. We are
foraying into new lines of business to
insulate ourselves from the cyclicality of
the steel industry through continuous
development of solutions beyond
steel such as Pravesh Steel Doors and
Windows, ReadyBuild cut and bend rebar
solutions and Nest-In housing solutions.
Tailoring solutions for customer requirements
96%
Loyal (repeat)
customers
> 81
Customer
satisfaction index
(score out of 100)
3838
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
Pravesh: steel doors and windows with the elegance of wood and the strength of steel
AquaNest: Water ATMs
TISCON Superlinks: High-Strength Stirrups
Solutions for enriched living
Customer Focus
SO1, SO3
KEY
AREAS
Create value and meet the growth
aspirations of customers through :
• New and enriched products
• Services and solutions
• Entry into new segments
•
Maintaining leadership position in
chosen segments
The key differentiator of our marketing strategy has been our ability
to develop and sustain relationships with our customers and channel
partners, while managing a countrywide distribution network.
Our Value Analysis and Value Engineering (VAVE) initiative is supporting
our automotive customers’ growing requirements for cost-effective and
lightweight solutions to reduce fuel consumption. We are capitalising
on these opportunities by ramping up volumes and developing high-
end products at our Kalinganagar plant and through our joint venture
with Jamshedpur Continuous Annealing & Processing Company Private
Limited (JCAPCPL). We have entered new market segments such as Oil
and Gas, Lifting and Excavation (L&E) and Pre-engineered Building and
also consolidated our market share in our existing product portfolio of
automotive.
We continue to strive for superior quality offerings with our flagship
brands in the Construction segment, such as Tata Tiscon and Tata
Shaktee. We have also been able to meet the needs of Small and
Medium Enterprises (SMEs) with our tailor-made offerings through
our Emerging Corporate Accounts (ECA) brands.
Our application-specific grades and
customised service offerings on Tata
Astrum, Tata Steelium and Galvano to
ECAs have achieved a 15% growth over
FY 2016–17.
Key Enablers and Initiatives
1.
To retain leadership position in the Automotive
segment through our product and non-product value
creation
3.
Unlock value from fragmented underserved markets
through micro segmentation and enhancing
capabilities
With focus on the commercialisation of new products such as
high-tensile HR grades for structural uses and by ensuring the
majority share in most of the new automotive launches in the
country, we have been able to attain a leading position in the
automotive market.
impact created
• Achieved a growth of 17% (over FY 2016-17) against
an industry growth of 10%
• Growth in automotive high-end sales by 21% over
FY 2016-17
2.
Ensuring sustained revenue by increasing retail play
and safeguarding against price volatility (Tata Tiscon
and Tata Shaktee)
Several initiatives were launched to increase reach, meet specific
customer requirements and increase the value-added products’
portfolio. Some of these are the Tiscon Footprint initiative to
increase the network of dealers, Tata Discovery programme for
engaging architects and organising dealer meets, launch of Tata
Kosh for galvanised steel and Tata Sampoorna, a one-stop shop
for all B2C brands to tap the potential of the rural market.
impact created
• Tata Tiscon premium growth of 3% over FY 2016-17
• Tata Shaktee sales growth of 5% over FY 2016-17
During FY 2017-18, we focussed on the development of
new-grade products, carried out more than 250 customer-
engagement activities and carried out programmes for
enhancing the sales capabilities of area sales officers.
impact created
30% increase in turnover from ECAs achieved in
FY 2017-18
4.
Ramp-up sales of new product solutions from Tata
Steel – Pravesh (steel doors) and Nest-In (housing)
Intensive product demonstration was carried out for end
consumers, focussed on installation excellence for Tata Pravesh
steel doors and expanding the Nest-In footprint through a network
of partners across the country, while leveraging digitalisation and
accelerating EzyNest’s reach to the major segments.
impact created
• Pravesh Steel Doors bookings increased five times as
compared to FY 2016-17
• Nest-In revenue grew by 60% as compared to
FY 2016-17
71/100
NPS
Tata Tiscon
77/100
NPS
Tata Shaktee
NPS: Net Promoter Score
(Index ranging from -100 to +100 that measures the willingness of our
customers to recommend our products to others)
3939
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180 5. Build capability to attain leadership in the Engineering
Case Study
segment
We have expanded our coverage in this segment through 30
new product developments and technical engagements with
customers, while acquiring new customers during the year.
We are developing relationships with the key players in the Oil
and Gas segment. We have received almost 20 new customer
approvals from the Kalinganagar plant in FY 2017-18.
impact created
The sales volume in the Engineering segment has
doubled in FY 2017-18
6. Strengthening the Indian construction and
infrastructure space
In order to facilitate faster and hassle-free construction at the
project site, we launched the welded wire fabric ‘Sm@rtFAB’
for the construction and infrastructure industry. The cut and
bend products have been approved as a preferred technology
by nodal agencies such as Central Public Works Department
(CPWD) and Engineers India Ltd. (EIL), among others.
impact created
8% higher sales of ReadyBuild (cut and bend rebars)
over FY 2016-17
Our Performance
25% growth in the B2B segment (contributing to 60% of
revenue) in FY 2017-18
• Our top-line growth in the B2B segment has been 25%
over FY 2016-17. This can be mainly attributed to growth
in demand in the Automotive Steel and Engineering
segments.
• Automotive Steel achieved a growth of 17% against an
industry growth of 10%. While there has been production
growth in Original Equipment Manufacturers (OEMs), the
higher sales of our HR and CR sheets have been enabled
through increased customer engagements and cross-
functional approach, which ensured agility in submitting
trial material and getting quick approvals. We are ensuring
future readiness and also developing and obtaining
customer approvals for high-strength steels.
• Different sub-segments under the Engineering segment
have registered remarkable growth, including Pre-
engineered Buildings, L&E as well as Construction and
related projects. New product development and customer
approvals of new grades are the key enablers of this
achievement.
50
40
30
20
41
90
80
70
60
81.40
800
700
600
500
606
FY14
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
Application engineers working
jointly with customers
(Nos.)
Customer Satisfaction Index
(%)
Quality/customer complaints – TSJ (PPM)
7.5
6.0
4.5
3.0
6.50
9
7
5
3
8.90
4
3
2
1
3.30
FY14
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
Enriched / value-added products sales (MnT)
Sales – Flat Products
(MnT)
Sales – Long products
(MnT)
PPM: Parts Per Million
4040
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Customer Focus
• Maruti Suzuki
• Brakes India Ltd.
• Grow to keep pace with customers’
Awards
Way Forward
‘Overall Performance Award’ for
FY 2016–17 at their vendor
conference held in Singapore. The
Award was given for exhibiting
above-target performance
in Quality, Cost, Delivery and
Development. This is the third
consecutive year that Tata Steel has
been recognised with this award.
• Toyota Kirloskar
‘Quality Certificate’ at their Annual
Vendor Conference for achieving
the quality targets in FY 2016-17.
Against a target defect ratio of 0.2%,
we have achieved a defect ratio of
0.05%, which is at par with imports.
Best Supplier Award in the Raw
Material Category at their Annual
Vendor Conference in Chennai.
• Tata Motors
Technology and Innovation Category
at their Annual Supplier Conference
in Pune. The Award was given
for development of HS 800 for
commercial vehicle long members
and tipper body application.
• Honda Cars
Appreciation Award for Outstanding
Support in Sales Promotion at their
Annual Supplier Convention 2018 in
New Delhi.
growth aspirations
• Maintain market leadership in chosen
segments
• Scale-up in chosen new segments
– L&E, Pre-engineered Buildings,
Defence and Oil and Gas
• Focus on Downstream Products –
Tubes, Wires and Tinplate
• Capability building and
strengthening supply chain to
enhance the reach of Services and
Solutions
• Venture into international markets by
leveraging the strength of our brands
Customer Meet in Mumbai: Enduring Partnerships
4141
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180 Operational
Excellence
Steel manufacturing is dependent on a
wide variety of raw materials extracted
from natural resources such as iron ore,
coal and ferro alloys. The large variations
in input quality characteristics of raw
materials pose challenges to produce
high-quality steel with minimum
environmental footprint at a competitive
cost. Hence, we endeavour to achieve
efficiency and effectiveness by driving
excellence across the steel value chain
– spanning from raw material sourcing
to the processed steel reaching the end
consumer.
Coke dry quenching
93.4%
Availability
of critical
manufacturing
assets
`2,594 Cr.
Savings accrued
through improvement
projects
Pellet Plant, Jamshedpur Works: Achieving resource efficiency
Operational Excellence
SO2
KEY
AREAS
• Cost leadership
• Business excellence
Excelling in Quality and
Efficiency
We ensure excellence in efficiency through continuous improvement
in all areas of operations, such as process control, asset management
and supply chain. Our initiatives are aimed at achieving superior
product quality and delivery performance and optimising product
mix, thereby improving efficiency at each stage of operations.
By doing so, we also lower our carbon rate, reduce waste generation
and improve waste utilisation and maximise energy and material
efficiency. Driving efficiency not only helps in cost reductions, but
also enables us to reduce our environmental footprint.
42
42
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
Impact centre at cold rolling mill, Jamshedpur Works
Key Enablers and Initiatives
1. Continuous Improvement
Culture
The Total Quality Management culture
is deeply embedded in the ethos of
Tata Steel, with all sections of people
being involved in improvement
projects, which helps us in sustaining
the continuous improvement drive
across the organisation. To accelerate
and elevate improvement initiatives,
a special programme called Shikhar25
was launched in FY 2015-16 with the
objective of achieving sustained 25%
EBITDA at the market price of raw
materials.
A governance structure comprising
cross-functional teams called ‘Impact
Centres’ was put in place to achieve
the objectives of Shikhar25. The
Shikhar25 programme focusses on key
structural issues such as improvement
of Overall Equipment Effectiveness
(OEE), effective utilisation of material,
spend reduction and supply chain
optimisation. At present, there are 21
Impact Centres functioning across the
value chain, out of which five were
added in FY 2017–18.
Other focussed TQM initiatives such
as Small Group Activities (kaizens)
and Suggestion Management also
triggers improvements ensuring total
employee involvement.
impact created
• Total savings of approximately
Environment
`2,594 Cr. has accrued in
FY 2017–18
• Total number of Kaizens
implemented were 34,712 in
FY 2017–18
• Total number of suggestions
implemented were 11,963 in
FY 2017–18
Safety
Projects* undertaken in FY 2017-18
area
project description
impact created
Raw materials:
West Bokaro
Iron making -
Hot Metal
Iron making-
Agglomerate
Steel Making
TSK
Shared
Services
Segregation of left over coal
contaminated with over burden during
extraction and feeding back the same
to washery, thus minimizing wastage of
natural resources.
Recovery of coal wasted due to
formation of wedges during mining
through deployment of 3 stage mining
process.
Reducing coke rate by increasing Hot
Blast Temperature from 1,165 to 1,200
degrees centigrade at G and H blast
furnace.
Enhancing efficiency of coke drying
system for reduction of coke moisture
at H blast furnace through re-use of
surplus cold blast thereby reducing
coke rate.
91 KT additional coal recovered from
waste thereby enhancing mine
life and resulting in saving
of ~` 26.3 Cr.
Additional raw coal extraction of 20
KT resulting in saving of ~` 7.8 Cr.
and positively impacting mine life.
Reduction in CO2 emission and
cost savings of ~` 39 Cr. through
reduction in coke rate by 6 kg/thm.
Reduction in CO2 emission and
cost savings of ~` 12 Cr. through
reduction in coke rate by 8 kg/thm.
Less consumption of fuel for producing
pellet through utilisation of waste
sludge of Gas Cleaning Plant (GCP)
11% reduction in fuel
consumption at pellet plant thus
saving ~` 6 Cr.
Reduction of specific lime consumption
at LD1 by 6% through process
optimization
Conservation of natural resources
resulting in cost savings
of ~` 15 Cr.
Reduction in rail idle freight using
wagon load builder for optimized
loading of coils
Improvement of Mean Time Between
Shutdown (MTBS) on an average by
80% across different plants by changing
work practices, improving life of
spares and shifting from time based to
predictive maintenance
Reduction in Specific Water
Consumption at Wet Processing Plant
of OMQ by process optimization and
design modification in water circuit at
HBF and TSK blast furnace for recycling
and reuse.
Enhancing safety by fool proofing
Torpedo circuit, CGL#2 Steam
Network and in-house development
of wireless transmitter for BF
temperature measuring lance.
27% reduction in idle freight thus
saving ~` 13 Cr.
Additional throughput of 61 KT
in Agglomerates, 29.5 KT in Iron
Making and 14.7 KT in Steel Making
thus saving ~` 26 Cr.
26.5% reduction in water
consumption
Eliminating unsafe incidents from
18 to zero.
* Selected projects. Not comprehensive.
4343
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180 2. Successful ramp-up of the Kalinganagar plant
Ramp-up of the Kalinganagar plant
production (mnt)
commissioning
date
FY 2016-17
FY 2017-18
rated
capacity (mnt)
Sep ’15
1.32
1.57
1.50
Coke Plant
(Gross Coke)
Sinter Plant
(Net Sinter)
Jan ’16
Blast Furnace
Mar ’16
Steel Melting Shop
Mar ’16
Hot Strip Mill
Oct ’15
2.44
2.23
1.68
1.78
3.40
4.60
2.91
2.53
2.56
3.20
3.00
3.50
We have been able to demonstrate our
organisation’s strength in operational management
and continuous improvement culture with
the successful ramp-up of all our units at our
Kalinganagar plant in FY 2017-18. (Refer to the
table and chart on the right) Our Kalinganagar
plant has till date rolled out 110 grades of steel, of
which 40 were added in FY 2017-18. The necessary
certifications required for servicing auto and other
Original Equipment Manufacturer (OEM) customers
have also been obtained. The Kalinganagar plant
has enabled Tata Steel to enter new and promising
market segments, including Oil and Gas, L&E and
Defence.
Kalinganagar Steel Works
4444
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
Our Performance
5200
5025
4850
4675
4500
4,866
3500
3000
2500
2000
1500
FY14
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
Completed improvement projects (Nos.)
Savings accrued through improvement
projects (Shikhar 25)
(` in Cr.)
10
8
6
4
2
7.29
5.67
600
550
500
450
400
350
300
434
348
FY14
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
TSJ
TSK
TSJ
TSK
TSJ & TSK - Energy intensity
(Gcal/tcs)
Coke rate - TSJ & TSK (Kg/Tonne of Hot Metal)
Thin slab caster and rolling facility at Jamshedpur Steel Works
Operational Excellence
Awards
Prime Minister’s Trophy for ‘Best
Integrated Steel Plant’ for the assessment
years 2014-15 and 2015-16
2,594
Way Forward
For us, the future course of action will
encompass:
• Focussing on structural cost reduction
for long-term competitiveness
• Optimising the use of captive raw
materials and consequently improving
mine life
• Exploring new opportunities for
additional capacity at Jamshedpur
through debottlenecking and replacing
of old facilities with new, efficient and
state-of-the-art facilities
• Benchmarking performance in plant
reliability
• Optimising asset utilisation at the
Kalinganagar plant by adopting
maintenance practices deployed at
Jamshedpur
• Rationalising product mix for optimum
utilisation of capacity and capability
of the two plants (Jamshedpur and
Kalinganagar)
• Working towards environmental
excellence by augmenting new
environmental equipment,
implementing new initiatives and
investing in environment-related R&D
projects
• Building over 20 algorithms under
Project MARVEL (Making Analytics Real
Valuable Efficient and Logical) and
focusing on more than 200 projects
under digitalization drive in the areas of
Yield, Energy, Throughput and Quality
(YETQ). Implementation of these ideas
via an asset light IT strategy to enable
near real time & intelligent decision
making to become a more Agile &
Mobile organization
4545
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180
Innovation
In the changing business environment,
with competition from alternate
materials and increasing regulatory
risks, Tata Steel is leveraging capabilities
in the areas of Research, Technology
Development and Digital Initiatives.
While our research and technical
capabilities focus on manufacturing
innovative products with lower
environmental footprint, our digital
initiatives ensure integration of
Information Technology (IT) with our
operational processes for productivity,
safety, transparency and cost
optimisation.
enGENE: The first-ever biotechnology laboratory established by a steel producer in the world
Innovation
SE2, SE3, SE4
KEY
AREAS
• Research & Development
• Product Technology
• Process Technology
• Advanced Materials
• Digital
R&D facility, Jamshedpur Works: Pushing the frontiers of R&D
Key Enablers and Initiatives
133
New products
launched
`181.64 Cr.
Spent on R&D
46
46
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
1. Research and Technology Development
Our R&D and Technology projects are spread across the
value chain and the key research areas include Raw Material
Research, Coal, Coke, Iron and Steel-making Research,
Product and Product Application Research and Environmental
Research, among others. Our research is continuously focussed
on optimised usage of natural raw materials and developing
high-end products. Some of the key research areas include
coatings, high-strength auto grade steels, leveraging low-
grade raw materials, and value from by-products.
2. New Product Development
3. Process Technology Improvement
In iron making, our process technology
improvements focus on blast furnaces, which
are major contributors to carbon emissions
and wastewater discharge. Some of the key
improvements we have undertaken during the
year include in-house technology development
for measuring blast furnace stave thickness,
development of a novel compound for cyanide
removal from wastewater and increase in the
consumption of solid waste, resulting in reduced
consumption of virgin raw materials.
impact created
• The carbon rate at our blast furnaces at
Jamshedpur has been reduced by 10 kg/
tonne of hot metal
• Increase in the consumption of solid waste
from 79 kg/tonne of sinter to 97 kg/tonne
of sinter in one of our sinter plants
4. Advanced Materials
With an increasing threat to our business from
alternate materials, it is important for us to be
proactive in researching advanced materials. Our
Graphene Development Centre (GDC) completed
a year in FY 2017-18. During the year, the centre
produced corrosion-resistant graphene paint and
supplied graphene powder to renowned tyre
companies. It also demonstrated the potential of
Graphene Inks (Gink).
Our product development activities are focussed on making various grades
of steel products that are lightweight and high-strength HR or CR steels for
both the Automotive and Construction segments. We have collaborated
with leading institutes such as the Cambridge University, University of
Science and Technology, Beijing and Indian Institute of Science, among
others, for the execution of lab-scale research into manufacturing facilities.
To augment automotive and construction steel production, we have
entered into a 50:50 joint venture with Nippon Steel and BlueScope steel
for producing a wide range of automotive steels, Galvalume and colour-
coated sheets. Tata Steel Kalinganagar has further enabled us to enter new
segments.
There are other steel grades that we are developing and they are at
different stages of their development cycle.
Item
Application
Status
Line pipe
L&E
Pilot trial done. Plant
trial to be taken up
Pilot trial done. Plant
trial to be taken up
White goods and
furniture
Commercial trial made.
Supplied to customers
Liners in steel plant
Pilot trial is in progress
Pilot scale development of API
X-80 for non-sour and API X-65
for sour application
Pilot scale development of
abrasion-resistant steel with
400 BHN for L&E application
Development of polymer-
coated steel (Poly Steel) for
eliminating the cumbersome
seven-stage pre-treatment
process for powder coating
Cost-effective production of
metallic glass powder, which
is characterised by very high
hardness (10X than steel) and
good corrosion resistance
impact created
In FY 2017-18, we launched 133 new products* for different
markets. On this front, we undertook the following initiatives:
• Developed and commercialised HR high-strength grade HS 800
for long-member application of commercial vehicles
• Commercialised the production of coloured Galvanised Iron (GI)
barbed wire with organic coating for extra corrosion protection
*New product is defined as product developed at Tata Steel through new processes
and technology and then commercialised.
Graphene development centre
4747
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180 5. Digitalisation
The opportunity presented by the emergence of Digital
Technologies is one of the key strategic enablers to our sustainable
growth. Confluence of information and operational technologies
has helped us create safer, simpler and smarter operations.
We co-developed, with external consultants, custom e-learning
modules on various digital technologies, which have been
undertaken by more than 10,000 of our employees, cutting across
levels and geographies.
As a step towards process simplification, integration and speed, we
have implemented the SAP S4 – HANA platform, thereby becoming
the first integrated steel plant in India to do so. This has enabled the
organisation with a single source for costing, financial accounting
and asset accounting through its ‘Universal Journal’ architecture. We
have been enhancing stakeholder experience and mobility through
various applications and embedded analytics over business layers.
This forms the foundation for our future process improvement
journey and builds the right momentum for our journey towards
being an Industry 4.0 company.
Moreover, through collaborations, we have developed and
deployed advanced analytics, design thinking and agile
methodologies.
impact created
• As a part of our efforts towards Smart Asset
Management, we have deployed an online Fleet
Management System to improve the utilisation of
Heavy Earth Moving Machinery (HEMM) at our iron ore
mines located at Noamundi and Katamati. The solution
will get horizontally deployed at our other mining
locations
• DigiWheels is a shared platform for our in-plant
transport vehicles. The solution is being extended to
the Kalinganagar plant and to raw material locations.
RakeDrishti, a project with the Indian Railways,
enables visibility of rakes in closed-circuit and
improves loading or unloading planning
SeFondre: State-of-the-art centre for advanced welding and joining
4848
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Our Performance
200
5200
174
5025
148
4850
122
4675
96
70
4500
181.64
4,866
WIP
FY14
FY14
FY15
FY15
FY16
FY16
FY17
FY17
FY18
FY18
(Cr.)
964
R&D spend
1000
900
800
700
600
500
FY14
FY15
FY16
FY17
FY18
Patents filed (cumulative)
(Nos.)
418
500
450
400
350
300
250
200
FY14
FY15
FY16
FY17
FY18
Patents granted (cumulative)
(Nos.)
Innovation
Awards
Way Forward
Following are the awards and
recognitions won by Tata Steel
representatives in various areas
of innovation and technology
developments:
• Award by Tata Motors in their annual
supplier conference for developing
and supplying HS 800 grade
• CII Environmental Best Practices
Award under the Most Innovative
Project category
• National Metallurgist Award
(Industry)
• Winner and runner-up at the
seventh Innovation Practitioner’s
Summit organised by All India
Management Association (AIMA)
We will continue our efforts on all
dimensions of research, technology
development and digitalisation, while
focussing on the following aspects:
• Make investments in Information
Technology to be an agile and
mobile organisation, and in the
process, uncover greater cost
savings across the value chain.
• Grow our Graphene business by
becoming a reliable and quality
producer of Graphene products
• Develop a strong product portfolio
in advanced materials, while
converting the concept proofs into
potential business cases
50
40
30
20
10
0
34
1200
1050
900
750
600
1,188
150
120
90
60
30
133
FY14
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
Collaborations/membership
(technical institutes)
[Number of projects requiring external
collaborations has reduced from the
previous FY]
(Nos.)
Revenue through services and
solutions business (incl. Profit Centres) (Cr.)
New products launched
(Nos.)
4949
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180
Supply
Chain
Supply chain is a critical element in
Tata Steel’s value-creation process for
ensuring on-time delivery of the right
quality of raw materials, other goods
and services to manufacturing locations,
and finished products to the customers.
Storage of semi-finished and finished
products is a critical process with respect
to timeliness of delivery, security and
preserving quality.
Central warehouse at Jamshedpur
> 5,000
Supplier base
> 1,500
Number of local
suppliers
50
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
Aiming for delivery compliance
Managing a Diverse
Supply Chain
Supply Chain
SO2
KEY
AREAS
•
•
Optimising inbound &
outbound logistics network
Managing suppliers & channel
partners
Our major manufacturing locations are located in the eastern part of the
country, in the states of Jharkhand and Odisha, while Profit Centres such as
Wires Division, etc. and customer delivery points are located pan-India. To
meet the delivery and quality requirements of customers, we have steel-
processing centres and stockyards at strategic locations across the country
to optimise the delivery time and cost. Our captive iron ore mines and
collieries are located at sites around Jamshedpur and Kalinganagar.
• While railways are the most preferred mode of transportation in
India from an environment point of view, it is wholly owned by the
Government, which allocates the wagons to various agencies in the
country. For the raw material segment, we are totally dependent on
the Indian Railways for inbound transportation. We have closed-circuit
rakes running between the captive mines, ports and manufacturing
locations. We are one of the first in the steel industry to capitalise on
incentives by the Indian Railways – Special Freight Train Operator
(SFTO) Scheme and long-term tariff contract.
• The road conditions are not ideal for transportation of high-end
steel products, which have to travel as far as 1,700 kms from
the manufacturing locations to pan-India. Inland waterways in
the country are in the early stages of development. Hence, it
is not an open option at this stage, even though it is the most
environment friendly mode.
Therefore, we need to adopt multiple modes of transportation, taking
into consideration the above constraints, aiming for the best possible
delivery compliance and cost while taking utmost care of safety and
the environment.
In FY 2017-18, Tata Steel imported almost 8.3 Million Tonnes (MnT) of
coal from Australia, New Zealand, and North America, Canada/US and
CIS; 4 MnT of fluxes were imported from the Middle East and Vietnam.
• Tata Steel plays a pivotal role in ensuring close co-ordination
and planning between overseas miners, load ports, ship owners,
port authorities in India, the Indian Railways and our plants
receiving the raw materials. We are one of the first major steel
manufacturers to initiate the deployment of energy-efficient and
environment friendly vessels for ocean transportation.
and
With increasing focus on environment and on de-risking our supply
chain from emerging regulatory and other climate change risks
(Refer
on Page 30-31), we are now enhancing our focus
on a Green Supply Chain and exploring the concepts of third-party
logistics, modern state-of-the-art warehouses, use of energy-efficient
and newer design eco-friendly ships, coastal shipping to reduce
landside tonne miles and use of digital meals to simplify the cargo
flow of raw materials and other bought-out goods (maintenance
repair operations, bulk, etc.) and services. We ensure the
implementation of Human Rights throughout the supply chain. The
schematic depiction of our supply chain with the flow of materials is
shown below:
For one tonne of finished goods, the total movement in the supply chain circuit is ~4 tonnes inclusive of raw material
RM Locations/
Procurement
Inbound
Transit
Plant
(intra-works)
Loading
point
Outbound
1st leg
Stockyard
2nd Leg
28
12
Mines
Ore - 22 MnT
Coal - 4 MnT
Flux - 2 MnT
Discharge Port
Coal - 8.3 MnT
Flux - 4 MnT
Dhamra, Haldia,
Paradip & Kolkata
R
E
I
L
P
P
U
S
Ocean Logistics/
Air Freight
Load Port
Limestone: Oman & UAE,
Coal: Australia
MRO and Bulk Imports:
Europe, China, SEA, US,UK
Rail
Logistics
RM
Stockpiles
6.7
Rail Logistics
3
Customers
5.1
Domestic
MRO, Bulk
and Services
From domestic
sources all
over India
Plant
12.6
Loading Point
Stockyard
8.1
5.1
2nd
Leg Road
TSJ Steel - 10
TSK Steel - 2.6
1st
Leg Road
5.3
3.9
Customers
0.6
Steel
Customers
Steel Zonal
Distribution
South - 49%
North - 26%
West - 15%
- 10%
East
Inbound Supply Chain
Outbound Supply Chain
*All figures in million tonne
MRO: Maintenance, Repair, Operations
R
E
M
O
T
S
U
C
5151
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180 Key Enablers and Initiatives*
project description
impact
1
Reduction of carbon emissions
by hiring at least 50% vessels
with GHG emissions rating of
class A to D
Almost 65% vessels hired of GHG class
A to D. Average grams of CO2 emissions per
tonne nautical mile for vessels hired by Tata Steel
in FY 2017-18 was 4 gm as compared to the
global average of 10.9. **
2
3
4
5
Reduction in the consumption
of wooden dunnage used in FG
steel dispatch by introducing
SFTO rakes with inbuilt saddles
•
Wood savings of 80,352 cu. ft. every year for
~8,498 number of coils by eliminating the use
of wooden dunnage, thereby reducing adverse
environmental impact.
• Enhanced delivery quality and savings
of `3.3 Cr. in FY18.
Develop and increase business
with underprivileged and DP
(Displaced) Vendors
Development of the few first-generation
entrepreneurs from the underprivileged section of
the society with a business volume of ~`80 Cr.
Implementation of the Solid
State Interlocking (SSI) system
to improve safety in rail
network
• Cabin-operated rail traffic through control panel.
• This also resulted in savings of ~`1 Cr. in
manpower productivity and ~`25 Cr. on
rail penal charges
Implementation of Engine
on Load (EOL) concept in raw
material circuit for the first
time in the steel industry
•
•
•
Throughput of rolling stock increased by 40%
ensuring raw material security
Avoidance of one-time Capital Expenditure
(~ `80 Cr.) with recurring savings of ~`15 Cr.
through better loco fleet utilisation
Improved safety performance: (Zero Loss Time
Injury (LTI) and Reduction in derailment by 50%)
Pan-India retailer reach and a network of service
partners in key consumption centres provide a
unique competitive advantage to the TSL market
Plant
Warehouses
Jamshedpur and
Kalinganagar
Hubs
Pan India Network
6 (Delhi, Faridabad,
Kolkata, Nagpur,
Vijayawada, Chennai)
Stockyards
18 (pan-India)
Key Facts
• 100% fleet covered by vehicle tracking system
• Judicious mix of rail (~60%) and road (~40%) movement (cost
effective and timeliness)
• 150 sales officers in 26 locations (customer account managers for
relationship building and ensuring service)
• 193 distributors, 1,500 distributors’ feet, 11,883 dealers (strong
network across India) reaching out to ~650 districts (95%
coverage)
• Theory of Constraints (TOC) supply chain implemented in all
product categories for retail sales (central warehouse enabled)
• Local/ customised production enabled by 24 Steel Processing
Centres (SPCs) across Steel and Profit Centres
• Company distributor owned service centres for last point
processing
35.000
30.625
26.250
21.875
17.500
13.125
8.750
4.375
0.000
30.14
8.95
FY14
FY15
FY16
FY17
FY18
TSJ
TSK
Raw Material handled (MnT)
* Selected projects. Not comprehensive.
** Source: BIMCO (Baltic International Maritime Council) and Rightship – a Maritime Risk Management and Environmental Assessment Organisation.
5252
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
Route to market has been designed to bring in user segment focus
Mills
Marketing & Sales
Business Vertical
Channel Partner
Customer Groups
l
l
i
M
t
c
u
d
o
r
P
t
a
l
F
TSJ
•
•
•
•
HSM
TSCR
CRM
CRC(W)
t
c
u
d
o
r
P
t
a
l
F
l
l
i
M
TSK
•
HSM
l
l
i
M
t
c
u
d
o
r
P
g
n
o
L
TSJ
•
•
•
•
•
MM
NBM
WRM
WRM-W
EPAs
Outsourced
Units
• HR
• CR
• Galv
• HR
• Rebar
• WR
S&S
Products
Tata Centre
(Corporate &
Marketing)
Zonal Sales
Offices (4)
Regional
Sales Offices
(26)
Automotive
& Special
Products
(A&SP)
Branded
Products &
Retail (BPR)
Industrial
Products,
Projects &
Exports (IPPE)
Service &
Solutions (S&S)
Distributors
Dealers
Service
Partner
Project
Distributor
Automotive
Customers (~20)
Individual House
Builders (~ 0.2 Million)
Steel Roofing Customers
(~ 2 Million)
Homemaker
(New segment through S&S)
ECA Customers (8,000)
Commercial Customers,
including Export (~350 Nos.)
Construction
Companies (~100)
High-end Wire
Drawing (60)
HSM: Hot Strip Mill TSCR: Thin Slab Caster and Rolling CRM: Cold Rolling Mill CRC(W): Cold Rolling Complex (West) MM: Merchant Mill
NBM: New Bar Mill WRM: Wire Rod Mill HR: Hot Rolled Steel CR: Cold Rolled Steel GALV: Galvanised Steel
Our Performance
100
84
68
52
36
20
69
FY14
FY15
FY16
FY17
FY18
500
420
340
260
180
100
433
FY14
FY15
FY16
FY17
FY18
Number of underprivileged suppliers
(Suppliers from the Scheduled Castes and
(No.)
Scheduled Tribes Community)
Suppliers trained through Vendor
Capability Advancement
Programme (VCAP)
(No.)
7000
5780
4560
3340
2120
900
5,722
1,215
4500
4000
3500
3000
2500
2000
1500
1000
500
4,252
1,320
FY14
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
TSJ
TSK
TSJ
TSK
Outbound despatch volumes: Rail
(TSJ and TSK)
(kT)
Outbound despatch volumes: Road
(TSJ and TSK)
(kT)
Supply Chain
Way Forward
• Network optimisation for improving
the reliability and cost performance
of the supply chain
• Asset-light and agile growth through
utilisation of Private Freight Terminals
(PFTs)
• Coastal steel shipping as a
de-risking mechanism, for reduction
in transport-related CO2 emission and
ensuring sustainable supplies for our
customers in South and West India
• Connecting North-East India through
barge transport on inland waterways
from Kolkata/Haldia through
Bangladesh – this route would avoid
long-winding and expensive truck
routes to North-East India
• Economic speed management of
vessels whenever and wherever
possible – close co-ordination by all
entities in the supply chain
5353
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180
Responsible
Behaviour
ENVIRONMENT
Steel-manufacturing process depends on as
well as impacts natural resources. Coal, iron
ore, ferro alloys and water are key inputs
to our iron and steel-making processes,
resulting in emissions (e.g. CO2 , dust and
other gases), discharge of effluents and solid
waste generation. Due to our captive mines
and collieries, we have a significant impact
on the natural ecosystem and biodiversity in
our mining locations. We are exploring the
opportunities for increasing the utilisation
of LD slag, which is a problem for steel
manufacturers across the globe, through
market-based solutions.
With consumer consciousness and community
expectations growing in the area of
environmental performance, we have begun
to focus more on product stewardship and
environmental declarations for our products.
Taking forward the learnings from the TSJ
plant, the TSK plant has in place state-of-
the-art technologies and new facilities have
been designed for minimal carbon and water
footprint.
Butterfly park at Noamundi
`544 Cr.
Capital spend on
environment
54
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
A 3 MW solar power plant at Noamundi iron ore mine
Environment
SO4, SG1, SG2
KEY
AREAS
•
•
•
•
•
CO2 emission
Water consumption & effluent
discharge
Solid waste utilization
Biodiversity
Dust emission
Key Enablers and Initiatives
Responsible Behaviour: Environment
Increasing LD Slag Utilisation
• Started Material Reclamation Plant (MRP) at TSK and upgradation
of MRP at TSJ to recover metallic matter from LD slag and
recycling
• Developed new markets/applications for LD slag
• Launched branded LD slag products – Tata Aggreto and Tata
Nirman – in January 2018
impact created
• Year-on-year increase in the utilisation of LD slag (TSJ*
and TSK figures are given below):
• FY 2015-16* – 43%
• FY 2016-17* – 53%
• FY 2017-18* – 59% (TSK – 56%)
• Avoided excess landfill
Responsible Behaviour: Environment
CO2 Emission Reduction
1. Sustain carbon efficiency in iron making
3. TSK: Ramp-up Top Recovery Turbine (18 MW)
impact created
Specific energy intensity (national
benchmark)
• Sustained energy efficiency in FY 2017-18:
5.674 Gcal/TCS
• Sustained CO2 emissions performance in
FY 2017-18: 2.30 tCO2 /TCS
Commission CDQ (12 MW)
Start pulverised coal injection in 2017
Optimise fuel use due to ramp-up
• Over 0.6 MnTPA dry-quenched coke used by blast furnaces
• Used 3,58,723 t of Pulverised Coal Injection (PCI) in the blast furnace
(123kg/t of hot metal)
• Reduced coke rate in blast furnaces to 434 kg/thm in FY 2017-18 versus
561 kg/thm in FY 2016-17
impact created
Following ramp-up in FY 2017-18, 14% reduction in CO2 intensity at TSK
2. Integrate climate change mitigation into
4. Raw material locations: Commission 3 MW solar power plant at
business decision making
Continued to implement internal carbon pricing
(shadow price of CO2) in the financial appraisal
of capital projects. One of the first Indian steel
companies to do so.
impact created
• Fast-tracked environmental projects
• Directed investments towards low carbon
growth
• Brand enhancement
Noamundi
Use biodiesel in iron ore mines
• Generated 37,98,022 kWh solar power during FY 2017-18
• Used 18% biodiesel in Joda and Khondbond mines during October 2017
impact created
• Offset 3,038 tCO2 through solar energy
•
3% of the Renewable Purchase Obligations (RPOs) met through
own generation in FY 2017-18
•
Replaced 104 KL of diesel with biodiesel and offset 300
tonnes of CO2
Responsible Behaviour: Environment
Blast Furnace Slag Utilisation and Ground Granulated Blast
Furnace Slag (GGBS)
1. Application in manufacturing of
2. Enhance value of products
Portland cement, glass, mineral wool
insulation, replacement of sand, etc.
Granulated and sold 98.5% of blast
furnace slag to the cement plant to
replace clinker by more than 60% in
cement making
GreenPro Certification awarded to Tata Steel’s
GGBS by CII-GBC, Hyderabad. Tata Steel is one
of the first companies in India to get the green
product certification for GGBS. GreenPro is a
CII-awarded green label that enables wider
acceptance by environment-conscious customers
impact created
impact created
Utilised 100% wet granulated slag
in cement making, avoiding fugitive
air emissions during transportation
Achieved highest-ever sales for GGBS of
16.5 KT, replacing equivalent quantity of
Portland cement
3. Improve availability
of processed slag
and closely monitor
and control effective
utilisation of sinter
plant assets
impact created
Recycled ~98% of
process-generated
waste in the iron-
making process
5555
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180 Responsible Behaviour: Environment
Biodiversity
Water
Progressively implemented Biodiversity Management
Plans (BMPs) at raw material locations in partnership with
the International Union for Conservation of Nature (IUCN)
• Developed biodiversity management plans for each mining
site
• Planted around 1,90,000 saplings of 45 species
Reducing Freshwater Intake
Over the last decade, several initiatives have been taken at
TSJ, including infrastructure upgradation for increasing water
recycling and reuse and augmentation of rainwater harvesting
within and beyond the fence. Apart from these, multiple
improvement projects were undertaken, as listed below:
•
Installed over 400 nest boxes to enhance birds’ nesting niche
at the Noamundi iron ore mine
• Metering and on-line monitoring
• Departmental water audits
• Used the globally recognised tool – Biodiversity Indicator
and Reporting System (BIRS) for habitat enhancement
monitoring and reporting
impact created
• Replacement of freshwater with recovery water in low-end
applications
•
Improved utilisation of recycling assets (Common Effluent
Treatment Plant (CETP), effluent pumping and catch pits)
• Began systematic action, monitoring and reporting
on biodiversity enhancement
The major capital projects include commissioning of six catch
pits and capacity enhancement of the existing catchment area.
• Promoted diversity in plantation and discouraged
impact created
monoculture at each site
Niche Nesting
Central effluent treatment plant: Reducing water footprint
5656
35% reduction in water consumption in the last
five years. At TSK, the focus has been on increasing
water recycling through improvement in the CETP
performance, improvement in Biological Oxygen
Demand (BOD) treatment and better diagnosis of
leakage and remediation at blast furnaces and hot
strip mills
Dust
Reducing Dust Emissions
At TSJ, several improvement measures along with capital
investment projects were undertaken to reduce dust
emissions. These include upgradation of the existing Air
Pollutant Control Equipment (APCE) and torch-cutting
and fume-extraction system at Metal Recovery and Slag
Processing Plant (MRSPP) commissioned in
FY 2016-17 at ₹16.6 Cr.
impact created
Maintained air emissions of TSJ at a level of 5 MnTPA
while producing 10 MnTPA
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Responsible Behaviour: Environment
Conserving and Enhancing Biodiversity
Assessment of leasehold areas to monitor the biodiversity
and habitat enhancements using the Biodiversity Indicator
and Reporting System (BIRS) tool
Tata Steel and IUCN have been working together since July 2013
and phase-I of our engagement culminated with the launch of
the Company-level biodiversity policy and the finalisation of
Biodiversity Management Plans (BMPs) for each of the mining sites
of Tata Steel. In 2016, Tata Steel entered into phase-II of engagement
with IUCN for roll-out of BMPs at all mining sites.
In 2017, Tata Steel became the first company to monitor BMP
implementation progress using the Biodiversity Indicator and
Reporting System (BIRS) tool.
Plantation in the mined-out area of hill 1 and 2 in Noamundi: Reducing the ecological
footprint
BIRS is a simple system for assessing the overall biodiversity
suitability of a defined site having different habitat types, expressed
as ‘Site Biodiversity Condition Class’, on a scale of 1-10. It considers
the area of every habitat type on a site, the ecological condition
of these habitats (including enhancements and threats) and the
uniqueness and ecological importance of each habitat in the
regional context.
A rise in the calculated index value and especially an increase in the
Site Biodiversity Condition Class, from one assessment to the next,
would show an overall enhancement of the suitability of a site for
biodiversity, while a decrease would signal a lowering of the site’s
value for biodiversity.
Hibiscus park at Noamundi
Assessment Review
• Feedback from the IUCN Regional Office and Country Office
• Feedback from the Tata Steel Senior Management
Key Development
Tata Steel conducted extensive BIRS assessments in 2017 at all
mining sites. During the assessment, we identified site-specific
key threats to biodiversity. Based on the BIRS report, Tata Steel
is implementing measures to mitigate the threats, thereby
contributing to the biodiversity enhancement of the site.
Way Forward
• BIRS will continue to be used for regular and standardised
reporting on changes to biodiversity conditions
• Moving towards no net loss in biodiversity at its raw
material location
5757
Noamundi iron ore mine
IUCN: International Union for Conservation of Nature
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180 Responsible Behaviour: Environment
Making the Best of By-products
– LD Slag
Increasing the utilisation of by-products, especially LD slag,
and introducing branded by-products, Tata Aggreto and
Tata Nirman
The objective of our Industrial By-product Management Division (IBMD) is to
deliver maximum value from our industrial by-products.
Exploring the Opportunities of a Circular Economy: Last year, IBMD
processed ~13 MnT, of which ~6.8 MnT is slag from iron and steel-making.
18% slag was utilised internally in sinter making and another ~62% was used
externally, mostly in cement making, reducing CO2 emissions from clinker
making while conserving natural resources (limestone). We are currently
exploring strategies and avenues to bring back the balance 20%, which is mostly
steel-making slag, as part of a circular economy.
The steel-making slag is finding application in other industries such as cement,
civil construction, road-making, railway ballast, etc. Our intent is to standardise
processing to deliver consistent product specifications to make them suitable
for various external applications.
We have achieved the highest ever steel-making slag utilisation during the
year at TSJ at the rate of 59%. We have successfully derived value from various
streams of by-products and maximising this presents a great opportunity.
Deriving value from by-products
Achieved
Launched branded LD slag brands:
• Tata Aggreto was launched in January
2018 for the sale of steel-making slag
with a promise to provide superior,
ready-to-use material with consistent
sizes. This product replaces natural
aggregate for road making. With the
focus on road building in India, this could
open up a new window for the Company.
• Tata Nirman was launched for usage
as raw material in fly ash brick making
(replacing sand as filler and limestone
as binder) and clinker making (replacing
limestone to the quantity consumed).
Major initiatives pursued
through partnerships for
the future
• De-bottlenecking the
present wet and dry cycle
weathering facility at
Galudih
Responsible Behaviour: Environment
Way Forward
To demonstrate environmental leadership in the
short and long term, we will pursue time-bound
actions directed at the following:
• Reducing carbon footprint across the value
• Open-steam aging at TSJ
chain (< 2tCO2/tcs) by 2025
and TSK
• Moving towards zero effluent discharge for Tata
• Closed-steam aging system
Steel India
at TSJ and TSK
• Dedicated testing lab at TSJ
for quality control of Tata
Aggreto
• Slag atomisation at TSK
• Moving towards world benchmark for specific
water consumption at < 3 m3/tcs at TSJ
• Utilising LD Slag at 90% for Tata Steel India by
FY23
5858
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Our Performance
450
425
400
375
350
325
300
390
12
9
6
3
0
7.50
5.03
12
10
8
6
4
2
0
7.82
4.94
FY14
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
TSI – Trees planted
Dip due to lesser availability of reclaimed
land in mining areas
(Thousand Nos.)
TSJ
TSK
TSJ
TSK
TSJ and TSK – Sulphur oxides (SOx)
emission
(kT)
TSJ and TSK – Nitrogen oxides (NOx)
emission
(kT)
4
3
2
1
2.65
2.30
1.50
1.25
1.00
0.75
0.50
0.25
2.5
2.0
1.5
1.0
0.5
0.0
0.64
0.41
1.01
0.59
FY14
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
TSJ
TSK
TSJ
TSK
TSJ
TSK
TSJ and TSK – GHG emissions
intensity
(tCO2e/tcs)
TSJ and TSK – dust
emissions intensity
(kg/tcs)
TSJ and TSK – effluent
discharge intensity
(m3/tcs)
90
80
70
60
87.22
84.40
FY14
FY15
FY16
FY17
FY18
TSJ
TSK
8
6
4
2
4.75
3.68
FY14
FY15
FY16
FY17
FY18
TSJ
TSK
TSJ and TSK – Solid waste utilisation
(%)
TSJ and TSK – Specific
Water Consumption
(m3/tcs)
Steel-making sites
(primary/ secondary) excl. downstream (as per worldsteel guidelines)
Particulars
Absolute Emission
India (TSJ and TSK)
UoM
2013-14
2014-15
2015-16
2016-17
2017-18
Scope-1
MnT CO2
20.46
21.10
21.02
25.53
26.33
Scope-1.1
MnT CO2
Scope-2
MnT CO2
2.33
0.73
2.27
0.72
2.31
0.74
3.69
1.11
4.07
1.15
Scope-3
MnT CO2
-0.87
-1.08
-1.19
-2.21
-1.99
Overall
MnT CO2
22.65
23.02
22.89
28.11
29.55
Europe (incl. UK)
Overall
MnT CO2
27.79
26.96
25.48
19.27
19.18
South East Asia (Tata Steel Thailand and NatSteel)
Overall
MnT CO2
0.98
0.91
0.98
0.91
1.01
Kalinganagar Steel Plant was commissioned in 2016-17 followed by ramp-up process
5959
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180
Responsible
Behaviour
COMMUNITY
The mining and metals business impacts
the environment and communities around
its area of operation. Our manufacturing
and Raw Materials (RM) operations are in
the eastern part of the country, having
significant development challenges
compared to the rest of the country.
Tata Steel actively engages with communities
to respond to the development challenges
in its operating areas through Corporate
Social Responsibility (CSR) initiatives ranging
across themes such as health, education and
livelihood, along with initiatives in drinking
water, sanitation, sports, empowerment,
infrastructure creation and ethnicity. Our CSR
approach is based on the needs assessed
through community engagement.
(Refer Page 23)
While addressing the major challenges
faced by communities, we focus on
signature programmes aimed at creating
development models that can be replicated
at scale and adopted across geographies
with similar issues. Programmes such as
Maternal & Newborn Survival Initiative
(MANSI), enhancing school education and
Samvaad are some examples of signature
programmes that have been deployed in
large geographies.
> 1 Million
Lives impacted through Health,
Education, Livelihood and other
community initiatives
60
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
The first-ever tribal musical conclave, ‘Sarjom Baa’
Community
SO4, SG4
KEY
AREAS
Impact based CSR in areas of
•
Health
• Education
• Skill development
• Sustainable livelihood
• Sports & Ethnicity
Key Enablers and Initiatives
Responsible Behaviour: Community / Rural
Skill Development
SABAL: Persons with Disabilities (PwDs)
face discrimination and stigma in their
lives (including from their own families
and society) that restricts them in
acquiring skills for a gainful employment
SABAL Centre for Abilities at Noamundi was
created to empower PwDs through skilling
programmes, which help mainstream them
as well as sensitise communities to enable
PwDs to lead productive and dignified lives.
The centre is a joint venture of Tata Steel Skill
Development Society (TSSDS) and Enable
India.
impact created
• 28 PwDs empowered through
training on skills
• 15 persons (including six PwDs)
underwent the Training of Trainers
(ToT) module in FY 2017-18
SABAL: Centre for Abilities
Empowering through skilling
Responsible Behaviour: Community / Rural
Education
1. Enhancing School Education: To bring
out-of-school children from vulnerable
backgrounds in the fold of education and
also to improve the foundation of learning
in Government primary schools
The project intends to implement Right to
Education by increasing the access of children
to school, by improving the quality of primary
education in Government schools as well as
ensuring better governance through School
Management Committees (SMCs).
2. Residential Bridging Schools: To provide
a safe and conducive residential school
atmosphere to children from vulnerable
backgrounds and link them to the formal
education system
Tata Steel operates two all-girls schools at Pipla
and Noamundi and an all-boys school (Masti Ki
Pathshala) at Jamshedpur. The schools provide
residential bridge courses for out-of-school
children to re-integrate them into the formal
schooling system.
impact created
impact created
• The initiative reached out to around
2,00,000 children across 2,800 habitations
in Odisha and Jharkhand by the end of
FY 2017-18
• 1,165 habitations have been made child
labour free zones by the end of FY 2017-18
• In Odisha, school functioning has
improved, with up to 90% attendance
in some schools, regular PTA meetings,
quality mid-day meals and active libraries,
school projects, Bal Panchayats and
children’s festivals
Responsible Behaviour: Community / Rural
Sustainable Livelihoods
Productivity improvement in agriculture and
allied activities: Agriculture is the mainstay
for the population in Jharkhand and Odisha.
However, due to lack of knowledge about
scientific agrarian practices, many farmers in the
two states do not consider agriculture and allied
activities as full-time and profitable occupations.
Tata Steel adopts a multi-pronged strategy to
promote sustainable livelihood options among small
and marginal farmers. They are capacitated with new
skills and knowledge to improve production practices
through regular training programmes. Scientific
The three schools put together, 319 children
have benefited in FY 2017-18
3. 30 Model Schools: To enable children from
Educationally Backward Blocks (EBBs)
to avail quality government educational
infrastructure
Tata Steel has entered into a Memorandum of
Understanding (MoU) with the government of
Odisha to construct 30 Model Schools in
30 different blocks in the state to provide quality
secondary education in EBBs. A total of nine Model
Schools have been constructed and handed over
to the state government so far, of which six were
handed over in FY 2017-18.
impact created
Benchmark infrastructure has facilitated
proper environment for learning among
over 5,000 rural children in the nine Model
Schools
agrarian practices (System of Rice Intensification (SRI),
multi-cropping, integrated cropping, etc.) and allied
activities (pisciculture, lac culture, duck rearing, etc.)
are also promoted among farmers. As dependence
on rain limits the agriculture potential of the farmers
in the two states, Tata Steel also provides them with
irrigation facilities (ponds, check dams, etc.) that help
increase cropping intensity.
impact created
Increase in paddy yield by almost 1 tonne/acre
Improving the quality
of education
Vaarta: A farmer’s
conclave to enable
sustainability and
profitability of agriculture
6161
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180 Responsible Behaviour: Community / Rural
Responsible Behaviour: Community / Rural
Health
Ethnicity
1. Maternal & Newborn Survival Initiative (MANSI): Lack
of easy access to institutional care (during pregnancy,
delivery and post pregnancy) and low level of awareness
about proper care for mothers and babies lead to mortality
among neonates (less than 1 month old) and infants (less
than 1 year old) in remote rural areas.
MANSI reduces mortality among neonates and infants by
enhancing the capacity of Government health volunteers
(ASHAs/Sahiyas) in the Home Based Newborn Care (HBNC)
system. Tata Steel, the National Health Mission (NHM), American
India Foundation (AIF) and the Society for Education Action and
Research in Community Health (SEARCH) – the pioneer of HBNC
in India – have collaborated in this public-private partnership,
working in 12 blocks across Jharkhand and Odisha.
impact created
• Reduction in Neonatal Mortality Rate (NMR) – 61% since
inception.
• Reduction in Infant Mortality Rate (IMR) – 63% since
inception.
(Based on the study from the period January 1, 2015 to December 31, 2015)
2. Regional Initiative for Safe Sexual Health by Today’s
Adolescents (RISHTA): Illiteracy and low level of awareness
in rural areas lead to instances of early marriage and early
parenthood, which have health-related as well as social
and financial implications.
Project RISHTA enables adolescents to make informed choices
about their sexual and reproductive health and overall
well-being as well as provides coaching on life skills and
self-development.
impact created
• Increased awareness about adolescent reproductive
and sexual health in communities and improved overall
health of adolescents by identifying and training peer
educators among them (more than 700 developed in
FY 2017-18)
• Reached out to 19,601 adolescents in FY 2017-18
• Launched the RISHTA mobile application for profiling
adolescents in FY 2017-18
1. Samvaad: Tribal communities across geographies find
deep roots in their traditional heritage, wisdom and
culture, which often hold valuable insights for their
identity as well as a sustainable way or life for the rest
of the society. Hence, there is a need to preserve and
promote this knowledge and enable their voices to
be heard.
The annual tribal conclave, Samvaad, offers a platform for
indigenous communities from India and abroad to discuss
critical issues and showcase their heritage. Each year, Samvaad
focusses on a specific theme centred around an area of
interest for tribal communities. Samvaad also reaches out to a
wider audience among tribal communities through Regional
Samvaad events organised in tribal pockets across India. All
events in Samvaad are attended by luminaries of national and
international stature who have worked on aspects of tribal and
social development.
impact created
• Regional Samvaad events held in 2017 at Wayanad
(Kerala), Netrang (Gujarat), Guwahati (Assam),
Amarkantak (Madhya Pradesh), Ranchi (Jharkhand) and
Bhubaneswar (Odisha)
• Samvaad 2017 focussed on instilling leadership in
tribal youth and was attended by many distinguished
personalities working on development issues, including
a Nobel Laureate
• Samvaad 2017 drew over 1,200 delegates representing
tribal communities from India and abroad, with a first-
ever international flavour, with representatives of tribes
from Australia, Canada, Kenya and Zimbabwe
• More than 400 tribal youth representing 103 tribes
from 22 states went through a structured leadership
programme during Samvaad 2017 that encouraged them
to take leadership roles within their communities – these
included around 100 youth engaged through a specially
designed Tribal Leadership Programme earlier in 2017
Providing institutional care to mothers,
neonates and infants
Nurturing informed adolescents
Samvaad - A Tribal Conclave
6262
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR 2. Youth Empowerment through Sports (Football and Hockey):
Communities residing in Tata Steel’s operational areas have a
natural inclination and talent for certain sports (e.g. football
and hockey). There is a need to discover and hone this talent,
which could provide career options to rural tribal youth.
Also, age-old tribal sports (e.g. Sekkor and Kati) that are
integral to tribal heritage have lost their prominence over
the years and therefore need to be preserved.
• To train budding football talent from remote locations of the
Company’s operational areas, Tata Steel runs 31 under-10 football
coaching centres.
• As part of the grassroots hockey development programme,
Tata Steel operates 20 hockey centres in West Singhbhum, East
Singhbhum and Seraikela-Kharsawan districts of Jharkhand.
• Hooking2Hockey involves training of students in the stick game
through engaging modules; the programme implemented
through 13 centres in Jharkhand and Odisha is designed by
Hockey Australia, the governing body of hockey in Australia.
• Tata Steel consistently made efforts to revive and promote
traditional tribal sports such as Kati, Sekkor, Chhur, Bahu
Responsible Behaviour: Community / Urban
1. Urban Amentities: Jamshedpur is the only million-plus city
in India without a municipal corporation, with Tata Steel
providing all amenities, such as power, water, sewage and
sanitation, resulting in high Quality of Life (QoL) for its
citizens. Tata Steel has ensured that the challenges posed by
the surge in urban growth and aspiration for a world-class
city with the best QoL in India have progressively been met.
The Company consistently focusses on managing key urban
amenities and resources efficiently and responsibly to make
them available and affordable for the citizens. On metrics of
QoL assessed by AC Neilson, Jamshedpur is neck to neck, and
sometimes exceeding the likes of Chandigarh, with an eQ
index of 88 and QoL index of 101 in FY 2017-18.
About 20 km of main roads have been de-congested through
widening, including the creation of dividers, roundabouts and
footpaths, over the last 3 years; 100% of streets are lighted.
impact created
This drive was taken primarily to ensure safe and smooth flow
of traffic in town. Similar such projects are underway in the
current year as well
2. Green City: Jamshedpur is known for its parks and gardens,
which are an integral part since the conception of the city.
Eight new parks have been created in the last 3 years.
impact created
This has provided citizens an opportunity to be physically
active and also reduces the Urban Heat Island Effect 37.54% –
highest among industrial towns
Chor and Ramdel by organising tournaments among tribal
communities in Jharkhand and Odisha.
impact created
• 22 cadets from the football and hockey training centres
selected for sports academies (Minerva Punjab Academy,
Chandigarh; United Sports Club Academy, Kolkata and
Army Boys Sports Company-Bihar Regiment Centre-
Danapur, an infantry of the Indian Army and Naval Tata
Hockey Academy)
• 950 children covered under the grassroots hockey
development programmes (including hockey centres and
the Hooking2Hockey initiative) in FY 2017-18
• First-ever Sekkor Premier League drew 2,300 players from
villages in Jharkhand in FY 2017-18
• The second edition of Kati Premier League drew 1,890
players from villages in Jharkhand and Odisha in
FY 2017-18
• Total 55,963 youth engaged through popular sports
and tribal sports
3. Medical Services: Tata Steel runs a 1,000-bed modern
tertiary-care hospital supported by eight Tata Memorial
Hospital (TMH) clinics spread across Jamshedpur and
has established a 200-bed Tata Steel Medical Hospital
at Kalinganagar. TMHs are also located at Jamadoba,
Noamundi, Sukinda, West Bokaro and Joda. These facilities
meet the needs not only of the employees and their families,
but also of the communities around our areas of operations.
Upgradation of all key infrastructure is in progress to meet the
growing needs of the town and provide quality services. Adoption
of NPS to capture customer feedback and actionable points for
improvement has resulted in a perceptible improvement. The
Company ensures extended availability of specialists and services
to the community during the evening hours. Commenced TMH
PRIME.
The team comprises over 2,000 trained professionals, including over
350 doctors, 700 nurses and 150 paramedics.
impact created
• 1.64 million OPD patients (including TMH clinics), 62,000
indoor admissions and around 19,000 surgeries and
procedures
• TMH Prime has more than 67,000 OPD consultations,
around 3,000 procedures and surgeries and 11,000 patients
undergoing diagnostics
6363
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180 Our Performance
250
230
210
190
170
150
232
2000
1625
1250
875
500
1,948
FY14
FY15
FY16
FY17
FY18
FY14
FY15
FY16
FY17
FY18
CSR spend
(Cr.)
Youth placed / self-employed
(Nos.)
23,610
25000
20000
15000
10000
5000
FY14
FY15
FY16
FY17
FY18
Farmers covered through
improved agricultural productivity (Nos.)
Responsible Behaviour: Community/Sports
Sports
Tata Steel engages employees, their families and the community in sporting activities. Tata Steel has been a promoter of sports – having built
training centres for football, archery, hockey, mountain climbing, athletics, badminton, etc. The recent addition of a Tata-owned football club
– Jamshedpur Football Club (JFC) – and matches of the Indian Super League (ISL) in Jamshedpur and Bhubaneswar have added to the sports
orientation of the community.
1. Marathons
2. Naval Tata Hockey Academy
Tata Steel Kolkata 25K, a 25-km Run that has a social cause at
its heart, supporting the Tata Medical Centre, a cancer hospital
in Kolkata, was commenced four years back. Tata Steel has also
organised running events in Jamshedpur and Noamundi (both
in Jharkhand) and Bhubaneswar (Odisha).
impact created
Seeing increasing participation, enhanced community
connect through increased health consciousness
Tata Steel and Tata Trust, along with Floris Jan Bovelander
(Director of ‘One Million Hockey Legs’), joined hands in 2017 to
promote hockey in the state of Jharkhand in a formalised way to
form ‘The Naval Tata Hockey Academy’. The hockey stadium has
a world-class astro turf for practice and tournaments. There is a
special focus on the tribal community.
impact created
From around 4,500 boys, 24 tribal boys were selected
for the first batch
Naval Tata Hockey Academy: Providing a platform to budding sportspersons
6464
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
3. Tata Archery Academy
5. Tata Steel Adventure Foundation
The Company continues to nurture
the Tata Archery Academy. The
Academy was established on
October 4, 1996 with the aim
to identify and train potential
talented youth, particularly from
Jharkhand, to achieve success at
national and international meets.
The cadets are provided a world-
class ecosystem – highest quality
infrastructure and highly qualified
coaches and support staff (including
Strength and Conditioning Coach,
Sports Psychologist, Nutritionist
and Masseurs). The cadets are also
provided with the highest quality
archery equipment every year with an
expenditure of ₹1.5 lakh per cadet.
impact created
Over the last 16 years, the
Academy has trained 127 cadets,
45 of whom have represented
India at various levels. Its most
popular student is Deepika
Kumari, who has made it to the
world’s top ranks in the sport.
The Academy has an enthused
community that identifies
closely with the sport of archery.
4. Tata Football Academy (TFA)
TFA was established in 1987 to
train and nurture budding Indian
footballers. TFA identifies and shortlists
raw talent from all over the country.
Selected candidates join up for a
four-year residential programme. The
Academy is now reaping the benefits
from linkages with JFC.
impact created
Till date, of the 213 cadets
graduated from TFA, 141 have
represented the country. TFA
cadets have also captained the
Indian football team (in different
age groups) and two former
cadets have won the Arjuna
Award. There are 28 ex-cadets
participating in the current season
of the ISL
(TSAF)
Established in 1984 and headed by
Bachendri Pal, India’s first woman
to climb Mt. Everest, the TSAF is
all about promoting the spirit of
adventure and enterprise and
leadership development. Not less
than seven TSAF beneficiaries have
managed to conquer Mt. Everest.
impact created
TSAF works with rural youth;
more than 3,000 of them have
benefited from TSAF’s outdoor
leadership programme. It has
helped several enterprising
mountaineers, including
Premlata Agarwal, who became
the oldest Indian woman to
climb Mt. Everest at 48 years
of age. Arunima Sinha, who
lost her leg in a train accident,
became the first female
amputee in the world to climb
Mt. Everest.
6. Jamshedpur Football Club (JFC)
Tata Steel formed the JFC with
Jamshedpur as the host city and
participated in the ISL. The team
brought together some of India’s top
talent, promising youngsters and
experienced foreign players. Tata
Steel has shown its seriousness by
upping its budget for football from
₹20 million a couple of years ago to
around ₹300 million now.
Tata Archery Academy
Tata Football Academy
impact created
The larger intent behind JFC is to
enhance the overall ecosystem
of football, including grassroots
football, youth football and
women’s football, and to help
improve the infrastructure
and training and development
practices in the game. There is
overwhelming excitement and
support from the community.
Jamshedpur Football Club (JFC)
6565
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180
Ethics and Governance
Tata Steel has been conducting its business
based on ethical principles and is sensitive
to the communities it serves.
The Management of Business Ethics (MBE) is deployed across the organisation
based on the MBE framework. This framework is founded on the core values that
serve as a moral compass and is supported by the four pillars:
• Leadership
• Compliance Structure
• Communication and Training
• Measurement
The Chief Executive
Officer and Managing
Director of TSL is the
Chief Ethics Officer.
The Ethics Champions
have been introduced
as the first touchpoint
for frontline employees
to spread awareness
and dilemma
clarifications.
There are 13 Internal
Committees (IC) in
TSL located in various
zones.
6666
Ethics Month 2017: Spreading awareness on ethics
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Establishing a Robust System for Governance
TSL has a robust Corporate Governance model in place with roles
established at the Board and Management-level committees. The
Ethics Counsellor regularly attends Audit Committee meetings to
share updates on the status of the vigilance mechanism. On its part,
the Apex Ethics Committee meets on a quarterly basis to decide upon
policies and guidelines as well as review sexual harassment concerns
and statistics of concerns. There are also 13 Internal Committees (IC)
instituted across the organisation.
The Ethics Committee provides uniform decision making following
the consequence management framework in case of ethical
breaches, while also providing protection to the whistleblower. The
MBE is promoted and enforced by the senior leadership through
an appropriate reward and recognition policy to encourage
whistleblowing. TSL also has a scheme for ‘reputation champion’
where stakeholders who demonstrate ethical behaviour are
recognised and their actions publicised through the organisation.
Tata Steel Limited
Group Ethics Office
Integration of the Group’s Comprehensive Strengths
Annual ethics co-ordinators’ meet
Deploying MBE across the Organisation
The Chief Executive Officer and Managing Director of TSL holds
the position of Chief Ethics Officer. The Chief Ethics Officer, in turn,
appoints a full-time Ethics Counsellor who heads the Corporate Ethics
Department and has the overall responsibility for the deployment of
MBE in the organisation. For this, the Ethics Counsellor is supported
by Departmental Ethics Coordinators (DECs). Ethics Champions have
also been introduced. Working in close association with the DECs, the
Ethics Champions act as the first touchpoint for frontline employees
in order to spread awareness and clarify dilemmas.
Ethics Counsellor
Tata Steel | Tata Steel India
Group Companies
Direction
Direction
Head Ethics
Assistant
Sr. Manager
Ethics
Tata Steel India
Manager
Tata Steel India
Champions
Direction
and
Ethics
(Operations, Raw
(Nos. 88)
South-East Asia
Material, Marketing
and Sales)
Direction
Audit Committee
Chairman
Independent Director, TSL
Apex Ethics Committee
Chairman and
Chief Ethics Officer
CEO & MD
Ethics Committee
Chairman
VP Finance (I & SEA)
Feedback
Audit and
Feedback
Approval
Feedback
and Reports
Departmental
Ethics
Coordinators
(Nos. 144)
Manager
Ethics
Sr. Manager
TIS Group
Sr. Manager
Growth
Projects
CAVE
(Corporate Audit, Vigilance, Ethics)
Chairman – Principal
Executive Officer
OEC
Organisational Ethics Council
Chairman – Ethics Councellor
IC
Internal Committee Chairman
Sr. Lady Executive
VGRC
Vendor Grievance Redressal
Committee
Chairman – Vice President Steel Making
Tata Steel
Board
Group
6767
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180 Tata Network Forum India East - Ethics conclave 2017: Enriching ethical culture through sharing of best practices
Multiple Channels to Establish an Ethical
Culture
Instituting Programmes to Ensure
Awareness
Apart from TCoC, there are policies and guidelines in multiple
languages to support the MBE deployment. TSL has leveraged
digitalisation to promote a one-stop solution by providing an ethics
compliance register called ‘Darpan’, which is accessible through
the Company’s intranet and mobile app. All the latest policies and
guidelines are communicated through this portal, apart from the
resource centre at intranet. The various ethics-related declarations
and approvals are made in Darpan. The link to Web-based training
modules (TCoC, POSH and Conflict of Interest), compliances to MBE
activities and reports are available there. Among various reporting
channels provided by TSL, an independent UK-based third-party
helpline ‘Intouch’, popularly known as ‘Speak Up’, is provided to all
stakeholders to enable whistle blowing. ‘Speak Up’ is communicated
through posters, visiting cards, Company websites and IT - portal
accessible to vendors. ‘Ethics Line Walk ‘is a new initiative where
DECs and Ethics Champions interact at the workplace and help in
building awareness and confidence.
Communication and training programmes have been instituted
to raise awareness of Tata values, TCoC and ethical practices. The
communication plans also reach out to external stakeholders.
Several communication programmes such as quarterly theme-
based campaigns, town hall events, departmental events and
other MBE-related information are communicated through internal
channels and various forums.
TSL also observes the Ethics Month in July every year. The theme
for FY 2017-18 was ‘Respectful Workplace’ and multiple events were
organised around the theme. A short movie based on the whistle
blowing facility was released during Ethics Month FY 2017-18 and
publicised widely. The Annual Organisational Ethics Council Meet
in FY 2017-18 , in which all DECs participated, was an immersive
experience with various creative workshops, deliberations and
interactive sessions with the Chief Ethics Officer.
Policies
• Whistle Blower Policy for Directors and Employees
• Whistle Blower Policy for Business Associates
• Gift and Hospitality Policy
• Prevention of Sexual Harassment Policy at Workplace & Guidelines
• Conflict of Interest Policy
• Reward and Recognition Policy
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INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Ensuring Compliance to Ethical Principles
All newly-appointed employees at TSL undergo a training
programme on ethics, with mandatory Web-based trainings on
POSH, CoI and TCoC acceptance. Even contractor employees are
given training before gate passes are issued to them.
TSL has also instituted a supplier code of conduct and takes a formal
acceptance from them for abiding by the TCoC during the vendor
registration process. The Ethics Counsellor interacts with business
associates in various forums such as vendor meets, dialogues for
business associates (suppliers / vendors, distributors, channel
partners and customers), etc.
The MBE perception survey is conducted internally as well as by
an external agency in alternate years. The feedback is shared with
the Senior Management and the way forward is incorporated in
the Annual Business Plan (ABP). One of the actions emanating from
this consist of an integrated information system for recording and
monitoring MBE activities.
TSL has conducted several benchmarking exercises within Tata
Group Companies and other reputed companies, apart from various
international forums such as Ethics & Compliance Initiative (ECI) Best
Practice Forum and Ethisphere Summit.
Awards
Tata Steel has consistently been rated as having the ‘advanced
maturity level’ for process deployment and implementation by the
Tata Group Ethics Office. Tata Steel has also been recognised as the
World’s Most Ethical Company by Ethisphere Institute for the sixth
time and has the distinction of being the only Indian company to
win the Award in the Metals, Minerals & Mining sector.
6 times
recognised as the World’s Most
Ethical Companies by Ethisphere
Score of Tata Steel in 2018: 78 out of 100
(World’s Most Ethical Companies average score
was 74 out of 100)
Key Performance Indicators
MBE Perception
Survey
UoM
(Index out of 100)
Officers
Non-officers
Vendors
Concerns
Closed
Open
Total
85
90
91
UoM
(Nos.)
332
64
396
Sexual
harassment cases*
UoM
(Nos.)
Closed
Open
Total
16
8
24
* This data is included in number of concerns
Training
Officers
Non-officers
UoM
(Nos. of people trained)
1,564
5,725
Contract Employees
> 30,000
Concerns
Severity
UoM
(% of concerns addressed
in target investigation
cycle time)
High
Medium
Low
84
79
89
Target investigation cycle time:
High (within 90 days), Medium (within 60 days), Low (within 30 days)
6969
Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180 Sustainability
World Steel Association conference, Brussels
The CSR Committee of
Tata Steel was
re-designated as the
CSR and Sustainability
Committee to enhance
the governance of
integrated thinking and
working of Tata Steel.
7070
Sustainability Review and Governance
For Tata Steel, sustainability is an integral part of the business and is driven by the
Company’s leadership, with an organisation-wide governance structure around it.
The performance related to various sustainability aspects is reviewed at the Corporate as
well as the Board levels. The scope and membership of the Board-level Committees have
been detailed in the Corporate Governance Report. (Refer Page 114) At the Corporate level,
various committees review the sustainability and governance initiatives. These include the
Apex Safety Committee, Apex Environment Committee, Apex HRD Committee, Apex CSR
Committee, Apex R&D Committee and Quality and Production Meeting. These Committees
are chaired by the Chief Executive Officer and Managing Director or the Executive Director
and Chief Financial Officer.
FY 2017-18 has been a year in which the Company has strengthened the governance
structure for addressing the environmental, social and people-related material issues and
mitigating the related risks.
A new Safety, Health and Sustainability division was created and is led by a new dedicated
VP (Safety, Health and Sustainability) for focussed action planning and review. A new
team of about 80 sustainability champions was constituted across Tata Steel India to
create capabilities for integrated approach and to drive sustainability issues across the
organisation. In addition, the Life Cycle Assessment (LCA) team, responsible for conducting
LCA studies for the processes and products of the Company, was integrated with the
Corporate Sustainability Group. To keep ourselves abreast with the changing global
environment, emerging stakeholder needs and the risks and opportunities thereof, Tata
Steel has undertaken an extensive stakeholder engagement and ‘materiality assessment’.
Tata Steel Limited named as one of the Steel Sustainability Champions 2017 by World Steel Association
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Global Water Summit 2018, Paris: Representation in international sustainability forums
Safety and Health Excellence Recognition 2017 by World Steel Association
Thought Leadership with Participation in
National and International Forums
Our senior leaders actively engage with various industry bodies such
as the World Steel Association (WSA), the Confederation of Indian
Industry (CII), Global Reporting Initiative (GRI), International Integrated
Reporting Council (IIRC), UN Global Compact (UNGC) and the Task
Force on Climate-related Financial Disclosures (TCFD), guiding the
Company further on implementing sustainability practices.
External Experts’ Perspectives
Our Corporate Sustainability team also drives various external
assessments such as the Dow Jones Sustainability Index (DJSI) and
those conducted by the CII. We use feedback from these external
assessments for further improvement. We use the feedback from the
panel of experts of IIRC for bringing about improvements in our IR.
Creating a Culture of Sustainability
Key Developments in FY 2017-18
Corporate Sustainability shares the best sustainability practices,
benchmark data and reports on the key developments in the
organisation through a quarterly Sustainability Management
Information Systems (MIS). Customised awareness programmes for
Tata Steel employees are conducted at regular intervals across the
Company. Such programmes on relevant aspects of sustainability
are also made available to external stakeholders such as suppliers
and the community. Focussed campaigns and celebrations (such
as World Environment Day, World Water Day, Biodiversity Day,
Safety Week, World Health Day and Ethics Month) are undertaken
to drive awareness on environmental, health and safety issues.
In June every year, we celebrate the Tata Sustainability Month to
mainstream sustainability in our business and conduct focussed
campaigns for all employees, suppliers and the community. In
2017, Tata Sustainability Month was celebrated with the theme
of ‘Mainstreaming Sustainability’, touching more than 1,000
stakeholders, including Group Companies, employees, suppliers
and the community.
Focus Area
Development
• Continued the inclusion of a shadow
Climate Change
Mitigation
•
carbon price of $15/ tCO2 for evaluation
of capital projects
Identified technology partners for Carbon
Sequestration and Use (CSU) for doing
pilot projects
LCA Studies
Initiated projects for the first time beyond the
gate to study the ‘use phase’ impacts of steel
in automobile and selected value-added
products for the Construction segment
Embedding the
SDGs
Conducted an exercise to map the UN SDGs,
to which Tata Steel is already contributing,
and to identify the way forward to enhance
this contribution
Renewable Energy
Commissioned a 3 MW solar plant in
Noamundi, part compliance of Renewable
Purchase Obligation, for the first time in
FY 2017-18 through own generation
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Integrated Report 1-72Financial Statements 181-386Statutory Reports 73-180
Key Challenges Faced by Corporate
Sustainability in FY 2017-18
Our Disclosures
Disclosures during FY 2017-18
Scope
• Embedding environmental practices in the supply chain,
considering the broad base and varying profiles of partners.
• Finding a suitable Indian partner for baselining and identification
of hot spots for GHG emissions and water across the value chain.
Awards
• Tata Steel Limited and Tata Steel Europe are two companies out
of the six that have been recognised by World Steel Association
(WSA) as Sustainability Champion for 2017. Both companies
were shortlisted based on the criteria laid down by WSA.
• Awarded the Gold Class rating for the second year in a
row in the steel sector in the DJSI Corporate Sustainability
Assessment 2017.
• Tata Steel Jamshedpur Works, Iron Ore Mines and JUSCO were
recognised by the CII for Excellence in Water Management at the
Annual Water Summit.
• Integrated Report (IR) for FY 2016-17 has been recognised as
Asia’s Best Integrated Report by Asia Sustainability Reporting
Awards (ASRA), the highest regional recognition for sustainability
and integrated reporting. Tata Steel IR has been the only Indian
winning entry among all the 16 awards categories and has
competed with company reports from the entire ASEAN as well as
Middle Eastern countries.
• Ground Granulated Blast Furnace Slag (GGBS) of Tata Steel was
GreenPro (green label) certified by CII–GBC. This is the first
Green Label Certification for any product in Tata Steel India.
Way Forward
• Creation of the cross-functional CoE for long-term focus on
climate mitigation and adaptation
Integrated Annual Report presenting the
value-creation story of Tata Steel to all
stakeholders
Tata Steel India
Disclosure to RobecoSAM DJSI Corporate
Sustainability Assessment
Tata Steel India
CDP (erstwhile Carbon Disclosure Project)
disclosure for climate change and water
All four
integrated steel
plants of Tata
Steel (Port Talbot,
IJmuiden, Tata
Steel Jamshedpur
and Tata Steel
Kalinganagar)
Application for World’s Most Ethical
Companies (WME) to Ethisphere Institute, US
Tata Steel India
Communication of Progress to UNGC on the
ten principles of sustainability
Tata Steel India
Data against the sustainability indicators of
WSA
Tata Steel India
and Tata Steel
Europe
Our Partnerships
The Company is an active member of the following industry
associations that have an international and nationwide presence:
•
Integration of function-wise material issues and relevant SDGs in
annual and long-term business planning
• World Steel Association
• United Nations Global Compact
• Using the outcome of LCA studies in design and manufacturing
• Confederation of Indian Industry
•
Institutionalising sustainability initiatives with supply chain
partners
• Federation of Indian Chambers of Commerce and Industry and
Federation of Indian Mineral Industries
• Environmental declarations for key steel products
•
Indian Institute of Metals
• The Energy and Resources Institute
• Tata Steel is an active member of the steel industry’s ‘Energy
Operating Committee’ to share performance and enablers as well
as form industry opinion for advocacy
• Tata Steel has supported the Bureau of Energy Efficiency (BEE) as
a member of the Industry Expert Group
• Ongoing partnership with IUCN for consultation and action
planning for biodiversity at mines
7272
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
Statutory Reports
Directors’ Report
Annexure 1 – Dividend Distribution Policy
Annexure 2 – Management Discussion and Analysis
Annexure 3 – Annual Report on CSR Activities
Annexure 4 – Corporate Governance Report
Annexure 5 – Policy on Appointment & Removal of Directors
Annexure 6 – Remuneration Policy of Directors, KMPs
and Other Employees
Annexure 7 – Particulars of Remuneration
Annexure 8 – Financial Information of Subsidiary Companies
Annexure 9 – Information on Subsidiaries, Joint Ventures or
Associates
Annexure 10 – Secretarial Audit Report
Annexure 11 – Extract of Annual Return
Annexure 12 – Particulars of Loans, Guarantees or Investments
Annexure 13 – Particulars of Energy Conservation, Technology
Absorption and Foreign Exchange Earnings
and Outgo
74-180
74
93
96
111
114
130
133
135
139
147
148
151
173
174
Directors’ Report
To the Members,
Your Directors take pleasure in presenting the 3rd Integrated Report (prepared as per the framework set forth by the International Integrated
Reporting Council) and the 111th Annual Accounts on the business and operations of your Company, along with the summary of standalone
and consolidated financial statements for the year ended March 31, 2018.
A. Financial Results
Particulars
Gross revenue from operations
Total expenditure before finance cost, depreciation (net of expenditure
transferred to capital)
Operating Profit
Add: Other income
Profit before finance cost, depreciation, exceptional items and taxes
Less: Finance costs
Profit before depreciation, exceptional items and taxes
Less: Depreciation
Profit/(Loss) before share of profit/(loss) of joint ventures & associates,
exceptional items & tax
Share of profit/(loss) of Joint Ventures & Associates
Profit/(Loss) before exceptional items & tax
Add/(Less): Exceptional Items
Profit before taxes
Less: Tax Expense
(A) Profit/(Loss) after taxes – from Continuing operations
Profit/(loss) before tax from Discontinued operations
Less: Tax expense of Discontinued Operations
Profit/(Loss) after tax from Discontinued Operations
Profit/(Loss) on Disposal of Discontinued Operations
(B) Net Profit/(loss) after tax – from Discontinued operations
(C) Net Profit/(Loss) for the Period [ A + B ]
Total Profit/(Loss) for the period attributable to:
Owners of the Company
Non-controlling interests
(D) Total other comprehensive income
(E) Total comprehensive income for the period [ C + D ]
Retained Earnings: Balance brought forward from the previous year
Add: Profit for the period
Less: Distribution on Hybrid perpetual securities
Add: Tax effect on distribution of Hybrid perpetual securities
Add: Other Comprehensive Income recognised in Retained Earnings
Add: Other movements within equity
Balance
Which the Directors have apportioned as under to:-
(i) Dividend on Ordinary Shares
(ii) Tax on dividends
Total Appropriations
Retained Earnings: Balance to be carried forward
7474
(₹ crore)
Tata Steel Standalone
2017-18
60,519.37
2016-17
53,260.96
Tata Steel Group
2017-18
1,33,016.27
2016-17
1,17,419.94
44,740.41
41,385.01
1,11,125.84
1,00,412.12
15,778.96
763.66
16,542.62
2,810.62
13,732.00
3,727.46
11,875.95
414.46
12,290.41
2,688.55
9,601.86
3,541.55
21,890.53
909.45
22,799.98
5,501.79
17,298.19
5,961.66
17,007.82
527.47
17,535.29
5,072.20
12,463.09
5,672.88
10,004.54
6,060.31
11,336.53
6,790.21
-
10,004.54
(3,366.29)
6,638.25
2,468.70
4,169.55
-
-
-
-
-
4,169.55
-
-
(61.12)
4,108.43
12,280.91
4,169.55
266.13
92.70
155.39
3,427.46
19,859.88
-
6,060.31
(703.38)
5,356.93
1,912.38
3,444.55
-
-
-
-
-
3,444.55
-
-
675.79
4,120.34
10,075.75
3,444.55
266.10
92.09
(142.42)
1.75
13,205.62
174.10
11,510.63
9,599.12
21,109.75
3,405.39
17,704.36
53.30
-
53.30
5.15
58.45
17,762.81
7.65
6,797.86
(4,324.23)
2,473.63
2,778.01
(304.38)
(770.86)
8.01
(778.87)
(3,085.32)
(3,864.19)
(4,168.57)
13,434.33
4,328.48
(3,078.01)
14,684.80
(11,447.01)
13,434.33
266.13
92.70
(2,780.05)
9,926.37
8,960.21
(4,240.80)
72.23
(563.06)
(4,731.63)
(2,415.49)
(4,240.80)
266.10
92.09
(3,549.43)
(142.57)
(10,522.30)
971.22
188.41
1,159.63
18,700.25
776.97
147.74
924.71
12,280.91
970.05
188.17
1,158.22
7,801.99
776.97
147.74
924.71
(11,447.01)
Directors’ ReportINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
Notes:
During the year, the exceptional items primarily include:
a)
Provision of (`3,214) crore in respect of certain statutory demands and claims,
net of liability towards district mining fund no longer required, written back
and provision for advances paid for repurchase of equity shares in Tata
Teleservices Ltd. from NTT DoCoMo Inc. (₹27 crore) at Tata Steel India.
b)
Charge on account of Employee Separation Scheme (‘ESS‘) under Sunhere
Bhavishya Ki Yojana (‘SBKY‘) scheme (₹108 crore) mainly at Tata Steel India and
at Jamshedpur Utilities & Services Company Limited.
c)
Restructuring and other provisions of ₹13,851 crore represents gains arising
out of modification in benefit structure for members of the new pension
scheme (‘NBSPS‘) versus their benefits under Tata Steel Europe’s British Steel
Pension Scheme (‘BSPS’), offset by settlement charges for those members
who did not join the NBSPS and one-off costs at Tata Steel Europe.
d)
Impairment charges (₹903 crore) in respect of property, plant and equipment
(including Capital Work-in-Progress) and intangible assets relating to global
The Board has recommended dividend based on the parameters laid
down in the Dividend Distribution Policy.
The dividend on Ordinary (fully paid as well as partly paid) Shares
is subject to the approval of the Shareholders at the ensuing
Annual General Meeting (‘AGM‘) scheduled to be held on Friday,
July 20, 2018. The dividend once approved by Shareholders will
be paid on and from Monday, July 23, 2018. The total dividend
pay-out works out to 33% (Previous Year: 34%) of the net profit for the
standalone results.
The Register of Members and Share Transfer Books of the Company
(for fully paid as well as partly paid shares) will remain closed from
Saturday, July 7, 2018 to Friday, July 20, 2018 (both days inclusive)
for the purpose of payment of dividend for the Financial Year ended
March 31, 2018 and the AGM.
mineral entities.
3. Transfer to Reserves
The exceptional items in Financial Year 2016-17 primarily include:
a)
Provision for demands and claims (₹218 crore), charge on account of Employee
Separation Scheme (‘ESS’) under Sunhere Bhavishya Ki Yojana (‘SBKY‘) scheme
The Board of Directors has decided to retain the entire amount of
profits in the profit and loss account.
(₹207 crore), provision for advances given for repurchase of Equity shares in
4. Capex and Liquidity
Tata Teleservices Ltd. from NTT DoCoMo Inc. (₹125 crore) at Tata Steel India
b)
Impairment charges (₹268 crore) in respect of property, plant and equipment
(including CWIP) and intangible assets mainly relating to European &
South-East Asian operations.
c)
Restructuring and other provisions (₹3,614 crore) primarily include curtailment
charge relating to closure of Tata Steel Europe’s British Steel Pension Scheme
(‘BSPS’) to future accrual.
During the year, the Company on a consolidated basis spent
₹7,479 crore on capital projects across India, Europe, South-East Asia,
and Canada. The spend was largely towards essential sustenance,
replacement and on-growth projects in India and Netherlands.
Despite this significant spend, the Company was able to keep the
gross debt level stable during the year.
d)
Profit on sale of investments in subsidiaries, associates and joint ventures
₹23 crore and profit on sale of assets of a subsidiary in South-East Asia on
The Company’s liquidity position remains strong at ₹36,320 crore as
on March 31, 2018, which includes undrawn lines.
liquidation ₹86 crore.
1. Dividend Distribution Policy
In terms of Regulation 43A of the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations,
2015 (‘Listing Regulations’) the Board of Directors of the Company
has formulated and adopted the Dividend Distribution Policy (‘the
Policy’). As per the Policy, the Company endeavours to pay dividend
up to 50% of profit after tax of the Company subject to the applicable
rules and regulations.
The Policy is annexed to this report (Annexure 1) and is also available
on our website www.tatasteel.com
2. Dividend
The Board of Directors of the Company (‘the Board’) has recommended
a dividend of ₹10 per Fully Paid Ordinary Share on 112,64,84,815
Ordinary Shares of Face Value ₹10 each for the year ended
March 31, 2018. (Dividend for Financial Year 2016-17: ₹10 per
Ordinary Share on 97,12,15,889 Ordinary Shares of ₹10 each).
The Board has recommended a dividend of ₹2.504 per Partly
Paid Ordinary Share on 7,76,34,625 Ordinary Shares of Face Value
₹10
for the year ended
March 31, 2018.
(paid-up ₹2.504 per share) each
5. Management Discussion and Analysis
The Management Discussion and Analysis as required in terms of
the Listing Regulations is annexed to the report (Annexure 2) and
is incorporated herein by reference and forms an integral part of this
report.
B. Integrated Report
Commitment to society has always been at the forefront in the
Company. In furtherance to this commitment, in 2016, the Company
transitioned from compliance based reporting to governance based
reporting and adopted the framework developed by the
International Integrated Reporting Council. Our Integrated Report for
Financial Year 2016-17 has been recognised as Asia’s Best Integrated
Report by Asia Sustainability Reporting Awards (‘ASRA’), the highest
regional recognition for sustainability and integrated reporting.
In continuation with our efforts towards enhancing stakeholder
value, we are happy to present to you our 3rd Integrated Report
which endeavours to articulate the measures undertaken by the
Company in the journey towards long-term sustainability and
value creation.
7575
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 C. External Environment
1. Macroeconomic Condition
During the Financial Year 2017-18, the global economy continued
its broad-based momentum and registered a growth of 3.8%, its
strongest level since 2011, as more than half of the world’s economies
registered growth. Global manufacturing activity continued to
grow on account of favourable financing conditions globally,
accommodative policies, rising investor confidence and increase in
commodity prices.
Global economy was aided by rebound in global trade, investment
recovery in advanced economies and continued growth in emerging
Asia. Growth in advanced economies was driven by strong domestic
demand and improved labour markets while emerging markets
witnessed strong consumption and trade momentum. The United
States of America (‘US’) witnessed a growth of 2.3% on the back of
strong external demand, private investment and a weaker dollar.
Demand was positively affected by the overhaul of the tax code in
30 years - the corporate income tax rate was slashed to 21% from 35%
and taxes for households were also lowered. Strong domestic demand
is also a recurring theme in Europe and Asia. Euro area registered
a growth of 2.4%, which is almost 0.6% higher than previous year.
Policy stimulus and strengthening global demand has contributed
to this increase in growth. In Japan, strong domestic demand aided
by recovery in consumer spending and investment helped achieve
growth of 1.7%. Among the emerging and developing economies,
China continued to maintain its growth rate at approximately 7%,
aided by policy support and recovery in trade. Growth in India was
6.7% owing to consumption led growth influenced by Government
policies and investments. Growth in Middle-East and sub-Saharan
Africa was impacted by geo-political/domestic conflicts. Overall,
improved growth in US, Europe and other key regions more than
offset the lower growth in other regions and helped sustain growth
momentum.
2. Economic Outlook
According to International Monetary Fund (‘IMF’), global growth is
projected to rise to 3.9% in 2018 and 2019, closer to the long-term
growth trend of 4%. The IMF estimates that the growth of more than
1.5% in 2017 in each of the world’s seven biggest economies—the
US, China, Germany, Japan, France, the UK and India— will provide an
impetus to the world economy to achieve more robust growth in 2018.
Advanced economies are expected to maintain their growth
momentum in 2018. The US economy is projected by IMF to grow
at a faster pace (2.7%) in 2018 aided by fiscal stimulus and policies.
The euro area economic recovery has broadened across its member
nations and is likely to be aided by rise in capex and consumption.
Unemployment rate has reached its lowest level since 2009 and
the European Central Bank (‘ECB’) is expected to keep interest rates
unchanged and gradually scale back on asset purchases with an
eye on economic growth. Among other key regions, China’s GDP
growth is likely to moderate to 6.5% in 2018 as the policy makers
7676
continue their efforts to promote quality growth. Supply side reforms
through capacity cuts, rural revitalisation, urbanisation & housing
reform and controlled pace of credit growth are likely to determine
domestic demand and potential movement in commodity prices.
As per IMF, India is expected to grow between 7.0% to 7.5% in
Financial Year 2018-19 aided by rural development, infrastructure
investment and expansion of manufacturing activity. Outlook for
Middle-East and North Africa is gradually improving on the back of
higher commodity prices.
Structural issues though continue to pose a significant risk to the
global growth cycle. While the supportive economic environment,
policies and commodity prices are likely to aid growth in the
short term, possible financial stress, increased protectionism and
rising geopolitical tensions may pose as downside risks to growth.
Further, restrictions by the US government on imports and other
protectionist measures in Europe & other regions may disrupt
global trade and investment adversely affecting global growth and
sentiment. Also, high leverage levels among nations makes them
financially vulnerable and any tighter financial conditions in US,
Europe or China is likely to have adverse spill-over effect on global
growth. Outcome of the Brexit negotiations is likely to impact the
pace of recovery in UK as well as the Eurozone economy.
D. Steel Industry
1. Global Steel Industry
Global steel markets continued their recovery in Financial Year
2017-18. Steel prices were up across the regions aided by growth in
regional demand, supply side reforms in China and low inventory
levels. During 2017, global steel demand grew by nearly 2% to
1.58 billion tonnes while the global crude steel production increased
by 4% to 1.7 billion tonnes, as compared to the previous year. Policy
led capacity cuts have led to improved utilisation levels in China. This
coupled with strong domestic demand has led to lower steel exports
from China compared to the previous year. China’s steel net exports
were down 20% to 0.08 billion tonnes. Low level of exports coupled
with volatile raw material prices have led to demand pull and cost push
for steel prices at various times during the year.
Iron ore prices were positively affected by growth in China and
increased demand for higher quality raw material. Along with these
factors, weather disruptions and production outages have contributed
to coking coal price movements.
During the year, India witnessed steel (including alloy and stainless
steel) demand growth of approximately 7.8% in apparent steel use
terms, aided by strong demand in steel consuming sectors i.e. Auto,
Construction and Consumer durables etc. The Indian steel industry
has witnessed improved utilisation levels (approximately 80%) even
as the resolution process under Insolvency and Bankruptcy Code,
2016 paves way for further consolidation within the industry. This is
likely to ease the financial stress and further improve utilisation levels
within the industry. The domestic crude steel production was around
102 MnT with approximately 91 MnT being consumed. India continued
to remain a net exporter.
Directors’ ReportINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR In Europe, anti-dumping legislation, domestic demand and currency
movement have led to an increase in demand by approximately 2%
to 159 MnT as compared to 2016. Steel demand grew broadly in line
with economic growth. Domestic steel production also witnessed an
increase in market share as compared to imports.
2. Outlook for Steel Industry
As per the World Steel Association (‘WSA’), global steel demand
is expected to grow at 1.8% in 2018 to 1.62 billion tonnes and a
further 0.7% in 2019 to reach 1.63 billion tonnes. Broad-based global
growth momentum is expected to aid growth in advanced as well as
developing markets. However, possible escalation of trade tensions
between US and China and rising inflationary pressure due to oil
prices poses a significant risk to the outlook.
China’s steel demand which accounts for 46% of global steel demand
is expected to be flat at 737 MnT in 2018 while declining by 2% in
2019. However, steel demand in rest of the world is expected to grow
at 3.4% in 2018 and 2.9% in 2019. Advanced economies are expected
to grow at a steady pace while much of the growth is likely to be
witnessed in Asia, Middle-East and North Africa.
India’s prospects continue to remain bright considering that India’s per
capita consumption of approximately 65 kg is one-third of the global
average and government intends to increase it to approximately
160 kg by Financial Year 2031 (CAGR approximately 8%) under the
National Steel Policy. Public investment, government initiatives such
as ‘Make in India’, Smart cities and focus on rural development is likely
to support growth in domestic demand while headwinds exist in the
form of increased competitiveness and possible delay in increase of
investment cycle particularly private investments. As per WSA, Indian
steel demand is expected to grow at 6-7% per annum in the next
two years.
In Europe, increase in non-residential construction and strong
manufacturing activities are expected to aid growth in steel demand.
As per WSA, EU is expected to grow at 2% to approximately 166 MnT
in 2018 and a further 0.8% to approximately167 MnT in 2019. Growth
in automotive sector is likely to moderate while machinery sector is
expected to benefit from rising investment. At the same time, the
construction sector is likely to witness growth in 2018 and 2019 on
back of rise in consumer confidence and access to low cost finance.
E. Operations and Performance
1. Tata Steel Group
During the year under review, the Tata Steel Group (‘the Group’)
recorded total deliveries of 25.27 MnT (previous year - 23.88 MnT).
The turnover for the Group was at ₹1,33,016 crore (previous
year - ₹1,17,420 crore), an increase of 13% over the previous year. This
increase is due to additional volumes from Tata Steel Kalinganagar
(‘TSK’) which were capitalised from June 2016 as well as increased
realisations. The chrome business also saw an increase in revenue
owing to higher volumes. The turnover at Europe increased due to
improvement in average revenue per tonne.
The Group EBITDA was ₹22,045 crore (previous year - ₹17,025 crore),
an increase of 29.5% over the previous year. This increase in EBITDA
is attributable to higher volumes and improved realisations, partly
offset by increase in operating costs mainly raw materials in India
as well as on account of favourable foreign exchange movement at
Tata Steel Global Holdings. This increase was partly offset by decline
in steel spread and operational issues encountered in Europe and
higher operating costs at Tata Steel Thailand.
During the year, the Group reported a consolidated profit after tax
(including discontinued operations) of ₹17,763 crore as against a
consolidated loss of ₹4,169 crore in the previous year. The year’s profit
includes an exceptional gain of ₹9,599 crore as against a charge of
₹4,324 crore during the previous year. The exceptional gain during the
year is primarily due to non-cash accounting surplus arising from the
formation of the new British Steel Pension Scheme. The underlying
profit during the year is driven by increased production due to
ramp-up at the Kalinganagar plant and improved selling prices.
2.
India
During the year, total deliveries at Tata Steel India were at
12.15 MnT (previous year - 10.97 MnT), recording an increase of 10.7%
over the previous year. The turnover from the Indian operations was
₹60,519 crore (previous year - ₹53,261 crore), 13.6% higher than
the previous year. The increase in turnover was primarily through
higher volumes at TSK and higher realisations and volumes at Tata
Steel Jamshedpur. Higher revenue at Ferro Alloys and Minerals
Divison from ferro chrome and ferro manganese as well as Wires
and Tubes Division has also contributed to the increase. The EBITDA
from Indian operations was ₹15,800 crore (previous year - ₹11,944
crore), 32% higher than the previous year. The increase in EBITDA is
on account of improved steel margins attributable to higher volumes
and realisations. The profit after tax from Indian operations was
₹4,170 crore (previous year - ₹3,445 crore), 21% higher than previous
year. The increase is primarily on account of improved realisations
and higher deliveries, partly offset by higher exceptional charges
over previous year.
The Company’s branded products portfolio has been growing
strongly and the Company continues to invest in this portfolio with
the aim of gaining greater market share. The branded products
contributed to around 46% of total sales. The Company continued
its focus towards value added products and achieved highest ever
annual sales in value added segments over last year through the
various product development initiatives.
The Company is striving to continuously increase its presence
in Services & Solutions space for better consumer connect and
experience. ‘Pravesh’ (Steel doors and windows) won the ‘Best Online
Marketing Campaign of the year’ award by ET now.
7777
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 3. Europe
During the year, our European operations continued to focus on
improving operational efficiencies and minimising environmental
impact.
recorded
European operations
Our
total deliveries of
9.99 MnT (previous year – 9.93 MnT). The turnover increased from
₹52,085 crore in the previous year to ₹59,985 crore during the year,
thereby recording an increase of ₹7,900 crore (15%). The increase can
be attributed to improvement in average revenue per tonne driven
by improved market conditions which were a result of the imposition
of anti-dumping measures along with marginal increase in deliveries,
partly offset by adverse exchange impact on translation. The EBITDA
from European operations was ₹3,792 crore as against ₹4,705 crore in
the previous year. The decrease of ₹913 crore (19%) was mainly due
to decline in steel spread and operational issues encountered in Strip
UK and Strip MLE, partly offset by improvement in steel prices. The
profit after tax reported during the year was ₹11,687 crore as against
a loss of ₹4,515 crore in the previous year. The significant increase
in profits is due to an exceptional gain of Regulated Apportionment
Arrangement credit.
During the year, several strategic and critical re-structuring
initiatives were undertaken including signing of Memorandum of
Understanding between Tata Steel and thyssenkrupp AG to create
a new 50:50 joint venture company, restructuring the British Steel
Pension Scheme and sale of Tata Steel UK 42-inch and 84-inch pipe
mills in Hartlepool.
During the year, Tata Steel Europe won a ‘Steelie’, the highest award
for the steel industry, presented by the World Steel Association for
taking a new approach towards demonstrating that steel is a highly
sustainable product. BMW announced that TSE has been awarded
the best performing supplier with a maximum rating of 100 for
quality, as per their rating system.
4. South-East Asia
During the year, the demand for steel in South-East Asia was weak
but price stability was observed due to supply side reforms and lower
exports from China. The turnover stood at ₹9,542 crore (previous
year – ₹8,245 crore) and the EBITDA was ₹437 crore (previous year –
₹528 crore). The Profit after tax for the year stood at ₹141 crore
(previous year - ₹175 crore). The operational profit witnessed a
negative growth despite improved selling prices primarily due to
negative sentiment in construction sector in both Singapore and
Thailand and elevated scrap prices.
During the year, NatSteel Holdings (‘NSH’) witnessed a stable
operating profitability. The EBITDA for the year was ₹201 crore as
compared to ₹206 crore in the previous year. The better management
of spreads and upward movement of selling prices helped to offset
the weakening demand caused due to slump in the construction
activities. The profit for the year showed a significant drop as compared
to previous year, since the profits of the previous year included a
one-time gain relating to sale of land and other assets at NatSteel Xiamen.
7878
Our operations in Thailand witnessed a drop in deliveries owing
to weak market sentiments and sluggish demand for rebar partly
offset by higher export volumes. However, there was an increase in
turnover owing to improvement in realisation, driven by increase in
input metallic price and international prices, partly offset by lower
volumes. The EBITDA for the year was ₹236 crore as compared to
₹322 crore in the previous year. The decline is mainly due to higher
metallic prices along with increase in the cost of electrodes. The
profit for the year was however higher as compared to previous year,
since the profits of the previous year contained one time provision
for impairment of Mini Blast Furnace.
F. Strategy
Tata Steel, in line with its Vision of being a global benchmark in
‘Value Creation’ and ‘Corporate Citizenship’, is pursuing the following
priorities in the medium term:
Industry leadership in India and Europe: India is expected to be
one of the few large regions with good demand growth. Tata Steel
intends to grow through organic and inorganic routes to ensure it
remains the leading steel player in attractive segments and also at
the overall industry level. The Company has initiated execution of
expansion of the steel plant at Kalinganagar from 3 MnTPA to 8 MnTPA.
The Company will continue to look for inorganic opportunities that
provide a good strategic fit in terms of assets and product mix. In
Europe, the Company is working out a strategic JV with thyssenkrupp
AG which will be the second largest steel company in Europe and
generate synergies through complementarities in manufacturing
and products.
Cost competitiveness and focus on downstream: Operational
efficiency is one of our key strengths, and one of our key priorities is
to be the lowest cost producer in the regions in which we operate. The
Netherlands plant has world class operating parameters and we will
continue to build on this platform. In India, our ongoing operational
excellence programme continues to bring more of our operations
closer to world benchmark levels further consolidating our position
as a global cost leader. To counter the cyclicality of steel business, Tata
Steel continues to focus on, and now scale up, downstream products
& services which are less vulnerable to steel down cycles.
Industry Leadership in CSR: In India, Tata Steel has a long value
chain from mining to steel manufacturing and these have significant
impact on the communities neighbouring the operating sites.
Tata Steel expects to continue funding its signature programmes
on Health, Education & Tribal Welfare in collaboration with local
communities and other stakeholders.
Focus on Safety & Environment: Creating a safe working
environment is a key focus area for Tata Steel. Safety of its people
is the Company’s top priority. Tata Steel through the ‘Committed
to Zero’ programme aims to achieve Zero Lost Time Injury across
all its sites. Safety performance will continue to remain a priority
with concentrated efforts in the areas of Organisational Safety
Competency and Capability Improvement, Contractor Safety Risk
Management etc.
Directors’ ReportINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Tata Steel is committed to minimising the impact of its operations on
the environment. Reducing carbon footprint is one of the key goals
that Tata Steel has set for itself. In India, Tata Steel has reduced the
specific emission of CO2 by 24% in the last 10 years and is currently
the Indian steel industry benchmark at 2.29 tCO2/tcs. Steps are being
taken to bring this down to below 2.0 tCO2/tcs by 2025. In Europe, the
Tata Steel plant has achieved CO2 emission of 1.8 tCO2/tcs. In addition,
the HIsarna pilot plant at Tata Steel in IJmuiden uses groundbreaking
technology to convert iron ore fines and coal almost directly into
liquid iron which can reduce CO2 emissions by 20%. Further, steel is a
completely recyclable material, and in India, steel scrap availability is
expected to increase in the future, and therefore Tata Steel is taking
substantial steps to create an organised circular economy system for
steel recycling.
Leverage digital technologies: Digital technologies have the
potential to transform all aspects of the steel value chain. Tata Steel
is actively seeking opportunities to redefine existing processes and
systems through digital technologies to create innovative products
& services and increase flexibility and productivity of operations.
Keeping pace with the global trends of digitalisation, a number
of projects have been initiated to identify business opportunities
and build capabilities – for better value and improved stakeholder
experience.
G. Key Developments
1.
India
Acquisitions
Bhushan Steel Limited
Pursuant to the Insolvency and Bankruptcy Code, 2016 (‘IBC’), the
Company had submitted its bid for the acquisition of Bhushan Steel
Limited (‘BSL’). At a meeting of the Committee of Creditors (‘CoC’)
of BSL held on March 6, 2018, Tata Steel Limited was identified as
the highest evaluated compliant resolution applicant to acquire
controlling stake in BSL under the Corporate Insolvency Resolution
Process (‘CIRP’) of the IBC.
Thereafter, CoC of BSL declared Tata Steel Limited as the successful
resolution applicant, subject to obtaining necessary regulatory
approvals, including approval from National Company Law Tribunal
(‘NCLT’) and the Competition Commission of India (‘CCI’). On
April 25, 2018, CCI accorded its approval to the resolution plan (‘RP’)
submitted by the Company. NCLT vide its order dated May 15, 2018
also approved the RP.
As per the terms of the RP, the Company will acquire 72.65% equity
stake in BSL through its wholly-owned subsidiary company, Bamnipal
Steel Limited, for an aggregate amount of ₹158.89 crore. To complete
the acquisition process, the financial creditors will be given a total
consideration of ₹35,200 crore for settlement of the existing financial
debt of BSL. Further, the financial creditors will also be allotted equity
shares by virtue of conversion of loan amount of ₹14.5 crore. The
Company will carry out the further necessary steps in this process as
per the stipulations under the CIRP of the IBC.
Bhubaneshwar Power Private Limited
As on November 30, 2017, Tata Steel held 26% stake in Bhubaneshwar
Power Private Limited (‘BPPL’). In order to increase its captive
source of power to meet the growing demand, the Company, on
November 30, 2017, executed definitive agreements with JL Power
Ventures Private Limited, to acquire 74% equity shares of BPPL.
BPPL is engaged in the business of generation of power. BPPL owns
a 135 MW (2 x 67.5 MW) thermal power plant at Anantapur village
in Cuttack district in Odisha. The acquisition of the remaining 74%
shares was completed on February 1, 2018.
Subarnarekha Port Private Limited
In January 2017, the Company entered into definitive agreement
to acquire 51% equity stake in Creative Port Development Private
Limited (‘CPDPL’) for the development of Subarnarekha Port at
Odisha through a wholly-owned subsidiary Subarnarekha Port
Private Limited (‘SPPL’). CPDPL had executed a 34 years Concession
agreement with the Government of Odisha to develop and operate
the Subarnarekha port which is to be carried out through SPPL.
As per the terms of the definitive agreement, in March 2017, the
Company had subscribed to 3% equity shares of SPPL.
On April 9, 2018, the Company entered into a definitive agreement
to subscribe to additional 4.19% equity shares of SPPL. Pursuant to
the additional subscription, the Company’s equity stake in SPPL shall
increase to 7.06%.
Divestments
Tata Motors Limited
On June 23, 2017, the Company sold 8,35,37,697 equity shares held
in Tata Motors Limited for a profit of ₹3,427.29 crore.
Rights Issue
The Board, at its meeting held on December 18 and 19, 2017,
approved the issuance of equity and equity linked instruments
including ordinary shares of the Company by way of a rights issue
to the existing shareholders of the Company for an amount not
exceeding ₹12,800 crore. Subsequently, the Executive Committee
of the Board approved the simultaneous but unlinked issue of 4:25
fully paid shares for amount upto ₹8,000 crore at a price of ₹510
per share and 2:25 partly paid shares for amount upto ₹4,800 crore
at price of ₹615 per share (₹154 per share payable as application
money and ₹461 per share payable on first and final call) on a rights
basis. The said issue opened for subscription by shareholders on
February 14, 2018 and closed on February 28, 2018. The shares were
allotted to the shareholders on March 14, 2018.
7979
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Credit Rating
During the year, Brickwork revised its rating outlook on the Company
from ‘Stable’ to ‘Positive’ while, Moody’s revised its rating outlook on
the Company from ‘Negative’ to ‘Stable’.
2. Europe
Joint Venture between Tata Steel and thyssenkrupp AG
On September 20, 2017, the Company and thyssenkrupp AG signed
a Memorandum of Understanding to create a leading European
steel enterprise by combining the flat product businesses of the two
companies in Europe and the steel mill services of the thyssenkrupp
group. The proposed 50:50 joint venture (thyssenkrupp Tata Steel)
would be formed through a non-cash transaction framework, based
on fair valuation where both shareholders would contribute debt
and liabilities to achieve an equal shareholding in the venture. The
proposed joint venture would be focused on quality and technology
leadership and the supply of premium and differentiated products
to customers, with annual shipments of about 21 MnT of flat steel
products. The proposed venture is expected to benefit from the scale
and network capability of the combined assets to achieve quality,
technology and cost leadership in the European steel industry.
British Steel Pension Scheme
In furtherance to its ongoing efforts to ensure a sustainable
and enduring future for the business, Tata Steel UK (‘TSUK’), on
August 11, 2017, signed the documentation for a Regulated
Apportionment Agreement (‘RAA’) with the Trustee of the British
Steel Pension Scheme (‘BSPS’), offering more sustainable outcomes
for the pensioners, employees and the business. Consequent to
the signing of the documentation, the Pensions Regulator issued a
determination notice and a clearance statement in response to Tata
Steel’s application for clearance and approval in respect of the RAA.
This resulted in the commencement of a 28 days period during which
the affected parties by the RAA could refer the decision to approve
the RAA to the Upper Tribunal.
On September 11, 2017, the Pensions Regulator approved the RAA.
Consequent to the approval, the BSPS has been separated from TSUK
and a number of affiliated companies. As part of the RAA, a payment
of £550 million from TSUK has been made to BSPS and the shares in
TSUK, equivalent to a 33% economic equity stake in TSUK have been
issued to the BSPS Trustee, under the terms of the Shareholder’s
Agreement.
TSUK also agreed to sponsor a new pension scheme subject to certain
qualifying conditions being met. The members of the BSPS were
offered an option to transfer to the new Scheme. 69% of the members
of the BSPS opted to transfer to the new scheme. The new scheme
would have lower future annual increases for pensioners and deferred
members than the BSPS, giving it an improved funding position which
would pose significantly less risk for TSUK.
Divestments
Sale of Hartlepool SAW pipe mills
As part of restructuring the UK portfolio of the Company, TSUK, on
July 11, 2017, signed a definitive agreement with Liberty House Group
for sale of its Hartlepool Submerged Arc Weld (‘SAW’) pipe mills. The
sale covers the 42-inch and 84-inch pipe mills which employs about
140 people to manufacture pipeline for gas and oil products around
the world. The sale was completed on August 1, 2017.
3. South-East Asia
Issue of Bonds
During the year, ABJA Investment Co. Pte. Ltd., a wholly-owned
subsidiary of the Company, issued a dual tranche of USD 1.3 billion
unsecured bonds in the international markets. The issue comprises
USD 300 million 4.45% Unsecured bonds due on July 24, 2023 and
USD 1 billion 5.45% Unsecured bonds due on January 24, 2028.
H. Sustainability
At Tata Steel, sustainability is embedded in the culture of the
organisation, stemming from the belief of our founder that the
community is not just another stakeholder, but the very purpose of
our existence. This belief is embedded in the vision and values of Tata
Steel which balances the aspiration for value creation with that of the
responsibility of being a benchmark corporate citizen.
The sustainability approach of the Company is articulated in the
Sustainability policy of the Company as well as in various other
policies such as CSR Policy, HR Policy, Affirmative Action Policy,
Climate Change Policy, Environment Policy, Energy Policy, etc.
which embed the triple bottom line approach in its systems and
processes. Further, the Company has established various platforms
for periodically listening to the voice of stakeholders i.e. community,
investors, customers, employees, etc. which are prioritised and
embedded in our business objectives and strategies. The Company
is also focused on embedding Sustainability in its mining operations,
across supply chains and towards product stewardship through Life
Cycle Analysis studies. The Company is also examining the relevance
of the UN Sustainable Development Goals to progressively embed
them into the strategy of the Company. The Company is associated
with various industry bodies such as Confederation of Indian Industry
(‘CII’), Global Reporting Initiative, International Integrated Reporting
Council and the Taskforce for Climate Related Financial Disclosures
of the Financial Stability Board on implementing Sustainability
practices.
During the year, the Company has strengthened the Governance
structure for mitigating the environmental, social and people related
material issues and related risks. The Corporate Social Responsibility
(‘CSR’) Committee of the Board was re-designated as the CSR and
Sustainability Committee to enhance the Governance of Integrated
Thinking and the working of Tata Steel.
8080
Directors’ ReportINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR There
is a dedicated Corporate Sustainability Group at Tata
Steel which is responsible for implementing and mainstreaming
sustainability across the organisation and throughout its value chain.
The group tracks the global best practices related to sustainability and
facilitates their incorporation in the key processes of the Company.
The group also drives various external assessments like the Dow
Jones Sustainability index and those conducted by the CII. Globally,
the Company has been awarded the Gold Class Rating for the second
year in a row in the steel sector in the Dow Jones Sustainability index
– Corporate Sustainability Assessment 2017.
1. Environment
The Company aims to be the benchmark for environmental
stewardship in Steel Industry by focusing on climate change
mitigation and reducing its resource footprint. Given the nature
of the business and the industry that we operate in, the Company
recognises its impact on the environment and is conscious of its duty
towards safeguarding the environment. The Company is committed
to responsible use and protection of the natural environment
through conservation and sustainable practices. The Company
focuses on operational excellence aimed at resource efficiency
through a ‘Prevent, Minimise, Recover, Reuse and Recycle’ hierarchical
approach to reducing its ecological footprint. The Company has also
implemented environmental management systems that meet the
requirements of international standard ISO14001 at all of its leading
manufacturing sites. These systems provide the Company with a
framework for managing compliance and improving environmental
performance, making
it future ready to address stakeholder
requirements.
The Company pursues responsible advocacy on policy and regulatory
issues by being the member of World Steel Association Environment
Policy Committee, Central Pollution Control Board’s National
Taskforce, Indian Steel Association and various other organisations.
During the year, the Company engaged with Government of India
to address environmental issues such as actions to surpass National
Development Council’s commitments,
international bilateral
initiatives, showcasing achievements on climate response and
pursuing growth under blue sky to realise aspirations under ‘Make
in India’.
The Company is currently national benchmark in Specific Energy
Consumption in integrated steel sector and CO2 emission intensity
(coal based integrated steel plants, BF-BOF route). In order to cater
to various stakeholders’ requests for greater reporting scopes,
the Company is consolidating its GHG footprint of business. The
Company has in place a Safety, Health & Environment Committee
that provides the necessary direction and guidance on matters
relating to environment and also monitors the performance of the
Company and its impact on the environment.
In Europe, the Company continues to invest in short to medium
term CO2 emission reduction and energy efficiency improvements.
In addition to these improvements, as a follow up to the ULCOS
(Ultra-Low CO2 Steel-making) co-operative research initiative to
achieve a step change in CO2 emissions from steel-making, the
Company is also working on a longer term major project to develop
a new smelting reduction technology (‘HIsarna’) to produce steel
without the need for coke making or agglomeration processes,
thereby improving efficiency, reducing energy consumption and
reducing CO2 emissions. The pilot plant is located at the Company’s
IJmuiden site in the Netherlands.
NatSteel Holdings (‘NSH’) in South-East Asia, operates one of the
most energy efficient steel operations in the world. NSH is ranked in
the top 25% for CO2 emission for Electric Arc Furnace operators. All
three manufacturing sites of Tata Steel Thailand were awarded with
the Green Industry Award level 4 by Ministry of Industry, Thailand.
2. Climate Change
Climate change is the defining environmental issue of the early 21st
Century and the Company recognises that it has an obligation to
minimise its own contribution to climate change. Furthermore, the
Company aims to play a leadership role in addressing the challenge
of climate change. However, the Company also understands that
steel products will be an integral part of the solution to climate
change and that local, short-term action will not necessarily help to
tackle this global, long-term issue. Considering all these factors, the
Company has formulated a climate change strategy based on 5 key
themes as outlined below:
Emissions Reduction: To improve its current processes to increase
its energy efficiency and to reduce its carbon footprint. The Company
aims to reduce its carbon dioxide emissions per tonne of crude steel
by at least 20% compared to 1990 levels.
Investing in Technology: To invest in the development of long-term
breakthrough technologies through initiatives such as HIsarna &
Carbon Capture & Utilisation (‘CCU’).
Market Opportunities: To develop new products and services that
reduce environmental impact over product life cycles and in turn
help its customers to reduce their carbon footprints.
Employee Engagement: To actively engage its workforce and
encourage everyone to contribute to its strategy.
Lead by Example: To develop its pro-active role in global steel sector
initiatives through the World Steel Association.
3. Health and Safety
Health and safety remains the Company’s highest priority and Tata
Steel aspires to be the steel industry benchmark in health & safety.
Safety and Health Management is integrated into the Annual
Business Plan and is cascaded into the personal key result areas
(‘KRAs’) of each officer to place accountability and responsibility at
all levels in the Company. The Company has made some significant
achievements through the
‘Committed to Zero’ programme.
The Company’s strategic efforts are directed towards ensuring
committed leadership, engaged employees and effective systems
in order to minimise risk. At the Group level, the Company achieved
8181
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 a 21% improvement in Lost Time Injury Frequency Rate (‘LTIFR’) in
Financial Year 2017-18 as compared to the previous year.
It is with regret we report that, during the year, in India, there were
3 fatalities. However, the Company is continuously channelising its
efforts to eliminate such incidents and achieve zero fatality.
Several initiatives were undertaken during the year to improve
health & safety standards of the Company. Steps were taken to
improve competency and capability for hazard identification and
risk management. To ensure deployment of competent vendors for
high risk jobs, star-rating assessment was conducted for all high-risk
vendors and 88% of the vendors have achieved star rating 3 and
above. This helped in 40% reduction in contractor fatalities and 21%
reduction in Lost Time injury cases of contractor employees across
Tata Steel India.
We regret to report that, in Europe, the Company had one fatality
during the year. However, efforts are being made to ensure such
instances are avoided in future. Training for Group Senior Managers
focusing on their leadership role related to health & safety has been
completed. The same was also extended to more junior Business
Senior Managers during Financial Year 2017-18. In addition, process
safety leadership training was continued throughout the year under
review. The combined LTIFR in Financial Year 2017-18 for employees
and contractors improved to 1.36 as compared to 1.51 in the previous
year. The recordables rate, which includes lost time injuries as well as
minor injuries, also improved from 5.12 in Financial Year 2016-17 to
4.13 in Financial Year 2017-18. A ‘back to basics’ campaign focusing on
hazard identification and risk minimisation was undertaken during
the year and there were various initiatives to accelerate deployment
of standards and to improve maturity of the Group’s health & safety
management system.
During the year, NatSteel recorded the lowest LTI in the last 5 years.
The Government of Singapore has selected NatSteel as one of the
pioneering companies in the area of Safe Working. NatSteel was
awarded the ‘bizSAFE award’ by the Work Place Safety and Health
Council, Singapore for exemplary risk management systems. Tata
Steel Thailand (‘TSTH’) was recognised at World Steel Association for
Contractor Safety Management practices and NTS plant of TSTH won
Prime Minister Industry award for Safety Excellence.
4. Research and Development
The competitive business environment in which the Company
operates makes innovation imperative for success of the business.
Recognising the need to improve, expand and innovate, the
Company is concentrating efforts on research and development of
alternate materials and new products.
The Company has started working on the technology roadmap that
aligns with it’s vision of becoming a leader among the innovation
driven organisations. A number of research and development
projects have reached high Technology Readiness Levels. The
Company is focusing on making these innovations ready for the
market through lean, scalable, efficient and sustainable processes.
8282
Venturing into new market areas is another focus area for research
and development and accordingly, a number of new product
developments have been targeted. The planning for plant trials of
new products is underway and will be completed in the next couple
of months.
In Europe, the Company is continuously engaged in various research
and technology initiatives. To illustrate, the Company has progressed
its activities to reduce CO2 emissions through the HIsarna project
i.e. a collaborative project amongst the major steelmakers in Europe
to develop a more flexible new smelting reduction technology to
produce steel from lower grade raw materials without the need for
coke making or agglomeration processes. The HIsarna pilot plant
is now in the final testing phase undertaking a 6 month sustained
campaign, after which the Company will look at scaling up for
commercial-scale production.
5. New Product Development
Creating value
for customers, meeting their ever-increasing
expectations and responsibility towards the environment sets the
foundation for the Company to invest its resources to create new and
enriched products, services and solutions, which not only provide
enhanced benefits to the customer but also reduce the negative
impact on the environment.
During the year, in India, the major focus for new product
development was to leverage the superior capability of the products
from the Kalinganagar steel plant. During the year, 133 new products
were launched in India of which 108 were from the Kalinganagar
plant. This resulted in an additional sales of 190 kilo tonnes during
the year.
The major focus was to address the needs of automotive segment and
accordingly different grades for wheels and structural applications
were developed. In the industrial products and projects vertical,
grades for lifting and excavation segment, pre-engineered buildings
and oil & gas sector were developed. In addition, a grade for line
pipes was also designed, which is in the final stage of plant trial. In
the branded products segment, a grade steel was developed for
bank ATM application. For the first time in India, hot rolled enameling
grade steel was developed for grain silos. Galvanised Coated steel
for solar back panel application and new grades of wire rods were
also developed.
In Europe, the Company launched 23 new products during the year.
These launches include major developments for the automotive,
construction, engineering and packaging markets. Prominent
examples of product and service launches include Hilumin® and
Prime Lubrication Treatment. Hilumin® is a nickel plated strip for
lithium-ion batteries for application in automotive energy storage
solutions. Prime Lubrication Treatment is a booster lubricant that
improves press performance, by reducing tool pollution during
deep drawing of GI Full Finish. The solution enables a switch from
electrogalvanised to hot dipped galvanised products. Advantica®
SDP 35 TR a tailored offering for construction of large, high thermal
insulation roof-sandwich panels for cooled trailers was also
Directors’ ReportINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR developed. Protact® is a cost-efficient, environmentally friendly
laminated packaging steel product which already has a proven
track record for two-piece can making, has now been developed for
three-piece cans. The Protact® offering has also extended its range
of available colours, offering customers even greater design options
and in particular, enhancing content appearance. The Company
has also succeeded in making its Colorcoat range of organic coated
steel products hexavalent chrome free to comply with European
legislation called REACH.
In Singapore, in line with the Government’s push for digital
transformation, NatSteel collaborated with a key customer to develop
a system to automate steel rebar procurement process. Through
digitalised selection process aided with 3D visualisation under the
Building Information Modelling environment, the customer can
now easily place order for rebar, and the order placed integrates
seamlessly into NatSteel’s back-end system. This project won the title
of ‘Most Scalable Collaboration’ at the 2018 Singapore International
Chamber Of Commerce Awards Gala. NatSteel launched bars and
couplers in Singapore which support the government’s initiative for
higher construction productivity by speeding up construction and
increasing construction safety. In Thailand, the Company developed
and commercialised Tyre Cord grade wire rods for Bridgestone
Thailand. Revenue from new products increased by 36% over last year.
6. Customer Relationship
The Company endeavours to develop and sustain long-term value-
creating partnerships with our customers and channel partners
through a wide range of product offerings, innovative services and
unique solutions.
In India, the customers are segmented into B2B, B2C and B2ECA
(Emerging Corporate Accounts). These segments are
further
divided into micro-segments based on applications and buying
behavior. The Company concentrates its efforts to understand the
expectations and requirements of current and potential customers/
market segments in order to deliver customer specific products and
services and provide value-creating solutions.
B2B
customers
engages with
The Company
through
cross-functional Customer Service Teams (‘CSTs’) to work on new
product development, quality improvement and value-creating
ideas which helps it to achieve operational excellence. The Company
has also collaborated with key automotive customers to provide
cost and weight reduction solutions using the Value Analysis &
Value Engineering (‘VAVE’) platform and the Advanced Product
Application support. This has also enabled the Company to partner
with these customers for future product launches. These initiatives
are now extended to industrial customers as well. In March 2018, the
Company also launched the Digital Supply Chain Real Time Visibility
Portal to track end-to-end material movement.
increased
The Company has
its customer engagement with
Emerging Corporate Accounts through the ECafez initiative which
facilitates upgradation of shop floor workers under programmes
such as ‘Skills4India’ and promotes a culture of safety through
‘Safety First’ initiative. The Company also conducts ‘Qualithon
clinic’- expert sessions on powder coating, welding with customer
quality people and ‘PurchasePro’ for people in supply chain division.
‘CREATE’- Collaborative Reform with ECA for Advanced Technical
Enhancement is carried out to strengthen partnership in value chain.
The Company’s B2C brands have embraced digital solutions to
substantially enhance the consumer buying experience. In February
launched the early engagement platform,
2018, TATA Tiscon
aashiyana.tatasteel.com, for individual house builders. The platform
has 4 sections - Inspirational Home Designs, Material Estimator,
Service Provider Directory and E-Commerce.
To reach out to the rural consumers at the last mile intensive mobile
marketing campaigns are conducted under the programme of
‘Ek Kadam Parivartan ki Ore’ (A step towards positive change) where
the consumers are educated about the benefits of Tata Shaktee
vis-à-vis other roofing solutions prevalent in the region. The Group
Rural Action Mission (‘GRAM’) initiative continues to focus on
harnessing synergies with other group companies for creating
rural consumers awareness and to lead generation programmes.
The programme was further strengthened with digital enrolling of
fabricators (6,000 nos. registered) and training programme on best
practices.
During the year, the Company organised a ‘Construction Conclave’
to bring together industry experts from around the globe as well as
from India – including our customers. This initiative has facilitated the
Company to develop deeper understanding of the construction and
infrastructure industry thereby helping to build new partnerships.
The Company also organised other knowledge-sharing platforms
such as ‘Wired 2 Win’ and ‘Technical Seminars with Original Equipment
Manufacturing customers’ to provide insights on current and future
industry trends and to promote new services & solution offerings.
The senior leadership team of Tata Steel frequently interacts with
strategic and key customers at various customer meets, business
seminars and during plant visits undertaken by the customers and at
celebration events to commemorate the milestones achieved.
In Europe, the Company partners with customers to help them excel
in their market, co-creating more sustainable value throughout the
entire value chain. ‘Customer Focus’, a company wide programme,
reinforces our mission and drive towards customer centricity.
Improvements on this front have also been acknowledged in the
Tata Business Excellence Model assessment. The Company also has
a value chain transformation programme known as ‘Future Value
Chain’ programme, which focuses on driving service improvements.
Our European operations are also focusing on a balanced portfolio
and differentiation strategy, which aims to increase the proportion
of differentiated products. As part of the strategy, the Company
launched 23 new products in Europe this year. These launches
include major developments for the automotive, construction,
engineering and packaging markets. Along with products, the
Company also offers services such as Electronic Data Interchange,
Track and Trace, Early Vendor Involvement, Design and Engineering
support, Technical Support, Building Information Modelling and Life
8383
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Cycle Analysis. In June 2017, the Company launched an overarching
programme called ‘Future Commercial Excellence’ that focuses on
commercial improvements.
In Singapore, the Company continues to focus on building strong
relationship with key customers and providing high levels of service.
To improve customer connectivity, a new solutions team was created
to address the needs and requirements of customers at the design
level. The Company achieved the best ever Customer Satisfaction
Score against its competitors in the country. In Thailand too the
Customer Satisfaction Index of the Company increased from 77 to
81, being the highest among its peers in the country.
7. Human Resources Management & Industrial Relations
Human Resource has always been the central focus at Tata Steel.
The emphasis on the people of the organisation stems from the
belief that human resource is the key factor to achieving success in
business.
Tata Steel has been a front runner in its people practices with many
pioneering policies in the area of human resources. Our people
practices are based on the Tata Values with emphasis on respect,
dignity, unity and fostering a culture of togetherness.
Financial year 2017-18 was a milestone year for the Company,
as major improvements were seen in areas related to diversity
& inclusion and training & development where initiatives were
undertaken to bring about a change in culture and mind set of
the workforce. The focus for the year was on Gender diversity and
inclusion of differently abled persons. Special efforts have been put
in on hiring and creating infrastructure for diverse workforce as well
as retaining and developing women leaders.
During the year, learning and development underwent a shift
in pedagogy and various e-learning courses on managerial and
functional competencies were assigned to more than 15,000
persons (not unique) through the Skillsoft learning platform. The
Digital capability programme saw a participation of more than
9,000 employees. With the management focusing on Learning and
Innovation, the Innovation club was started during the year with more
than 120 members and over 40 projects. The Company undertook
an exhaustive exercise to re-look at its training programmes.
Training programmes at the Tata Steel Management Development
Centre were aligned with the 9 managerial competencies under
Management Competency framework and have been redesigned to
include a blend of facilitator-led sessions and e-learning including
complete revamp of the Cadre training methodology and content.
Safety and health of the workforce is of utmost importance and hence
the need was felt for the same to percolate from the top leadership in
form of learning and experience-sharing. Steps were taken to ensure
complete coverage of employees for Felt leadership training across
various locations of Tata Steel India with senior leaders as trainers
sharing with the audience their learning and advice on matters
related to work and safety.
8484
Improving employee productivity is the key focus area for the Company
and achieving benchmark performance in this area, year on year, is a
major goal for the Company led by the Human Resource division. This
focus has led to an improvement in productivity from 709 tonnes of
crude steel/employee/year to 769 tonnes/employee/year with the
employees on roll reducing from 34,989 to 34,072 in India.
This being our 89th year of Industrial harmony, our focus has been to
have highly engaging and meaningful partnership with our Unions in
order to achieve our targets and improve productivity over last year.
During the year Tata Steel won the Golden Peacock Award for
HR Excellence in 2018. Tata Steel was also declared the Best Place
to Work in the Core Sector by Business Today. This recognition was
bestowed on the Company for the 2nd year in a row. Tata Steel was
also certified as Great Place to Work in the Great Place to Work study
conducted for the year 2017.
In Europe too, the Company continues to invest in the recruitment,
engagement, health, skills and capabilities of its employees. The
Tata Steel Academy
in Europe strengthens the organisation’s
competitive advantage by enabling its people to achieve the highest
standards of technical and professional expertise, with a combined
use of practical, virtual and classroom training to maximise training
effectiveness. The major part of the training remains ‘on the job’, but
is structured through the creation of 12 distinct faculties focused on
par leadership, health & safety, sales & marketing, manufacturing,
engineering, technical, supply chain, finance, HR, IT, procurement
and total quality management. The Company aims to create modern
employment conditions that ensure healthy long-term employability
and a well-received Employer Value Proposition with current and
potential employees. The Company has responsible pension schemes
that allow for a sustainable business. The Company has also made the
provision of an income for enrolled employees beyond retirement.
In Europe, the Company employs a wide range of strategies to
engage its employees. Steps are taken to regularly review the
organisational health through surveys as well as comparisons with
other companies using the Organisational Health Index method
supported by McKinsey. The Company strives to ensure that
the employees’ motivation and capabilities are enhanced by its
leaders, organisational structure, operational protocols, including
daily management and operational excellence programmes,
communication processes & business excellence and reward and
recognition policies.
In Europe, the Company also focused on developing a healthy work
environment. Physical health is promoted through various central
and local programmes and a range of sporting and outdoor activities.
The Company provides training and support to promote mental
health inside and outside the workplace. Health and wellbeing of
employees is an important part of the local labour conditions and a
focus of improvement initiatives.
In Singapore too, the Company has begun a focus initiative on
building employee capability at all levels through secondment
opportunities, job rotations and trainings. NatSteel achieved its
Directors’ ReportINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR best ever Employee Engagement Score (58%) and the lowest
attrition level in Financial Year 2017-18. In Thailand, the Company
undertook the Shop Floor Knowledge Transformation Programme
to identify and share best practices among various operating units.
The Company has also taken steps to improve employee agility and
cut unproductive work. The Siam Construction Steel Co. Ltd. (‘SCSC’),
a subsidiary company, was awarded the Kaizen Gold award and
Thailand Quality Circle award from Ministry of Industry. SCSC and
NTS Steel Group Plc also received the Thailand Labour Management
Excellence Award 2017.
8. 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
Social Responsibility (‘CSR’) initiatives is to improve the quality of life
of communities through long-term value creation for all stakeholders.
For decades, the Company has pioneered various CSR initiatives.
The Company continues to remain focused on improving the quality
of life and engaging communities through health, education,
livelihood, sports and infrastructure development. The Company is
working with indigenous communities in its areas of operation in
India (primarily in Jharkhand and Odisha).
Towards achieving excellence in our CSR activites, the Company has
partnered with the State Governments of Jharkhand and Odisha
and with various reputed national and international organisations
such as American
India Foundation, The Hans Foundation,
Timken Foundation, NABARD, Welt Hunger Hilfe and Tata Trusts
amongst others.
The Company has in place a CSR policy which provides guidelines
to conduct CSR activities of the Company. The CSR policy is available
on the website of the Company www.tatasteel.com During the year,
the Company spent ₹232 crore on CSR activities. The Annual Report
on CSR activities, in terms of Section 135 of the Companies Act, 2013
(‘Act’), is annexed to this report (Annexure 3).
In Europe too, the Company focuses on working with local
communities in three key areas - education & learning, health & well-
being and environment & sustainability. The Company is building on
education and learning partnerships which have been formed with
local organisations. The Company works with these organisations
to increase the social skills and confidence of young people, boost
pupils’ level of understanding about the steel industry and improve
the understanding and ambition of students. The Company also runs
its own Academy in IJmuiden. Every year, around 100 students start
their education in mechanics, electro or process technology. The
Academy is currently working closely with municipalities and the
Province Noord Holland in order to have more regional impact.
Further, the Company at its site in IJmuiden is cooperating with local
and regional parties on sustainable energy projects such as residual
heat and wind turbines. Through our community partnership
programme, we invest in a range of sustainable initiatives which
benefit large groups within our communities ranging from sports
groups to charities and key community organisations.
In Singapore, the Company continues to promote active volunteerism
and touches the lives of people through three of its adopted charities.
In Thailand, the Company encourages each of its employees to
participate in at least one CSR activity and has clocked over 11 man
hours/employee on CSR activities.
I. Corporate Governance
At Tata Steel, we ensure that we evolve and follow the corporate
governance guidelines and best practices sincerely, not only to boost
long-term shareholder value, but also to respect minority rights. We
consider it our inherent responsibility to disclose timely and accurate
information regarding our operations and performance, as well as
the leadership and governance of the Company.
Pursuant to the Listing Regulations, the Corporate Governance
Report along with the Certificate from a Practicing Company
Secretary, regarding compliance of conditions of Corporate
Governance, is annexed to this report (Annexure 4).
1. Board Meetings
For seamless scheduling of meetings, a calendar is prepared and
circulated in advance. The Board has also adopted an activity guidance
giving them visibility on the upcoming topics for discussions.
The Board met 7 times during the year, the details of which are given
in the Corporate Governance Report. The intervening gap between
the meetings was within the period prescribed under the Act and the
Listing Regulations.
2. Selection of New Directors and Board Membership Criteria
The Nomination and Remuneration Committee (‘NRC’) works with
the Board to determine the appropriate characteristics, skills and
experience for the Board as a whole and its individual members
with the objective of having a Board with diverse backgrounds and
experience in business, government, education and public service.
Characteristics expected of all Directors include independence,
integrity, high personal and professional ethics, sound business
judgement, ability to participate constructively in deliberations and
willingness to exercise authority in a collective manner. The Policy
on appointment & removal of Directors and determining Directors’
independence was adopted by the Board on March 31, 2015. During
the year, there have been no changes to the Policy. The same is
annexed to this report (Annexure 5) and is available on our website
www.tatasteel.com
3. Familiarisation Programme for Independent Directors
All new Independent Directors (‘IDs’) inducted on the Board go
through a structured orientation programme. Presentations are
made by Executive Directors and Senior Management giving an
overview of our operations, to familiarise the new IDs with the
Company’s business operations. The new IDs are given an orientation
on our products, group structure and subsidiaries, Board constitution
and procedures, matters reserved for the Board, and our major risks
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Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 and risk management strategy. Visits to Plant and mining locations
are organised for the IDs to enable them to understand the business
better.
Details of orientation given to our existing IDs in areas of strategy,
operations & governance, safety, health and environment, industry
& regulatory trends, competition and future outlook are provided
in the Corporate Governance Report and is also available on our
website www.tatasteel.com
4. Evaluation
The Board evaluated the effectiveness of its functioning, that of
the Committees and of individual Directors. The Board sought the
feedback of Directors on various parameters such as:
Degree of fulfillment of key responsibilities towards stakeholders
(by way of monitoring corporate governance practices,
participation in the long-term strategic planning, etc.);
The 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 meetings with the
IDs and the Chairman of the NRC had one-on-one meetings with
the Executive and Non-Executive Directors. These meetings were
intended to obtain Directors’ inputs on effectiveness of the Board/
Committee processes.
The Board considered and discussed the inputs received from the
Directors. Further, the IDs at their meeting reviewed the performance
of non Independent Directors, Board as a whole and Chairman of the
Board after taking into account views of Executive Directors and
Non-Executive Directors.
The evaluation process endorsed the Board Members’ confidence in
the ethical standards of the Company, the resilience of the Board and
Management in navigating the Company during challenging times,
cohesiveness amongst the Board Members, constructive relationship
between the Board and the Management and the openness of the
Management in sharing strategic information to enable the Board
Members to discharge their responsibilities.
In the coming year, the Board intends to enhance focus on diversity
of the Board through the process of induction of members having
industry expertise, strategic plan for portfolio restructuring of Tata
Steel Europe, exploring new drivers of growth for the Tata Steel
Group and further enhancing engagement with investors.
8686
5. Compensation Policy for the Board and Senior Management
Based on the recommendations of the NRC, the Board has approved
the Remuneration Policy for Directors, Key Managerial Personnel
(‘KMPs’) and all other employees of the Company. As part of the
policy, the Company strives to ensure that:
the level and composition of remuneration is reasonable and
sufficient to attract, retain and motivate Directors of the quality
required to run the Company successfully;
relationship between remuneration and performance is clear and
meets appropriate performance benchmarks; and
remuneration to Directors, KMPs and Senior Management
involves a balance between fixed and incentive pay, reflecting
short, medium and
long-term performance objectives
appropriate to the working of the Company and its goals.
The Remuneration Policy for Directors, KMPs and other Employees
was adopted by the Board on March 31, 2015. During the
year, there have been no changes to the Policy. The same is
annexed to this report (Annexure 6) and is available on our
website www.tatasteel.com
6. Particulars of Employees
Disclosures pertaining to remuneration and other details as required
under Section 197(12) of the Companies Act, 2013, read with Rule 5(1)
of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 are annexed to this report.
In terms of the provisions of Section 197(12) of the Companies Act,
2013 read with Rules 5(2) and 5(3) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, a statement
showing the names and other particulars of employees drawing
remuneration in excess of the limits set out in the said Rules forms
part of the report (Annexure 7).
7.
Independent Directors’ Declaration
ID
The Company has received the necessary declaration
each
independence as
he/she meets the criteria of
Section 149(6) of the Act and the Listing Regulations.
from
in accordance with Section 149(7) of the Act that
in
laid out
8. Directors
The year under review saw the following changes to the Board of
Directors (‘Board’).
Inductions to the Board
On the recommendations of the NRC, the Board appointed
Mr. Saurabh Agrawal as an Additional (Non-Executive) Director of
the Company effective August 10, 2017. Mr. Agrawal brings to the
Board his extensive knowledge and experience in finance, strategy
and capital markets.
Directors’ ReportINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
The resolution for confirming the above appointment forms part of
the Notice convening the Annual General Meeting (‘AGM’) scheduled
to be held on July 20, 2018. We seek your support and hope you
will enthusiastically vote in confirming Mr. Saurabh Agrawal’s
appointment to the Board.
Re-appointments
In terms of the provisions of the Act, Mr. N. Chandrasekaran will
retire at the ensuing AGM and being eligible, seeks re-appointment.
The Board recommends, seeks your support and hopes you
will enthusiastically vote in confirming the re-appointment of
Mr. N. Chandrasekaran.
During the year, based on the recommendations of Nomination
and Remuneration Committee, the Board of Directors re-appointed
Mr. Koushik Chatterjee as a Whole Time Director of the Company for a
period of five years effective November 9, 2017. The re-appointment
is subject to the approval of the Members of the Company at the
ensuing AGM of the Company. The Board seeks your support and
hopes you will enthusiastically vote in confirming the re-appointment
of Mr. Koushik Chatterjee.
The profile and particulars of experience, attributes and skills that
qualify the above Directors for the Board membership is disclosed in
the Notice convening the AGM to be held on July 20, 2018.
Cessation
In accordance with the retirement policy applicable for the
Company’s Board, Mr. Ishaat Hussain and Mr. Andrew Robb retired
from the Board effective September 1, 2017.
Mr. Hussain joined the Company in 1983 and has been a Member of
the Board since July, 1989 and Mr. Robb joined the Tata Steel Board
in 2007.
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 expresses its gratitude towards Mr. Hussain, Mr. Robb
and Mr. Mehrotra for their contributions to the Company. The Board
acknowledges that the Company has immensely benefitted from
their profound knowledge and experience in the steel industry. The
Board deeply appreciates Mr. Hussain’s invaluable dedication and
support throughout his tenure with the Company. The Board sincerely
appreciates Mr. Robb’s valued counsel and deep insights in the areas
of Governance and Finance as well as his effective stewardship
and expert supervision at Tata Steel Europe. The Board thanks
Mr. Mehrotra for his contributions as a Director of the Company.
Leadership changes
Based on the recommendations of the Nomination and Remuneration
Committee, the Board of Directors on October 30, 2017, elevated
Mr. T. V. Narendran as the global Chief Executive Officer and
Managing Director of Tata Steel. Prior to this elevation, Mr. Narendran
was the Managing Director (India and South East Asia). The Board
approved his elevation based on his track record of successfully
executing and commissioning one of the largest greenfield projects
in India, the Kalinganagar Steel Plant and enhancing its ability
to deliver to higher value segments like steel for automobiles.
Mr. Narendran’s career in Tata Steel has spanned across many areas, in
India and abroad – including, Marketing & Sales, International Trade,
Supply Chain & Planning, Operations and General Management.
Further, based on the recommendations of the NRC, the Board of
Directors also re-appointed Mr. Koushik Chatterjee as Whole-time
Director for a period of 5 years effective November 9, 2017 and
designated him as Executive Director and Chief Financial Officer.
The Board approved the re-appointment of Mr. Koushik Chatterjee
based on his significant contributions to the financial management
of the Company and in view of the key role he has played in the re-
organisation of Tata Steel Europe.
9. Key Managerial Personnel
Pursuant to Section 203 of the Companies Act, 2013, the Key
Managerial Personnel of the Company are – Mr. T. V. Narendran,
Chief Executive Officer and Managing Director, Mr. Koushik
Chatterjee, Executive Director and Chief Financial Officer and
Mr. Parvatheesam K, Company Secretary and Compliance Officer.
During the year, there has been no change in the Key Managerial
Personnel.
10. Audit Committee
The Audit Committee was constituted in the year 1986. The
Committee has adopted a Charter for its functioning. The primary
objective of the Committee is to monitor and provide effective
supervision of the Management’s financial reporting process, to
ensure accurate and timely disclosures, with the highest levels of
transparency, integrity and quality of financial reporting.
The Committee met 5 times during the year, the details of which are
given in the Corporate Governance Report. As on date of this report,
the Committee comprises Mr. O. P. Bhatt (Chairman), Mr. Aman Mehta,
Dr. Peter Blauwhoff and Mr. Saurabh Agrawal. All the members of the
Committee have deep knowledge in accounts and finance.
11. Internal Control Systems and Internal Audit
The Board of Directors of the Company is responsible for ensuring
that Internal Financial Controls have been laid down in the Company
and that such controls are adequate and operating effectively.
The foundation of Internal Financial Controls (‘IFC’) lies in the Tata
Code of Conduct (‘TCoC’), policies and procedures adopted by
the Management, corporate strategies, annual business planning
process, management reviews, management system certifications
and the risk management framework.
The Company has an IFC framework, commensurate with the size,
scale and complexity of its operations. The framework has been
designed to provide reasonable assurance with respect to recording
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Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 laws, safeguarding assets
information,
and providing reliable financial and operational
complying with applicable
from
unauthorised use, executing transactions with proper authorisation
and ensuring compliance with corporate policies. The controls,
based on the prevailing business conditions and processes have
been tested during the year and no reportable material weakness in
the design or effectiveness was observed. The framework on Internal
Financial Controls over Financial Reporting has been reviewed by the
internal and external auditors.
The Company uses various IT platforms to keep the IFC framework
robust and our Information Management Policy governs these IT
platforms. The systems, standard operating procedures and controls
are implemented by the executive leadership team and are reviewed
by the internal audit team whose findings and recommendations are
placed before the Audit Committee.
The scope and authority of the Internal Audit function is defined in the
Internal Audit Charter. To maintain its objectivity and independence,
the Internal Audit function reports directly to the Chairman of the
Audit Committee. The Internal Audit team develops an annual audit
plan based on the risk profile of the business activities. The Internal
Audit plan is approved by the Audit Committee, which also reviews
compliance to the plan.
The Internal Audit team monitors and evaluates the efficacy and
adequacy of internal control systems in the Company, its compliance
with operating systems, accounting procedures and policies at all
locations of the Company and its subsidiaries. Based on the report
of internal audit function, process owners undertake corrective
action(s) in their respective area(s) and thereby strengthen the
controls. Significant audit observations and corrective action(s)
thereon are presented to the Audit Committee.
The Audit Committee reviews the reports submitted by the Internal
Auditors in each of its meeting. Also, the Audit Committee at frequent
intervals has independent sessions with the external auditor and the
Management to discuss the adequacy and effectiveness of internal
financial controls.
12. Risk Management
environment
Several factors such as advancements in technology, prevalent
geo-political
and
and
environmental requirements have consequential impacts across the
value chain of a business. These impacts are likely to continue and
intensify over time and for a business to be sustainable, it needs to
adapt to the environment by managing risks and opportunities in a
systematic manner.
regulatory
stringent
The Company follows a robust 5 step Enterprise Risk Management
(‘ERM’) process to address the risks associated with its business.
The ERM process is based on international standards such as
ISO 31000 and Committee of Sponsoring Organisation of the
Treadway Commission (‘COSO’) with inputs drawn from the best
practices of leading companies across industries.
8888
The ERM process aims to develop a ‘Risk intelligent culture’ within the
Company to encourage risk informed business decision-making as
well as resilience to adverse environment and to create awareness of
opportunities in order to enhance the long-term stakeholder value.
To achieve the stated objectives, the Company has constituted
a robust governance structure comprising three levels of risk
management responsibilities viz. Risk Oversight, Risk Infrastructure
and Risk Ownership.
The Risk Oversight function consists of the Board, Risk
Management Committee
(‘RMC’) & Group Risk Review
Committee (‘GRRC’) that provide guidance for implementing the
ERM framework and policy across the organisation.
The RMC assists the Board in developing and revising the
risk management plan for the Company and reviewing and
guiding the risk management policy. The RMC periodically
reviews key risks to the Tata Steel Group and actions deployed
by the Management with respect to their identification, impact
assessment, mitigation and monitoring.
GRRC
is a Management Committee comprising Senior
Management personnel as its members. The GRRC has the
primary responsibility of implementing the Risk Management
Policy of the Company and achieving the stated objective of
developing a risk intelligent culture that helps ameliorate the
Company’s performance.
The Company has a dedicated ERM unit to successfully deploy and
maintain the ERM framework across business units. The ERM unit
is led by Group Head – Corporate Finance & Risk Management,
who acts as the Chief Risk Officer (‘CRO’) of the Company.
The responsibility of tracking and monitoring the key risks of the
division periodically and implementing suitable mitigation plans
proactively is with the senior executives of various functional
units. These risk owners are expected to avoid any undue
deviations or adverse events and ultimately help in creating
value for the business.
In addition to the above, the ERM process is also integrated
with other core processes of the Company such as strategy &
planning, capital allocation, internal audit etc. to not only reduce
risk but also embrace opportunities, thereby creating hallmark of
a risk intelligent culture. Risks identified through the ERM process
are used as inputs in the strategy & planning process while risk
assessment of capital allocation and key investment proposals
for organic and inorganic growth ensure risk informed decision
making. Similarly, integration with internal audit assures that the
risk management and internal control framework is operating
effectively.
During the year, the Company undertook multiple initiatives to
strengthen, widen and deepen the scope and coverage of the
ERM process across the Company. Various analytical tools were
introduced for assessment of risks. The ERM process was rolled out
to domestic and overseas subsidiaries. An in-house digital platform
Directors’ ReportINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
which facilitates real time reporting, data mining and escalation
mechanisms across the Enterprise was successfully deployed.
Various training and communication programmes were conducted
to enhance skillsets and to help create a risk aware culture across the
organisation.
consisted of a short story based on situations related with accepting
of gifts and hospitality from business associates. The Company also
celebrates the month of July as Ethics Month. This practice has
helped in reinforcing employee involvement and passion in driving
the Management of Business Ethics.
The Board is happy to report that the Company has won the award
for ‘Best Risk Management Framework & Systems’ in Metals & Mining
category and also in the category ‘Firm of the year: Risk Governance’
at the ‘4th India Risk Management Awards 2018’ organised by
ICICI Lombard & CNBC-TV18. These awards are a testimony to the
Company’s commitment towards ensuring a risk intelligent culture.
13. Vigil Mechanism
Commitment towards highest moral and ethical standards in the
conduct of business is of utmost importance to the Company. To
advance standards of ethical practices, the Company has deployed
the Management of Business Ethics (‘MBE’) across the organisation
through a well-defined Framework. The Company has adopted the
Tata Code of Conduct (‘TCoC’) which is driven by five core values –
Unity, Integrity, Responsibility, Understanding and Excellence.
The Company also has a Vigil Mechanism that provides a formal
mechanism for all Directors, employees and vendors to approach
the Ethics Counselor/Chairman of the Audit Committee and make
protective disclosures about the unethical behaviour, actual or
suspected fraud or violation of the TCoC.
The Vigil Mechanism comprises 3 policies viz. the Whistle Blower
Policy for Directors & Employees, Whistle Blower Policy for Vendors
and Whistle Blower Reward and Recognition Policy for Employees.
The same is available on our website www.tatasteel.com
The Whistle Blower Policy for Directors & Employees is an extension
of the TCoC that requires every Director or employee to promptly
report to the Management any actual or possible violation of the
TCoC or any event wherein he or she becomes aware of that which
could affect the business or reputation of the Company.
The Whistle Blower Policy for Vendors provides protection to vendors
from any victimisation or unfair trade practices by the Company.
The Whistle Blower Reward and Recognition Policy for Employees
has been implemented in order to encourage employees to
genuinely blow the whistle on any misconduct or unethical activity
taking place in the Company. The disclosures reported are addressed
in the manner and within the time frames prescribed in the Whistle
Blower Policy.
During the year, the Company undertook a series of communication
and training programmes for internal and external stakeholders, with
the aim to create awareness of Tata values, TCoC and other ethical
practices of the Company. The Company started various theme
based campaigns, round table discussions and departmental events.
‘Neeti Katha’ i.e. storytelling through snippet series were mailed
to employees as part of the awareness campaign. Each snippet
The Company has also adopted the Conflict of Interest Policy. The
policy requires employees to act in the best interest of the Company
without any conflicts and declare conflicts, if any (real, potential or
perceived), to the Ethics Counsellor.
Tata Steel has been recognised as the World’s Most Ethical company
by Ethisphere Institute for the sixth time and has the distinction of
being the only Indian Company to win the Award in Metals, Minerals
& Mining sector.
During the year, the Company received 372 whistle-blower
complaints of which 316 were investigated and appropriate action
was taken. Investigations are underway for the remaining complaints.
14. Related Party Transactions
During the year, the Company did not have any contracts or
arrangements with related parties in terms of Section 188 (1) of the
Act. Also, there were no material related party contracts entered
into by the Company and all contracts were at arms length and in
ordinary course of business.
Accordingly, particulars of contracts or arrangements with related
parties referred to in Section 188(1) of the Act along with the
justification for entering into such contracts or arrangements in Form
AOC-2 does not form part of the report.
15. Disclosure as per The Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has zero tolerance towards sexual harassment at the
workplace and has adopted a policy on prevention, prohibition and
redressal of sexual harassment at workplace in line with the provisions
of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 and the Rules thereunder.
During the year, the Company received 24 complaints of sexual
harassment, out of which 16 complaints have been resolved by
taking appropriate actions. The remaining 8 complaints are under
investigation.
16. Directors’ Responsibility Statement
Based on the framework of internal financial controls established
and maintained by the Company, work performed by the internal,
statutory, cost and secretarial auditors and external agencies
including audit of internal financial controls over financial reporting
by the statutory auditors and the reviews performed by Management
and the relevant Board Committees, including the Audit Committee,
the Board is of the opinion that the Company’s internal financial
controls were adequate and effective during Financial Year 2017-18.
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Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 a)
b)
c)
d)
e)
f )
Accordingly, pursuant to Section 134(5) of the Companies Act, 2013,
the Board of Directors, to the best of their knowledge and ability
confirm:
that in the preparation of the annual accounts, the applicable
accounting standards have been followed and there are no
material departures;
that we have selected such accounting policies and applied
them consistently and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the
state of affairs of the Company at the end of the financial year
and of the profit of the Company for that period;
that proper and sufficient care has been taken for the
maintenance of adequate accounting records in accordance
with the provisions of the Companies Act, 2013 for safeguarding
the assets of the Company and for preventing and detecting
fraud and other irregularities;
Companies Act, 2013 prepared consolidated financial statements
of the Company and all its subsidiaries, which form part of the
Integrated Report. Further, the report on the performance and
financial position of each subsidiary, associate and joint venture and
salient features of the Financial Statements in the prescribed Form
AOC-1 is annexed to this report (Annexure 8).
In accordance with the provisions of Section 136 of the Companies
Act, 2013 and the amendments thereto, the audited Financial
Statements, including the consolidated financial statements and
related information of the Company and financial statements
of the subsidiary companies will be available on our website
www.tatasteel.com These documents will also be available for
inspection during business hours at the Registered Office of the
Company.
The names of companies that have become or ceased to be
subsidiaries, joint ventures and associates during the year are
disclosed in the annexure to this report (Annexure 9).
that the annual accounts have been prepared on a going
concern basis;
19. Auditors
that proper systems to ensure compliance with the provisions
of all applicable laws were in place and that such systems were
adequate and operating effectively; and
that proper internal financial controls were laid down and that
such internal financial controls are adequate and were operating
effectively.
17. Business Responsibility Report
The Securities and Exchange Board of India (‘SEBI’) requires
companies to prepare and present to stakeholders a Business
Responsibility Report (‘BRR’) in the prescribed format. SEBI, however,
allows companies to follow an internationally recognised framework
to report on the environmental and social initiatives undertaken
by the Company. Further, SEBI has on February 6, 2017 advised
companies that Integrated Reporting may be adopted on a voluntary
basis from the Financial Year 2017-18 by top 500 companies which
are required to prepare BRR.
As stated earlier in the Report, the Company has followed the
framework of the International Integrated Reporting Council
to report on all the six capitals that we use to create long term
stakeholder value. Our Integrated Report has been assessed and
KPMG has provided the required assurance. We have also provided
the requisite mapping of principles between the Integrated Report,
the Global Reporting Initiative (‘GRI’) and the Business Responsibility
Report as prescribed by SEBI. The same is available on our website
www.tatasteel.com
Statutory Auditors
Members of the Company at the Annual General Meeting (‘AGM’)
held on August 8, 2017, approved the appointment of Price
Waterhouse & Co Chartered Accountants LLP (‘PW’), Chartered
Accountants, as the statutory auditors of the Company for a period
of five years commencing from the conclusion of the 110th Annual
General Meeting held on August 8, 2017 until the conclusion
of 115th Annual General Meeting of the Company to be held in the
year 2022.
PW has audited the book of accounts of the Company for the
Financial Year ended March 31, 2018 and have issued the Auditors’
Report thereon. There are no qualifications or reservations or adverse
remarks or disclaimers in the said Report.
In terms of the provisions relating to statutory auditors forming part
of the Companies Amendment Act, 2017, notified on May 7, 2018,
ratification of appointment of Statutory Auditors at every AGM is
no more a legal requirement. Accordingly, the Notice convening
the ensuing AGM does not carry any resolution on ratification of
appointment of Statutory Auditors. However, PW has confirmed that
they are eligible to continue as Statutory Auditors of the Company
to audit the books of accounts of the Company for the Financial
Year ending March 31, 2019 and accordingly PW will continue to
be the Statutory Auditors of the Company for Financial Year ending
March 31, 2019.
Cost Auditors
18. Subsidiaries, Joint Ventures and Associates
The Company has 244 subsidiaries and 64 associate companies
(including 30 joint ventures) as on March 31, 2018. During the
year, the Board of Directors reviewed the affairs of material
subsidiaries. We have, in accordance with Section 129(3) of the
In terms of Section 148 of the Act, the Company is required to
have the audit of its cost records conducted by a Cost Accountant.
In this connection, the Board of Directors of the Company has
on the recommendation of the Audit Committee, approved the
appointment of M/s Shome & Banerjee as the cost auditors of the
Company for the year ending March 31, 2019.
9090
Directors’ ReportINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR In accordance with the provisions of Section 148(3) of the Act read
with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the
remuneration payable to the Cost Auditors as recommended by the
Audit Committee and approved by the Board has to be ratified by
the members of the Company. Accordingly, appropriate resolution
forms part of the Notice convening the AGM. We seek your support
in approving the proposed remuneration of ₹18 lakh plus applicable
taxes and out-of-pocket expenses payable to the Cost Auditors for
the Financial Year ending March 31, 2019.
M/s Shome & Banerjee have vast experience in the field of cost
audit and have been conducting the audit of the cost records of the
Company for the past several years.
The Cost Audit Report of the Company for the Financial Year
ended March 31, 2017 was filed in XBRL mode by the Company on
September 1, 2017.
Secretarial Auditors
Section 204 of the Companies Act, 2013 inter-alia requires every
listed company to annex with its Board’s report, a Secretarial
Audit Report given by a Company Secretary in practice, in the
prescribed form.
The Board appointed Parikh & Associates, practicing Company
Secretaries, as Secretarial Auditor to conduct Secretarial Audit of the
Company for the Financial Year 2017-18 and their report is annexed to
this report (Annexure 10). There are no qualifications or reservations
or adverse remarks or disclaimers in the said Report.
The Board has also appointed Parikh & Associates as Secretarial
Auditor to conduct Secretarial Audit of the Company for Financial
Year 2018-19.
20. Extract of the Annual Return
The details forming part of the extract of the Annual Return in Form
MGT-9 as per provisions of the Companies Act, 2013 and Rules
thereto are annexed to this report (Annexure 11).
21. Significant and Material Orders passed by the Regulators or Court
There have been no significant and material orders passed by the
regulators or courts or tribunals impacting the going concern status
and the Company’s operations. However, Members’ attention is
drawn to the statement on contingent liabilities, commitments in the
notes forming part of the Financial Statements.
Further, the Securities and Exchange Board of India vide adjudication
order dated December 7, 2017, imposed a penalty of ₹10 lakh on
the Company for delayed disclosures under the provisions of the
Securities and Exchange Board of India (Prohibition of Insider Trading)
Regulations, 1992, in relation to the Company’s shareholding in The
Tinplate Company of India Limited pursuant to rights issue of shares
in 2009 and the automatic conversion of fully convertible debentures
in 2011. The penalty has been paid by the Company.
22. Particulars of Loans, Guarantees or Investments
Particulars of loans, guarantees given and investments made during
the year in accordance with Section 186 of the Companies Act, 2013
is annexed to this report (Annexure 12).
23. Energy Conservation, Technology Absorption and Foreign
Exchange Earnings and Outgo
Details of the energy conservation, technology absorption and
foreign exchange earnings and outgo are annexed to this report
(Annexure 13).
24. Deposits
During the year, the Company has not accepted any public deposits
under the Companies Act, 2013.
25. Secretarial Standards
The Company has in place proper systems to ensure compliance
with the provisions of the applicable secretarial standards issued by
The Institute of Company Secretaries of India and such systems are
adequate and operating effectively.
J. Acknowledgements
We thank our customers, vendors, dealers, investors, business
associates and bankers for their continued support during the year.
We place on record our appreciation of the contribution made by
employees at all levels. Our resilience to meet challenges was made
possible by their hard work, solidarity, co-operation and support.
We thank the Government of India, the State Governments where we
have operations and other government agencies for their support
and look forward to their continued support in the future.
On behalf of the Board of Directors
sd/-
N. CHANDRASEKARAN
Chairman
DIN: 00121863
Mumbai
May 16, 2018
9191
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Declaration regarding Compliance by Board Members and Senior Management Personnel with the
Code of Conduct
This is to confirm that the Company has adopted the Tata Code of Conduct for its employees including the Managing Director and the
Whole-time Directors. In addition, the Company has adopted the Tata Code of Conduct for the Non-Executive Directors. Both these Codes are
available on the Company’s website www.tatasteel.com
I confirm that the Company has in respect of the Financial Year ended March 31, 2018, received from the Senior Management Team of the
Company and the Members of the Board, a declaration of compliance with the Code of Conduct as applicable to them.
For the purpose of this declaration, Senior Management Team means the Members of the Management one level below the Chief Executive
Officer and Managing Director as on March 31, 2018.
Mumbai
May 16, 2018
sd/-
T. V. NARENDRAN
Chief Executive Officer and Managing Director
DIN: 03083605
9292
Directors’ Report | Dividend Distribution PolicyINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR ANNEXURE 1
Dividend Distribution Policy
1. Preamble
1.1 The Dividend Distribution Policy (hereinafter referred to as the
‘Policy’) has been developed in accordance with the extant
provisions of the Companies Act, 2013 and SEBI regulations.
1.2 The Board of Directors (the ‘Board’) of Tata Steel Limited
(the ‘Company’) has adopted the Policy of the Company
as required in terms of Regulation 43A of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 (the
‘Listing Regulations’) at its meeting held on April 20, 2017.
1.3 Under Section 2(35) of the Companies Act, 2013, ‘Dividend’
includes any interim dividend. In common parlance, ‘dividend’
means the profit of a company, which is not retained in
the business and is distributed among the shareholders in
proportion to the amount paid-up on the shares held by them. In
case of listed companies, Section 24 of the Companies Act, 2013
confers on SEBI, the power of administration of the provisions
pertaining to non-payment of dividend.
2. Effective Date
The Policy shall become effective from the date of its adoption
by the Board i.e. April 20, 2017.
3. Purpose, Objectives and Scope
3.1 The Securities and Exchange Board of India (‘SEBI’) vide its
Gazette Notification dated July 8, 2016 has amended the Listing
Regulations by inserting Regulation 43A in order to make it
mandatory to have a Dividend Distribution Policy in place by
the top five hundred listed companies based on their market
capitalisation calculated as on the 31st day of March of every
year.
3.2 As the Company is one of the top five hundred companies as
on March 31, 2016, the Board has laid down a broad framework
for distribution of dividend to its shareholders and/or retaining
or plough back of its profits. The Policy also sets out the
circumstances and different factors for consideration by the
Board at the time of taking such decisions of distribution or of
retention of profits, in the interest of providing transparency to
the shareholders.
3.3 Declaration of dividend on the basis of parameters in addition
to the elements of this Policy or resulting in amendment of
any element of the Policy will be regarded as deviation. Any
such deviation on elements of this Policy in extraordinary
circumstances, when deemed necessary in the interests of
the Company, along with the rationale will be disclosed in the
Annual Report by the Board.
3.4 The Policy reflects the intent of the Company to reward its
shareholders by sharing a portion of its profits after retaining
sufficient funds for growth of the Company. The Company shall
pursue this Policy, to pay, subject to the circumstances and
factors enlisted hereon, progressive dividend, which shall be
consistent with the performance of the Company over the years.
4.
Parameters to be considered while declaring
Dividends
4.1 Financial Parameters
a)
b)
c)
d)
e)
f)
g)
Magnitude of current year’s earnings of the Company: Since
dividend is directly linked with the availability of earning over
the long haul, the magnitude of earnings will significantly
impact the dividend declaration decisions of the Company.
Operating cash flow of the Company: If the Company cannot
generate adequate operating cash flow, it may need to rely on
outside funding to meet its financial obligations and sometimes
to run the day-to-day operations. The Board will consider the
same before its decision whether to declare dividend or retain
its profits.
Return on invested capital: The efficiency with which the
Company uses its capital.
Cost of borrowings: The Board will analyse the requirement
of necessary funds considering the long-term or short-term
projects proposed to be undertaken by the Company and the
viability of the raising funds from alternative sources vis-a-vis
plough back its own funds.
Obligations to lenders: The Company should be able to repay
its debt obligations without much difficulty over a reasonable
period of time. Considering the volume of such obligations and
time period of repayment, the decision of dividend declaration
shall be taken.
Inadequacy of profits: If during any financial year, the Board
determines that the profits of the Company are inadequate, the
Board may decide not to declare dividends for that financial year.
Post dividend EPS: The post dividend EPS can have strong
impact on the funds of the Company, thus, impacting the overall
operations on day-to-day basis and therefore, affects the profits
and can impact the decision for dividend declaration during a
particular year.
4.2 Proposals for major capital expenditures
The Board may also take into consideration the need for
replacement of capital assets, expansion and modernisation or
augmentation of capital asset including any major sustenance,
improvement and growth proposals.
9393
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
Dividend Distribution Policy
4.3 Agreements with lending institutions/Bondholders/
6. Target Dividend
Debenture Trustees
The decision of dividend pay-out shall also be affected by the
restrictions and covenants contained in the agreements as may
be entered into with the lenders of the Company from time to
time.
4.4 Statutory requirements
The Company shall observe the relevant statutory requirements
including those with respect to mandatory transfer of a certain
portion of profits to any specific reserve such as Debenture
Redemption Reserve, Capital Redemption Reserve etc. as
provided in the Companies Act, 2013, which may be applicable
to the Company at the time of taking decision with regard to
dividend declaration or retention of profit.
5. Factors that may affect Dividend Payout
6.1 The Company has adopted a progressive dividend policy,
intending to maintain or grow the dividend each year.
6.2 The Company targets to pay dividend up to 50% of profit after tax
of the Company subject to the applicable rules and regulations.
7.
Circumstances under which the Shareholders
can or cannot expect Dividend
7.1 The Board shall consider the factors provided under Clause
4 and 5 above, before determination of any dividend payout after
analysing the prospective opportunities and threats, viability of
the options of dividend payout or retention, etc.
7.2 The decision of dividend payout shall, majorly be based on
the aforesaid factors considering the balanced interest of the
shareholders and the Company.
5.1 External Factors
8. Manner of Dividend Payout
Macroeconomic conditions: Considering the current and
future outlook of the economy of the Country, the policy
decisions that may be formulated by the Government and
other similar conditions prevailing in the global market which
may have a bearing on or affect the business of the Company,
the management may consider retaining a larger part of the
profits to have sufficient reserves to meet the exigency during
unforeseen circumstances.
Cost of raising funds from alternative sources: If the cost
of raising funds to pursue its planned growth and expansion
plans is significantly higher, the management may consider
retaining a larger part of the profits to have sufficient funds to
meet the capital expenditure plan.
Taxation and other regulatory provisions: Dividend
distribution tax or any tax deduction at source as required by
applicable tax regulations in India, as may be applicable at the
time of declaration of dividend. Any restrictions on payment
of dividends by virtue of any regulation as may be applicable
to the Company at the time of declaration of dividend.
5.2 Internal Factors
The Company’s long term growth strategy which requires to
conserve cash in the Company to execute the growth plan.
The liquidity position of the Company including its working
capital requirements and debt servicing obligations.
The trend of the performance/reputation of the Company that
has been during the past years determine the expectation of
the shareholders.
8.1 Given below is a summary of the process of declaration and
payment of dividends, and is subject to applicable regulations
8.2 In case of final dividends:
a)
b)
c)
Recommendation, if any, shall be done by the Board,
usually in the Board meeting that considers and approves
the annual financial statements, subject to approval of the
shareholders of the Company.
The dividend as recommended by the Board shall be
approved/declared at the annual general meeting of the
Company.
The payment of dividends shall be made within 30 days
from the date of declaration to the shareholders entitled
to receive the dividend on the record date/book closure
period as per the applicable law.
8.3 In case of interim dividend:
a) Interim dividend, if any, shall be declared by the Board.
b) Before declaring interim dividend, the Board shall consider the
financial position of the Company that allows the payment of
such dividend.
c) The payment of dividends shall be made within 30 days from
the date of declaration to the shareholders entitled to receive
the dividend on the record date as per the applicable laws.
d) In case no final dividend is declared, interim dividend paid
during the year, if any, will be regarded as final dividend in the
annual general meeting.
9494
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
9.
Policy as to how the Retained Earnings will be
Utilised
9.1 The Board may retain its earnings in order to make better use of
the available funds and increase the value of the stakeholders in
the long run.
9.2 The decision of utilisation of the retained earnings of the
Company shall be based on the following factors:
Long term strategic plans
Augmentation/Increase in production capacity
Market expansion plan
Product expansion plan
Modernisation plan
Diversification of business
Replacement of capital assets
Balancing the Capital Structure by de-leveraging the Company
Other such criteria as the Board may deem fit from time
to time.
10. Provisions in regard to various classes of shares
10.1 The Company has only one class of equity shareholders and
does not have any issued preference share capital. However, in
case Company issue different class of equity shares any point
in time, the factors and parameters for declaration of dividend
to different class of shares of the Company shall be same as
covered above.
10.4 Dividend when declared shall be first paid to the preference
shareholders of the Company, if any as per the terms and
conditions of their issue.
11. Applicability of the Policy
11.1 The Policy shall not apply to:
Determination and declaring dividend on preference shares
as the same will be as per the terms of issue approved by the
shareholders;
Distribution of dividend in kind, i.e. by issue of fully or partly
paid bonus shares or other securities, subject to applicable
law
Distribution of cash as an alternative to payment of dividend
by way of buyback of equity shares
12. Reporting and Disclosure
As prescribed by Regulation 43A of the Listing Regulation, this
Policy shall be disclosed on the Company’s website and the
Annual report.
13. Review of the Policy
13.1 This Policy shall be subject to review as may be deemed
necessary as per any regulatory amendments.
13.2 Such amended Policy shall be periodically placed before the
Board for adoption immediately after such changes.
10.2 The payment of dividend shall be based on the respective rights
attached to each class of shares as per their terms of issue.
14. Compliance Responsibility
10.3 The dividends shall be paid out of the Company’s distributable
profits and/or general reserves, and shall be allocated among
shareholders on a pro-rata basis according to the number of
each type and class of shares held.
Compliance of this Policy shall be the responsibility of the
Company Secretary of the Company who shall have the power
to ask for any information or clarifications from the management
in this regard.
9595
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
Management Discussion and Analysis
ANNEXURE 2
Management Discussion and Analysis
A. Overview
The following operating and financial review is intended to convey
the Management’s perspective on the financial and operating
performance of the Company at the end of Financial Year 2017-18.
This Report should be read in conjunction with the Company’s
financial statements, the schedules and notes thereto and other
information included elsewhere in the Integrated Report. The
Company’s financial statements have been prepared in accordance
with Indian Accounting Standards (‘Ind AS’) complying with the
requirements of the Companies Act, 2013 and guidelines issued by
the Securities and Exchange Board of India (‘SEBI’).
This report is an integral part of the Directors’ Report. Aspects on
industry structure and developments, outlook, risks, internal control
systems and their adequacy, material developments in human
resources and industrial relations have been covered in the Directors’
Report. Your attention is also drawn to sections on Strategy forming
part of the Integrated Report. This section gives significant details on
the performance and the risks faced by the Company.
B. Tata Steel Group Operations
1. Tata Steel India
Turnover
EBITDA
Profit before tax (PBT), before exceptional
Profit before tax (PBT)
Profit after tax (PAT), before exceptional
Profit after tax (PAT)
FY 18
60,519
15,800
10,005
6,638
7,536
4,170
(₹ crore)
FY 17
53,261
11,944
6,060
5,357
4,148
3,445
a) Operations
Hot Metal
Crude Steel
Saleable Steel
Sales
FY 18
13.86
12.48
12.24
12.15
(in million tonnes)
FY 17 Change (%)
6
13.05
7
11.68
8
11.35
11
10.97
The saleable steel production and sales trend over the years is as
follows:
Production and sales of Steel Division
(‘000 tonnes)
1
3
9
8
,
6
1
5
8
,
3
7
0
9
,
0
5
7
8
,
8
9
6
9
,
3
4
5
9
,
7
3
2
2
1
,
1
5
1
2
1
,
1
5
3
1
1
,
3
7
9
0
1
,
FY14
FY15
FY16
FY17
FY18
Production
Sales
During Financial Year 2017-18, the saleable steel production stood at
12.24 MnT which is ~8% increase over previous year. The hot metal
production for the Financial Year was at 13.86 MnT which is 6%
higher over previous year. The improvement in performance is due
to stabilisation of operations at Kalinganagar which commissioned
in June 2016 and various on-going initiatives undertaken for stable
performance. Accordingly, Tata Steel Jamshedpur (‘TSJ’) has achieved
the Indian bench mark in specific consumption of energy, refractory,
pulverised coal injection and coke rate.
Tata Steel Kalinganagar (‘TSK’) strives to maintain a world-class
environment in the premises by following environmental management
systems in accordance with rules and regulations framed by the
government and have comprehensive processes in place for ensuring
health and safety of people, plant and equipment. The plant is
designed to have minimal water footprint, by-product gas based
power generation leading to reduction in carbon footprints, Coke
Dry Quenching technology, zero-effluent discharge and significant
reduction of noise and dust pollution.
During Financial Year 2017-18, capacity utilisation at TSK reached
higher levels over the previous year in all the major facilities marking
extremely improved performance. There was a significant quality
ramp-up in steel making and successful development of 108 new
products as against the plan of 101 new products. The acceptance
of the products was good by customers. The product mix comprised
of low carbon, medium & high carbon and peritectic grades, which
served different market segments such as LPG, tube making, tin
9696
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR plating, construction & projects, lifting & excavation, automotive,
heavy engineering, amongst others. The plant has also produced
higher automotive grades and is poised to produce Advanced High
Strength Steel grades.
After successful ramp-up, TSK has embarked upon second phase of
expansion which will take its production capacity to 8 MnTPA.
b) Marketing and Sales Initiatives
During Financial Year 2017-18, our Steel Business Unit (‘SBU’) has
achieved a growth in sales of ~11% over previous year, outperforming
the market growth.
The break-up of sales in our various segments and the break-up of
domestic sales to exports are as follows:
Particulars
Automotive & Special products
Branded Products, Retail & Solutions
Industrial Products & Projects
Domestic
Exports
Domestic + Exports
Transfers (Wires, Tubes, Agrico, Tinplate)
Total Deliveries
(in million tonnes)
FY 18
1.94
3.80
4.24
9.98
1.15
11.13
1.02
12.15
FY 17
1.58
3.47
4.03
9.08
0.74
9.82
1.15
10.97
Following are the Key Business Initiatives and achievements of
Financial Year 2017-18:
Automotive and Special Products: Achieved best ever annual sales
in Automotive sector thereby registering a growth of 23% year-on-year
as against industry growth of 14% (mainly driven by 2 & 3 wheelers)
leading to an increase in market share to 45%. This was achieved
due to initiation of commercial supplies of hot rolled products from
TSK, ramp-up of cold rolled volumes from Jamshedpur Continuous
Annealing & Processing Company Private Limited. (‘JCAPCPL’), high
share received in new models through development of advanced
hi-end products and various non-product services such as Value
Analysis & Value Engineering (‘VAVE’) work shops, collaborative
improvement as part of Customer Service Team’s
initiatives.
As a recognition of the various initiatives, the Company received
accolades from its key customers and automotive leaders, the ‘Best
Supplier Award’, ‘Business Alignment Gold’ award and ‘Technology/
Innovation’ award.
Branded Products, Retail and Solutions: Sales of branded products
grew by ~10% in Financial Year 2017-18 over the previous year. The
Company maintained market leadership in B2C sales of Tata Tiscon
and Tata Shaktee. Further, there was an increase in B2C sales of new
products and brands like Tata Kosh, Tata Shaktee Long Lengths. In
Financial Year 2017-18, the Company achieved best ever Emerging
Corporate Account (‘ECA’) sales of 2,145 kilo tonnes. Channel
capability enhancement and Augmentation of service centres
resulted in enhancing our presence in key micro segments (e.g. Solar,
Transmission & Distribution, etc) of ECA business. The Company also
augmented digital tools for covering entire Tata Tiscon eco-system
in order to enhance consumer engagement. Tata Tiscon won ‘Asia’s
most admired Brand’ award in construction category, Tata Shaktee
received the ‘Flame leadership award’ from the Rural Marketing
Association of India (‘RMAI’) for innovative marketing campaign
and recognition from one of its Key customers as part of customer
centricity for localisation & stabilisation of Enameling process.
Industrial Products, Projects and Exports: The Company continued
its focus towards value added products and achieved highest ever
annual sales in value added segments of hot rolled coupled with
two times growth in Engineering Segment Sales (Pre-Engineered
Building, Lifting & Excavation, Construction & Projects and Oil & Gas)
over last year through the various product development initiatives.
Industrial Products business enhanced its presence in international
geographies and crossed the landmark of 1 MnT of exports for the
first time in Financial Year 2017-18. The Company has increased its
downstream businesses like Cut & Bend (Readybuild) & Couplers and
also launched India’s first Branded Welded Wire Fabric ‘Smart Fab’ to
capture its market.
Services & Solutions: The Company is increasing its presence
in Services & Solutions space for better consumer connect and
experience. ‘Pravesh’ (steel doors & windows) has won ‘Best Online
Marketing Campaign of the year’ award by ET Now and crossed
bookings of 1.2 lakh for the year. The Company enhanced its product
portfolio in services & solution through the launch of ‘Nestudio’ under
‘Nest-in’ family of products (a construction solution) for premium
housing category for both B2B and B2C consumers and ‘Tata Tiscon
Ultima’ coated products of Tata Tiscon such as Plasma coated Rebars
and GFX coated Superlinks (Stirrups).
c) Ferro Alloys and Minerals Division
Our Ferro Alloy and Minerals Division (‘FAMD’) is amongst the top six
chrome alloy producers in the world with operations spanning across
two continents. In India, it is the largest producer of ferro chrome and
one of the leading manganese alloy producer.
During the year, there was softening of Ferro Chrome prices in the
international market. As market inclination is towards alloys business,
the Company has shifted its business model from sale of minerals to
Value Addition (to alloys) through Ferro Processing Centres.
FAMD achieved a production of 1,270 kilo tonnes as against 1,320
kilo tonnes in the previous year.
9797
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Management Discussion and Analysis
Production and Sales of (FAMD)
(‘000 tonnes)
4
0
0
1 1
1
9
,
0
4
7
5
8
5
5
1
3
5
1
3
0
2
3
1
,
7
2
3
1
,
0
7
2
1
,
1
4
2
1
,
FY14
FY15
FY16
FY17
FY18
Production
Sales
The Company started the first ever Gas Cleaning Plant (Slurry
Processing) in the industry to recover Manganese rich sludge and
water re-circulation at Ferro Alloys Plant, Joda. Further, the Company
launched first of its kind Global Positioning System (‘GPS’) based
Ferro Alloy consignment tracking along with mobile app: FASTRACK.
d) Tubes Division:
Our Tubes Strategic Business Unit is a leading manufacturer of
pipes and tubes in India having its manufacturing facility situated at
Jamshedpur with an annual production capacity of ~500 kilo tonnes.
The three main lines of businesses are conveyance tubes (Tata Pipes),
structural tubes (Tata Structura), precision tubes for auto and boiler
segments.
Production and Sales of Tubes Division
(‘000 tonnes)
Primer, Graphene, multilayer coated & Thin Organic Coating (‘TOC’).
The division has also started new facilities of Hollow section Universal
Mill and Precision Tube Mill at Jamshedpur along with large diameter
Tube Mill at TSK.
The division won ‘The Best Company of the Year’ for its contribution
to the Construction Industry at the Construction Times Awards 2017.
e) Industrial By-products and Management Division
Our Industrial By-products and Management Division (‘IBMD’)
handles variety of by-products in the entire value chain. The business
operates on the principle of 3Rs (Reduce, Reuse, Recycle), thereby
ensuring contribution towards the green journey of the Company.
The product portfolio comprises of steel by-products such as metallic
scrap, slag, coal tar, flat product scrap and coal by-products like
middlings tailings and rejects. Product branding has been done to
create recognition among peers and customers’ brands.
During year, the division launched India’s first ever branded LD Slag
products Tata Aggreto and Tata Nirman. Further, first ever Blast
Furnace Slag was exported to Bangladesh and Tata Ferroshots to
Indonesia.
During the Financial Year 2017-18, by-product utilisation at the Plant
increased substantially and sales increased by 8% over the previous
year.
Scrap Utilisation at Plant and Sales of IBM Division
(‘000 tonnes)
8
1
8
5
6
8
0
9
7
7
0
9
0
8
9
2
2
4
8
1
4
4
4
4
4
4
4
2
6
4
9
5
4
7
8
4
3
8
4
9
0
5
1
1
5
7
2
1
2
5
1
4
9
1
0
3
2
2
1
3
FY13
FY14
FY15
FY16
FY17
Scrap Utilisation
Sales
Harnessing ‘Value from waste and by-products’ has been the
objective of the division. It is committed to becoming a knowledge
driven business unit leveraging digital and innovation days as
key pillars. The division has also delved into downstream value
enhancement of by-products which serve as quality benchmarks
in the industry. The division is in the process of developing steel
recycling business comprising pan-India steel collection and
processing centres. These centres would feed the processed scrap to
captive electric arc furnace for steel making and downstream rolling
which would further contribute towards developing a sustainable
ecosystem in the long run.
FY14
FY15
FY16
FY17
FY18
Production
Sales
During Financial Year 2017-18, the Tubes Strategic Business Unit
achieved 6% growth in sales over previous year mainly contributed by
17% growth in precision tubes in line with the growth of automotive
industry and 9% growth in Tata Structura due to improved demand
in the construction segment (Telecom, Metro railway projects). The
division has developed new products like Colour coated tubes -
9898
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR The division has been awarded with Green-Pro Certification for
Ground Granulated Blast Furnace Slag (‘GGBS’) by CII-GBC council.
Tata Steel is one of the first companies, in India, to get the green
product certification for GGBS.
Hub Unit Bearings, Clutch Release Bearings, Double Row Angular
Contact Bearings, Centre Bearings and Magneto Bearings. It is the
only bearings manufacturer in India to win the TPM Award (2004)
from Japan Institute of Plant Maintenance, Tokyo.
f) Wires Division
Our Global Wires India Business Unit is the largest manufacturer
of steel wires in India. The plants are located at Tarapur, Mumbai,
Pithampur, Indore and at Jamshedpur, having an annual capacity of
375 kilo tonnes. The products offered are Tyre Bead wire for the tyre
industry, spring and spoke wires for the auto industry, Prestressed
Concrete (‘PC’) Strands and PC wires for the construction industry,
Galvanised wires for fencing and Binding wires for the rural markets.
Production and Sales of Wires Division
(‘000 tonnes)
6
2
3
6
2
3
7
0
3
9
0
3
2
0
3
0
1
3
0
6
3
6
6
3
1
2
3
0
2
3
FY14
FY15
FY16
FY17
FY18
Production
Sales
During Financial Year 2017-18, the division achieved 14% growth
in sales over previous year mainly contributed by 20% growth in
infrastructure segment, 13% growth in automotive segment (in line
with the growth of automotive industry) and 11% growth in the retail
segment. The Pithampur plant has undertaken major expansion. The
annual capacity increased to ~88 kilo tonnes from ~53 kilo tonnes.
The division has won the following accolades:
The Brand Excellence Award in Iron & Steel Industry’ and Tata
Wiron was awarded ‘Emerging Brand Award’ at the brand
excellence award hosted by the World Marketing Congress.
SPANDAN – a farmer connect initiative has been awarded ‘Best
Integrated Rural Marketing Campaign’ by National awards for
Excellence in Rural Marketing.
g) Bearings Division
its manufacturing
Our Bearings Division is one of the India’s largest quality bearing
manufacturers, having
facility situated at
Kharagpur, West Bengal with an annual production capacity of
40 million bearing numbers. The Company is foremost in the
manufacturing of a wide variety of bearings and auto assemblies
and product range includes Ball Bearings, Taper Roller Bearings,
Production and Sales of Bearings Division
(Mn nos.)
5
4 3
3
5
3
4
3
7
3
6
3
8
3
8
3
9
8 3
3
FY14
FY15
FY16
FY17
FY18
Production
Sales
The division achieved 3% growth in sales over previous year mainly
due to increased off-take by auto two-wheeler and engineering
segments. The division has also improved plant availability by
de-bottlenecking and leveraging its existing resources for sustainable
operations.
The division has been conferred with DOL (Direct on Line) certification
from Rockman Industries (Auto components Manufacturer in India).
h) Shikhar 25 (Operational Improvement programmes)
Shikhar 25 programme
is a multi-divisional, multi-location,
cross functional programme that intends to drive breakthrough
improvement projects with best of rigor and simplified governance,
without compromising on safety, environment and people standards
and works in collaboration with internal/external stakeholders to
achieve best in class in operational performance.
The continuous learning and improvement journey has been one
of the foundation pillars for driving a benchmark performance
across the value chain. The programme was rolled out in steel value
chain with structured collaboration from Raw Material division to
Marketing & Sales division as an umbrella initiative.
During the year, the Shikhar 25 programme was extended to tap
potentials for Cross cutting themes across divisions and the new
facility at TSK. Further, 5 new Impact Centres were established
namely Value in Use, Jharia, Shared Services, GST and export
logistics and TSK. All the Impact Centres focused on new technology
adaptation in collaboration with suppliers and integrating digital
initiatives to explore new horizons of improvements. Key levers for
improvement were improvement in fuel rate in Blast Furnaces and
throughput, sale of enriched products, increase in throughput at
West Bokaro collieries, cost reduction at Mines and Collieries, solid
9999
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Management Discussion and Analysis
waste utilisation at Sinter Plants, Hot Metal and Scrap yield, Lime
consumption, Ferro Alloys cost reduction at LDs, reduction in the
spend base of Inbound/Outbound Logistics, packaging cost, energy
efficiency, cost optimisation for other procured goods and services
amongst others.
Total improvement savings achieved in Financial Year 2017-18 is
₹2,594 crore.
2. Tata Steel Europe
Global GDP growth in 2017 was 3.8%. The eurozone economy grew
by 2.3% in 2017 which was higher than 1.8% in 2016. In order to avoid
a deflationary environment, the European Central Bank extended the
quantitative easing programme. The UK economy grew by 1.8% in
2017 (1.9% in 2016). The immediate impact of the referendum to
leave the EU has been modest. In 2017 the pound depreciated slightly
against the euro from 1.16 in January 2017 to 1.13 in December 2017.
Even though steel margins have improved in Europe, there are
ongoing challenges due to the overcapacity in Europe and the
slowdown in China. The persistent overcapacity in Europe is expected
to continue with demand forecast to increase by around 1% per
annum over the next 10 years. Current industry forecasts predict EU
steel spreads in Financial Year 2018-19 to reduce from current levels
by >€20/tonne.
Whilst the Company seeks to increase differentiated/premium
business that is less dependent on market price movements, it
still retains focus in both the UK and IJmuiden on improving its
operations, consistency and taking measures to protect against
unplanned interruptions and property damage. Best practices are
in asset management, enhancing technical knowledge and skills,
improving process safety, targeted capital expenditure and focused
risk management.
The turnover and profit/loss figures of TSE (continuing operations)
are given below:
Turnover
EBITDA
Profit before tax (PBT), before exceptional
Profit before tax (PBT)
Profit after tax (PAT), before exceptional
Profit after tax (PAT)
FY 18
59,985
3,792
(1,803)
12,048
(2,164)
11,687
(₹ crore)
FY 17
52,085
4,705
(326)
(4,079)
(762)
(4,515)
The production and sales performance of TSE (continuing operations)
is given below:
Liquid Steel Production
Deliveries
FY 18
10.69
9.99
(in million tonne)
FY 17 Change (%)
1
10.56
1
9.93
TSE’s revenue of ₹59,985 crore for Financial Year 2017-18 increased
by ₹7,900 crore (15%) owing to increase in average revenue per
tonne due to improved market conditions and marginal increase in
deliveries.
The principal activities
in Financial Year 2017-18 comprised
manufacture and sale of steel products throughout the world. TSE’s
continuing operations produced carbon steel by the basic oxygen
steelmaking method at its integrated steelworks in the Netherlands
at IJmuiden and in the UK at Port Talbot. During Financial Year
2017-18 these plants produced 10.7 MnT of liquid steel.
Strip Products Mainland Europe – During Financial Year 2017-18,
the liquid steel production at IJmuiden Steel Works, Netherlands was
at 7.1 MnT which was 0.1 MnT higher than the previous year. Record
annual outputs of 1.4 MnT were achieved at the Direct Sheet Plant and
0.6 MnT at third galvanising line. The plant has undertaken
initiatives on cost reduction, business specific
improvement
improvement plans and securing access to cost effective raw
materials. It is undergoing a ‘Sustainable Profit’ programme which
is targeting improvements to delivery and yield performance and
reduce operating costs and unplanned downtime and a ‘Strategic
Asset Roadmap’ (‘STAR’) capital investment programme to support
the strategic growth of differentiated, high value products in the
automotive, lifting & excavating, energy and power market sectors.
During Financial Year 2017-18, further progress was achieved towards
the installation of a new caster to allow enhanced casting capabilities
for advanced products and the commissioning of a heavy-duty coiler
at the hot strip mill.
Strip Products UK – During the year, the liquid steel production
at Port Talbot Steel Works, Wales was at 3.6 MnT which is same as
the previous year. Strip Products UK increased the capacity of the
ZODIAC automotive hot dipped galvanising line by 100 kilo tonnes
to 600 kilo tonnes/annum through enhancements to the furnace
and pre and post pot cooling sections, and commissioned a new
Automotive Finishing Line (‘AFL’) to provide all material processing
requirements for the Strip Automotive market. The hub is pursuing
with its ‘Delivering Our Future’ improvement initiative programme.
TSE had supplied steel structure to create steel and concrete
composite flooring at overseas infrastructure projects, light weight
composite steel to automotive makers and transport sectors.
Awards and Accolades:
TSE won a ‘Steelie’, steel industry’s highest awards, presented
by the World Steel Association for taking a new approach to
demonstrating that steel is a highly sustainable construction
product.
BMW announced that TSE had been awarded the best
performing supplier with a maximum rating of 100 for quality in
their scoring system.
100100
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR 3. NatSteel Holdings
The turnover and profit/loss figures of NatSteel Holdings (‘NSH’) for
Financial Year 2017-18 are as follows:
Turnover
EBITDA
Profit before tax (PBT), before exceptional
Profit before tax (PBT)
Profit after tax (PAT), before exceptional
Profit after tax (PAT)
FY 18
5,181
201
39
39
52
52
(₹ crore)
FY 17
4,478
206
27
132
30
134
During the year, the Singapore economy grew by 3.5%, highest in
3 years, supported by strong manufacturing and service sectors.
Construction continues to be lagging behind. The demand for steel
to remain stagnated due to contraction in construction spend.
Steel demand in Malaysia grew by 5%, driven by infrastructure and
construction demand and the steel demand in Vietnam is expected
to grow at a slower rate than previous years.
During Financial Year 2017-18, the deliveries were 1,293 kilo tonnes
as against 1,349 kilo tonnes of previous year. The decline in volumes
were due to lower demand because of slowdown of the construction
activities and lower exports. An increase in turnover was reported
due to increased realisation offset by lower volumes.
During the year, NSH received the national bizSAFE partner award
and Singapore Health Award.
4. Tata Steel Thailand
The turnover and profit/loss figures of Tata Steel Thailand (‘TSTH’) for
Financial Year 2017-18 are as follows:
Turnover
EBITDA
Profit before tax (PBT), before exceptional
Profit before tax (PBT)
Profit after tax (PAT), before exceptional
Profit after tax (PAT)
FY 18
4,361
236
114
114
89
89
(₹ crore)
FY 17
3,767
322
202
84
159
41
During 2017, the Thailand economy grew by 3.9%, above its
10-year average, improving from 3.2% in 2016. Private consumption
continually expanded by 3.2%, which was supported by government
stimulus measures. Private consumption growth was encouraged
by an increase in minimum wage and more deductions for personal
income tax. Public spending growth slowed down due to delay in
investments in mega projects and disbursement of the government’s
annual budget.
The steel consumption declined by 14% Y-o-Y, the worse impact
being on long products which declined 26% Y-o-Y. Construction
sector declined by 5.5% Y-o-Y mainly due to slowdown in public
investments because of slow budget disbursements. The price of
finished products increased in line with strong global metallic price
trend, high prices of ferro alloys and electrodes.
During Financial Year 2017-18,
the deliveries were at
1,217 kilo tonnes as against 1,262 kilo tonnes of previous year
primarily due to slowdown in the construction sector. The turnover
increased over previous year, due to increased realisation partly
offset by lower sales volumes. The increase in profits is attributable to
one-off item in Financial Year 2016-17 relating to provision of
impairment loss of Mini Blast Furnace which is not present in the
current year.
During the year, TSTH received the following awards:
N.T.S. Steel Group Public Company Ltd. won the prestigious Prime
Minister’s Awards 2017 on Safety Management.
The Siam Construction Steel Company Ltd. (‘SCSC’) and The Siam
Iron and Steel Company Ltd. (‘SISCO’) plants received ‘CSR – DIW
Awards’ from the Department of Industrial Works.
TSTH won the Kaizen Gold award in the category of Innovation
during Thailand Kaizen Award 2017.
5. Tata Metaliks Limited
The turnover and profit/loss figures of Tata Metaliks Limited (‘TML’)
for Financial Year 2017-18 are as follows:
Turnover
Profit before tax (PBT)
Profit after tax (PAT)
FY 18
1,894
200
159
(₹ crore)
FY 17
1,410
152
116
TML has its manufacturing plant at Kharagpur, West Bengal,
India which produces annually 300 kilo tonnes of pig iron and
200 kilo tonnes of ductile iron pipes. Pig iron is marketed under the
brand name ‘Tata eFee’ (world’s first brand) and ductile iron pipe is
marketed in the brand name ‘Tata Ductura’.
During Financial Year 2017-18, the sale of pig iron was at 291 kilo
tonnes as against 195 kilo tonnes of previous year and sale of
Ductile Iron pipes was at 209 kilo tonnes as against 182 kilo tonnes
of previous year due to increased demands. The annual profits of
current year are higher as compared to previous year primarily due
to higher volumes of pig iron and ductile iron pipes.
TML took following strategic measures during the year:
Air pre-heater in Mini Blast Furnace (‘MBF’) - 1 higher hot blast
temperature leading to lower coke rate.
40 tonnes Hot Metal carrier for transfer of hot metal from MBF to
Ductile Iron for lower temperature loss and higher yield.
ICRA increased the credit rating of TML from A+ to AA group due to
better performance.
101101
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Management Discussion and Analysis
During the year, the profits increased due to higher contribution from
tolling business along with increase in tolling compensation received
from the Company and others. Distribution volumes increased by
32% due to increase in production.
During the year TSPDL received the following accolades:
Pune unit was awarded the ‘Energy Efficient Unit’ at CII National
Energy Management Award 2017,
NSCI safety award - 2017 Prashansa Patra (certificate) in Group D
under the manufacturing sector category.
8. Tata Sponge Iron Limited
The turnover and profit/loss figures of Tata Sponge Iron Limited
(‘TSIL’) for Financial Year 2017-18 are as follows:
Turnover
Profit before tax (PBT)
Profit after tax (PAT)
FY 18
817
210
141
(₹ crore)
FY 17
615
84
58
TSIL is a manufacturer of sponge iron with an annual production
capacity of 390 kilo tonnes and generates 26 MW of power through
the waste heat recovery route.
During the year, sale of sponge iron was 414 kilo tonnes as against
393 kilo tonnes of previous year. Further, the sale of power during
the Financial Year 2017-18 was at 143 MKWH as against 132 MKWH
of previous year. These increases are primarily due to increased
realisation from sponge iron.
C. Financial Performance
1. TATA STEEL INDIA
During the year, the Company recorded a profit after tax of
₹4,170 crore (previous year: ₹3,445 crore). The increase is primarily on
account of improved realisations and higher deliveries, partly offset
by higher exceptional charges over previous year. The basic and
diluted earnings per share for Financial Year 2017-18 were at ₹38.57
and ₹38.56 respectively (previous year: ₹31.74).
The analysis of major items of the financial statements is given below:
a) Net sales and other operating income
Sale of products
Sale of power and water
Income from town,
medical and other services
Other operating income
Total income from
operations
FY 18
57,614
1,691
148
1,066
(₹ crore)
FY 17 Change (%)
13
19
51,011
1,418
136
696
9
53
14
60,519
53,261
6. The Tinplate Company of India Limited
The turnover and profit/loss figures of The Tinplate Company of India
Limited (‘TCIL’) for Financial Year 2017-18 are as follows:
Turnover
Profit before tax (PBT)
Profit after tax (PAT)
FY 18
1,931
115
73
(₹ crore)
FY 17
849
41
28
TCIL is the largest indigenous producer of tin coated and tin free steel
used for metal packaging. It has also been ‘value-adding’ its products
by way of providing printing and lacquering facility to reach closer
to food processors/fillers. TCIL has two Cold Rolling Mills and two
electrolytic tinning lines with an installed annual production capacity
of around 379 kilo tonnes of tinplate and tin-free steel.
During the year, TCIL achieved sales of 361 kilo tonnes as against
317 kilo tonnes of previous year. The annual production of tinning
is at 356 kilo tonnes which is 11% higher than previous year at
321 kilo tonnes. Turnover is higher over the previous year due to shift
in business model from conversion to buy and sale model along with
higher deliveries and improvement in realisations. The annual profits
improved over previous year in line with higher turnover, partly
offset by increase in input steel cost.
7. Tata Steel Processing and Distribution Limited
The turnover and profit/loss figures of Tata Steel Processing and
Distribution Limited (‘TSPDL’) for Financial Year 2017-18 are as
follows:
Turnover
Profit before tax (PBT)
Profit after tax (PAT)
FY 18
3,196
96
64
(₹ crore)
FY 17
2,472
56
40
TSPDL has extended its footprint with a new distribution centre at
Sanand, Gujarat in the year 2017. It has commissioned a Wide Cut
To Length (‘WCTL’) line having an annual capacity of 410 kilo tonnes
to process thick Hot Rolled materials (8-25mm) at the Company’s
Kalinganagar facility in June 2017. An inspection and parting line
with annual capacity of 120 kilo tonnes was commissioned at CRM
Bara Complex of the Company in August 2017. These have enabled
to increase the total capacity to 3.3 MnT as compared to the installed
capacity of 2.8 MnT in the previous year. However, during the year,
the capacity utilisation has been 2.13 MnT compared to 1.9 MnT
achieved in the previous year. As a constant endeavour to improve
the quality of products to customers, TSPDL developed a scale
brushing system which has been commissioned at Narrow Cut To
Length (‘NCTL’) in Chennai and WCTL line at Kalinganagar. TSPDL
undertook an EBITDA improvement initiative ‘Lakshya 25’.
102102
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR During the year, overall turnover was higher as compared to the
previous year, primarily due to increased operations at Tata Steel
Kalinganagar (‘TSK’) along with increase in realisations. Ferro Alloys
and Mineral Division (‘FAMD’) registered higher revenue owing to
higher production of Ferro Chrome along with improved demand in
the international market.
b) Purchase of finished, semi-finished steel and other products
Purchase of finished,
semi-finished steel and
other products
FY 18
FY 17 Change (%)
(₹ crore)
647
881
(27)
During the year, purchase of finished and semi-finished materials
decreased as compared to the previous year due to lower purchases
of steel wire rods and imported rebars for resale.
c) Raw materials consumed
Raw materials consumed
(₹ crore)
FY 18
16,878
FY 17 Change (%)
35
12,497
During the year, the consumption of Raw Material increased
primarily due to increased operations at TSK as well as higher cost of
imported coal.
d) Employee benefits expense
Employee benefits expense
(₹ crore)
FY 18
4,829
FY 17 Change (%)
5
4,605
During the year, the expense increased, primarily on account of salary
revisions and its consequential impact on the retirement provisions.
e) Depreciation and amortisation expense
Depreciation and
amortisation expense
(₹ crore)
FY 18
3,727
FY 17 Change (%)
3,542
5
Other expenditure represents the following expenditure:
(₹ crore)
FY 17 Change (%)
Consumption of stores and
spares
Repairs to buildings
Repairs to machinery
Relining expenses
Fuel oil consumed
Purchase of power
Conversion charges
Freight and handling charges
Rent
Royalty
Rates and taxes
Insurance charges
Commission, discounts and
rebates
Allowance for credit losses/
provision for advances
Excise Duty (including
recovered on sales)
Other expenses
Less:-Expenditure (other than
interest) transferred to capital
& other accounts
Total Other expenses
FY 18
3,306
72
2,603
52
154
2,771
2,838
4,102
75
1,573
966
111
194
2,752
71
2,282
55
111
2,770
2,701
3,784
76
1,146
1,298
80
207
54
16
903
2,404
5,268
2,333
337
218
20
1
14
(7)
39
0
5
8
(0)
37
(26)
40
(6)
239
(83)
3
55
21,841
24,732
(12)
Other expenses were higher as compared to the previous year,
primarily on account of higher consumption of stores and spares on
account of increased operations at TSK. Further, increase in repairs
and maintenance expenses was due to higher contract jobs at mines
and collieries and at TSK. There was increase in royalty charges,
freight and handling, fuel oil consumed and insurance charges at TSK
due to full scale operations of the facilities. This was partly offset by
lower expenses under rates and taxes due to implementation of GST.
g) Finance costs and Net Finance costs
The increase in depreciation is primarily due to full year charge
(TSK commenced operations with effect from June 1, 2016), partly
offset by lower amortisation charges.
Finance costs
Net Finance costs
FY 18
2,811
2,068
(₹ crore)
FY 17 Change (%)
5
2,689
(12)
2,342
f) Other expenses
Other expenses
(₹ crore)
FY 18
21,841
FY 17 Change (%)
(12)
24,732
During the year, finance costs were higher as previous year included
higher interest capitalised in relation to TSK. Net finance charges
were lower on account of higher income from mutual funds, partly
offset by increase in finance costs.
103103
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Management Discussion and Analysis
to the previous year is mainly due to increase in inventory of coal
at Jamshedpur and Kalinganagar. The increase in stores and spares
inventory is due to increase in prices.
l) Sundry Debtors
Gross Debtors
Less: Provision for
doubtful debts
Net Debtors
(₹ crore)
FY 17 Change (%)
(6)
2,025
FY 18
1,908
32
18
1,876
2,007
77
(7)
The decrease in sundry debtors as compared to the previous year is
primarily due to better realisation.
m) Gross Debt and Net Debt
h) Exceptional items
Exceptional items
(₹ crore)
FY 18
(3,366)
FY 17 Change (%)
(379)
(703)
The exceptional items during the year primarily represents statutory
demands and claims, net of liability towards district mineral
foundation no longer required, written back, charge on account of
Employee Separation Scheme (‘ESS’) under ‘Sunhere Bhavishya ki
Yojana’ (‘SBKY’) scheme, provision for advances given for repurchase
of equity shares in Tata Teleservices Limited from NTT DoCoMo
Inc. and provision for diminution in value of investment held in
subsidiaries and joint ventures.
i) Fixed Assets
FY 18
FY 17 Change (%)
(₹ crore)
Property, Plant and
Equipment
Capital work-in-progress
Other Intangible assets
Intangible assets under
development
Total Fixed Assets
70,943
71,779
5,642
786
32
6,125
788
39
77,402
78,731
Capitalisation of Kalinganagar facilities from June 1, 2016.
(1)
(8)
(0)
(18)
(2)
Gross Debt
Less: Cash and Bank
balances (incl. Non-current
balances)
Less: Current
investments
Net Debt
(₹ crore)
FY 18
28,126
FY 17 Change (%)
(1)
28,285
4,717
1,008
368
14,640
5,310
8,769
21,967
176
(60)
j) Investments
Investment in
Subsidiary, JVs and
Associates
Other Investments
Current Investments
Total Investments
FY 18
FY 17 Change (%)
(₹ crore)
3,666
3,398
5,971
14,640
24,277
4,958
5,310
13,666
8
20
176
78
During the year, the increase in total investments was predominantly
on account of higher investments in Mutual Funds as compared
to the previous year and fair value adjustments of non-current
investments.
k) Inventories
Stock-in-Trade
Finished and semi-finished
goods
Work-in-progress
Raw materials
Stores and spares
Total Inventory
FY 18
FY 17 Change (%)
(₹ crore)
3,658
4,205
(13)
7
4,953
2,405
11,023
6
3,899
2,127
10,237
15
27
13
8
Finished and semi-finished inventory decreased as compared to the
previous year mainly due to decrease in flat products inventory at
Jamshedpur. The increase in raw material inventories as compared
104104
The Net debt was lower as compared to the previous year. This is
attributable to increase in current investments along with cash and
bank balances.
Gross debt was almost at par as there was less drawal of commercial
paper (net of payment) which was offset by increase in term loans
(net of repayment).
n) Cash Flow
Net Cash Flow from
operating activities
Net Cash Flow from investing
activities
Net Cash Flow from financing
activities
Net increase/(decrease) in
cash and cash equivalents
(₹ crore)
FY 18
FY 17 Change (%)
11,791
11,167
6
(12,273)
(3,956)
(210)
4,166
(7,280)
157
3,684
(69)
5,403
Net cash flow from operating activities
During the year, the net cash flow from operating activities was
₹11,791 crore as compared to ₹11,167 crore during the previous
year. The cash operating profit before working capital changes and
direct taxes was ₹15,109 crore as compared to ₹11,561 crore during
the previous year due to higher operational profit. Working Capital
increased during the year by ₹815 crore mainly due to increase
in inventories by ₹785 crore and decrease in trade payables and
other liabilities by ₹487 crore, which is partly offset by decrease in
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Non-current/Current financial and other assets by ₹457 crore. The
income taxes paid during the year was ₹2,503 crore as compared to
₹1,541 crore during the previous year.
Net cash flow from investing activities
During the year, the net cash outflow from investing activities
amounted to ₹12,273 crore as compared to ₹3,956 crore during
the previous year. The outflow during the year broadly represents
purchase (net of sale) of current investments of ₹8,651 crore,
purchase of investments in subsidiaries of ₹5,019 crore, capex of
₹2,527 crore, partly offset by sale of investments in Tata Motors
Limited of ₹3,778 crore.
Net cash flow from financing activities
During the year, the net cash inflow from financing activities was ₹4,166
crore as compared to an outflow of ₹7,280 crore as compared to previous
year. The inflow during the year represents proceeds from rights issue
of equity capital ₹9,087 crore partly offset by payment of interest of
₹2,770 crore, payment of dividend including taxes of ₹1,160 crore and
repayment of borrowings (net of proceeds) of term loans of ₹506 crore.
b) Purchases of finished, semi-finished steel & other products
Tata Steel
TSE
NSH
TSTH
Others
Eliminations &
Adjustments
Purchase of finished,
semi-finished steel and
other products
FY 18
647
4,800
3,740
2,521
4,327
(₹ crore)
FY 17 Change (%)
(27)
(13)
19
6
72
881
5,518
3,149
2,385
2,518
(5,031)
(3,026)
(66)
11,003
11,425
(4)
increased owing to
Purchases at TSTH and NSH
in
production and input metallic price. Indian operations decreased
primarily on account of lower purchases of imported rebars due to
lower requirement. The decline at TSE was due to change in sales
mix after the sale of long products along with favourable exchange
impact on translation.
increase
2. TATA STEEL GROUP
c) Raw materials consumed
Tata Steel Group profit after tax from continuing operations before
exceptional items for the current year was `8,105 crore as against
`4,020 crore during previous year. Exceptional items, including
non-cash gains arising out of modification in benefit structure of
Pension Scheme, aggregating to `9,599 crore resulted in a profit of
`17,704 crore from continuing operations during the current year.
a) Net sales and other operating income
Tata Steel
TSE
NSH
TSTH
Others
Eliminations &
Adjustments
Total income from
operations
FY 18
60,519
59,985
5,181
4,361
38,261
(₹ crore)
FY 17 Change (%)
14
15
16
16
23
53,261
52,085
4,478
3,767
31,145
(35,292)
(27,316)
1,33,016
1,17,420
(29)
13
The turnover of the Group was higher as compared to previous year.
The increase at Tata Steel India was primarily on account of higher
volumes from TSK and higher revenue at FAMD owing to higher
production of Ferro Chrome along with increase in realisation of
Ferro Manganese. Moreover, revenues from Wires and Tubes division
also increased due to higher volumes and increase in realisations.
The increase in turnover at Tata Steel Europe (‘TSE’) was mainly on
account of an increase in average revenue per tonne, partly offset by
adverse exchange impact on translation.
Tata Steel
TSE
NSH
TSTH
Others
Eliminations &
Adjustments
Raw materials consumed
FY 18
16,878
22,629
105
341
28,569
(₹ crore)
FY 17 Change (%)
35
34
51
66
19
12,497
16,883
69
205
24,035
(27,316)
(21,271)
41,205
32,418
(28)
27
The increase at Tata Steel India is due to higher consumption at TSK
and cost of imported coal, higher production at FAMD and increase
in cost of ore. The increase at TSE is primarily due to increase in price
of coke which has doubled from previous year, along with increase in
iron ore and coking coal prices, partly offset by favourable exchange
impact on translation.
Others primarily reflect activities at Tata Steel Group Procurement in
relation to raw material procurement, eliminated on consolidation.
d) Employee benefits expense
Tata Steel
TSE
NSH
TSTH
Others
Employee benefits expense
FY 18
4,829
11,407
458
178
734
17,606
(₹ crore)
FY 17 Change (%)
5
4,605
1
11,344
(3)
470
4
172
11
661
2
17,252
The increase in turnover of NSH and TSTH was mainly on account of
higher realisations.
Employee Benefit expenses increased in Tata Steel India mainly
on account of salary revisions and its consequential impact on the
105105
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Management Discussion and Analysis
retirement provisions. The wage cost at TSE increased on account of
normal increase in wages and contribution to provident and other
funds, partly offset by favourable exchange impact on translation.
e) Depreciation and amortisation expense
Tata Steel
TSE
NSH
TSTH
Others
Depreciation and
amortisation expense
FY 18
3,727
1,727
124
96
287
(₹ crore)
FY 17 Change (%)
5
3,542
5
1,639
(13)
143
3
93
12
256
5,962
5,673
5
The increase in depreciation is primarily at Tata Steel India due to
due to full year charge (TSK commenced operations with effect from
June 1, 2016), partly offset by lower amortisation charges. Expense
increased at TSE which was partly offset by favourable exchange
impact on translation.
f) Other expenses
Tata Steel
TSE
NSH
TSTH
Others
Eliminations & Adjustments
Other expenses
FY 18
21,841
17,793
771
1,114
1,881
(2,046)
41,355
(₹ crore)
FY 17 Change (%)
(12)
9
(8)
25
(41)
5
(6)
24,732
16,362
837
894
3,189
(2,159)
43,855
Other expenditure represents the following expenditure:
FY 18
8,658
102
5,923
152
544
4,840
2,693
8,101
2,439
1,658
1,245
293
258
102
861
4,487
(₹ crore)
FY 17 Change (%)
7,881
101
5,333
141
467
4,754
2,343
7,268
2,364
1,188
1,644
426
235
10
1
11
8
17
2
15
11
3
39
(24)
(31)
10
46
122
5,121
5,308
(83)
(15)
Consumption of stores and
spares
Repairs to buildings
Repairs to machinery
Relining expenses
Fuel oil consumed
Purchase of power
Conversion charges
Freight and handling charges
Rent
Royalty
Rates and taxes
Insurance charges
Commission, discounts and
rebates
Allowance for credit losses/
provision for advances
Excise Duty (including
recovered on sales)
Other expenses
106106
FY 18
FY 17 Change (%)
(₹ crore)
Less: Expenditure (other than
interest) transferred to capital
& other accounts
Total Other expenses
1,001
765
41,355
43,855
31
(6)
Other expenditures in Tata Steel India were higher mainly on account
of increased operations at TSK. Increase at TSE is primarily on account
of increase in levels of maintenance activity in Strip Products MLE,
higher stores and spares consumed, freight and handling expenses
due to increase in transport costs, partly offset by exchange impact
on translation. The decrease in others is primarily due to favourable
exchange rate movement at Tata Steel Global Holdings, Singapore.
g) Finance costs and Net Finance costs
Tata Steel
TSE
NSH
TSTH
Others
Eliminations & Adjustments
Finance costs
Tata Steel
TSE
NSH
TSTH
Others
Eliminations & Adjustments
Net Finance costs
FY 18
2,811
3,912
43
27
2,786
(4,077)
5,502
FY 18
2,068
3,868
37
26
(358)
(1,068)
4,573
(₹ crore)
FY 17 Change (%)
5
2,689
15
3,413
6
40
(4)
28
10
2,528
(12)
(3,626)
8
5,072
(₹ crore)
FY 17 Change (%)
(12)
2,342
14
3,392
3
36
(4)
27
(23)
(291)
(12)
(951)
0
4,555
Higher finance cost at Tata Steel India as compared to previous year
included interest capitalised mainly on account of TSK. Increase at TSE
is primarily due to addition of subordinate loan over last year along
with higher utilisation of working capital facility following an increase
in raw material prices, partly offset by exchange impact on translation.
Net finance charges were almost at par as the increase in finance cost
was almost offset by increase in finance income at Tata Steel India
mainly due to higher income from mutual funds.
h) Exceptional items
Tata Steel
TSE
NSH
TSTH
Others
Eliminations & Adjustments
Exceptional items
FY 18
(3,366)
13,851
0
0
(921)
36
9,599
(₹ crore)
FY 17 Change (%)
(379)
(703)
469
(3,753)
(100)
105
(100)
(118)
(2,956)
(30)
(80)
175
322
(4,324)
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Exceptional items during the year primarily represents:
a)
b)
c)
Statutory demands and claims, net of liability towards district
mineral foundation no longer required written back and
provision for advances paid for repurchase of equity shares in
Tata Teleservices Ltd. from NTT DoCoMo Inc. at Tata Steel India.
Charge on account of Employee Separation Scheme (‘ESS’)
under Sunhere Bhavishya Ki Yojana (‘SBKY’) scheme at Tata Steel
India and at Jamshedpur Utilities & Services Company Limited.
Gains arising out of modification in benefit structure for
members of the new pension scheme (‘NBSPS’) vis-à-vis their
benefits under Tata Steel Europe’s British Steel Pension Scheme
(‘BSPS’), offset by settlement charges for those members who
did not join the NBSPS and one-off costs at TSE.
d)
Impairment charges in respect of property, plant and equipment
(including Capital Work-in-progress) relating to Global mineral
entities.
Exceptional items during the previous year primarily represents:
a)
b)
c)
Statutory demands and claims, provision for advances given for
repurchase of equity shares in Tata Teleservices Limited from NTT
DoCoMo Inc. and charge on account of Employee Separation
Scheme (‘ESS’) under ‘Sunhere Bhavishya Ki Yojana’ (‘SBKY’) at
Tata Steel India.
Impairment of property plant and equipment mainly relating to
the European and South East Asian operations.
Curtailment charge relating to closure of Tata Steel Europe’s
British Steel Pension Scheme (‘BSPS’) to future accrual.
i) Fixed Assets
Tata Steel
TSE
NSH
TSTH
Others
Eliminations & Adjustments
Fixed Assets
(₹ crore)
FY 18
77,402
20,562
811
692
9,512
(358)
1,08,620
FY 17 Change (%)
(2)
32
(3)
(0)
9
(9)
4
78,731
15,605
835
695
8,760
(330)
1,04,296
TSE was impacted on account of increase in closing exchange rate of
GBP during the year as compared to previous year.
j) Inventories
Stock-in-Trade
Finished and semi-finished
goods
Work-in-progress
Raw materials
Stores and spares
Total Inventory
FY 18
FY 17 Change (%)
(₹ crore)
9,854
9,185
5,145
9,551
3,780
28,331
4,379
8,020
3,220
24,804
7
18
19
17
14
Tata Steel
TSE
NSH
TSTH
Others
Eliminations & Adjustments
Inventories
FY 18
11,023
13,762
1,053
725
1,826
(58)
28,331
(₹ crore)
FY 17 Change (%)
8
17
29
24
26
(2)
14
10,237
11,770
818
587
1,449
(57)
24,804
Increase was primarily at Tata Steel India on account of increase in
raw material inventory mainly increase in quantity of coal, partly
offset by decline in inventory of finished and semi-finished goods
mainly in flat products at Indian operations. At TSE, the increase
was primarily in finished and semi-finished inventory on account of
exchange impact on translation and lower deliveries.
Stores and spares stock increased in Tata Steel India mainly due to
increase in prices. The increase at TSE was on account of exchange
impact on translation.
k) Sundry Debtors
Tata Steel
TSE
NSH
TSTH
Others
Eliminations & Adjustments
Net Debtors
FY 18
1,876
6,451
516
254
14,805
(11,486)
12,416
(₹ crore)
FY 17 Change (%)
(7)
2,007
3
6,255
22
421
42
179
21
12,223
(21)
(9,498)
7
11,587
Increase at TSE was mainly on account of exchange impact on
translation, partly offset by decrease at Tata Steel India. Increase in NSH
and TSTH was in line with increase in turnover due to higher realisations.
l) Gross Debt and Net Debt
Gross Debt
Less: Cash and Bank
balances (incl. Non-current
balances)
Less: Current investments
Net Debt
(₹ crore)
FY 18
92,147
FY 17 Change (%)
11
83,014
8,023
4,975
14,909
69,215
5,673
72,366
61
163
(4)
Increase in Gross Debt was mainly on account of proceeds from
borrowings (net of repayment) by ₹4,225 crore along with exchange
impact on translation being ₹3,567 crore (mainly at TSE). The increase
in borrowings was mainly at Singapore entities, partly offset by net
repayments at NSH and Tata Steel India.
The decrease in Net Debt was mainly on account of increase in
current investments and cash and bank balances at Tata Steel India,
partly offset by net increase in gross debt.
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Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Management Discussion and Analysis
(₹ crore)
FY 17 Change (%)
Information regarding key risks facing Tata Steel and their mitigation
strategies is given here:
1. Macroeconomic Risks
m) Cash Flow
Net Cash Flow from
operating activities
Net Cash Flow from investing
activities
Net Cash Flow from financing
activities
Net increase/(decrease)
in cash and cash cash
equivalents
FY 18
8,023
10,824
(12,026)
(9,076)
6,640
(2,579)
2,638
(831)
(26)
(33)
357
418
Net cash flow from operating activities
During the year, the Group generated ₹8,023 crore from operations
as compared to ₹10,824 crore in the previous year. The cash
generated from operations before changes in working capital
and tax payments during the year was ₹20,187 crore as against
₹17,581 crore in previous year reflecting higher operating profits.
Working capital increased during the year by ₹9,276 crore primarily
due to decrease in trade payable and other liabilities along with
increase in inventories. The payments of income taxes during
the year were ₹2,888 crore as compared to ₹1,843 crore in the
previous year.
Net cash flow from investing activities
During the year, the cash outflow was ₹12,026 crore as compared
to ₹9,076 crore in the previous year. The outflow represents capex
by ₹7,479 crore and purchase (net of sale) of current investments by
₹8,555 crore partly offset by proceeds from sale of investments in
Tata Motors ₹3,778 crore.
Net cash flow from financing activities
During the year, net cash inflow from financing activities amounted
to ₹6,640 crore as compared to an outflow of ₹2,579 crore in the
previous year. The net inflow broadly represents proceeds from rights
issue of equity shares by ₹9,087 crore and proceeds from borrowings
(net of repayment) was ₹4,225 crore, partly offset by interest paid by
₹5,146 crore and dividend payment by ₹1,180 crore.
D. Risks and Mitigation Strategies
Tata Steel operates in an interconnected world with stringent
regulatory and environmental requirements, increased geopolitical
risks and fast-paced technological disruptions that could have a
material impact across the value chain of the organisation. Tata Steel
has implemented an Enterprise Risk Management (‘ERM’) process
to provide a holistic view of aggregated risk exposures as well as to
facilitate more informed decision-making.
In its journey towards risk intelligence, a robust governance structure
has been developed across the organisation. The Board of Directors
has constituted a Committee of the Board called Risk Management
Committee. At the Senior Management level, a Group Risk Review
Committee has been constituted to drive the ERM process across the
Tata Steel Group.
108108
Overcapacity and oversupply in the global steel industry as well
as increased levels of imports may adversely affect steel prices,
impacting profitability.
in the competitive global business
Newer developments
environment and potential consolidation among competitors
may adversely impact the Company’s financial condition and
prospects.
Slower than expected pace of growth in India, coupled with
expansion in domestic steel capacity, may result in lower than
expected realisations.
Key Mitigation Strategies
Diversification of product portfolio
Development of alternate markets
Participation in industry consolidation
2. Financial Risks
Fluctuation in foreign exchange rates due to volatility in financial
markets may impact the Company’s debt servicing and create
uncertainties in accessing financial markets.
Substantial amount of debt on the balance sheet may have
an adverse impact on the Company’s ability to raise finance at
competitive rates.
Changes in assumptions underlying the carrying value of certain
assets may result in the impairment of such assets.
Key Mitigation Strategies
Maximising operational cashflow
Terming out debt and refinancing debt with favourable
covenants
Appropriate foreign exchange hedging policies
Integration of business planning and cashflow projections
with liquidity management
3. Regulatory Risks
Non-compliance
regulatory
increasing
environmental norms may result in liabilities and damage to
reputation.
stringent
to
The Company operates leased mines. Non-renewal of mining
leases may result in the Company having to purchase minerals at
higher prices from the open market, impacting its profitability.
Removal of favorable trade measures such as anti-dumping laws,
countervailing duties, etc. may impact the Company’s business
and prospects.
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
Key Mitigation Strategies
Focus on compliance
Dialogue with regulatory authorities for greater clarity and
availing legal consultations for timely clearances
Working with industry associations towards simplification
of rules, a predictive policy regime and transition time for
regulatory changes
4. Operational Risks
The steel industry is prone to high proportion of fixed
costs and volatility in prices of raw materials and energy.
Limitations or disruptions in the supply of raw materials
could adversely affect Company’s profitability.
Failure of critical information systems/ servers that control
the Company’s manufacturing plants may adversely impact
business operations.
Violation of safety standards, unsafe acts and conditions
may lead to Lost Time Injuries or fatalities, resulting in
stoppage of operations, loss of personnel, damage to assets
and reputation.
Paris agreement, and 176 countries, including India, have
become party to it. The Agreement aims to keep a check on
rising global temperatures and intensify actions required
Going forward,
for a sustainable low-carbon future.
the steel industry will face stringent international and
domestic regulations relating to Greenhouse Gas emissions.
Increasingly stringent climate control regulations may
impact the Company’s operations and prospects.
Key Mitigation Strategies
Continued investment in environment related projects
Collaboration with academic/research institutes for projects
on climate change issues
7. People Risks
Any labour dispute or social unrest in regions where the
Company operates may adversely affect its operations and
financial condition.
Loss of one or more members of the Senior Management,
or inability to attract and retain employees, may affect the
Company’s business and prospects.
Key Mitigation Strategies
Key Mitigation Strategies
Enhancing in-house capability and leveraging from past
learnings and expertise
Establishing sources of supplies from alternate geographies
Build relations with key stakeholders
including local/
regional influential people, interest groups and bureaucracy
across levels of administrative machinery (taluka to state
level) to address labour or social unrest
Enhancing
in-house capability
developing Deep Sea Port capacity
in
rail
logistics and
Succession planning for Senior Management to ensure
continuity in business
“Committed to Zero” - Safety drives across the Company
People related policies for attracting and retaining talent
5. Market Related Risks
8. Strategic Risks
Steel is a cyclical industry and excess volatility in the
steel and raw material markets may adversely impact the
Company’s financial condition.
Competition from substitute materials, or changes in
manufacturing processes, may lead to a decline in product
demand, resulting in loss of market share.
Product liability claims could have an adverse impact on the
Company’s finances.
Key Mitigation Strategies
The Company is growing its Indian operations through
organic and inorganic routes. The Company may be unable
to realise the anticipated benefits of these growth plans
which could have a material adverse impact on its financial
condition and reputation.
The Company may be subject to business risk relating to
proposed joint venture with thyssenkrupp AG, including
potential delays in completing the proposed transaction
and/or the proposed transaction not consummating
successfully
Development of value-added products and enhanced
services and solutions
Key Mitigation Strategies
Strengthening contractual agreements
6. Climate Change Risks
As of May 2018, 195 United Nations Framework Convention
on Climate Change (UNFCCC) members have signed the
Strong engineering and project team to commission the
expansion project within budgeted time and cost
Ensuring that learnings from previous projects are applied
for improved execution and faster ramp-up of production
Deputation of experienced team from Tata Steel along
109109
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
Management Discussion and Analysis | Annual Report on CSR Activities
with strong review and governance to accelerate the
performance of the acquired assets
Integrate the management of acquired company to drive
synergies. Bring Tata Steel expertise to the acquired assets
in operations, maintenance and marketing to ensure
high capacity utilisation, cost competitiveness and better
product mix
Experienced team driving focused consultations with the
relevant Stakeholders in Europe
strengthen its status as a low-cost and high-quality producer of steel.
The competitive business environment, the Company operates
in, makes innovation imperative for success of the business.
Recognising the need to improve, expand and innovate, the
Company is concentrating efforts on research and development of
alternate materials and new products.
Steel is a completely recyclable material making it ideal for achieving
a circular economy in India. The Company will seize the opportunity
to create an organised circular economy system for steel recycling.
E. Opportunities
India is expected to experience sustained growth in short to medium
term driven by growth in steel consuming sectors, revival of rural
demand, increased spending on infrastructure amongst others.
Further, the conducive government stance towards the steel industry
through policies focusing on ‘Make in India’ and Smart City Mission
reinforces India’s stance as an attractive place for the steel industry.
India continues to be an attractive region for steel given its low
per capita consumption of approximately 65 kg (world average of
208 kg, China 493 kg). This shows that there is significant headroom
for consumption growth. The Company expects to take advantage of
the growth opportunity provided by the Indian economy.
The Company aims to be at the forefront in attaining the leadership
position in the steel industry. Towards this objective it has plans to
grow organically as well as inorganically. The Company has seized
the opportunity to acquire distressed assets in the steel industry
under the Insolvency and Bankruptcy Code, 2016 and expects to
leverage its acquisition opportunities on possibilities for synergies,
broadening customer base, access to raw materials, manufacturing
facilities,
locations, advanced
technology and growth.
infrastructure, new geographic
Further, India’s iron ore reserves and competitive labour costs give
steel manufacturers based in the country a distinctive cost advantage.
The Company seeks to leverage this advantageous position and
The Company expects the demand for steel products to be strong in
the developing economies and the Company proposes to utilise it as
well as its Group’s existing network to meet this increased demand.
The Company is actively seeking opportunities to redefine existing
processes and systems by leveraging digital technologies which
has the potential to transform all aspects of the steel value chain.
Keeping pace with the global trends of digitalisation, the digital
team of the Company has been working in tandem with the business
to identify business opportunities and drive digitalisation initiatives
across the value chain to add value to the business by being a key
enabler for the Company’s strategies.
To enable the Company’s customers to realise value from its
by-products, the Company assists them in exploring new application
areas.
F. Statutory Compliance
The Chief Executive Officer and Managing Director makes a
declaration at each Board Meeting regarding compliance with
provisions of various statutes after obtaining confirmation from
respective units of the Company. The Company Secretary ensures
compliance with Company Law, SEBI and other corporate laws
applicable to the Company.
110110
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
ANNEXURE 3
Annual Report on Corporate Social Responsibility Activities
[Pursuant to Section 135 of the Companies Act, 2013 and the
Companies (Corporate Social Responsibility Policy) Rules, 2014]
I.
Overview of the Corporate Social Responsibility
(‘CSR’) Policy
Our CSR Policy (‘Policy’) was adopted by the Board of Directors
on September 17, 2014. The Policy is available on the Company’s
website www.tatasteel.com The guidelines for our CSR activities
are outlined in the Policy. Our CSR activities are in line with the
Tata Group focus initiatives namely education, health, livelihood,
rural and urban infrastructure. Our Company also undertakes
other community-centric interventions in the areas of sports,
disaster relief, environment and ethnicity.
II.
Composition of CSR and Sustainability
Committee of the Board
To guide the CSR activities of the Company, we have in place a
Corporate Social Responsibility and Sustainability Committee
of the Board that comprises Mr. Deepak Kapoor (Chairperson),
Mr. O. P. Bhatt, Mr. D. K. Mehrotra, Mr. Koushik Chatterjee and
Mr. T. V. Narendran.
III. CSR Advisory Council
We have a CSR Advisory Council comprising of eminent
personalities from academia and the development sector. The
members of the Advisory Council provide macro policy-level
inputs to the apex CSR and Sustainability Committee and guide
the Company in its approach towards CSR.
Tribal Cultural Society (‘TCS’), a registered society under Societies
Registration Act, 1860. The principal objective of the society is
to promote and undertake cultural activities, cultural education
and training of various tribes.
Tata Steel Skill Development Society (‘TSSDS’), a registered
society under Societies Registration Act, 1860. The principal aim
and objective of the society is to provide facilities for technical
and other skill enhancement trainings within the nation.
Tata Steel Family Initiatives Foundation (‘TSFIF’), a registered trust
under Indian Trusts Act, 1882. The principal objective of the trust
is to undertake projects/programmes on reproductive health,
prevention of drug or alcohol addiction and empowerment of
women through literacy and income generation.
Tata Steel Zoological Society (‘TSZS’), a registered society under
Societies Registration Act, 1860. The principal objective of the
society is to provide natural habitats to various animals suitable
for their conservation and propagation. It also acts as a facilitator
to spread the message of nature conservation by building
awareness and conducting educational programmes.
Tata Steel Foundation (‘TSF’), a Section 8 Company incorporated
under the Companies Act, 2013. The main objective of the
formation of TSF is to strengthen the CSR deployment and
governance system of Tata Steel’s CSR as well as create a distinct
brand identity for it.
IV. CSR Delivery Arms
V. Financial Details
In terms of the Companies Act, 2013, companies are allowed
to carry out their CSR activities through registered trusts
and/or societies. We carry out our community centric
interventions through a number of CSR delivery arms including
the following:
Tata Steel Rural Development Society (‘TSRDS’), a registered
society under Societies Registration Act, 1860. The principal aim
and objective of the society is to undertake, promote, sponsor,
assist or aid directly any activity/project/programme for the
promotion and growth of the rural economy, rural welfare,
socio-economic development and upliftment of the people in
rural areas.
Particulars
Average net profit of the Company for last three
financial years
Prescribed CSR expenditure (2% of the average net
profits)
Details of CSR spent during the financial year:
(a) Total amount to be spent for the financial year
(b) Amount spent
(c) Amount unspent, if any
(₹ crore)
4,280.96
85.62
85.62
231.62
Nil
The manner in which the amount is spent on CSR activities
undertaken during the year is given as an annexure to this report.
Details of CSR projects undertaken during the year along with its
impact is discussed in the Community Section of this Integrated
Report.
111111
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
Annual Report on CSR Activities
VI. Responsibility Statement
We hereby affirm that the CSR Policy, as approved by the Board, has been implemented and the Corporate Social Responsibility and Sustainability
Committee monitors the implementation of CSR Projects and activities in compliance with the CSR objectives and CSR Policy of the Company.
sd/-
DEEPAK KAPOOR
Chairman of CSR and Sustainability Committee
DIN: 00162957
Mumbai
May 16, 2018
sd/-
T. V. NARENDRAN
Chief Executive Officer and Managing Director
DIN: 03083605
Annexure to the Corporate Social Responsibility Annual Report
Manner in which the amount spent during the financial year is detailed below:
(1)
(2)
(3)
(4)
(5)
(6)
Sl.
No.
CSR project or activity
identified
Sector in
which the
project is
covered
Location of project
(District & State)
Amount
outlay
Amount spent
on the projects
or programmes
during current
reporting period
(7)
Cumulative
amount spent on
the projects or
programmes upto
current reporting
period
(₹ crore)
(8)
Amount
spent: Direct
or through
implementing
agency
1
Promoting health care including
preventive Healthcare and
Sanitation
Health
Total
2
Making Available safe Drinking
Water
Drinking
Water
Total
3
4
5
Promotion of education including
special education
Education
Total
Employment enhancing vocational
skills especially to Women, Children,
Differently abled
Livelihood enhancement projects
Livelihood
Jharkhand - East
Singhbhum, West
Singhbhum, Dhanbad,
Ramgarh
Odisha - Ganjam, Jajpur,
Kendujhar, Sundargarh
Maharashtra - Mumbai
West Bengal - Kolkata
Jharkhand - East
Singhbhum, West
Singhbhum, Dhanbad,
Ramgarh
Odisha - Ganjam, Jajpur,
Kendujhar, Sundargarh
West Bengal - Haldia
Jharkhand - East
Singhbhum, West
Singhbhum, Dhanbad,
Ramgarh, Ranchi
Odisha - Ganjam, Jajpur,
Kendujhar, Sundargarh,
Puri
Maharashtra - Tarapur
Jharakhand - East
Singhbhum, West
Singhbhum, Dhanbad,
Ramgarh, Ranchi
Odisha - Ganjam, Jajpur,
Kendujhar, Sundargarh
Total
112112
117.31
94.65
265.79
Direct,
TSRDS,
TCS,
TSFIF
117.31
94.65
265.79
11.47
12.33
54.96
Direct,
TSRDS
11.47
12.33
54.96
52.22
57.81
205.70
52.22
57.81
205.70
25.46
23.99
114.76
25.46
23.99
114.76
Direct,
TSRDS,
TCS
Direct,
TSRDS,
TCS ,
TSSDS
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR (1)
(2)
(3)
(4)
(5)
(6)
Location of project
(District & State)
Amount
outlay
Amount spent
on the projects
or programmes
during current
reporting period
(7)
Cumulative
amount spent on
the projects or
programmes upto
current reporting
period
(₹ crore)
(8)
Amount
spent: Direct
or through
implementing
agency
Sl.
No.
CSR project or activity
identified
Sector in
which the
project is
covered
Environment
Environmental sustainability,
protection of flora & fauna, agro
forestry, animal welfare, resource
conservation, maintaining quality
of soil, air, water
Total
Protection and restoration of
national heritage, promotion of
art, culture, handicrafts, setting
up public libraries etc
Ethnicity
Total
Promotion of Rural, Nationally
recognised, Paralympic and
Olympic sports especially training
Sports
Total
Rural development projects
(infrastructure and other
developments)
Rural & Urban
Infrastructure
6
7
8
9
Jharkhand - East
Singhbhum, Ramgarh
Odisha - Jajpur,
Kendujhar
West Bengal - Burdwan
Jharakhand - East
Singhbhum, West
Singhbhum, Ramgarh,
Ranchi
Odisha - Kendujhar,
Jajpur
Jharkhand - East
Singhbhum, West
Singhbhum, Dhanbad,
Ramgarh, Ranchi
Odisha - Ganjam, Jajpur,
Kendujhar, Sundargarh
Jharkhand - East
Singhbhum, West
Singhbhum, Dhanbad,
Ramgarh
Odisha - Ganjam, Jajpur,
Kendujhar
3.61
4.21
15.49
Direct,
TSRDS,
TSZS
3.61
4.21
15.49
5.32
5.63
18.95 TCS
5.32
5.63
18.95
12.90
7.46
25.43
12.90
7.46
25.43
17.42
14.51
61.91
Direct,
TSRDS
Direct,
TSRDS
Total
Total Direct expenses of projects & programmes (A)
Overhead Expenses (restricted to the 5% of total CSR expenditure) (B)
Total (A) + (B)
17.42
245.71
12.29
258.00
14.51
220.59
11.03
231.62
61.91
762.99
38.16
801.15
Note: Cumulative amount spent on the projects or programmes upto current reporting period has been calculated from Financial Year 2014-15 onwards.
113113
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Corporate Governance Report
ANNEXURE 4
Corporate Governance Report
Company’s Corporate Governance Philosophy
Board of Directors
is the creation and enhancement of
Corporate governance
long-term sustainable value for our stakeholders through ethically
driven business process. At Tata Steel, it is imperative that our
Company’s affairs are managed in a fair and transparent manner.
We ensure that we evolve and follow not just the stated corporate
governance guidelines, but also global best practices. We consider it
our inherent responsibility to protect the rights of our shareholders
and disclose timely, adequate and accurate information regarding
our financials and performance, as well as the leadership and
governance of the Company.
In accordance with our Vision, Tata Steel Group (‘the Group’) aspires
to be the global steel industry benchmark for ‘value creation’ and
‘corporate citizenship’. The Group expects to realise its Vision by
taking such actions as may be necessary to achieve its goals of value
creation, safety, environment and people.
Corporate Governance Guidelines
The Board of Directors (‘the Board’) has adopted the Tata Group
Guidelines on Board Effectiveness to help fulfil its corporate
governance responsibility towards its stakeholders. These guidelines
provide for the composition and role of the Board and ensure that
the Board will have the necessary authority and processes in place
to review and evaluate the Company’s operations. Further, these
guidelines allow the Board to make decisions that are independent
of the Management of the Company.
The Board is at the core of our corporate governance practice and
oversees and ensures that the Management serves and protects the
long-term interest of all our stakeholders. We believe that an active,
well-informed and independent Board is necessary to ensure the
highest standards of corporate governance.
Size and Composition of the Board
Our policy is to have an appropriate mix of Executive Directors
(‘EDs’), Non-Executive Directors (‘NEDs’) and Independent Directors
(‘IDs’) to maintain the Board’s independence as well as separate its
functions of governance and management. As on March 31, 2018,
the Board comprised of ten members, two of whom are EDs, three
NEDs and five IDs including a Woman Director. The Board periodically
evaluates the need for change in its composition and size. Detailed
profile of our Directors is available on our website www.tatasteel.com
None of our NEDs serve as IDs in more than seven listed companies
and none of the EDs serve as IDs on any listed company.
The Company has issued formal letters of appointment to the IDs.
As required under Regulation 46 of the SEBI (Listing Obligation and
Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’),
the terms and conditions of appointment of IDs including their role,
responsibility and duties are available on our website www.tatasteel.com
Table A: Composition of the Board and Directorships held as on March 31, 2018:
Name of the Director
DIN
Indian Public
Companies(1)
All Companies
worldwide(2)
Board Committees(3)
Chairperson
Member
Non-Executive Directors
Mr. Natarajan Chandrasekaran
Mr. D. K. Mehrotra(4)
Mr. Saurabh Agrawal(5)
Independent Directors
Ms. Mallika Srinivasan
Mr. O. P. Bhatt
Dr. Peter Blauwhoff
Mr. Aman Mehta
Mr. Deepak Kapoor
Executive Directors
Mr. T. V. Narendran
Mr. Koushik Chatterjee
00121863
00142711
02144558
00037022
00548091
07728872
00009364
00162957
03083605
00004989
7
9
8
8
4
1
6
3
7
7
8
10
13
10
6
10
8
4
9
11
-
2
1
-
2
-
1
1
-
-
-
4
4
-
4
-
6
2
-
1
(1)
(2)
Directorships in Indian Public Companies including Tata Steel Limited and excluding Section 8 Companies.
Includes Directorship in Indian and foreign companies including Tata Steel Limited and excluding Section 8 Companies.
114114
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR (3)
(4)
(5)
As required under Regulation 26(1)(b) of the Listing Regulations, the
disclosure includes chairmanship/membership of the Audit Committee
and Stakeholders’ Relationship Committee in Indian public companies
including Tata Steel Limited.
Mr. D. K. Mehrotra ceased to be Member of the Board effective May 16, 2018.
Mr. Saurabh Agrawal was appointed as an Additional (Non-Executive)
Director effective August 10, 2017.
the Senior Management Personnel and visited the facilities in proximity
to Jamshedpur.
As stated in the Director’s Report, the details of orientation given to
our existing Independent Directors are provided in Table B below.
Table B: Details of orientation given to the existing Independent
Directors during the year are as follows:
Note:
There are no inter-se relationships between our Board Members.
Name
Selection of New Directors and Board Membership Criteria
The Nomination and Remuneration Committee (‘NRC’) works with
the Board to determine the appropriate qualifications, positive
attributes, characteristics, skills and experience required for the
Board as a whole and its individual members with the objective
of having a Board with diverse backgrounds and experience in
business, government, education and public service. The Policy for
appointment and removal of Directors and determining Directors’
independence is annexed to the Directors’ Report and is available on
our website www.tatasteel.com
Familiarisation Programme for Independent Directors
All new Independent Directors inducted on the Board are given a formal
orientation. The familiarisation programme for our Directors is customised
to suit each one’s interests and area of expertise. The Directors are
encouraged to visit the plant and raw material locations of the Company
and interact with the members of Senior Management as part of the
induction programme. The Senior Management make presentations giving
an overview of the Company’s strategy, operations, products, markets,
group structure and subsidiaries, Board constitution and guidelines,
matters reserved for the Board and the major risks and risk management
strategy. This enables the Directors to get a deep understanding of the
Company, its people, values and culture and facilitates their active
participation in overseeing the performance of the Management.
Further, during the year, the Board held one meeting at our Jamshedpur
Plant location to discuss strategy. The Board Members also interacted with
Safety,
Health and
Environment
Initiatives
1.5
0.8
7.7
1.4
7.7
Strategy/
Industry
Trends
Governance
and
Operations
Total
Hours
20.0
11.5
16.0
13.8
18.2
33.4 54.90
15.3 27.60
11.6 35.30
15.6 30.80
14.0 39.90
Mr. O. P. Bhatt
Ms. Mallika Srinivasan
Dr. Peter Blauwhoff
Mr. Aman Mehta
Mr. Deepak Kapoor
Dr. Peter Blauwhoff, Mr. Aman Mehta and Mr. Deepak Kapoor,
Independent Directors of the Company, were taken through a
comprehensive induction programme, spanning over 7-10 days,
covering the economic, environmental and social aspects of the
organisation. As part of their induction, they met Senior Management
Personnel at various plant and raw material locations.
These details are also available on our website www.tatasteel.com
Board Evaluation
The Nomination and Remuneration Committee has formulated a
Policy for evaluation of the Board, its Committees and Directors
and the same has been approved by the Board. The details of Board
Evaluation forms part of the Directors’ Report.
Compensation Policy for Board and Senior Management
The Board has approved the Remuneration Policy for Directors,
Key Managerial Personnel (‘KMPs’) and all other employees of
the Company. The same is annexed to the Directors’ Report and is
available on our website www.tatasteel.com Details of remuneration
for Directors in Financial Year 2017-18 are provided in Table C below.
Table C: Shares held and cash compensation paid to Directors for the year ended March 31, 2018:
Name
Non-Executive Directors
Mr. N. Chandrasekaran
Mr. Ishaat Hussain
Mr. D. K. Mehrotra
Mr. Saurabh Agrawal
Independent Directors
Ms. Mallika Srinivasan
Mr. O. P. Bhatt
Mr. Andrew Robb
Dr. Peter Blauwhoff
Mr. Aman Mehta
Mr. Deepak Kapoor
Executive Directors
Mr. T. V. Narendran
Mr. Koushik Chatterjee
Basic
Fixed Salary
Perquisite/
Allowance
Total Fixed Salary
Commission
Sitting
Fees
Total
Compensation
(` in lakh)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
120.00
111.60
172.94
202.20
292.94
313.80
–
80.00
80.00
–
115.00
170.00
50.00
75.00
80.00
70.00
650.00
600.00
4.80
4.80
5.30
3.70
4.40
10.00
2.40
4.40
4.40
5.60
–
–
4.80
84.80
85.30
3.70
119.40
180.00
52.40
79.40
84.40
75.60
942.94
913.80
115115
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Corporate Governance Report
Notes:
As a policy, Mr. N. Chandrasekaran, Chairman, has abstained from receiving
commission from the Company. Further, in line with the internal guidelines of
the Company, no payment is made towards commission to the Non-Executive
Directors of the Company, who are in full time employment with any other
Tata Company. The commission of Mr. D. K. Mehrotra is paid to Life Insurance
Corporation of India.
Mr. Ishaat Hussain and Mr. Andrew Robb retired as Members of the Board
effective September 1, 2017.
Dr. Peter Blauwhoff is a Director of Tata Steel Europe (‘TSE’) and Chairman and
Member of Supervisory Board of Tata Steel Nederland BV (‘TSN BV’). Towards
this, he receives an annual fee of £70,000 from TSE and €80,000 from TSN BV.
The fee paid is consistent with the market practices and are aligned to the
benchmark figures published by global consulting firms.
In addition to the compensation shown above, Mr. T. V. Narendran was paid
`42.30 lakh under the Company’s Long Term Incentive Plan. This amount
relates to the period April 1, 2013 through September 17, 2013 prior to him
becoming Member of the Board.
Mr. T. V. Narendran holds 2,032 Fully Paid Ordinary Shares and 139 Partly Paid
Ordinary Shares of the Company and Mr. Koushik Chatterjee holds 1,531 Fully
Paid Ordinary Shares and 105 Partly Paid Ordinary Shares of the Company as
on March 31, 2018.
None of the Directors hold stock options as on March 31, 2018. None of the
Executive Directors are eligible for payment of any severance fees and the
contracts with Executive Directors may be terminated by either party giving
the other party six months’ notice or the Company paying six months’ salary
in lieu thereof.
Board Meetings
Scheduling and selection of agenda items for Board Meetings
Dates for Board Meetings in the ensuing financial year are decided
in advance and communicated to the Board. The information as
required under Regulation 17(7) read with Schedule II Part A of
the Listing Regulations is made available to the Board. The Board
reviews minutes of the meetings of board of directors of the unlisted
subsidiaries of the Company. The agenda and explanatory notes
are sent to the Board in advance. The Board periodically reviews
compliance reports of all laws applicable to the Company. The Board
meets at least once a quarter to review the quarterly financial results
and other items on the agenda and also on the occasion of the Annual
General Meeting (‘AGM’) of the Shareholders. Additional meetings
are held, when necessary. Committees of the Board usually meet the
day before the formal Board Meeting, or whenever the need arises
for transacting business. The recommendations of the Committees
are placed before the Board for necessary approval and noting.
7 Board Meetings were held during the year ended March 31,
2018 on April 20, 2017, May 16, 2017, August 7, 2017, September
8, 2017, October 30, 2017, December 18, 2017 continued through
December 19, 2017 and February 9, 2018. The gap between any two Board
meetings during this period did not exceed one hundred and twenty days.
116116
Table D: Attendance details of Directors for the year ended
March 31, 2018 are given below:
Name of the Director
Category
No. of
Meetings
Attended
Attendance
(%)
Mr. N. Chandrasekaran
(Chairperson)
Mr. Ishaat Hussain
Mr. D. K. Mehrotra
Mr. Saurabh Agrawal
Mr. Andrew Robb
Ms. Mallika Srinivasan
Mr. O. P. Bhatt
Dr. Peter Blauwhoff
Mr. Aman Mehta
Mr. Deepak Kapoor
Mr. T. V. Narendran
Mr. Koushik Chatterjee
NED
NED
NED
NED
ID
ID
ID
ID
ID
ID
ED
ED
7
3
7
4
3
6
7
7
6
7
7
7
100
100
100
100
100
86
100
100
86
100
100
100
NED – Non-Executive Director; ID – Independent Director;
ED – Executive Director
Mr. Saurabh Agrawal was appointed as an Additional (Non-Executive) Director
effective August 10, 2017.
Mr. Ishaat Hussain and Mr. Andrew Robb retired from the Board effective
September 1, 2017.
All the Directors as on the date of the AGM were present at the AGM of the
Company held on August 8, 2017.
Discussions with Independent Directors
The Board’s policy is to regularly have separate meetings with
Independent Directors, to update them on all business related issues,
new initiatives and changes in the industry specific market scenario.
At such meetings, the Executive Directors and other Members of the
Management make presentations on relevant issues.
Meeting of the Independent Directors
Pursuant to Schedule
IV of the Companies Act, 2013, the
Independent Directors met on April 20, 2017 without the presence of
Non-Independent Directors and Members of the Management. The
Independent Directors inter alia evaluated the performance of the
Non-Independent Directors and the Board of Directors as a whole,
evaluated the performance of the Chairman of the Board taking into
account the views of Executive and Non-Executive Directors and
discussed aspects relating to the quality, quantity and timeliness of
the flow of information between the Company, the Management and
the Board.
Board Committees
Audit Committee
The primary objective of the Audit Committee is to monitor and
provide an effective supervision of the Management’s financial
reporting process, to ensure accurate and timely disclosures, with
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR the highest levels of transparency, integrity and quality of financial
reporting. The Committee oversees the work carried out in the
financial reporting process by the Management, the internal auditor,
the statutory auditor and the cost auditor and notes the processes
and safeguards employed by each of them. The Committee further
reviews the process and controls
including compliance with
applicable laws, Tata Code of Conduct and Tata Code of Conduct
for Prevention of Insider Trading, Whistle Blower Policy and related
cases thereto, functioning of the Prevention of Sexual Harassment at
Workplace Policy and guidelines and internal controls. The Tata Code
of Conduct is available on our website www.tatasteel.com
Discussion with external Auditors:
To ensure independence and objectivity of external auditors, the
Committee discusses on significant issues pertaining to Financial
Statements,
impairment of assets, appropriate estimates and
judgements of the Management, conclusions reached by Auditors in
respect of key judgement and identifying any other issues in relation
to the above.
The Board of Directors of the Company adopted the Charter on
March 31, 2015 which was revised on March 2, 2017.
The Company Secretary acts as the Secretary to the Committee. The
internal auditor reports functionally to the Audit Committee. The
Executive Directors and Senior Management of the Company also
attend the meetings as invitees to address concerns raised by the
Committee Members.
5 meetings of the Committee were held during the year ended
March 31, 2018 on April 20, 2017, May 15, 2017, August 7, 2017,
October 29, 2017 and February 8, 2018.
Table E: The composition of the Committee and the attendance
details of the Members are given below:
Names of Members
Category
Mr. O. P. Bhatt (Chairperson)
Mr. Andrew Robb
Mr. Aman Mehta
Dr. Peter Blauwhoff
Mr. Ishaat Hussain
Mr. Saurabh Agrawal
ID
ID
ID
ID
NED
NED
No. of
Meetings
Attended
5
3
4
1
3
2
Attendance
(%)
100
100
80
100
100
100
ID – Independent Director; NED – Non-Executive Director
Dr. Peter Blauwhoff was appointed as Member of the Audit Committee
effective December 18, 2017 and Mr. Saurabh Agrawal was appointed as
an Additional (Non-Executive) Director effective August 10, 2017 and was
appointed as a Member of the Audit Committee effective same date.
Mr. Ishaat Hussain and Mr. Andrew Robb retired from the Board effective
September 1, 2017 and consequently ceased to be Members of the Audit
Committee effective same date.
Mr. O. P. Bhatt, Chairman of the Audit Committee as on date of the AGM was
present at the AGM of the Company held on August 8, 2017.
Nomination and Remuneration Committee
The purpose of the Nomination and Remuneration Committee
(‘NRC’) is to oversee the Company’s nomination process including
succession planning for the senior management and the Board and
specifically to assist the Board in identifying, screening and reviewing
individuals qualified to serve as Executive Directors, Non-Executive
Directors and Independent Directors consistent with the criteria as
stated by the Board in its Policy on Appointment and Removal of
Directors and to recommend, for approval by the Board, nominees
for election at the AGM of the Shareholders.
The Board has adopted the NRC Charter for the functioning of the
Committee on May 20, 2015.
The NRC also discharges the Board’s responsibilities relating to
compensation of the Company’s Executive Directors and Senior
Management. The Committee has formulated the Remuneration
Policy for Directors, KMPs and all other employees of the Company.
The remuneration policy and the criteria for making payments to
Non-Executive Directors is available on our website www.tatasteel.com
The Committee has the overall responsibility of approving and
evaluating the compensation plans, policies and programmes for
Executive Directors and the Senior Management. The Committee
reviews and recommends to the Board, the base salary, incentives/
commission, other benefits, compensation or arrangements and
executive employment agreements for the Executive Directors for
its approval. The Committee co-ordinates and oversees the annual
self-evaluation of the performance of the Board, Committees and of
individual Directors.
5 meetings of the Committee were held during the year ended
March 31, 2018 on April 20, 2017, May 16, 2017, August 7, 2017,
October 5, 2017 and October 30, 2017.
Table F: The composition of the Committee and the attendance
details of the Members are given below:
Names of Members
Category
No. of
Meetings
Attended
Attendance
(%)
Ms. Mallika Srinivasan
(Chairperson)
Mr. O. P. Bhatt
Mr. N. Chandrasekaran
Mr. Ishaat Hussain
ID
ID
NED
NED
5
5
3
3
ID – Independent Director; NED – Non-Executive Director
100
100
100
100
Mr. N. Chandrasekaran was appointed as Member of the Nomination
and Remuneration Committee on May 16, 2017. Ms. Mallika Srinivasan,
Chairperson of the Nomination and Remuneration Committee was present at
the AGM of the Company held on August 8, 2017.
Mr. Ishaat Hussain retired from the Board effective September 1, 2017 and
consequently ceased to be Member of the NRC effective same date.
117117
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Corporate Governance Report
Corporate Social Responsibility and Sustainability Committee
The purpose of our Corporate Social Responsibility and Sustainability
(‘CSR&S’) Committee is to formulate and recommend to the Board,
a Corporate Social Responsibility Policy. The Policy shall indicate the
initiatives to be undertaken by the Company, recommend the amount
of expenditure the Company should incur on Corporate Social
Responsibility (‘CSR’) activities and to monitor from time to time the
CSR activities and Policy of the Company. The Committee provides
guidance in formulation of CSR strategy and its implementation and
also reviews practices and principles to foster sustainable growth
of the Company by creating values consistent with long-term
preservation and enhancement of financial, manufactured, natural,
social, intellectual and human capital.
The Board has approved a Charter for the functioning of the
Committee, on March 31, 2015 which was subsequently revised on
March 2, 2017.
The CSR policy is available on our website www.tatasteel.com
4 meetings of the CSR&S Committee were held during the year
ended March 31, 2018 on June 6, 2017, July 14, 2017, October 30,
2017 and February 8, 2018
Table G: The composition of the Committee and the attendance
details of the Members are given below:
Names of Members
Category
No. of
Meetings
Attended
Attendance
(%)
Mr. Deepak Kapoor
(Chairperson)
Mr. O. P. Bhatt
Mr. Ishaat Hussain
Mr. D. K. Mehrotra
Mr. T. V. Narendran
Mr. Koushik Chatterjee
ID
ID
NED
NED
ED
ED
2
4
2
4
4
4
NED – Non-Executive Director; ID – Independent Director;
ED – Executive Director
100
100
100
100
100
100
Mr. Deepak Kapoor was appointed as Chairperson and Member of the CSR&S
Committee effective August 7, 2017. He was present at the AGM held on
August 8, 2017.
Mr. Ishaat Hussain retired from the Board effective September 1, 2017 and
consequently ceased to be Member of the CSR&S Committee effective same
date.
Risk Management Committee
Risk Management is crucial to achieve the Group’s objective in
interests of
its financial position, safeguarding
strengthening
stakeholders, enhancing its ability to continue as a going concern
and maintain a consistent sustainable growth.
The Company has constituted a Risk Management Committee (‘RMC’) for
framing, implementing and monitoring the Risk Management Policy of
118118
the Company. The Committee assists the Board in fulfilling its oversight
responsibility with respect to Enterprise Risk Management (‘ERM’).
The terms of reference of the RMC are:
a)
b)
Overseeing key risks, including strategic, financial, operational
and compliance risks.
Assisting the Board in framing, implementing and monitoring
the risk management plan for the Company and reviewing and
guiding the Risk Policy.
c)
Developing risk management policy and risk management
system/framework for the Company.
The Board has adopted a Charter for the RMC Committee on
May 20, 2015 in accordance with Regulation 21 of the Listing
Regulations.
2 meetings of the RMC were held during the year ended
March 31, 2018 on July 14, 2017 and February 8, 2018.
Table H: The composition of the Committee and the attendance
details of the Members are given below:
Names of Members
Category
Mr. O. P. Bhatt (Chairperson)
Mr. Aman Mehta
Mr. Deepak Kapoor
Mr. Ishaat Hussain
Mr. D. K. Mehrotra
Mr. Saurabh Agrawal
Mr. T. V. Narendran
Mr. Koushik Chatterjee
Dr. Hans Fischer
Mr. Anand Sen
Mr. Sandip Biswas
Mr. N. K. Misra
ID
ID
ID
NED
NED
NED
ED
ED
MoM
MoM
MoM
MoM
No. of
Meetings
Attended
Attendance
(%)
2
1
2
1
2
1
2
2
2
2
1
2
100
100
100
100
100
100
100
100
100
100
50
100
ID – Independent Director; NED – Non-Executive Director;
ED – Executive Director; MoM – Member of Management.
Mr. Aman Mehta and Mr. Saurabh Agrawal were appointed as Members of the
RMC effective August 7, 2017.
Mr. Ishaat Hussain retired from the Board effective September 1, 2017 and
consequently ceased to be Member of the RMC effective same date.
Note: Details on risks and opportunities including commodity
price risks and foreign exchange risks are available in the Risks and
Opportunities sections of the Management Discussion and Analysis
annexed to the Directors’ Report.
Stakeholders’ Relationship Committee
The Stakeholders’ Relationship Committee (‘SRC’) considers and
resolves the grievances of our shareholders, debenture holders and
other security holders, including complaints relating to non-receipt
of annual report, transfer and transmission of securities, non-receipt
of dividends/interests and such other grievances as may be raised by
the security holders from time to time.
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR 1 meeting of the SRC was held during the year on February 9, 2018.
Table I: The composition of the Committee and the attendance
details of the Members are given below:
Names of Members
Category
No. of
Meetings
Attended
Attendance
(%)
Mr. D. K. Mehrotra
(Chairperson)
Mr. Saurabh Agrawal
Mr. Koushik Chatterjee
NED
NED
ED
1
1
1
100
100
100
NED – Non-Executive Director; ED – Executive Director
Mr. Saurabh Agrawal was appointed as an Additional (Non-Executive) Director
effective August 10, 2017 and was inducted as a Member of the SRC effective
same date.
Mr. Ishaat Hussain retired from the Board effective September 1, 2017 and
consequently ceased to be a Member of the SRC effective same date.
Table K: The composition of the Committee and the attendance
details of the Members are given below:
Names of Members
Category
No. of
Meetings
Attended
Attendance
(%)
Mr. N. Chandrasekaran
(Chairperson)
Mr. Saurabh Agrawal
Mr. O. P. Bhatt
Mr. T. V. Narendran
Mr. Koushik Chatterjee
NED
NED
ID
ED
ED
2
2
2
2
2
NED – Non-Executive Director; ID – Independent Director;
ED – Executive Director
100
100
100
100
100
Mr. O. P. Bhatt was appointed as Member of the ECOB effective August 7, 2017.
Also, Mr. Saurabh Agrawal was appointed as an Additional (Non-Executive)
Director effective August 10, 2017 and was inducted as a Member of the ECOB
effective same date.
Further, Mr. D. K. Mehrotra, Chairman of the SRC was present at the AGM of the
Company held on August 8, 2017.
Mr. Ishaat Hussain retired from the Board effective September 1, 2017 and
consequently ceased to be a Member of the ECOB effective same date.
In terms of Regulation 6 and Schedule V of the Listing Regulations,
the Board has appointed Mr. Parvatheesam K, Company Secretary as
the Compliance Officer of the Company.
The details of complaints received and resolved during the Financial
Year ended March 31, 2018 are given in the Table below. The
complaints relate to non-receipt of annual report, dividend, share
transfers and other investor grievances.
Table J: Details of complaints received and resolved during the
Financial Year 2017-18:
Opening as on April 1, 2017
Received during the year
Resolved during the year
Closing as on March 31, 2018
Executive Committee of the Board
10
229
218
21
The Executive Committee of the Board (‘ECOB’) approves capital
expenditure schemes or any change in their scope if any and
donations within the stipulated limits and to recommend to
the Board, capital budgets and other major capital schemes, to
consider new businesses, acquisitions, alliances and Joint Ventures,
subsidiaries, divestments, changes
in organisational structure,
financing requirements of the Company and Company contracts
above 5 years. It also periodically reviews the Company’s business
plans and future strategies and metrics for long-term value creation.
The Committee also reviews climate change matters and regulatory
compliance and policy advocacy. The Finance Committee of the
Board and the Committee of Directors have been merged and form
part of the ECOB effective August 7, 2017.
2 meetings of the ECOB were held during the year ended
March 31, 2018 on January 19, 2018 and March 14, 2018.
Safety, Health and Environment Committee
The Safety, Health and Environment Committee (‘SH&E Committee’)
of the Board oversees the policies relating to Safety, Health and
Environment and their implementation across Tata Steel Group.
The Board has approved a Charter for the functioning of the
Committee on October 27, 2009.
3 meetings of the Committee were held during the year ended
March 31, 2018 on July 6, 2017, October 25, 2017 and February 8, 2018.
Table M: The composition of the Committee and the attendance
details of the Members are given below:
Names of Members
Category
No. of
Meetings
Attended
Attendance
(%)
Dr. Peter Blauwhoff
(Chairperson)
Mr. Deepak Kapoor
Mr. T. V. Narendran
Dr. Hans Fischer
ID
ID
ED
MoM
3
3
3
3
100
100
100
100
ID – Independent Director; ED – Executive Director,
MoM - Member of Management
General Information for Shareholders
Disclosures regarding the appointment or re-appointment of
Directors
In terms of the relevant provisions of the Companies Act, 2013,
Mr. N. Chandrasekaran
liable to retire by rotation at the
ensuing Annual General Meeting (‘AGM’) and being eligible,
seeks re-appointment.
is
119119
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Corporate Governance Report
Further, during the year under review, based on the recommendation
of the NRC, the Board appointed Mr. Saurabh Agrawal as an
Additional (Non-Executive) Director effective August 10, 2017. The
Board has recommended that Mr. Agrawal be appointed as a Director,
subject to Shareholders’ approval at the ensuing AGM. Further,
based on the recommendation of the NRC, the Board re-appointed
Mr. Koushik Chatterjee as Whole Time Director, designated as
Executive Director and Chief Financial Officer of the Company,
liable to retire by rotation, with effect from November 9, 2017 to
November 8, 2022 upon the terms and conditions as mentioned in
the Notice convening the AGM.
certificates and dividends amongst others, shareholders should
communicate with TSR Darashaw Limited, the Company’s Registrars
and Transfer Agents (‘RTA’) quoting their folio number or Depository
Participant ID (‘DP ID’) and Client ID number.
Share transactions in electronic form can be effected in a much
simpler and faster manner. After a confirmation of a sale/purchase
transaction from the broker, shareholders should approach the DP
with a request to debit or credit the account for the transaction. The
DP will immediately arrange to complete the transaction by updating
the account. There is no need for a separate communication to the
Company to register these share transfers.
The Board recommends above appointment/re-appointments for
approval of the Shareholders.
Code of conduct
The detailed profiles of the above Directors and particulars of their
experience, skill or attributes that qualify them for Board Membership
are provided in the Notice convening the AGM.
Communication to the Shareholders
We send quarterly financial results to our Shareholders electronically.
Key financial data is published in The Indian Express, Financial
Express, Nav Shakti, Free Press Journal and Loksatta. The financial
results along with the earnings releases are also posted on the
Company’s website www.tatasteel.com
Earnings calls are held with analysts and investors and their
transcripts are published on the website. Presentations made to
analysts and others are also made available on the Company’s
website www.tatasteel.com
All price sensitive information and matters that are material to
shareholders are disclosed to the respective Stock Exchanges where
the securities of the Company are listed. All submissions to the
Exchanges are made through their respective electronic filing systems.
The Company’s website is a comprehensive reference on it’s
leadership, management, vision, mission, policies, corporate
governance, sustainability,
relations, products and
investor
processes and updates and news. The section on ‘Investors’ serves
to inform the Shareholders, by giving complete financial details,
shareholding patterns, corporate benefits, information relating to
Stock Exchanges, Stock Exchange Compliances, details of Registrars
& Transfer Agents and Frequently Asked Questions (‘FAQs’). Investors
can also submit their queries and get feedback through online
interactive forms. The section on ‘Media’ includes all major press
reports and releases, awards and campaigns, amongst others.
Investor grievance and share transfer
We have a Board-level Stakeholders’ Relationship Committee to
examine and redress investors’ complaints. The status on complaints
and share transfers are reported to the entire Board.
For shares transferred in physical form, the Company provides
adequate notice to the seller before registering the transfer of
shares. For matters regarding share transfer in physical form, share
120120
Senior Management
is available on
The Company has adopted the Tata Code of Conduct (‘TCoC’)
Personnel
for
Executive Directors,
and other Executives, which
the website
www.tatasteel.com The Company has received confirmations
from the EDs as well as Senior Management Personnel regarding
compliance of the Code during the year under review. The Company
has also adopted the Code of Conduct for Non-Executive Directors of
the Company which is available on the website www.tatasteel.com
The Company has received confirmation from the NEDs regarding
compliance of the Code for the year under review.
Details of non-compliance
The Company has complied with the requirements of the Stock
Exchanges, SEBI and other statutory authorities on all matters
relating to capital markets during the last three years. There has been
no instance of non-compliance with any legal requirements during
the year except as below:
Vide Adjudication Order No. EAD-2/DSR/RG/869/2017 dated
December 7, 2017, the adjudication officer appointed by the SEBI has
imposed a monetary penalty of `10,00,000/- (Rupees Ten Lakh Only)
on the Company for delayed disclosures under Regulation 13(3) read
with Regulation 13(5) of the SEBI (Prohibition of Insider Trading)
Regulations, 1992 in relation to the increase in the Company’s
shareholding in The Tinplate Company of India Limited pursuant to
a rights issue of shares in 2009 and the automatic conversion of fully
convertible debentures in 2011. This penalty has been paid by the
Company. There have not been any other strictures imposed by any
stock exchange or SEBI on the Company in last 3 years.
None of the Company’s listed securities are suspended from trading.
Auditors’ certificate on corporate governance
As required by Regulation 34(3) and Schedule V Part E of the Listing
Regulations, the certificate given by Parikh and Associates, Practising
Company Secretaries, is annexed to this report.
CEO and CFO certification
As required by Regulation 17(8) read with Schedule II Part B of
the Listing Regulations, the CEO & MD and ED & CFO have given
appropriate certifications to the Board of Directors.
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Reconciliation of Share Capital Audit
In terms of Regulation 40(9) and 61(4) of the Listing Regulations,
certificates on half-yearly basis have been issued by a Company
Secretary in Practice with respect to due compliance of share and
security transfer formalities by the Company.
The Company Secretary in Practice carried out a Reconciliation
of Share Capital Audit to reconcile the total admitted capital with
(‘NSDL’) and Central
National Securities Depository Limited
Depository
(collectively
(‘CDSL’)
Limited
‘Depositories’) and the total issued and listed capital. The audit
confirms that the total paid-up capital is in agreement with the
aggregate of the total number of shares in physical form and in
dematerialised form (held with the Depositories) respectively.
Services
(India)
Related Party Transactions
All transactions entered into with related parties as defined under the
Companies Act, 2013 and Regulation 23 of the Listing Regulations
during the year under review were on an arm’s length price basis and
in the ordinary course of business. These have been approved by the
Audit Committee. The Company has not entered into any materially
significant related party transaction that may have potential conflict
with the interests of the Company at large. The Board of Directors
have approved and adopted a Policy on Related Party Transactions
and the same has been uploaded on the website of the Company
and can be accessed at www.tatasteel.com
During the Financial Year 2017-18, the Company did not have any
material pecuniary relationship or transactions with Non-Executive
General Body Meetings
Table N: Location and time where last three AGMs were held:
Directors apart from paying Director’s remuneration. Further, the
Directors have not entered into any contracts with the Company or
its subsidiaries, which will be in material conflict with the interest of
the Company.
In the preparation of financial statements, the Company has followed
the applicable Accounting Standards. The significant accounting
policies that are applied have been set out in the Notes to Financial
Statements. The Board has received disclosures from KMPs relating
to material, financial and commercial transactions where they and/
or their relatives have personal interest.
Policy for Determining Material Subsidiaries
The Company has formulated a Policy for Determining Material
Subsidiaries and the same is available on the Company’s website
www.tatasteel.com
Vigil Mechanism
The Vigil Mechanism approved by the Board provides a formal
mechanism for all Directors, employees and vendors of the
Company to approach the Ethics Counsellor/Chairman of the
Audit Committee of the Company and make protective disclosures
regarding the unethical behaviour, actual or suspected fraud or
violation of the Company’s Code of Conduct. Under the Policy,
every Director, employee or vendor of the Company has an assured
access to the Ethics Counsellor/Chairman of the Audit Committee.
Details of the Vigil Mechanism are given in the Directors’ Report.
The whistle blower policy is available on the Company’s website
www.tatasteel.com
Financial Year Ended
Date
Time
Venue
March 31, 2017
March 31, 2016
March 31, 2015
August 8, 2017
August 12, 2016
3:00 p.m. (IST)
August 12, 2015
Birla Matushri Sabhagar,
19, Sir Vithaldas
Thackersey Marg,
Mumbai - 400 020.
Special Resolution Passed
Issue of Non-Convertible Debentures on
private placement basis not exceeding
`10,000 crore
Further issuance of securities not
exceeding `10,000 crore
No Special Resolution was passed by the Company last year through Postal Ballot. None of the businesses proposed to be transacted at the
ensuing AGM require passing a Special Resolution through Postal Ballot.
Table O: Annual General Meeting 2018:
Date
Time
Venue
Financial Year
Book Closure Dates
Dividend Payment Date
July 20, 2018
3:00 p.m. IST
Birla Matushri Sabhagar, 19, Sir Vithaldas Thackersey Marg, Mumbai - 400 020.
April 1 to March 31
July 7, 2018 to July 20, 2018 (both days inclusive) (For both, Fully Paid & Partly Paid Ordinary Shares)
On and from July 23, 2018
121121
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Corporate Governance Report
Dematerialisation of shares and liquidity
The Company’s Ordinary Shares are tradable compulsorily
in
electronic form. We have established connectivity with both the
depositories, i.e., NSDL and CDSL. The International Securities
Identification Number (‘ISIN’) allotted to the Fully paid and Partly paid
Ordinary Shares under the Depository System are INE081A01012
and IN9081A01010 respectively.
The Company has 1,17,78,08,646 Ordinary Shares (including Fully
and Partly paid shares) representing 97.81% of the Company’s share
capital which is dematerialised as on March 31, 2018. To enable us to
serve our Shareholders better, we request our Shareholders whose
shares are in physical mode to dematerialise shares and to update
their bank accounts and e-mail ids with their respective DPs.
Further, 1,27,40,651 outstanding GDR Shares
(31.03.2017:
1,55,10,420) of face value of `10 per share represent the shares
underlying GDRs which were issued during 1994 and 2009. Each GDR
represents one underlying Ordinary Share.
Designated e-mail address for investor services
To serve the investors better and as required under Regulation 46(2)
(j) in the Listing Regulations, the designated e-mail address for
investor complaints is cosec@tatasteel.com This email address for
grievance redressal is continuously monitored by the Company’s
Compliance Officer.
Investor Awareness
As part of good governance we have provided subscription facilities
to our investors for IR alerts regarding press release, results, webcasts,
analyst meets and presentations amongst others. We also provide
our investors a facility to write queries regarding their rights and
shareholdings and have provided details of persons to be contacted
for this purpose. We encourage investors to visit our website for
reading the documents and for availing the above facilities at
www.tatasteel.com
Legal proceedings
There are certain pending cases related to disputes over title to
shares in which we had been made a party. However, these cases are
not material in nature.
Share Transfer System
Share Transfers in physical form can be lodged with TSR Darashaw
Limited. The transfers are normally processed within 15 days from
the date of receipt if the documents are complete in all respects.
Table P: Distribution of Shareholding of Ordinary Shares:
Total No. of Shareholders
as on March 31
% to total holders
as on March 31
Total No. of Shares
as on March 31
% to total capital
as on March 31
2018
21,327
1,13,210
2,29,602
1,20,595
1,25,266
96,320
34,067
27,738
2,782
1,832
371
7,73,110
2017
25,545
1,16,936
2,58,030
1,40,993
1,38,784
97,576
35,088
26,908
2,639
1,658
272
8,44,429
2018
2.76
14.64
29.70
15.60
16.20
12.46
4.40
3.59
0.36
0.24
0.05
100.00
2017
3.02
13.85
30.56
16.70
16.43
11.55
4.16
3.19
0.31
0.20
0.03
100.00
2018
21,327
7,61,432
66,82,927
92,35,996
1,80,02,217
2,95,63,645
2,40,00,787
5,47,92,310
1,92,88,108
4,38,39,362
92,02,96,704
1,12,64,84,815
2017
25,545
8,09,461
77,96,201
1,13,09,854
2,05,85,912
3,07,73,602
2,52,36,294
5,35,08,710
1,83,57,019
3,90,11,303
76,38,01,538
97,12,15,439
2018
0.00
0.07
0.59
0.82
1.60
2.63
2.13
4.86
1.71
3.89
81.70
100.00
2017
0.00
0.08
0.80
1.17
2.12
3.17
2.60
5.51
1.89
4.02
78.64
100.00
Fully Paid Shares
Shareholding
1
2-10
11-50
51-100
101-200
201-500
501-1,000
1,001-5,000
5,001-10,000
10,001-1,00,000
1,00,001 and above
Total
122122
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Partly Paid Shares (as on March 31, 2018)
Shareholding
1
2-10
11-50
51-100
101-200
201-500
501-1,000
1,001-5,000
5,001-10,000
10,001-1,00,000
1,00,001 and above
Total
Total No. of
Shareholders
% to total holders
Total No. of
Shares
% to total capital
5,990
60,702
74,752
16,382
8,405
4,790
1,409
807
90
138
44
1,73,509
3.45
34.99
43.08
9.44
4.84
2.76
0.81
0.47
0.05
0.08
0.03
100.00
5,990
3,53,322
18,17,111
12,16,790
12,22,880
15,04,180
10,00,904
16,13,296
6,31,577
50,38,057
6,32,30,518
7,76,34,625
0.01
0.45
2.34
1.57
1.57
1.94
1.29
2.08
0.81
6.49
81.45
100.00
Note : The Partly Paid Shares of the Company were alloted on March 14, 2018 and hence there are no comparable numbers for previous year.
Transfer of Unclaimed Dividend and Shares to the Investor
Education and Protection Fund (‘IEPF’)
Pursuant to the provisions of the Companies Act, 2013 read with
The Investor Education and Protection Fund Authority (Accounting,
Audit, Transfer and Refund) Rules, 2016, as amended, (‘Rules’), the
dividends, unclaimed for a consecutive period of seven years from
the date of transfer to the Unpaid Dividend Account of the Company
are liable to be transferred to IEPF. Further, the shares (excluding the
disputed cases having specific orders of the Court, Tribunal or any
Statutory Authority restraining such transfer) pertaining to which
dividend remains unclaimed for a period of continuous seven years
from the date of transfer of the dividend to the unpaid dividend
account are also mandatorily required to be transferred to the IEPF
established by the Central Government. Accordingly, the Company
has transferred eligible Shares to IEPF Demat Account maintained by
the IEPF authority within statutory timelines.
The Company has sent individual communication to the concerned
shareholders at their registered address, whose dividend remained
unclaimed and whose shares were liable to be transferred to the IEPF
by November 30, 2017. The communication was also published in
national English and local Marathi newspapers.
Any person whose unclaimed dividend and shares pertaining thereto,
matured deposits, matured debentures, application money due
for refund, or interest thereon, sale proceeds of fractional shares,
redemption proceeds of preference shares, amongst others has been
transferred to the IEPF Fund can claim their due amount from the
IEPF Authority by making an electronic application in e-form IEPF-5.
Upon submitting a duly completed form, Shareholders are required
to take a print of the same and send physical copy duly signed along
with requisite documents as specified in the form to the attention of
the Nodal Officer, at the Registered Office of the Company. The e-form
can be downloaded from our website www.tatasteel.com under the
‘unclaimed dividend’ section and simultaneously from the website of
Ministry of Corporate Affairs www.iepf.gov.in
Table Q: The status of dividend remaining unclaimed is given hereunder:
Unclaimed
Dividend
Status
Whether it can be
claimed
Can be claimed from
Action to be taken
Up to and including the
Financial Year 1994-95
Transferred to the General
Revenue Account of the
Central Government
For the Financial Years
1995-96 to 2009-10
Transferred to the IEPF of the
Central Government
For the Financial Years
2010-11 to 2016-17
Amount lying in respective
Unpaid Dividend Accounts
Office of Registrar of Companies,
Central Government Office
Building, ‘A’ Wing, 2nd Floor, Next
to Reserve Bank of India, CBD,
Belapur - 400 614
Submit e-form IEPF-5 to the
Registered Office of the Company
addressed to the Nodal Officer
along with complete documents
Claim to be forwarded in
prescribed Form No. II of the
Companies Unpaid Dividend
(Transfer to General Revenue
Account of the Central
Government) Rules, 1978
IEPF Authority to pay
the claim amount to the
shareholder based on the
verification report submitted
by the Company and the
documents submitted by the
investor
TSR Darashaw Limited, Registrars
and Transfer Agents
Letter on plain paper
Yes
Yes
Yes
123123
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Corporate Governance Report
The Company has hosted on its website the details of the unclaimed dividend/interest/principal amounts for the Financial Year 2016-17 as per
the Notification No. G S R 352 (E) dated May 10, 2012 of Ministry of Corporate Affairs. (As per Section 124 of the Companies Act, 2013).
Table R: Details of date of declaration & due date for transfer to IEPF
Year
2011
2012
2013
2014
2015
2016
2017
Dividend Per Share
12
12
8
10
8
8
10
Date of Declaration
August 03, 2011
August 14, 2012
August 14, 2013
August 14, 2014
August 12, 2015
August 12, 2016
August 08, 2017
Due date for Transfer to IEPF
September 08, 2018
September 18, 2019
September 16, 2020
September 16, 2021
September 16, 2022
September 17, 2023
September 09, 2024
Shareholders are requested to get in touch with the RTA for encashing the unclaimed dividend/interest/principal amount, if any, standing to
the credit of their account.
Nomination Facility
Shareholders whose shares are in physical form and wish to make/
change a nomination in respect of their shares in the Company, as
permitted under Section 72 of the Companies Act, 2013, may submit
to RTA the prescribed Forms SH-13/SH-14. The Nomination Form can
be downloaded from the Company’s website www.tatasteel.com
under the section ‘Investors’.
Shares held in Electronic Form
Shareholders holding shares in electronic form may please note
instructions regarding change of address, bank details,
that
e-mail ids, nomination and Power of Attorney should be given
directly to the DP.
Shares held in Physical Form
Shareholders holding shares in physical form may please note that
instructions regarding change of address, bank details, e-mails ids,
nomination and Power of Attorney should be given to the Company’s
RTA i.e. TSR Darashaw Limited.
Updation of bank details for remittance of dividend/cash
benefits in electronic form
The Securities and Exchange Board of India (‘SEBI’) vide its Circular
No. CIR/MRD/DP/10/2013 dated March 21, 2013 (‘Circular’) to all
listed companies requires them to update bank details of their
shareholders holding shares in demat mode and/or physical form,
to enable usage of the electronic mode of remittance i.e., National
Automated Clearing House (‘NACH’) for distributing dividends and
other cash benefits to the Shareholders.
The Circular further states that in cases where either the bank details
such as Magnetic Ink Character Recognition (‘MICR’) and Indian
Financial System Code (‘IFSC’), amongst others, that are required
for making electronic payment are not available or the electronic
payment instructions have failed or have been rejected by the bank,
companies or their Registrars and Transfer Agents may use physical
payment instruments for making cash payments to the investors.
Companies shall mandatorily print the bank account details of the
investors on such payment instruments.
Regulation 12 of the Listing Regulations, allows the Company to pay
dividend by cheque or ‘payable at par’ warrants where payment by
electronic mode is not possible. Shareholders to note that payment
of dividend and other cash benefits through electronic mode has
many advantages like prompt credit, elimination of fraudulent
encashment/delay in transit and more. Shareholders are requested
to opt for any of the above mentioned electronic modes of payment
of dividend and other cash benefits and update their bank details:
In case of holdings in dematerialised form, by contacting their
DP and giving suitable instructions to update the bank details in
their demat account.
In case of holdings in physical form, by informing the Company’s
RTA i.e., TSR Darashaw Limited, through a signed request letter
with details such as their Folio No(s), Name and Branch of the
Bank in which they wish to receive the dividend, the Bank
Account type, Bank Account Number allotted by their banks
after implementation of Core Banking Solutions (‘CBS’) the
9 digit MICR Code Number and the 11 digit IFSC Code. This letter
should be supported by cancelled cheque bearing the name of
the first shareholder.
Listing on Stock Exchanges
The Company has issued Fully and Partly paid Ordinary shares
which are listed on BSE Limited and National Stock Exchange of
India Limited in India. The annual listing fees has been paid to the
respective stock exchanges.
124124
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
Table S: ISIN details
Stock Exchanges
BSE Limited (‘BSE’)
Phiroze Jeejeebhoy Towers,
Dalal Street,
Mumbai - 400 001,
Maharashtra, India
National Stock Exchange of
India Limited (‘NSE’)
Exchange Plaza, 5th Floor,
Plot No. C/1, G Block,
Bandra-Kurla Complex,
Mumbai - 400 051,
Maharashtra, India
ISIN
Stock Code
INE081A01012
(Fully Paid Shares)
500470
(Fully Paid Shares)
IN9081A01010
(Partly Paid Shares)
890144
(Partly Paid Shares)
INE081A01012
(Fully Paid Shares)
TATASTEEL
(Fully Paid Shares)
IN9081A01010
(Partly Paid Shares)
TATASTEELPP
(Partly Paid Shares)
Table T: International Listings of securities issued by the
Company are as under:
Global Depository Receipts (‘GDRs’):
GDRs
ISIN
Listed on
1994
US87656Y1091
Luxembourg Stock
Exchange
2009
US87656Y4061
London Stock Exchange
Table U(i): Perpetual Hybrid Securities
in the form of
Non-Convertible Debentures are listed on the Wholesale Debt
Market segments of the Stock Exchanges as under:
Rate (%)
ISIN
Principal Amount (` in crore)
Date of Maturity
Listed on
11.80
INE081A08165
1,500
Perpetual
NSE & BSE
11.50
INE081A08173
775
Perpetual
NSE
Table U(ii): Unsecured Redeemable Non-Convertible Debentures (‘NCDs’) are listed on the Wholesale Debt Market segment of the
Stock Exchanges as under:
Coupon Rate (%)
ISIN
Principal Amount
9.15
10.40
11.00
9.15
2.00
8.15
10.25
10.25
INE081A08199
INE081A08124
INE081A08132
INE081A08207
INE081A08181
INE081A08215
INE081A08140
INE081A08157
500.00
650.90
1,500.00
500.00
1,500.00
1,000.00
500.00
2,500.00
Maturity
(` crore)
Date
January 24, 2019
May 15, 2019
May 19, 2019
January 24, 2021
April 23, 2022
October 1, 2026
December 22, 2028
December 22, 2029
December 22, 2030
January 6, 2029
January 6, 2030
January 6, 2031
Amount
500.00
650.90
1,500.00
500.00
1,500.00
1,000.00
166.67
166.67
166.66
833.34
833.33
833.33
125125
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Corporate Governance Report
Market Information
Table V: Market Price Data- High, Low (based on the closing prices) and volume during each month in last Financial Year of fully paid
shares:
BSE Limited
National Stock Exchange of India Limited
Month
April 2017
May 2017
June 2017
July 2017
August 2017
September 2017
October 2017
November 2017
December 2017
January 2018
February 2018
March 2018
Yearly
Low (`)
445.75
432.00
490.00
546.35
559.55
640.15
658.70
678.05
668.05
705.05
637.85
566.60
432.00
High (`)
501.65
511.80
544.35
571.00
638.95
687.65
729.45
711.60
734.65
783.20
712.50
675.30
783.20
Volume (No. of
shares)
1,18,62,807
2,55,97,116
1,34,05,300
1,05,48,255
1,15,46,864
88,41,728
75,03,317
68,53,226
60,31,305
83,04,413
1,47,48,625
1,69,37,765
14,21,80,721
Low (`)
445.85
431.90
490.30
547.55
559.30
639.75
659.00
677.75
667.60
705.05
637.55
566.50
431.90
High (`)
501.65
511.85
545.75
571.20
639.00
687.65
729.20
712.70
736.25
783.50
713.10
675.05
783.50
Volume
(No. of shares)
9,20,06,980
20,01,30,043
12,05,68,808
8,57,01,393
12,48,84,567
9,34,22,737
9,31,15,900
7,33,65,756
8,81,94,926
10,32,80,698
16,62,65,169
21,36,41,395
1,45,45,78,372
Tata Steel Fully Paid Share Price versus BSE Sensex/NIFTY
850
750
650
550
450
350
7
1
-
r
p
A
7
1
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y
a
M
7
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D
8
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8
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e
F
8
1
-
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a
M
40,000
38,000
36,000
34,000
32,000
30,000
28,000
26,000
24,000
850
750
650
550
450
350
7
1
-
r
p
A
7
1
-
y
a
M
7
1
-
n
u
J
7
1
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l
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J
7
1
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u
A
7
1
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S
7
1
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c
O
7
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N
7
1
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D
8
1
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J
8
1
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e
F
8
1
-
r
a
M
13,000
12,500
12,000
11,500
11,000
10,500
10,000
9,500
9,000
8,500
Tata Steel Share Price (LHS)
BSE Sensex (RHS)
Tata Steel Share Price (LHS)
Nifty (RHS)
The Company’s shares are regularly traded on BSE Limited and National Stock Exchange of India Limited, as is seen from the volume of shares
indicated in the Table containing Market Information.
Secretarial Audit
Green Initiative
The Company’s Board of Directors appointed Parikh and Associates,
Practising Company Secretaries Firm, to conduct the secretarial audit
of its records and documents for the Financial Year 2017-18. The
secretarial audit report confirms that the Company has complied
with all applicable provisions of the Companies Act, 2013, Secretarial
Standards, Depositories Act 1996, SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, SEBI (Prohibition of
Insider Trading) Regulations, 2015 and all other regulations and
guidelines of SEBI as applicable to the Company. The Secretarial
Audit Report forms part of the Directors’ Report.
As a responsible corporate citizen, the Company welcomes and
supports the ‘Green Initiative’ undertaken by the Ministry of
Corporate Affairs, Government of India, enabling electronic delivery
of documents including the Annual Report, quarterly and half-yearly
results, amongst others, to Shareholders at their e-mail address
previously registered with the DPs and RTAs.
Shareholders who have not registered their e-mail addresses so
far are requested to do the same. Those holding shares in demat
form can register their e-mail address with their concerned DPs.
Shareholders who hold shares in physical form are requested to
register their e-mail addresses with the RTA, by sending a letter, duly
signed by the first/sole holder quoting details of Folio Number.
126126
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Major Plant Locations:
Tata Steel Kalinganagar Plant
Tata Steel Limited
Kalinganagar Industrial Complex
Duburi, Dist. Jajpur
Odisha - 755026
Tata Steel Jamshedpur Plant
Tata Steel Limited
P.O. Bistupur
Jamshedpur - 831001
Cold Rolling Mill Complex, Bara
Tata Steel Limited
P.O. Agrico, P.S. Sidhgora
Block: Jamshedpur, Dist. Purbi Singhbhum
Pin - 831009
Tata Steel Growth Shop
Tata Steel Limited
Adityapur Industrial Estate,
P.O. Gamharia, Dist. Seraikela-Kharsawan
Pin - 832 108
Tata Steel Tubes Division
Tubes Division
Tata Steel Limited
P.O. Burma Mines
Jamshedpur - 831 007
Joda East Iron Mine
Joda Central Organisation
Tata Steel Limited, Joda
Dist. Keonjhar, Odisha - 758 034
Cold Rolling Complex (West)
Tata Steel Limited
Plot No S 76, Tarapur Industrial Area
P.O. 22, Tarapur Industrial Estate
District Palghar, Maharashtra - 401 506
Wire Division, Tarapur
Tata Steel Limited - Wire Division
Plot F8 & A6, Tarapur MIDC
P.O. Boisar, Dist. Palghar - 401 506
Wire Division, Indore
Tata Steel Limited - Wire Division
Plot 14/15/16 & 32 Industrial Estate
Laxmibai Nagar, Fort Indore
Madhya Pradesh - 452 006
Wire Division, Pithampur
Tata Steel Limited-Wire Division
Plot 158 & 158A, Sector III
Industrial Estate, Pithampur
Madhya Pradesh - 454 774
Bearings Division
Tata Steel Limited
P.O. Rakha Jungle
Nimpura Industrial Estate
Kharagpur, West Bengal - 721 301
Chromite Mine, Sukinda
Tata Steel Limited - Sukinda
Chromite Mine
P.O. Kalarangiatta, Dist. Jajpur
Odisha - 755 028
Noamundi Iron Mine
Tata Steel Limited
West Singhbhum, Noamundi
Jharkhand - 833 217
Ferro Alloys Plant
Tata Steel Limited
P.O. Bamnipal, Dist. Keonjhar
Odisha - 758 082
Joda West Manganese Mines
Tata Steel Limited
P.O. Bichakundi, Joda, Dist. Keonjhar
Odisha - 758 034
Bamebari Manganese Mines
Tata Steel Limited
P.O. Polaso ‘Ka’, Via: Joda, Dist. Keonjhar,
Odisha - 758 036
Gomardih Dolomite Quarry
Tata Steel Limited
P.O. Tunmura, Dist. Sundergarh
Odisha-770 070
Jharia Division
Tata Steel Limited
Jamadoba, Dhanbad
Jharkhand - 828 112
West Bokaro Division
Tata Steel Limited
Ghatotand, Dist. Ramgarh
Jharkhand - 825 314
Hooghly Met Coke Division
Tata Steel Limited
Patikhali, Haldia, Purba
Medinipur, West Bengal - 721 606
Ferro Alloy Plant, Joda
Tata Steel Limited - Joda
Dist. Keonjhar, Odisha - 758 034
Ferro Chrome Plant
Tata Steel Limited - Gopalpur Project
P.O. Chamakhandi, Chatrapur Tahsil
Dist. Ganjam, Odisha - 761 020
Investor Contact:
Registered Office:
Bombay House, 24, Homi Mody Street,
Fort, Mumbai-400 001.
Tel.: +91 22 6665 8282; Fax: +91 22 6665 7724
E-mail: cosec@tatasteel.com
Website: www.tatasteel.com
Corporate Identity Number -
L27100MH1907PLC000260
Name, designation & address of
Compliance Officer:
Mr. Parvatheesam K, Company Secretary
Bombay House, 24, Homi Mody Street,
Fort, Mumbai-400 001.
Tel.: +91 22 6665 7279; Fax: +91 22 6665 7724
E-mail: cosec@tatasteel.com
Name, Designation & Address of
Investor Relations Officer:
Mr. Sandep Agrawal,
Head - Group Investor Relation
One Forbes, 6th Floor, 1, Dr. V. B. Gandhi
Marg, Fort, Mumbai-400 001.
Tel.: +91 22 6665 0530; Fax: +91 22 6665 0598
E-mail: ir@tatasteel.com
127127
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
Corporate Governance Report
Central Depository Services (India)
Limited
Marathon Futurex, A-Wing, 25th Floor,
NM Joshi Marg,
Lower Parel (East), Mumbai-400013.
Tel.: +91 22 2305 8640/8642/8639/8663
E-mail: helpdesk@cdslindia.com
Investor Grievance:
complaints@cdslindia.com
Website: www.cdslindia.com
Debenture Trustee:
IDBI Trusteeship Services Limited
Asian Building, Ground Floor,
17, R. Kamani Marg, Ballard Estate,
Mumbai-400 001.
Tel.: +91 22 4080 7000; Fax:+91 22 6631 1776
E-mail: itsl@idbitrustee.com
Website: www.idbitrustee.com
Registrars and Transfer Agents:
TSR Darashaw Limited
Unit: Tata Steel Limited,
6-10, Haji Moosa Patrawala Industrial Estate,
Nr. Famous Studio, 20, Dr. E Moses Road,
Mahalaxmi, Mumbai-400 011.
Contact Person: Ms. Mary George
Tel.: +91 22 6656 8484/8411/8412/8413
Fax: +91 22 6656 8494
Timings: Monday to Friday,
10 a.m. to 3.30 p.m.
E-mail: csg-unit@tsrdarashaw.com
Website: www.tsrdarashaw.com
Luxembourg Stock Exchange
35A Boulevard Joseph II
L-1840 Luxembourg,
Tel: (+352) 4779361
Fax: (+352) 473298
Website: www.bourse.lu
London Stock Exchange
10 Paternoster Square,
London - EC4M 7LS
Tel: (+44) 20 7797 1000
Website: www.londonstockexchange.com
Stock Exchanges:
Depository Services:
National Securities Depository Limited
Trade World, A Wing, 4th & 5th Floors,
Kamala Mills Compound,
Lower Parel, Mumbai-400 013.
Tel.: +91 22 2499 4200; Fax:+91 22 2497 6351
E-mail: info@nsdl.co.in
Investor Grievance: relations@nsdl.co.in
Website: www.nsdl.co.in
BSE Limited
Phiroze Jeejeebhoy Towers,
Dalal Street, Mumbai-400 001.
Tel.: +91 22 2272 1233; Fax: +91 22 2272 1919
Website: www.bseindia.com
National Stock Exchange of India Limited
Exchange Plaza, Plot No. C/1,
G Block Bandra-Kurla Complex,
Bandra (E), Mumbai-400 051.
Tel.: +91 22 2659 8100; Fax: +91 22 2659 8120
Website: www.nseindia.com
Details of Corporate Policies
Particulars
Dividend Distribution Policy
Composition and Profile of the Board of Directors
Terms and conditions of appointment of Independent
Directors
Policy on Appointment and Removal of Directors
Familiarisation Programme for Independent Directors
Website Details/Links
http://www.tatasteel.com/media/6086/dividend-policy-final.pdf
http://www.tatasteel.com/corporate/our-organisation/leadership/
http://www.tatasteel.com/media/2917/terms-and-conditions-of-appointment-of-
independent-directors.pdf
http://www.tatasteel.com/corporate/pdf/Policy-on-Appointment-and-Removal-
of-Directors.pdf
http://www.tatasteel.com/media/7040/familiarization-programme-for-
independent-directors.pdf
Remuneration Policy of Directors, KMPs & Other Employees http://www.tatasteel.com/media/6817/remuneration-policy-of-directors-etc.pdf
Tata Code of Conduct
Criteria of Making Payments to Non-Executive Directors
Corporate Social Responsibility Policy
Code of Conduct for Non-Executive Directors
Policy on Related Party Transactions
http://www.tatasteel.com/corporate/pdf/TCOC.pdf
http://www.tatasteel.com/media/3931/criteria-of-making-payments-to-neds.pdf
http://www.tatasteel.com/media/7039/csr-policy.pdf
http://www.tatasteel.com/media/3930/tcoc-non-executive-directors.pdf
http://www.tatasteel.com/media/5891/policy-on-related-party-transactions.pdf
http://www.tatasteel.com/media/5890/policy-on-determining-material-
subsidiaries.pdf
http://www.tatasteel.com/media/5892/vigil-mechanism.pdf
http://www.tatasteel.com/media/6843/code-of-corporate-disclosure-practices.pdf
http://www.tatasteel.com/media/6844/tata-steel-determination-of-materiality-
policy.pdf
http://www.tatasteel.com/media/6845/tata-steel-document-retention-policy.pdf
Policy on Determining Material Subsidiary
Whistle Blower Policy
Code of Corporate Disclosure Practices
Policy on Determination of Materiality for Disclosure
Document Retention and Archival Policy
Prevention of Sexual Harassment (POSH) at Workplace
Policy
128128
http://www.tatasteel.com/media/5819/posh.pdf
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR PRACTISING COMPANY SECRETARIES’ CERTIFICATE ON CORPORATE GOVERNANCE
To The Members of
Tata Steel Limited
We have examined the compliance of the conditions of Corporate Governance by Tata Steel Limited (‘the Company’) for the year ended on
March 31, 2018, as stipulated under Regulations 17 to 27, clauses (b) to (i) of sub-regulation (2) of Regulation 46 and para C, D & E of Schedule V
of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI Listing Regulations’).
The compliance of the conditions of Corporate Governance is the responsibility of the management. Our examination was limited to the review
of procedures and implementation thereof, as adopted by the Company for ensuring compliance with conditions of Corporate Governance.
It is neither an audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, and the representations made by the Directors
and the management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the SEBI Listing
Regulations for the year ended on March 31, 2018.
We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness
with which the management has conducted the affairs of the Company.
Mumbai, May 16, 2018
For Parikh & Associates
Practising Company Secretaries
sd/-
P. N. PARIKH
FCS No.: 327 CP No.: 1228
129129
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
Policy on Appointment & Removal of Directors
ANNEXURE 5
Policy on Appointment & Removal of Directors
1. Introduction
1.1 In terms of Section 178 of the Companies Act, 2013, rules
made thereunder and the Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (‘Listing Regulations’) (erstwhile Listing
Agreement) the Committee has formulated this policy on
appointment and removal of Directors. The Policy has been
adopted by the Nomination and Remuneration Committee
(‘NRC’) vide
its resolution dated 31 March, 2015 and
approved by the Board of Directors vide its resolution dated
31 March, 2015.
1.2 This policy shall act as a guideline for determining qualifications,
positive attributes, independence of a Director and matters
relating to the appointment and removal of Directors.
2. Objective of the Policy
2.1 To lay down criteria and terms and conditions with regards to the
identification of persons who are qualified to become Directors
(executive, non-executive and independent) including their
qualifications, positive attributes and independence and who
may be appointed as the Senior Management of the Company.
3. Appointment of Directors
This Policy enumerates guidelines which may be used by NRC in
selecting/appointing/re-appointing and removal of a Director.
3.5 NRC to recommend the appointment of shortlisted candidate to
the Board for its consideration.
3.6 Emergency Succession: If position of a Director suddenly
becomes vacant by reason of death or other unanticipated
occurrence, the NRC shall convene a special meeting at the
earliest opportunity to fill such vacancy.
4. Policy Implementation
4.1 The Committee is responsible for recommending this Policy to
the Board.
4.2 The Board
is responsible for approving and overseeing
implementation of this Policy (with the support of the
Committee).
5. Review of the Policy
This Policy will be reviewed and reassessed by the Committee as
and when required and appropriate recommendations shall be
made to the Board to update this Policy based on changes that
may be brought about due to any regulatory amendments or
otherwise.
6. Applicability to Subsidiary Companies
This Policy may be adopted by the Company’s subsidiaries
subject to suitable modifications and approval of the Board of
Directors of the respective subsidiary companies.
3.1 Assess skill-sets the Board needs given the strategies, challenges
faced by the Company.
7. Compliance Responsibility
3.2 In selecting
individuals
for appointment/re-appointment/
removal of directors, the NRC may refer to the following
guidelines/policies:
3.2.1
Board Membership Criteria (Refer Schedule A)
3.2.2
Board Diversity Policy (Refer Schedule B)
3.2.3
Criteria for determining independence of Directors (in
case of appointment of Independent Directors Refer
Schedule C)
3.3 Request candidature from the database maintained by Tata
Group HR/Company or list of potential candidates shared by the
external consultants or any other source as deemed appropriate
by the Committee.
3.4 NRC members (either jointly/individually, as delegated) shall
meet the potential candidate and assess his/her suitability for
the role.
130130
Compliance of this Policy shall be the responsibility of the
Company Secretary of the Company who shall have the power
to ask for any information or clarifications from the management
in this regard.
Schedule A
Board Membership Criteria
The NRC works with the Board to determine the appropriate
characteristics, skills and experience for the Board as a whole and its
individual members with the objective of having a Board with diverse
backgrounds and experience in business, government, education,
and public service. Characteristics expected of all Directors include
independence, integrity, high personal and professional ethics,
sound business judgement, ability to participate constructively in
deliberations and willingness to exercise authority in a collective
manner.
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
In evaluating the suitability of individual Board members, the
Committee considers many factors, including general understanding
of marketing, finance, operations management, public policy,
international relations, legal, governance and other disciplines
relevant to the success of a large publicly traded metals and mining
company in today’s business environment; understanding of the
Company’s business; experience in dealing with strategic issues and
long-term perspectives; maintaining an independent familiarity
with the external environment in which the Company operates and
especially in the Directors particular field of expertise; educational
and professional background; personal accomplishment; and
geographic, gender, age, and ethnic diversity.
The Board evaluates each individual in the context of the Board as a
whole, with the objective of having a group that can best perpetuate
the success of the Company’s business and represent stakeholders’
interests through the exercise of sound judgment, using its diversity
of experience.
In determining whether to recommend a Director for re-election, the
Committee also considers the Director’s past attendance at meetings,
participation in meetings and contributions to the activities of the
Board, and the results of the most recent Board self-evaluation.
Board members are expected to rigorously prepare for, attend
and participate in all Board and applicable committee meetings.
Each member is expected to ensure that their other current and
planned future commitments do not materially interfere with the
responsibilities at Tata Steel.
Schedule B
Board Diversity Policy
1. Purpose
The need for diversity in the Board has come into focus post the
changes in the provisions of the Companies Act, 2013 (‘Act’)
and the corporate governance requirements as prescribed by
Securities and Exchange Board of India (‘SEBI’) under Listing
Regulations.
The NRC has framed this Policy to set out the approach to
diversity on the Board of the Company (‘Policy’).
experience and viewpoints which will add to the strength of the
Company.
While all appointments to the Board are made on merit, the
diversity of Board in aggregate will be of immense strength to
the Board in guiding the Company successfully through various
geographies.
The Committee reviews and recommends appointments of
new Directors to the Board. In reviewing and determining the
Board composition, the Committee will consider the merit, skill,
experience, gender and other diversity of the Board.
To meet the objectives of driving diversity and an optimum skill
mix, the Committee may seek the support of Tata Group Human
Resources.
4. Monitoring And Reporting
The Committee will report annually, in the Corporate Governance
section of the Annual Report of the Company, the process
it employed in Board appointments. The report will include
summary of this Policy including purpose and the progress
made in achieving the same.
5. Review of the Policy
This Policy will be reviewed and reassessed by the Committee as
and when required and appropriate recommendations shall be
made to the Board to update this Policy based on changes that
may be brought about due to any regulatory amendments or
otherwise.
6. Applicability to Subsidiaries
This Policy may be adopted by the Company’s subsidiaries
subject to suitable modifications and approval of the Board of
Directors of the respective subsidiary companies.
7. Compliance Responsibility
Compliance of this Policy shall be the responsibility of the
Company Secretary of the Company who shall have the power
to ask for any information or clarifications from the management
in this regard.
2. Scope
Schedule C
This Policy is applicable to the Board of the Company.
Criteria for Determining Independence of Directors
3. Policy Statement
1. Purpose
The Company recognises the importance of diversity in its
success. Considering the global footprint of the Company, it is
essential that the Company has as diverse a Board as possible.
A diverse Board will bring in different set of expertise and
perspectives. The combination of Board having different skill
set, industry experience, varied cultural and geographical
background and gender diversity will bring a variety of
The purpose of this Policy is to define guidelines that will be
used by the Nomination and Remuneration Committee/Board
to assess the independence of Directors of the Company.
2. Independence Guidelines
A Director is considered independent if the Board makes
an affirmative determination after a review of all relevant
131131
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
Policy on Appointment & Removal of Directors | Remuneration Policy
information. The Board has established the categorical standards
set forth below to assist it in making such determinations.
(iii) holds together with his relatives two percent or more of
the total voting power of the company; or
An independent director in relation to a company, means a
director other than a managing director or a whole-time director
or a nominee director,—
(a)
who, in the opinion of the Board, is a person of integrity and
possesses relevant expertise and experience;
(b) (i)
who is or was not a promoter of the company or its
holding, subsidiary or associate company;
(iv) is a Chief Executive or director, by whatever name called,
of any non-profit organization that receives twenty-five
percent or more of its receipts from the company, any
of its promoters, directors or its holding, subsidiary or
associate company or that holds two percent or more
of the total voting power of the company; or
(v) is a material supplier, service provider or customer or a
lessor or a lessee of the Company
(ii) who is not related to promoters or directors in the
company, its holding, subsidiary or associate company;
(f ) who is not less than 21 years of age
(c) apart from receiving directors remuneration has or had
no pecuniary relationship with the company, its holding,
subsidiary or associate company, or their promoters, or
directors, during the two immediately preceding financial
years or during the current financial year;
(d) none of whose relatives has or had pecuniary relationship
or transaction with the company, its holding, subsidiary
or associate company, or their promoters, or directors,
amounting to two percent or more of its gross turnover
or total income or fifty lakh rupees or such higher amount
as may be prescribed, whichever is lower, during the two
immediately preceding financial years or during the current
financial year;
(e) who, neither himself nor any of his relatives —
(i)
holds or has held the position of a key managerial
personnel or is or has been employee of the company
or its holding, subsidiary or associate company in any
of the three financial years immediately preceding the
financial year in which he is proposed to be appointed;
(ii) is or has been an employee or proprietor or a partner, in
any of the three financial years immediately preceding
the financial year in which he is proposed to be
appointed, of —
(A) a firm of auditors or company secretaries in
practice or cost auditors of the company or its
holding, subsidiary or associate company; or
(B) any legal or a consulting firm that has or had
any transaction with the company, its holding,
subsidiary or associate company amounting to ten
percent or more of the gross turnover of such firm;
(g) who possesses such other qualifications as prescribed
Definitions in Addition to Those Provided Above
1.
2.
3.
‘Nominee Director’ implies a Director nominated by any financial
institution in pursuance of the provisions of any law for the
time being in force, or of any agreement, or appointed by any
government or any other person to represent its interests.
‘Associate Company’ implies a company which is an ‘associate’
as defined in Accounting Standard (‘AS’) 23, ‘Accounting for
Investments in Associates in Consolidated Financial Statements’,
issued by the Institute of Chartered Accountants of India.
‘Relative’ implies anyone who is related to another if they are
members of HUF; if they are husband and wife; or if one person is
related to the other in such manner as may be prescribed under
the Act. A person shall be deemed to be the relative of another, if
he or she is related to another in the following manner, namely –
Father (includes step-father), Mother (includes step-mother), Son
(includes step-son), Son’s wife, Daughter, Daughter’s husband,
Brother (includes step-brother), Sister (includes step-sister).
Explanations:
Consecutive Terms: He/she shall be eligible for appointment
as Independent Director after the expiration of three years of
ceasing to be a Director on the Board of the Company provided
that he/she shall not during the said period of three years, be
appointed in or associated with Tata Steel in any other category,
either directly or indirectly.
132132
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
ANNEXURE 6
Remuneration Policy of Directors, KMPs and other employees
The philosophy for remuneration of Directors, KMP and all
other employees of Tata Steel Limited (‘Company’) is based on
commitment demonstrated by the Directors, KMPs and other
employees towards the Company and truly fostering a culture
of leadership with trust. The remuneration policy is aligned to
this philosophy.
This remuneration policy has been prepared pursuant to the
provisions of Section 178(3) of the Companies Act, 2013 (‘Act’) and
Regulation 19(4) read with Part D of Schedule II of the Securities
and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015
In
case of any inconsistency between the provisions of law and this
remuneration policy, the provisions of the law shall prevail and the
Company shall abide by the applicable law. While formulating this
Policy, the Nomination and Remuneration Committee (‘NRC’) has
considered the factors laid down under Section 178(4) of the Act,
which are as under:
(‘Listing Regulations’).
a)
‘the level and composition of remuneration is reasonable and
sufficient to attract, retain and motivate Directors of the quality
required to run the Company successfully;
b)
relationship of remuneration to performance is clear and meets
appropriate performance benchmarks; and
c)
remuneration to Directors, KMP and senior management
involves a balance between fixed and incentive pay reflecting
short and long-term performance objectives appropriate to the
working of the Company and its goals’.
Key principles governing this remuneration policy are as follows:
Remuneration for Independent Directors and Non-Independent
Non-Executive Directors
Overall remuneration should be reflective of the size of the Company,
complexity of the sector/industry/Company’s operations and the
company’s capacity to pay the remuneration.
Independent Directors (‘ID’) and Non-Independent Non-Executive
Directors (‘NED’) may be paid sitting fees (for attending the meetings
of the Board and of committees of which they may be members) and
commission within regulatory limits. Quantum of sitting fees may be
subject to review on a periodic basis, as required.
Within the parameters prescribed by law, the payment of sitting fees
and commission will be recommended by the NRC and approved by
the Board.
Overall remuneration (sitting fees and commission) should be
reasonable and sufficient to attract, retain and motivate Directors
aligned to the requirements of the Company
into
consideration the challenges faced by the Company and its future
growth imperatives).
(taking
Overall remuneration practices should be consistent with recognised
best practices.
The aggregate commission payable to all the NEDs and IDs will
be recommended by the NRC to the Board based on Company’s
performance, profits, return to investors, shareholder value creation
and any other significant qualitative parameters as may be decided
by the Board.
The NRC will recommend to the Board, the quantum of commission
for each Director based upon the outcome of the evaluation process
which is driven by various factors including attendance and time
spent in the Board and committee meetings, individual contributions
at the meetings and contributions made by Directors other than in
meetings.
In addition to the sitting fees and commission, the Company may
pay to any Director such fair and reasonable expenditure, as may
have been incurred by the Director while performing his/her role as a
Director of the Company. This could include reasonable expenditure
incurred by the Director for attending Board/Board committee
meetings, general meetings, court convened meetings, meetings
with shareholders/creditors/management, site visits, induction and
training (organised by the Company for Directors) and in obtaining
professional advice from independent advisors in the furtherance of
his/her duties as a director.
Remuneration for Managing Director (MD)/Executive Directors
(EDs)/KMP/rest of the employees
The extent of overall remuneration should be sufficient to attract
and retain talented and qualified individuals suitable for every role.
Hence remuneration should be:
Market competitive (market for every role is defined as companies
from which the Company attracts talent or companies to which
the Company loses talent),
Based on the role played by the individual in managing the
Company including responding to the challenges faced by the
Company,
133133
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
Reflective of size of the Company, complexity of the sector/
industry/company’s operations and the Company’s capacity to
pay,
Consistent with recognised best practices and
Aligned to any regulatory requirements.
In terms of remuneration mix or composition,
The remuneration mix for the MD/EDs is as per the contract
approved by the shareholders. In case of any change, the
same would require the approval of the shareholders.
Basic/fixed salary is provided to all employees to ensure
that there is a steady income in line with their skills and
experience.
In addition to the basic/fixed salary, the Company may
provide employees with certain perquisites, allowances
and benefits to enable a certain level of lifestyle and to offer
scope for savings and tax optimisation, where possible.
The Company may also provide all employees with a social
security net (subject to limits) by covering medical expenses
and hospitalisation through re-imbursements or insurance
cover and accidental death and dismemberment through
personal accident insurance.
Remuneration Policy | Particulars of Remuneration
Remuneration payable to Director for services rendered in
other capacity
The remuneration payable to the Directors shall be inclusive of any
remuneration payable for services rendered by such Director in any
other capacity unless:
a) The services rendered are of a professional nature; and
b)
The NRC is of the opinion that the Director possesses requisite
qualification for the practice of the profession.
Premium on Insurance policy
Where any insurance is taken by the Company on behalf of its NEDs,
for indemnifying them against any liability, the premium paid on
such insurance shall not be treated as part of the remuneration.
Where any insurance is taken by the Company on behalf of its
MD/EDs, KMP and any other employees for indemnifying them
against any liability in respect of any negligence, default, misfeasance,
breach of duty or breach of trust for which they may be guilty in
relation to the Company, the premium paid on such insurance shall
not be treated as part of the remuneration. Provided that if such
person is proved to be guilty, the premium paid on such insurance
shall be treated as part of the remuneration.
The Company provides retirement benefits as applicable.
Policy implementation
In addition to the basic/fixed salary, benefits, perquisites and
allowances as provided above, the Company may provide
MD/EDs such remuneration by way of bonus/performance
linked
incentive and/or commission calculated with
reference to the net profits of the Company in a particular
financial year, as may be determined by the Board, subject
to the overall ceilings stipulated in Section 197 of the Act.
The specific amount payable to the MD/EDs would be based
on performance as evaluated by the Board or the NRC and
approved by the Board.
The Company may provide the rest of the employees a
performance linked bonus and/or performance linked
incentive and/or long-term incentive as applicable. The
performance linked bonus/performance linked incentive
would be driven by the outcome of the performance
appraisal process and the performance of the Company.
The NRC is responsible for recommending the remuneration policy
to the Board. The Board is responsible for approving and overseeing
implementation of the remuneration policy.
Review of the Policy
This Policy will be reviewed and reassessed by the NRC as and when
required and appropriate recommendations shall be made to the
Board to update this Policy based on changes that may be brought
about due to any regulatory amendments or otherwise.
Applicability to subsidiaries
This Policy may be adopted by the Company’s subsidiaries subject to
suitable modifications and approval of the Board of Directors of the
respective subsidiary companies.
Compliance Responsibility
Compliance of this Policy shall be the responsibility of the Company
Secretary of the Company who shall have the power to ask for any
information or clarification from the management in this regard.
–
–
–
–
–
–
134134
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
Particulars of Remuneration
Part A: Information pursuant to Section 197(12) of the Companies Act, 2013
[Read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]
ANNEXURE 7
Ratio of the remuneration of each Director/KMP to the median remuneration of all the employees of the Company for the Financial Year:
Median remuneration of all the employees of the Company for the Financial Year 2017-18
The percentage increase in the median remuneration of employees in the Financial Year
The number of permanent employees on the rolls of Company as on March 31, 2018
₹9,45,788
8.78%
34,072
Name of Director
Non-Executive Directors
Mr. N. Chandrasekaran (1)
Mr. Ishaat Hussain (2)
Mr. D. K. Mehrotra (3)
Mr. Saurabh Agrawal (4)
Independent Directors
Ms. Mallika Srinivasan
Mr. O. P. Bhatt
Mr. Andrew Robb (5)
Dr. Peter Blauwhoff
Mr. Aman Mehta (6)
Mr. Deepak Kapoor (7)
Executive Directors/KMP
Mr. T. V. Narendran
Mr. Koushik Chatterjee
Mr. Parvatheesam K.(8)
Remuneration for Financial Year (₹ lakh)
2017-18
2016-17
% increase in
remuneration
Ratio of remuneration to median
remuneration of all employees
4.80
84.80
85.30
3.70
119.40
180.00
52.40
79.40
84.40
75.60
942.94
913.80
124.91
0.80
130.20
75.20
-
93.60
129.60
77.70
25.40
-
-
817.31
809.91
153.47
^
*
13.43
*
27.56
38.89
*
^
^
^
15.37
12.83
*
0.51
*
9.02
*
12.62
19.03
*
8.40
8.92
7.99
99.70
96.62
*
^Since the remuneration of these Directors is only for part of the previous year, increase in remuneration is not stated.
*Since the remuneration of these Directors/KMP is only for part of the year, the ratio of their remuneration to median remuneration is not comparable and increase
in remuneration is not stated.
Notes:
(1) As a policy, Mr. N. Chandrasekaran, Chairman, has abstained from receiving commission from the Company.
(2) Mr. Ishaat Hussain retired as Member of the Board effective September 1, 2017.
(3) Commission of Mr. D. K. Mehrotra is paid to Life Insurance Corporation of India.
(4)
Mr. Saurabh Agrawal was appointed as an Additional (Non-Executive) Director effective August 10, 2017. In line with the internal guidelines of the Company
no payment is made towards commission to the Non-Executive Directors of the Company, who are in full time employment with any other Tata Company.
(5) Mr. Andrew Robb retired as Member of the Board effective September 1, 2017.
(6) Mr. Aman Mehta was appointed as an Additional (Independent) Director effective March 29, 2017.
(7) Mr. Deepak Kapoor was appointed as an Additional (Independent) Director effective April 1, 2017.
(8)
Mr. Parvatheesam K. is on study leave from August 28, 2017 through June 18, 2018. Accordingly, his remuneration includes salary drawn by him as Company
Secretary and Compliance Officer for the period April 1, 2017 through August 27, 2017 and salary received by him up to March 31, 2018 towards his earned leave.
(9) The ratio of remuneration to median remuneration is based on remuneration paid during the period April 1, 2017 to March 31, 2018.
During the year, the average percentage increase in salary of the Company’s employees, excluding the Key Managerial Personnel (‘KMP’) was
4.86%. The total remuneration of the KMPs for the Financial Year 2017-18 was ₹1,981.65 lakh as against ₹1,780.69 lakh during the previous year.
The percentage increase in remuneration during the Financial Year 2017-18 to Mr. T.V. Narendran, CEO & Managing Director was 15.37% and
to Mr. Koushik Chatterjee, Executive Director & CFO was 12.83%. During the year, there has been no exceptional increase in remuneration for
the KMPs.
Remuneration is as per the remuneration policy of the Company.
Mumbai
May 16, 2018
On behalf of the Board of Directors
sd/-
N. CHANDRASEKARAN
Chairman
DIN: 00121863
135135
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Particulars of Remuneration
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Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
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Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
Financial Information of Subsidiary Companies
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1
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INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
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Financial Information of Subsidiary Companies
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Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
Financial Information of Subsidiary Companies | Information on Subsidiaries, Joint Ventures or Associates
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5
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
ANNEXURE 9
Companies that have become/ceased to be Company’s Subsidiaries, Joint Ventures or Associate Companies
The names of companies which have become Subsidiaries, Joint Ventures or Associate Companies during the year:
Sl. No Name of the Company
Subsidiary
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Jamshedpur Football and Sporting Private Limited
Kalimati Global Shared Services Limited
Sakchi Steel Limited
Jugsalai Steel Limited
Noamundi Steel Limited
Straight Mile Steel Limited
Bamnipal Steel Limited
Bistupur Steel Limited
Jamadoba Steel Limited
Dimna Steel Limited
Bhubaneshwar Power Private Limited*
The names of companies which have ceased to be Subsidiaries, Joint Ventures or Associate Companies during the year:
Blume Stahlservice Polska Sp.Z.O.O
Ickles Cottage Trust Limited
Speciality Steels UK Limited
Stocksbridge Works Cottage Trust Limited
Tata Steel Speciality Service Centre Suzhou Co. Limited
Tata Steel Speciality Service Centre Xian Co. Limited
B S Pension Fund Trustee Limited
Eric Olsson & Soner Forvaltnings AB
Skruv Erik AB
Augusta Grundstücks GmbH
Trierer Walzwerk Verwaltungsgesellschaft mbH
Corus Beteiligungs GmbH
Kalzip Inc
Tata Steel Latvia Building Systems SIA
Tata Steel International (Benelux) BV
Sl. No Name of the Company
Subsidiary
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Joint Venture
1.
2.
3.
4.
Associate
1.
2.
Caparo Merchant Bar Plc
Tata Elastron Steel Service Center SA
Industrial Rail Services IJmond BV
Bhubaneshwar Power Private Limited*
Metal Corporation of India Limited
Aditya Automotive Applications Private Limited
* On February 1, 2018, Bhubaneshwar Power Private Limited ceased to be a Joint Venture of the Company, pursuant to the acquisition of additional 74% equity
stake and is now a subsidiary company.
Mumbai
May 16, 2018
On behalf of the Board of Directors
sd/-
N. CHANDRASEKARAN
Chairman
DIN: 00121863
147147
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Secretarial Audit Report
ANNEXURE 10
Form No. MR-3
Secretarial Audit Report for the Financial Year Ended March 31, 2018
Pursuant to Section 204 (1) of the Companies Act, 2013
[Read with rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]
To
The Members,
Tata Steel Limited
We have conducted the secretarial audit of the compliance of
applicable statutory provisions and the adherence to good corporate
practices by Tata Steel Limited (hereinafter called the Company).
Secretarial Audit was conducted in a manner that provided us a
reasonable basis for evaluating the corporate conducts/statutory
compliances and expressing our opinion thereon.
Based on our verification of the Company’s books, papers, minute
books, forms and returns filed and other records maintained by the
Company, the information provided by the Company, its officers,
agents and authorised representatives during the conduct of
secretarial audit, the explanations and clarifications given to us and
the representations made by the Management, we hereby report
that in our opinion, the Company has, during the audit period
covering the financial year ended on March 31, 2018, generally
complied with the statutory provisions listed hereunder and also
that the Company has proper Board processes and compliance
mechanism in place to the extent, in the manner and subject to the
reporting made hereinafter:
We have examined the books, papers, minute books, forms and
returns filed and other records made available to us and maintained
by the Company for the financial year ended on March 31, 2018
according to the provisions of:
(i)
The Companies Act, 2013 (‘the Act’) and the rules made
thereunder;
(ii)
The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the
rules made thereunder;
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws
framed thereunder;
(iv) Foreign Exchange Management Act, 1999 and the rules
and regulations made thereunder to the extent of Foreign
Direct Investment, Overseas Direct Investment and External
Commercial Borrowings;
(v)
The following Regulations and Guidelines prescribed under the
Securities and Exchange Board of India Act, 1992 (‘SEBI Act’)
(a) The Securities and Exchange Board of India (Substantial
Acquisition of Shares and Takeovers) Regulations, 2011;
148148
(b) The Securities and Exchange Board of India (Prohibition of
Insider Trading) Regulations, 2015;
(c)
(d)
The Securities and Exchange Board of India (Issue of Capital
and Disclosure Requirements) Regulations, 2009 and
amendments from time to time;
The Securities and Exchange Board of India (Share Based
Employee Benefits) Regulations, 2014; (Not applicable to
the Company during the audit period)
(e)
The Securities and Exchange Board of India (Issue and
Listing of Debt Securities) Regulations, 2008;
(f )
(g)
(h)
The Securities and Exchange Board of India (Registrars
to an Issue and Share Transfer Agents) Regulations, 1993
regarding the Companies Act and dealing with client; (Not
applicable to the Company during the audit period)
The Securities and Exchange Board of India (Delisting of
Equity Shares) Regulations, 2009; (Not applicable to the
Company during the audit period) and
The Securities and Exchange Board of India (Buyback
of Securities) Regulations, 1998; (Not applicable to the
Company during the audit period)
(vi) Other laws applicable specifically to the Company namely:
1.
2.
3.
4.
5.
The Mines Act, 1952 and the rules, regulations made
thereunder.
Mines and Minerals (Development & Regulation) Act, 1957
and the rules made thereunder.
Air (Prevention and Control of Pollution) Act, 1981 and the
rules and standards made thereunder.
Water (Prevention and Control of Pollution) Act, 1974 and
Water (Prevention and Control of Pollution) Rules, 1975
Environment Protection Act, 1986 and the rules, notifications
issued thereunder.
6. Factories Act, 1948 and allied State Laws.
We have also examined compliance with the applicable clauses of
the following:
(i)
Secretarial Standards issued by The Institute of Company
Secretaries of India with respect to board and general meetings.
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
(ii)
The Listing Agreements entered into by the Company with BSE
Limited and National Stock Exchange of India Limited read with
the Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015.
(1)
During the period under review, the Company has complied with the
provisions of the Act, Rules, Regulations, Guidelines, standards etc.
mentioned above.
We further report that:
The Board of Directors of the Company is duly constituted with
proper balance of Executive Directors, Non-Executive Directors and
Independent Directors. The changes in the composition of the Board
of Directors that took place during the period under review were
carried out in compliance with the provisions of the Act.
Adequate notice was given to all directors to schedule the Board
Meetings, agenda and detailed notes on agenda were sent at
least seven days in advance for meetings other than those held at
shorter notice, and a system exists for seeking and obtaining further
information and clarifications on the agenda items before the
meeting and for meaningful participation at the meeting.
Majority decision is carried through while the dissenting members’
views are captured and recorded as part of the Minutes of the
Meetings.
We further report that there are adequate systems and processes
in the Company commensurate with the size and operations of the
Company to monitor and ensure compliance with applicable laws,
rules, regulations and guidelines.
However, during the period under review, SEBI vide Adjudication
Order No. EAD-2/DSR/RG/869/2017 dated December 7, 2017, has
imposed a monetary penalty of `10,00,000/- (Rupees Ten Lakh Only)
on the Company for delayed disclosures under Regulation 13(3) read
with Regulation 13(5) of the SEBI (Prohibition of Insider Trading)
Regulations, 1992 in relation to the increase in the Company’s
shareholding in The Tinplate Company of India Limited pursuant
to a rights issue of shares in 2009 and the automatic conversion of
fully convertible debentures in 2011, which penalty has been paid by
the Company.
We further report that during the audit period the Company had
following events which had bearing on the Company’s affairs in
pursuance of the above referred laws, rules, regulations, guidelines,
standards etc.
The Company issued simultaneous but unlinked issue of
(1) 15,53,94,550 fully paid shares of face value of `10 each on
Rights basis to eligible ordinary shareholders of the Company
for cash at a price of `510 per fully paid shares (including
a premium of `500 per fully paid share) in the ratio of 4 fully
paid share for every 25 ordinary shares held by eligible
ordinary shareholders on February 1, 2018 (record date) and
(2) 7,76,97,280 partly paid shares of face value `10 (paid-up
`2.504 per share) each on a Rights basis to the eligible ordinary
shareholders of the Company for cash at a price of `615 per
partly paid share (including a premium of `605 per partly paid
share) in the ratio of 2 partly paid shares for every 25 ordinary
shares held by the eligible ordinary shareholders on the
record date.
The Company has executed a Memorandum of Understanding
with thyssenkrup AG dated September 20, 2017, with the
purpose of incorporating a 50:50 JV company in Netherlands,
namely, thyssenkrupp Tata Steel AG. The JV would combine flat
steel business of the Company and thyssenkrupp AG and the
steel mills of thyssenkrupp AG.
The Company has submitted the resolution plan for Bhushan
Steel Limited (‘BSL’) under the corporate insolvency resolution
process under Insolvency and Bankruptcy Code. The Committee
of Creditors of BSL on March 22, 2018, declared Tata Steel
to be a successful resolution applicant, subject to obtaining
necessary regulatory approvals. Further, the National Company
Law Tribunal (Principal Bench, New Delhi) vide its Order dated
May 15, 2018, had approved the Resolution Plan submitted by
Tata Steel Limited for acquiring the controlling stake of BSL.
(2)
(3)
For Parikh & Associates
Company Secretaries
sd/-
P. N. PARIKH
Partner
FCS No.: 327 CP No.: 1228
Place: Mumbai
Date: May 16, 2018
This Report is to be read with our letter of even date which is annexed
as Annexure A and Forms an integral part of this report.
149149
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Secretarial Audit Report | Extract of Annual Return
Annexure A
To,
The Members,
Tata Steel Limited
Our report of even date is to be read along with this letter.
1.
2.
Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on
these secretarial records based on our audit.
We have followed the audit practices and process as were appropriate to obtain reasonable assurance about the correctness of the
contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records.
We believe that the process and practices, we followed provide a reasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.
4.
5.
6.
Whereever required, we have obtained the Management Representation about the Compliance of laws, rules and regulations and
happening of events etc.
The Compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management.
Our examination was limited to the verification of procedure on test basis.
The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which
the management has conducted the affairs of the Company.
For Parikh & Associates
Company Secretaries
sd/-
P. N. PARIKH
Partner
FCS No.: 327 CP No.: 1228
Place: Mumbai
Date: May 16, 2018
150150
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR ANNEXURE 11
Form No. MGT 9
Extract of Annual Return as on March 31, 2018
Pursuant to Section 92(3) of the Companies Act, 2013
[Read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014]
I. Registration and other details
Company
CIN
Registration Date
Name
Category/Sub-category of the Company
Registered office address
Contact details
Whether listed company – Yes/No
Registrar and Transfer Agent
Name
Address
Contact details
L27100MH1907PLC000260
:
: August 26, 1907
:
:
:
:
:
Tata Steel Limited
Public listed company having share capital
Bombay House, 24 Homi Mody Street, Fort, Mumbai - 400 001
Phone No. +91 22 6665 8282, Fax No. +91 22 6665 7724
Yes
:
:
:
TSR Darashaw Limited
6-10, Haji Moosa Patrawala Industrial Estate, 20,
Dr. E. Moses Road, Mahalaxmi, Mumbai - 400 011
Phone No. +91 22 6656 8484, Fax No. +91 22 6656 8494
II. Principal Business Activities of the Company
All the business activities contributing 10% or more of the total turnover of the Company shall be stated.
Sl. No. Name and Description of main products
1
Manufacturing of steel and steel products
NIC Code of the Products
330
% to total turnover of the Company
89%
III. Particulars of Holding, Subsidiary and Associate Companies
Sl. No. Name and address of the Company
Subsidiary Companies (Pursuant to Section 2(87)(ii) of Companies Act, 2013)
1.
2.
3.
4.
5.
6.
7.
ABJA Investment Co. Pte Ltd.
22 Tanjong Kling Road, Singapore 628048
Adityapur Toll Bridge Company Limited
Aiada Vikash Bhawan, Adityapur, Jamshedpur - 831 013
CIN: U45201JH1996PLC007124
Tata Steel Special Economic Zone Limited
2-B Fortune Towers, Chandrasekharpur, Bhubaneswar - 751 023
CIN: U45201OR2006PLC008971
Indian Steel & Wire Products Ltd
Flat 7 D & E, 7th Floor, Everest House, 46 C Chowringhee Road, Kolkata - 700 071
CIN: U27106WB1935PLC008447
Jamshedpur Utilities & Services Company Limited
Sakchi Boulevard Road, Northern Town, Bistupur, Jamshedpur - 831 001
CIN: U45200JH2003PLC010315
Haldia Water Management Limited
Shakti Palace, Plot No 492 (Old) & 784 (New), 2nd Floor, Mouza, Khanjanchak Haldia - 721 602, West Bengal
CIN: U74140WB2008PLC126534
Kalimati Global Shared Services Limited
1st Floor, Tata Centre, 43 Jawaharlal Nehru Road, Kolkata – 700 071
CIN: U74999WB2018PLC224208
Holding (%)
100.00
88.50
100.00
95.01
100.00
60.00
100.00
151151
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
Extract of Annual Return
Sl. No. Name and address of the Company
Subsidiary Companies (Pursuant to Section 2(87)(ii) of Companies Act, 2013)
Holding (%)
Mohar Export Services Pvt Ltd
Bank of Baroda Bldg, Bombay Samachar Marg, Mumbai - 400 001
CIN: U51900MH1988PTC049518
NatSteel Asia Pte. Ltd.
22 Tanjong Kling Road, Singapore 628048
TS Asia (Hong Kong) Ltd.
Room 807, 8/F, Tower 1, Enterprise Square 1, No. 9 Sheung Yuet Road, Kowloon Bay, Kowloon, Hong Kong
Rujuvalika Investments Limited
Bombay House 3rd Flr, 24 Homi Mody Street, Mumbai - 400 001
CIN: U67120MH1988PLC049872
T S Alloys Limited
N-3/24, IRC Village, Nayapalli, Bhubaneswar - 751 015 (Odisha)
CIN: U27109OR2004PLC009683
Tata Korf Engineering Services Ltd
Tandem Apartment, 3rd Floor, Flat No.14, 52E, Ballygunge, Circular Road, Kolkata - 700 019
CIN: U74210WB1985PLC039675
Tata Metaliks Ltd.
Tata Centre, 10th Floor, 43, J L Nehru Road, Kolkata - 700 071
CIN: L27310WB1990PLC050000
Tata Sponge Iron Limited
P.O. Joda, Dist- Keonjhar, Odisha - 758 034
CIN: L27102OR1982PLC001091
TSIL Energy Limited
Tata Sponge Administrative Building, Bileipada, P.O. Baneikala, Odisha - 758 038
CIN: U40109OR2012PLC016232
Tata Steel (KZN) (Pty) Ltd.
22 Bronze Bar Road, Alton North, Richards Bay - 3900, South Africa
T Steel Holdings Pte. Ltd.
22 Tanjong Kling Road, Singapore 628048
T S Global Holdings Pte. Ltd.
22 Tanjong Kling Road, Singapore 628048
Orchid Netherlands (No.1) B.V.
Wenckebachstraat 1, 1951 Jz, Velsen-Noord, Netherlands
NatSteel Holdings Pte. Ltd.
22 Tanjong Kling Road, Singapore 628048
Easteel Services (M) Sdn. Bhd.
Suite 6.1A, Level 6, Menara Pelangi, Jalan Kuning, Taman Pelangi, 80400 Johor Bahru, Johor, Malaysia
Eastern Steel Fabricators Philippines, Inc.
212 Barrio Bagbaguin, Meycauayan, Bulacan, Philippines
NatSteel (Xiamen) Ltd.
No. 19, Jiangang Road, Haicang South Industrial District, Xiamen, Fujian Province, People’s Republic of China,
Postcode 361026
NatSteel Recycling Pte Ltd.
22 Tanjong Kling Road, Singapore 628048
NatSteel Trade International (Shanghai) Company Ltd.
Room No. 328, No. 500 Bingke Road, Wai Gaoqiao Free Trade Zone, Pudong, Shanghai, People’s Republic of China
NatSteel Trade International Pte. Ltd.
22, Tanjong Kling Road, Singapore 628048
NatSteel Vina Co. Ltd.
Luu Xa, Cam Gia Ward, Thai Nguyen City, Thai Nguyen Province, Vietnam
The Siam Industrial Wire Company Ltd.
14th Floor, Rasa Tower, 555 Phaholyothin Road, Kwaeng Chatuchak, Khet Chatuchak, Bangkok 10900 Thailand
TSN Wires Co., Ltd.
14th Floor, Rasa Tower, 555 Phaholyothin Road, Kwaeng Chatuchak, Khet Chatuchak, Bangkok 10900 Thailand
Tata Steel Europe Limited
30 Millbank, London, SW1P 4WY
66.46
100.00
100.00
100.00
100.00
100.00
50.09
54.50
100.00
90.00
100.00
100.00
100.00
100.00
100.00
67.00
100.00
100.00
100.00
100.00
56.50
100.00
60.00
100.00
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
152152
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Sl. No. Name and address of the Company
Subsidiary Companies (Pursuant to Section 2(87)(ii) of Companies Act, 2013)
Holding (%)
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
58.
Apollo Metals Limited
14th Avenue, Bethlehem, 18018-0045, USA
Automotive Laser Technologies Limited
30 Millbank, London, SW1P 4WY
Beheermaatschappij Industriele Produkten B.V.
Wenckebachstraat 1, 1970 CA Velsen-Noord, Netherlands
Bell & Harwood Limited
30 Millbank, London, SW1P 4WY
Blastmega Limited
30 Millbank, London, SW1P 4WY
Blume Stahlservice GmbH
Umschlag 10, Mulheim 45478, Germany
Bore Samson Group Limited
30 Millbank, London, SW1P 4WY
Bore Steel Limited
30 Millbank, London, SW1P 4WY
British Guide Rails Limited
30 Millbank, London, SW1P 4WY
British Steel Corporation Limited
30 Millbank, London, SW1P 4WY
British Steel Directors (Nominees) Limited
30 Millbank, London, SW1P 4WY
British Steel Engineering Steels (Exports) Limited
30 Millbank, London, SW1P 4WY
British Steel Nederland International B.V.
Wenckebachstraat 1, 1970 CA Velsen-Noord, Netherlands
British Steel Service Centres Limited
30 Millbank, London, SW1P 4WY
British Tubes Stockholding Limited
30 Millbank, London, SW1P 4WY
C V Benine
Schenkkade 65, 2595 AS Den Haag, Netherlands
C Walker & Sons Limited
30 Millbank, London, SW1P 4WY
Catnic GmbH
Am Leitzenbach 16, 74889 Sinsheim, Germany
Catnic Limited
30 Millbank, London, SW1P 4WY
CBS Investissements SAS
Rue Geo Lufbery, Chauny 02300, France
Cogent Power Inc.
845 Laurentian Drive, Burlington, Ontario, Canada L7N 3W7
Tata Steel Mexico SA de CV
Avenida ING. Armando Birlain Shaffler No 2001 Corporatiave Central Park, Torre 1, 16 PSO C, Col Centro Sur,
Querenturo, Cp 76090 Mexico
Cogent Power Inc.
c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, DE 19801,
New Castle County, USA
Cogent Power Limited
Orb Works, Stephenson Street, Newport, Gwent, NP19 0RB
Color Steels Limited
30 Millbank, London, SW1P 4WY
Corbeil Les Rives SCI
Rue Decauville, Corbeil Essonnes 91100, France
Corby (Northants) & District Water Company Limited
C/o TSUK, PO Box 101, Weldon Road, Corby, Northamptonshire, NN17 5UA
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
76.92
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
67.30
100.00
153153
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Extract of Annual Return
Sl. No. Name and address of the Company
Subsidiary Companies (Pursuant to Section 2(87)(ii) of Companies Act, 2013)
Holding (%)
Cordor (C& B) Limited
30 Millbank, London, SW1P 4WY
Corus Aluminium Verwaltungsgesellschaft Mbh
Am Trippelsberg 48, Dusseldorf 40589, Germany
Corus Building Systems Bulgaria AD
1, Grivishkoshose, Pleven 5800, Bulgaria
Corus CNBV Investments
30 Millbank, London, SW1P 4WY
Corus Cold drawn Tubes Limited
30 Millbank, London, SW1P 4WY
Corus Engineering Steels (UK) Limited
30 Millbank, London, SW1P 4WY
Corus Engineering Steels Holdings Limited
30 Millbank, London, SW1P 4WY
Corus Engineering Steels Limited
30 Millbank, London, SW1P 4WY
Corus Engineering Steels Overseas Holdings Limited
30 Millbank, London, SW1P 4WY
Corus Engineering Steels Pension Scheme Trustee Limited
30 Millbank, London, SW1P 4WY
Corus Group Limited
30 Millbank, London, SW1P 4WY
Corus Holdings Limited
15 Atholl Crescent, Edinburgh, EH3 8HA
Corus International (Overseas Holdings) Limited
30 Millbank, London, SW1P 4WY
Corus International Limited
30 Millbank, London, SW1P 4WY
Corus International Romania SRL.
Bucaresti, Sector 1, Calea Floreasca, Nr. 169A, Corp A, Etaj 4, Birou 2038, Romania
Corus Investments Limited
30 Millbank, London, SW1P 4WY
Corus Ireland Limited
KPMG, 1 Stokes Place, St Stephens Green, Dublin 2, Ireland
Corus Large Diameter Pipes Limited
30 Millbank, London, SW1P 4WY
Corus Liaison Services (India) Limited
30 Millbank, London, SW1P 4WY
Corus Management Limited
30 Millbank, London, SW1P 4WY
Corus Primary Aluminium B.V.
Wenckebachstraat 1, 1970 CA Velsen-Noord, Netherlands
Corus Property
30 Millbank, London, SW1P 4WY
Corus Service Centre Limited
30 Millbank, London, SW1P 4WY
Corus Steel Service STP LLC
34, Letter A, 9-th line, V.O., Saint Petersburg, 199004, Business centre ‘Magnus’, Saint Petersburg
Corus Tubes Poland Spolka Z.O.O
Ul. Grabiszynska, Wroclaw 43-234, Poland
Corus UK Healthcare Trustee Limited
30 Millbank, London, SW1P 4WY
Corus Ukraine Limited Liability Company
Office 16, Building 11/23B, Chekhivskiy Provulok/Vorovskogo Street, 01054 Kiev, Ukraine
CPN (85) Limited
30 Millbank, London, SW1P 4WY
59.
60.
61.
62.
63.
64.
65.
66.
67.
68.
69.
70.
71.
72.
73.
74.
75.
76.
77.
78.
79.
80.
81.
82.
83.
84.
85.
86.
154154
100.00
100.00
65.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Sl. No. Name and address of the Company
Subsidiary Companies (Pursuant to Section 2(87)(ii) of Companies Act, 2013)
Holding (%)
87.
88.
89.
90.
91.
92.
93.
94.
95.
96.
97.
98.
99.
100.
101.
102.
103.
104.
105.
106.
107.
108.
109.
110.
111.
112.
113.
114.
Crucible Insurance Company Limited
35/37, Athol Street, Douglas, Isle of Man
Degels GmbH
Am Trippelsberg 48, Dusseldorf 40589, Germany
Demka B.V.
Wenckebachstraat 1, 1970 CA Velsen-Noord, Netherlands
DSRM Group Plc.
30 Millbank, London, SW1P 4WY
Esmil B.V.
Wenckebachstraat 1, 1970 CA Velsen-Noord, Netherlands
Europressings Limited
30 Millbank, London, SW1P 4WY
Firsteel Group Limited
30 Millbank, London, SW1P 4WY
Firsteel Holdings Limited
30 Millbank, London, SW1P 4WY
Fischer Profil GmbH
Waldstrasse 67, 57250 Netphen, Germany
Gamble Simms Metals Limited
Tata Steel Service Centre, Steel House, Bluebell Industrial Estate, Bluebell Avenue, Dublin 12
Grant Lyon Eagre Limited
30 Millbank, London, SW1P 4WY
H E Samson Limited
30 Millbank, London, SW1P 4WY
Hadfields Holdings Limited
30 Millbank, London, SW1P 4WY
Halmstad Steel Service Centre AB
C/o Hannes Snellman Advokatbyra AB, Box 7801, 103 96 Stockholm, Sweden
Hammermega Limited
30 Millbank, London, SW1P 4WY
Harrowmills Properties Limited
30 Millbank, London, SW1P 4WY
Hille & Muller GmbH
Am Trippelsberg 48, Dusseldorf 40589, Germany
Hille & Muller USA Inc.
Delaware Avenue N.W., Warren, 44485 Ohio, USA
Hoogovens USA Inc.
475 N. Martingale Road, Suite 400 Schaumburg, IL 60173 USA
Huizenbezit “Breesaap” B.V.
Wenckebachstraat 1, 1970 CA Velsen-Noord, Netherlands
Inter Metal Distribution SAS
3 Allee des Barbanniers, 92632 Gennevilliers Cedex, France
Kalzip Asia Pte Limited
25 Pioneer Crescent, Singapore 628554
Kalzip FZE
PO Box 18294, Jebel Ali, Dubai, UAE
Kalzip GmbH
August Horchstrasse 20-22, Koblenz 56070, Germany
Kalzip GmbH
Gusshausstrasse 4, Wien 1040, Austria
Kalzip India Private Limited
Unit 310, 3rd Floor, Vipul Agora Building, M.G. Road, Gurgaon, Delhi - 122002
CIN: U28920HR1960PTC043655
Kalzip Italy SRL
Via Santa Radegonda 11, Milan, 20121, Italy
Kalzip Limited
Haydock Lane, Haydock, St. Helens, Merseyside, WA11 9TY
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
62.50
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
155155
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Extract of Annual Return
Sl. No. Name and address of the Company
Subsidiary Companies (Pursuant to Section 2(87)(ii) of Companies Act, 2013)
Holding (%)
115.
116.
117.
118.
119.
120.
121.
122.
123.
124.
125.
126.
127.
128.
129.
130.
131.
132.
133.
134.
135.
136.
137.
138.
139.
140.
141.
142.
Kalzip Spain S.L.U.
Rosario Pino, 14-16, Torre Rioja, 28020 Madrid, Spain
Layde Steel S.L.
Eguskitza 11, E-48200 Durango, Spain
Lister Tubes Limited
Tata Steel Service Centre, Steel House, Bluebell Industrial Estate, Bluebell Avenue, Dublin 12
London Works Steel Company Limited
30 Millbank, London, SW1P 4WY
Midland Steel Supplies Limited
30 Millbank, London, SW1P 4WY
Montana Bausysteme AG
Durisolstrasse 11, Villmergen 5612, Switzerland
Naantali Steel Service Centre OY
Eteläesplanadi 20, 00130 Helsinki, Finland
Nationwide Steelstock Limited
30 Millbank, London, SW1P 4WY
Norsk Stal Tynnplater AS
Habornveien 60, PO Box 1403, N 1631 Gamle Fredrikstad, Norway
Norsk Stal Tynnplater AB
P.O.B 17544 S-20010 Malmo, Sweden
Orb Electrical Steels Limited
Orb Works, Stephenson Street, Newport, NP19 0RB
Ore Carriers Limited
30 Millbank, London, SW1P 4WY
Oremco Inc.
60 E42 Street, New York 10165, USA
Plated Strip (International) Limited
30 Millbank, London, SW1P 4WY
Precoat International Limited
30 Millbank, London, SW1P 4WY
Precoat Limited
30 Millbank, London, SW1P 4WY
Rafferty-Brown Steel Co Inc Of Conn.
2711 Centerville Road, Ste 400 Wilmington, 19808 USA
Round Oak Steelworks Limited
30 Millbank, London, SW1P 4WY
Runblast Limited
30 Millbank, London, SW1P 4WY
Runmega Limited
30 Millbank, London, SW1P 4WY
S A B Profiel B.V.
Produktieweg 2, 3401 MG IJsselstein, Netherlands
S A B Profil GmbH
Industriestrasse 13, Niederaula, 36272 Germany
Seamless Tubes Limited
30 Millbank, London, SW1P 4WY
Service Center Gelsenkirchen GmbH
Am Trippelsberg 48, Dusseldorf 40589, Germany
Service Centre Maastricht B.V.
P O BOX 3040, 6202 NA Maastricht, Netherlands
Societe Europeenne De Galvanisation (Segal) Sa
Chassee de Ramioul 50, Flemalle, Ivoz Ramet, 4400 Belgium
Staalverwerking en Handel B.V.
Wenckebachstraat 1, 1970 CA Velsen-Noord, Netherlands
Steel StockHoldings Limited
30 Millbank, London, SW1P 4WY
156156
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Sl. No. Name and address of the Company
Subsidiary Companies (Pursuant to Section 2(87)(ii) of Companies Act, 2013)
Holding (%)
143.
144.
145.
146.
147.
148.
149.
150.
151.
152.
153.
154.
155.
156.
157.
158.
159.
160.
161.
162.
163.
164.
165.
166.
167.
168.
169.
170.
Steelstock Limited
30 Millbank, London, SW1P 4WY
Stewarts & Lloyds Of Ireland Limited
1 Stokes Place, St Stephen’s Green, Dublin 2, Ireland
Stewarts And Lloyds (Overseas) Limited
30 Millbank, London, SW1P 4WY
Surahammar Bruks AB
Box 201, SE-735 23, Surahammar, Sweden
Swinden Housing Association Limited
Swinden House, Moorgate, Rotherham, S60 3AR, UK
Tata Steel Belgium Packaging Steels N.V.
Walemstraat 38, Duffel 2570, Belgium
Tata Steel Belgium Services N.V.
Coremansstraat 34, Berchem 2600, Belgium
Tata Steel Denmark Byggsystemer A/S
Kaarsbergsvej 2, DK-8400 Ebeltoft, Denmark
Tata Steel Europe Distribution BV
Wenckebachstraat 1, 1970 CA Velsen-Noord, Netherlands
Tata Steel Europe Metals Trading BV
Wenckebachstraat 1, 1970 CA Velsen-Noord, Netherlands
Tata Steel France Batiment et Systemes SAS
Rue Geo Lufbery, BP 103, Chauny 02301, France
Tata Steel France Holdings SAS
3, Allee des Barbanniers, Gennevilliers 92632, France
Tata Steel Germany GmbH
Am Trippelsberg 48, Dusseldorf 40589, Germany
Tata Steel IJmuiden BV
Wenckebachstraat 1, 1970 CA Velsen-Noord, Netherlands
Tata Steel International (Americas) Holdings Inc
Wilmington Trust SP Services Inc. 1105 North Market Place, Wilmington, DE 19899, USA
Tata Steel International (Americas) Inc
475 N. Martingale Road, Suite 400 Schaumburg, IL 60173 USA
Tata Steel International (Canada) Holdings Inc
Dentons Canada LLP, 1 Place Villa-Marie, Suite 3900, Montreal, Quebec, Canada H3B 4M7
Tata Steel International (Czech Republic) S.R.O
1st Floor, Mala Stepanska 9, 120 00 Prague 2, Czech Republic
Tata Steel International (Denmark) A/S
Frederiksborgvej 23, 3520 Farum, Denmark
Tata Steel International (Finland) OY
Hitsaajankatu 22, 00810 Helsinki, Finland
Tata Steel International (France) SAS
3, Allee des Barbanniers, Gennevilliers 92632, France
Tata Steel International (Germany) GmbH
Am Trippelsberg 48, Dusseldorf 40589, Germany
Tata Steel International (South America) Representações LTDA
Santiago & Amboulos Advogados, AV. Rio Branco, 45-10 Andar, Grupo 1013 Centro - Rio De Janiero - RJ CEP
20090-003
Tata Steel International Hellas SA
5 Pigis Avenue, Melissia, Athens, Greece
Tata Steel International (Italia) SRL
Via G.G. Winckelmann 2, Milano 20146, Italy
Tata Steel International (Middle East) FZE
PO Box 18294, Jebel Ali, Dubai, UAE
Tata Steel International (Nigeria) Ltd.
Block 69 A. Plot 8, Admiralty Way, Lekki, Phase 1, Lagos, Nigeria
Tata Steel International (Poland) sp Zoo
Ul. Piastowska 7, 40-005 Katowice, Poland
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
157157
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Extract of Annual Return
Sl. No. Name and address of the Company
Subsidiary Companies (Pursuant to Section 2(87)(ii) of Companies Act, 2013)
Holding (%)
171.
172.
173.
174.
175.
176.
177.
178.
179.
180.
181.
182.
183.
184.
185.
186.
187.
188.
189.
190.
191.
192.
193.
194.
195.
196.
197.
198.
Tata Steel International (Schweiz) AG
Wartenbergstrasse 40, Basel 4052, Switzerland
Tata Steel International (Sweden) AB
Barlastgatan 2, SE-414 63 Goteborg, Sweden
Tata Steel International (India) Limited
3rd Floor, One Forbes, Dr. V. B. Gandhi Marg Fort, Mumbai 400001
CIN: U74900MH2005PLC151710
Tata Steel International Iberica SA
Rosario Pino 14-16 Torre Rioja 28020 Madrid, Spain
Tata Steel Istanbul Metal Sanayi ve Ticaret AS
Elmadag Harbiye Mahallesi Cumhuriyet Caddesi, 48 Pegasus Evi Kat:7/5 Sisli, Istanbul, Turkey
Tata Steel Maubeuge SAS
22, Avenue Abbe Jean de Beco, Louvroil 59720, France
Tata Steel Nederland BV
Wenckebachstraat 1, 1970 CA Velsen-Noord, Netherlands
Tata Steel Nederland Consulting & Technical Services BV
Wenckebachstraat 1, 1970 CA Velsen-Noord, Netherlands
Tata Steel Nederland Services BV
Wenckebachstraat 1, 1970 CA Velsen-Noord, Netherlands
Tata Steel Nederland Star-Frame BV
Wenckebachstraat 1, 1970 CA Velsen-Noord, Netherlands
Tata Steel Nederland Technology BV
Wenckebachstraat 1, 1970 CA Velsen-Noord, Netherlands
Tata Steel Nederland Tubes BV
Souvereinstraat 33, 4903 RH Oosterhout, Netherlands
Tata Steel Netherlands Holdings B.V.
Wenckebachstraat 1, 1970 CA Velsen-Noord, Netherlands
Tata Steel Norway Byggsystemer A/S
Roraskogen 2, N 3739 Skien, Norway
Tata Steel Sweden Byggsystem AB
Haldelsvagen, 4 30230 Halmstad, Sweden
Tata Steel UK Consulting Limited
30 Millbank, London, SW1P 4WY
Tata Steel UK Holdings Limited
30 Millbank, London, SW1P 4WY
Tata Steel UK Limited
30 Millbank, London, SW1P 4WY
Tata Steel USA Inc.
475 N Martingale Road, Suite 400, Schaumburg 60173, USA
The Newport And South Wales Tube Company Limited
30 Millbank, London, SW1P 4WY
The Stanton Housing Company Limited
30 Millbank, London, SW1P 4WY
The Templeborough Rolling Mills Limited
30 Millbank, London, SW1P 4WY
Thomas Processing Company
Delaware Avenue N.W., Warren, 44485 Ohio, USA
Thomas Steel Strip Corp.
Delaware Avenue N.W., Warren, 44485 Ohio, USA
Toronto Industrial Fabrications Limited
30 Millbank, London, SW1P 4WY
TS South Africa Sales Office Proprietary Limited
Komogelo Suite A1 & B1 Lakefield Avenue, Lakefield, Benoni South Africa
Tulip UK Holdings (No. 2) Limited
30 Millbank, London, SW1P 4WY
Tulip UK Holdings (No. 3) Limited
30 Millbank, London, SW1P 4WY
158158
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Sl. No. Name and address of the Company
Subsidiary Companies (Pursuant to Section 2(87)(ii) of Companies Act, 2013)
Holding (%)
199.
200.
201.
202.
203.
204.
205.
206.
207.
208.
209.
210.
211.
212.
213.
214.
215.
216.
217.
218.
219.
220.
221.
222.
223.
224.
225.
U.E.S. Bright Bar Limited
30 Millbank, London, SW1P 4WY
UK Steel Enterprise Limited
The Innovation Centre 217 Portobello, Sheffield S1 4DP
UKSE Fund Managers Limited
The Innovation Centre 217 Portobello, Sheffield S1 4DP
Unitol SAS
1 Rue Fernand Raynaud, Corbeil Essonnes 91814, France
Walker Manufacturing And Investments Limited
30 Millbank, London, SW1P 4WY
Walkersteelstock Ireland Limited
Tata Steel Service Centre, Steel House, Bluebell Industrial Estate, Bluebell Avenue, Dublin 12
Walkersteelstock Limited
30 Millbank, London, SW1P 4WY
Westwood Steel Services Limited
30 Millbank, London, SW1P 4WY
Whitehead (Narrow Strip) Limited
30 Millbank, London, SW1P 4WY
T S Global Minerals Holdings Pte Ltd.
22 Tanjong Kling Road Singapore 628048
Al Rimal Mining LLC
P O Box 54, Muscat, Sultanate of Oman, Postal Code 100
Black Ginger 461 (Proprietary) Ltd.
39, Ferguson Road, Illovo 2196, Johannesburg, South Africa
Kalimati Coal Company Pty. Ltd.
Level 1, 12 Creek Street, Brisbane Qld 4000
Sedibeng Iron Ore Pty. Ltd.
39, Ferguson Road, Illovo 2196, Johannesburg, South Africa
Tata Steel Cote D'ivoire S.A
Lot 50, Ilot 4, Cocody Mermoz, 01 Po Box 5871 Abidjan 01
TSMUK Limited
18 Grosvenor Place, London.SW1X 7HS
Tata Steel Minerals Canada Limited
Park Place, 666 Burrard Street, Suite 1700, Vancouver, BC V6C 2X8
T S Canada Capital Limited
Park Place, 666 Burrard Street, Suite 1700, Vancouver, BC V6C 2X8
Tata Steel International (Singapore) Holdings Pte. Ltd.
22 Tanjong Kling Road, Singapore 628048
TSIA Holdings (Thailand) Limited
No. 179/60-62, Bangkok City Tower, 13th Floor, South Sathorn Road, Thungmahamek Sub-District,
Sathorn District, Bangkok Metropolis 10120
Tata Steel International (Shanghai) Ltd.
Room 2006, No. 568 Hengfeng Road, Zhabei District, 200070, Shanghai, China
Tata Steel International (Thailand) Limited
No. 179/60-62, Bangkok City Tower, 13th Floor, South Sathorn Road, Thungmahamek Sub-District,
Sathorn District, Bangkok Metropolis 10120
Tata Steel International (Singapore) Pte. Ltd.
22 Tanjong Kling Road, Singapore 628048
Tata Steel International (Asia) Limited
Unit 603B, Empire Centre, 68 Mody Road, Tsim Sha Tsui East, Kow Loon, Hong Kong
Tata Steel (Thailand) Public Company Ltd.
555 Rasa Tower 2, 20th Floor, Phaholyothin Road, Chatuchak, Bangkok 10900, Thailand
N.T.S Steel Group Plc.
No. 351, Moo 6, 331 Highway, Hemaraj Chonburi Industrial Estate, Bowin, Sriracha, Chonburi 20230, Thailand
The Siam Construction Steel Co. Ltd.
Plot 1-23, Map Ta Phut Industrial Estate, Amphur Muang, Rayong 21150, Thailand
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
70.00
100.00
100.00
64.00
85.00
100.00
77.68
100.00
100.00
100.00
100.00
100.00
100.00
100.00
67.90
99.76
99.99
159159
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Extract of Annual Return
Sl. No. Name and address of the Company
Subsidiary Companies (Pursuant to Section 2(87)(ii) of Companies Act, 2013)
Holding (%)
226.
227.
228.
229.
230.
231.
232.
233.
234.
235.
236.
237.
238.
239.
240.
241.
242.
243.
244.
The Siam Iron And Steel (2001) Co. Ltd.
No. 49 Moo 11, Tambon Bang Khamode, Ampher Ban Mor, Saraburi 18270, Thailand
T S Global Procurement Company Pte. Ltd.
22 Tanjong Kling Road Singapore 628048
ProCo Issuer Pte. Ltd.
22 Tanjong Kling Road Singapore 628048
Tata Steel Odisha Limited
Bombay House, 24, Homi Mody Street, Fort, Mumbai - 400 001
CIN: U27310MH2012PLC232512
Tata Steel Processing and Distribution Limited
Tata Centre, 43 Chowringhee Road, Kolkata-700 071
CIN: U27109WB1997PLC084005
Tayo Rolls Limited
3 Circuit House Area (North-East), Road No 11 PO & PS – Bistupur, Jamshedpur – 831 001
CIN: L27105JH1968PLC000818
The Tata Pigments Limited
Sakchi Boulevard, Jamshedpur - 831 002
CIN: U24100JH1983PLC001836
The Tinplate Company of India Ltd
4, Bankshall Street, Kolkata-700 001
CIN: L28112WB1920PLC003606
Tata Steel Foundation
6th Floor, One Forbes, No. 1, Dr. V. B. Gandhi Marg, Fort, Mumbai - 400 001
CIN: U85300MH2016NPL284815
Jamshedpur Football and Sporting Private Limited
6th Floor, One Forbes, No. 1, Dr. V. B. Gandhi Marg, Fort, Mumbai - 400 001
CIN: U92490MH2017PTC297047
Sakchi Steel Limited
Tarapur Complex, Plot No. F8, MIDC, Tarapur Industrial Area, Palghar, 401 506
CIN: U27310MH2018PLC304205
Jugsalai Steel Limited
Tarapur Complex, Plot No. F8, MIDC, Tarapur Industrial Area, Palghar, 401 506
CIN: U27109MH2018PLC304352
Noamundi Steel Limited
Tarapur Complex, Plot No. F8, MIDC, Tarapur Industrial Area, Palghar, 401506
CIN: U27320MH2018PLC304346
Straight Mile Steel Limited
Tarapur Complex, Plot No. F8, MIDC, Tarapur Industrial Area, Palghar, 401 506
CIN: U27300MH2018PLC304187
Bamnipal Steel Limited
Tarapur Complex, Plot No. F8, MIDC, Tarapur Industrial Area, Palghar, 401 506
CIN: U27310MH2018PLC304494
Bistupur Steel Limited
Tarapur Complex, Plot No. F8, MIDC, Tarapur Industrial Area, Palghar, 401 506
CIN: U27310MH2018PLC304376
Jamadoba Steel Limited
Tarapur Complex, Plot No. F8, MIDC, Tarapur Industrial Area, Palghar, 401 506
CIN: U27109MH2018PLC304486
Dimna Steel Limited
Tarapur Complex, Plot No. F8, MIDC, Tarapur Industrial Area, Palghar, 401 506
CIN: U27209MH2018PLC304623
Bhubaneshwar Power Private Limited
Golden Edifice, 1st Floor, Opp: Visweswaraya Statue, Khairatabad Circle, Hyderabad - 500 004
CIN: U40109TG2006PTC050759
160160
99.99
100.00
100.00
100.00
100.00
54.91
100.00
74.96
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Sl. No. Name and address of the Company
Associate Companies (Pursuant to Section 2(6) of Companies Act, 2013)
Holding (%)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
Kalinga Aquatic Ltd
259, Sipasurubali, Puri, Odisha
CIN: U05004OR1989PLC002356
Kumardhubi Fireclay & Silica Works Ltd
Chartered Bank Building, 4, Netaji Subhash Road, Kolkata, West Bengal - 700 001
CIN: U45209WB1915PLC002601
Kumardhubi Metal Casting and Engineering Limited
Xlri Campus, Circuit House, Area, Jamshedpur, Jharkhand - 831 001
CIN: U27100JH1983PLC001890
Strategic Energy Technology Systems Private Limited
24, Bombay House, First Floor, Homi Mody Street, Mumbai - 400 001
CIN: U72900MH2006PTC163193
Tata Construction & Projects Ltd.
6 A Middleton Street, Kolkata - 700 071
TRL Krosaki Refractories Limited
PO: Belpahar, Dist. - Jharsuguda, Odisha - 768 218, India
CIN: U26921OR1958PLC000349
TRF Limited
11, Station Road, Burmamines, Jamshedpur - 831 007, Jharkhand
CIN: L74210JH1962PLC000700
TRF Singapore Pte Limited
6 Battery Road, #10-01, Singapore - 049906
TRF Holdings Pte Limited
6 Battery Road, #10-01, Singapore - 049906
York Transport Equipment (Asia) Pte Ltd
No.5, Tuas Avenue 6,Singapore 639295
York Transport Equipment (India) Private Limited
Gat no. 537 & 538, Badhalwadi,Vill. Navlakh Umbre, Near Talegaon MIDC,Tal. Maval, Dist. Pune - 410507
CIN: U60200PN2008FTC146906
York Transport Equipment Pty Limited
13 Monterey Road, Dandenong, Victoria 3175
York Sales (Thailand) Co. Ltd
2101 Moo 1, Old Railway Road, Samrong Nua, Muang Samutprakarn 10270
YTE Transport Equipment (SA) (Pty) Ltd
51 Todd Avenue, Villieria 0186 Pretoria, South Africa
Rednet Pte Ltd
122 Pioneer Road, Singapore 639583
PT York Engineering
Ruko Bukit Beruntung, Block C-2 Batam, Indonesia
YTE Special Products Pte. Limited
No.5, Tuas Avenue 6,Singapore 639295
Qingdao YTE Special Products Ltd
No.18 Huishi Road Licang District, Qingdao, China 266100
York Transport Equipment (Shanghai) Ltd
Building 2,NO 299 Yuanxi Road,Nanhui Industrial District, Shanghai,China
Dutch Lanka Trailer Manufactures Limited
Nattandiya Road, Dankotuwa, Sri Lanka
Dutch Lanka Engineering (Private) Limited
No. 575, 1st Floor, Orumix Building, Nawala Road, Rajagiriya, Sri Lanka
DLT LLC
PO Box 453, PC 217, Salalah, Al-Awqdain, Sultanate of Oman
Hewitt Robins International Ltd
Huntingdon Court, Huntingdon Way, Measham, Derbyshire, DE127NQ,U.K
Hewitt Robins International Holdings Ltd
Huntingdon Court, Huntingdon Way, Measham, Derbyshire, DE127NQ,U.K
Malusha Travels Pvt Ltd
Bank of Baroda Bldg, Bombay Samachar Marg, Mumbai-400 001, Maharashtra
CIN: U63040MH1988PTC049514
30.00
27.78
49.31
25.00
27.19
26.62
34.11
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
70.00
100.00
100.00
33.23
161161
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Extract of Annual Return
Sl. No. Name and address of the Company
Associate Companies (Pursuant to Section 2(6) of Companies Act, 2013)
Holding (%)
European Profiles (M) Sdn. Bhd.
C-19-3a, Dataran 32, No. 2, Jalan 19/1, 46300 Petaling Jaya, Selangor Darul Ehsan
Albi Profils SRL
Zone Industrielle D’albi-Jarlard, Rue Lebon, 8100 Albi, France
GietWalsOnderhoudCombinatie B.V.
Staalstraat 150, 1951 Jp Velsen-Noord, Netherlands
Hoogovens Gan Multimedia S.A. De C.V.
Zaragoza 1300, Sur 6400, Monterrey, 82235, Mexico
ISSB Limited
Corinthian House, 17 Lansdowne Road, Croydon, Greater London, England, CR0 2BX
Wupperman Staal Nederland B.V.
Vlasweg 19, 4782 PW Moerdijk, Netherlands
New Millennium Iron Corp.
1000 - 250 2nd Street SW, Calgary AB, Canada
9336-0634 Québec Inc
720-900 BOUL. René-Lévesque Est, Québec, G1R2B5, Canada
Fabsec Limited
1st floor, Unit 3 Calder Close, Calder Business Park, Wakefield, West Yorkshire, WF4 3BA
Himalaya Steel Mill Services Private Limited
Ground Floor, Rings & Agrico Building Armoury Road Northern Town, Jamshedpur, Jharkhand, 831001
CIN: U74900JH2009PTC000689
mjunction services limited
Tata Centre, 43 J L Nehru Road, Kolkata - 700 071
CIN: U00000WB2001PLC115841
S & T Mining Company Private Limited
Tata Centre, 1st Floor, 43, J. L. Nehru Road, Kolkata - 700 071 ( W.B.)
CIN: U13100WB2008PTC129436
Tata BlueScope Steel Limited
Metrolpolitan, Survey No. 21, Final Plot No. 27, Wakdewadi, Shivaji Nagar, Pune 411005
CIN: U45209PN2005PLC020270
BlueScope Lysaght Lanka (Pvt) Ltd
No. 26 & 27, Sapugaskanda Industrial Estate, Pattiwila Road, Sapugaskanda
Tata NYK Shipping Pte Ltd.
11 Keppel Road, #10-03, Abi Plaza, Singapore - 089057
Tata NYK Shipping (India) Private Limited
1401, PS Srijan Corporate Park, 14th Floor, Tower-1, Block-GP, Sector-V, Saltlake, Kolkata - 700 091 (India)
CIN: U61100WB2007PTC118354
Jamshedpur Continuous Annealing & Processing Company Private Limited
Tata Centre, 43, Jawaharlal Nehru Road, Kolkata-700 071
CIN: U27310WB2011PTC160845
T M Mining Company Limited
Tata Centre, 43 Jawaharlal Nehru Road, Kolkata-700 071
CIN: U13100WB2010PLC156401
TM International Logistics Limited
43 J L Nehru Road, Tata Centre, Kolkata-700 071
CIN: U63090WB2002PLC094134
International Shipping and Logistics FZE
Office No. TPOFCA0140, P O Box : 18490, Jebel Ali Free Zone, Dubai United Arab Emirates
TKM Global China Ltd.
Unit G, Floor 11, Hengji Mansion, No. 99 Huai Hai East Road, Shanghai - 200021, P.R. China
TKM Global GmbH
Spladingstrasse 210, 20097 Hanburg, Germany
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
162162
20.00
30.00
50.00
50.00
50.00
30.00
26.18
33.33
25.00
26.00
50.00
50.00
50.00
100.00
50.00
100.00
51.00
74.00
51.00
100.00
100.00
100.00
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Sl. No. Name and address of the Company
Associate Companies (Pursuant to Section 2(6) of Companies Act, 2013)
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.
61.
62.
63.
64.
TKM Global Logistics Limited
Tata Centre, 43, Jawaharlal Nehru Road, Kolkata-700 071
CIN: U51109WB1991PLC051941
Industrial Energy Limited
C/O - The Tata Power Company Limited, Corporate Center B, 34 Sant Tukaram Road, Carnac Bunder, Mumbai-400 009,
Maharashtra, India
CIN: U74999MH2007PLC167623
Jamipol Limited
Namdih Road, Burmamines, Jamshedpur-831007
CIN: U24111JH1995PLC009020
Nicco Jubilee Park Limited
Jheel Meel, Sector-IV, Salt Lake City, Kolkata, West Bengal-700 106
CIN: U45201WB2001PLC092842
Medica TS Hospital Private Limited
S-125, Maitri Vihar, P. O. - Rail Vihar, P. S. – Chandrasekharpur, Bhubaneswar-751 023, Odisha
CIN: U85110OR2014PTC018162
SEZ Adityapur Limited.
Sakchi Boulevard Road, Northern Town, Jamshedpur-831 005
CIN: U45200JH2006PLC012633
Naba Diganta Water Management Limited
Gn 11-19, Sector-V, Salt Lake, Kolkata-700 091
CIN: U93010WB2008PLC121573
TVSC Construction Steel Solutions Limited
Rooms 4903-7, 49/F, Hopewell Centre, No. 183 Queen’s Road East,Wanchai, Hong Kong
Afon Tinplate Company Limited
Afon Works, Bryntywod, Swansea, West Glamorgan, SA5 7LN
Air Products Llanwern Limited
Hersham Place Technology Park, Molesey Road, Walton on Thames Surrey, KT12 4RZ
BSR Pipeline Services Limited
PO Box 101, Weldon Road, Corby, Northamptonshire, NN17 5UA
Laura Metaal Holding B.V.
Rimurgerweg 40, 6471 XX Eygelshoven, Netherlands
Ravenscraig Limited
15 Atholl Crescent, Edinburgh, EH3 8HA
Tata Steel Ticaret AS
Cumhuriyet Caddesi No:48 Pegasus Evi Kat:7 Harbiye 34367 Istanbul, Turkey
Texturing Technology Limited
PO Box 22, Texturing Technology Ltd Central Road, Tata Steel Site Margam, Port Talbot, West Glamorgan, Wales, SA13 2YJ
Hoogovens Court Roll Service Technologies VOF
Wenckebachstraat 1, 1951 Jz Velsen-Noord, Netherlands
Minas De Benga (Mauritius) Limited
Av. 24 de Julho, Edificio, nº.1123, 4º Floor, Bairro da Polana Cimento B, Maputo, Mozambique
Note: Companies listed from Sl. No. 35 to 64 are joint venture companies
Holding (%)
100.00
26.00
39.78
25.31
26.00
51.00
74.00
50.00
64.00
50.00
50.00
49.00
33.33
50.00
50.00
50.00
35.00
163163
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Extract of Annual Return
IV Share Holding Pattern (Equity Share Capital Breakup as Percentage of Total Equity)
A Fully Paid-Up Equity Shares
i) Category-wise Share Holding
Category of Shareholders
Foreign
Individuals Non-Resident Individuals
Other Individuals
Bodies Corporate
Banks/FI
Qualified Foreign Investor
Any Other (specify)
Promoters (including Promoter Group)
Indian
Individuals/Hindu Undivided Family
Central Government
State Governments(s)
Bodies Corporate
Financial Institutions/Banks
Any Other (Trust)
Sl.
No.
(A)
(1)
(a)
(b)
(c)
(d)
(e)
(f)
Sub-Total (A) (1)
(2)
(a)
(b)
(c)
(d)
(e)
(f)
Sub-Total (A) (2)
Total Shareholding of Promoter
and Promoter Group (A) = (A) (1) + (A) (2)
Public Shareholding
(B)
Institutions
(1)
Mutual Funds
(a)
Financial Institutions/Banks
(b)
Central Government
(c)
State Governments(s)
(d)
Venture Capital Funds
(e)
Insurance Companies
(f)
Foreign Institutional Investors
(g)
Foreign Venture Capital Investors
(h)
(i)
Any Other (specify)
(i - 1 ) Qualified Foreign Investor
(i - 2 ) Foreign Institutional Investors - DR
(i - 3 ) Foreign Bodies - DR
(i - 4 ) Foreign Porfolio Investments - Individual
(i - 5 ) Foreign National- DR
(i - 6 ) Alternate Investment Funds
(i - 7 ) Foreign National
(i - 8 ) UTI
Sub-Total (B) (1)
(2)
(a)
i
ii
(b)
i
ii
Non-Institutions
Bodies Corporate
Indian
Overseas
Individuals -
Individual shareholders holding nominal share
capital upto `1 lakh
Individual shareholders holding nominal share
capital in excess of `1 lakh
Any Other
Trusts
IEPF Account
HUF
Clearing Member
LLP/LLP-DR
Qualified Foreign Investor
(c)
i
ii
iii
iv
v
(d)
Sub-total (B) (2)
Total Public Shareholding (B) = (B)(1)+(B)(2)
(C)
Shares held by Custodians and against which
Depository Receipts have been issued*
Number of shares held (April 1, 2017)
Number of shares held (March 31,2018)
Electronic
Physical
Total
%
Electronic
Physical
Total
%
% Change
-
-
-
30,34,70,316
-
10,31,460
30,45,01,776
-
-
-
565
-
-
565
-
-
-
30,34,70,881
-
10,31,460
30,45,02,341
-
-
-
31.25
-
0.10
31.35
-
-
-
35,98,80,277
-
10,31,460
36,09,11,737
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30,45,01,776
565
30,45,02,341
31.35
36,09,11,737
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
35,98,80,277
-
10,31,460
36,09,11,737
-
-
-
-
-
-
-
-
-
-
31.95
-
0.09
32.04
-
-
-
-
-
-
-
-
-
-
0.70
-
(0.01)
0.69
-
-
-
-
-
-
36,09,11,737
32.04
0.69
12,12,28,769
59,87,778
-
2,000
-
16,98,54,554
13,58,95,156
-
-
1,03,892
10,11,082
892
164
18,116
-
15,191
43,41,17,594
38,780
2,02,282
-
1,11,277
-
1,455
27,282
-
-
-
-
-
-
-
-
20,262
4,01,338
12,12,67,549
61,90,060
-
1,13,277
-
16,98,56,009
13,59,22,438
-
-
1,03,892
10,11,082
892
164
18,116
-
35,453
43,45,18,932
12.49
0.64
-
0.01
-
17.49
14.00
-
-
0.01
0.10
-
-
-
-
-
44.74
14,75,65,586
18,95,090
6,83,823
500
-
15,21,05,744
21,61,08,805
-
-
-
5,66,956
892
164
1,000
762
15,191
51,89,44,513
26,658
1,60,202
-
1,11,277
-
1,380
16,945
-
-
-
-
-
-
-
-
16,387
3,32,849
14,75,92,244
20,55,292
6,83,823
1,11,777
-
15,21,07,124
21,61,25,750
-
-
-
5,66,956
892
164
1,000
762
31,578
51,92,77,362
1,00,44,825
4,500
2,81,752
1,125
1,03,26,577
5,625
1.06
-
1,48,89,046
4,500
2,42,642
-
1,51,31,688
4,500
13,73,08,996
2,15,95,136
15,89,04,132
16.36
13,41,07,082
1,84,82,698
15,25,89,780
2,66,97,892
20,98,512
2,87,96,404
2.96
3,23,54,125
18,43,873
3,41,97,998
47,86,209
-
49,88,677
37,46,517
-
-
18,75,77,616
62,16,95,210
1,55,10,420
51,28,362
-
1,243
-
-
-
2,91,06,130
2,95,07,468
99,14,571
-
49,89,920
37,46,517
-
-
21,66,83,746
65,12,02,678
-
1,55,10,420
1.02
-
0.52
0.39
-
-
22.31
67.05
1.60
70,93,589
28,71,968
51,47,726
1,12,34,497
1,52,155
-
20,78,54,688
72,67,99,201
1,27,40,651
51,28,424
-
2,740
-
-
-
2,57,00,377
2,60,33,226
1,22,22,013
28,71,968
51,50,466
1,12,34,497
1,52,155
-
23,35,55,065
75,28,32,427
-
1,27,40,651
13.10
0.18
0.06
0.01
-
13.50
19.19
-
-
-
0.05
-
-
-
-
-
46.10
1.34
-
13.55
3.04
1.08
0.25
0.46
1.00
0.01
-
20.73
66.83
1.13
0.61
(0.46)
0.06
-
-
(3.99)
5.19
-
-
(0.01)
(0.05)
-
-
-
-
-
1.36
0.28
-
(2.82)
0.07
0.06
0.25
(0.06)
0.61
0.01
-
(1.58)
(0.22)
(0.47)
GRAND TOTAL (A)+(B)+(C)
94,17,07,406
2,95,08,033
97,12,15,439
100.00
110,04,51,589
2,60,33,226
112,64,84,815
100.00
Note:
*This represents public non-institutional shareholding.
164164
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR ii) Shareholding of Promoter (including Promoter Group)
Sl.
No.
1
2
3
4
5
6
7
8
9
10
11
12
Shareholder’s Name
Shareholding (April 1, 2017)
Shareholding (March 31, 2018)
No.of
Shares
% of total
Shares
% of Shares
Pledged/
encumbered
No.of
Shares
% of total
Shares
% of Shares
Pledged/
encumbered
% change in
shareholding
Tata Sons Limited - Promoter
Tata Motors Limited
Tata Chemicals Ltd
Tata Investment Corporation Limited
Ewart Investments Limited
Rujuvalika Investments Limited (2)
Sir Dorabji Tata Trust
Tata Motors Finance Limited
(formerly Sheba Properties Limited)
Tata Industries Limited
Sir Ratan Tata Trust
Titan Company Limited
Tata Capital Limited
28,88,98,245
44,32,497
24,91,977
33,85,885
17,95,142
11,68,393
8,42,460
4,91,542
7,91,675
1,89,000
2,025
13,500
30,45,02,341
29.75
0.46
0.26
0.35
0.18
0.12
0.08
0.05
0.08
0.02
-
-
31.35
1.79
-
-
-
-
-
-
-
34,31,42,275
51,41,696
28,90,693
39,27,625
20,82,364
11,68,393
8,42,460
5,70,188
-
-
-
-
9,39,358
1,89,000
2,025
15,660
1.79 36,09,11,737
30.46
0.46
0.26
0.35
0.18
0.10
0.07
0.05
0.08
0.02
-
-
32.04
1.24
-
-
-
-
-
-
-
-
-
-
-
1.24
0.71
-
-
-
-
(0.02)
(0.02)
-
-
-
-
-
0.69
Note:
(1) Entities listed from Sl.No. 2 to 12 above form part of the Promoter Group.
(2)
11,68,393 Ordinary Shares held by Rujuvalika Investments Limited (a wholly owned subsidiary of the Company effective May 8, 2015), do not carry any
voting rights.
iii) Change in Promoter’s (including Promoter Group) Shareholding
Particulars
Date
Tata Sons Limited - Promoter
At the beginning of the year
Decrease during the year (Transferred to IEPF)
Increase during the year
(Allotment pursuant to Rights Issue)
At the end of the year
Tata Motors Limited
At the beginning of the year
Increase during the year
(Allotment pursuant to Rights Issue)
At the end of the year
Tata Chemicals Limited
At the beginning of the year
Increase during the year
(Allotment pursuant to Rights Issue)
At the end of the year
Tata Investment Corporation Limited
At the beginning of the year
Increase during the year
(Allotment pursuant to Rights Issue)
At the end of the year
Ewart Investments Limited
At the beginning of the year
Increase during the year
(Allotment pursuant to Rights Issue)
At the end of the year
April 1, 2017
December 1, 2017
March 23, 2018
March 31, 2018
April 1, 2017
March 23, 2018
March 31, 2018
April 1, 2017
March 23, 2018
March 31, 2018
April 1, 2017
March 23, 2018
March 31, 2018
April 1, 2017
March 23, 2018
March 31, 2018
Shareholding
Cumulative Shareholding
during the year
No. of Shares
% of total Shares
of the Company
No. of Shares
% of total Shares
of the Company
28,88,98,245
(565)
5,42,44,595
29.75
-
4.82
28,88,98,245
28,88,97,680
34,31,42,275
-
-
34,31,42,275
44,32,497
7,09,199
-
24,91,977
3,98,716
-
33,85,885
5,41,740
-
17,95,142
2,87,222
-
0.46
0.06
-
0.26
0.04
-
0.35
0.06
-
0.18
0.03
-
44,32,497
51,41,696
51,41,696
24,91,977
28,90,693
28,90,693
33,85,885
39,27,625
39,27,625
17,95,142
20,82,364
20,82,364
29.75
29.75
30.46
30.46
0.46
0.46
0.46
0.26
0.26
0.26
0.35
0.35
0.35
0.18
0.18
0.18
165165
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
Extract of Annual Return
Particulars
Date
Tata Motors Finance Limited
(formerly Sheba Properties Limited)
At the beginning of the year
Increase during the year
(Allotment pursuant to Rights Issue)
At the end of the year
Tata Industries Limited
At the beginning of the year
Increase during the year
(Allotment pursuant to Rights Issue)
At the end of the year
Tata Capital Limited
At the beginning of the year
Increase during the year
(Allotment pursuant to Rights Issue)
At the end of the year
April 1, 2017
March 23, 2018
March 31, 2018
April 1, 2017
March 23, 2018
March 31, 2018
April 1, 2017
March 23, 2018
March 31, 2018
Shareholding
Cumulative Shareholding
during the year
No. of Shares
% of total Shares
of the Company
No. of Shares
% of total Shares
of the Company
4,91,542
78,646
-
7,91,675
1,47,683
-
13,500
2,160
-
0.05
0.01
-
0.08
0.01
-
-
-
-
4,91,542
5,70,188
5,70,188
7,91,675
9,39,358
9,39,358
13,500
15,660
15,660
0.05
0.05
0.05
0.08
0.08
0.08
-
-
-
iv) Shareholding Pattern of Top Ten Shareholders (Other than Directors, Promoters and Holders of GDRs and ADRs):
Name of shareholders
Life Insurance Corporation of India
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
HDFC Trustee Company Limited
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
ICICI Prudential Mutual Funds
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
Reliance Capital Trustee Co. Ltd.
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
Government Pension Fund Global
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
The New India Assurance Company Limited
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
Sl.
No.
1.
2.
3.
4.
5.
6.
166166
Shareholding
Cumulative Shareholding
during the year
No. of shares
% of total shares
of the Company
No. of shares
% of total shares
of the Company
12,20,49,896
1,45,37,060
(2,81,98,296)
10,83,88,660
4,10,52,250
3,39,30,685
(3,76,53,609)
3,73,29,326
2,40,93,845
2,23,01,057
(3,45,52,906)
1,18,41,996
2,35,39,029
3,31,76,361
(2,06,53,162)
3,60,62,228
1,10,21,201
49,90,349
(48,97,587)
1,11,13,963
1,08,01,058
16,10,118
(34,28,254)
89,82,922
12.57
1.29
(2.50)
9.62
4.23
3.01
(3.34)
3.31
2.48
1.98
(3.07)
1.05
2.42
2.95
(1.83)
3.20
1.13
0.44
(0.43)
0.99
1.11
0.14
(0.30)
0.80
12,20,49,896
13,65,86,956
10,83,88,660
10,83,88,660
4,10,52,250
7,49,82,935
3,73,29,326
3,73,29,326
2,40,93,845
4,63,94,902
1,18,41,996
1,18,41,996
2,35,39,029
5,67,15,390
3,60,62,228
3,60,62,228
1,10,21,201
1,60,11,550
1,11,13,963
1,11,13,963
1,08,01,058
1,24,11,176
89,82,922
89,82,922
12.57
12.13
9.62
9.62
4.23
6.66
3.31
3.31
2.48
4.12
1.05
1.05
2.42
5.03
3.20
3.20
1.13
1.42
0.99
0.99
1.11
1.10
0.80
0.80
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
Sl.
No.
Name of shareholders
Shareholding
Cumulative Shareholding
during the year
No. of shares
% of total shares
of the Company
No. of shares
% of total shares
of the Company
8.
7.
Abu Dhabi Investment Authority
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
Aditya Birla Sun Life Trustee Private Limited
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
HDFC Standard Life Insurance Company Limited
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
10. SBI Life Insurance Co. Ltd.
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
9.
11. DSP Blackrock Mutual Funds
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
12. New Perspective Fund
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
1,06,72,139
63,68,956
(90,62,762)
79,78,333
87,14,823
1,51,06,219
(76,17,985)
1,62,03,057
71,27,624
78,10,695
(91,96,574)
57,41,745
68,27,405
18,84,418
(42,05,862)
45,05,961
54,22,693
1,14,34,516
(38,27,095)
1,30,30,114
0
69,78,822
0
69,78,822
1.10
0.57
(0.80)
0.71
0.90
1.34
(0.68)
1.44
0.73
0.69
(0.82)
0.57
0.70
0.17
(0.37)
0.40
0.56
1.02
(0.34)
1.16
0.00
0.62
0.00
0.62
1,06,72,139
1,70,41,095
79,78,333
79,78,333
87,14,823
2,38,21,042
1,62,03,057
1,62,03,057
71,27,624
1,49,38,319
57,41,745
57,41,745
68,27,405
87,11,823
45,05,961
45,05,961
54,22,693
1,68,57,209
1,30,30,114
1,30,30,114
0
69,78,822
69,78,822
69,78,822
1.10
1.51
0.71
0.71
0.90
2.11
1.44
1.44
0.73
1.33
0.51
0.51
0.70
0.77
0.40
0.40
0.56
1.50
1.16
1.16
0.00
0.62
0.62
0.62
Notes:
(1) The above information is based on weekly beneficiary position received from Depositories.
(2) The date wise increase or decrease in shareholding of top ten shareholders is available on the website of the Company at www.tatasteel.com
(3)
The % of total shares of the Company in respect of shares bought and sold during the year is calculated on the total share capital of the Company as on
March 31, 2018.
v) Shareholding of Directors and Key Managerial Personnel
Sl.
No.
Name of the Shareholder
Directors
I
1 Mr. Ishaat Hussain2
2 Mr. T. V. Narendran
3 Mr. Koushik Chatterjee
II
4 Mr. Parvatheesam K
Key Managerial Personnel
Shareholding (April 1, 2017)
Shareholding (March 31, 2018)
No. of Shares
% of total shares
of the Company
No. of shares
% of total shares
of the Company
2,216
1,753
1,320
100
-
-
-
-
NA
2,032
1,531
100
NA
-
-
-
Note:
(1)
Mr. N. Chandrasekaran, Ms. Mallika Srinivasan, Mr. O. P. Bhatt, Dr. Peter Blauwhoff, Mr. Aman Mehta, Mr. Deepak Kapoor, Mr. D. K. Mehrotra and
Mr. Saurabh Agrawal held no fully paid-up ordinary shares in the Company during the year.
(2) Mr. Ishaat Hussain retired effective September 1, 2017
167167
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
Extract of Annual Return
B Partly Paid-Up Equity Shares
i) Category-wise Share Holding
Sl.
No.
Category of Shareholders
Number of shares held (April 1, 2017)
Number of shares held (March 31, 2018)
Electronic
Physical
Total
% of Total
Shares
Electronic
Physical
Total
% of Total
Shares
% Change
Foreign
Individuals Non-Resident Individuals
Other Individuals
Bodies Corporate
Banks/FI
Qualified Foreign Investor
Any Other (specify)
Promoters (including Promoter Group)
Indian
Individuals/Hindu Undivided Family
Central Government
State Governments(s)
Bodies Corporate
Financial Institutions/Banks
Any Other (Trust)
(A)
(1)
(a)
(b)
(c)
(d)
(e)
(f)
Sub-Total (A) (1)
(2)
(a)
(b)
(c)
(d)
(e)
(f)
Sub-Total (A) (2)
Total Shareholding of Promoter and Promoter
Group (A) = (A) (1) + (A) (2)
Public Shareholding
(B)
Institutions
(1)
Mutual Funds
(a)
Financial Institutions/Banks
(b)
Central Government
(c)
State Governments(s)
(d)
Venture Capital Funds
(e)
Insurance Companies
(f)
Foreign Institutional Investors
(g)
Foreign Venture Capital Investors
(h)
(i)
Any Other (specify)
(i - 1 ) Qualified Foreign Investor
Foreign Institutional Investors - DR
(i - 2 )
Foreign Bodies - DR
(i - 3 )
Foreign Porfolio Investments - Individual
(i - 4 )
(i - 5 )
Foreign National- DR
(i - 6 ) Alternate Investment Funds
(i - 7 )
Foreign National
(i - 8 ) UTI
Sub-Total (B) (1)
(2)
(a)
i
ii
(b)
Non-Institutions
Bodies Corporate
Indian
Overseas
Individuals
Individual shareholders holding nominal
share capital upto `1 lakh
Individual shareholders holding nominal
share capital in excess of `1 lakh
Any Other
Trusts
IEPF Account
HUF
Clearing Member
LLP/LLP-DR
(c)
i
ii
iii
iv
v
Sub-total (B) (2)
Total Public Shareholding (B) = (B)(1)+(B)(2)
i
ii
(C)
Shares held by Custodians and against
which Depository Receipts have been
issued
GRAND TOTAL (A)+(B)+(C)
168168
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,89,42,837
-
-
3,89,42,837
-
-
-
-
-
-
-
-
-
50.16
-
-
50.16
-
-
-
-
-
-
-
-
-
50.16
-
-
50.16
-
-
-
-
-
-
-
3,89,42,837
50.16
50.16
-
-
3,89,42,837
-
-
3,89,42,837
-
-
-
-
-
-
-
3,89,42,837
1,69,99,158
13,986
-
-
-
21,89,357
66,81,422
-
-
-
53,633
-
-
-
84
-
2,59,37,640
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
194
-
-
-
-
-
-
-
-
-
194
1,69,99,158
13,986
-
-
-
21,89,357
66,81,616
-
-
-
53,633
-
-
-
84
-
2,59,37,834
10,75,364
-
1,800
-
10,77,164
-
76,79,326
2,75,030
79,54,356
20,53,660
8
20,53,668
3,92,562
-
5,10,495
3,46,693
4,18,480
1,24,76,580
3,84,14,220
48
-
488
-
-
2,77,374
2,77,568
3,92,610
-
5,10,983
3,46,693
4,18,480
1,27,53,954
3,86,91,788
-
-
-
7,73,57,057
2,77,568
7,76,34,625
100.00
21.89
0.02
-
-
-
2.82
8.61
-
-
-
0.07
-
-
-
-
-
33.41
1.39
-
-
10.24
2.64
0.51
-
0.66
0.45
0.54
16.43
49.84
-
21.89
0.02
-
-
-
2.82
8.61
-
-
-
0.07
-
-
-
-
-
33.41
-
1.39
-
10.24
2.64
0.51
-
0.66
0.45
0.54
16.43
49.84
-
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
ii) Shareholding of Promoter (including Promoter Group)
Sl.
No.
Shareholder’s Name
1
2
3
4
5
6
7
8
Tata Sons Limited – Promoter
Tata Motors Limited
Tata Investment Corporation Limited
Tata Chemicals Limited
Ewart Investments Limited
Tata Industries Limited
Tata Motors Finance Limited
(formerly Sheba Properties Limited)
Tata Capital Limited
Shareholding (April 1, 2017)
Shareholding (March 31, 2018)
No.of
Shares
% of total
Shares
% of Shares
Pledged/
encumbered
No.of Shares
% of total
Shares
% of Shares
Pledged/
encumbered
% change in
shareholding
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
37,830,810
354,599
270,869
199,358
143,611
103,187
39,323
1,080
3,89,42,837
48.73
0.46
0.35
0.26
0.18
0.13
0.05
-
50.16
-
-
-
-
-
-
-
-
-
48.73
0.46
0.35
0.26
0.18
0.13
0.05
-
50.16
Notes:
1)
Entities listed from Sr. No. 2 to 8 form part of the Promoter Group
iii) Change in Promoter’s (including Promoter Group) Shareholding
Particulars
Date
Shareholding
No. of shares
% of total shares of
the Company
Cumulative Shareholding during the year
% of total shares of
the Company
No. of shares
Tata Sons Limited - Promoter
At the beginning of the year
Increase during the year
(Allotment pursuant to Rights Issue)
At the end of the year
Tata Motors Limited
At the beginning of the year
Increase during the year
(Allotment pursuant to Rights Issue)
At the end of the year
Tata Chemicals Limited
At the beginning of the year
Increase during the year
(Allotment pursuant to Rights Issue)
At the end of the year
Tata Investment Corporation Limited
At the beginning of the year
Increase during the year
(Allotment pursuant to Rights Issue)
At the end of the year
Ewart Investments Limited
At the beginning of the year
Increase during the year
(Allotment pursuant to Rights Issue)
At the end of the year
Tata Motors Finance Limited
(formerly Sheba Properties Limited)
At the beginning of the year
Increase during the year
(Allotment pursuant to Rights Issue)
At the end of the year
Tata Industries Limited
At the beginning of the year
Increase during the year
(Allotment pursuant to Rights Issue)
At the end of the year
Tata Capital Limited
At the beginning of the year
Increase during the year
(Allotment pursuant to Rights Issue)
At the end of the year
April 1, 2017
March 23, 2018
March 31, 2018
April 1, 2017
March 23, 2018
March 31, 2018
April 1, 2017
March 23, 2018
March 31, 2018
April 1, 2017
March 23, 2018
March 31, 2018
April 1, 2017
March 23, 2018
March 31, 2018
April 1, 2017
March 23, 2018
March 31, 2018
April 1, 2017
March 23, 2018
March 31, 2018
April 1, 2017
March 23, 2018
March 31, 2018
-
3,78,30,810
-
48.73
-
-
3,54,599
-
-
1,99,358
-
-
2,70,869
-
-
1,43,611
-
-
39,323
-
-
1,03,187
-
-
1,080
-
-
-
0.46
-
-
0.26
-
-
0.35
-
-
0.18
-
-
0.05
-
-
0.13
-
-
-
-
-
3,78,30,810
3,78,30,810
-
3,54,599
3,54,599
-
1,99,358
1,99,358
-
2,70,869
2,70,869
-
1,43,611
1,43,611
-
39,323
39,323
-
1,03,187
1,03,187
-
1,080
1,080
-
48.73
48.73
-
0.46
0.46
-
0.26
0.26
-
0.35
0.35
-
0.18
0.18
-
0.05
0.05
-
0.13
0.13
-
-
-
169169
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
Extract of Annual Return
iv) Shareholding Pattern of Top Ten Shareholders (Other than Directors, Promoters and Holders of GDRs and ADRs):
Sl.
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
Name of shareholders
Reliance Capital Trustee Co. Ltd.
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
Hdfc Trustee Company Limited
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
ICICI Prudential Mutual Fund
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
Kotak Asset Management Limited
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
DSP Blackrock Mutual Fund
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
The New India Assurance Company Limited
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
Government Pension Fund Global
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
Aditya Birla Sun Life Trustee Private Limited
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
Government of Singapore
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
10. SBI Mutual Fund
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
Shareholding
Cumulative Shareholding
during the year
No. of shares
% of total shares
of the Company
No. of shares
% of total shares
of the Company
-
78,27,234
-
78,27,234
-
25,21,807
-
25,21,807
-
19,47,091
-
19,47,091
-
10,01,830
-
10,01,830
-
9,63,002
-
9,63,002
-
7,76,084
-
7,76,084
-
7,18,974
-
7,18,974
-
7,00,462
-
7,00,462
-
6,32,026
-
6,32,026
-
5,63,819
-
5,63,819
-
10.08
-
10.08
-
3.25
-
3.25
-
2.51
-
2.51
-
1.29
-
1.29
-
1.24
-
1.24
-
1.00
-
1.00
-
0.93
-
0.93
-
0.90
-
0.90
-
0.81
-
0.81
-
0.73
-
0.73
-
78,27,234
78,27,234
78,27,234
-
25,21,807
25,21,807
25,21,807
-
19,47,091
19,47,091
19,47,091
-
10,01,830
10,01,830
10,01,830
-
9,63,002
9,63,002
9,63,002
-
7,76,084
7,76,084
7,76,084
-
7,18,974
7,18,974
7,18,974
-
7,00,462
7,00,462
7,00,462
-
6,32,026
6,32,026
6,32,026
-
5,63,819
5,63,819
5,63,819
-
10.08
10.08
10.08
-
3.25
3.25
3.25
-
2.51
2.51
2.51
-
1.29
1.29
1.29
-
1.24
1.24
1.24
-
1.00
1.00
1.00
-
0.93
0.93
0.93
-
0.90
0.90
0.90
-
0.81
0.81
0.81
-
0.73
0.73
0.73
Notes:
(1) The above information is based on the weekly beneficiary position received from Depositories.
(2) The date wise increase or decrease in shareholding of the top ten shareholders is available on the website of the Company at www.tatasteel.com
170170
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
v) Shareholding of Directors and Key Managerial Personnel
Sl.
No.
Name of the Shareholder
Directors
I
1 Mr. T. V. Narendran
2 Mr. Koushik Chatterjee
V. Indebtedness
Shareholding (April 1, 2017)
Shareh(olding (March 31, 2018)
No. of shares
% of total shares
of the Company
No. of shares
% of total shares
of the Company
-
-
-
-
139
105
-
-
Indebtedness of the Company including interest outstanding/accrued but not due for payment.
Indebtedness at the beginning of the financial year
(i) Principal Amount
(ii)
Interest due but not paid
(iii) Interest accrued but not due
Total (i+ii+iii)
Change in Indebtedness during the financial year
• Addition
• Reduction
Net Change
Indebtedness at the end of the financial year
(i) Principal Amount
(ii)
Interest due but not paid
(iii) Interest accrued but not due
Total (i+ii+iii)
Secured Loans
excluding
deposits
*2,435.03
-
-
2,435.03
93.83
-
93.83
*2,528.86
-
-
2,528.86
Unsecured
Loans
25,849.60
-
545.05
26,394.65
**2,713.52
#2,966.18
(252.66)
25,596.94
-
556.01
26,152.95
Deposits
(₹ crore)
Total
Indebtedness
-
-
-
-
-
-
-
-
-
-
28,284.63
-
545.05
28,829.68
2,807.35
2,966.18
(158.83)
28,125.80
-
556.01
28,681.81
*includes funded interest on SDF loan of ₹855.09 crore (31.03.2017: ₹781.32 crore).
**includes revaluation loss (net) of ₹150.13 crore on forex loans and amortisation of loan issue and premium and discount expenses aggregating ₹202.66 crore
under effective interest rate method.
#includes realised exchange gain (net) of ₹0.24 crore on repayment of forex loans.
VI. Remuneration of Directors and Key Managerial Personnel
A. Remuneration of Managing Director, Whole-time Directors and/or Manager
Sl.
No.
1
2
3
4
5
Particulars of Remuneration
Gross salary
(a) Salary as per provisions contained in Section 17(1) of the
Income Tax, Act 1961
(b) Value of perquisites u/s 17(2) of the Income Tax Act, 1961
(c) Profits in lieu of salary under Section 17(3) of the Income Tax
Act, 1961
Stock Option
Sweat Equity
Commission
Others (retirement benefits)
Total
Ceiling as per the Companies Act, 2013
Name of MD/WTD/Manager
Mr. T. V. Narendran Mr. Koushik Chatterjee
ED & CFO
CEO & MD
(` lakh)
Total Amount
182.1
94.94
-
-
-
650.00
15.90
942.94
166.19
132.72
-
-
-
600.00
14.89
913.80
348.29
227.66
-
-
-
1,250.00
30.79
1,856.74
53,202
171171
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
B. Remuneration to other Directors
Name
Non-Executive Directors
Sl.
No
I
1 Mr. Natarajan Chandrasekaran - Chairman
2 Mr. Ishaat Hussain
3 Mr. D. K. Mehrotra
4 Mr. Saurabh Agrawal
Total (I)
Independent Directors
II
1 Ms. Mallika Srinivasan
2 Mr. O. P. Bhatt
3 Mr. Andrew Robb
4 Dr. Peter Blauwhoff
5 Mr. Aman Mehta
6 Mr. Deepak Kapoor
Total (II)
Grand Total (I + II)
Overall Ceiling as per the Companies Act, 2013
Extract of Annual Return | Particulars of Loans, Guarantees or Investments
Commission
Sitting Fees
(` lakh)
Total
Compensation
-
80.00
80.00
160.00
115.00
170.00
50.00
75.00
80.00
70.00
560.00
720.00
4.80
4.80
5.30
3.70
18.60
4.40
10.00
2.40
4.40
4.40
5.60
31.20
49.80
4.80
84.80
85.30
3.70
178.60
119.40
180.00
52.40
79.40
84.40
75.60
591.20
769.80
5,320
Note:
(1)
As a policy, Mr. N. Chandrasekaran, Chairman has abstained from receiving commission from the Company. Further, in line with the internal
guidelines of the Company, no payment is made towards commission to the Non-Executive Directors of the Company, who are in full time employment
with any other Tata Company.
Mr. Ishaat Hussain and Mr. Andrew Robb retired as Members of the Board effective September 1, 2017.
Mr. Saurabh Agrawal was appointed as an Additional (Non-Executive) Director effective August 10, 2017.
Commission of Mr. D. K. Mehrotra is paid to Life Insurance Corporation of India.
(2)
(3)
(4)
C. Remuneration to KMP other than MD/Manager/WTD
Sl.
No.
1
2
3
4
5
Particulars of Remuneration
Gross salary
(a) Salary as per provisions contained in Section 17(1) of the Income-tax Act, 1961
(b) Value of perquisites u/s 17(2) of the Income Tax Act, 1961
(c) Profit in lieu of salary under Section 17(3) of Income-tax Act, 1961
Stock Option
Sweat Equity
Bonus/Commission
Others (retirement benefits)
Total
(` lakh)
Mr. Parvatheesam K
Company Secretary
101.66
20.50
-
-
-
-
2.75
124.91
Note:
Mr. Parvatheesam K. is on study leave from August 28, 2017 through June 18, 2018. Accordingly, his remuneration includes salary drawn by him as Company
Secretary and Compliance Officer for the period April 1, 2017 through August 27, 2017 and salary received by him up to March 31, 2018 towards his earned leave.
VII. Penalties/Punishments/Compounding of Offences
During the year, there were no penalties/punishments/compounding of offences under the Companies Act, 2013.
Mumbai
May 16, 2018
172172
sd/-
T. V. NARENDRAN
Chief Executive Officer and Managing Director
DIN: 03083605
sd/-
PARVATHEESAM K
Company Secretary
ACS: 15921
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR ANNEXURE 12
Particulars of Loans, Guarantees or Investments
[Pursuant to Section 186 of the Companies Act, 2013]
Amount outstanding as on March 31, 2018
Particulars
Loans given
Guarantee given
Investments made
Loans, Guarantees given or Investments made during the Financial Year 2017-18
Name of the Entity
Relation
Amount
Subsidiary
Joint Venture
Subsidiary
Jamshedpur Football and Sporting Private Limited
Tayo Rolls Limited
Industrial Energy Limited
S&T Mining Company Private Limited
Tata Steel Holdings Pte Ltd.
Tata Steel Special Economic Zone Limited
Bamnipal Steel Limited
Bhubaneshwar Power Private Limited
Bistupur Steel Limited
Dimna Steel Limited
Jamadoba Steel Limited
Jamshedpur Football and Sporting Private Limited
Jugsalai Steel Limited
Noamundi Steel Limited
Sakchi Steel Limited
Straight Mile Steel Limited
Tata Steel Special Economic Zone Limited
Tata Steel Holdings Pte Ltd.
Tayo Rolls Limited
Advance Against Equity as on Financial Year 2017-18
Name of the Entity
Tayo Rolls Limited
15.00
7.00
46.22
0.60
483.86
70.00
0.01
255.00
0.01
0.01
0.01
20.00
0.01
0.01
0.01
0.01
29.00
4,646.55
78.55
(` crore)
Amount
69.26
11,478.00
9,636.56
(` crore)
Particulars
of Loan,
Guarantees given
or Investments
made
Purpose for which
the loans, guarantees
and investments
are proposed to be
utilised
Loan
Business purpose
Investments in
Equity Shares
Investments in
Preference Shares
Relation
Subsidiary
` crore
Amount
2.00
As on March 31, 2018, Company’s loan in Tayo Rolls Limited and S&T Mining Company Private Limited along with investment and advance
against equity in Tayo Rolls Limited and Jamshedpur Football and Sporting Private Limited has been fully impaired.
Mumbai
May 16, 2018
On behalf of the Board of Directors
sd/-
N. CHANDRASEKARAN
Chairman
DIN: 00121863
173173
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
[Pursuant to Companies (Accounts) Rules, 2014]
ANNEXURE 13
(A) Conservation of Energy
Steel Melting Shop
i) Steps taken or impact on conservation of energy
Jamshedpur
Best by-product gas utilisation of 97.56%
Lowest ever fuel rate at Blast Furnaces (‘BF’) - 533.35 kg/thm -
Use of Pellets and higher coal injection (189 kg/thm) at BF
Lowest ever middling consumption in in-house power station
of 7.0 Kilo Tonnes
Lowest ever specific water consumption 3.68 m3/tcs
Reduction in Cyanide concentration in Works drains by 26%
Highest ever LD Gas recovery of 58.795 kNm3/hr rate achieved
Optimisation of Coke Oven Booster operation and gas supply
strategy by modifying Coke oven gas headers has enabled to
eliminate entire Waste Plant Booster House
Reduction of Cold Blast venting loss by utilising excess wind
for Coke drying for ‘H’ BF
Optimisation of coal tar consumption at Pellet Plant by
effective utilisation of Coke Oven Gas (‘COG’)
Optimisation of compressor operation through network
modification enabled permanent shutdown of Centac
Compressor House with lower power consumption
Experimentation/adaptation of new technologies, energy
management using real time data capturing, visualisation
and analytics. Pilot completed at Rurhstahl Heraeus (‘RH’)
degasser of LD2
Kalinganagar
Blast Furnace
Reduction in coke rate/fuel rate by charging pellets - Charging
trials were taken and stabilised for >10% pellet in burden.
Commissioning of waste heat recovery unit to reduce gas
consumption for stoves heating
Commissioning and stabilisation of Top Recovery Turbine
(‘TRT’) as an integral part of Blast Furnace - Power generation
at a rate of 14 MWH stabilised
Commissioning and ramp-up of PCI system - Pulverised coal
injection plant was commissioned and stabilised for injection
rate > 130 kg/thm as an alternate fuel (replacing coke)
Initiatives to reduce specific water consumption (Average
consumption for Financial Year 2017-18 - 0.56 m³/thm) by
reusing the waste water generated inside blast furnace in slag
granulation system
Flaring of BF gas minimised by efficient operation of flare
control system
174174
Total amount of LD gas recovered in Financial Year 2017-18 is
1,57,355 Gcal
Total specific water consumption in Financial Year 2017-18 is
0.54m3/tcs
Hot Strip Mill
Mill Specific Power reduction from 144KWh/T to 127KWh/T,
achieved through:
Stopping the line in planned way and putting off all
auxiliaries power at that time
Increasing production rate to reduce variable power
Introducing idle running mode in de-scaler for small mill
stoppages
Reducing Specific gas consumption from 0.33 Gcal/tonnes to
0.30 Gcal/tonnes by increasing Hot charging percentage
Reducing Specific clarified water consumption from 0.52 m³/
tonnes to 0.43 m³/tonnes by using blow down from Direct
Cooling Water in laminar makeup water
Utility
Electrical power demand met from by-product gases - 46.6%
By-product gas Utilisation - 93.6%
Specific Energy Consumption - 6.72 Gcal/tcs
Specific Water Consumption - 4.75 m3/tcs
LD Gas recovery started from June 2017 and 76% heats
recovered
Tri-fuel co-axial burners are being used in Captive Power Plant
Boiler for flame stability
LD gas Holder and BF gas Holder are being used to maintain
temperature or to continue production in Hot Strip Mill,
Lime Calcination Plant and Sinter Plant during BF planned
shutdown
ii.
Steps taken by the Company for utilising alternate sources
of energy
Jamshedpur
Projects on low grade heat recovery and Solar Power
generations initiated at Jamshedpur
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
iii. Capital investment on energy conservation equipments
Particulars
Jamshedpur
Recovery of sensible heat of Coke by installation of Coke Dry Quenching System in Battery # 10 & 11 at Coke Plant
Replacement of Boiler # 3 at Power House # 4
Duel Fuel burner at Pellet Plant
Installation of Variable Frequency Drive in HT motors with variable load at Blower House and LD3 & Thin Slab Casting & Rolling
(‘TSCR’)
Provision for Light Diesel Oil (‘LDO’) firing facility in boilers of Power House # 4
New LD Gas Holder
Kalinganagar
Commissioning of Top Recovery Turbine (‘TRT’) in Blast Furnace
PCI system in Blast Furnace
Coke Dry Quenching (‘CDQ’) in Coke Plant (excluding coke power plant)
₹ Crore
243.91
14.15
26.67
3.40
11.25
55.76
62.40
348.12
367.94
(B) Technology Absorption
1. Efforts made towards technology absorption
(i) Projects under Research and Development
Project Title
Jamshedpur
Benefits
Prevention of dust formation in Ladle Furnace (‘LF’) slag to improve
environmental issues
Implementation of cyanide removal by Anion Complex at blast
furnace
Use of ‘Super absorbent Polymer based flow aid’ in Dry Processing
Plant to improve flowability of iron ore
Integration of Grinding Model into the Level-2 System of Pellet Plant
Improvement in Sinter Reduction Degradation Index (‘RDI’)
by controlling rate of sintering
Utilisation of LD (Lindz and Donawitz) slag in Cement making
Pigmented Organic Coating on GI (Galvanised Iron) barbed wires
Use of blow down water with higher chlorine content
API X-80 for non-sour & API X-65 for sour application
Abrasion resistant steel with 400 Brinell Hardness Number (‘BHN’)
for Locomotive & Earthmoving (‘L&E’) application
Addition of different additives in the LF helped in preventing slag dust
formation which is a major environment concern. The results were
achieved by addition of a naturally occurring compounds in earth
crust.
The results showed that 80% removal of cyanide was achieved as
compared to inlet.
The average increase in plant throughput during the trial period
was 5,500 tonnes/day. Subsequently, data collected for the average
throughput rate per hour indicated that the plant could achieve a
throughput rate of 10,00 tonnes/hour which is about 30% more than
that what was achievable during the monsoon period.
The Grinding model is generalised so that it can be used for any
input size ranges using Rosin Rammler distribution. Back calculation
method which consists of experimentation and simulations is used for
calculation of breakage parameters.
Improve in sinter strength with reduced cost of fuel. This will also result
in increase of utilisation of low grade ores.
LD slag can be added in the clinker mix to replace the limestone and to
lowering the energy and CO2 emission. Based on the results, plant trial
was carried out by adding the LD slag up to 1.5% (clinker burden) at
one of the cement plant.
Better look and corrosion resistance. Commercial line has been
designed and commissioned and commercial production and supply
to the market has started in the 4th quarter of last year.
Based on evaluation and
research and
recommendation of
development team, the plant is now using blow down water with
higher chlorine content in sinter making.
These two products have been developed at pilot scale & plant trials
are under plan.
This product has been developed at pilot scale. The plant trial is under
plan using TSK hot strip mill facility. This will replace the conventional
quenched & tempered material.
175175
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
Project Title
Development of polymer coated steel (Poly Steel)
VAVE and EVI (Early Vendor Involvement) with Major Auto Customers
Online copper stave thickness measurement technique for H-BF
Development of an Non-desdructive Testing (‘NDT’) technique for
thickness measurement of hearth refractories in BFs
To develop a process to address distortion control
Benefits
This product has been developed for eliminating cumbersome 7-stage
pre-treatment process for powder coating.
A total of 5 models from major auto OEMs (Original Equipment
Manufacturer) and 1 non-automotive model were covered as part of
the Value Analysis Value Engineering (‘VAVE’) workshops for Financial
Year 2017-18. The objective of the workshop was to create value
through cost and weight reduction ideas on the vehicle by means
of use of newer steel grades apart from the blank optimisation and
engineering design changes. These activities result in improved CSI
(Customer Satisfaction Index) and opportunity to present Tata Steel
with supply of new grades material in newer models. This also helps in
customer engagement initiatives.
Reliable copper stave thickness measurement enables safe operation
of blast furnaces.
Thickness measurement of hearth refractories is needed to obtain
effective extended life of BFs. In-house development of this NDT
technique eliminates dependency on external agency and cost.
Serving customer by providing welding simulation results performed
in a finite element based commercial package - SYSWELD. The result
provided welding process parameters and sequence of joining large
components without facing the distortion problem. This led to cost
saving as well as increased productivity at customer’s (Tata Growth
Shop) end.
Kalinganagar
Development of SPFH- 590B steel with high stretch flangeability
through TSK
Development of API X 70 for sweet applications in Oil & Gas segment
through TSK
New product for automotive application developed. This is at customer
approval stage. This product has superior stretch flangeability as
compared to normal grade required for suspension parts.
API X-70 steel has been developed using TSK facilities. Results conform
to API specification up to 16 mm thickness strip.
(ii) Process Improvement:
Jamshedpur
Ore Beneficiation
Established ‘High Intensity Magnetic Separation’ technology
on a pilot scale at Noamundi iron ore processing plant to
recover iron value from slimes.
‘Dry Magnetic Separation’ technique for beneficiation of low
grade manganese ore fines established on a pilot scale which
will facilitate using of ore which is currently being dumped.
Comprehensive/deep beneficiation flow sheet developed for
processing low grade iron ore at Noamundi & Khondbond to
achieve higher yields at lower alumina.
Reduction in specific water consumption at Noamundi wash
plant by optimising the scrubber performance.
Coal Beneficiation
Through trials on lab & pilot scale, it was successfully
established that an intermediate circuit is essential at West
Bokaro Washery#3 for beneficiation of 1.5mm-0.25mm size
fraction of coal. This will mitigate the inefficiencies of Dense
media cyclones & Flotation cells in processing the said size
fraction of coal.
Impact of increase in ash on the clean coal yield & rheological
properties established through lab studies. Based on the
same, West Bokaro clean coal ash was increased from 17 to
17.5% which led to ~50 kt additional clean coal despatch from
West Bokaro.
Initiatives taken to enhance process visibility of critical unit
operations at West Bokaro Washery#3 like Flotation cells,
Reflux Classifier, Vacuum Belt Filter & Thickeners by installation
of critical measurement systems to improve process efficiency.
0.8% coal yield improvement observed at Jamadoba washery
by application of modifier in the flotation cells.
Agglomeration
Development of carbon composite briquette using plant
reverts as third agglomerate in Blast furnace. This will enable
reduction in carbon rate of blast furnaces.
Implementation of lime excess framework for sinter chemistry
control to optimise flux consumption in Iron making.
176176
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
Coal Coke
Established new coal in the blend which will help to reduce
the blend cost without affecting coke quality.
Development of coke quality prediction model using machine
learning techniques to facilitate attainment of consistent coke
quality.
Process Energy & Emission
Improvement in coke ovens Biological oxidation treatment
plant performance
in
pollutants (cyanide and ammonia).
leading to significant reduction
Ferro Alloys
Physio chemical characterisation of Manganese ore done
for the first time for better understating of raw material
characteristics. This will enable optimisation of furnace feed
for Ferro Manganese production.
Metallurgical know-how for premium grade low Silicon Ferro
Chrome production established.
Blast Furnace
Lowest ever coke rate achieved through process improvement
Controlling furnace hearth wear by suitable adjustment of
casting practice and use of acoustic technology
Kalinganagar
Process Solid Waste Utilisation at Sinter Plant
Solid wastes from Blast Furnaces, Steel Melt Shop and Hot
Strip Mill are mixed and processed in various proportions
and are utilised as by-products in Sinter making. This not
only reduces the Sinter cost but also helps prevent disposal
cost and preserves natural resources thereby supporting
sustainability of Steel Plant. Processed Solid Waste utilisation
started in Sinter-making from April 2017 and has reached
the utilisation
in
Financial Year 2017-18 which is equivalent to consumption of
all the solid wastes that get generated at Kalinganagar Plant.
level of 80 kg/tonnes of Net Sinter
Modification of wagon tippler under Raw Material Handling
System
Tata Steel Kalinganagar is equipped with the most advanced
Twin Wagon Tippler for handling different raw materials. This
was designed for handling different types of wagons such as
BOXN, BOXNHL, BOY, BOY-25 etc. This wagon tippler has been
modified and made capable of handling BOST, BOBSN & BOBYN
rakes as well. This has created flexibility in rake allocation
with increased rake availability and faster turnaround time
for raw material movement, thereby strengthening the Raw
Material supply chain. It has also supplemented the dispatch
of finished goods from TSK in wagons such as BOST types.
Coke Plant
in the third
Sulphur Recovery Unit was commissioned
quarter of Financial Year 2017-18. This unit helps in reducing
the sulphur content of coke oven gas and thereby reduces
SOx generation from all the chimneys of the steel plant. In
addition, the heat generated during the recovery process
is used for steam generation, which helps in reducing the
steam consumption from the central steam grid. Operation
of sulphur recovery has improved the overall coke oven gas
yield. The recovered sulphur is also a valuable by-product.
Treated water from biochemical oxidation and dephenolisation
(‘BOD’) plant is transferred to Central Effluent Treatment Plant
(‘CETP’) from Q4FY’18 for re-circulation in the TSK fire hydrant
and miscellaneous other industrial water circuits. This has
reduced the load on the consumption of fresh clarified water
in the system.
PCI coal is being used in the coal blend from August 2017,
thereby reducing the usage of costly imported semi-soft coal.
PCI usage has gradually increased from 5% to 10%.
Coke Dry Quenching has been ramped up to almost 80% of
the coke production. This has significantly reduced the coke
moisture, and thereby coke rate at Blast Furnace.
(iii) Product Development
Jamshedpur
High strength structural steels (IS 2062 E350 Grade A) for hot
dip galvanising applications.
High strength enameling grade – Entry into new segment of
constructions and projects.
Higher size, 36mm corrosion resistant 500 CRSD rebars – First
in India
Grade B 500B rebars as per BS4449 for NatSteel Holdings
Singapore – First time Export
Fe 500 S (20 to 32mm) rebars through QST route – First in India
HC 72A wire rods for direct draw to 1.26mm motor tyre bead
wire – Entry into new segment
HC 48B (low Silicon) wire rods for earth wire – Long pending
Customer demand fulfilled
Grade 4 and Grade 6 wire rods for ribbed welded wire mesh –
Entry into new segment
177177
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
HC 82B Cr wire rods for high strength Aluminium Cladded
Steel Reinforcement (‘ACSR’) – New application
8mm SD rebars from Indian Steel & Wire Product (‘ISWP’) –
fulfilling the requirement in the eastern region
Kalinganagar
High strength HS800 grade (Strength >= 800 Mega Pascal) in
the thickness range of 4.0 mm - 8.0 mm for long members of
heavy commercial vehicles.
80 kilo square inch grade [5.0 mm -12.0 mm thickness] for
suspension applications of commercial vehicles.
SPFH 590 high strength grade [2.0 mm – 6.0 mm thickness] for
wheel rim and disc applications.
JSH 590B high strength grade [2.0 mm – 3.2 mm thickness]
for automotive structural high HER (Hole Expansion Ratio)
application.
High strength grades (S275 J0 and S355 J2) with better
structural integrity for Lifting and excavation applications
Thicker high strength grade (ASTM A 572 Grade 50, S460) for
Pre-engineered building applications.
Medium & high carbon steels with high internal soundness –
new segment of high end tubes & pipes
API Grades X46, X65 and X70 developed for Sweet Applications
in Oil and Gas segment.
2. Benefits derived from key projects:
Project Title
Jamshedpur
Benefits
Modification of cooling in run out table of hot strip mill.
Tension levelling in steel processing centres for L&E and
Pre-Engineered Building (‘PEB’) grades
Optimise coiling temperature and rolling speed in hot strip mill
to avoid coil sagging.
Rationalise the sequencing of grade in continuous casting
to reduce rejections.
Improve co product management in the supply chain
Optimisation of rolling parameters for 5.5mm, ER70S6
Reduction of start-up breakouts at CC3, LD1
Lime reduction in vessel at LD1
Kalinganagar
Reduction of breakouts in Steel Melt Shop through logic
modification in Breakout Detection System
Lower residual stresses in thick plates used for high end application
which demands better shapes (BOW) after blanking & shearing.
Higher plasticity (~75%) while levelling to homogenise the locked in
stresses and ensure better flatness after processing.
Thinner and wider sections with higher level of carbon are prone
to sagging after coiling in down coiler. Optimisation of coiling
temperature and rolling speed was done to reduce the defect.
With the objective of compliance to quality control order the mixing
logic and conditions were redefined to reduce the scraps and transition
slabs in LD#2 & LD#3.
Unorganised diversions of prime grades were always a concern in
supply chain. Hierarchy based cascading with stress on diversion in
value added grades helped in improving the availability and reduction
in ferro alloy consumption
Reduction in adherent scale content and reduction in entanglement
during coil pay off
From May 2017 to February 2018, there were just 7 start-up breakouts,
down from 46 in the 10 months preceding. The initial casting speed
at main heat increased by increasing the nozzle diameter from March
2017 from the existing 16mm nozzle (3.0mtr/min) to 16.5mm nozzle
(3.2mtr/min).
Average lime additions at LD1 reduced from 9.88 to 9.05 tonnes/heat
without any adverse effect on turndown P. Further scope for reduction
identified.
Number of breakouts reduced to 3 per year. This has also reduced the
number of false alarm generation.
178178
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
3. Information regarding imported technology (last three years)
Technology imported
Sl No.
Jamshedpur
Year
Status
Pulverised coal injection at existing H Blast Furnace
Coke Oven gas holder
BF gas holder
Installation of 3rd blower & interconnecting piping for ‘G’ & ‘H’ BF’s
Slab Deburring & Slab Marking Machine in Caster# 1 & 3
Installation of Torch Cutting Machine in Caster# 1 & 3
Installation of Tension Leveller at CGL#1
Coil Box revamp at HSM
Installation & Commissioning of Twin RH Facility
Installation of 4th Grinder
Installation of Surface Inspection System for TSCR
Installation of new Slab Scarfing machine
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13. Power augmentation at Bulk Power receiving station (‘BPRS’)
14.
15. Hot Rolled Skin Pass & Oiled (‘HRSPO’) coils at Cold Rolling Mill (‘CRM’) Bara (Ph-II)
16. Barrel reclaimer
17. Conveyors for pre-screening plant at Noamundi
18.
19. H BF - Augmentation of electrics
20.
21. Coke Oven Flare Stack
22. Upgradation of RCL1 at CRM
23. Dust extraction system at H BF Stockhouse
24.
Fire fighting system at LD gas holder
LD Slag processing plant
SP#2 Dedusting system
E BF Re-lining
Kalinganagar
25. Coke Oven Batteries
26.
27. Blast Furnace – 4330 CuM capacity – Furnace, Charging System, Pulverised Coal Injection System
Sinter Plant – Sinter Cooler, Sinter Machine, Screens, Granulator, Mixer, Noduliser
28.
Steel Melt Shop – Converter, Composition Adjustment System with Oxygen Blowing (‘CASOB’), Twin
Strand Caster
29. Hot Strip Mill – Roughing Mill, Finishing Mill and Down Coiler
30. Dynamic Soft Reduction facility in Slab Caster
31.
32.
Installation of Slab tilter facility at Steel Melt Shop
Installation of RH Degasser facility at Steel Melt Shop
2016
2017
2018
2016
2017
2018
Commissioned
Commissioned
179179
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
4. Expenditure on Research & Development (R&D)
(a)
(b)
(c)
(d)
Capital
Recurring
Total
Total R&D expenditure as a % of Total Turnover
(C) Foreign Exchange Earnings and Outgo
Foreign exchange earnings
Value of direct imports (C.I.F. Value)
Expenditure in foreign currency
Mumbai
May 16, 2018
(` crore)
22.42
159.22
181.64
0.30
FY 2017-18
5,898.19
13,355.43
334.94
(` crore)
FY 2016-17
3,996.55
10,298.00
447.38
On behalf of the Board of Directors
sd/-
N. CHANDRASEKARAN
Chairman
DIN: 00121863
180180
INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
Financial Statements
181-386
Highlights
Financial Highlights
Financial Ratios
Production & Financial Statistics
Dividend Statistics
Standalone
Independent Auditors’ Report
Balance Sheet
Statement of Profit and Loss
Statement of Changes in Equity
Cash Flow Statement
Notes
Consolidated
Independent Auditors’ Report
Balance Sheet
Statement of Profit and Loss
Statement of Changes in Equity
Cash Flow Statement
Notes
Notice
182
183
184
185
186
194
195
196
198
200
275
280
282
284
286
288
387
Financial Highlights
Revenue from operations
Profit/(loss) before tax
Profit/(loss) after tax
Dividends
Retained earnings
Capital Employed
Net worth
Borrowings
Net debt: Equity
Net worth per Share as at year end
Earnings per Share:
Basic
Diluted
Dividend declared per Ordinary Share
Employees (Numbers)
Shareholders (Numbers)
Tata Steel Standalone
Tata Steel Group
(` crore)
2017-18
60,519.37
6,638.25
4,169.55
971.22
18,700.25
98,174.73
63,789.84
28,125.80
Ratio
0.15
`
556.67
38.57
38.56
10.00
34,072
7,81,392
2016-17
53,260.96
5,356.93
3,444.55
776.97
12,280.91
86,329.91
51,934.01
28,284.63
0.44
534.73
31.74(i)
31.74 (i)
10.00
34,989
8,44,429
2017-18
1,33,016.37
21,109.75
17,762.81
970.05
7,801.99
1,64,524.06
61,807.14
92,147.05
Ratio
1.37
`
539.92
128.12
128.10
10.00
65,144
2016-17
1,17,419.94
2,473.63
(4,168.57)
776.97
(11,447.01)
1,32,465.59
39,421.02
83,014.49
1.72
406.38
(42.89)(i)
(42.89)(i)
10.00
67,902
(i) Adusted for the bonus element in respect of rights issue during 2017-18.
182182
StandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Financial Ratios
Inventory turnover (in days)
EBITDA/Turnover
PBET/Turnover
Return on average capital employed
Return on average net worth
1.
2.
3.
4.
5. Asset turnover
6.
7. Debtors turnover (in days)
8. Gross block to net block
9. Net debt to equity
10. Current ratio
11.
12. Net worth per share (`)
13. Basic earnings per share - continuing operations (`)
Interest service coverage ratio
Basic earnings per share - continuing and discontinued (`)
14. Dividend payout
15. P/E ratio
1.
EBITDA/Turnover
(EBITDA: PBT +/(-) Exceptional Items + Net Finance Charges +
Depreciation and amortisation)
(Net Finance Charges: Finance costs - Interest income - Dividend
income from current investments - Net gain/(loss) on sale of
current investments)
(Turnover: Revenue from Operations)
2.
PBET/Turnover
Profit before exceptional items and tax/Turnover
3.
Return on Average Capital Employed: EBIT/Average Capital
Employed
Total
(Capital
Borrowings
borrowings
Current Borrowings + Deferred tax liabilities)
Equity
Current maturities
Employed:
+
and
Finance
+
Non-current
of Non-current
+
Lease Obligations
(EBIT: PBT +/(-) Exceptional Items + Net Finance Charges)
4.
Return on Average Net worth: PAT (including discontinued
operations)/Average Net worth
(Net worth: Total equity + Preference Shares issued by subsidiary
companies + Warrants issued by a subsidiary company + Hybrid
Perpetual Securities)
Tata Steel Standalone
Tata Steel Group
2017-18
26.11%
16.53%
13.09%
7.21%
60.02%
67
12
1.17
0.15
0.91
7.08
556.67
38.57
38.57
33%
14.80
2016-17
22.43%
11.38%
9.79%
6.83%
54.46%
62
11
1.12
0.44
0.76
4.21
534.73
31.74
31.74
34%
15.21
2017-18
16.57%
8.65%
10.87%
35.09%
69.33%
75
33
1.47
1.37
1.46
4.14
539.92
127.56
128.12
8%
4.48
2016-17
14.50%
5.79%
7.89%
(9.93%)
73.02%
71
37
1.38
1.72
1.44
2.83
406.38
(5.35)
(42.89)
-
-
7. Debtors Turnover: Average Debtors/Turnover in days
8. Gross Block to Net Block: Gross Block/Net Block
(Gross Block: Cost of tangible assets + Capital work in progress +
Cost of intangible assets + Intangible assets under development)
(Net Block: Gross Block - Accumulated depreciation and
amortisation - Accumulated impairment)
9. Net Debt to Equity: Net Debt/Average Net Worth
(Net Debt: Non-current borrowings + Current maturities of Non-
current borrowings and Finance Lease Obligations + Current
borrowings - Current Investments - Non-current balances with
banks - Cash and Bank Balances)
10.
Current Ratio: Current Assets (excluding current investments)/
Current Liabilities
(Current liabilities: Trade Payables + Other current liabilities
+ Short-term provisions - Current maturities of Non-current
borrowings and Finance Lease Obligations)
11.
Interest Service Coverage Ratio: EBIT/Net Finance Charges
(excluding interest on short term debts)
12.
Net worth per share: Net Worth/Number of Equity Shares
13.
Basic Earnings per share: Profit attributable to Ordinary
Shareholders/Weighted average number of Ordinary Shares
5.
Asset Turnover: Turnover/(Total Assets - Investments - Advance
Against Equity)
14.
Dividend Payout: Dividend (includes tax on dividend)/Profit
after tax
6.
Inventory Turnover: Average Inventory/Sale of Products in days
15.
P/E Ratio: Market Price per share/Basic Earnings per share-
continuing operations
183183
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
Production Statistics
Iron
Ore
Coal
Iron
Crude
steel
Rolled/
Forged
Bars and
Structurals
Plates
Sheets
Hot
Rolled
Coils/
Strips
Cold
Rolled
Coils
Railway
Materials
Semi-
Finished
for Sale
’000 Tonnes
Total
Saleable
Steel
3,569
3,726
3,509
3,996
4,126
4,201
4,796
5,181
5,766
5,984
6,056
6,456
6,989
7,335
7,985
8,445
9,803
10,834
9,776
10,022
10,417
12,044
13,087
13,189
15,005
17,364
13,694
16,431
21,284
23,043
3,793
3,754
3,725
3,848
3,739
3,922
4,156
4,897
5,294
5,226
5,137
5,155
5,282
5,636
5,915
5,842
6,375
6,521
7,041
7,209
7,282
7,210
7,024
7,460
7,295
6,972
6,044
6,227
6,315
6,224
2,238
2,268
2,320
2,400
2,435
2,598
2,925
3,241
3,440
3,513
3,626
3,888
3,929
4,041
4,437
4,466
4,347
5,177
5,552
5,507
6,254
7,231
7,503
7,750
8,858
9,899
10,163
10,655
13,051
13,855
2,313
2,323
2,294
2,415
2,477
2,487
2,788
3,019
3,106
3,226
3,264
3,434
3,566
3,749
4,098
4,224
4,104
4,731
5,046
5,014
5,646
6,564
6,855
7,132
8,130
9,155
9,331
9,960
11,683
12,482
637
553
558
599
575
561
620
629
666
634
622
615
569
680
705
694
706
821
1,230
1,241
1,350
1,432
1,486
1,577
1,638
1,676
1,778
1,823
1,882
1,882
93
91
88
92
78
-
-
-
-
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
131
117
118
123
122
124
137
133
114
60
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
166
155
153
170
163
281
613
1,070
1,228
1,210
1,653
2,057
1,858
1,656
1,563
1,578
1,354
1,556
1,670
1,697
1,745
2,023
2,127
2,327
3,341
4,271
4,259
4,742
6,295
7,093
-
-
-
-
-
-
-
-
-
0
0
0
356
734
1,110
1,262
1,445
1,495
1,523
1,534
1,447
1,564
1,544
1,550
1,445
1,638
1,836
1,689
1,837
1,853
13
17
14
9
7
6
2
-
-
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
904
1,033
1,013
1,045
1,179
1,182
1,074
869
811
1,105
835
615
647
566
563
555
604
679
506
386
833
1,421
1,534
1,514
1,518
1,346
1,200
1,443
1,481
1,481
1,900
1,913
1,901
1,978
2,084
2,117
2,391
2,660
2,783
2,971
3,051
3,262
3,413
3,596
3,975
4,076
4,074
4,551
4,929
4,858
5,375
6,439
6,691
6,970
7,941
8,931
9,073
9,698
11,351
12,237
Year
1988-89
1989-90
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
Financial Statistics
Year
2015-16
2016-17
2017-18
Capital Reserves
and
Surplus
45,665.97
3,246.41
Borrow-
ings
Gross
Block
Net
Block
Invest-
ments
Total
Income
30,843.51
84,014.31
78,294.27
11,785.42
43,088.60
Total
Expen-
diture c
38,582.98
Depre-
ciation
2,962.28
Profit
before
Tax
1,543.34
Tax
587.69
Profit
after
Tax
955.65
3,246.42
48,687.59
28,284.63
87,987.34
78,731.11
13,665.71
53,675.42
44,776.94
3,541.55
5,356.93
1,912.38
3,444.55
(` crore)
Dividend#
926.28
924.71
3,421.14 60,368.70
28,125.80 90,354.85
77,402.35
24,276.93
61,283.03
50,917.32
3,727.46 6,638.25
2,468.70 4,169.55
1,159.63
c
#
Expenditure includes excise duty recovered on sales.
Includes tax on dividend.
184184
StandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Dividend Statistics
Year
1988-89
1989-90
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
First Preference
(`150)
Second Preference
(`100)
Rate
`
Dividend
` lakh
Rate
`
Dividend @
` lakh
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
9.25
–
8.42
–
–
–
–
–
0.41j
2.00
2.00
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
860.80
1,496.58 h,i
228.33
–
–
–
–
–
2,596.11
12,805.48
5,367.78
–
–
–
–
–
–
–
–
Ordinary
(`100 upto 1988-89
and `10 from 1989-90)d
Total
`lakh
Rate*
`
30.00
3.00
3.10
3.50
2.50
3.00
3.50
4.50
4.50
4.00
4.00
4.00
5.00
4.00
8.00
10.00
13.00
13.00
15.50
16.00
16.00
8.00
12.00
12.00
8.00
10.00
8.00
8.00
10.00
10.00k
a
b,c
d
e
f
g
Dividend @
` lakh
4,616.74
5,059.30
7,134.23
8,054.78
6,482.21
9,655.44
11,823.94
15,697.11
18,222.25
16,198.05
16,329.05
16,329.07
20,264.09
14,710.88
33,299.88
41,625.77
82,137.22
82,042.66
1,10,432.51
1,36,759.54
1,36,443.72
82,477.15
1,30,777.35
1,34,703.22
90,569.91
1,03,740.40
92,627.74
92,47,1.69
1,16,893.21
1,38,147.27
Tax on
dividend
` lakh
–
–
–
–
–
–
–
–
1,656.57
1,472.55
1,618.19
1,618.20
1,875.50
–
3,781.33
4,727.58
10,185.74
10,092.00
16,041.72
19,866.05
19,549.31
11,500.02
15,671.62
18,157.49
12,872.69
6,618.86
14,930.51
14,774.46
19,771.66
23,554.82
4,616.74
5,059.30
7,134.23
8,054.78
6,482.21
9,655.44
11,823.94
15,697.11
18,222.25
16,198.05
16,329.05
17,189.87
21,760.67
14,939.21
33,299.88
41,625.77
82,137.22
82,042.66
1,10,432.51
1,39,355.65
1,49,249.20
87,844.93
1,30,777.35
1,34,703.22
90,569.91
1,03,740.40
92,627.74
92,47,1.69
1,16,893.21
1,38,147.27
Tax on
dividend
` lakh
–
–
–
–
–
–
–
–
–
–
–
85.30
275.88
21.13
–
–
–
–
377.12
1,860.16
779.74
–
–
–
–
–
–
–
–
a
b
c
d
e
f
g
h
i
j
k
On the Capital as increased by Rights Issue of Ordinary Shares during 1987-88.
The Ordinary Shares of `100 each have been sub-divided into Ordinary Shares of `10 each during 1989-90 and the rate of Dividend is per Ordinary Share of
`10 each.
On the Capital as increased by shares allotted on Conversion of Convertible Debentures.
On the Capital as increased by Rights Issue of Ordinary Shares during 1992-93.
On the Capital as increased by Ordinary Shares issued during 1993-94 against Detachable Warrants.
On the Capital as increased by Ordinary Shares issued during 1994-95 against Detachable Warrants and Foreign Currency Convertible Bonds.
On the Capital as increased by Ordinary Shares issued during 1995-96 against Detachable Warrants, Foreign Currency Convertible Bonds and Naked Warrants.
Includes Dividend of `22.30 lakhs on 9.25% Cumulative Redeemable Preference Shares for the period 1st April, 2000 to 27th June, 2000.
Includes Dividend of `1,198.40 lakhs on 8.42% Cumulative Redeemable Preference Shares for the period 1st June, 2000 to 31st March, 2001.
Dividend paid for 74 days.
On the Capital as increased by Rights Issue of Ordinary Shares during 2017-18.
*
@
Dividend proposed for the year
Includes tax on dividend.
185185
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Independent Auditor’s Report
TO THE MEMBERS OF TATA STEEL LIMITED
Report on the Standalone Indian Accounting Standards (Ind AS)
Financial Statements
1.
We have audited the accompanying standalone Ind AS financial
statements of Tata Steel Limited (“the Company”), which
comprise the Balance Sheet as at March 31, 2018 the Statement
of Profit and Loss (including Other Comprehensive Income), the
Cash Flow Statement and the Statement of Changes in Equity
for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
6.
Management’s Responsibility for the Standalone Ind AS
Financial Statements
2.
The Company’s Board of Directors is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 (“the Act”)
with respect to the preparation of these standalone Ind AS
financial statements to give a true and fair view of the financial
position, financial performance (including other comprehensive
income), cash flows and changes in equity of the Company in
accordance with the accounting principles generally accepted
in India, including the Indian Accounting Standards specified
in the Companies (Indian Accounting Standards) Rules, 2015
(as amended) under Section 133 of the Act. This responsibility
also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding of
the assets of the Company and for preventing and detecting
frauds and other irregularities; selection and application of
appropriate accounting policies; making
judgments and
estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant
to the preparation and presentation of the standalone Ind AS
financial statements that give a true and fair view and are free
from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
specified under Section 143(10) of the Act and other
issued by the
applicable authoritative pronouncements
Institute of Chartered Accountants of India. Those Standards
and pronouncements require that we comply with ethical
requirements and plan and perform the audit to obtain
reasonable assurance about whether the standalone Ind AS
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit
evidence about the amounts and the disclosures in the
Ind AS financial statements. The procedures
standalone
selected depend on the auditors’ judgment, including the
assessment of the risks of material misstatement of the
standalone Ind AS financial statements, whether due to
fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company’s
preparation of the standalone Ind AS financial statements that
give a true and fair view, in order to design audit procedures
that are appropriate in the circumstances. An audit also includes
evaluating the appropriateness of the accounting policies used
and the reasonableness of the accounting estimates made
by the Company’s Directors, as well as evaluating the overall
presentation of the standalone Ind AS financial statements.
7.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion on the
standalone Ind AS financial statements.
Opinion
8.
In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid standalone Ind
AS financial statements give the information required by the
Act in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in
India, of the state of affairs of the Company as at March 31, 2018,
and its total comprehensive income (comprising of profit and
other comprehensive income), its cash flows and the changes in
equity for the year ended on that date.
Our responsibility is to express an opinion on these standalone
Ind AS financial statements based on our audit.
Other Matter
3.
4.
We have taken into account the provisions of the Act and the
Rules made thereunder including the accounting and auditing
standards and matters which are required to be included in the
audit report under the provisions of the Act and the Rules made
thereunder.
5.
We conducted our audit of the standalone Ind AS financial
statements in accordance with the Standards on Auditing
186186
9.
The standalone Ind AS financial statements of the Company for
the year ended March 31, 2017, were audited by another firm
of chartered accountants under the Companies Act, 2013 who,
vide their report dated May 16, 2017, expressed an unmodified
opinion on those financial statements. Our opinion is not
qualified in respect of this matter.
StandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Report on Other Legal and Regulatory Requirements
(g)
10.
As required by the Companies (Auditor’s Report) Order, 2016,
issued by the Central Government of India in terms of sub-
section (11) of section 143 of the Act (“the Order”), and on the
basis of such checks of the books and records of the Company
as we considered appropriate and according to the information
and explanations given to us, we give in the Annexure B a
statement on the matters specified in paragraphs 3 and 4 of the
Order.
As required by Section 143 (3) of the Act, we report that:
(a)
(b)
(c)
(d)
(e)
(f )
We have sought and obtained all the information and
explanations which to the best of our knowledge and belief
were necessary for the purposes of our audit.
In our opinion, proper books of account as required by law
have been kept by the Company so far as it appears from
our examination of those books.
The Balance Sheet, the Statement of Profit and Loss
(including other comprehensive income), the Cash Flow
Statement and the Statement of Changes in Equity dealt
with by this Report are in agreement with the books of
account.
In our opinion, the aforesaid standalone Ind AS financial
statements comply with the Indian Accounting Standards
specified under Section 133 of the Act.
On the basis of the written representations received from
the directors as on March 31, 2018 taken on record by the
Board of Directors, none of the directors is disqualified as
on March 31, 2018 from being appointed as a director in
terms of Section 164 (2) of the Act.
With respect to the adequacy of the internal financial
controls with reference to financial statements of the
Company and the operating effectiveness of such controls,
refer to our separate Report in Annexure A.
i.
ii.
iii.
With respect to the other matters to be included in
the Auditors’ Report in accordance with Rule n of the
Companies (Audit and Auditors) Rules, 2014, in our opinion
and to the best of our knowledge and belief and according
to the information and explanations given to us:
The Company has disclosed the impact, if any, of pending
litigations as at March 31, 2018 on its financial position in
its standalone Ind AS financial statements — Refer Notes
36 and 37 to the standalone Ind AS financial statements;
The Company has long-term contracts including derivative
contracts as at March 31, 2018, for which there were no
material foreseeable losses;
There has been no delay in transferring amounts, required
to be transferred, to the Investor Education and Protection
Fund by the Company during the year ended March 31,
2018 except for amounts aggregating to `4.62 crores,
which according to the information and explanations
provided by the Management is held in abeyance due to
dispute / pending legal cases.
iv.
The reporting on disclosures relating to Specified Bank
Notes is not applicable to the Company for the year ended
March 31, 2018.
For Price Waterhouse & Co Chartered Accountants LLP
Firm Registration Number: 304026E/ E-300009.
Chartered Accountants
Mumbai
May 16, 2018
Russell I Parera
Partner
Membership Number 042190
187187
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
Annexure A to the Independent Auditor’s Report
Referred to in paragraph 11(f) of the Independent Auditors’
Report of even date to the members of Tata Steel Limited on
the standalone Ind AS financial statements for the year ended
March 31, 2018
4.
Report on the Internal Financial Controls under Clause (i) of
Sub-section 3 of Section 143 of the Act
1.
We have audited the internal financial controls over financial
reporting of Tata Steel Limited (“the Company”) as of March 31,
2018 in conjunction with our audit of the standalone Ind AS
financial statements of the Company for the year ended on that
date.
Management’s Responsibility for Internal Financial Controls
2.
The Company’s management is responsible for establishing
and maintaining internal financial controls based on the
internal control over financial reporting criteria established
by the Company considering the essential components of
internal control stated in the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting issued by
the Institute of Chartered Accountants of India (ICAI). These
responsibilities
implementation and
maintenance of adequate internal financial controls that were
operating effectively for ensuring the orderly and efficient
conduct of its business, including adherence to company’s
policies, the safeguarding of its assets, the prevention and
detection of frauds and errors, the accuracy and completeness
of the accounting records, and the timely preparation of reliable
financial information, as required under the Act.
include the design,
Auditors’ Responsibility
3.
Our responsibility is to express an opinion on the Company’s
internal financial controls over financial reporting based on our
audit. We conducted our audit in accordance with the Guidance
Note on Audit of Internal Financial Controls Over Financial
Reporting (the “Guidance Note”) and the Standards on Auditing
deemed to be prescribed under section 143(10) of the Act to
the extent applicable to an audit of internal financial controls,
both applicable to an audit of internal financial controls and
both issued by the ICAI. Those Standards and the Guidance
Note require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance about
whether adequate internal financial controls over financial
reporting was established and maintained and if such controls
operated effectively in all material respects.
188188
Our audit involves performing procedures to obtain audit
evidence about the adequacy of the
internal financial
controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over
financial reporting included obtaining an understanding of
internal financial controls over financial reporting, assessing the
risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based
on the assessed risk. The procedures selected depend on the
auditor’s judgement, including the assessment of the risks
of material misstatement of the standalone Ind AS financial
statements, whether due to fraud or error.
5.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion on the
Company’s internal financial controls system over financial
reporting.
Meaning of Internal Financial Controls Over Financial Reporting
6.
A company’s internal financial control over financial reporting is
a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of the
standalone Ind AS financial statements for external purposes
in accordance with generally accepted accounting principles.
A company’s internal financial control over financial reporting
includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of the
assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of
the standalone Ind AS financial statements in accordance with
generally accepted accounting principles, and that receipts
and expenditures of the company are being made only in
accordance with authorisations of management and directors
of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorised acquisition, use,
or disposition of the company’s assets that could have a material
effect on the standalone Ind AS financial statements.
Inherent Limitations of Internal Financial Controls Over
Financial Reporting
7.
Because of the inherent limitations of internal financial controls
over financial reporting, including the possibility of collusion
improper management override of controls, material
or
misstatements due to error or fraud may occur and not be
detected. Also, projections of any evaluation of the internal
StandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR financial controls over financial reporting to future periods
are subject to the risk that the internal financial control over
financial reporting may become inadequate because of changes
in conditions, or that the degree of compliance with the policies
or procedures may deteriorate.
Opinion
components of internal control stated in the Guidance Note on
Audit of Internal Financial Controls Over Financial Reporting
issued by the Institute of Chartered Accountants of India.
For Price Waterhouse & Co Chartered Accountants LLP
Firm Registration Number: 304026E/ E-300009.
Chartered Accountants
8.
In our opinion, the Company has, in all material respects, an
adequate internal financial controls system over financial
reporting and such internal financial controls over financial
reporting were operating effectively as at March 31, 2018,
based on the internal control over financial reporting criteria
established by the Company considering the essential
Mumbai
May 16, 2018
Russell I Parera
Partner
Membership Number 042190
189189
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Annexure B to the Independent Auditor’s Report
Referred to in paragraph 10 of the Independent Auditors’
Report of even date to the members of Tata Steel Limited on the
standalone Ind AS financial statements as of and for the year
ended March 31, 2018
i.
(a)
The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of
fixed assets.
(b)
The fixed assets are physically verified by the Management
according to a phased programme designed to cover all
the items over a period of three years which, in our opinion,
is reasonable having regard to the size of the Company
and the nature of its assets. Pursuant to the programme,
a portion of the fixed assets has been physically verified
by the Management during the year and no material
discrepancies have been noticed on such verification.
(c)
According to the information and explanations given
to us and the records examined by us, the title deeds
of immovable properties are held in the name of the
Company, except for the following:
(i)
(ii)
title deeds to freehold land with gross carrying
amount and net carrying amount of `60.44 crore and
`60.44 crore respectively, which are held in the name
of erstwhile companies which have subsequently
been amalgamated with the Company;
title deeds to buildings with gross carrying amount
and net carrying amount of `83.48 crores and `76.73
crores respectively, which are held in the name of
erstwhile companies which have subsequently been
amalgamated with the Company.
(iii)
title deeds to freehold land with gross carrying
amount and net carrying amount of `202.67 crores
and `202.67 crores respectively, which were not
readily available.
(iv)
title deeds to buildings with gross carrying amount
and net carrying amount of `95.62 crores and `81.59
crores respectively, which were not readily available.
ii.
iii.
The physical verification of inventory (excluding stocks with
third parties) have been conducted at reasonable intervals by
the management during the year. In respect of inventory lying
with third parties, these have substantially been confirmed
by them. In respect of inventories of stores and spares, the
management has a verification programme designed to cover
all the items over a period of three years. The discrepancies
noticed on physical verification of inventory as compared to
book records were not material.
The Company has granted secured/unsecured
loans, to
companies covered in the register maintained under Section
189 of the Act. The Company has not granted any secured /
unsecured loans to any other party, as applicable, covered in the
register maintained under Section 189 of the Companies Act,
2013.
(a)
(b)
(c)
In respect of the aforesaid loans, the terms and conditions
under which such loans were granted are not prejudicial
to the Company’s interest except for two inter corporate
deposits made during the year aggregating to `7.60
crores, placed with a subsidiary company and a joint
venture company. Maximum amount outstanding during
the year was `67.00 crores and `0.60 crores from the
aforesaid subsidiary company and joint venture company
respectively. As these companies are not going concerns,
therefore in our opinion these deposits are prejudicial to
the Company’s interests.
In respect of the aforesaid loans, the schedule of repayment
of principal and payment of interest has been stipulated by
the Company. Except for amounts aggregating `760.12
crores outstanding towards principal and interest from six
subsidiary companies and two joint venture companies, the
parties are repaying the principal amounts, as stipulated,
and are also regular in payment of interest as applicable.
In respect of the aforesaid loans, the total amount overdue
towards principal and interest for more than ninety days
as at March 31, 2018 is `648.28 crores. In such instances,
in our opinion, reasonable steps have been taken by the
Company for the recovery of the principal amounts and
interest thereon.
190190
StandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
iv.
v.
In our opinion, and according to the
information and
explanations given to us, the Company has complied with the
provisions of Section 185 and 186 of the Companies Act, 2013 in
respect of the loans and investments made, and guarantees and
security, as applicable, provided by it.
According to the information and explanations given to us, the
Company has not accepted any deposit during the year. In our
opinion, and according to the information and explanations
given to us, the Company has complied with the provisions of
Sections 73, 74, 75 and 76 or any other relevant provisions of
the Act and the Rules framed thereunder to the extent notified,
with regard to unclaimed deposits, as applicable. According
to the information and explanations given to us, no order has
been passed by the Company Law Board or National Company
Law Tribunal or Reserve Bank of India or any Court or any other
Tribunal on the Company in respect of the aforesaid deposits.
vi.
Pursuant to the rules made by the Central Government of India,
the Company is required to maintain cost records as specified
under Section 148(1) of the Act in respect of its products.
We have broadly reviewed the same, and are of the opinion that,
prima facie, the prescribed accounts and records have been
made and maintained. We have not, however, made a detailed
examination of the records with a view to determine whether
they are accurate or complete.
vii. (a)
According to the information and explanations given to
us and the records of the Company examined by us, in our
opinion, the Company is regular in depositing undisputed
statutory dues, including provident fund, employees’ state
insurance, income tax, sales tax, service tax, duty of customs
, duty of excise, value added tax, cess, goods and service tax
with effect from July 1, 2017and other material statutory
dues, as applicable, with the appropriate authorities, other
than arrear dues outstanding for more than six months as
at March 31, 2018 set out below. We are informed that the
Company has applied for exemption from operations of
Employees’ State Insurance Act at some locations. We are
also informed that actions taken by the authorities at some
locations to bring the employees of the Company under
the Employees’ State Insurance Scheme has been contested
by the Company and payment has not been made of the
contributions demanded.
The extent of the arrears of statutory dues outstanding as
at March 31, 2018, for a period of more than six months
from the date they became payable are as follows:
Name of the statute
Nature of dues
Central Excise Act, 1944
Excise Duty
Amount
(` in crores)
0.14
191191
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
(b)
According to the information and explanations given to us and the records of the Company examined by us, there are no dues of goods
and service tax as at March 31, 2018 which have not been deposited on account of any dispute and the particulars of dues of income tax,
sales tax, service tax, duty of customs, duty of excise, value added tax and service tax as at March 31,2018 which have not been deposited
on account of a dispute, are as follows:
Amounts paid
(`crore)
Period for which
dispute relates to
Forum where Dispute
is pending
Name of Statute
Nature of dues
Income-tax Act, 1961
Income-tax
Amount
(net of payments)
(`crore)
395.31*
Customs Act, 1962
Customs Duty
Central Excise Act,1944
Excise Duty
Sales Tax Laws
Sales Tax
0.67
79.67
3.95
0.85
246.13
0.18
34.66
0.03
691.45
26.07
580.28*
-
50.00
0.07
-
111.47
-
0.10
0.01
45.76
11.30
57.91
3.97
325.03
18.12
0.03
164.03
28.15
8.79
252.84
21.30
103.93
119.56
15.48
0.89
0.12
0.04
5.56
0.97
1,291.87
0.03
2.31
2.47
2.67
1.07
3.30
1.21
4.60
1.71
0.05
0.06
0.001
0.12
-
10.17
Value Added Tax Laws
Value Added Tax
Finance Act, 1994
Service Tax
1998-1999, 2006-2007,
2007-2008, 2009-2010,
2010-2011
2010-2011
2005-2008
2002-2003
1983-1985
1989-1990, 1994-2002,
2003-04, 2005-2017
1985-1987, 1998-1999
1988-1990, 2003-2009
1998-1999
1990-1991, 1992-1997,
1998-2015, 2016-17
1973-1974, 1977-1979,
1983-1984, 1991-1997,
2000-2002, 2008-2009
1977-1978, 1980-1981,
1983-1985, 1987-1988,
1989-1999, 2000-2001,
2003-2005, 2009-2012,
2013-2015, 2016-2017
1988-1990, 1991-1992,
1993-1994, 2001-2005,
2006-2014
2001-2002
1975-1976, 1983-1988,
1994-1995, 1997-2006,
2007-2009, 2013-2015
2002-2003, 2012-2015
1973-1974, 1980-1993,
1994-1997, 2001-2002,
2003-2005, 2008-2009
1994-1996, 2007-2008,
2012-2016
2005-2011, 2012-2015
2005-2015, 2016-2017
2010-2011, 2012-2014
2005-2011, 2014-2015
2012-2015
2005-2006, 2008-2009,
2013-2014, 2016-2017
2013-2014, 2015-2016
2004-2018
2009-2010
2004-2017
Tribunal
Income-tax Officer
Commissioner
High Court
Assistant Commissioner
Commissioner
Deputy Commissioner
High Court
Joint Commissioner
Tribunal
High Court
Tribunal
Commissioner
Joint Commissioner
Deputy Commissioner
Additional Commissioner
Assistant Commissioner
High Court
Tribunal
Commissioner
Joint Commissioner
Deputy Commissioner
Additional Commissioner
Assistant Commissioner
Assistant Commissioner
Commissioner
Deputy Commissioner
Tribunal
*excluding net excess payments/adjustments for the years 2008-2009, 2011-2012 and 2012-2013 aggregating ` 282.86 crores.
192192
StandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR The following matter has been decided in favour of the Company although the department has preferred appeal at higher levels:
Name of Statute
Nature of dues
Central Excise Act,1944
Excise Duty
Amount
(net of payments)
(`crore)
235.48
0.64
Period for which
dispute relates to
Forum where Dispute
is pending
2004-2005
2013-2014
Supreme Court
Tribunal
viii. According to the records of the Company examined by us and
the information and explanation given to us, the Company
has not defaulted in repayment of loans or borrowings to any
financial institution or bank or Government or dues to debenture
holders, as applicable, as at the balance sheet date.
ix.
x.
In our opinion and according to the explanations given to us,
money raised by way of further public offer (rights issue) during
the year and the term loans have been applied for the purposes
for which they were obtained. Out of the total money received
by way of rights issue during the year, amounts aggregating
` 2614.29 crores are lying in cash and cash equivalents as at year
end, pending eventual utilisation for specific purposes as per
the terms and conditions of the rights issue.
During the course of our examination of the books and records
of the Company, carried out in accordance with the generally
accepted auditing practices in India, and according to the
information and explanations given to us, we have neither come
across any instance of material fraud by the Company or on
the Company by its officers or employees, noticed or reported
during the year, nor have we been informed of any such case by
the management.
xi.
The Company has paid/provided for managerial remuneration
in accordance with the requisite approvals mandated by the
provisions of Section 197 read with Schedule V to the Act.
xiii. The Company has entered into transactions with related parties
in compliance with the provisions of Sections 177 and 188 of
the Act. The details of such related party transactions have
been disclosed in the standalone Ind AS financial statements
as required under Indian Accounting Standard 24, Related Party
Disclosures specified under Section 133 of the Act.
xiv. The Company has not made any preferential allotment or private
placement of shares or fully or partly convertible debentures
during the year under review. Accordingly, the provisions of
Clause 3(xiv) of the Order are not applicable to the Company.
xv.
The Company has not entered into any non cash transactions
with its directors or persons connected with him. Accordingly,
the provisions of Clause 3(xv) of the Order are not applicable to
the Company.
xvi. The Company is not required to be registered under Section
45-IA of the Reserve Bank of India Act, 1934. Accordingly, the
provisions of Clause 3(xvi) of the Order are not applicable to the
Company.
For Price Waterhouse & Co Chartered Accountants LLP
Firm Registration Number: 304026E/ E-300009.
Chartered Accountants
xii.
As the Company is not a Nidhi Company and the Nidhi Rules,
2014 are not applicable to it, the provisions of Clause 3(xii) of the
Order are not applicable to the Company.
Mumbai
May 16, 2018
Russell I Parera
Partner
Membership Number 042190
193193
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Balance Sheet
AS AT MARCH 31, 2018
Note Page
As at
March 31, 2018
(` crore)
As at
March 31, 2017
Assets
I
Property, plant and equipment
Non-current assets
(a)
(b) Capital work-in-progress
Intangible assets
(c)
Intangible assets under development
(d)
Investments in subsidiaries, associates and joint ventures
(e)
Financial assets
(f )
(i)
(ii)
(iii) Derivative assets
(iv) Other financial assets
Income tax assets (net)
Investments
Loans
(g)
(h) Other assets
Total non-current assets
Current assets
(a)
(b)
II
Investments
Trade receivables
Inventories
Financial assets
(i)
(ii)
(iii) Cash and cash equivalents
(iv) Other balances with bank
(v)
(vi) Derivative assets
(vii) Other financial assets
Loans
(c) Other assets
Total current assets
Total assets
Equity and Liabilities
III
Equity
(a)
Equity share capital
(b) Hybrid perpetual securities
(c) Other equity
Total equity
(a)
IV Non-current liabilities
Financial liabilities
(i)
Borrowings
(ii) Derivative liabilities
(iii) Other financial liabilities
Provisions
Retirement benefit obligations
(b)
(c)
(d) Deferred income
(e) Deferred tax liabilities (net)
(f ) Other liabilities
Total non-current liabilities
Current liabilities
(a)
V
Financial liabilities
Borrowings
(i)
(ii)
Trade payables
(iii) Derivative liabilities
(iv) Other financial liabilities
Provisions
Retirement benefit obligations
Income tax liabilities (net)
(b)
(c)
(d)
(e) Other liabilities
Total current liabilities
Total Equity and Liabilities
Notes forming part of the financial statements
211
215
216
219
223
225
229
231
219
231
233
233
223
225
229
234
237
237
241
244
244
245
246
226
246
241
247
244
244
245
246
03
05
06
07
08
09
11
12
07
13
14
15
08
09
11
16
17
18
19
20
21
22
23
10
24
19
25
20
21
22
24
1-44
70,942.90
5,641.50
786.18
31.77
3,666.24
5,970.32
213.50
12.13
21.21
1,043.84
2,140.84
90,470.43
11,023.41
14,640.37
1,875.63
4,588.89
107.85
74.13
30.07
480.62
1,822.94
34,643.91
1,25,114.34
1,146.12
2,275.00
60,368.72
63,789.84
24,568.95
70.08
19.78
1,961.21
1,247.73
1,365.61
6,259.09
224.71
35,717.16
669.88
11,242.75
16.41
6,541.40
735.28
90.50
454.06
5,857.06
25,607.34
1,25,114.34
In terms of our report attached
For and on behalf of the Board of Directors
For Price Waterhouse & Co Chartered Accountants LLP
sd/-
N. Chandrasekaran
sd/-
Mallika Srinivasan
sd/-
O. P. Bhatt
Firm Registration Number: 304026E/ E-300009.
Chartered Accountants
Chairman
DIN: 00121863
Director
DIN: 00037022
Director
DIN: 00548091
sd/-
Peter Blauwhoff
Director
DIN: 07728872
sd/-
Russell I Parera
Partner
Membership Number 042190
Mumbai, May 16, 2018
194194
sd/-
D. K. Mehrotra
Director
DIN: 00142711
sd/-
Saurabh Agrawal
Director
DIN: 02144558
sd/-
T. V. Narendran
Chief Executive Officer and
Managing Director
DIN: 03083605
sd/-
Koushik Chatterjee
Executive Director and
Chief Financial Officer
DIN: 00004989
71,778.97
6,125.35
788.18
38.61
3,397.83
4,958.07
211.97
0.12
79.49
867.75
3,108.67
91,355.01
10,236.85
5,309.81
2,006.52
905.21
65.10
27.14
6.26
315.06
1,238.45
20,110.40
1,11,465.41
971.41
2,275.00
48,687.60
51,934.01
24,694.37
179.33
18.22
2,024.74
1,484.21
1,885.19
6,111.27
77.74
36,475.07
3,239.67
10,717.44
270.17
4,062.35
700.60
56.58
465.72
3,543.80
23,056.33
1,11,465.41
sd/-
Deepak Kapoor
Director
DIN: 00162957
sd/-
Parvatheesam K.
Company Secretary
ACS: 15921
StandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
Statement of Profit and Loss
FOR THE YEAR ENDED MARCH 31, 2018
Revenue from operations
Other income
Total income
I
II
III
IV Expenses:
(a) Raw materials consumed
(b) Purchases of finished, semi-finished and other products
(c)
Changes in inventories of finished and semi-finished goods,work-in-progress and
stock-in-trade
Finance costs
(d) Employee benefits expense
(e)
(f ) Depreciation and amortisation expense
(g) Other expenses
Less: Expenditure (other than interest) transferred to capital and other accounts
Total expenses
Profit before exceptional items and tax (III-IV)
V
VI Exceptional items:
Employee separation compensation
(a) Provision for impairment of investments/doubtful advances
(b) Provision for demands and claims
(c)
(d) Other provisions
Total exceptional items
VII Profit before tax (V+VI)
VIII Tax expense:
(a) Current Tax
(b) Deferred Tax
Total tax expense
IX Profit for the year (VII-VIII)
X Other comprehensive income/(loss)
Note Page
26
27
247
248
28
29
30
31
32
248
249
249
250
250
33
251
A
(i)
(ii)
B
(i)
(ii)
Remeasurement gains/(losses) on post employment defined benefit plans
Fair value changes of investments in equity shares
Items that will not be reclassified subsequently to the statement of profit
and loss
(a)
(b)
Income tax on items that will not be reclassified subsequently to the statement of
profit and loss
Items that will be reclassified subsequently to the statement of profit and loss
(a)
Income tax on items that will be reclassified subsequently to the statement of profit
and loss
Fair value changes of cash flow hedges
Total other comprehensive income/(loss)
Total comprehensive income/(loss) for the year (IX+X)
XI
XII Earnings per share
Basic (`)
Diluted (`)
XIII Notes forming part of the financial statements
34
252
1-44
In terms of our report attached
For and on behalf of the Board of Directors
For Price Waterhouse & Co Chartered Accountants LLP
sd/-
N. Chandrasekaran
sd/-
Mallika Srinivasan
sd/-
O. P. Bhatt
Firm Registration Number: 304026E/ E-300009.
Chartered Accountants
Chairman
DIN: 00121863
Director
DIN: 00037022
Director
DIN: 00548091
sd/-
Peter Blauwhoff
Director
DIN: 07728872
sd/-
Russell I Parera
Partner
Membership Number 042190
Mumbai, May 16, 2018
sd/-
D. K. Mehrotra
Director
DIN: 00142711
sd/-
Saurabh Agrawal
Director
DIN: 02144558
sd/-
T. V. Narendran
Chief Executive Officer and
Managing Director
DIN: 03083605
sd/-
Koushik Chatterjee
Executive Director and
Chief Financial Officer
DIN: 00004989
(` crore)
Year ended
March 31, 2018
Year ended
March 31, 2017
60,519.37
763.66
61,283.03
16,877.63
647.21
545.36
4,828.85
2,810.62
3,727.46
22,178.02
51,615.15
336.66
51,278.49
10,004.54
(62.92)
(3,213.68)
(89.69)
-
(3,366.29)
6,638.25
1,586.78
881.92
2,468.70
4,169.55
237.63
(223.00)
(82.24)
9.96
(3.47)
(61.12)
4,108.43
38.57
38.56
53,260.96
414.46
53,675.42
12,496.78
881.18
(1,329.65)
4,605.13
2,688.55
3,541.55
24,949.09
47,832.63
217.52
47,615.11
6,060.31
(170.87)
(218.25)
(178.68)
(135.58)
(703.38)
5,356.93
1,400.54
511.84
1,912.38
3,444.55
(217.79)
819.01
75.37
(1.22)
0.42
675.79
4,120.34
31.74
31.74
sd/-
Deepak Kapoor
Director
DIN: 00162957
sd/-
Parvatheesam K.
Company Secretary
ACS: 15921
195195
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
Statement of Changes in Equity
FOR THE YEAR ENDED MARCH 31, 2018
A. Equity share capital
Balance as at
April 1, 2017
971.41
Balance as at
April 1, 2016
971.41
B. Hybrid perpetual securities
Balance as at
April 1, 2017
2,275.00
Balance as at
April 1, 2016
2,275.00
C. Other Equity
Changes
during the year
174.71
Changes
during the year
-
Changes
during the year
-
Changes
during the year
-
Retained
earnings
(Refer Note
18A,
Page 237)
Items of other
comprehensive
income
(Refer Note 18B,
Page 237)
Other reserves
(Refer Note 18C,
Page 239)
Share application
money pending
allotment
(Refer Note 18D,
Page 240)
Balance as at April 1, 2017
Profit for the year
Other comprehensive income for the year
Total comprehensive income
Issue of ordinary shares(i)
Dividend
Tax on dividend
Equity issue expenses written off (i)
Distribution on hybrid perpetual securities
Tax on distribution on hybrid perpetual securities
Transfers within equity
Application money received
Balance as at March 31, 2018
12,280.91
4,169.55
155.39
4,324.94
-
(971.22)
(188.41)
-
(266.13)
92.70
3,427.46
-
18,700.25
3,752.83
-
(216.51)
(216.51)
-
-
-
-
-
-
(3,427.46)
-
108.86
32,653.85
-
-
-
8,939.59
-
-
(33.85)
-
-
-
-
41,559.59
(i) represents premium received and issue expenses on rights issue of shares during the year.
0.01
-
-
-
-
-
-
-
-
-
(0.01)
0.02
0.02
196196
(` crore)
Balance as at
March 31, 2018
1,146.12
(` crore)
Balance as at
March 31, 2017
971.41
(` crore)
Balance as at
March 31, 2018
2,275.00
(` crore)
Balance as at
March 31, 2017
2,275.00
(` crore)
Total
Equity
48,687.60
4,169.55
(61.12)
4,108.43
8,939.59
(971.22)
(188.41)
(33.85)
(266.13)
92.70
(0.01)
0.02
60,368.72
StandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Statement of Changes in Equity (Contd.)
FOR THE YEAR ENDED MARCH 31, 2018
Retained
earnings
(Refer Note
18A,
Page 237)
Items of other
comprehensive
income
(Refer Note 18B,
Page 237)
Other reserves
(Refer Note 18C,
Page 239)
Share application
money pending
allotment
(Refer Note 18D,
Page 240)
Balance as at April 1, 2016
Profit for the year
Other comprehensive income for the year
Total comprehensive income
Dividend
Tax on dividend
Distribution on hybrid perpetual securities
Tax on distribution on hybrid perpetual securities
Transfers within equity
Application money received
Balance as at March 31, 2017
10,075.75
3,444.55
(142.42)
3,302.13
(776.97)
(147.74)
(266.10)
92.09
1.75
-
12,280.91
2,936.37
-
818.21
818.21
-
-
-
(1.75)
-
3,752.83
32,653.85
-
-
-
-
-
-
-
-
32,653.85
-
-
-
-
-
-
-
-
0.01
0.01
(` crore)
Total
Equity
45,665.97
3,444.55
675.79
4,120.34
(776.97)
(147.74)
(266.10)
92.09
-
0.01
48,687.60
D. Notes forming part of the financial statements
Note 1-44
In terms of our report attached
For and on behalf of the Board of Directors
For Price Waterhouse & Co Chartered Accountants LLP
sd/-
N. Chandrasekaran
sd/-
Mallika Srinivasan
sd/-
O. P. Bhatt
Firm Registration Number: 304026E/ E-300009.
Chartered Accountants
Chairman
DIN: 00121863
Director
DIN: 00037022
Director
DIN: 00548091
sd/-
Peter Blauwhoff
Director
DIN: 07728872
sd/-
Russell I Parera
Partner
Membership Number 042190
Mumbai, May 16, 2018
sd/-
D. K. Mehrotra
Director
DIN: 00142711
sd/-
Saurabh Agrawal
Director
DIN: 02144558
sd/-
T. V. Narendran
Chief Executive Officer and
Managing Director
DIN: 03083605
sd/-
Koushik Chatterjee
Executive Director and
Chief Financial Officer
DIN: 00004989
sd/-
Deepak Kapoor
Director
DIN: 00162957
sd/-
Parvatheesam K.
Company Secretary
ACS: 15921
197197
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
Statement of Cash Flow
FOR THE YEAR ENDED MARCH 31, 2018
A. Cash flows from operating activities:
Profit before taxes
Adjustments for:
Depreciation and amortisation expense
Net (gain)/loss on sale of non-current investments
Income from non-current investments
(Profit)/loss on sale of property, plant and equipment including intangible assets
(net of loss on assets sold/discarded/written off )
Exceptional (income)/expenses
(Gain)/loss on cancellation of forwards, swaps and options
Interest income and income from current investments and guarantees
Finance costs
Exchange (gain)/loss on revaluation of foreign currency loans and swaps
Other non cash items
Operating profit before changes in current/non current assets and liabilities
Adjustments for:
Non-current/current financial and other assets
Inventories
Non-current/current financial and other liabilities/provisions
Cash generated from operations
Income taxes paid
Net cash from/(used in) operating activities
B. Cash flows from investing activities:
Purchase of capital assets
Sale of capital assets
Purchase of investments in subsidiaries(i)
Purchase of other non-current investments
Sale of other non-current investments
(Purchase)/sale of current investments (net)
Loans given
Repayment of loans given
Fixed deposits with banks (placed)/realised
Interest and guarantee commission received
Dividend received from subsidiaries
Dividend received from associates and joint ventures
Dividend received from others
Year ended
March 31, 2018
(` crore)
Year ended
March 31, 2017
6,638.25
5,356.93
3,727.46
-
(88.57)
40.48
3,366.29
79.33
(788.38)
2,810.62
(88.17)
(588.33)
456.70
(784.63)
(487.09)
(2,527.46)
13.28
(5,018.88)
-
3,877.78
(8,650.92)
(622.68)
487.61
(13.32)
92.67
30.31
41.06
17.20
3,541.55
(0.97)
(87.51)
6.91
703.38
66.95
(397.86)
2,688.55
15.47
(332.72)
8,470.73
15,108.98
6,203.75
11,560.68
(1,076.39)
(3,093.05)
5,316.27
(815.02)
14,293.96
(2,502.51)
11,791.45
1,146.83
12,707.51
(1,540.87)
11,166.64
(3,212.72)
6.80
(100.12)
(177.73)
3.90
(668.19)
(31.37)
24.90
(6.72)
117.34
38.14
40.89
8.48
Net cash from/(used in) investing activities
(12,273.35)
(3,956.40)
198198
StandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
Statement of Cash Flow (Contd.)
FOR THE YEAR ENDED MARCH 31, 2018
C. Cash Flows from financing activities:
Proceeds from issue of equity shares (net of issue expensesii)
Proceeds from borrowings
Repayment of borrowings
Repayment of finance lease obligations
Amount received/(paid) on utilisation/cancellation of derivatives
Distribution on hybrid perpetual securities
Interest paid
Dividend paid
Tax on dividend paid
Net cash from/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents
Opening cash and cash equivalents (Refer Note 14, Page 233)
Closing cash and cash equivalents (Refer Note 14, Page 233)
(i)
Includes investment in preference shares ₹4,646.55 crore (2016-17: Nil).
Year ended
March 31, 2018
(` crore)
Year ended
March 31, 2017
9,087.23
2,343.84
(2,850.24)
(108.14)
(110.72)
(267.10)
(2,769.66)
(971.22)
(188.41)
0.01
2,906.18
(6,162.07)
(111.63)
(97.22)
(265.76)
(2,624.51)
(776.97)
(147.74)
4,165.58
3,683.68
905.21
4,588.89
(7,279.71)
(69.47)
974.68
905.21
(ii)
Expenses incurred in connection with Rights Issue, 2018 have been partly paid by the Company and is pending adjustment against actual
utilisation from the issue proceeds.
(iii) Significant non cash movements in borrowings during the year include:
(a) addition on account of finance leases ₹110.37 crore (2016-17: ₹730.00 crore).
(b) exchange loss ₹149.90 crore (2016-17: gain ₹127.70 crore).
D. Notes forming part of the financial statements
Note 1-44
In terms of our report attached
For and on behalf of the Board of Directors
For Price Waterhouse & Co Chartered Accountants LLP
sd/-
N. Chandrasekaran
sd/-
Mallika Srinivasan
sd/-
O. P. Bhatt
Firm Registration Number: 304026E/ E-300009.
Chartered Accountants
Chairman
DIN: 00121863
Director
DIN: 00037022
Director
DIN: 00548091
sd/-
Peter Blauwhoff
Director
DIN: 07728872
sd/-
Russell I Parera
Partner
Membership Number 042190
Mumbai, May 16, 2018
sd/-
D. K. Mehrotra
Director
DIN: 00142711
sd/-
Saurabh Agrawal
Director
DIN: 02144558
sd/-
T. V. Narendran
Chief Executive Officer and
Managing Director
DIN: 03083605
sd/-
Koushik Chatterjee
Executive Director and
Chief Financial Officer
DIN: 00004989
sd/-
Deepak Kapoor
Director
DIN: 00162957
sd/-
Parvatheesam K.
Company Secretary
ACS: 15921
199199
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
1. Company information
(c)
Use of estimates and critical accounting judgements
Tata Steel Limited (“the Company”) is a public limited Company
incorporated in India with its registered office in Mumbai,
Maharashtra, India. The Company is listed on the Bombay Stock
Exchange (BSE) and the National Stock Exchange (NSE).
The Company has presence across the entire value chain of steel
manufacturing from mining and processing iron ore and coal
to producing and distributing finished products. The Company
offers a broad range of steel products including a portfolio of
high value added downstream products such as hot rolled, cold
rolled and coated steel, rebars, wire rods, tubes and wires.
The functional and presentation currency of the Company
is Indian Rupee (“`”) which is the currency of the primary
economic environment in which the Company operates.
As on March 31, 2018, Tata Sons Limited (or Tata Sons) owns
31.64 % of the Ordinary shares of the Company, and has the
ability to influence the Company’s operations.
The financial statements for the year ended March 31, 2018 were
approved by the Board of Directors and authorised for issue on
May 16, 2018.
2. Significant accounting policies
The significant accounting policies applied by the Company in
the preparation of its financial statements are listed below. Such
accounting policies have been applied consistently to all the
periods presented in these financial statements, unless otherwise
indicated.
(a) Statement of compliance
The financial statements have been prepared in accordance
with the Indian Accounting Standards (referred to as “Ind AS”)
prescribed under section 133 of the companies Act, 2013
read with Companies (Indian Accounting Standards) Rules, as
amended from time to time.
(b) Basis of preparation
The financial statements have been prepared under the historical
cost convention with the exception of certain assets and liabilities
that are required to be carried at fair values by Ind AS.
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date.
200200
In the preparation of financial statements, the Company makes
judgements, estimates and assumptions about the carrying
values of assets and liabilities that are not readily apparent
from other sources. The estimates and associated assumptions
are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these
estimates.
Estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised and future periods
affected.
Key source of estimation of uncertainty at the date of
standalone financial statements, which may cause material
adjustment to the carrying amounts of assets and liabilities
within the next financial year, is in respect of impairment,
useful lives of property, plant and equipment and intangible
assets, valuation of deferred tax assets, provisions, contingent
liabilities and fair value measurements of financial instruments
as discussed below. Key source of estimation of uncertainty in
respect of revenue recognition and employee benefits have
been discussed in the respective policies.
Impairment
The Company estimates the value in use of the cash generating
unit (CGU) based on future cash flows after considering current
economic conditions and trends, estimated future operating
results and growth rate and anticipated future economic and
regulatory conditions. The estimated cash flows are developed
using internal forecasts. The cash flows are discounted using a
suitable discount rate in order to calculate the present value.
Useful lives of property, plant and equipment and intangible
assets
The Company reviews the useful life of property, plant and
equipment and intangible assets at the end of each reporting
period. This reassessment may result in change in depreciation
and amortisation expense in future periods.
Valuation of deferred tax assets
The Company reviews the carrying amount of deferred tax
assets at the end of each reporting period. The policy has been
detailed in Note 2 (u)
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
2. Significant accounting policies (Contd.)
Provisions and contingent liabilities
A provision is recognised when the Company has a present
obligation as result of a past event and it is probable that the
outflow of resources will be required to settle the obligation,
in respect of which a reliable estimate can be made. These are
reviewed at each balance sheet date and adjusted to reflect the
current best estimates. Contingent liabilities are not recognised
in the financial statements. Contingent assets are neither
recognised nor disclosed in the financial statements.
Fair value measurements of financial instruments
When the fair value of financial assets and financial liabilities
recorded in the balance sheet cannot be measured based on
quoted prices in active markets, their fair value is measured
using valuation techniques including Discounted Cash Flow
Model. The inputs to these models are taken from observable
markets where possible, but where this is not feasible, a degree
of judgement is required in establishing fair values. Judgements
include considerations of inputs such as liquidity risks, credit
risks and volatility. Changes in assumptions about these factors
could affect the reported fair value of financial instruments.
Retirement benefit obligations
The Company’s retirement benefit obligation are subject to a
number of judgement including discount rates, inflation and
salary growth. Significant judgement is required when setting
these criteria and a change in these assumptions would have
a significant impact on the amount recorded in the Company’s
balance sheet and the statement of profit and loss. The Company
sets these judgement based on previous experience and third
party actuarial advice.
(d) Property, plant and equipment
An item of property, plant and equipment is recognised as an
asset if it is probable that future economic benefits associated
with the item will flow to the Company and its cost can be
measured reliably. This recognition principle is applied to costs
incurred initially to acquire an item of property, plant and
equipment and also to costs incurred subsequently to add to,
replace part of, or service it. All other repair and maintenance
costs, including regular servicing, are recognised in the
statement of profit and loss as incurred. When a replacement
occurs, the carrying value of the replaced part
is de-
recognised. Where an item of property, plant and equipment
comprises major components having different useful lives,
these components are accounted for as separate items.
Property, plant and equipment is stated at cost/deemed cost,
less accumulated depreciation and impairment. Cost includes
all direct costs and expenditures incurred to bring the asset
to its working condition and location for its intended use. Trial
run expenses (net of revenue) are capitalised. Borrowing costs
incurred during the period of construction is capitalised as part
of cost of qualifying asset.
The gain or loss arising on disposal of an item of property, plant
and equipment is determined as the difference between sale
proceeds and carrying value of such item, and is recognised in
the statement of profit and loss.
(e) Exploration for and evaluation of mineral resources
Expenditures associated with search for specific mineral
resources are recognised as exploration and evaluation assets.
The following expenditure comprises cost of exploration and
evaluation assets:
obtaining of the rights to explore and evaluate mineral
reserves and resources including costs directly related to
this acquisition
researching and analysing existing exploration data
conducting geological studies, exploratory drilling and
sampling
examining and testing extraction and treatment methods
compiling pre-feasibility and feasibility studies
activities in relation to evaluating the technical feasibility
and commercial viability of extracting a mineral resource
Administration and other overhead costs are charged to the
cost of exploration and evaluation assets only if directly related
to an exploration and evaluation project.
If a project does not prove viable, all irrecoverable exploration
and evaluation expenditure associated with the project net
of any related impairment allowances is written off to the
statement of profit and loss.
The Company measures its exploration and evaluation assets
at cost and classifies as property, plant and equipment or
intangible assets according to the nature of the assets acquired
and applies the classification consistently. To the extent that a
tangible asset is consumed in developing an intangible asset,
the amount reflecting that consumption is capitalised as a part
of the cost of the intangible asset.
As the asset is not available for use, it is not depreciated. All
exploration and evaluation assets are monitored for indications
of impairment. An exploration and evaluation asset is no longer
classified as such when the technical feasibility and commercial
201201
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
2. Significant accounting policies (Contd.)
viability of extracting a mineral resource are demonstrable
and the development of the deposit is sanctioned by the
management. The carrying value of such exploration and
evaluation asset is reclassified to mining assets.
(f) Development expenditure for mineral reserves
Development is the establishment of access to mineral reserves
and other preparations for commercial production. Development
activities often continue during production and include:
sinking shafts and underground drifts (often called mine
development)
making permanent excavations
developing passageways and rooms or galleries
building roads and tunnels and
advance removal of overburden and waste rock
associated future economic benefits would flow to the
Company. In this case they are measured initially at purchase
cost and then amortised on a straight line basis over their
estimated useful lives. All other costs on patents, trademarks
and software are expensed in the statement of profit and loss as
and when incurred.
Expenditure on research activities is recognised as an expense
in the period in which it is incurred. Costs incurred on
individual development projects are recognised as intangible
assets from the date when all of the following conditions
are met:
(i)
completion of the development is technically feasible.
(ii)
it is the intention to complete the intangible asset and use
or sell it.
(iii)
it is clear that the intangible asset will generate probable
future economic benefits.
Development (or construction) also includes the installation
of infrastructure (e.g., roads, utilities and housing), machinery,
equipment and facilities.
(iv)
adequate technical, financial and other resources to
complete the development and to use or sell the intangible
asset are available and;
Development expenditure
is capitalised and presented
as part of mining assets. No depreciation is charged on
the development expenditure before
start of
commercial production.
the
(g) Provision for restoration and environmental costs
The Company has liabilities related to restoration of soil and
other related works, which are due upon the closure of certain
of its mines.
local
taking
into account applicable
Such liabilities are estimated case-by-case based on available
information,
legal
requirements. The estimation is made using existing technology,
at current prices, and discounted using an appropriate discount
rate where the effect of time value of money is material. Future
restoration and environmental costs, discounted to net present
value, are capitalised and the corresponding restoration liability
is raised as soon as the obligation to incur such costs arises.
Future restoration and environmental costs are capitalised in
property, plant and equipment or mining assets as appropriate
and are depreciated over the life of the related asset. The effect
of time value of money on the restoration and environmental
costs liability is recognised in the statement of profit and loss.
(h)
Intangible assets
Patents, trademarks and software costs are included in the
balance sheet as intangible assets when it is probable that
202202
(v)
it
is possible to reliably measure the expenditure
attributable to the intangible asset during its development.
Recognition of costs as an asset is ceased when the project is
complete and available for its intended use, or if these criteria
are no longer applicable.
Where development activities do not meet the conditions for
recognition as an asset, any associated expenditure is treated as
an expense in the period in which it is incurred.
Subsequent to initial recognition, intangible assets with definite
useful lives are reported at cost/deemed cost less accumulated
amortisation and accumulated impairment losses.
(i)
Depreciation and amortisation of property, plant and
equipment and intangible assets
Depreciation or amortisation is provided so as to write off, on
a straight line basis, the cost/deemed cost of property, plant
and equipment and intangible assets, including those held
under finance leases to their residual value. These charges
are commenced from the dates the assets are available for
their intended use and are spread over their estimated useful
economic lives or, in the case of leased assets, over the lease
period, if shorter. The estimated useful lives of assets and
residual values are reviewed regularly and, when necessary,
revised. No further charge is provided in respect of assets that
are fully written down but are still in use.
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
2. Significant accounting policies (Contd.)
Depreciation on assets under construction commences only
when the assets are ready for their intended use.
The estimated useful lives for main categories of property, plant
and equipment and intangible assets are:
Buildings
Roads
Plant and Machinery
Railway Sidings
Vehicles and Aircraft
Furniture, Fixtures and Office Equipments
Estimated useful
life (years)
upto 60 years*
5 years
upto 40 years*
upto 35 years*
5 to 20 years
4 to 6 years
Computer Software
Assets covered under Electricity Act (life as
prescribed under the Electricity Act)
5 years
3 to 34 years
Mining assets are amortised over the useful life of the mine or
lease period whichever is lower.
Major furnace relining expenses are depreciated over a period
of 10 years (average expected life).
Freehold land is not depreciated.
Assets value upto `25,000 are fully depreciated in the year of
acquisition.
*For these class of assets, based on internal assessment and
independent technical evaluation carried out by chartered
engineers, the Company believes that the useful lives as given
above best represents the period over which the Company
expects to use these assets. Hence the useful lives for these
assets are different from the useful lives as prescribed under Part
C of Schedule II of the Companies Act, 2013.
(j)
Impairment
At each balance sheet date, the Company reviews the carrying
values of its property, plant and equipment and intangible
assets to determine whether there is any indication that the
carrying value of those assets may not be recoverable through
continuing use. If any such indication exists, the recoverable
amount of the asset is reviewed in order to determine the extent
of impairment loss, if any. Where the asset does not generate
cash flows that are independent from other assets, the Company
estimates the recoverable amount of the cash generating unit to
which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell
and value in use. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset for which
the estimates of future cash flows have not been adjusted. An
impairment loss is recognised in the statement of profit and
loss as and when the carrying value of an asset exceeds its
recoverable amount.
Where an impairment loss subsequently reverses, the carrying
value of the asset (or cash generating unit) is increased to the
revised estimate of its recoverable amount so that the increased
carrying value does not exceed the carrying value that would
have been determined had no impairment loss been recognised
for the asset (or cash generating unit) in prior years. A reversal of
an impairment loss is recognised in the statement of profit and
loss immediately.
(k) Leases
The Company determines whether an arrangement contains
a lease by assessing whether the fulfilment of a transaction
is dependent on the use of a specific asset and whether the
transaction conveys the right to use that asset to the Company
in return for payment. Where this occurs, the arrangement is
deemed to include a lease and is accounted for either as finance
or an operating lease.
Leases are classified as finance leases where the terms of the lease
transfer substantially all the risks and rewards of ownership to the
lessee. All other leases are classified as operating leases.
The Company as lessee
(i)
Operating lease – Rentals payable under operating leases are
charged to the statement of profit and loss on a straight line basis
over the term of the relevant lease unless another systematic basis
is more representative of the time pattern in which economic
benefits from the leased asset are consumed. Contingent rentals
arising under operating leases are recognised as an expense in
the period in which they are incurred.
In the event that lease incentives are received to enter into
operating leases, such incentives are recognised as a liability.
The aggregate benefit of incentives is recognised as a reduction
of rental expense on a straight line basis, except where another
systematic basis is more representative of the time pattern in
which economic benefits from the leased asset are consumed.
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Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
2. Significant accounting policies (Contd.)
(ii)
(i)
(ii)
lease – Finance
leases are capitalised at
Finance
the
commencement of lease, at the lower of fair value of the property
or the present value of the minimum lease payments. The
corresponding liability to the lessor is included in the balance sheet
as a finance lease obligation. Lease payments are apportioned
between finance charges and reduction of the lease obligation so
as to achieve a constant rate of interest on the remaining balance
of the liability. Finance charges are recognised in the statement of
profit and loss over the period of the lease.
The Company as lessor
Operating lease – Rental income from operating leases is
recognised in the statement of profit and loss on a straight line
basis over the term of the relevant lease unless another systematic
basis is more representative of the time pattern in which economic
benefits from the leased asset is diminished. Initial direct costs
incurred in negotiating and arranging an operating lease are
added to the carrying value of the leased asset and recognised on
a straight line basis over the lease term.
Finance lease – When assets are leased out under a finance lease,
the present value of minimum lease payments is recognised as a
receivable. The difference between the gross receivable and the
present value of receivable is recognised as unearned finance
income. Lease income is recognised over the term of the lease
using the net investment method before tax, which reflects a
constant periodic rate of return.
(l) Stripping costs
The Company separates two different types of stripping costs
that are incurred in surface mining activity:
developmental stripping costs and
production stripping costs
Developmental stripping costs which are incurred in order
to obtain access to quantities of mineral reserves that will be
mined in future periods are capitalised as part of mining assets.
Capitalisation of developmental stripping costs ends when the
commercial production of the mineral reserves begins.
A mine can operate several open pits that are regarded as separate
operations for the purpose of mine planning and production. In
this case, stripping costs are accounted for separately, by reference
to the ore extracted from each separate pit. If, however, the pits are
highly integrated for the purpose of mine planning and production,
stripping costs are aggregated too.
204204
The determination of whether multiple pit mines are considered
separate or integrated operations depends on each mine’s
specific circumstances. The following factors normally point
towards the stripping costs for the individual pits being
accounted for separately:
mining of the second and subsequent pits is conducted
consecutively with that of the first pit, rather than
concurrently
separate investment decisions are made to develop each
pit, rather than a single investment decision being made at
the outset
the pits are operated as separate units in terms of mine
planning and the sequencing of overburden and ore
mining, rather than as an integrated unit
expenditures for additional infrastructure to support the
second and subsequent pits are relatively large
the pits extract ore from separate and distinct ore bodies,
rather than from a single ore body.
The relative importance of each factor is considered by the
management to determine whether, the stripping costs should
be attributed to the individual pits or to the combined output
from the several pits.
Production stripping costs are incurred to extract the ore in the
form of inventories and/or to improve access to an additional
component of an ore body or deeper levels of material.
Production stripping costs are accounted for as inventories
to the extent the benefit from production stripping activity is
realised in the form of inventories.
The Company recognises a stripping activity asset in the
production phase if, and only if, all of the following are met:
it is probable that the future economic benefit (improved
access to the ore body) associated with the stripping
activity will flow to the Company
the entity can identify the component of the ore body for
which access has been improved and
the costs relating to the improved access to that component
can be measured reliably.
Such costs are presented within mining assets. After initial
recognition, stripping activity assets are carried at cost/deemed
cost
impairment. The
expected useful life of the identified component of the ore body
is used to depreciate or amortise the stripping asset.
less accumulated amortisation and
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
2. Significant accounting policies (Contd.)
(m) Investments in subsidiaries, associates and joint ventures
(ii)
Other bank balances - which includes balances and deposits
with banks that are restricted for withdrawal and usage.
Investments in subsidiaries, associates and joint ventures are
carried at cost/deemed cost less accumulated impairment losses,
if any. Where an indication of impairment exists, the carrying
amount of investment is assessed and an impairment provision
is recognised, if required immediately to its recoverable amount.
On disposal of such investments, difference between the net
disposal proceeds and carrying amount is recognised in the
statement of profit and loss.
(n) Financial Instruments
Financial assets and financial liabilities are recognised when the
Company becomes a party to the contractual provisions of the
instrument. Financial assets and liabilities are initially measured
at fair value. Transaction costs that are directly attributable to
the acquisition or issue of financial assets and financial liabilities
(other than financial assets and financial liabilities at fair value
through profit and loss) are added to or deducted from the
fair value measured on initial recognition of financial asset or
financial liability. The transaction costs directly attributable to
the acquisition of financial assets and financial liabilities at fair
value through profit and loss are immediately recognised in the
statement of profit and loss.
Effective interest method
The effective interest method is a method of calculating the
amortised cost of a financial instrument and of allocating
interest income or expense over the relevant period. The
effective interest rate is the rate that exactly discounts future
cash receipts or payments through the expected life of the
financial instrument, or where appropriate, a shorter period.
(a) Financial assets
Cash and bank balances
Cash and bank balances consist of:
(i)
Cash and cash equivalents - which includes cash in hand,
deposits held at call with banks and other short term
deposits which are readily convertible into known amounts
of cash, are subject to an insignificant risk of change in
value and have maturities of less than one year from the
reporting date. These balances with banks are unrestricted
for withdrawal and usage.
Financial assets at amortised cost
Financial assets are subsequently measured at amortised cost if
these financial assets are held within a business model whose
objective is to hold these assets in order to collect contractual
cash flows and the contractual terms of the financial asset give
rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
Financial assets measured at fair value
Financial assets are measured at fair value through other
comprehensive income if such financial assets are held within
a business model whose objective is to hold these assets in
order to collect contractual cash flows or to sell such financial
assets and the contractual terms of the financial asset give rise
on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
The Company in respect of equity investments (other than in
subsidiaries, associates and joint ventures) which are not held
for trading has made an irrevocable election to present in
other comprehensive income subsequent changes in the fair
value of such equity instruments. Such an election is made
by the Company on an instrument by instrument basis at the
time of initial recognition of such equity investments. These
investments are held for medium or long term strategic purpose.
The Company has chosen to designate these investments in
equity instruments as fair value through other comprehensive
income as the management believe this provides a more
meaningful presentation for medium or long term strategic
investments, than reflecting changes in fair value immediately
in the statement of profit & loss.
Financial asset not measured at amortised cost or at fair value
through other comprehensive income is carried at fair value
through the statement of profit and loss.
Impairment of financial assets
Loss allowance for expected credit losses is recognised for
financial assets measured at amortised cost and fair value
through other comprehensive income.
The Company recognises life time expected credit losses for all
trade receivables that do not constitute a financing transaction.
205205
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
2. Significant accounting policies (Contd.)
For financial assets whose credit risk has not significantly
increased since initial recognition, loss allowance equal to twelve
months expected credit losses is recognised. Loss allowance
equal to the lifetime expected credit losses is recognised if the
credit risk of the financial asset has significantly increased since
initial recognition.
De-recognition of financial assets
The Company de-recognises a financial asset only when the
contractual rights to the cash flows from the asset expire, or
it transfers the financial asset and substantially all risks and
rewards of ownership of the asset to another entity.
If the Company neither transfers nor retains substantially all the
risks and rewards of ownership and continues to control the
transferred asset, the Company recognises its retained interest in the
assets and an associated liability for amounts it may have to pay.
If the Company retains substantially all the risks and rewards
of ownership of a transferred financial asset, the Company
continues to recognise the financial asset and also recognises a
borrowing for the proceeds received.
(b) Financial liabilities and equity instruments
Classification as debt or equity
Financial liabilities and equity instruments issued by the
Company are classified according to the substance of the
contractual arrangements entered into and the definitions of a
financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual
interest in the assets of the Company after deducting all of its
liabilities. Equity instruments are recorded at the proceeds
received, net of direct issue costs.
Financial Liabilities
Trade and other payables are initially measured at fair value,
net of transaction costs, and are subsequently measured at
amortised cost, using the effective interest rate method where
the time value of money is significant.
Interest bearing bank loans, overdrafts and issued debt are
initially measured at fair value and are subsequently measured
at amortised cost using the effective interest rate method. Any
206206
difference between the proceeds (net of transaction costs) and
the settlement or redemption of borrowings is recognised over
the term of the borrowings in the statement of profit and loss.
De-recognition of financial liabilities
The Company de-recognises financial liabilities when, and only
when, the Company’s obligations are discharged, cancelled or
they expire.
Derivative financial instruments and hedge accounting
In the ordinary course of business, the Company uses certain
derivative financial instruments to reduce business risks which
arise from its exposure to foreign exchange and interest rate
fluctuations. The instruments are confined principally to forward
foreign exchange contracts, cross currency swaps, interest rate
swaps and collars. The instruments are employed as hedges of
transactions included in the financial statements or for highly
probable forecast transactions/firm contractual commitments.
These derivatives contracts do not generally extend beyond
six months, except for certain currency swaps and interest rate
derivatives.
Derivatives are initially accounted for and measured at fair
value on the date the derivative contract is entered into and are
subsequently re-measured to their fair value at the end of each
reporting period.
The Company adopts hedge accounting for forward foreign
exchange and
interest rate contracts wherever possible.
At inception of each hedge, there is a formal, documented
designation of the hedging relationship. This documentation
includes, inter alia, items such as identification of the hedged
item and transaction and nature of the risk being hedged.
At inception each hedge is expected to be highly effective
in achieving an offset of changes in fair value or cash flows
attributable to the hedged risk. The effectiveness of hedge
instruments to reduce the risk associated with the exposure
being hedged is assessed and measured at the inception and on
an ongoing basis. The ineffective portion of designated hedges
is recognised immediately in the statement of profit and loss.
When hedge accounting is applied:
for fair value hedges of recognised assets and liabilities,
changes in fair value of the hedged assets and liabilities
attributable to the risk being hedged, are recognised in
the statement of profit and loss and compensate for the
effective portion of symmetrical changes in the fair value of
the derivatives.
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
2. Significant accounting policies (Contd.)
for cash flow hedges, the effective portion of the change
in the fair value of the derivative is recognised directly in
other comprehensive income and the ineffective portion is
recognised in the statement of profit and loss. If the cash
flow hedge of a firm commitment or forecasted transaction
results in the recognition of a non-financial asset or liability,
then, at the time the asset or liability is recognised, the
associated gains or losses on the derivative that had
previously been recognised in equity are included in the
initial measurement of the asset or liability. For hedges that
do not result in the recognition of a non-financial asset or
a liability, amounts deferred in equity are recognised in the
statement of profit and loss in the same period in which the
hedged item affects the statement of profit and loss.
In cases where hedge accounting is not applied, changes in the
fair value of derivatives are recognised in the statement of profit
and loss as and when they arise.
Hedge accounting is discontinued when the hedging instrument
expires or is sold, terminated, or exercised, or no longer qualifies
for hedge accounting. At that time, any cumulative gain or loss
on the hedging instrument recognised in equity is retained
in equity until the forecasted transaction occurs. If a hedged
transaction is no longer expected to occur, the net cumulative
gain or loss recognised in equity is transferred to the statement
of profit and loss for the period.
(o) Employee benefits
Defined contribution plans
Payments to defined contribution plans are charged as an
expense as they fall due. Payments made to state managed
retirement benefit schemes are dealt with as payments to
defined contribution schemes where the Company’s obligations
under the schemes are equivalent to those arising in a defined
contribution retirement benefit scheme.
Defined benefit plans
For defined benefit retirement schemes the cost of providing
benefits is determined using the Projected Unit Credit Method,
with actuarial valuation being carried out at each year end
balance sheet date. Re-measurement gains and losses of the net
defined benefit liability/(asset) are recognised immediately in
other comprehensive income. The service cost and net interest
on the net defined benefit liability/(asset) is recognised as an
expense within employment costs.
Past service cost is recognised as an expense when the plan
amendment or curtailment occurs or when any related
restructuring costs or termination benefits are recognised,
whichever is earlier.
The retirement benefit obligation recognised in the balance
sheet represents the present value of the defined-benefit
obligation as reduced by the fair value of plan assets.
Compensated absences
Compensated absences which are not expected to occur
within twelve months after the end of the period in which the
employee renders the related service are recognised based on
actuarial valuation at the present value of the obligation as on
the reporting date.
(p)
Inventories
Inventories are stated at the lower of cost and net realisable
value. Cost is ascertained on a weighted average basis. Costs
comprise direct materials and, where applicable, direct labour
costs and those overheads that have been incurred in bringing
the inventories to their present location and condition. Net
realisable value is the price at which the inventories can be
realised in the normal course of business after allowing for
the cost of conversion from their existing state to a finished
condition and for the cost of marketing, selling and distribution.
Stores and spare parts are carried at lower of cost and net
realisable value.
Provisions are made to cover slow moving and obsolete items
based on historical experience of utilisation on a product
category basis, which involves individual businesses considering
their product lines and market conditions.
(q) Provisions
Provisions are recognised in the balance sheet when the
Company has a present obligation (legal or constructive) as a
result of a past event, which is expected to result in an outflow of
resources embodying economic benefits which can be reliably
estimated. Each provision is based on the best estimate of the
expenditure required to settle the present obligation at the
balance sheet date. Where the time value of money is material,
provisions are measured on a discounted basis.
Constructive obligation is an obligation that derives from an
entity’s actions where:
207207
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
2. Significant accounting policies (Contd.)
(a)
by an established pattern of past practice, published
policies or a sufficiently specific current statement, the
entity has indicated to other parties that it will accept
certain responsibilities and;
(b)
as a result, the entity has created a valid expectation on
the part of those other parties that it will discharge such
responsibilities.
Where a disposal group represents a separate major line of
business or geographical area of operations, or is part of a
single coordinated plan to dispose of a separate major line of
business or geographical area of operations, then it is treated
as a discontinued operation. The post-tax profit or loss of
the discontinued operation together with the gain or loss
recognised on its disposal are disclosed as a single amount in
the statement of profit and loss, with all prior periods being
presented on this basis.
(r) Onerous contracts
(u)
Income taxes
A provision for onerous contracts is recognised when the
expected benefits to be derived by the Company from a
contract are lower than the unavoidable cost of meeting its
obligations under the contract. The provision is measured at the
present value of the lower of the expected cost of terminating
the contract and the expected net cost of continuing with
the contract. Before a provision is established, the Company
recognises any impairment loss on the assets associated with
that contract.
(s) Government grants
Government grants related to expenditure on property, plant
and equipment are credited to the statement of profit and loss
over the useful lives of qualifying assets or other systematic
basis representative of the pattern of fulfilment of obligations
associated with the grant received. Total grants received less
amounts credited to the statement of profit and loss at the
balance sheet date are included in the balance sheet as deferred
income.
(t)
Non-current assets held for sale and discontinued
operations
Non-current assets and disposal groups classified as held for
sale are measured at the lower of their carrying value and fair
value less costs to sell.
Assets and disposal groups are classified as held for sale if their
carrying value will be recovered through a sale transaction rather
than through continuing use. This condition is only met when the
sale is highly probable and the asset, or disposal group, is available
for immediate sale in its present condition and is marketed for
sale at a price that is reasonable in relation to its current fair value.
The Company must also be committed to the sale, which should
be expected to qualify for recognition as a completed sale within
one year from the date of classification.
208208
Tax expense for the period comprises current and deferred
tax. The tax currently payable is based on taxable profit for the
period. Taxable profit differs from net profit as reported in the
statement of profit and loss because it excludes items of income
or expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible. The
Company’s liability for current tax is calculated using tax rates
and tax laws that have been enacted or substantively enacted
by the end of the reporting period.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying values of assets and liabilities
in the financial statements and the corresponding tax bases
used in the computation of taxable profit and is accounted for
using the balance sheet liability method. Deferred tax liabilities
are generally recognised for all taxable temporary differences.
In contrast, deferred tax assets are only recognised to the extent
that it is probable that future taxable profits will be available
against which the temporary differences can be utilised.
The carrying value of deferred tax assets is reviewed at the end
of each reporting period and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available
to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply
in the period when the liability is settled or the asset is realised
based on the tax rates and tax laws that have been enacted or
substantially enacted by the end of the reporting period. The
measurement of deferred tax liabilities and assets reflects the tax
consequences that would follow from the manner in which the
Company expects, at the end of the reporting period, to recover or
settle the carrying value of its assets and liabilities.
Deferred tax assets and liabilities are offset to the extent that
they relate to taxes levied by the same tax authority and there
are legally enforceable rights to set off current tax assets and
current tax liabilities within that jurisdiction.
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
2. Significant accounting policies (Contd.)
Commission income
Current and deferred tax are recognised as an expense or income
in the statement of profit and loss, except when they relate to
items credited or debited either in other comprehensive income
or directly in equity, in which case the tax is also recognised in
other comprehensive income or directly in equity.
Deferred tax assets include Minimum Alternate Tax (MAT) paid
in accordance with the tax laws in India, which is likely to give
future economic benefits in the form of availability of set off
against future income tax liability. MAT is recognised as deferred
tax assets in the balance sheet when the asset can be measured
reliably and it is probable that the future economic benefit
associated with the asset will be realised.
(v) Revenue
Revenue is measured at the fair value of consideration received
or receivable net of discounts, taking into account contractually
defined terms and excluding taxes and duties collected on
behalf of the government.
Sale of goods
Revenue from sale of goods is recognised when the Company
has transferred to the buyer the significant risks and rewards
of ownership, no longer retains control over the goods sold,
the amount of revenue can be measured reliably, it is probable
that the economic benefits associated with the transaction will
flow to the Company and the costs incurred or to be incurred in
respect of the transaction can be measured reliably. Depending
on the contractual terms, risks and rewards of ownership is
transferred when the delivery is completed. In case of exports
sale delivery is completed on issuance of bill of lading.
Interest income
Interest income is accrued on a time proportion basis, by
reference to the principal outstanding and effective interest rate
applicable.
Dividend income
Dividend income from investments is recognised when the right
to receive payment has been established.
Rental income
Rental income is recognised on a straight line basis over the
term of the relevant arrangements.
Commission income is recognised when the services have been
rendered.
(w) Foreign currency transactions and translations
The financial statements of the Company are presented in Indian
rupees (`), which is the functional currency of the Company and
the presentation currency for the financial statements.
In preparing the financial statements, transactions in currencies
other than the Company’s functional currency are recorded at
the rates of exchange prevailing on the date of the transaction.
At the end of each reporting period, monetary
items
denominated in foreign currencies are re-translated at the rates
prevailing at the end of the reporting period. Non-monetary
items carried at fair value that are denominated in foreign
currencies are re-translated at the rates prevailing on the date
when the fair value was determined. Non-monetary items that
are measured in terms of historical cost in a foreign currency are
not translated.
Exchange differences arising on translation of long term foreign
currency monetary items recognised in the financial statements
before the beginning of the first Ind AS financial reporting
period in respect of which the Company has elected to recognise
such exchange differences in equity or as part of cost of assets
as allowed under Ind AS 101-“First time adoption of Indian
Accounting Standard” are added/deducted to/ from the cost of
assets as the case may be. Such exchange differences recognised
as part of cost of assets is recognised in the statement of profit
and loss on a systematic basis.
Exchange differences arising on the re-translation or settlement
of other monetary items are included in the statement of profit
and loss for the period.
(x) Borrowing costs
Borrowings costs directly attributable to the acquisition,
construction or production of qualifying assets, which are assets
that necessarily take a substantial period of time to get ready
for their intended use or sale, are added to the cost of those
assets, until such time as the assets are substantially ready for
the intended use or sale.
Investment income earned on temporary investment of specific
borrowings pending their expenditure on qualifying assets is
recognised in the statement of profit and loss.
209209
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
2. Significant accounting policies (Contd.)
Ind AS 115 – “Revenue from Contracts with Customers”
Discounts or premiums and expenses on the issue of debt
securities are amortised over the term of the related securities
and included within borrowing costs. Premiums payable on
early redemptions of debt securities, in lieu of future finance
costs, are written off as borrowing costs when paid.
Ind AS 115 establishes a single model for entities to use in
accounting for revenue arising from contracts with customers.
Ind AS 115 will supersede the current revenue recognition
standard, Ind AS 18 “Revenue” and Ind AS 11 “Construction
Contracts” when it becomes effective.
(y) Earnings per share
Basic earnings per share has been computed by dividing profit
or loss for the year by the weighted average number of shares
outstanding during the year. Partly paid up shares are included
as fully paid equivalents according to the fraction paid up.
Diluted earnings per share has been computed using the
weighted average number of shares and dilutive potential
shares except where the result would be anti dilutive.
(z) Recent Accounting Pronouncements
(“MCA”) has notified the
Ministry of Corporate Affairs
Companies
(Indian Accounting Standards) Amendment
Rules, 2018 containing the following new amendments
to Ind AS which the Company has not applied as they
are effective for annual periods beginning on or after
April 1, 2018.
Ind AS 115 – Revenue from contracts with customers.
Ind AS 21 – The Effect of Changes in Foreign Exchange Rates.
The core principle of Ind AS 115 is that, an entity should recognize
revenue to depict the transfer of promised goods and services
to customers in an account that reflects the consideration to
which the entity expects to be entitled in exchange for these
goods or services. The new standard also requires enhanced
disclosures about the nature, amount, timing and uncertainty
of revenue.
The Company is in the process of evaluating the impact of
adoption of Ind AS 115 on its financial statements.
Ind AS 21 – The Effect of Changes in Foreign Exchange Rates
The amendment clarifies the date of the transaction for the
purpose of determining the exchange rate to use on initial
recognition of the related asset, expense or income, when an
entity has received or paid advance consideration in a foreign
currency.
The Company is in the process of evaluating the impact of
adoption of amendment to Ind AS 21 on its financial statements.
210210
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
3. Property, plant and equipment
[Item No. I(a), Page 194]
Cost/Deemed cost as at April 1, 2017
Additions
Disposals
Cost /Deemed cost as at March 31, 2018
Impairment as at April 1, 2017
Accumulated impairment as at March 31, 2018
Accumulated depreciation as at April 1, 2017
Charge for the period
Disposals
Accumulated depreciation as at March 31, 2018
Total accumulated depreciation and
impairment as at March 31, 2018
Net carrying value as at April 1, 2017
Net carrying value as at March 31, 2018
Cost/Deemed cost as at April 1, 2016
Additions
Disposals
Cost /Deemed cost as at March 31, 2017
Impairment as at April 1, 2016
Other re-classifications
Accumulated impairment as at March 31, 2017
Accumulated depreciation as at April 1, 2016
Charge for the period
Disposals
Other re-classifications
Accumulated depreciation as at March 31, 2017
Total accumulated depreciation and
impairment as at March 31, 2017
Net carrying value as at April 1, 2016
Net carrying value as at March 31, 2017
Land
including
roads
14,058.74
58.43
-
14,117.17
0.15
0.15
390.40
103.15
-
493.55
493.70
Buildings
Plant and
Machinery
Furniture,
fixtures
and office
equipments
Vehicles
Railway
Sidings
(` crore)
Total
5,722.77
179.23
-
58,458.26
2,414.33
(26.30)
5,902.00 60,846.29
0.09
0.09
6,844.56
3,140.58
(5.02)
9,980.12
9,980.21
1.32
1.32
461.43
229.13
-
690.56
691.88
352.18
82.96
(3.88)
431.26
-
-
246.46
48.72
(3.81)
291.37
291.37
324.15
17.44
(36.97)
304.62
-
-
159.14
27.64
(22.36)
164.42
164.42
1,024.00
32.94
-
79,940.10
2,785.33
(67.15)
1,056.94 82,658.28
1.56
1.56
8,159.57
3,585.44
(31.19)
93.80 11,713.82
93.80 11,715.38
-
-
57.58
36.22
-
13,668.19
13,623.47
51,613.61
5,260.02
5,210.12 50,866.08
105.72
139.89
165.01
140.20
71,778.97
966.42
963.14 70,942.90
Land
including
roads
13,777.17
281.57
-
14,058.74
0.13
0.02
0.15
285.28
105.14
-
(0.02)
390.40
390.55
Buildings
Plant and
Machinery
Furniture,
fixtures
and office
equipments
Vehicles
Railway
Sidings
(` crore)
Total
4,920.91
801.91
(0.05)
34,717.09
23,744.86
(3.69)
5,722.77 58,458.26
0.09
-
0.09
3,925.67
2,919.71
(0.82)
-
6,844.56
6,844.65
1.32
-
1.32
239.75
221.68
-
-
461.43
462.75
238.29
114.00
(0.11)
352.18
-
-
-
198.93
47.62
(0.09)
-
246.46
246.46
309.00
22.12
(6.97)
324.15
-
-
-
136.62
28.10
(5.58)
-
159.14
159.14
414.72
609.28
-
54,377.18
25,573.74
(10.82)
1,024.00 79,940.10
1.54
0.02
1.56
4,814.59
3,351.49
(6.49)
(0.02)
8,159.57
8,161.13
-
-
-
28.34
29.24
-
-
57.58
57.58
13,491.76
13,668.19
4,679.84
5,260.02
30,791.33
51,613.61
39.36
105.72
172.38
165.01
386.38
966.42
49,561.05
71,778.97
(i)
Buildings include `2.32 crore (March 31, 2017: `2.32 crore) being cost of shares in co-operative housing societies and limited companies.
211211
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
3. Property, plant and equipment (Contd.)
[Item No. I(a), Page 194]
(ii) Net carrying value of plant and machinery comprises of:
Assets held under finance leases
Cost/Deemed cost
Accumulated depreciation and impairment
Owned assets
(iii)
Net carrying value of furniture, fixtures and office equipments comprises of:
Furniture and fixtures:
Cost/Deemed cost
Accumulated depreciation and impairment
Office equipments:
Cost/Deemed cost
Accumulated depreciation and impairment
(` crore)
As at
March 31, 2018
As at
March 31, 2017
3,632.46
1,590.98
2,041.48
3,522.09
1,486.69
2,035.40
48,824.60
49,578.21
50,866.08
51,613.61
(` crore)
As at
March 31, 2018
As at
March 31, 2017
104.02
80.04
23.98
327.24
211.33
115.91
139.89
84.02
71.47
12.55
268.16
174.99
93.17
105.72
(iv)
₹75.96 crore (March 31, 2017: ₹221.25 crore) of borrowing costs has been capitalised during the year on qualifying assets under
construction using a capitalisation rate of 9.00% (2016-17: 9.50%).
Rupee liability has increased by `44.33 crore (March 31, 2017: `137.11 crore) arising out of re-translation of the value of long-term foreign
currency loans and liabilities for procurement of property, plant and equipment. This increase has been adjusted against the carrying
value of assets and has been depreciated over their remaining useful life. The depreciation for the current year is higher by `1.39 crore
(2016-17: `3.16 crore) on account of this adjustment.
Property, plant and equipment (including capital work-in-progress) were tested for impairment during the year where indicators
of impairment existed. During the year ended March 31, 2018, the Company has recognised an impairment charge of `33.99 crore
(2016-17: Nil) in respect of expenditure incurred for a project (included in capital work in progress) wherein progress has been slow over
the years due to certain hindrances. The impairment recognised is included within other expenses in the statement of profit and loss.
(v)
(vi)
212212
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
3. Property, plant and equipment (Contd.)
[Item No. I(a), Page 194]
(vii) Property, plant and equipment includes capital cost of in-house research facilities as below:
Cost/Deemed cost as at April 1, 2017
Additions
Cost/Deemed cost as at March 31, 2018
Capital work-in-progress
Buildings
Plant and
Machinery
Furniture,
fixtures & office
equipments
Vehicles
(` crore)
Total
6.04
0.26
0.31
5.78
6.35
6.04
66.56
60.00
6.16
6.56
72.72
66.56
6.08
5.01
0.93
1.07
7.01
6.08
0.09
0.09
-
-
0.09
0.09
78.77
65.36
7.40
13.41
86.17
78.77
19.75
4.74
Figures in italics represent comparative figures for previous years.
(viii) Details of property, plant and equipment pledged against borrowings is presented in Note 19, Page 241.
4. Leases
The Company has taken certain land, buildings, plant and machinery under operating and/or finance leases. The following is a summary of
future minimum lease rental payments under non-cancellable operating leases and finance leases entered into by the Company.
A. Operating leases:
Significant leasing arrangements include lease of land for periods ranging between 12 to 99 years renewable on mutual consent, lease of office
space and assets dedicated for use under long term arrangements. Payments under long term arrangements involving use of dedicated assets
are allocated between those relating to the right to use of assets, executory services and for output based on the underlying contractual terms
and conditions. Any change in the allocation assumptions may have an impact on lease assessment and/or lease classification. Payments linked
to changes in inflation index under the lease arrangements have been considered as contingent rent and recognised in the statement of profit
and loss as and when incurred.
Future minimum lease payments under non-cancellable operating leases are as below:
Not later than one year
Later than one year but not later than five years
Later than five years
(` crore)
Minimum lease payments
As at
March 31, 2018
As at
March 31, 2017
133.58
412.62
1,229.77
1,775.97
151.99
416.64
1,334.23
1,902.86
During the year ended March 31, 2018, total operating lease rental expense recognised in the statement of profit and loss was `280.80 crore,
(2016-17: `294.81 crore) including contingent rent of `31.20 crore (2016-17: `37.07 crore).
213213
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
4. Leases (Contd.)
B. Finance leases:
Significant leasing arrangements include assets dedicated for use under long term arrangements. The arrangements cover a substantial part
of the economic life of the underlying assets and generally contain a renewal option on expiry. Payments under long term arrangements
involving use of dedicated assets are allocated between those relating to the right to use of assets, executory services and for output based
on underlying contractual terms and conditions. Any change in the allocation assumptions may have an impact on lease assessment and/or
lease classification.
The minimum lease payments and minimum lease payments excluding future finance charges in respect of arrangements classified as
finance leases is as below:
Not later than one year
Later than one year but not later than five years
Later than five years
Total future minimum lease commitments
Less: Future finance charges
Present value of minimum lease payments
Disclosed as:
Non-current borrowings (Refer Note 19, Page 241)
Other financial liabilities - Current (Refer Note 20, Page 244)
As at March 31, 2018
As at March 31, 2017
(` crore)
Minimum Lease
payments
463.76
1,523.48
4,013.01
6,000.25
3,746.79
2,253.46
2,133.65
119.81
2,253.46
Minimum lease
payments less
future finance
charges
119.81
432.02
1,701.63
2,253.46
Minimum Lease
payments
437.55
1,525.25
4,246.92
6,209.72
3,958.50
2,251.22
2,138.53
112.69
2,251.22
Minimum lease
payments less
future finance
charges
112.69
409.81
1,728.72
2,251.22
214214
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
5.
Intangible assets
[Item No. I(c), Page 194]
Cost/Deemed cost as at April 1, 2017
Additions
Cost/Deemed cost as at March 31, 2018
Accumulated impairment as at April 1, 2017
Accumulated impairment as at March 31, 2018
Accumulated amortisation as at April 1, 2017
Charge for the period
Accumulated amortisation as at March 31, 2018
Total accumulated amortisation and impairment as at March 31, 2018
Net carrying value as at April 1, 2017
Net carrying value as at March 31, 2018
Cost/Deemed cost as at April 1, 2016
Additions
Cost/Deemed cost as at March 31, 2017
Accumulated impairment as at April 1, 2016
Charge for the period
Accumulated impairment as at March 31, 2017
Accumulated amortisation as at April 1, 2016
Charge for the period
Accumulated amortisation as at March 31, 2017
Total accumulated amortisation and impairment as at March 31, 2017
Net carrying value as at April 1, 2016
Net carrying value as at March 31, 2017
Software
costs
198.72
42.17
240.89
-
-
146.35
21.39
167.74
167.74
52.37
73.15
Software
costs
147.76
50.96
198.72
-
-
-
122.72
23.63
146.35
146.35
25.04
52.37
Mining
assets
1,684.56
97.85
1,782.41
37.05
37.05
911.70
120.63
1,032.33
1,069.38
735.81
713.03
Mining
assets
1,283.49
401.07
1,684.56
35.92
1.13
37.05
745.27
166.43
911.70
948.75
502.30
735.81
(` crore)
Total
1,883.28
140.02
2,023.30
37.05
37.05
1,058.05
142.02
1,200.07
1,237.12
788.18
786.18
(` crore)
Total
1,431.25
452.03
1,883.28
35.92
1.13
37.05
867.99
190.06
1,058.05
1,095.10
527.34
788.18
(i)
Mining assets represent expenditure incurred in relation to acquisition of mines, mine development expenditure post establishment of
technical and commercial feasibility and restoration obligations as per applicable regulations.
(ii)
During the year ended March 31, 2017, the Company had recognised an impairment charge of `1.13 crore for expenditure incurred in
respect of certain mines which are not in operation.
(iii)
Software costs related to in-house research and development included within Software costs is `0.27 crore (2016-17: `0.27 crore).
215215
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
6.
Investment in subsidiaries, associates and joint ventures
[Item No. I(e), Page 194]
No. of shares as at March
31, 2018 (face value of `10
each fully paid -up unless
otherwise specified)
(` crore)
As at
March 31, 2018
As at
March 31, 2017
1,26,67,590
55,87,372
83,93,554
7,84,57,640
2,00,000
4,14,00,000
10,000
26.30
-
86.54
395.02
507.86
1.08
26.40
0.01
21,39,86,703
298.72
10,000
10,000
56,92,651
10,000
2,00,00,000
2,03,50,000
10,000
3,352
28,14,37,128
10,000
13,28,800
10,000
10,000
0.01
0.01
3.08
0.01
20.00
20.35
0.01
-
773.86
0.01
60.40
0.01
0.01
26.30
-
86.54
395.02
507.86
1.08
26.40
-
-
-
-
3.08
-
-
20.35
-
-
773.86
-
60.40
-
-
Investments carried at cost
A.
(a) Equity Investments in subsidiary companies
(i) Quoted
(1) Tata Metaliks Ltd.
(2) Tayo Rolls Limited
(3) Tata Sponge Iron Limited
(4) The Tinplate Company of India Ltd.
(ii) Unquoted
(1) ABJA Investment Co. Pte. Ltd.
(Face value of USD 1 each)
(2) Adityapur Toll Bridge Company Limited
(3) Bamnipal Steel Limited
(wholly owned subsidiary incorporated during the year)
(4) Bhubaneshwar Power Private Limited
(17,03,85,878 shares acquired during the year)
(5) Bistupur Steel Limited
(wholly owned subsidiary incorporated during the year)
(6) Dimna Steel Limited
(7)
(8)
(9)
(wholly owned subsidiary incorporated during the year)
Indian Steel & Wire Products Ltd.
Jamadoba Steel Limited
(wholly owned subsidiary incorporated during the year)
Jamshedpur Football and Sporting Private Limited
(wholly owned subsidiary incorporated during the year)
(10) Jamshedpur Utilities & Services Company Limited
(11) Jugsalai Steel Limited
(wholly owned subsidiary incorporated during the year)
(12) Mohar Exports Services Pvt. Ltd.*
(13) NatSteel Asia Pte. Ltd.
(Face value of SGD 1 each)
(14) Noamundi Steel Limited
(wholly owned subsidiary incorporated during the year)
(15) Rujuvalika Investments Limited
(16) Sakchi Steel Limited
(wholly owned subsidiary incorporated during the year)
(17) Straight Mile Steel Limited
(wholly owned subsidiary incorporated during the year)
216216
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
6.
Investment in subsidiaries, associates and joint ventures (Contd.)
[Item No. I(e), Page 194]
(18) Tata Korf Engineering Services Ltd.*
(19) Tata Pigments Limited
(Face value of `100 each)
(20) Tata Steel Foundation
(21) Tata Steel Holdings Pte Ltd.*
(Face value of GBP 1 each)
(22) Tata Steel (KZN) (Pty) Ltd.*
(Face value of ZAR 1 each)
(23) Tata Steel Odisha Limited
(24) Tata Steel Processing and Distribution Limited
(25) Tata Steel Special Economic Zone Limited
(2,90,00,000 shares acquired during the year)
(26) TS Alloys Limited
Aggregate provision for impairment in value of investments
(b)
Investments in associate companies
(i) Quoted
(1) TRF Limited
(ii) Unquoted
(1) Kalinga Aquatics Limited*
(2) Malusha Travels Pvt.Ltd. `33,520 (March 31, 2017 : `33,520)
(3) Nicco Jubilee Park Limited*
(4) Strategic Energy Technology Systems Private Limited
(5) TRL Krosaki Refractories Limited
Aggregate provision for impairment in value of investments
No. of shares as at March
31, 2018 (face value of `10
each fully paid -up unless
otherwise specified)
3,99,986
75,000
10,00,000
5,93,17,67,688
12,96,00,000
25,67,000
6,82,50,000
15,47,42,631
6,57,07,544
37,53,275
10,49,920
3,352
3,40,000
2,56,14,500
55,63,864
(` crore)
As at
March 31, 2018
As at
March 31, 2017
-
0.70
1.00
-
-
2.57
274.45
129.82
78.64
1,691.15
(38.00)
1,653.15
2,161.01
5.79
5.79
-
-
-
0.91
42.38
43.29
(0.91)
42.38
48.17
-
0.70
1.00
-
-
2.57
274.45
100.82
78.64
1,343.35
(15.43)
1,327.92
1,835.78
5.79
5.79
-
-
-
0.91
42.38
43.29
(0.91)
42.38
48.17
217217
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
6.
Investment in subsidiaries, associates and joint ventures (Contd.)
[Item No. I(e), Page 194]
(c)
Investments in Joint Ventures
(i) Unquoted
(1) Bhubaneshwar Power Private Limited
(2) Himalaya Steel Mills Services Private Limited
(3)
(4) Jamipol Limited
(5)
Industrial Energy Limited
Jamshedpur Continuous Annealing and Processing
Company Private Limited
(6) Medica TS Hospital Pvt Ltd.
(7) mjunction services limited
(8) S & T Mining Company Private Limited
(9) Tata BlueScope Steel Limited
(10) Tata NYK Shipping Pte Ltd. (Face value of USD 1 each)
(11) T M International Logistics Limited
(12) T M Mining Company Limited
Aggregate provision for impairment in value of investments
Total investment in subsidiaries, associates and joint ventures
* These investments are carried at a book value of `1.00
No. of shares as at March
31, 2018 (face value of `10
each fully paid -up unless
otherwise specified)
(` crore)
As at
March 31, 2018
As at
March 31, 2017
4,36,00,825
36,19,945
17,31,60,000
36,75,000
47,53,20,000
2,60,000
40,00,000
1,29,41,400
43,30,00,000
6,51,67,500
91,80,000
1,62,800
-
3.61
173.16
8.39
475.32
0.26
4.00
12.94
433.00
350.14
9.18
0.16
1,470.16
(13.10)
1,457.06
3,666.24
43.72
3.61
173.16
8.39
475.32
0.26
4.00
12.94
433.00
350.14
9.18
0.16
1,513.88
-
1,513.88
3,397.83
(i)
The Company holds 51% of the equity share capital in T M International Logistics Limited, Jamshedpur Continuous Annealing and
Processing Company Private Limited and T M Mining Company Limited. However, decisions in respect of activities which significantly
affect the risks and rewards of these businesses, require unanimous consent of all the shareholders. These entities have therefore been
considered as joint ventures.
(ii)
Carrying value and market value of quoted and unquoted investments are as below:
(a)
(b)
(c)
Investment in subsidiary companies:
Aggregate carrying value of quoted investments
Aggregate market value of quoted investments
Aggregate carrying value of unquoted investments
Investment in associates:
Aggregate carrying value of quoted investments
Aggregate market value of quoted investments
Aggregate carrying value of unquoted investments
Investment in joint ventures:
Aggregate carrying value of unquoted investments
(` crore)
As at
March 31, 2018
As at
March 31, 2017
507.86
3,211.31
1,653.15
5.79
83.66
42.38
507.86
1,967.70
1,327.92
5.79
85.35
42.38
1,457.06
1,513.88
(iii)
Bhubaneshwar Power Private Limited earlier a joint venture of the Company, became a subsidiary during the year ended March 31, 2018
on acquisition of additional 74% stake by the Company.
218218
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
7.
Investments
[Item No. I(f )(i), Page 194]
A. Non-Current
(I)
Investments carried at fair value through other comprehensive income:
Investment in equity shares
(i) Quoted
(1) Credit Analysis & Research Limited
(2) Housing Development Finance Corporation Ltd.
(Face value of `2 each)
(3) Tata Consultancy Services Limited (Face Value of `1 each)
(596 shares offered for buy-back during the year)
(4) Tata Investment Corporation Limited
(5) Tata Motors Ltd.
(Face value of `2 each)
( 8,35,37,697 shares sold during the year)
(6) The Tata Power Company Ltd.
(Face value of `1 each)
(7) Timken India Ltd.
(8) Steel Strips Wheels Limited
(ii) Unquoted#
IFCI Venture Capital Funds Ltd.
(1)
(2) Panatone Finvest Ltd.
(3) Steelscape Consultancy Pvt. Ltd.
(4) Subarnarekha Port Private Limited
(5) Taj Air Limited
(6) Tarapur Environment Protection Society
(7) Tata Industries Ltd.
(Face value of `100 each)
(8) Tata International Ltd.
(Face value of `1,000 each)
(9) Tata Services Ltd.
(Face value of `1,000 each)
(10) Tata Sons Limited
(Face value of `1,000 each)
(11) Tata Teleservices Ltd.
(2,27,35,223 shares acquired during the year)
(12) Others(ii)
No. of shares as at March
31, 2018 (face value of `10
each fully paid -up unless
otherwise specified)
(` crore)
As at
March 31, 2018
As at
March 31, 2017
3,54,000
7,900
23,804
2,46,018
1,00,000
42.79
1.44
6.78
18.10
3.27
59.92
1.19
5.93
15.64
3,896.26
3,91,22,725
309.07
353.48
1
10,86,972
1,00,000
45,000
50,000
1,72,517
42,00,000
82,776
99,80,436
28,616
1,621
12,375
8,74,27,533
-
115.76
497.21
0.10
0.05
-
7.00
-
0.89
202.19
31.19
0.16
68.75
-
0.01
310.34
807.55
-
89.75
4,422.17
0.10
0.05
-
7.00
-
0.89
202.19
31.19
0.16
68.75
75.82
0.01
386.16
4,808.33
219219
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
7.
Investments (Contd.)
[Item No. I(f )(i), Page 194]
(II)
Investments carried at fair value through profit and loss:
Investments in preference shares
(a) Subsidiary companies
(i) Unquoted
(1)
(2)
(3)
(4)
(5)
Tata Metaliks Ltd.
8.50% non-cumulative redeemable preference shares
(Face value of `100 each)
(1,00,00,000 shares redeemed during the year)
Tata Steel Holdings Pte Ltd.
Non-cumulative redeemable preference shares
(Face value of 1 GBP each) (55,41,31,297 shares
subscribed during the year)
Tayo Rolls Limited
7.00% non-cumulative redeemable preference shares
(Face value of `100 each) (41,30,000 shares subscribed
during the year)
Tayo Rolls Limited
7.17% non-cumulative redeemable preference shares
(Face value of `100 each) (37,25,000 shares subscribed
during the year)
Tayo Rolls Limited
8.50% non-cumulative redeemable preference shares
(Face value of `100 each)
Investment in bonds and debentures
(a)
Joint ventures
(i) Unquoted
(1) Medica TS Hospital Pvt. Ltd.
Secured optionally convertible redeemable debentures
(Face value of `1,000 each)
No. of shares as at March
31, 2018 (face value of `10
each fully paid -up unless
otherwise specified)
(` crore)
As at
March 31, 2018
As at
March 31, 2017
-
-
100.00
55,41,31,297
5,113.03
41,30,000
64,00,000
2,31,00,000
-
-
-
-
-
-
-
5,113.03
100.00
4,97,400
49.74
49.74
49.74
5,970.32
49.74
4,958.07
220220
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
7.
Investments (Contd.)
[Item No. II(b)(i), Page194]
B. Current
Investments carried at fair value through profit and loss:
Investments in Mutual funds – Unquoted
(a) Aditya Bira Sun Life Cash Plus - Growth
(b) Axis Liquid Fund - Growth
(c) Baroda Pioneer Liquid Fund - Growth
(d) DSP BlackRock Liquidity Fund - Growth
(e) Goldman Sachs Mutual Fund - Liquid Bees
(f ) HDFC Cash Management Fund - Saving Plan - Growth
(g) HDFC Liquid Fund - Growth
ICICI Prudential Money Market Fund - Growth
(h)
IDFC Cash Fund - Growth
(i)
IDBI Liquid Fund - Growth
(j)
Invesco India Liquid Fund - Growth
(k)
(l)
JM High Liquidity - Growth
(m) Kotak Liquid Scheme - Growth
(n) LIC MF Liquid Fund - Growth
(o) Reliance Liquidity Fund - Growth
(p) Reliance MF ETF Liquid
(q) SBI Premier Liquid Fund - Growth
(r) Tata Money Market Fund - Growth
(s) UTI Liquid Fund - Cash Plan - Growth
(i) Carrying value and market value of quoted and unquoted investments are as below:
(a)
Investment in quoted instruments:
Aggregate Carrying value
Aggregate Market value
(b)
Investment in unquoted instruments:
Aggregate Carrying value
(` crore)
As at
March 31, 2018
As at
March 31, 2017
1,191.57
1,477.02
882.72
1,250.63
-
1,044.26
-
1,440.59
952.69
741.08
1,246.89
-
616.07
738.43
1,329.38
0.09
878.38
850.57
-
14,640.37
-
571.11
-
125.03
0.08
-
500.33
604.05
231.34
-
353.60
25.08
339.61
-
1,006.74
-
300.25
659.59
593.00
5,309.81
(` crore)
As at
March 31, 2018
As at
March 31, 2017
497.21
497.21
4,422.17
4,422.17
20,113.48
5,845.71
(ii)
Cumulative gain on de-recognition of investments carried at fair value through other comprehensive income during the year amounted
to `3,427.46 crore (2016-17: `1.75 crore).
Fair value of such investments as on the date of de-recognition was `3,782.76 crore (2016-17: `2.93 crore).
# Cost of unquoted equity instruments has been considered as an appropriate estimate of fair value because of a wide range of possible fair
value measurements and cost represents the best estimate of fair value within that range.
221221
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
7.
Investments (Contd.)
[Item No. I(f )(i), Page 194]
(ii) Details of other unquoted investments carried at fair value through other comprehensive income is as below:
(a) Barajamda Iron Ore Mine Workers’ Central Co-operative Stores Ltd.
200
5,000.00
5,000.00
No. of shares as at March
31, 2018 (face value of `10
each fully paid -up unless
otherwise specified)
As at
March 31, 2018
(`)
As at
March 31, 2017
(`)
(Face value of `25 each)
(b) Bokaro and Ramgarh Ltd.
(c) Eastern Synpacks Limited (Face value of `25 each)
(d) Ferro Manganese Plant Employees’ Consumer Co-operative Society Ltd.
(Face value of `25 each)
(e) Investech Advisory Services (India) Limited (Face value of `100 each)
(f ) Jamshedpur Co-operative House Building Society Ltd.
(Face value of `100 each)
(g) Jamshedpur Co-operative Stores Ltd. (Face value of `5 each)
(h) Jamshedpur Educational and Culture Co-operative Society Ltd.
(Face value of `100 each)
(i) Joda East Iron Mine Employees’ Consumer Co-operative Society Ltd.
(Face value of `25 each)
(j) Kumardhubi Fireclay and Silica Works Ltd.
(k) Kumardhubi Metal Casting and Engineering Ltd.
(l) Namtech Electronic Devices Limited
(m) Reliance Firebrick and Pottery Company Ltd. (Partly paid-up)
(n) Reliance Firebrick and Pottery Company Ltd.
(o) Sanderson Industries Ltd.
(p) Standard Chrome Ltd.
(q) Sijua (Jherriah) Electric Supply Co. Ltd.
Tata Construction and Projects Ltd.
(r)
(s)
TBW Publishing and Media Pvt. Limited
(t) Wellman Incandescent India Ltd.
(u) Woodland Multispeciality Hospital Ltd.
(v) Unit Trust of India - Mastershares
100
1,50,000
100
1,680
10
50
50
100
1,50,001
10,70,000
48,026
16,800
2,400
3,33,876
11,16,000
4,144
11,97,699
100
15,21,234
1,25,000
2,229
16,225.00
1.00
2,500.00
1.00
1,000.00
250.00
5,000.00
16,225.00
1.00
2,500.00
1.00
1,000.00
250.00
5,000.00
2,500.00
2,500.00
1.00
1.00
1.00
1.00
1.00
2.00
2.00
40,260.00
1.00
1.00
2.00
1.00
47,477.00
1,20,228.00
1.00
1.00
1.00
1.00
1.00
2.00
2.00
40,260.00
1.00
1.00
2.00
1.00
47,477.00
1,20,228.00
222222
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
8. Loans
[Item No. I(f )(ii) and II(b)(v), Page 194]
A. Non-current
(a) Security deposits
Unsecured, considered good
Unsecured, considered doubtful
Less: Allowance for credit losses
(b) Loan to related parties
Unsecured, considered doubtful
Less: Allowance for credit losses
(c) Other loans
Unsecured, considered good
Unsecured, considered doubtful
Less: Allowance for credit losses
B. Current
(a) Loan to related parties
Unsecured, considered good
Unsecured, considered doubtful
Less: Allowance for credit losses
(b) Other loans
Unsecured, considered good
Unsecured, considered doubtful
Less: Allowance for credit losses
(` crore)
As at
March 31, 2018
As at
March 31, 2017
193.84
2.12
2.12
193.84
558.95
558.95
-
19.66
0.87
0.87
19.66
213.50
190.04
1.26
1.26
190.04
539.73
539.73
-
21.93
0.62
0.62
21.93
211.97
(` crore)
As at
March 31, 2018
As at
March 31, 2017
69.26
68.25
68.25
69.26
4.87
2.00
2.00
4.87
74.13
21.51
60.63
60.63
21.51
5.63
2.00
2.00
5.63
27.14
(i)
Security deposits are primarily in relation to public utility services and rental agreements.
Security deposits include deposit with a subsidiary `14.00 crore (March 31, 2017: `14.00 crore) and deposits with Tata Sons
`1.25 crore (March 31, 2017: `1.25 crore).
(ii)
Non-current loans to related parties represent loans given to subsidiaries `558.95 crore (March 31, 2017: `539.73 crore), which is have fully
impaired.
(iii) Current
to
loans
(March 31, 2017:
`82.14 crore) and joint venture `46.82 crore (March 31, 2017: Nil) out of which `67.65 crore (2016-17: `60.63 crore) and `0.60 crore
(2016-17: Nil) respectively is impaired.
inter-corporate deposits given
subsidiaries `90.69 crore
related parties
represent
to
223223
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
8. Loans (Contd.)
[Item No. I(f )(ii) and II(b)(v), Page 194]
(iv)
Other loans primarily represent loans given to employees.
(v)
Disclosure as per Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 and Section 186(4) of the Companies Act, 2013:
(a)
Amount of loans/advances in the nature of loan outstanding from subsidiaries, associates and joint venture for the year ended
March 31, 2018:
Name of the Company
Subsidiaries
(1) Tata Steel Special Economic Zone Limited
(carries interest at the rate of 10.00 % to 11.00 %)
(2) Tayo Rolls Limited(i)
(carries interest at the rate of 7.00 % to 13.07 %)
(3) Tata Steel (KZN) (Pty) Ltd.(i)
(4) Jamshedpur Utilities & Services Company Limited
(carries interest at the rate of 10.50 % to 12.50%)
(5) Adityapur Toll Bridge Company Limited
(6) Jamshedpur Football and Sporting Private Limited
(carries interest at the rate of 12.25%)
Joint ventures
(1)
Industrial Energy Limited
(carries interest at the rate of 10.00 %)
(2) S&T Mining Company Private Limited(i)
(carries interest at the rate of 14.00%)
Debts
outstanding as at
March 31, 2018
Maximum balance
outstanding during
the year
` crore
-
10.00
67.00
60.00
558.95
539.73
7.50
11.50
-
-
15.00
-
46.22
-
0.60
-
` crore
80.00
10.00
67.00
65.00
558.95
561.77
11.50
11.50
-
15.43
15.00
-
46.22
-
0.60
-
Figures in italics represents comparative figures of previous years.
(i)
The above loans have been given for business purpose. As at March 31, 2018, loans given to Tayo Rolls Limited, Tata Steel (KZN) (Pty)
Ltd. and S&T Mining Company Private Limited have been fully impaired.
(b) Details of investments made and guarantees provided are given in Note 6, Page 216, Note 7, Page 219 and Note 36, Page 259.
(vi)
There are no outstanding debts from directors or other officers of the Company.
224224
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
9. Other financial assets
[Item No. I(f )(iv) and II(b)(vii), Page 194]
A. Non-current
(a)
Interest accrued on deposits and loans
Unsecured, considered good
(b) Earmarked bank balances
(c) Other financial assets
Unsecured, considered good
Unsecured, considered doubtful
Less: Allowance for credit losses
B. Current
(a)
Interest accrued on deposits and loans
Unsecured, considered good
Unsecured, considered doubtful
Less: Allowance for credit losses
(b) Other financial assets
(` crore)
As at
March 31, 2018
As at
March 31, 2017
0.67
19.96
0.58
2.00
2.00
0.58
21.21
2.27
37.74
39.48
119.72
119.72
39.48
79.49
(` crore)
As at
March 31, 2018
As at
March 31, 2017
27.54
14.32
14.32
27.54
453.08
480.62
9.98
7.81
7.81
9.98
305.08
315.06
(i)
(ii)
Non-current earmarked bank balances represent deposits and balances in escrow account not due for realisation within 12 months from
the balance sheet date. These are primarily placed as security with government bodies, margin money against issue of bank guarantees.
Non-current other financial assets include advance against equity for purchase of shares in subsidiaries `2.00 crore (March 31, 2017:
`12.30 crore) out of which `2.00 crore (March 31, 2017: `2.30 crore) is impaired.
Non-current other financial assets as at March 31, 2017, include advance for repurchase of equity shares in Tata Teleservices Limited (TTSL)
from NTT Docomo Inc, `144.07 crore out of which `117.42 crore was impaired.
(iii)
Current other financial assets include amount receivable from post-employment benefit fund `296.38 crore (March 31, 2017:
`247.04 crore) on account of retirement benefit obligations paid by the Company directly.
225225
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
10. Income tax
[Item No. IV(e), Page 194]
A.
Income tax expense/(benefit)
The Company is subject to income tax in India on the basis of its standalone financial statements. As per the Income Tax Act, 1961, the
Company is liable to pay income tax based on higher of regular income tax payable or the amount payable based on the provisions applicable
for Minimum Alternate Tax (MAT). MAT paid in excess of regular income tax during a year can be carried forward for a period of fifteen years and
can be offset against future tax liabilities arising from regular income tax.
The Company can claim tax exemptions/deductions under specific sections of the Income Tax Act, 1961 subject to fulfilment of prescribed
conditions, as may be applicable.
Business loss can be carried forward for a maximum period of eight assessment years immediately succeeding the assessment year to which
the loss pertains. Unabsorbed depreciation can be carried forward for an indefinite period.
The reconciliation of estimated income tax to income tax expense is as below:
Profit/(loss) before tax
Expected income tax expense at statutory income tax rate of 34.608 % (2016-17: 34.608 %)
(a)
(b)
(c)
Tax expense as reported
Income exempt from tax/Items not deductible
Additional tax benefit for capital investment including research and development expenditures
Impact of change in tax rate(i)
Year ended
March 31, 2018
6,638.25
2,297.36
116.62
(26.79)
81.51
2,468.70
(` crore)
Year ended
March 31, 2017
5,356.93
1,853.93
188.06
(129.61)
-
1,912.38
(i) Finance Act, 2018, changed the statutory tax rate applicable for Indian companies having turnover of more than `250 crore from 34.608 % to
34.944 % (including surcharge and cess) from assessment year 2019-20. The Company has accordingly re-measured deferred tax balances
expected to reverse in future periods based on the revised applicable rate.
226226
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
10. Income tax (Contd.)
[Item No. IV(e), Page 194]
B. Deferred tax assets/(liabilities)
(i) Components of deferred tax assets and liabilities as at March 31, 2018 is as below:
Deferred tax assets//(liabilities):
Tax-loss carry forwards
Investments
Retirement benefit assets
Expenses allowable for tax purposes
when paid/written off
MAT credit entitlement
Others
Deferred tax liabilities:
Property, plant and equipment and
intangible assets
Others
Net deferred tax assets/(liabilities)
Disclosed as:
Deferred tax assets
Deferred tax liabilities
Balance
as at
April 1, 2017
Recognised/
(reversed) in
statement of
profit and loss
during the year
Recognised
in other
comprehensive
income during
the year
107.43
3,011.56
184.21
1,821.46
1,513.30
76.52
6,714.48
(107.43)
29.24
1.79
16.59
(85.75)
(123.55)
(269.11)
-
-
-
-
731.37
(3.47)
727.90
(` crore)
Recognised
in equity during
the year
Balance
as at
March 31, 2018
-
-
-
-
-
-
-
-
3,040.80
186.00
1,838.05
2,158.92
(50.50)
7,173.27
12,781.58
616.45
-
(6.20)
13,391.83
44.17
12,825.75
(6,111.27)
-
(6,111.27)
(6,111.27)
(3.64)
612.81
(881.92)
-
-
727.90
-
(6.20)
6.20
40.53
13,432.36
(6,259.09)
-
(6,259.09)
(6,259.09)
227227
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
10. Income tax (Contd.)
[Item No. IV(e), Page 194]
Components of deferred tax assets and liabilities as at March 31, 2017 is as below:
Deferred tax assets:
Tax-loss carry forwards
Investments
Retirement benefit assets
Expenses allowable for tax purposes when
paid/written off
MAT credit entitlement
Others
Deferred tax liabilities:
Property, plant and equipment and
intangible assets
Others
Net deferred tax assets/(liabilities)
Disclosed as:
Deferred tax assets
Deferred tax liabilities
Balance
as at
April 1, 2016
Recognised/
(reversed) in
statement of
profit and loss
during the year
Recognised
in other
comprehensive
income during
the year
(` crore)
Recognised
in equity during
the year
Balance
as at
March 31, 2017
-
3,011.56
184.21
1,500.89
269.38
192.32
5,158.36
107.43
-
-
320.57
1,243.92
(116.22)
1,555.70
10,695.66
2,096.77
(29.23)
2,067.54
(511.84)
73.40
10,769.06
(5,610.70)
-
(5,610.70)
(5,610.70)
-
-
-
-
-
0.42
0.42
-
-
-
0.42
-
-
-
-
-
-
-
107.43
3,011.56
184.21
1,821.46
1,513.30
76.52
6,714.48
(10.85)
12,781.58
-
(10.85)
10.85
44.17
12,825.75
(6,111.27)
-
(6,111.27)
(6,111.27)
(ii)
Deferred tax assets amounting to `8,112.23 crore as at March 31, 2018 (March 31, 2017: `8,034.23 crore) on fair value adjustment
recognised in respect of investments held in a subsidiary on transition to Ind AS has not been recognised due to uncertainty surrounding
availability of future taxable income against which such loss can be offset.
228228
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
11. Other assets
[Item No. I(h) and II(c), Page 194]
A. Non-current
(a) Capital advances
Unsecured, considered good
Unsecured, considered doubtful
Less: Provision for doubtful advances
(b) Advance with public bodies
Unsecured, considered good
Unsecured, considered doubtful
Less: Provision for doubtful advances
(c) Prepaid lease payments for operating leases
(d) Capital advance to related parties
Unsecured, considered doubtful
(e) Others
Unsecured, considered good
(` crore)
As at
March 31, 2018
As at
March 31, 2017
299.65
90.76
90.76
299.65
831.39
12.68
12.68
831.39
917.96
359.62
86.15
86.15
359.62
1,765.85
12.76
12.76
1,765.85
877.18
91.84
95.46
-
-
2,140.84
10.56
10.56
3,108.67
229229
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
11. Other assets (Contd.)
[Item No. I(h) and II(c), Page 194]
B. Current
(a) Advance with public bodies
Unsecured, considered good
Unsecured, considered doubtful
Less: Provision for doubtful advances
(b) Advance to related parties
Unsecured, considered good
(c) Prepaid lease payments for operating leases
(d) Others
Unsecured, considered good
Unsecured, considered doubtful
Less: Provision for doubtful advances
(` crore)
As at
March 31, 2018
As at
March 31, 2017
1,440.57
2.35
2.35
1,440.57
171.29
171.29
12.97
198.11
60.77
60.77
198.11
1,822.94
1,023.97
2.43
2.43
1,023.97
28.02
28.02
12.97
173.49
60.46
60.46
173.49
1,238.45
(i)
(ii)
Advance with public bodies primarily relate to input credit entitlements and amounts paid under protest in respect of demands and
claims from regulatory authorities.
Prepaid lease payments for operating leases relate to land leases classified as operating since title is not expected to transfer at the end of
the lease term and that land has an indefinite economic life.
(iii) Others include advances against supply of goods/services and advances paid to employees.
230230
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
12. Inventories
[Item No. II(a), Page 194]
(a) Raw materials
(b) Work-in-progress
(c)
(d) Stock-in-trade
(e) Stores and spares
Finished and semi-finished goods
Raw materials
Included above, goods-in-transit:
(i)
(ii) Finished and semi-finished goods
(iii) Stock-in-trade
(iv) Stores and spares
As at
March 31, 2018
4,953.20
6.77
3,602.13
56.13
2,405.18
11,023.41
1,152.80
-
31.99
132.30
1,317.09
(` crore)
As at
March 31, 2017
3,898.99
5.88
4,096.56
107.95
2,127.47
10,236.85
644.38
-
97.09
136.30
877.77
Value of inventories above is stated after provisions (net of reversal) `51.51 crore (March 31, 2017: `35.03 crore) for write-downs to net
realisable value and provision for slow moving and obsolete items.
13. Trade receivables
[Item No. II(b)(ii), Page 194]
(a) Unsecured, considered good
(b) Unsecured, considered doubtful
Less: Allowance for credit losses
As at
March 31, 2018
1,875.63
30.97
1,906.60
30.97
1,875.63
(` crore)
As at
March 31, 2017
2,006.52
18.10
2,024.62
18.10
2,006.52
In determining allowance for credit losses of trade receivables, the Company has used the practical expedient by computing the expected
credit loss allowance based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted
for forward looking information. The expected credit loss allowance is based on ageing of the receivables that are due and rates used in the
provision matrix.
231231
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
13. Trade receivables (Contd.)
[Item No. II(b)(ii), Page 194]
(i) Movements in allowance for credit losses of receivables is as below:
Balance at the beginning of the year
Charge during the year
Release during the year
Utilised during the year
Balance at the end of the year
(ii) Ageing of trade receivables and credit risk arising there from is as below:
Amounts not yet due
One month overdue
Two months overdue
Three months overdue
Between three to six months overdue
Greater than six months overdue
Amounts not yet due
One month overdue
Two months overdue
Three months overdue
Between three to six months overdue
Greater than six months overdue
Year ended
March 31, 2018
18.10
17.77
(3.91)
(0.99)
30.97
(` crore)
Year ended
March 31, 2017
13.96
7.64
(2.03)
(1.47)
18.10
Gross
credit risk
1,785.18
44.25
12.84
6.60
18.12
39.61
1,906.60
Gross
credit risk
1,868.93
48.67
12.95
9.25
18.63
66.19
2,024.62
As at March 31, 2018
Allowance for
credit losses
0.65
0.40
0.39
0.67
1.81
27.05
30.97
As at March 31, 2017
Allowance for
credit losses
0.50
0.31
0.33
0.30
1.09
15.57
18.10
(` crore)
Net
credit risk
1,784.53
43.85
12.45
5.93
16.31
12.56
1,875.63
(` crore)
Net
credit risk
1,868.43
48.36
12.62
8.95
17.54
50.62
2,006.52
iii)
The Company considers its maximum exposure to credit risk with respect to customers as at March 31, 2018 to be `1,875.63 crore
(March 31, 2017: `2,006.52 crore), which is the fair value of trade receivables (after allowance for credit losses).
The Company’s exposure to customers is diversified and no single customer contributes more than 10% of the outstanding receivables as
at March 31, 2018 and March 31, 2017.
(iv) There are no outstanding receivable debts due from directors or other officers of the Company.
232232
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
14. Cash and cash equivalents
[Item No. II(b)(iii), Page 194]
(a) Cash in hand
(b) Cheques, drafts on hand
(c) Remittances-in-transit
(d) Unrestricted balances with banks
(i) Cash and bank balances are denominated and held in Indian rupees.
15. Other balances with bank
[Item No. II(b)(iv), Page 194]
(a)
Earmarked balances with banks
As at
March 31, 2018
0.93
8.85
1.73
4,577.38
4,588.89
(` crore)
As at
March 31, 2017
0.44
19.19
52.55
833.03
905.21
As at
March 31, 2018
107.85
(` crore)
As at
March 31, 2017
65.10
(i)
Earmarked balances with bank represent balances held for unpaid dividends and margin money/fixed deposits against issue of
bank guarantees.
(ii)
Earmarked bank balances are denominated and held in Indian rupees.
(iii)
In accordance with the MCA notification G.S.R. 308(E) dated March 30, 2017, details of Specified Bank Notes (SBN) and Other Denomination
Notes (ODN) held and transacted during the period from November 8, 2016 to December 30, 2016, is as below:
Closing cash in hand as on November 8, 2016
Add: Unpermitted receipts
Add: Permitted receipts
Less: Unpermitted payments
Less: Permitted payments
Less: Amounts deposited in Banks
Closing cash in hand as on December 30, 2016
(a) Unpermitted receipts include:
SBNs
35,40,500
1,15,20,000
-
70,000
-
1,49,90,500
-
ODNs
6,72,235
-
6,16,97,156
-
67,28,665
5,26,06,715
30,34,011
(`)
Total
42,12,735
1,15,20,000
6,16,97,156
70,000
67,28,665
6,75,97,215
30,34,011
1.
Company hospital receipts `1,06,21,500 which includes receipts at Tata Main Hospital, Jamshedpur of `1,04,34,000. Since Tata Main
Hospital is the only hospital equipped with modern facilities and super-speciality services in the region, on advice from the district
administration, specified notes were accepted.
2. Refund of advances by employees & internal departments `74,500.
3. Canteen receipts of `5,90,500 are primarily received from Contractor’s employees.
4. Refund of advance by Steel Welfare Workers Society `2,33,500.
(b)
Unpermitted payments represents amount collected by Company’s employees and exchanged for new notes against their individual
Permanent Account Number.
233233
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
16. Equity share capital
[Item No. III(a), Page 194]
Authorised:
1,75,00,00,000
35,00,00,000
2,50,00,000
60,00,00,000
Issued:
1,12,75,20,570
7,76,97,280
Ordinary Shares of `10 each
(March 31, 2017: 1,75,00,00,000 Ordinary Shares of `10 each)
"A" Ordinary Shares of `10 each
(March 31, 2017: 35,00,00,000 "A" Ordinary Shares of `10 each)
Cumulative Redeemable Preference Shares of `100 each
(March 31, 2017: 2,50,00,000 Shares of `100 each)
Cumulative Convertible Preference Shares of `100 each
(March 31, 2017: 60,00,00,000 Shares of `100 each)
Ordinary Shares of `10 each
(March 31, 2017: 97,21,26,020 Ordinary Shares of `10 each)
Ordinary Shares of `10 each (Partly paid up)
(March 31, 2017: Nil)
Subscribed and Paid up:
1,12,64,84,815
7,76,34,625
Ordinary Shares of `10 each fully paid up
(March 31, 2017: 97,12,15,439 Ordinary Shares of `10 each)
Ordinary Shares of `10 each (` 2.504 each paid up)
(March 31, 2017: Nil)
Amount paid up on 3,89,516 Ordinary Shares forfeited
(March 31, 2017: 3,89,516 Shares of `10 each)
(` crore)
As at
March 31, 2018
As at
March 31, 2017
1,750.00
1,750.00
350.00
350.00
250.00
250.00
6,000.00
6,000.00
8,350.00
8,350.00
1,127.52
972.13
77.70
-
1,205.22
972.13
1,126.48
971.21
19.44
0.20
-
0.20
1,146.12
971.41
(i)
Subscribed and paid up capital includes 11,68,393 (March 31, 2017: 11,68,393) Ordinary shares of face value `10 each fully paid up held
by a wholly owned subsidiary of the Company.
(ii) Details of movement in subscribed and paid up share capital is as below:
As at
March 31, 2018
As at
March 31, 2017
No. of shares
` crore
No. of shares
` crore
97,12,15,439
15,52,69,376
7,76,34,625
1,20,41,19,440
971.21
155.27
19.44
1,145.92
97,12,15,439
-
-
97,12,15,439
971.21
-
-
971.21
Ordinary shares of `10 each
Balance at the beginning of the year
Fully paid shares allotted during the year(a),(b)
Partly paid shares allotted during the year(b)
Balance at the end of the year
234234
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
16. Equity share capital (Contd.)
[Item No. III(a), Page 194]
(a) 450 Ordinary Shares of face value of `10 per share were allotted on May 15, 2017 at a premium of `290 per share to shareholders whose
shares were kept in abeyance in the Rights Issue made in 2007.
(b) During the year ended March 31, 2018, the Company allotted 15,52,68,926 fully paid Ordinary Shares of face value of `10 each for
cash at a price of `510 per fully paid share (including a premium of `500 per fully paid share) aggregating to `7,918.72 crore and
7,76,34,625 partly paid Ordinary Shares of face value of `10 each (paid up value `2.504 per share) for cash at a price of `615 per partly
paid share (including a premium of `605 per partly paid share) aggregating to `1,195.57 crore pursuant to the Rights Issue of 2018.
Tata Sons Limited had undertaken to subscribe, on its own account and through any nominated entity or person belonging to the promoter
Group, to the full extent of their Rights Entitlement in the Issue in accordance with Regulation 10(4)(a) of the Takeover Regulations.
(iii) Proceeds from the Rights Issue, 2018 have been utilised in the following manner:
Particulars
Repayments of loan
Expenses towards general corporate purpose
Issue expense
Total
Proposed to be
utilised during
2017-18
Utilised till
March 31, 2018
5,000.00
1,500.00
-
6,500.00
5,000.00
1,500.00
-
6,500.00
(` crore)
To be
utilised during
2018-19
1,950.00
630.44
33.85
2,614.29
(iv)
As at March 31, 2018, 3,00,395 Ordinary Shares (March 31, 2017: 3,01,183 Ordinary Shares) are kept in abeyance in respect of Rights Issue
of 2007.
As at March 31, 2018, 1,25,624 Ordinary Shares and 62,655 partly paid Ordinary Shares are kept in abeyance in respect of Rights
Issue of 2018.
(v) Details of shareholders holding more than 5 percent shares in the Company is as below:
Name of shareholders
(a) Tata Sons Limited
(b) Life Insurance Corporation of India
As at
March 31, 2018
As at
March 31, 2017
No. of ordinary
shares
% held
No. of ordinary
shares
% held
38,09,73,085
10,83,88,660
31.64
9.00
28,88,98,245
12,20,50,996
29.75
12.57
235235
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
16. Equity share capital (Contd.)
[Item No. III(a), Page 194]
(vi)
1,27,40,651 shares (March 31, 2017: 1,55,10,420 shares) of face
value of `10 per share represent the shares underlying GDRs
which were issued during 1994 and 2009. Each GDR represents
one underlying Ordinary Share.
(b)
(vii) The rights, powers and preferences relating to each class of
share capital and the qualifications, limitations and restrictions
thereof are contained in the Memorandum and Articles of
Association of the Company. The principal rights are as below:
The holders of ‘A’ Ordinary Shares shall be entitled to dividend
on each ‘A’ Ordinary Share which may be equal to or higher
than the amount per Ordinary Share declared by the Board
for each Ordinary Share, and as may be specified at the time
of the issue. Different series of ‘A’ Ordinary Shares may carry
different entitlements to dividend to the extent permitted under
applicable law and as prescribed under the terms applicable to
such issue.
A. Ordinary Shares of `10 each
C. Preference Shares
The Company has two classes of preference shares
i.e.
Cumulative Redeemable Preference Shares (CRPS) of `100 per
share and Cumulative Convertible Preference Shares (CCPS) of
`100 per share.
Such shares shall confer on the holders thereof, the right to a
fixed preferential dividend from the date of allotment, at a rate
as may be determined by the Board at the time of the issue, on
the capital for the time being paid up or credited as paid up
thereon.
Such shares shall rank for capital and dividend (including all
dividend undeclared upto the commencement of winding up)
and for repayment of capital in a winding up, pari passu inter
se and in priority to the Ordinary Shares of the Company, but
shall not confer any further or other right to participate either
in profits or assets. However, in case of CCPS, such preferential
rights shall automatically cease on conversion of these shares
into Ordinary Shares.
The holders of such shares shall have the right to receive
all notices of general meetings of the Company but shall
not confer on the holders thereof the right to vote at
any meetings of the Company save to the extent and in
the manner provided in the Companies Act, 1956, or any
re-enactment thereof.
(iv)
CCPS shall be converted into Ordinary Shares as per the terms,
determined by the Board at the time of issue; as and when
converted, such Ordinary Shares shall rank pari passu with the
then existing Ordinary Shares of the Company in all respects.
(i)
(ii)
(iii)
In respect of every Ordinary Share (whether fully paid or partly
paid), voting right shall be in the same proportion as the capital
paid up on such Ordinary Share bears to the total paid up
Ordinary Capital of the Company.
The dividend proposed by the Board of Directors is subject to
the approval of the Shareholders in the ensuing Annual General
Meeting, except in case of interim dividend.
In the event of liquidation, the Shareholders of Ordinary Shares
are eligible to receive the remaining assets of the Company after
distribution of all preferential amounts, in proportion to their
shareholding.
(i)
(ii)
B.
‘A’ Ordinary Shares of `10 each
(a)(i) The holders of ‘A’ Ordinary Shares shall be entitled to such rights
of voting and/or dividend and such other rights as per the terms
of the issue of such shares, provided always that:
−
−
in the case where a resolution is put to vote on a poll, such
differential voting entitlement (excluding fractions, if any)
will be applicable to holders of ‘A’ Ordinary Shares.
(iii)
in the case where a resolution is put to vote in the meeting
and is to be decided on a show of hands, the holders of
‘A’ Ordinary Shares shall be entitled to the same number of
votes as available to holders of Ordinary Shares.
(ii)
The holders of Ordinary Shares and the holders of ‘A’ Ordinary
Shares shall vote as a single class with respect to all matters
submitted for voting by shareholders of the Company and shall
exercise such votes in proportion to the voting rights attached to
such shares including in relation to any scheme under Sections
391 to 394 of the Companies Act, 1956.
236236
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
17. Hybrid perpetual securities
[Item No. III(b), Page 194]
The detail of movement in Hybrid perpetual securities is as below:
Balance at the beginning of the year
Balance at the end of the year
(` crore)
As at
March 31, 2018
2,275.00
2,275.00
As at
March 31, 2017
2,275.00
2,275.00
The Company had issued hybrid perpetual securities of `775.00 crore and `1,500.00 crore in May 2011 and March 2011 respectively. These
securities are perpetual in nature with no maturity or redemption and are callable only at the option of the Company. The distribution on these
securities are 11.50% p.a. and 11.80% p.a. respectively, with a step up provision if the securities are not called after 10 years. The distribution
on the securities may be deferred at the option of the Company if in the six months preceding the relevant distribution payment date, the
Company has not made payment on, or repurchased or redeemed, any securities ranking pari passu with, or junior to the instrument. As these
securities are perpetual in nature and the Company does not have any redemption obligation, these have been classified as equity.
18. Other equity
[Item No. III(c), Page 194]
A. Retained earnings
The details of movement in retained earnings is as below:
Balance at the beginning of the year
Profit for the year
Remeasurement of defined employee benefit plans
Dividend
Tax on dividend
Distribution on hybrid perpetual securities
Tax on distribution on hybrid perpetual securities
Transfers within equity(i)
Balance at the end of the year
As at
March 31, 2018
12,280.91
4,169.55
155.39
(971.22)
(188.41)
(266.13)
92.70
3,427.46
18,700.25
(` crore)
As at
March 31, 2017
10,075.75
3,444.55
(142.42)
(776.97)
(147.74)
(266.10)
92.09
1.75
12,280.91
(i) Represents profit on sale of investments carried at fair value through other comprehensive income.
B.
Items of other comprehensive income
(a) Cash flow hedge reserve
The cumulative effective portion of gain or losses arising on changes in the fair value of hedging instruments designated as cash flow hedges
are recognised in cash flow hedge reserve. Such changes recognised are reclassified to the statement of profit and loss when the hedged item
affects the profit or loss or are included as an adjustment to the cost of the related non-financial hedged item.
The Company has designated certain foreign currency forward contracts and interest rate collars as cash flow hedges in respect of foreign
exchange and interest rate risks.
237237
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
18. Other equity (Contd.)
[Item No. III(c), Page 194]
The details of movement in Cash flow hedge reserve is as below:
Balance at the beginning of the year
Other comprehensive income recognised during the year
Balance at the end of the year
(i) The details of other comprehensive income recognised during the year is as below:
Fair value changes recognised during the year
Fair value changes reclassified to the statement of profit and loss/cost of hedged items
Tax impact on above
As at
March 31, 2018
(1.35)
6.49
5.14
Year ended
March 31, 2018
8.02
1.94
(3.47)
6.49
(` crore)
As at
March 31, 2017
(0.55)
(0.80)
(1.35)
(` crore)
Year ended
March 31, 2017
(7.63)
6.41
0.42
(0.80)
During the year, ineffective portion of cash flow hedges recognised in the statement of profit and loss amounted to Nil (2016-17: Nil)
(ii) The amount recognised in cash flow hedge reserve (net of tax) is expected to impact the statement of profit and loss as below:
- within the next one year: gain `1.39 crore (2016-17: loss `1.35 crore)
- later than one year: gain `3.75crore (2016-17: Nil)
(b)
Investment revaluation reserve
The cumulative gains and losses arising on fair value changes of equity investments measured at fair value through other comprehensive
income are recognised in investment revaluation reserve. The balance of the reserve represents such changes recognised net of amounts
reclassified to retained earnings on disposal of such investments.
The details of movement in investment revaluation reserve is as below:
Balance at the beginning of the year
Other comprehensive income recognised during the year
Transfers within equity
Balance at the end of the year
As at
March 31, 2018
3,754.18
(223.00)
(3,427.46)
103.72
(` crore)
As at
March 31, 2017
2,936.92
819.01
(1.75)
3,754.18
238238
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
18. Other equity (Contd.)
[Item No. III(c), Page 194]
C. Other reserves
(a) Securities premium
Securities premium is used to record premium received on issue of shares. The reserve is utilised in accordance with the provisions of the
Companies Act, 2013 (the “Companies Act”).
The details of movement in securities premium is as below:
Balance at the beginning of the year
Received on issue of shares during the year
Share issue expenses written off during the year
Balance at the end of the year
(b) Debenture redemption reserve
As at
March 31, 2018
18,873.68
8,939.59
(33.85)
27,779.42
(` crore)
As at
March 31, 2017
18,873.68
-
-
18,873.68
The Companies Act, 2013 requires that where a Company issues debentures, it shall create a debenture redemption reserve out of profits of
the Company available for payment of dividend. The Company is required to maintain a Debenture Redemption Reserve of 25% of the value
of debentures issued, either by a public issue or on a private placement basis. The amounts credited to the debenture redemption reserve
cannot be utilised by the Company except to redeem debentures.
The details of movement in debenture redemption reserve during the year is as below:
Balance at the beginning of the year
Balance at the end of the year
(c) General reserve
(` crore)
As at
March 31, 2018
2,046.00
2,046.00
As at
March 31, 2017
2,046.00
2,046.00
Under the erstwhile Companies Act 1956, a general reserve was created through an annual transfer of net profit at a specified percentage in
accordance with applicable regulations. Consequent to the introduction of the Companies Act, 2013, the requirement to mandatory transfer a
specified percentage of net profit to general reserve has been withdrawn.
The details of movement in general reserve during the year is as below:
Balance at the beginning of the year
Balance at the end of the year
(` crore)
As at
March 31, 2018
11,596.35
11,596.35
As at
March 31, 2017
11,596.35
11,596.35
239239
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
18. Other equity (Contd.)
[Item No. III(c), Page 194]
(d) Capital redemption reserve
The Companies Act, 2013 requires that when a Company purchases its own shares out of free reserves or securities premium account, a sum
equal to the nominal value of the shares so purchased shall be transferred to a capital redemption reserve account and details of such transfer
shall be disclosed in the balance sheet. The capital redemption reserve account may be applied by the Company, in paying up unissued shares
of the Company to be issued to shareholders of the Company as fully paid bonus shares. The Company established this reserve pursuant to the
redemption of preference shares issued in earlier years.
The details of movement in capital redemption reserve during the year is as below:
Balance at the beginning of the year
Balance at the end of the year
(e) Others
(` crore)
As at
March 31, 2018
20.78
20.78
As at
March 31, 2017
20.78
20.78
Others primarily represent amount appropriated out of the statement of profit and loss for unforeseen contingencies. Such appropriations are
free in nature.
The details of movement in others during the year is as below:
(` crore)
As at
March 31, 2018
117.04
117.04
As at
March 31, 2017
117.04
117.04
As at
March 31, 2018
0.01
0.02
(0.01)
0.02
(` crore)
As at
March 31, 2017
-
0.01
-
0.01
Balance at the beginning of the year
Balance at the end of the year
D. Share application money pending allotment
The details of movement in share application money pending allotment during the year is as below:
Balance at the beginning of the year
Application money received during the year
Allotment of equity shares during the year
Balance at the end of the year
240240
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
19. Borrowings
[Item No. IV(a)(i) and V(a)(i), Page 194]
A. Non-current
(a) Secured
(i)
Loans from Joint Plant Committee - Steel Development Fund
(b) Unsecured
(i) Non-convertible debentures
(ii) Term loans from banks
(iii) Finance lease obligations
B. Current
(a) Secured
(i)
Repayable on demand from banks and financial institutions
(b) Unsecured
Loans from banks
(i)
(ii) Commercial papers
(` crore)
As at
March 31, 2018
As at
March 31, 2017
2,494.42
2,420.65
9,846.00
10,094.88
2,133.65
24,568.95
10,175.70
9,959.49
2,138.53
24,694.37
(` crore)
As at
March 31, 2018
As at
March 31, 2017
34.44
635.44
-
669.88
14.38
950.93
2,274.36
3,239.67
(i)
As at March 31, 2018, `2,528.86 crore (March 31, 2017: `2,435.03
crore) of the total outstanding borrowings were secured by a
charge on property, plant and equipment, inventories and
receivables.
The security details of major borrowings as at March 31, 2018
are as below:
(a)
Loan from Joint Plant Committee-Steel Development Fund
It is secured by mortgages on, all present and future immovable
properties wherever situated and hypothecation of movable
assets, excluding land and building mortgaged in favour of
Government of India under the deed of mortgage dated April
13, 1967 and in favour of Government of Bihar under two deeds
of mortgage dated May 11, 1963, immovable properties and
movable assets of the Tube Division, Bearing Division, Ferro
Alloys Division and Cold Rolling Complex (West) at Tarapur
and all investments and book debts of the Company subject
to the prior charges created and/or to be created in favour of
the bankers for securing borrowing for the working capital
requirement and charges created and/or to be created on
specific items of machinery and equipment procured/to be
procured under deferred payment schemes/bill re-discounting
schemes/asset credit schemes.
The loan is repayable in 16 equal semi-annual instalments after
completion of four years from the date of the tranche.
The Company has filed a writ petition before the High Court at
Kolkata in February 2006 claiming waiver of the outstanding
loan and interest and refund of the balance lying with Steel
Development Fund and the matter is subjudice.
The loan includes funded interest `855.09 crore (March 31,
2017: `781.32 crore).
It includes `1,639.33 crore (March 31, 2017: `1,639.33 crore)
representing repayments and interest on earlier loans for which
applications of funding are awaiting sanction and is not secured
by charge on movable assets of the Company.
241241
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
19. Borrowings (Contd.)
[Item No. IV(a)(i) and V(a)(i), Page 194]
(ii)
The details of major unsecured borrowings as at March 31, 2018
are as below:
(a) Non-Convertible Debentures
(i)
(ii)
10.25% p.a.
interest bearing 25,000 debentures of
face value `10,00,000 each are redeemable at par in 3 equal
annual instalments commencing from January 6, 2029.
10.25% p.a. interest bearing 5,000 debentures of face value
`10,00,000 each are redeemable at par in 3 equal annual
instalments commencing from December 22, 2028.
(iii)
8.15% p.a. interest bearing 10,000 debentures of face value
`10,00,000 each are redeemable at par on October 1, 2026.
(iv)
2.00% p.a. interest bearing 15,000 debentures of face value
`10,00,000 each are redeemable at a premium of 85.03% of
the face value on April 23, 2022.
(v)
9.15% p.a. interest bearing 5,000 debentures of face value
`10,00,000 each are redeemable at par on January 24, 2021.
(vi)
11.00% p.a.
interest bearing 15,000 debentures of
face value `10,00,000 each are redeemable at par on May
19, 2019.
(vii) 10.40% p.a.
interest bearing 6,509 debentures of
face value `10,00,000 each are redeemable at par on May
15, 2019.
(viii) 9.15% p.a.
interest bearing 5,000 debentures of
face value `10,00,000 each are redeemable at par on
January 24, 2019.
(b)
Term loans from banks and financial institutions
(i)
Rupee loan amounting `4,450 crore (March 31, 2017:
`4,450.00 crore) is repayable in 17 quarterly instalments.
The Company on March 15, 2018 gave prepayment notice
to the lenders for an amount of `1,950.00 crore. The
remaining amount is repayable in 9 quarterly instalments
commencing from March 31, 2023.
(ii)
(iii)
(iv)
(v)
(vi)
Rupee loan amounting `750.00 crore (March 31, 2017: Nil)
is repayable in 3 equal annual instalments commencing
from May 21, 2021.
USD 7.86 million equivalent to `51.24 crore (March 31,
2017: 7.86 million equivalent to `50.98 crore) is repayable
on March 1, 2021.
USD 200 million equivalent to `1,303.65 crore (March 31,
2017: USD 200.00 million equivalent to `1,297.10 crore) loan
is repayable in 3 equal annual instalments commencing
from February 18, 2020.
Rupee loan amounting `2,000.00 crore (March 31, 2017:
`2,000.00 crore) is repayable in 10 semi-annual instalments
commencing from April 30, 2019.
Rupee loan amounting `646.16 crore (March 31, 2017:
`650.00 crore) is repayable in 18 semi-annual instalments, the
next instalment is due on August 14, 2018.
(vii) Euro 21.62 million equivalent to `174.68 crore (March 31,
2017: Euro 27.02 million equivalent to `187.18 crore) loan
is repayable in 8 equal semi-annual instalments; the next
instalment is due on July 6, 2018.
(viii) Euro 4.69 million equivalent to `37.92 crore (March 31, 2017:
Euro 9.39 million equivalent to `65.02 crore) loan is repayable
in 2 equal semi-annual instalments, the next instalment is due
on July 2, 2018.
(ix)
(x)
(xi)
Rupee loan amounting `823.84 crore (March 31, 2017:
`850.00 crore) is repayable in 14 semi-annual instalments,
the next instalment is due on June 15, 2018.
Rupee loan amounting `1,485 crore (March 31, 2017: Nil) is
repayable in 19 semi-annual instalments, the next instalment
is due on May 28, 2018.
to `694.80 crore
Euro 85.98 million equivalent
(March 31, 2017: Euro 105.08 million equivalent to `727.98
crore) loan is repayable in 9 equal semi-annual instalments,
the next instalment is due on April 27, 2018.
Interest rates on the above term loans from banks and financial
institutions range between 8.20 % to 8.75 % for rupee term
loans and between 0.12 % to 4.80 % for foreign loans.
242242
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
19. Borrowings (Contd.)
[Item No. IV(a)(i) and V(a)(i), Page 194]
(iii) Currency and interest exposure of borrowings including current maturities at the end of the reporting period is as below:
Fixed
rate
13,234.70
565.37
-
13,800.07
As at March 31, 2018
Floating
rate
12,663.12
326.13
1,336.48
14,325.73
Total
25,897.82
891.50
1,336.48
28,125.80
Fixed
rate
15,535.48
588.99
-
16,124.47
As at March 31, 2017
Floating
rate
10,344.92
375.40
1,439.84
12,160.16
(` crore)
Total
25,880.40
964.39
1,439.84
28,284.63
INR
EURO
USD
Total
INR-Indian rupees, USD-United States dollars.
(iv)
Majority of floating rate borrowings are bank borrowings bearing interest rates based on LIBOR and EURIBOR. Of the total floating rate
borrowings as at March 31, 2018, `977.74 crore (March 31, 2017: `972.83 crore) has been hedged using interest rate swaps and collars,
with contracts covering period of more than one year.
(v) Maturity profile of borrowings including current maturities is as below:
Not later than one year or on demand
Later than one year but not two years
Later than two years but not three years
Later than three years but not four years
Later than four years but not five years
More than five years
Less: Future finance charges on finance leases
Less: Capitalisation of transaction costs
As at
March 31, 2018
3,902.13
3,693.68
2,228.26
1,966.48
4,227.71
1,6510.22
32,528.48
3,746.79
655.89
28,125.80
(` crore)
As at
March 31, 2017
3,916.24
1,142.12
3,596.29
2,119.20
2,433.35
19,894.48
33,101.68
3,958.50
858.55
28,284.63
(vi)
Some of the Company’s major financing arrangements include financial covenants, which require compliance to certain debt-equity
and debt coverage ratios. Additionally, certain negative covenants may limit the Company’s ability to borrow additional funds or to incur
additional liens, and/or provide for increased costs in case of breach.
243243
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
20. Other financial liabilities
[Item No. IV(a)(iii) and V(a)(iv), Page 194]
A. Non-current
(a) Creditors for other liabilities
B. Current
Current maturities of long-term borrowings
Current maturities of finance lease obligations
Interest accrued but not due
(a)
(b)
(c)
(d) Unclaimed dividends
(e)
Creditors for other liabilities
(` crore)
As at
March 31, 2018
19.78
As at
March 31, 2017
18.22
As at
March 31, 2018
2,767.16
119.81
556.01
55.00
3,043.42
6,541.40
(` crore)
As at
March 31, 2017
237.90
112.69
545.05
51.76
3,114.95
4,062.35
(i)
(ii)
Current maturities of long-term borrowings include `1,950.00 crore (March 31, 2017: Nil) in respect of a Rupee loan for which the Company
has given prepayment notice to the lenders on March 15, 2018 and hence these have been classified as current.
Non-current and current creditors for other liabilities include:
(a)
(b)
creditors for capital supplies and services `1,725.31 crore (March 31, 2017: `2,056.80 crore).
liability for employee family benefit scheme `184.39 crore (March 31, 2017: `173.35 crore).
21. Provisions
[Item No. IV(b) and V(b), Page 194]
A. Non-current
Employee benefits
(a)
(b) Others
B. Current
Employee benefits
(a)
(b) Others
244244
As at
March 31, 2018
1,663.88
297.33
1,961.21
(` crore)
As at
March 31, 2017
1,749.44
275.30
2,024.74
As at
March 31, 2018
356.27
379.01
735.28
(` crore)
As at
March 31, 2017
311.19
389.41
700.60
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
21. Provisions (Contd.)
[Item No. IV(b) and V(b), Page 194]
(i)
(ii)
Non-current and current provision for employee benefits include leave salaries `984.33 crore (March 31, 2017: `1,016.95 crore) and provision
for early separation scheme `1,019.98 crore (March 31, 2017 `1,036.89 crore).
As per the leave policy of the Company, an employee is entitled to be paid the accumulated leave balance on separation. The Company
presents provision for leave salaries as current and non-current based on actuarial valuation considering estimates of availment of leave,
separation of employee, etc.
(iii) Non current and current other provisions include:
(a)
(b)
provision for compensatory afforestation, mine closure and rehabilitation obligations `626.01 crore (March 31, 2017: `529.13 crore).
These amounts become payable upon closure of the mines and are expected to be incurred over a period of 1 to 34 years.
provision for legal and constructive commitments provided by the Company in respect of a loss making subsidiary `50.33 crore
(March 31, 2017: `135.58 crore). The same is expected to be settled within one year from the reporting date.
(iv) The details of movement in other provisions is as below:
Balance at the beginning of the year
Charged during the year
Additions during the year
Utilised during the year
Balance at the end of the year
22. Retirement benefit obligations
[Item No. IV(c) and V(c), Page 194]
A. Non-current
(a) Retiring gratuities
(b) Post retirement medical benefits
(c) Other defined benefits
B. Current
(a) Post retirement medical benefits
(b) Other defined benefits
As at
March 31, 2018
664.71
11.60
85.28
(85.25)
676.34
(` crore)
As at
March 31, 2017
226.31
135.58
302.82
-
664.71
As at
March 31, 2018
60.97
1,119.32
67.44
1,247.73
(` crore)
As at
March 31, 2017
217.03
1,170.51
96.67
1,484.21
As at
March 31, 2018
85.38
5.12
90.50
(` crore)
As at
March 31, 2017
50.67
5.91
56.58
(i) Detailed disclosure in respect post retirement defined benefit schemes is provided in Note 35, Page 252.
(ii) Other defined benefits include long service awards, packing and transportation, farewell gifts, etc.
245245
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
23. Deferred income
[Item No. IV(d), Page 194]
(a) Grants relating to property, plant and equipment
(` crore)
As at
March 31, 2018
1,365.61
As at
March 31, 2017
1,885.19
(i)
Grants relating to property, plant and equipment relate to duty saved on import of capital goods and spares under the EPCG scheme. Under
the scheme, the Company is committed to export prescribed times of the duty saved on import of capital goods over a specified period of
time. In case such commitments are not met, the Company would be required to pay the duty saved along with interest to the regulatory
authorities. Such grants recognised are released to the statement of profit and loss based on fulfilment of related export obligations.
During the year `519.31crore (2016-17: `342.90 crore ) was released from deferred income to the statement of profit and loss on fulfillment
of export obligations.
24. Other liabilities
[Item No. IV(f ) and V(e), Page 194]
A. Non-current
(a)
Statutory dues
(b) Other credit balances
B. Current
(a)
(b)
(c)
Advances received from customers
Employee recoveries and employer contributions
Statutory dues
As at
March 31, 2018
35.47
189.24
224.71
(` crore)
As at
March 31, 2017
55.31
22.43
77.74
As at
March 31, 2018
363.82
59.54
5,433.70
5,857.06
(` crore)
As at
March 31, 2017
380.01
39.39
3,124.40
3,543.80
(i)
Statutory dues primarily relate to payables in respect of GST, excise duty, service tax, sales tax, VAT, tax deducted at source and royalties.
246246
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
25. Trade payables
[Item No. V(a)(ii), Page 194]
(a)
(b)
Creditors for supplies and services
Creditors for accrued wages and salaries
As at
March 31, 2018
9,749.53
1,493.22
11,242.75
(` crore)
As at
March 31, 2017
9,342.83
1,374.61
10,717.44
(i)
Amount due to Micro and Small Enterprises as defined in the “The Micro, Small and Medium Enterprises Development Act, 2006” has
been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosures
relating to Micro and Small Enterprises is as below:
Interest due thereon remaining unpaid to supplier as at the end of the year
(i) Principal amount remaining unpaid to supplier as at the end of the year
(ii)
(iii) Amount of interest due and payable for the period of delay in making payment (which have been
paid but beyond the appointed day during the year) but without adding the interest specified
under this Act
Year ended
March 31, 2018
19.45
1.24
5.58
(` crore)
Year ended
March 31, 2017
14.28
0.96
4.88
(iv) Amount of interest accrued during the year and remaining unpaid at the end of the year
6.82
5.84
26. Revenue from operations
[Item No. I, Page 195]
(a)
(b)
(c)
(d)
Sale of products
Sale of power and water
Income from town, medical and other services
Other operating revenue
Year ended
March 31, 2018
57,614.48
1,690.60
148.15
1,066.14
60,519.37
(` crore)
Year ended
March 31, 2017
51,010.53
1,418.43
135.97
696.03
53,260.96
247247
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
27. Other income
[Item No. II, Page 195]
(a) Dividend income
(b) Finance income
(c) Net gain/(loss) on sale of non-current investments
(d) Net gain/(loss) on investments carried at fair value through profit and loss
(e) Gain/(loss) on sale of property, plant and equipment including intangibles assets (net of loss on
assets sold/scrapped/written off )
(f ) Gain/(loss) on cancellation of forwards, swaps and options
(g) Other miscellaneous income
Year ended
March 31, 2018
88.57
69.56
-
679.64
(40.48)
(` crore)
Year ended
March 31, 2017
87.51
35.89
0.97
316.63
(6.91)
(79.33)
45.70
763.66
(66.95)
47.32
414.46
(i)
Dividend income includes income from investments carried at fair value through other comprehensive income `17.20 crore
(2016-17: `8.48 crore).
(ii)
Finance income includes:
(a)
income on financial assets carried at amortised cost `61.06 crore (2016-17: `27.39 crore).
(b) income on financial assets carried at fair value through profit and loss `8.50 crore (2016-17: `8.50 crore).
28. Changes in inventories of finished and semi-finished goods, work-in-progress and stock-in-trade
[Item No. IV(c), Page 195]
(` crore)
Year ended
March 31, 2018
Year ended
March 31, 2017
6.77
3,602.13
56.13
3,665.03
5.88
4,096.56
107.95
4,210.39
(545.36)
5.88
4,096.56
107.95
4,210.39
18.30
2,792.69
69.75
2,880.74
1,329.65
Inventories at the end of the year
(a) Work-in-progress
(b) Finished and semi-finished goods
(c) Stock-in-trade
Inventories at the beginning of the year
(a) Work-in-progress
(b) Finished and semi-finished goods
(c) Stock-in-trade
248248
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
29. Employee benefits expense
[Item No. IV(d), Page 195]
(a) Salaries and wages
(b) Contribution to provident and other funds
(c) Staff welfare expenses
Year ended
March 31, 2018
4,130.68
446.75
251.42
4,828.85
(` crore)
Year ended
March 31, 2017
3,934.58
434.30
236.25
4,605.13
(i)
During the year, the Company has recognised an amount of `19.04 crore (2016-17: `18.13 crore) as remuneration to key managerial
personnel. The details of such remuneration is as below:
(a) Short term employee benefits
(b) Post employment benefits
(c) Other long term employee benefits
30. Finance costs
[Item No. IV(e), Page 195]
Interest expense on:
(a) Bonds, debentures, bank borrowings and others
(b) Finance leases
Less: Interest capitalised
(i) Other interest expense include interest on income tax `5.85 crore (2016-17: `16.22 crore).
(` crore)
Year ended
March 31, 2018
19.03
(0.02)
Year ended
March 31, 2017
17.13
0.71
0.03
19.04
0.29
18.13
(` crore)
Year ended
March 31, 2018
Year ended
March 31, 2017
2,547.68
338.90
2,886.58
75.96
2,810.62
2,597.04
312.76
2,909.80
221.25
2,688.55
249249
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
31. Depreciation and amortisation expense
[Item No. IV(f ), Page 195]
(a) Depreciation on tangible assets
(b) Amortisation of intangible assets
32. Other expenses
[Item No. IV(g), Page 195]
(a) Consumption of stores and spares
(b) Repairs to buildings
(c) Repairs to machinery
(d) Relining expenses
(e) Fuel oil consumed
(f ) Purchase of power
(g) Conversion charges
(h) Freight and handling charges
(i)
(j)
(k) Rates and taxes
(l)
(m) Commission, discounts and rebates
(n) Allowance for credit losses/provision for advances
(o) Excise duty (including recovered on sales)
(p) Others
Insurance charges
Rent
Royalty
Year ended
March 31, 2018
3,585.44
142.02
3,727.46
(` crore)
Year ended
March 31, 2017
3,351.49
190.06
3,541.55
(` crore)
Year ended
March 31, 2018
Year ended
March 31, 2017
3,306.45
71.79
2,602.61
51.79
154.21
2,770.99
2,838.13
4,102.23
75.43
1,572.69
966.02
111.22
193.87
54.48
902.55
2,403.56
22,178.02
2,751.81
70.80
2,281.82
55.44
111.17
2,769.75
2,701.03
3,783.56
75.60
1,145.51
1,298.41
79.61
207.14
16.09
5,267.94
2,333.41
24,949.09
(i) Others include foreign exchange gain (net) `21.12 crore (2016-17: foreign exchange loss (net) `2.16 crore)
(ii) Details of auditors’ remuneration and out-of-pocket expenses is as below:
(a)
(b)
Auditors remuneration and out-of-pocket expenses
(i) As auditors
(ii) For taxation matters
(iii) For other services#
(iv) Out-of-pocket expenses
Cost audit fees [Including out of pocket expenses `32,206 (2016-17: `25,084)]
(` crore)
Year ended
March 31, 2018
Year ended
March 31, 2017
4.75
0.40
0.60
0.25
0.18
6.30
0.46
0.33
0.18
0.12
# Other services includes `0.45 crore (2016-17: Nil) on account of rights issue expenses which has been charged to securities premium.
250250
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
32. Other expenses (Contd.)
[Item No. IV(g), Page 195]
(iii)
As per the Companies Act, 2013, amount required to be spent by the Company on Corporate Social Responsibility (CSR) activities during
the year was `85.62 crore (2016-17 : `115.80 crore).
During the year ended March 31, 2018, in respect of CSR activities the Company incurred revenue expenditure which was recognised in
the statement of profit and loss amounting to `189.96 crore [`188.96 crore has been paid in cash and `1.00 crore is yet to be paid]. During
the year ended March 31, 2017, similar expense incurred was `191.21 crore [`190.29 crore was paid in cash and `0.93 crore was unpaid].
During the year ended March 31, 2018, Capital expenditure incurred on construction of capital assets under CSR projects is
`41.66 crore [`24.25 crore paid in cash and `17.42 crore is yet to be paid]. During the year ended March 31, 2017, similar expense incurred
was `2.40 crore [`1.66 crore was paid in cash and `0.74 crore was unpaid].
(iv)
During the year ended March 31, 2018, revenue expenditure charged to the statement of profit and loss in respect of research and
development activities undertaken was `159.22 crore (2016-17: `132.26 crore) including depreciation of `7.67 crore (2016-17:
`7.87 crore). Capital expenditure incurred in respect of research and development activities during the year was `22.42 crore (2016-17:
`12.32 crore).
33. Exceptional items
[Item No. VI, Page 195]
Exceptional items are those which are considered for separate disclosure in the financial statements considering their size, nature or
incidence. Such items included within the statement of profit and loss are detailed below:
(a)
Provision for diminution in value of investments held in subsidiaries and joint ventures ₹36.27 crore (2016-17: ₹45.42 crore) and
provision in respect of advances paid for repurchase of equity shares in Tata Teleservices Limited from NTT Docomo Inc ₹26.65 crore
(2016-17: `125.45 crore).
(b)
Provision of ₹3,213.68 crore (2016-17: `218.25 crore) in respect of certain statutory demands and claims relating to environment and
mining matters, net of liability towards district mining fund no longer required written back.
(c) Provision of ₹89.69 crore (2016-17: ₹178.68 crore) on account of employee separation scheme.
(d)
During the year ended March 31, 2017, provision of ₹135.58 crore was recognised on account of legal and constructive commitments
provided by the Company in respect of a loss making subsidiary.
251251
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
34. Earnings per share
[Item No. XII, Page 195]
The following table reflects the profit and shares data used in the computation of basic and diluted earnings per share.
(a) Profit after tax
Less: Distribution on hybrid perpetual securities (net of tax)
Profit attributable to ordinary shareholders - for Basic and Diluted EPS
(b) Weighted average number of Ordinary Shares for Basic EPS
Add: Adjustment for shares held in abeyance
Weighted average number of Ordinary Shares and potential
Ordinary Shares for Diluted EPS
(c) Nominal value of Ordinary Shares (`)
(d) Basic Earnings per Ordinary Share (`)
(e) Diluted Earnings per Ordinary Share (`)
Year ended
March 31, 2018
4,169.55
173.43
3,996.12
Nos.
1,03,61,99,628
1,55,646
1,03,63,55,274
(` crore)
Year ended
March 31, 2017
3,444.55
174.01
3,270.54
Nos.
1,03,05,07,429
71,573
1,03,05,79,002
10.00
38.57
38.56
10.00
31.74
31.74
(i)
(i)
Basic and diluted earnings per share for the year ended March 31, 2017, have been adjusted retrospectively for the bonus element in
respect of rights issue made during the year ended March 31, 2018.
As at March 31, 2018, 28,69,886 options (2016-17: Nil) were excluded from weighted average number of Ordinary Shares for the
computation of diluted earning per share as these were anti-dilutive.
35. Employee benefits
A. Defined contribution plans
The Company participates in a number of defined contribution plans
on behalf of relevant personnel. Any expense recognised in relation
to these schemes represents the value of contributions payable
during the period by the Company at rates specified by the rules
of those plans. The only amounts included in the balance sheet are
those relating to the prior months contributions that were not due to
be paid until after the end of the reporting period.
The major defined contribution plans operated by the Company are
as below:
(a) Provident fund and pension
The Company provides provident fund benefits for eligible
employees as per applicable regulations wherein both
employee’s and the Company make monthly contributions
at a specified percentage of the eligible employee’s salary.
Contributions under such schemes are made either to a
provident fund set up as an irrevocable trust by the Company to
252252
manage the investments and distribute the amounts entitled to
employees or to state managed funds.
Benefits provided under plans wherein contributions are made
to state managed funds and the Company does not have a
future obligation to make good short fall if any, are treated as a
defined contribution plan.
(b) Superannuation fund
The Company has a superannuation plan for the benefit of its
employees. Employees who are members of the defined benefit
superannuation plan are entitled to benefits depending on the
years of service and salary drawn.
Separate irrevocable trusts are maintained for employees
covered and entitled to benefits. The Company contributes
up to 15% of the eligible employees’ salary or `1,00,000,
whichever is lower, to the trust every year. Such contributions
are recognised as an expense as and when incurred. The
Company does not have any further obligation beyond this
contribution.
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
35. Employee benefits (Contd.)
The contributions recognised as an expense in the statement of
profit and loss during the year on account of defined contribution
plans amounted to `145.40 crore (2016-17: `151.34 crore).
B. Defined benefit plans
The defined benefit plans operated by the Company are
as below:
(a) Provident fund and pension
fund benefits provided under plans wherein
Provident
contributions are made to an irrevocable trust set up by the
Company to manage the investments and distribute the
amounts entitled to employees are treated as a defined benefit
plan as the Company is obligated to provide the members a rate
of return which should, at the minimum, meet the interest rate
declared by Government administered provident fund. A part
of the Company’s contribution is transferred to Government
administered pension fund. The contributions made by the
Company and the shortfall of interest, if any, are recognised as
an expense in profit or loss under employee benefits expense.
In accordance with an actuarial valuation of provident fund
liabilities based on guidance issued by Actuarial Society of
India and based on the assumptions as mentioned below,
there is no deficiency in the interest cost as the present
value of the expected future earnings of the fund is greater
than the expected amount to be credited to the individual
members based on the expected guaranteed rate of interest of
Government administered provident fund.
Key assumptions used for actuarial valuation are as below:
Year ended
March 31, 2018
7.50%
8.55%
8.75%
Year ended
March 31, 2017
7.00%
8.65%
8.76%
Discount rate
Guaranteed rate of return
Expected rate of return on
investment
(b) Retiring gratuity
The Company has an obligation towards gratuity, a defined
benefit retirement plan covering eligible employees. The plan
provides for a lump-sum payment to vested employees at
retirement, death while in employment or on termination of
employment of an amount equivalent to 15 to 30 days salary
payable for each completed year of service. Vesting occurs
upon completion of five years of service. The Company makes
annual contributions to gratuity funds established as trusts or
insurance companies. The Company accounts for the liability
for gratuity benefits payable in the future based on an year end
actuarial valuation.
(c) Post retirement medical benefits
Under this unfunded scheme, employees of the Company
receive medical benefits subject to certain limits on amounts
of benefits, periods after retirement and types of benefits,
depending on their grade and location at the time of retirement.
Employees separated from the Company under an early
separation scheme, on medical grounds or due to permanent
disablement are also covered under the scheme. The Company
accounts for the liability for post-retirement medical scheme
based on an year end actuarial valuation.
(d) Other defined benefits
Other benefits provided under unfunded schemes include
pension payable to directors of the Company on their retirement,
farewell gifts and reimbursement of packing and transportation
charges to the employees based on their last drawn salary.
The defined benefit plans expose the Company to a number of
actuarial risks as below:
(a) Investment risk: The present value of the defined benefit
plan liability is calculated using a discount rate determined
by reference to government bond yields. If the return on
plan asset is below this rate, it will create a plan deficit.
(b) Interest risk: A decrease in the bond interest rate will
increase the plan liability. However, this will be partially
offset by an increase in the return on the plan’s debt
investments.
(c) Salary risk: The present value of the defined benefit plan
liability is calculated by reference to the future salaries of
plan participants. As such, an increase in salary of the plan
participants will increase the plan’s liability.
(d) Longevity risk: The present value of the defined benefit
plan liability is calculated by reference to the best estimate
of the mortality of plan participants. An increase in the life
expectancy of the plan participants will increase the plan’s
liability.
253253
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
35. Employee benefits (Contd.)
C.
Details of defined benefit obligations and plan assets:
(a) Retiring gratuity:
(i) The following table sets out the amounts recognised in the financial statements in respect of retiring gratuity plan:
(` crore)
Year ended
March 31, 2018
Year ended
March 31, 2017
2,779.95
129.90
185.47
(154.45)
87.55
(260.73)
2,767.69
2,640.22
118.00
192.44
143.44
-
(314.15)
2,779.95
(` crore)
Year ended
March 31, 2018
Year ended
March 31, 2017
2,562.92
177.82
11.33
215.38
(260.73)
2,706.72
2,479.53
186.23
50.31
161.00
(314.15)
2,562.92
As at
March 31, 2018
2,706.72
(2,767.69)
(60.97)
(` crore)
As at
March 31, 2017
2,562.92
(2,779.95)
(217.03)
(60.97)
(217.03)
Change in defined benefit obligations:
Obligation at the beginning of the year
Current service cost
Interest costs
Remeasurement (gain)/loss
Adjustment for arrear wage settlement
Benefits paid
Obligation at the end of the year
Change in plan assets:
Fair value of plan assets at the beginning of the year
Interest income
Remeasurement gain/(loss) excluding amount included within employee benefit expense
Employers' contribution
Benefits paid
Fair value of plan assets at the end of the year
Amounts recognised in the balance sheet consist of:
Fair value of plan assets
Present value of obligation
Recognised as:
Retirement benefit obligations - Non-current
254254
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR 35. Employee benefits (Contd.)
Expense recognised in the statement of profit and loss consists of:
Employee benefits expense:
Current service cost
Net interest expense
Other comprehensive income:
Return on plan assets excluding amount included in employee benefits expense
Actuarial (gain)/loss arising from changes in demographic assumption
Actuarial (gain)/loss arising from changes in financial assumption
Actuarial (gain)/loss arising from changes in experience adjustments
(` crore)
Year ended
March 31, 2018
Year ended
March 31, 2017
129.90
7.65
137.55
(11.33)
(35.02)
(97.18)
(22.25)
(165.78)
118.00
6.21
124.21
(50.31)
-
149.26
(5.82)
93.13
Expense/(gain) recognised in the statement of profit and loss
(28.23)
217.34
(ii)
Fair value of plan assets by category of investment is as below:
Assets category (%)
Equity instruments (quoted)
Debt instruments (quoted)
Insurance products (unquoted)
As at
March 31, 2018
As at
March 31, 2017
(%)
-
21.26
78.74
100.00
0.21
28.91
70.88
100.00
The Company’s investment policy is driven by considerations of maximising returns while ensuring credit quality of debt instruments. The asset
allocation for plan assets is determined based on investment criteria prescribed under the Indian Income Tax Act, 1961, and is also subject to
other exposure limitations. The Company evaluates the risks, transaction costs and liquidity for potential investments. To measure plan assets
performance, the Company compares actual returns for each asset category with published benchmarks.
(iii) Key assumptions used in the measurement of retiring gratuity is as below:
Discount rate (per annum)
Rate of escalation in salary (per annum)
(%)
As at
March 31, 2018
7.50
7.50 to 10.00
As at
March 31, 2017
7.00
7.50 to 10.00
(iv) Weighted average duration of the retiring gratuity obligation is 9 years (March 31, 2017: 9 Years).
(v) The Company expects to contribute `60.97 crore to the plan during the financial year 2018-19.
(vi)
The table below outlines the effect on retiring gratuity obligation in the event of a decrease/increase of 1% in the assumptions used.
255255
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 35. Employee benefits (Contd.)
As at March 31, 2018
Assumption
Discount rate
Salary rate
As at March 31, 2017
Assumption
Discount rate
Salary rate
Change in assumption
Increase by 1%, decrease by 1%
Increase by 1%, decrease by 1%
Impact on obligation
Decrease by `177.13 crore, increase by `202.04 crore
Increase by `199.27 crore, decrease by `177.13 crore
Change in assumption
Increase by 1%, decrease by 1%
Increase by 1%, decrease by 1%
Impact on obligation
Decrease by `195.55 crore, increase by `226.58 crore
Increase by `221.51 crore, decrease by `195.14 crore
The above sensitivities may not be representative of the actual change as it is unlikely that the change in assumptions would occur in isolation
of one another as some of the assumptions may be correlated.
(b) Post retirement medical benefits and other defined benefits:
(i)
The following table sets out the amounts recognised in the financial statements in respect of post retirement medical benefits and other
defined benefit plans.
Change in defined benefit obligation:
Obligation at the beginning of the year
Current service cost
Interest cost
Remeasurement (gain)/loss
(i) Actuarial (gains)/losses arising from changes in
demographic assumptions
(ii) Actuarial (gains)/losses arising from changes in
financial assumptions
(iii) Actuarial (gains)/losses arising from changes in
experience adjustments
Benefits paid
Past service cost
Obligation at the end of the year
Year ended March 31, 2018
Year ended March 31, 2017
Medical
Others
Medical
Others
(` crore)
1,221.18
21.41
83.36
(18.29)
(53.19)
10.62
(60.39)
-
1,204.70
1,02.58
7.06
6.94
(2.09)
(3.79)
(5.11)
(6.95)
(26.08)
72.56
1,063.93
19.04
80.34
-
126.17
(13.69)
(54.61)
-
1,221.18
84.38
5.77
6.30
-
7.84
4.34
(6.05)
-
102.58
256256
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR 35. Employee benefits (Contd.)
Amounts recognised in balance sheet consist of:
Present value of obligation
Recognised as:
Retirement benefit obligation - Current
Retirement benefit obligation - Non-current
Expense recognised in the statement of profit and loss consists of:
Employee benefits expense:
Current service cost
Past service cost
Net interest expense
Other comprehensive income:
Actuarial (gains)/losses arising from changes in demographic assumptions
Actuarial (gains)/losses arising from changes in financial assumption
Actuarial (gains)/losses arising from changes in experience adjustments
As at March 31, 2018
Others
Medical
(72.56)
(1,204.70)
As at March 31, 2017
Others
Medical
(102.58)
(1,221.18)
(` crore)
(85.38)
(1,119.32)
(5.12)
(67.44)
(50.67)
(1,170.51)
(5.91)
(96.67)
April- March 2018
Others
Medical
April- March 2017
Others
Medical
(` crore)
21.41
-
83.36
104.77
(18.29)
(53.19)
10.62
(60.86)
7.06
(26.08)
6.94
(12.08)
(2.09)
(3.79)
(5.11)
(10.99)
19.04
-
80.34
99.38
-
126.17
(13.69)
112.48
5.77
-
6.30
12.07
-
7.84
4.34
12.18
Expense recognised in the statement of profit and loss
43.91
(23.07)
211.86
24.25
(ii) Key assumptions used in the measurement of post-retirement medical benefits and other defined benefit plans is as below:
As at March 31, 2018
As at March 31, 2017
Discount rate (per annum)
Rate of escalation in salary (per annum)
Inflation rate (per annum)
Medical
7.50%
Others
7.50%
N.A 10.00% - 15.00%
4.00%
8.00%
Medical
7.00%
N.A.
8.00%
Others
7.00%
10.00% - 15.00%
4.00%
(iii)
Weighted average duration of post-retirement medical benefit obligation is 8 years (March 31, 2017: 9 Years) Weighted average duration
of other defined benefit obligation ranges from 8 to 10 years (March 31, 2017: 9 to 12 years)
257257
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
35. Employee benefits (Contd.)
(iv)
The table below outlines the effect on post retirement medical benefit obligation in the event of a decrease/increase of 1% in the
assumptions used:
As at March 31, 2018
Assumption
Discount rate
Medical cost inflation rate
As at March 31, 2017
Assumption
Discount rate
Medical cost inflation rate
Change in assumption
Increase by 1%, decrease by 1%
Increase by 1%, decrease by 1%
Impact on obligation
Decrease by `151.79 crore, increase by `191.55 crore
Increase by `179.50 crore, decrease by `144.56 crore
Change in assumption
Increase by 1%, decrease by 1%
Increase by 1%, decrease by 1%
Impact on obligation
Decrease by `163.42 crore, increase by `209.94 crore
Increase by `200.37 crore, decrease by `159.56 crore
The table below outlines the effect on other defined benefit obligation in the event of a decrease/increase of 1 % in the assumptions used.
As at March 31, 2018
Assumption
Discount rate
Rate of escalation in salary
Inflation rate
As at March 31, 2017
Assumption
Discount rate
Rate of escalation in salary
Inflation rate
Change in assumption
Increase by 1%, decrease by 1%
Increase by 1%, decrease by 1%
Increase by 1%, decrease by 1%
Impact on obligation
Decrease by `6.75 crore, increase by `8.15 crore
Increase by `2.05 crore, decrease by `1.82 crore
Increase by `4.66 crore, decrease by `4.15 crore
Change in assumption
Increase by 1%, decrease by 1%
Increase by 1%, decrease by 1%
Increase by 1%, decrease by 1%
Impact on obligation
Decrease by `10.23 crore, increase by `12.32 crore
Increase by `6.50 crore, decrease by `5.66 crore
Increase by `5.00 crore, decrease by `4.42 crore
The above sensitivities may not be representative of the actual change as it is unlikely that the change in assumptions would occur in isolation
of one another as some of the assumptions may be correlated.
258258
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR 36. Contingencies and commitments
A. Contingencies
31, 2017: `515.00 crore) as part payment as a precondition to obtain
stay of demand. The Company expects to sustain its position on
ultimate resolution of the appeals.
In the ordinary course of business, the Company faces claims and
assertions by various parties. The Company assesses such claims and
assertions and monitors the legal environment on an on-going basis
with the assistance of external legal counsel, wherever necessary.
The Company records a liability for any claims where a potential
loss is probable and capable of being estimated and discloses such
matters in its financial statements, if material. For potential losses that
are considered possible, but not probable, the Company provides
disclosure in the financial statements but does not record a liability
in its accounts unless the loss becomes probable.
The following is a description of claims and assertions where a
potential loss is possible, but not probable. The Company believes
that none of the contingencies described below would have a
material adverse effect on the Company’s financial condition, results
of operations or cash flows.
Litigations
The Company is involved in legal proceedings, both as plaintiff and
as defendant. There are claims which the Company does not believe
to be of material nature, other than those described below.
Income tax
The Company has ongoing disputes with income tax authorities
relating to tax treatment of certain items. These mainly include
disallowance of expenses, tax treatment of certain expenses claimed
by the Company as deduction and the computation of or eligibility of
the Company’s use of certain tax incentives or allowances.
Most of these disputes and/or dis-allowances, being repetitive in
nature, have been raised by the income tax authorities consistently
in most of the years.
As at March 31, 2018, there are matters and/or disputes pending in
appeal amounting to `1,443.29 crore (March 31, 2017: `1,417.54
crore).
The details of demands for more than `100 crore is as below:
Interest expenditure on loans taken by the Company for acquisition
of a subsidiary has been disallowed in assessments with tax demand
raised for `1,250.16 crore (inclusive of interest) (March 31, 2017:
`1,217.79 crore). The Company has deposited `665.00 crore (March
Customs, excise duty and service tax
As at March 31, 2018, there were pending litigations for various
matters relating to customs, excise duty and service taxes involving
demands of `669.48 crore (March 31, 2017: `482.72 crore).
The details of demands for more than `100 crore is as below:
The Company has a Chrome ore beneficiation plant at Sukinda which
was 100% EOU engaged in the manufacture and export of Chrome
concentrates. During the period from Aug 2011 to Jun 2016, chrome
concentrates were cleared to some customers in Domestic tariff area
on payment of appropriate Excise duty leviable on such goods after
availing the benefit of exemption under notification No.23/2003-
CE dated 31.03.2003. However, the Excise department has raised
the demand for alleged short payment of duty on the ground that
exemption notification mentioned above is not applicable to the
company and hence custom duty is payable instead of Excise duty.
The amount involved comprising of demand and penalty is ₹121
crore (March 31, 2017: Nil). An appeal is being filed against the order
before CESTAT, Kolkata.
Sales tax /VAT
The total sales tax demands that are being contested by the Company
amounted to `567.85 crore (March 31, 2017: `349.58 crore).
The details of demands for more than `100 crore is as below:
The Company transfers its goods manufactured at Jamshedpur works
plant to various depots/branches located across the country without
payment of Central Sales tax as per the provisions of the Act and
submits F-Form in lieu of the stock-transfers made during a particular
period. These goods are then sold to various customers outside the
states from these depots/branches and the value of these sales are
disclosed in the periodical returns filed as per the Jharkhand Vat
Act 2005. The Commercial Tax Department has raised the demand
of Central Sales tax by levying tax on the differences between Value
of sales outside the states and value of F-Form submitted for stock
transfers during sales tax assessments. The amount involved under
various assessment years from 2011-12 to 2014-15 is ₹ 312 crore out
of which ₹ 125 crore (March 31, 2017: Nil) has been considered as
contingent liability.
259259
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 36. Contingencies and commitments (Contd.)
Other taxes, dues and claims
Other amounts for which the Company may contingently be liable
aggregate to `9,925.20 crore (March 31, 2017: `8,571.00 crore).
(d)
The details of demands for more than `100 crore is as below:
(a)
(b)
Claim by a party arising out of conversion arrangement-
`195.79 crore (March 31, 2017: `195.82 crore). The Company
has not acknowledged this claim and has instead filed a claim of
`141.23 crore (March 31, 2017: `139.65 crore) on the party. The
matter is pending before the Calcutta High Court.
The State Government of Odisha introduced “Orissa Rural
Infrastructure and Socio Economic Development Act, 2004”
with effect from February 2005 levying tax on mineral bearing
land computed on the basis of value of minerals produced
from the mineral bearing land. The Company had filed a writ
petition in the High Court of Orissa challenging the validity
of the Act. Orissa High Court held in December 2005 that
State does not have authority to levy tax on minerals. The
State of Odisha filed an appeal in the Supreme Court against
the order of Orissa High Court and the case is pending in
Supreme Court. The potential liability, as at March 31, 2018
would be approximately `6,521.05 crore (March 31, 2017:
`5,880.83 crore).
(c)
The Company pays royalty on Iron ore on the basis of quantity
removed from the leased area at the rates based on notification
by the Ministry of Mines, Government of India and the price
published by Indian Bureau of Mines (IBM) on a monthly basis.
A demand of `411.08 crore has been raised by Deputy Director
of Mines, Joda, claiming royalty at sized ore rates on despatches
of ore fines. The Company has filed a revision petition on
November 14, 2013 before the Mines Tribunal, Government of
India, Ministry of Mines, New Delhi, challenging the legality and
validity of the demand raised and also to grant refund of royalty
paid in excess by the Company. Mines tribunal vide its order
dated November 13, 2014 has stayed the demand of royalty on
iron ore for Joda east of `314.28 crore upto the period ending
March 31, 2014. For the demand of `96.80 crore for April, 2014
to September, 2014, a separate revision application was filed
before Mines Tribunal. The matter was heard by Mines Tribunal
on July 14, 2015 and stay was granted on the total demand
with directive to Government of Odisha not to take any coercive
action for realisation of this demanded amount. Likely demand of
royalty on fines at sized ore rates as on March 31, 2018: `1,036.53
crore (March 31, 2017: `847.96 crore).
Demand notices were originally issued by the Deputy Director of
Mines, Odisha amounting to ₹3,828 crore for excess production
over the quantity permitted under the mining plan, environment
clearance or consent to operate, pertaining to 2000-01 to 2009-10.
The demand notices have been raised under Section 21(5) of the
Mines & Minerals (Development and Regulations) Act (MMDR).
The Company filed revision petitions before the Mines Tribunal
against all such demand notices. Initially, a stay of demands was
granted, later by order dated October 12, 2017, the issue has been
remanded to the state for reconsideration of the demand in the
light of Supreme Court judgement passed on August 2, 2017.
The Hon’ble Supreme Court subsequently pronounced
its
judgment in the Common Cause case on August 2, 2017 wherein
it directed that compensation equivalent to the price of mineral
extracted in excess of environment clearance or without forest
clearance from the forest land be paid.
In pursuance to the Judgment of Hon’ble Supreme Court,
demand/show cause notices amounting to ₹3,873.35 crore have
been issued by the Deputy Director of Mines, Odisha and the
District Mining Office, Jharkhand.
In respect of the above demands:
as directed by the Hon’ble Supreme Court, the Company
has provided and paid for iron ore and manganese ore
an amount of ₹614.41 crore for production in excess of
environment clearance to the Deputy Director of Mines,
Odisha.
the Company has provided and paid under protest an
amount of ₹56.97 crore for production
in excess of
environment clearance to the District Mining Office,
Jharkhand.
the Company has challenged the demands amounting to
₹132.91 crore for production in excess of lower of mining
plan and consent to operate limits raised by the Deputy
Director of Mines, Odisha before the Mines Tribunal and
obtained a stay on the matter. Demand amount of ₹132.91
crores has been considered as contingent liability.
260260
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
36. Contingencies and commitments (Contd.)
(c)
the Company has made a comprehensive submission
before the Deputy Director of Mines, Odisha against show
cause notices amounting to ₹694.02 crore for production in
violation of mining plan, Environment Protection Act, 1986
and Water (Prevention & Control of Pollution) Act, 1981.
There has been a demand amounting to ₹234.74 crore from
the Deputy Director of Mines, Odisha for production in
excess of the Environmental Clearance in April 2018 against
which suitable legal remedy is being explored. Demand of
₹234.74 crore has been provided and ₹694.02 crore has been
disclosed as contingent liability.
the Company based on
internal assessment has
its
provided an amount of ₹1,412.89 crore against demand
notices amounting to ₹2,140.30 crore received from the
District Mining Office, Jharkhand for production in excess
of environment clearance and the balance amount of
₹727.41 crore has been considered as contingent liability.
The Company has however been granted a stay by the
Revisional Authority, Ministry of Coal, Government of India
against such demand notices.
(d)
(e)
Tata Steel Limited and Bluescope Steel Limited have given
undertaking to State Bank of India not to reduce collective
shareholding in Tata Bluescope Steel Limited (TBSL), below
51% without prior consent of the Lender. Further, the Company
has given an undertaking to State Bank of India to intimate
them before diluting its shareholding in TBSL below 50%.
The Company, as a promoter, has pledged 4,41,55,800
equity shares of Industrial Energy Limited with Infrastructure
Development Finance Corporation Limited.
The Company along with TS Alloys Limited (Promoters) has
given an undertaking to Power Finance Corporation Limited
(PFC) and Rural Electrification Corporation Limited (REC)
(Lenders) not to dispose off/transfer their equity holding below
51% of total equity in Bhubaneswar Power Private Limited
(BPPL) till the repayment of entire loan by BPPL to the lenders
without prior written approval of the lenders. The Company
along with TS Alloys Limited has pledged 60% of their equity
contribution in BPPL to PFC, PFC being the security agent.
(f)
The Company has agreed, if requested by Tata Steel UK Holdings
Limited (TSUKH) (an indirect wholly owned subsidiary), to
procure an injection of funds to reduce the outstanding net
debt in TSUKH and its subsidiaries, to a mutually accepted level.
B. Commitments
(a)
The Company has entered into various contracts with suppliers
and contractors for the acquisition of plant and machinery,
equipment and various civil contracts of capital nature
amounting to `4,275.79 crore, (2016-17: `3,825.85 crore).
(g)
(b)
Other commitments as at March 31, 2018 amount to `0.01 crore
(March 31, 2017: `0.01 crore).
The Company has given undertakings to: (a) IDBI not to dispose
of its investment in Wellman Incandescent India Ltd. (b) IDBI and
ICICI Bank Ltd. (formerly ICICI) not to dispose of its investment
in Standard Chrome Ltd. (c) Mizuho Corporate Bank Limited
and Japan Bank for International Co-operation, not to dispose
of its investments in Tata NYK Shipping Pte Limited (to retain
minimal stake required to be able to provide a corporate
guarantee towards long-term debt) (d) ICICI Bank Limited to
directly or indirectly continue to hold atleast 51 % shareholding
in Jamshedpur Continuous Annealing & Processing Company
Private Limited.
Company
The
aggregating
`11,478.00 crore (2017: `11,344.47 crore) details of which
are as below:
guarantees
given
has
(i)
(ii)
in favour of Timken India Limited for `1.07 crore (March
31, 2017: `1.07 crore) on behalf of Timken India Limited to
Commissioner of Customs in respect of goods imported.
in favour of Mizuho Corporate Bank Ltd., Japan for
`27.33 crore (March 31, 2017: `45.38 crore) against the
loan granted to a joint venture Tata NYK Shipping Pte.
Limited.
(iii) in favour of The President of India for `177.18 crore (March
31, 2017: `177.18 crore) against performance of export
obligation under the various bonds executed by a joint
venture Jamshedpur Continuous Annealing & Processing
Company Private Limited.
261261
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
36. Contingencies and commitments (Contd.)
(iv) in favour of the note holders against due and punctual
repayment of the 100% amounts outstanding as on March
31, 2018 towards issued Guaranteed Notes by a subsidiary,
ABJA Investment Co. Pte. Limited for `9,777.37 crore
(March 31, 2017: `9,728.25 crore) and `1,494.90 crore
(March 31, 2017: `1,392.44 crore). The guarantee is capped
at an amount equal to 125% of the outstanding principal
amount of the Notes as detailed in “Terms and Conditions”
of the Offering Memorandum.
(v)
in favour of President of India for `0.15 crore (March 31,
2017: `0.15 crore) against advance license.
37. Other significant litigations
(a)
Odisha legislative assembly issued an amendment to Indian
Stamp Act on May 09, 2013 and inserted a new provision
(Section 3A) in respect of stamp duty payable on grant/ renewal
of mining leases. As per the amended provision, stamp duty is
levied equal to 15% of the average royalty that would accrue
out of the highest annual extraction of minerals under the
approved mining plan multiplied by the period of such mining
lease. The Company had filed a writ petition challenging the
constitutionality of the Act on July 5, 2013. The Hon’ble High
Court, Cuttack passed an order on July 9, 2013 granting interim
stay on the operation of the Amendment Act, 2013. As a result
of the stay, as on date, the Act is not enforceable and any
demand received by the Company is not liable to be proceeded
with. Meanwhile, the Company received demand notices for
the various mines at Odisha totalling to ₹5,579 crore (March
31, 2017: `5,579 crore). The Company has concluded that it is
remote that the claim will sustain on ultimate resolution of the
legal case by the courts.
In April, 2015 the Company has received an intimation from
Government of Odisha, granting extension of validity period
for leases under the MMDR Amendment Act, 2015 up to March
31, 2030 in respect of eight mines and up to March 31, 2020
for two mines subject to execution of supplementary lease
deed. Liability has been provided in the books of accounts as
on March 31, 2018 as per the existing provisions of the Stamp
Act 1899 and the Company has since paid the stamp duty and
registration charges totalling ₹413.72 crore (March 31, 2017:
`413.72 crore) for supplementary deed execution in respect of
eight mines out of the above mines.
(b)
Noamundi Iron Ore Mine of TSL was due for its third renewal
with effect from January 01, 2012. The application for renewal
was submitted by the Company within the stipulated time,
but it remained pending consideration with the State and the
mining operations were continued in terms of the prevailing
law.
By a judgment of April 2014 in the case of Goa mines, the
Supreme Court took a view that second and subsequent renewal
of mining lease can be effected once the State considers the
application and decides to renew the mining lease by issuing
an express order. State of Jharkhand issued renewal order to
the Company on December 31, 2014. The State, however, took
a view on an interpretation of Goa judgment that the mining
carried out after expiry of the period of second renewal was
‘illegal’ and hence, issued a demand notice of ₹3568.00 crore
being the price of iron ore extracted. The said demand has been
challenged by the Company before the Jharkhand Hight Court.
The mining operations were suspended from August 01, 2014.
Therefore, upon issuance of express order, Company paid
₹152.00 crore under protest, so that mining can be resumed.
The Mines and Minerals Development and Regulation (MMDR)
Amendment Ordinance 2015 promulgated on January 12, 2015
provides for extension of such mining leases whose applications
for renewal have remained pending with the State(s). Based on
the new Ordinance, Jharkhand Government revised the Express
Order on February 12, 2015 for extending the period of lease up
to March 31, 2030 with following terms and conditions:
262262
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
37. Other significant litigations (Contd.)
value of Iron ore produced by alleged unlawful mining
during the period January 1, 2012 to April 20, 2014 for
₹2,994.49 crore to be decided on the basis of disposal of
our writ petition before Hon’ble High Court of Jharkhand.
value of iron ore produced from April 21, 2014 to July 17,
2014 amounting to ₹421.83 crore to be paid in maximum 3
installments.
value of Iron Ore produced from July 18, 2014 to August 31,
2014 i.e. ₹152.00 crore to be paid immediately.
District Mining Officer Chaibasa on March 16, 2015 has issued
demand notice for payment of ₹421.83 crore, payable in three
monthly installments. The Company replied on March 20, 2015,
since the lease has been extended by application of law till
March 31, 2030, the above demand is not tenable. The Company
paid ₹50.00 crore under protest on July 27, 2015, because the
State had stopped issuance of transit permits.
Another writ petition has been filed before Hon’ble High Court
of Jharkhand and heard on September 9, 2015. An interim
order has been given by Hon’ble High Court of Jharkhand on
September 18, 2015 wherein court has directed the Company
to discharge the liability of one of the demands raised by
the State and pay the amount of ₹371.83 crore in 3 equal
installments, first installment by October 15, 2015, second
installment by November 15, 2015 and third installment by
December 15, 2015.
In view of the interim order of Hon’ble High Court of Jharkhand
₹124 crore was paid on September 28, 2015, ₹124.00 crore was
paid on November 12, 2015 and ₹123.83 crore on December 14,
2015 under protest.
The case is pending at Hon’ble High court for disposal. The
State issued similar terms and conditions to other mining
lessees in the State rendering the mining as illegal. On a correct
application of Goa judgment read with the amendment in the
year 2015, the Company expects that it is remote that the claim
of the State will sustain and consequently, the demands raised
by the State would be quashed by the courts .
263263
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
38. Capital management
The Company’s capital management is intended to create value for shareholders by facilitating the achievement of long term and short term
goals of the Company.
The Company determines the amount of capital required on the basis of annual business plan coupled with long term and short term strategic
investment and expansion plans. The funding needs are met through equity, cash generated from operations, long term and short term bank
borrowings and issue of non-convertible debt securities.
The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the
Company.
Net debt includes interest bearing borrowings less cash and cash equivalents, other bank balances (including non-current and earmarked
balances) and current investments.
The table below summarises the capital, net debt and net debt to equity ratio of the Company.
Equity share capital
Hybrid perpetual securities
Other equity
Total Equity (A)
Non-current borrowings
Short term borrowings
Current maturities of long term borrowings and finance lease obligations
Gross Debt (B)
Total Capital (A+B)
Gross Debt as above
Less: Current investments
Less: Cash and cash equivalents
Less: Other balances with bank (including non-current earmarked balances)
Net Debt (C)
As at
March 31, 2018
1,146.12
2,275.00
60,368.72
63,789.84
(` crore)
As at
March 31, 2017
971.41
2,275.00
48,687.60
51,934.01
24,568.95
669.88
2,886.97
28,125.80
91,915.64
2,8125.80
(14,640.37)
(4,588.89)
(127.81)
8,768.73
24,694.37
3,239.67
350.59
28,284.63
80,218.64
28,284.63
(5,309.81)
(905.21)
(102.84)
21,966.77
Net debt to equity(i)
0.15
0.44
(i) Net debt to equity ratio as at March 31, 2018 and March 31, 2017 has been computed based on average equity.
264264
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR 39. Disclosures on financial instruments
This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance
sheet items that contain financial instruments.
The details of significant accounting policies, including the criteria for recognition, basis of measurement and the basis on which income and
expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 2(n), Page 205
to the financial statements.
(a) Financial assets and liabilities
The following tables presents the carrying value and fair value of each category of financial assets and liabilities as at March 31, 2018 and
March 31, 2017.
As at March 31, 2018
Amortised
cost
Fair Value
through other
comprehensive
income
Derivative
instruments
in hedging
relationship
Derivative
instruments
not in hedging
relationship
Fair Value
through
statement of
profit and loss
Total
carrying
value
(` crore)
Total fair
value
Financial assets:
Cash and bank balances
Trade receivables
Investments
Derivatives
Loans
Other financial assets
Financial liabilities:
Trade and other payables
Borrowings
Derivatives
Other financial liabilities
4,716.70
1,875.63
-
-
287.63
481.87
7,361.83
11,242.75
28,125.80
-
3,674.21
43,042.76
-
-
807.55
-
-
-
807.55
-
-
-
-
-
-
-
-
7.90
-
-
7.90
-
-
-
-
-
-
-
-
34.30
-
-
34.30
-
-
86.49
-
86.49
-
-
19,803.14
-
-
-
4,716.70
1,875.63
20,610.69
42.20
287.63
481.87
19,803.14 28,014.72 28,014.72
4,716.70
1,875.63
20,610.69
42.20
287.63
481.87
11,242.75
28,125.80
86.49
3,674.21
11,242.75
-
28,719.48
-
86.49
-
-
3,674.21
- 43,129.25 43,722.93
265265
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
39. Disclosures on financial instruments (Contd.)
As at March 31, 2017
Amortised
cost
Fair Value
through other
comprehensive
income
Derivative
instruments
in hedging
relationship
Derivative
instruments
not in hedging
relationship
Fair Value
through
statement of
profit and loss
Total
carrying
value
(` crore)
Total fair
value
Financial assets:
Cash and bank balances
Trade receivables
Investments
Derivatives
Loans
Other financial assets
Financial liabilities:
Trade and other payables
Borrowings
Derivatives
Other financial liabilities
1,008.05
2,006.52
-
-
239.11
356.81
3,610.49
10,717.44
28,284.63
-
3,729.98
42,732.05
-
-
4,808.33
-
-
-
4,808.33
-
-
-
-
-
-
-
-
0.16
-
-
0.16
-
-
2.57
-
2.57
-
-
-
6.22
-
-
6.22
-
-
446.93
-
446.93
-
-
5,459.55
-
-
-
5,459.55
1,008.05
2,006.52
10,267.88
6.38
239.11
356.81
1,008.05
2,006.52
10,267.88
6.38
239.11
356.81
13,884.75 13,884.75
10,717.44
-
28,284.63
-
449.50
-
-
3,729.98
- 43,181.55
10,717.44
29,538.89
449.50
3,729.98
44,435.81
(i)
Investments in mutual funds and derivative instruments (other than those designated in a hedging relationship) are mandatorily classified
as fair value through the statement of profit and loss.
(b)
Fair value hierarchy
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped
into Level 1 to Level 3, as described below:
Quoted prices in an active market (Level 1): This level of hierarchy includes financial assets that are measured by reference to quoted
prices (unadjusted) in active markets for identical assets or liabilities. This category consists of investment in quoted equity shares and
mutual funds.
Valuation techniques with observable inputs (Level 2): This level of hierarchy includes financial assets and liabilities, measured using
inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or
indirectly (i.e., derived from prices). This level of hierarchy includes the Company’s over-the-counter (OTC) derivative contracts.
Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy includes financial assets and liabilities
measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in
part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in
the same instrument nor are they based on available market data. This level includes investment in unquoted equity shares and preference
shares.
266266
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
39. Disclosures on financial instruments (Contd.)
Financial assets:
Investment in mutual funds
Investment in equity shares
Investment in debentures
Investment in preference shares
Derivative financial assets
Financial liabilities:
Derivative financial liabilities
Financial assets:
Investment in mutual funds
Investment in equity shares
Investment in debentures
Investment in preference shares
Derivative financial assets
Financial liabilities:
Derivative financial liabilities
As at March 31, 2018
Level 1
Level 2
Level 3
Total
(` crore)
14,640.37
497.21
-
-
-
15,137.58
-
-
-
-
49.74
-
42.20
91.94
86.49
86.49
-
310.34
-
5,113.03
-
5,423.37
-
-
14,640.37
807.55
49.74
5,113.03
42.20
20,652.89
86.49
86.49
(` crore)
As at March 31, 2017
Level 1
Level 2
Level 3
Total
5,309.81
4,422.17
-
-
-
9,731.98
-
-
49.74
-
6.38
56.12
-
386.16
-
100.00
-
486.16
5,309.81
4,808.33
49.74
100.00
6.38
10,274.26
-
-
449.50
449.50
-
-
449.50
449.50
(i) Current financial assets and liabilities are stated at carrying value which is approximately equal to their fair value.
(ii)
Derivatives are fair valued using market observable rates and published prices together with forecasted cash flow information where applicable.
(iii)
(iv)
(v)
Investments carried at fair value are generally based on market price quotations. The investments included in the level 3 of the fair value
hierarchy have been valued using the cost approach to arrive at their fair value. Cost of unquoted equity instruments has been considered
as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate
of fair value within that range.
Fair value of borrowings which have a quoted market price in an active market is based on its market price which is categorised as level
1. Fair value of borrowings which do not have an active market or are unquoted is estimated by discounting expected future cash flows
using a discount rate equivalent to the risk-free rate of return adjusted for credit spread considered by lenders for instruments of similar
maturities which is categorised as level 2 in the fair value hierarchy.
Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in
any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily
indicative of the amounts that the Company could have realised or paid in sale transactions as of respective dates. As such, fair value of
financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date.
(vi) There have been no transfers between Level 1 and Level 2 for the years ended March 31, 2018 and March 31, 2017.
267267
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
39. Disclosures on financial instruments (Contd.)
(vii) Reconciliation of level 3 fair value measurement is as below:
Balance at the beginning of the year
Additions during the year
Sale/Redemption during the year
Fair value changes during the year
Balance at the end of the year
(c) Derivative financial instruments
As at
March 31, 2018
486.16
4,646.55
(100.00)
390.66
5,423.37
(` crore)
As at
March 31, 2017
507.81
7.00
-
(28.65)
486.16
Derivative instruments used by the Company include forward exchange contracts, interest rate swaps, currency swaps, options and interest
rate caps and collars. These financial instruments are utilised to hedge future transactions and cash flows and are subject to hedge accounting
under Ind AS 109 “ Financial Instruments” to the extent possible. The Company does not hold or issue derivative financial instruments for
trading purpose. All transactions in derivative financial instruments are undertaken to manage risks arising from underlying business activities.
The following table sets out the fair value of derivatives held by the Company as at the end of each reporting period.
(i)
(ii)
Foreign currency forwards, swaps and options
Interest rate swaps and collars
Classified as:
Non-current
Current
As at March 31, 2018
As at March 31, 2017
(` crore)
Assets
34.44
7.76
42.20
12.13
30.07
Liabilities
86.49
-
86.49
70.08
16.41
Assets
6.23
0.15
6.38
0.12
6.26
Liabilities
446.93
2.57
449.50
179.33
270.17
As at the end of the reporting period total notional amount of outstanding foreign currency contracts, interest rate swaps and collars that the
Company has committed to is as below:
(i)
(ii)
Foreign currency forwards, swaps and options
Interest rate swaps and collars
As at
March 31, 2018
1,322.86
150.00
1,472.86
(US$ million)
As at
March 31, 2017
1,337.69
150.00
1,487.69
268268
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR 39. Disclosures on financial instruments (Contd.)
(d) Transfer of financial assets
The Company transfers certain trade receivables under discounting arrangements with banks and financial institutions. Some of such
arrangements do not qualify for de-recognition due to recourse arrangement being in place. Consequently, the proceeds received from
transfer are recorded as short-term borrowings from banks and financial institutions.
The carrying value of trade receivables not de-recognised along with the associated liabilities is as below:
As at March 31, 2018
As at March 31, 2017
Carrying value of
asset transferred
Carrying value
of associated
liabilities
Carrying value of
asset transferred
Carrying value
of associated
liabilities
(` crore)
Trade receivables
547.56
547.56
651.36
651.36
(e) Financial risk management
In the course of its business, the Company is exposed primarily
to fluctuations in foreign currency exchange rates, interest rates,
equity prices, liquidity and credit risk, which may adversely
impact the fair value of its financial instruments.
The Company has a risk management policy which not only covers
the foreign exchange risks but also other risks associated with the
financial assets and liabilities such as interest rate risks and credit
risks. The risk management policy is approved by the Board of
Directors. The risk management framework aims to:
(i)
create a stable business planning environment by reducing
the impact of currency and interest rate fluctuations on the
Company’s business plan.
(ii)
achieve greater predictability to earnings by determining
the financial value of the expected earnings in advance.
(i) Market risk:
Market risk is the risk of any loss in future earnings, in realisable fair
values or in future cash flows that may result from a change in the
price of a financial instrument. The value of a financial instrument
may change as a result of changes in interest rates, foreign currency
exchange rates, equity price fluctuations, liquidity and other market
changes. Future specific market movements cannot be normally
predicted with reasonable accuracy.
(a) Market risk - Foreign currency exchange rate risk:
The fluctuation in foreign currency exchange rates may have a
potential impact on the statement of profit and loss and equity,
where any transaction references more than one currency or
where assets/liabilities are denominated in a currency other than
the functional currency of the Company.
The Company, as per its risk management policy, uses foreign
exchange and other derivative instruments primarily to hedge
foreign exchange and interest rate exposure. Any weakening
of the functional currency may impact the Company’s cost of
imports and cost of borrowings and consequently may increase
the cost of financing the Company’s capital expenditures.
A 10% appreciation/depreciation of foreign currencies with
respect to functional currency of the Company would result in
an increase/decrease in the Company’s net profit/equity before
considering tax impacts by approximately `514.89 crore for the
year ended March 31, 2018 (March 31, 2017: `9.46 crore) and an
increase/decrease
in carrying value of property, plant and
equipment (before considering depreciation) by approximately
`148.81 crore as at March 31, 2018 (March 31, 2017: `185.49 crore).
The foreign exchange rate sensitivity is calculated by assuming
a simultaneous parallel foreign exchange rates shift of all
the currencies by 10% against the functional currency of the
Company.
The sensitivity analysis has been based on the composition
of the Company’s financial assets and liabilities as at March
31, 2018 and March 31, 2017 excluding trade payables, trade
receivables, other derivative and non-derivative financial
instruments (except investment in preference shares) not
forming part of debt and which do not present a material
exposure. The period end balances are not necessarily
representative of the average balance outstanding during
the period.
269269
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
The Company has a policy of dealing only with credit worthy
counter parties and obtaining sufficient collateral, where
appropriate as a means of mitigating the risk of financial loss from
defaults.
Financial
instruments that are subject to credit risk and
concentration thereof principally consist of trade receivables,
loans receivables,
investments, cash and cash equivalents,
derivatives and financial guarantees provided by the Company.
None of the financial instruments of the Company result in
material concentration of credit risk.
The carrying value of financial assets represents the maximum
credit risk. The maximum exposure to credit risk was ₹27,206.24
crore and ₹9,063.68 crore, as at March 31, 2018 and March 31, 2017
respectively, being the total carrying value of trade receivables,
balances with bank, bank deposits, investments in debt securities,
mutual funds, loans, derivative assets and other financial assets.
The risk relating to trade receivables is presented in Note 13,
Page 231.
The Company’s exposure to customers is diversified and no single
customer contributes to more than 10% of outstanding trade
receivables as at March 31, 2018 and March 31, 2017.
In respect of financial guarantees provided by the Company to
banks and financial institutions, the maximum exposure which
the Company is exposed to is the maximum amount which the
Company would have to pay if the guarantee is called upon.
Based on the expectation at the end of the reporting period, the
Company considers that it is more likely than not that such an
amount will not be payable under the guarantees provided.
(iii) Liquidity risk:
Liquidity risk refers to the risk that the Company cannot meet its
financial obligations. The objective of liquidity risk management
is to maintain sufficient liquidity and ensure that funds are
available for use as per requirements.
The Company has obtained fund and non-fund based working
capital lines from various banks. Furthermore, the Company
has access to funds from debt markets through commercial
paper programs, non-convertible debentures and other debt
instruments. The Company invests its surplus funds in bank fixed
deposits and in mutual funds, which carry no or low market risk.
39. Disclosures on financial instruments (Contd.)
(b) Market risk - Interest rate risk:
Interest rate risk is measured by using the cash flow sensitivity for
changes in variable interest rates. Any movement in the reference
rates could have an impact on the Company’s cash flows as well
as costs.
The Company is subject to variable interest rates on some of its
interest bearing liabilities. The Company’s interest rate exposure
is mainly related to debt obligations.
Based on the composition of debt as at March 31, 2018 and
March 31, 2017 a 100 basis points increase in interest rates would
increase the Company’s finance costs (before considering interest
eligible for capitalisation) and thereby consequently reduce net
profit/equity before considering tax impacts by approximately
`143.71 crore for the year ended March 31, 2018 (2016-17:
`122.34 crore).
The risk estimates provided assume a parallel shift of 100 basis
points interest rate across all yield curves. This calculation also
assumes that the change occurs at the balance sheet date and
has been calculated based on risk exposures outstanding as at that
date. The period end balances are not necessarily representative of
the average debt outstanding during the period.
(c) Market risk - Equity price risk:
Equity price risk is related to change in market reference price of
investments in equity securities held by the Company.
The fair value of quoted investments held by the Company
exposes the Company to equity price risks. In general, these
investments are not held for trading purposes.
The fair value of quoted investments in equity, classified as fair
value through other comprehensive income as at March 31,
2018 and March 31, 2017 was `497.21 crore and `4,422.17 crore,
respectively.
A 10% change in equity prices of such securities held as at March
31, 2018 and March 31, 2017, would result in an impact of `49.72
crore and `442.22 crore respectively on equity before considering
tax impact.
(ii) Credit risk:
Credit risk is the risk of financial loss arising from counter-party
failure to repay or service debt according to the contractual terms
or obligations. Credit risk encompasses both the direct risk of
default and the risk of deterioration of creditworthiness as well as
concentration risks.
270270
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
39. Disclosures on financial instruments (Contd.)
The following table shows a maturity analysis of the anticipated cash flows including interest obligations for the Company’s derivative and non-
derivative financial liabilities on an undiscounted basis, which therefore differ from both carrying value and fair value. Floating rate interest is
estimated using the prevailing interest rate at the end of the reporting period. Cash flows in foreign currencies are translated using the period
end spot rates.
Non-derivative financial liabilities:
Borrowings including interest obligations
Trade payables
Other financial liabilities
Carrying
value
Contractual
cash flows
As at March 31, 2018
less than
one year
between one to
five years
More than
five years
(` crore)
28,125.80
11,242.75
3,674.21
43,042.76
42,841.11
11,242.75
3,674.21
57,758.07
5,528.51
11,242.75
3,654.43
20,425.69
17,766.50
-
5.00
17,771.50
19,546.10
-
14.78
19,560.88
Derivative financial liabilities
86.49
86.49
16.41
70.88
-
Non-derivative financial liabilities:
Borrowings including interest obligations
Trade payables
Other financial liabilities
Carrying
value
Contractual
cash flows
As at March 31, 2017
less than
one year
between one to
five years
More than
five years
(` crore)
28,284.63
10,717.44
3,729.98
42,732.05
44,658.00
10,717.44
3,729.98
59,105.42
5,141.84
10,717.44
3,711.76
19,571.04
15,921.64
-
5.26
15,926.90
23,594.52
-
12.96
23,607.48
Derivative financial liabilities
449.50
449.50
270.17
96.11
83.22
40. Segment reporting
The Company is engaged in the business of manufacturing and distribution of steel products and is primarily operated out of India. In
accordance with Ind AS 108 “Operating Segments”, the Company has presented segment information on the basis of its consolidated financial
statements which forms part of this report.
271271
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 41. Related party transactions
The Company’s related parties principally consist of its subsidiaries, associates and joint ventures, Tata Sons Limited including its subsidiaries
and joint ventures. The Company routinely enters into transactions with these related parties in the ordinary course of business at market rates
and terms.
The following table summarises related party transactions and balances included in the financial statements of the Company for the year
ended as at March 31, 2018 and March 31, 2017:
Subsidiaries Associates
Joint
Ventures
Tata Sons, its
subsidiaries and
joint ventures
(` crore)
Total
10,961.18
8,382.81
291.74
254.56
109.55
141.22
187.08 11,549.55
8,949.50
170.91
6,793.81
4,233.84
1,531.07
1,601.30
372.60
335.53
23.63
9.70
-
-
1.17
0.93
30.31
46.64
31.36
4.98
-
-
-
10.96
-
-
22.32
27.23
1,978.07
1,522.49
175.33
114.89
8,969.53
5,898.45
9.80
7.73
1,251.58
1,305.59
55.61
88.88
2,848.06
3,003.50
5.87
4.94
-
-
-
-
-
-
3.51
1.11
-
-
-
-
-
-
-
-
95.85
96.39
4.62
-
-
-
-
-
37.55
39.78
5.35
-
-
-
-
-
-
-
1.31
0.85
475.63
437.71
-
-
19.23
16.16
28.25
9.70
19.23
16.16
295.61
236.48
296.78
237.41
10.46
0.54
-
-
81.83
88.07
36.71
4.98
100.00
100.00
100.00
100.00
-
-
-
10.96
3,782.76
-
3,782.76
-
Purchase of goods
Sale of goods
Services received
Services rendered
Interest income recognised
Interest expenses recognised
Dividend paid
Dividend received
Provision for receivables recognised during the year
Management contracts
Purchase of investments
Sale of investments
272272
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR 41. Related party transactions (Contd.)
Finance provided during the year
Outstanding loans and receivables
Provision for outstanding loans and receivables
Outstanding payables
Guarantees provided outstanding
Subscription to rights issue
Subsidiaries Associates
Joint
Ventures
Tata Sons, its
subsidiaries and
joint ventures
(` crore)
Total
5,340.28
470.78
1,210.66
1,138.30
-
-
46.82
-
-
-
5,387.10
470.78
32.36
26.68
202.61
46.38
13.60
80.38
1,459.23
1,291.74
668.78
636.98
0.03
0.03
5.49
-
-
-
674.30
637.01
5,787.08
5,520.66
27.74
28.44
233.95
388.39
119.22
162.88
6,167.99
6,100.37
11,272.27
11,120.69
-
-
-
-
-
-
204.51
222.56
- 11,476.78
11,343.25
-
-
-
3,420.56
-
3,420.56
-
Figures in italics represents comparative figures of previous year.
(i) The details of remuneration paid to key managerial personnel is provided in Note 29, Page 249.
During the year ended March 31, 2018, value of shares subscribed by key managerial personnel and their relatives under rights issue is
`2,87,476.00 (2016-17: Nil)
The Company has paid dividend of `27,420.00 (2016-17: `21,936.00) to key managerial personnel and `3,310.00 (2016-17: `2,648.00) to
relatives of key managerial personnel during the year ended March 31, 2018.
(ii)
During the year ended March 31, 2018, the Company has contributed `431.35 crore (2016-17: `375.29 crore) to post employment benefit
plans.
As at March 31, 2018, amount receivable from post-employment benefit fund is `296.38 crore (March 31, 2017: `256.17 crore) on account
of retirement benefit obligations paid by the Company directly.
(iii) Transactions with joint ventures have been disclosed at full value and not at their proportionate share.
273273
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
42. The National Company Law Tribunal, New Delhi Bench, has approved the terms of the Resolution Plan submitted by the Company, to
acquire Bhushan Steel Limited (“BSL”) pursuant to a Corporate Insolvency Resolution process implemented under the Insolvency and
Bankruptcy Code 2016 (the “Resolution Plan”), and the terms of the Resolution Plan are now binding.
Pursuant to the Resolution Plan, Bamnipal Steel Limited (“BNPL”) a wholly-owned subsidiary of the Company, will subscribe to 72.65% of
the equity share capital of BSL for an aggregate amount of ₹158.89 crore and provide additional funds aggregating of ₹ 35,041.11 crore by
way of debt/convertible debt.
Upon implementation of the Resolution Plan, the Company will hold 72.65% of the paid up share capital of BSL. The remaining 27.35% of
BSL’s share capital will be held by BSL’s existing shareholders and the financial creditors who receive shares in exchange for the debt owed
to them. The funds received by BSL as debt and equity will be used to settle the debts owed to the existing financial creditors of BSL, by
payment of ₹35,200 crores.
The Competition Commission of India had earlier approved the Resolution Plan.
43. Dividend
The dividend declared by the Company is based on profits available for distribution as reported in the standalone financial statements of
the Company. On May 16, 2018, the Board of Directors of the Company have proposed a dividend of ₹10 per Ordinary share of ₹10 each
and ₹2.504 per partly paid Ordinary share of ₹10 each (paid up ₹2.504 per share) in respect of the year ended March 31, 2018 subject to
the approval of shareholders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of ₹1,381.47crore
inclusive of dividend distribution tax of ₹235.55 crore.
44. Previous year figures have been recasted/restated wherever necessary.
In terms of our report attached
For and on behalf of the Board of Directors
For Price Waterhouse & Co Chartered Accountants LLP
sd/-
N. Chandrasekaran
sd/-
Mallika Srinivasan
sd/-
O. P. Bhatt
Firm Registration Number: 304026E/ E-300009.
Chartered Accountants
Chairman
DIN: 00121863
Director
DIN: 00037022
Director
DIN: 00548091
sd/-
Peter Blauwhoff
Director
DIN: 07728872
sd/-
Russell I Parera
Partner
Membership Number 042190
Mumbai, May 16, 2018
sd/-
D. K. Mehrotra
Director
DIN: 00142711
sd/-
Saurabh Agrawal
Director
DIN: 02144558
sd/-
T. V. Narendran
Chief Executive Officer and
Managing Director
DIN: 03083605
sd/-
Koushik Chatterjee
Executive Director and
Chief Financial Officer
DIN: 00004989
sd/-
Deepak Kapoor
Director
DIN: 00162957
sd/-
Parvatheesam K.
Company Secretary
ACS: 15921
274274
Notes FORMING PART OF THE FINANCIAL STATEMENTSStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
Independent Auditor’s Report on Consolidated
Financial Statements
Report on consolidated Indian Accounting Standards (Ind AS)
Financial Statements
1.
We have audited the accompanying consolidated Ind AS
financial statements of Tata Steel Limited
(“hereinafter
referred to as the Holding Company”) and its subsidiaries (the
Holding Company and its subsidiaries together referred to as
“the Group”), its jointly controlled companies and associate
companies; (refer Note 1 to the attached consolidated Ind AS
financial statements), comprising of the consolidated Balance
Sheet as at March 31, 2018, the consolidated Statement of
Profit and Loss (including Other Comprehensive Income), the
consolidated Cash Flow Statement for the year then ended and
the Statement of Changes in Equity for the year then ended,
and a summary of significant accounting policies and other
explanatory information prepared based on the relevant records
(hereinafter referred to as “the Consolidated Ind AS Financial
Statements”).
Management’s Responsibility for the Consolidated Ind AS
Financial Statements
2.
The Holding Company’s Board of Directors is responsible for the
preparation of these consolidated Ind AS financial statements
in terms of the requirements of the Companies Act, 2013
(hereinafter referred to as “the Act”) that give a true and fair view
of the consolidated financial position, consolidated financial
performance, consolidated cash flows and changes in equity
of the Group including its associates and jointly controlled
companies in accordance with accounting principles generally
accepted in India including the Indian Accounting Standards
specified in the Companies (Indian Accounting Standards) Rules,
2015 (as amended) under Section 133 of the Act. The Holding
Company’s Board of Directors is also responsible for ensuring
accuracy of records including financial information considered
necessary for the preparation of consolidated Ind AS financial
statements. The respective Board of Directors of the Companies
included in the Group and of its associates and jointly controlled
companies are responsible for maintenance of adequate
accounting records in accordance with the provisions of the Act
for safeguarding the assets of the Group and its associates and
jointly controlled companies respectively and for preventing
and detecting frauds and other irregularities; the selection
and application of appropriate accounting policies; making
judgements and estimates that are reasonable and prudent;
and the design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting
records, relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free
from material misstatement, whether due to fraud or error,
which has been used for the purpose of preparation of the
consolidated Ind AS financial statements by the Directors of the
Holding Company, as aforesaid.
Auditors’ Responsibility
3.
4.
5.
6.
is to express an opinion on these
Our responsibility
consolidated Ind AS financial statements based on our audit.
While conducting the audit, we have taken into account the
provisions of the Act and the Rules made thereunder including
the accounting standards and matters which are required to be
included in the audit report.
We conducted our audit of the consolidated Ind AS financial
statements in accordance with the Standards on Auditing
specified under Section 143(10) of the Act and other
issued by the
applicable authoritative pronouncements
Institute of Chartered Accountants of India. Those Standards
and pronouncements require that we comply with ethical
requirements and plan and perform the audit to obtain
reasonable assurance about whether the consolidated Ind AS
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the consolidated
Ind AS financial statements. The procedures selected depend
on the auditors’ judgement, including the assessment of the
risks of material misstatement of the consolidated Ind AS
financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal financial
control relevant to the Holding Company’s preparation of the
consolidated Ind AS financial statements that give a true and fair
view, in order to design audit procedures that are appropriate
in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the
Holding Company’s Board of Directors, as well as evaluating
the overall presentation of the consolidated Ind AS financial
statements.
We believe that the audit evidence obtained by us and the audit
evidence obtained by the other auditors in terms of their reports
referred to in sub-paragraph 8 of the Other Matters paragraph
below, other than the unaudited financial statements/financial
information as certified by the management and referred to
in sub-paragraph 9 of the Other Matters paragraph below,
is sufficient and appropriate to provide a basis for our audit
opinion on the consolidated Ind AS financial statements.
275275
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Opinion
7.
In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid consolidated Ind
AS financial statements give the information required by the
Act in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted
in India of the consolidated state of affairs of the Group, its
associates and jointly controlled companies as at March 31,
2018, and their consolidated total comprehensive income
(comprising of consolidated profit and consolidated other
comprehensive income), their consolidated cash flows and
consolidated changes in equity for the year ended on that date.
Other Matter
8.
9.
We did not audit the financial statements/information of nine
subsidiaries, whose financial statements/information reflect
total assets of `83,196.23 crores and net assets of `(15,990.96)
crores as at March 31, 2018, total revenue of `72,668.19 crores,
total comprehensive income (comprising of profit/(loss) and
other comprehensive income) of `6,018.00 crores and net cash
flows amounting to `(1,046.45) crores for the year ended on
that date, as considered in the consolidated Ind AS financial
statements, which also include their step down jointly controlled
companies and associates representing `56.63 crores of the
Group’s share of total comprehensive income for the year ended
on that date. These financial statements/information have been
audited by other auditors whose reports have been furnished
to us by the Management, and our opinion on the consolidated
Ind AS financial statements in so far as it relates to the amounts
and disclosures included in respect of these subsidiaries and
their step down jointly controlled companies and associates,
and our report in terms of sub-section (3) of Section 143 of the
Act in so far as it relates to the aforesaid subsidiaries and their
step down jointly controlled companies and associates, is based
solely on the reports of the other auditors.
We did not audit the financial statements/information of twenty
subsidiaries whose financial statements/information reflect
total assets of `7339.37 crores and net assets of `(1,572.03)
crores as at March 31, 2018, total revenue of `45.93 crores, total
comprehensive income (comprising of profit/ (loss) and other
comprehensive income) of `(207.71) crores and net cash flows
amounting to `2.79 crores for the year ended on that date, as
considered in the consolidated Ind AS financial statements.
The consolidated Ind AS financial statements also include the
Group’s share of total comprehensive income (comprising
of profit/ (loss) and other comprehensive income) of `10.20
crores and `11.60 crores for the year ended March 31, 2018 as
considered in the consolidated Ind AS financial statements,
in respect of four associate companies and seven jointly
controlled companies respectively, whose financial statements/
information have not been audited by us. These financial
statements/information are unaudited and have been furnished
to us by the Management, and our opinion on the consolidated
Ind AS financial statements in so far as it relates to the amounts
and disclosures included in respect of these subsidiaries,
associate companies and jointly controlled companies and
our report in terms of sub-section (3) of Section 143 of the
Act in so far as it relates to the aforesaid subsidiaries, jointly
controlled companies and associates, is based solely on such
unaudited financial statements/information. In our opinion and
according to the information and explanations given to us by
the Management, these financial statements/information are
not material to the Group.
Our opinion on the consolidated Ind AS financial statements
and our report on Other Legal and Regulatory Requirements
below, is not modified in respect of the above matters with
respect to our reliance on the work done and the reports of
the other auditors and the financial statements/ information
certified by the Management.
10.
The consolidated Ind AS financial statements of the Company
for the year ended March 31, 2017, were audited by another firm
of chartered accountants under the Companies Act, 2013 who,
vide their report dated May 16, 2017, expressed an unmodified
opinion on those financial statements. Our opinion is not
qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
11.
As required by Section143(3) of the Act, we report, to the
extent applicable, that:
(a)
(b)
We have sought and obtained all the information and
explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit of the
aforesaid consolidated Ind AS financial statements.
In our opinion, proper books of account as required by
law maintained by the Holding Company, its subsidiaries
included in the Group, associate companies and jointly
controlled companies incorporated in India including
relevant records relating to preparation of the aforesaid
consolidated Ind AS financial statements have been kept
so far as it appears from our examination of those books
and records of the Holding Company and the reports of the
other auditors.
276276
ConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
(c)
(d)
(e)
The Consolidated Balance Sheet, the Consolidated Statement
of Profit and Loss (including other comprehensive income),
Consolidated Cash Flow Statement and the Consolidated
Statement of Changes in Equity dealt with by this Report are
in agreement with the relevant books of account maintained
by the Holding Company, its subsidiaries included in the
Group, associate companies and jointly controlled companies
incorporated in India including relevant records relating to the
preparation of the consolidated Ind AS financial statements.
In our opinion, the aforesaid consolidated Ind AS financial
statements comply with the Indian Accounting Standards
specified under Section 133 of the Act.
On the basis of the written representations received from the
directors of the Holding Company as on March 31, 2018 taken
on record by the Board of Directors of the Holding Company
and the reports of the statutory auditors of its subsidiary
jointly controlled
companies, associate companies and
companies incorporated in India, none of the directors of the
Group companies, its associate companies and jointly controlled
companies incorporated in India is disqualified as on March 31,
2018 from being appointed as a director in terms of Section 164
(2) of the Act.
(f )
With respect to the adequacy of the internal financial controls
with reference to financial statements of the Holding Company,
its subsidiary companies, associate companies and jointly
controlled companies incorporated in India and the operating
effectiveness of such controls, refer to our separate Report in
Annexure A.
i.
ii.
iii.
The consolidated Ind AS financial statements disclose the
impact, if any, of pending litigations as at March 31, 2018
on the consolidated financial position of the Group, its
associates and jointly controlled companies — Refer Notes
39 and 40 to the consolidated Ind AS financial statements.
The Group, its associates and jointly controlled companies
did not have any material foreseeable losses on long-term
contracts including derivative contracts as at March 31,
2018.
There has been no delay
in transferring amounts,
required to be transferred, to the Investor Education
and Protection Fund by the Holding Company and its
subsidiary companies, associate Companies and jointly
controlled companies incorporated in India during the year
ended March 31, 2018 except for amounts aggregating
to `4.67 crores, which according to the information and
explanations provided by the management is held in
abeyance due to dispute/pending legal cases.
iv.
The reporting on disclosures relating to Specified Bank
Notes is not applicable to the Group for the year ended
March 31, 2018.
For Price Waterhouse & Co Chartered Accountants LLP
Firm Registration Number: 304026E/ E-300009.
Chartered Accountants
(g)
With respect to the other matters to be included in the Auditors’
Report in accordance with Rule 11 of the Companies (Audit
and Auditors) Rules, 2014, in our opinion and to the best of our
information and according to the explanations given to us:
Mumbai
May 16, 2018
Russell I Parera
Partner
Membership Number 042190
277277
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
Annexure A to Independent Auditors’ Report
Referred to in paragraph 11(f) of the Independent Auditors’
Report of even date to the members of Tata Steel Limited on
the consolidated Ind AS financial statements for the year ended
March 31, 2018
Report on the Internal Financial Controls under Clause (i) of
Sub-section 3 of Section 143 of the Act
1.
In conjunction with our audit of the consolidated Ind AS financial
statements of the Company as of and for the year ended March
31, 2018, we have audited the internal financial controls over
financial reporting of Tata Steel Limited (hereinafter referred
to as “the Holding Company”) and its subsidiary companies, its
associate companies and jointly controlled companies, which
are companies incorporated in India, as of that date. Reporting
under clause (1) of sub section 3 of Section 143 of the Act in
respect of the adequacy of the internal financial controls over
financial reporting is not applicable to two jointly controlled
companies incorporated in India namely S & T Mining Company
Private Limited and Tata NYK Shipping (India) Private Limited,
pursuant to MCA notification GSR 583(E) dated 13 June 2017.
Management’s Responsibility for Internal Financial Controls
2.
The respective Board of Directors of the Holding company,
its subsidiary companies, its associate companies and jointly
controlled companies, to whom reporting under clause (i) of sub
section 3 of Section 143 of the Act in respect of the adequacy
of the internal financial controls over financial reporting is
applicable, which are companies incorporated in India, are
responsible for establishing and maintaining internal financial
controls based on the internal control over financial reporting
criteria established by the Company considering the essential
components of internal control stated in the Guidance Note on
Audit of Internal Financial Controls Over Financial Reporting
issued by the Institute of Chartered Accountants of India (ICAI).
These responsibilities include the design, implementation
and maintenance of adequate
internal financial controls
that were operating effectively for ensuring the orderly and
efficient conduct of its business, including adherence to the
respective company’s policies, the safeguarding of its assets,
the prevention and detection of frauds and errors, the accuracy
and completeness of the accounting records, and the timely
preparation of reliable financial information, as required under
the Act.
Auditor’s Responsibility
3.
4.
Our responsibility is to express an opinion on the Company’s
internal financial controls over financial reporting based on our
audit. We conducted our audit in accordance with the Guidance
Note on Audit of Internal Financial Controls Over Financial
Reporting (the “Guidance Note”) issued by the ICAI and the
Standards on Auditing deemed to be prescribed under section
143(10) of the Companies Act, 2013, to the extent applicable
to an audit of internal financial controls, both applicable to an
audit of internal financial controls and both issued by the ICAI.
Those Standards and the Guidance Note require that we comply
with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether adequate internal
financial controls over financial reporting was established
and maintained and if such controls operated effectively in all
material respects.
Our audit involves performing procedures to obtain audit
evidence about the adequacy of the
internal financial
controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over
financial reporting included obtaining an understanding of
internal financial controls over financial reporting, assessing the
risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based
on the assessed risk. The procedures selected depend on the
auditor’s judgement, including the assessment of the risks of
material misstatement of the financial statements, whether due
to fraud or error.
5.
We believe that the audit evidence we have obtained and
the audit evidence obtained by the other auditors in terms of
their reports referred to in the Other Matters paragraph below,
is sufficient and appropriate to provide a basis for our audit
opinion on the Company’s internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
6.
A company’s internal financial control over financial reporting is
a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal
financial control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records
278278
ConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and
that receipts and expenditures of the company are being made
only in accordance with authorisations of management and
directors of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorised
acquisition, use, or disposition of the company’s assets that
could have a material effect on the consolidated Ind AS financial
statements.
Opinion
8.
In our opinion, the Holding Company, its subsidiary companies,
its associate companies and jointly controlled companies,
which are companies incorporated in India, have, in all material
respects, an adequate internal financial controls system over
financial reporting and such internal financial controls over
financial reporting were operating effectively as at March 31,
2018, based on the internal control over financial reporting
criteria established by the Company considering the essential
components of internal control stated in the Guidance Note on
Audit of Internal Financial Controls Over Financial Reporting
issued by the Institute of Chartered Accountants of India.
Inherent Limitations of Internal Financial Controls Over
Financial Reporting
Other Matters
7.
Because of the inherent limitations of internal financial controls
over financial reporting, including the possibility of collusion
improper management override of controls, material
or
misstatements due to error or fraud may occur and not be
detected. Also, projections of any evaluation of the internal
financial controls over financial reporting to future periods
are subject to the risk that the internal financial control over
financial reporting may become inadequate because of changes
in conditions, or that the degree of compliance with the policies
or procedures may deteriorate.
9.
Our aforesaid reports under Section 143(3)(i) of the Act on the
adequacy and operating effectiveness of the internal financial
controls over financial reporting in so far as it relates to a
subsidiary company, which are companies incorporated in India,
is based on the corresponding report of the auditor of such
company incorporated in India. Our opinion is not qualified in
respect of this matter.
For Price Waterhouse & Co Chartered Accountants LLP
Firm Registration Number: 304026E/ E-300009.
Chartered Accountants
Mumbai
May 16, 2018
Russell I Parera
Partner
Membership Number 042190
279279
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Note Page
As at
March 31, 2018
As at
March 31, 2017
(` crore)
3
5
6
7
8
9
10
11
12
13
301
306
307
309
311
312
314
315
316
319
90,322.78
16,159.80
4,099.45
1,682.66
454.61
1,781.22
1,209.28
717.34
29.16
87.91
20,570.87
1,152.76
1,035.80
2,577.14
1,41,880.78
86,880.59
15,514.37
3,494.73
1,631.23
269.76
1,593.94
5,190.05
373.06
83.17
85.58
1,752.64
981.23
885.87
3,661.99
1,22,398.21
14
321
28,331.04
24,803.82
8
15
16
17
9
10
11
311
321
323
323
312
314
315
13
319
18
325
14,908.97
12,415.52
7,783.50
154.35
256.48
150.95
599.71
2.91
62.28
3,108.98
67,774.69
102.47
2,09,757.94
5,673.13
11,586.82
4,832.29
88.76
224.50
104.04
387.82
-
35.08
2,207.35
49,943.61
991.42
1,73,333.24
Consolidated Balance Sheet
AS AT MARCH 31, 2018
Assets
I
Property, plant and equipment
Capital work-in-progress
Goodwill on consolidation
Non-current assets
(a)
(b)
(c)
(d) Other Intangible assets
(e)
(f ) Equity accounted investments
(g) Financial assets
Intangible assets under development
Investments
(i)
(ii) Loans
(iii) Derivative assets
(iv) Other financial assets
(h) Retirement benefit assets
Income tax assets
(i)
(j) Deferred tax assets
(k) Other assets
Total non-current assets
Current assets
(a)
(b)
II
Investments
Trade receivables
Inventories
Financial assets
(i)
(ii)
(iii) Cash and cash equivalents
(iv) Other balances with bank
(v)
(vi) Derivative assets
(vii) Other financial assets
Retirement benefit assets
Income tax assets
Loans
(c)
(d)
(e) Other assets
Total current assets
III Assets held for sale
Total Assets
280280
ConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Note Page
As at
March 31, 2018
As at
March 31, 2017
(` crore)
Consolidated Balance Sheet (Contd.)
AS AT MARCH 31, 2018
Equity and Liabilities
IV Equity
(a)
Equity share capital
(b) Hybrid perpetual securities
(c) Other equity
Equity attributable to shareholders of the Company
Non controlling interests
Total equity
(a)
V Non-current liabilities
Financial liabilities
(i)
Borrowings
(ii) Derivative liabilities
(iii) Other financial liabilities
Provisions
Retirement benefit obligations
(b)
(c)
(d) Deferred income
(e) Deferred tax liabilities
(f ) Other liabilities
Total non-current liabilities
VI Current liabilities
(a)
Financial liabilities
Borrowings
(i)
(ii)
Trade payables
(iii) Derivative liabilities
(iv) Other financial liabilities
Provisions
Retirement benefit obligations
Income tax liabilities
(b)
(c)
(d) Deferred income
(e)
(f ) Other liabilities
Total current liabilities
VII Liabilities held for sale
Total Equity and Liabilities
Notes forming part of the consolidated financial statements
19
20
21
326
329
329
23
335
24
25
11
26
12
27
23
28
24
25
11
26
339
339
315
341
316
342
335
342
339
339
315
341
27
342
18
325
1-50
1,144.95
2,275.00
57,450.67
60,870.62
936.52
61,807.14
72,789.10
85.04
105.83
4,338.24
2,516.56
1,526.58
10,569.88
358.16
92,289.39
15,884.98
20,413.81
468.79
9,791.78
1,269.64
110.36
6.21
783.47
6,932.26
55,661.30
0.11
2,09,757.94
In terms of our report attached
For and on behalf of the Board of Directors
For Price Waterhouse & Co Chartered Accountants LLP
sd/-
N. Chandrasekaran
sd/-
Mallika Srinivasan
sd/-
O. P. Bhatt
Firm Registration Number: 304026E/ E-300009.
Chartered Accountants
Chairman
DIN: 00121863
Director
DIN: 00037022
Director
DIN: 00548091
sd/-
Peter Blauwhoff
Director
DIN: 07728872
sd/-
Russell I Parera
Partner
Membership Number 042190
Mumbai, May 16, 2018
sd/-
D. K. Mehrotra
Director
DIN: 00142711
sd/-
Saurabh Agrawal
Director
DIN: 02144558
sd/-
T. V. Narendran
Chief Executive Officer and
Managing Director
DIN: 03083605
sd/-
Koushik Chatterjee
Executive Director and
Chief Financial Officer
DIN: 00004989
970.24
2,275.00
34,574.08
37,819.32
1,601.70
39,421.02
64,022.27
179.98
108.78
4,279.69
2,666.27
2,057.59
10,030.08
226.51
83,571.17
18,328.10
18,574.46
673.67
6,315.51
987.38
95.20
22.52
739.18
4,315.27
50,051.29
289.76
1,73,333.24
sd/-
Deepak Kapoor
Director
DIN: 00162957
sd/-
Parvatheesam K.
Company Secretary
ACS: 15921
281281
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Consolidated Statement of Profit and Loss
FOR THE YEAR ENDED MARCH 31, 2018
I
II
III
IV
Revenue from operations
Other income
Total Income
Expenses:
(a) Raw materials consumed
(b) Purchases of finished, semi-finished and other products
(c) Changes in inventories of finished and semi-finished goods,
work-in-progress and stock-in-trade
(d) Employee benefits expense
(e) Finance costs
(f ) Depreciation and amortisation expense
(g) Other expenses
(h) Less: Expenditure (other than interest) transferred to capital and other
V
VI
VII
accounts
Total Expenses
Share of profit/(loss) of joint ventures and associates
Profit before exceptional items and tax (III-IV+V)
Exceptional Items:
(a) Profit on sale of non-current investments
(b) Profit on sale of non-current assets
(c) Provision for impairment of investments/doubtful advances
(d) Provision for impairment of non-current assets
(e) Provision for demands and claims
(f )
(g) Restructuring and other provisions
Total exceptional items
VIII Profit/(loss) before tax (VI+VII)
IX
Employee separation compensation
Tax expense:
(a) Current tax
(b) Deferred tax
Total tax expense
Profit/(loss) after tax from continuing operations
X
XI
Profit/(loss) after tax from discontinued operations
(a) Profit/(loss) after tax from discontinued operations
(b) Profit/(loss) on disposal of discontinued operations
Profit/(loss) after tax from discontinued operations
36
346
(` crore)
Note Page
29
30
342
343
Year ended
March 31, 2018
Year ended
March 31, 2017
1,33,016.37
909.45
1,33,925.82
1,17,419.94
527.47
1,17,947.41
31
32
33
34
343
344
344
344
35
345
41,205.43
11,002.82
(43.68)
17,606.19
5,501.79
5,961.66
42,355.94
1,23,590.15
1,000.86
32,418.09
11,424.94
(4,538.13)
17,252.22
5,072.20
5,672.88
44,619.71
1,11,921.91
764.71
1,22,589.29
174.10
11,510.63
1,11,157.20
7.65
6,797.86
-
-
(27.25)
(903.01)
(3,213.68)
(107.60)
13,850.66
9,599.12
21,109.75
2,002.77
1,402.62
3,405.39
17,704.36
22.70
85.87
(125.45)
(267.93)
(218.25)
(207.37)
(3,613.80)
(4,324.23)
2,473.63
1,741.70
1,036.31
2,778.01
(304.38)
53.30
5.15
58.45
(778.87)
(3,085.32)
(3,864.19)
17,762.81
(4,168.57)
XII
Profit/(loss) for the year (A)
282282
ConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Consolidated Statement of Profit and Loss (Contd.)
FOR THE YEAR ENDED MARCH 31, 2018
XIII Other Comprehensive Income/(loss)
Note Page
Year ended
March 31, 2018
Year ended
March 31, 2017
(` crore)
A)
(i)
(ii)
B)
(i)
(ii)
Items that will not be reclassified subsequently to the consolidated
statement of profit and loss
a)
Remeasurement gains/(losses) on post employment defined
benefit plans
Fair value changes of investments in equity shares
Share of equity accounted investees
b)
c)
Income tax on items that will not be reclassified subsequently to the
consolidated statement of profit and loss
Items that will be reclassified subsequently to the consolidated
statement of profit and loss
a) Foreign currency translation differences
b) Fair value changes of cash flow hedges
c)
Share of equity accounted investees
Income tax on items that will be reclassified subsequently to the
consolidated statement of profit and loss
(1,489.18)
(4,334.54)
(204.55)
(0.24)
212.98
(1,544.04)
(97.76)
16.20
28.58
836.92
3.37
782.34
2,045.14
145.33
(2.17)
(39.45)
Total Other Comprehensive Income/(loss) (B)
(3,078.01)
(563.06)
XIV Profit/(loss) from continuing operations for the year attributable to:
Shareholders of the Company
Non controlling interests
XV
XVI
Profit/(loss) from discontinued operations for the year attributable to:
Shareholders of the Company
Non controlling interests
Total Comprehensive Income for the year attributable to: (A+B)
(i)
(ii) Non controlling interests
Shareholders of the Company
XVII Earnings per equity share (from continuing operations)
37
347
Basic (`)
Diluted (`)
XVIII Earnings per equity share (from discontinued operations)
37
347
Basic (`)
Diluted (`)
XIX Earnings per equity share (from continuing and discontinued operations) 37
347
Basic (`)
Diluted (`)
Notes forming part of the consolidated financial statements
XX
1-50
In terms of our report attached
For and on behalf of the Board of Directors
13,375.88
4,328.48
17,704.36
58.45
-
58.45
8,802.54
5,882.26
14,684.80
127.56
127.54
0.56
0.56
128.12
128.10
For Price Waterhouse & Co Chartered Accountants LLP
sd/-
N. Chandrasekaran
sd/-
Mallika Srinivasan
sd/-
O. P. Bhatt
Firm Registration Number: 304026E/ E-300009.
Chartered Accountants
Chairman
DIN: 00121863
Director
DIN: 00037022
Director
DIN: 00548091
sd/-
Peter Blauwhoff
Director
DIN: 07728872
sd/-
Russell I Parera
Partner
Membership Number 042190
Mumbai, May 16, 2018
sd/-
D. K. Mehrotra
Director
DIN: 00142711
sd/-
Saurabh Agrawal
Director
DIN: 02144558
sd/-
T. V. Narendran
Chief Executive Officer and
Managing Director
DIN: 03083605
sd/-
Koushik Chatterjee
Executive Director and
Chief Financial Officer
DIN: 00004989
(376.61)
72.23
(304.38)
(3,864.19)
-
(3,864.19)
(4,800.32)
68.69
(4,731.63)
(5.35)
(5.35)
(37.54)
(37.54)
(42.89)
(42.89)
sd/-
Deepak Kapoor
Director
DIN: 00162957
sd/-
Parvatheesam K.
Company Secretary
ACS: 15921
283283
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED MARCH 31, 2018
A. Equity share capital
Balance as at
April 1, 2017
970.24
Balance as at
April 1, 2016
970.24
B. Hybrid perpetual securities
Balance as at
April 1, 2017
2,275.00
Balance as at
April 1, 2016
2,275.00
C. Other equity
Changes
during the year
174.71
Changes
during the year
-
Changes
during the year
-
Changes
during the year
-
(` crore)
Balance as at
March 31, 2018
1,144.95
(` crore)
Balance as at
March 31, 2017
970.24
(` crore)
Balance as at
March 31, 2018
2,275.00
(` crore)
Balance as at
March 31, 2017
2,275.00
Retained
earnings
(Refer Note
21A,
Page 329)
Items of other
comprehensive
income (Refer
Note 21B,
Page 329)
Other
consolidated
reserves
(Refer Note 21C,
Page 331)
Share
application
money
pending
allotment
(Refer Note
21D,
Page 333)
Equity
attributable to
share holders
of the Group
Non-
controlling
interests
(` crore)
Total
equity
Balance as at April 1, 2017
Profit /(loss) for the year
Other comprehensive income
for the year
Total comprehensive income
Issue of ordinary shares(i)
Dividend
Tax on dividend
Equity issue expenses written off (i)
Distribution on hybrid perpetual
securities
Tax on distribution on hybrid
perpetual securities
Transfers within equity
Adjustment for change in
ownership interests/ capital
contributions received
Application money received
Other movements
Balance as at March 31, 2018
(11,447.01)
13,434.33
(2,780.05)
12,428.86
-
(1,851.74)
33,592.22
-
-
0.01
-
-
34,574.08
13,434.33
(4,631.79)
1,601.70
4,328.48
1,553.78
36,175.78
17,762.81
(3,078.01)
10,654.28
-
(970.05)
(188.17)
-
(266.13)
92.70
3,426.26
6,500.11
-
-
7,801.99
(1,851.74)
-
-
-
-
-
-
(3,427.62)
-
-
8,939.59
-
-
(33.85)
-
-
1.20
-
-
-
7,149.50
-
-
42,499.16
-
-
-
-
-
-
-
(0.01)
-
0.02
-
0.02
8,802.54
8,939.59
(970.05)
(188.17)
(33.85)
(266.13)
5,882.26 14,684.80
8,939.59
(985.12)
(188.17)
(33.85)
(266.13)
-
(15.07)
-
-
-
92.70
-
92.70
(0.17)
6,500.11
0.16
(6,500.11)
(0.01)
-
0.02
-
57,450.67
0.02
-
(32.42)
(32.42)
936.52 58,387.19
(i) represents premium received and issue expenses on rights issue of shares during the year.
284284
ConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
Consolidated Statement of Changes in Equity (Contd.)
FOR THE YEAR ENDED MARCH 31, 2018
C. Other equity (Contd.)
Retained
earnings
(Refer Note
21A,
Page 329)
Items of other
comprehensive
income (Refer
Note 21B,
Page 329)
Other
consolidated
reserves
(Refer Note
21C, Page 331)
Share
application
money
pending
allotment
(Refer Note
21D, Page 333)
Equity
attributable to
share holders
of the Group
Non-
controlling
interests
(` crore)
Total
Equity
Balance as at April 1, 2016
Profit /(loss) for the year
Other comprehensive income
for the year
Total comprehensive income
Dividend
Tax on dividend
Additions during the year
Transfer to consolidated statement
of profit and loss
Distribution on hybrid perpetual
securities
Tax on distribution on hybrid
perpetual securities
Transfers within equity
Adjustment for change in ownership
interests/ capital contributions
received
(2,415.49)
(4,240.80)
(3,549.43)
9,440.70
-
2,989.91
33,462.10
-
-
(7,790.23)
(776.97)
(147.74)
-
-
(266.10)
92.09
(3.76)
(133.01)
2,989.91
-
-
-
-
-
-
(1.75)
-
-
-
-
191.39
(40.22)
-
-
(7.52)
1.75
-
-
-
-
-
-
-
-
-
-
-
-
40,487.31
(4,240.80)
(559.52)
780.94
72.23
(3.54)
41,268.25
(4,168.57)
(563.06)
(4,800.32)
(776.97)
(147.74)
191.39
(40.22)
68.69
(14.77)
-
-
-
(4,731.63)
(791.74)
(147.74)
191.39
(40.22)
(266.10)
-
(266.10)
92.09
-
92.09
(13.03)
(131.26)
13.03
783.15
-
651.89
Application money received
Other movements
Balance as at March 31, 2017
-
(5.80)
(11,447.01)
-
-
12,428.86
-
(15.28)
33,592.22
0.01
-
0.01
0.01
(21.08)
34,574.08
-
(29.34)
1,601.70
0.01
(50.42)
36,175.78
D. Notes forming part of the consolidated financial statements
Note1-50
In terms of our report attached
For and on behalf of the Board of Directors
For Price Waterhouse & Co Chartered Accountants LLP
sd/-
N. Chandrasekaran
sd/-
Mallika Srinivasan
sd/-
O. P. Bhatt
Firm Registration Number: 304026E/ E-300009.
Chartered Accountants
Chairman
DIN: 00121863
Director
DIN: 00037022
Director
DIN: 00548091
sd/-
Peter Blauwhoff
Director
DIN: 07728872
sd/-
Russell I Parera
Partner
Membership Number 042190
Mumbai, May 16, 2018
sd/-
D. K. Mehrotra
Director
DIN: 00142711
sd/-
Saurabh Agrawal
Director
DIN: 02144558
sd/-
T. V. Narendran
Chief Executive Officer and
Managing Director
DIN: 03083605
sd/-
Koushik Chatterjee
Executive Director and
Chief Financial Officer
DIN: 00004989
sd/-
Deepak Kapoor
Director
DIN: 00162957
sd/-
Parvatheesam K.
Company Secretary
ACS: 15921
285285
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 Consolidated Statement of Cash Flow
FOR THE YEAR ENDED MARCH 31, 2018
A. Cash flows from operating activities:
Profit before taxes
Adjustments for:
Depreciation and amortisation expense
Net (gain)/loss on sale of non-current investments
Income from non-current investments
(Profit)/loss on sale of property, plant and equipment including intangible
assets (net of loss on assets sold/discarded/written off )
Exceptional (Income)/Expenses
(Gain)/loss on cancellation of forwards, swaps and options
Interest income and income from current investments
Finance costs
Exchange (gain)/loss on revaluation of foreign currency loans and swaps
Share of profit or loss of joint ventures and associates
(Profit)/loss on disposal of discontinued operation
Other non cash items
Operating profit before changes in current/non current assets and liabilities
Adjustments for:
Non-current/current financial and other assets
Inventories
Non-current/current financial and other liabilities/provisions
Cash generated from operations
Income taxes paid
Net cash from/(used in) operating activities
B.
Cash flows from investing activities:
Purchase of capital assets
Sale of capital assets
Purchase of non-current investments
Sale of non-current investments
(Purchase)/sale of current investments (net)
Loans given
Repayments of loans given
Fixed/Restricted deposits with banks (placed)/realised
Interest received
Dividend received from associates and joint ventures
Dividend received from others
Acquisition of subsidiaries/undertakings
Sale of subsidiaries/undertakings
Year ended
March 31, 2018
(` crore)
Year ended
March 31, 2017
21,168.20
(1,382.55)
5,961.66
-
(68.25)
49.29
(9,599.12)
79.33
(929.15)
5,501.79
(1,376.77)
(174.10)
(5.15)
(420.59)
(208.94)
(1,595.43)
(7,471.16)
(7,478.50)
179.05
(85.67)
3,898.74
(8,555.08)
(46.22)
2.56
(85.33)
254.50
69.17
41.93
(255.00)
34.22
5,689.77
(0.97)
(57.17)
(0.15)
4,324.23
67.95
(517.62)
5,072.20
1,422.50
(7.65)
3,085.32
(114.42)
(981.06)
20,187.14
18,963.99
17,581.44
(548.00)
(8,243.17)
3,876.75
(9,275.53)
10,911.61
(2,888.22)
8,023.39
(4,914.42)
12,667.02
(1,842.66)
10,824.36
(7,715.64)
288.72
(168.73)
91.24
(692.63)
-
4.48
(27.22)
140.12
53.29
32.14
-
(1,081.36)
Net cash from/(used in) investing activities
(12,025.63)
(9,075.59)
286286
ConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Consolidated Statement of Cash Flow (Contd.)
FOR THE YEAR ENDED MARCH 31, 2018
C. Cash flows from financing activities:
Proceeds from issue of equity shares (net of issue expenses(ii))
Capital contributions received
Proceeds from borrowings
Repayment of borrowings
Repayment of finance lease obligations
Amount received/(paid) on utilisation/cancellation of derivatives
Distribution on hybrid perpetual securities
Interest paid
Dividend paid
Tax on dividend paid
Net cash from/(used in) financing activities
Net increase /(decrease) in cash or cash equivalents
Opening cash and cash Equivalents (i)
Effect of exchange rate on translation of foreign currency
cash and cash equivalents
Closing cash and cash Equivalents
(Refer Note 16, Page 323)
Year ended
March 31, 2018
(` crore)
Year ended
March 31, 2017
9,087.23
-
24,161.36
(19,724.98)
(211.15)
(79.86)
(267.10)
(5,145.57)
(982.35)
(197.64)
0.01
651.89
19,484.55
(16,394.07)
(208.23)
(165.11)
(265.76)
(4,732.80)
(791.32)
(158.52)
6,639.94
2,637.70
4,850.48
295.32
7,783.50
(2,579.36)
(830.59)
6,076.94
(414.06)
4,832.29
(i)
(ii)
Includes `18.19 crore in respect of a subsidiary acquired during the year (2016-17: excludes `32.11 crore in respect of subsidiaries
disposed off/classified as held for sale).
Expenses incurred in connection with Rights Issue, 2018 have been partly paid by the Company and is pending adjustment against actual
utilisation from the issue proceeds.
(iii) Significant non cash movements in borrowing during the year include:
(a) addition on account of finance leases ₹167.65 crore (2016-17: ₹790.21 crore).
(b)
addition on account of subsidiaries acquired during the ₹719.37 crore (2016-17: reduction on account of subsidiaries disposed off
₹211.14 crore).
(c) exchange loss (including translation) ₹3,571.86 crore (2016-17: gain ₹2,890.51 crore).
D. Notes forming part of the consolidated financial statements
Note 1-50
In terms of our report attached
For and on behalf of the Board of Directors
For Price Waterhouse & Co Chartered Accountants LLP
sd/-
N. Chandrasekaran
sd/-
Mallika Srinivasan
sd/-
O. P. Bhatt
Firm Registration Number: 304026E/ E-300009.
Chartered Accountants
Chairman
DIN: 00121863
Director
DIN: 00037022
Director
DIN: 00548091
sd/-
Peter Blauwhoff
Director
DIN: 07728872
sd/-
Russell I Parera
Partner
Membership Number 042190
Mumbai, May 16, 2018
sd/-
D. K. Mehrotra
Director
DIN: 00142711
sd/-
Saurabh Agrawal
Director
DIN: 02144558
sd/-
T. V. Narendran
Chief Executive Officer and
Managing Director
DIN: 03083605
sd/-
Koushik Chatterjee
Executive Director and
Chief Financial Officer
DIN: 00004989
sd/-
Deepak Kapoor
Director
DIN: 00162957
sd/-
Parvatheesam K.
Company Secretary
ACS: 15921
287287
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
1. Company information
Tata Steel Limited (“the Company”) is a public limited Company
incorporated in India with its registered office in Mumbai,
Maharashtra, India. The Company is listed on the Bombay Stock
Exchange (BSE) and the National Stock Exchange (NSE).
The Company and its subsidiaries (collectively referred to as
‘the Group’,) have presence across the entire value chain of steel
manufacturing from mining and processing iron ore and coal
to producing and distributing finished products. The Group
offers a broad range of steel products including a portfolio of
high value-added downstream products such as hot rolled, cold
rolled and coated steel, rebars, wire rods, tubes and wires.
The consolidated financial statements as at March 31, 2018
present the financial position of the Group as well as its interests
in associate companies and joint arrangements. The list of
entities consolidated is provided in Note 51.
The functional and presentation currency of the Company and
the presentation currency of the Group is Indian Rupee (“`”).
As on March 31, 2018, Tata Sons Limited (or Tata Sons) owns
31.64% of the Ordinary Shares of the Company, and has the
ability to influence the Group’s operations.
The financial statements for the year ended March 31, 2018 were
approved by the Board of Directors and authorised for issue on
May 16, 2018.
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date.
(c)
Use of estimates and critical accounting judgements
In the preparation of financial statements, the Group makes
judgements, estimates and assumptions about the carrying
values of assets and liabilities that are not readily apparent
from other sources. The estimates and associated assumptions
are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these
estimates.
Estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised and future periods
affected.
Key source of estimation of uncertainty at the date of
consolidated financial statements, which may cause material
adjustment to the carrying amounts of assets and liabilities
within the next financial year, is in respect of impairment, useful
lives of property, plant and equipment and intangible assets,
valuation of deferred tax assets, provisions and contingent
liabilities and fair value measurements of financial instruments
as discussed below. Key source of estimation of uncertainty in
respect of revenue recognition and employee benefits have
been discussed in the respective policies.
2. Significant accounting policies
Impairment
The significant accounting policies applied by the Group in the
preparation of its consolidated financial statements are listed
below. Such accounting policies have been applied consistently
to all the periods presented in these financial statements, unless
otherwise indicated.
(a) Statement of compliance
The financial statements have been prepared in accordance
with the Indian Accounting Standards (referred to as “Ind AS”)
prescribed under section 133 of the Companies Act, 2013
read with Companies (Indian Accounting Standards) Rules, as
amended from time to time.
(b) Basis of preparation
The financial statements have been prepared under the historical
cost convention with the exception of certain assets and liabilities
that are required to be carried at fair values by Ind AS.
288288
The Group estimates the value in use of the cash generating
unit (CGU) based on future cash flows after considering current
economic conditions and trends, estimated future operating
results and growth rate and anticipated future economic and
regulatory conditions. The estimated cash flows are developed
using internal forecasts. The cash flows are discounted using a
suitable discount rate in order to calculate the present value.
Useful lives of property, plant and equipment and intangible
assets
The Group reviews the useful life of property, plant and
equipment and intangible assets at the end of each reporting
period. This reassessment may result in change in depreciation
and amortisation expense in future periods.
Valuation of deferred tax assets
The Group reviews the carrying amount of deferred tax assets at
the end of each reporting period. The policy has been detailed
in Note 2 (y)
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
2. Significant accounting policies (Contd.)
Provisions and contingent liabilities
A provision is recognised when the Group has a present
obligation as result of a past event and it is probable that the
outflow of resources will be required to settle the obligation,
in respect of which a reliable estimate can be made. These are
reviewed at each balance sheet date and adjusted to reflect the
current best estimates. Contingent liabilities are not recognised
in the financial statements. Contingent assets are neither
recognised nor disclosed in the financial statements.
Fair value measurements of financial instruments
When the fair value of financial assets and financial liabilities
recorded in the balance sheet cannot be measured based on
quoted prices in active markets, their fair value is measured
using valuation techniques including Discounted Cash Flow
Model. The inputs to these models are taken from observable
markets where possible, but where this is not feasible, a degree
of judgement is required in establishing fair values. Judgements
include considerations of inputs such as liquidity risks, credit
risks and volatility. Changes in assumptions about these factors
could affect the reported fair value of financial instruments.
Retirement benefit obligations
The Group’s retirement benefit obligation are subject to a
number of judgement including discount rates, inflation and
salary growth. Significant judgement is required when setting
these criteria and a change in these assumptions would have
a significant impact on the amount recorded in the Group’s
balance sheet and the consolidated statement of profit and loss.
The Group sets these judgement based on previous experience
and third party actuarial advice.
(d) Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the
Company i.e. its subsidiaries. It also includes the Group’s share
of profits, net assets and retained post acquisition reserves
of joint arrangements and associates that are consolidated
using the equity or proportionate method of consolidation,
as applicable.
Control is achieved when the Company is exposed to, or has
rights to the variable returns of the entity and the ability to
affect those returns through its power over the entity.
The results of subsidiaries, joint arrangements and associates
acquired or disposed off during the year are included in the
consolidated statement of profit and loss from the effective
date of acquisition or up to the effective date of disposal, as
appropriate.
Wherever necessary, adjustments are made to the financial
statements of subsidiaries, joint arrangements and associates to
bring their accounting policies in line with those used by other
members of the Group.
Intra-group transactions, balances, income and expenses are
eliminated on consolidation.
Non-controlling interests in the net assets of consolidated
subsidiaries are identified separately from the Group’s equity.
The interest of non-controlling shareholders may be initially
measured either at fair value or at the non-controlling
interests’ proportionate share of the fair value of the acquiree’s
identifiable net assets. The choice of measurement basis is
made on an acquisition-by-acquisition basis. Subsequent to
acquisition, the carrying value of non-controlling interests is
the amount of those interests at initial recognition plus the non-
controlling interests’ share of subsequent changes in equity.
Total comprehensive income is attributed to non-controlling
interests even if it results in the non-controlling interests having
a deficit balance.
(e) Business combinations
Acquisition of subsidiaries and businesses are accounted for
using the purchase method. The consideration transferred in
each business combination is measured at the aggregate of the
acquisition date fair values of assets given, liabilities incurred
by the Group to the former owners of the acquiree and equity
interests issued by the Group in exchange for control of the
acquiree.
Acquisition related costs are recognised in the consolidated
statement of profit and loss.
Goodwill arising on acquisition is recognised as an asset
and measured at cost, being the excess of the consideration
transferred in the business combination over the Group’s
interest in the net fair value of the identifiable assets acquired,
liabilities assumed and contingent liabilities recognised. Where
the fair value of the identifiable assets and liabilities exceed
the cost of acquisition, after re-assessing the fair values of the
net assets and contingent liabilities, the excess is recognised as
capital reserve on consolidation.
289289
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
2. Significant accounting policies (Contd.)
Once control has been achieved, any subsequent acquisitions
where the Group does not originally hold hundred percent
interest in a subsidiary are treated as an acquisition of shares
from non-controlling shareholders. The
identifiable net
assets are not subject to further fair value adjustments and
the difference between the cost of acquisition of the non-
controlling interest and the net book value of the additional
proportion acquired is adjusted in equity.
Business combinations arising from transfer of interests in
entities that are under common control are accounted for
using the pooling of interest method. The difference between
any consideration transferred and the aggregate historical
carrying values of assets and liabilities of the acquired entity are
recognised in shareholder’s equity.
(f) Goodwill
Goodwill arising on acquisition of a subsidiary represents the
excess of consideration transferred in the business combination
over the Group’s interest in the net fair value of the identifiable
assets acquired, liabilities assumed and contingent liabilities
recognised at the date of acquisition. Goodwill is initially
recognised as an asset at cost and is subsequently measured at
cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill is allocated to
each of the Group’s cash-generating units or groups of cash-
generating units that are expected to benefit from the synergies
of the combination. Cash-generating units to which goodwill
has been allocated are tested for impairment annually, or more
frequently when there is an indication that the unit’s value may
be impaired. If the recoverable amount of the cash-generating
unit is less than the carrying value of the unit, the impairment
loss is allocated first to reduce the carrying value of any goodwill
allocated to the unit and then to the other assets of the unit in
proportion to the carrying value of each asset in the unit.
An impairment loss recognised for goodwill is not reversed in a
subsequent period. On disposal of a subsidiary, the attributable
amount of goodwill is included in the determination of profit or
loss on disposal.
(g)
Investment in associates
Associates are those enterprises over which the Group has
significant influence, but does not have control.
Investments in associates are accounted for using the equity
method and are initially recognised at cost from the date
significant influence commences until the date that significant
290290
influence ceases. Subsequent changes in the carrying value
reflect the post-acquisition changes in the Group’s share of net
assets of the associate and impairment charges, if any.
When the Group’s share of losses exceeds the carrying value
of the associate, the carrying value is reduced to nil and
recognition of further losses is discontinued, except to the
extent that the Group has incurred obligations in respect of
the associate.
Unrealised gains on transactions between the Group and its
associates are eliminated to the extent of the Group’s interest
in the associates, unrealised losses are also eliminated unless
the transaction provides evidence of an impairment of the asset
transferred and where material, the results of associates are
modified to confirm to the Group’s accounting policies.
(h)
Interest in joint arrangements
A joint arrangement is a contractual arrangement whereby the
Group and other parties undertake an economic activity where
the strategic financial and operating policy decisions relating to
the activities of the joint arrangement require the unanimous
consent of the parties sharing control.
its activities under
Where Group entity undertakes
joint
arrangements as joint operations, the Group’s share of jointly
controlled assets and any liabilities incurred jointly with other
parties are recognised in its financial statements and classified
according to their nature. Liabilities and expenses incurred
directly in respect of interests in joint operations are accounted
for on the accrual basis. Income from the sale or use of the
Group’s share of the output of joint operations, and its share of
joint arrangements expenses, are recognised when it is probable
that the economic benefits associated with the transactions will
flow to the Group and their amount can be measured reliably.
Joint arrangements that involve the establishment of a separate
entity in which each venturer has an interest are referred to as
joint ventures. The Group reports its interests in joint ventures
using the equity method of accounting whereby an interest in
joint venture is initially recorded at cost and adjusted thereafter
for post-acquisition changes in the Group’s share of net assets of
the joint venture. The consolidated statement of profit and loss
reflects the Group’s share of the results of operations of the joint
venture.
When the Group’s share of losses exceeds the carrying value
of the joint venture, the carrying value is reduced to nil and
recognition of further losses is discontinued, except to the
extent that the Group has incurred obligations in respect of
the joint venture.
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
2. Significant accounting policies (Contd.)
Unrealised gains on transactions between the Group and its
joint ventures are eliminated to the extent of the Group’s interest
in the joint venture, unrealised losses are also eliminated unless
the transaction provides evidence of an impairment of the asset
transferred and where material, the results of joint ventures are
modified to confirm to the Group’s accounting policies.
(i) Property, plant and equipment
An item of property, plant and equipment is recognised as an
asset if it is probable that future economic benefits associated
with the item will flow to the Group and its cost can be measured
reliably. This recognition principle is applied to costs incurred
initially to acquire an item of property, plant and equipment
and also to costs incurred subsequently to add to, replace part
of, or service it. All other repair and maintenance costs, including
regular servicing, are recognised in the consolidated statement
of profit and loss as incurred. When a replacement occurs, the
carrying value of the replaced part is de-recognised. Where
an item of property, plant and equipment comprises major
components having different useful lives, these components are
accounted for as separate items.
Property, plant and equipment is stated at cost/deemed cost,
less accumulated depreciation and impairment. Cost includes
all direct costs and expenditures incurred to bring the asset
to its working condition and location for its intended use. Trial
run expenses (net of revenue) are capitalised. Borrowing costs
incurred during the period of construction is capitalised as part
of cost of qualifying asset.
The gain or loss arising on disposal of an item of property, plant
and equipment is determined as the difference between sale
proceeds and carrying value of such item, and is recognised in
the consolidated statement of profit and loss.
(j) Exploration for and evaluation of mineral resources
Expenditures associated with search for specific mineral
resources are recognised as exploration and evaluation assets.
The following expenditure comprises the cost of exploration
and evaluation assets:
obtaining of the rights to explore and evaluate mineral
reserves and resources including costs directly related to
this acquisition
researching and analysing existing exploration data
conducting geological studies, exploratory drilling and
sampling
examining and testing extraction and treatment methods
compiling pre-feasibility and feasibility studies
activities in relation to evaluating the technical feasibility
and commercial viability of extracting a mineral resource.
Administration and other overhead costs are charged to the
cost of exploration and evaluation assets only if directly related
to an exploration and evaluation project.
If a project does not prove viable, all irrecoverable exploration
and evaluation expenditure associated with the project net
of any related impairment allowances is written off to the
consolidated statement of profit and loss.
The Group measures its exploration and evaluation assets
at cost and classifies as property, plant and equipment or
intangible assets according to the nature of the assets acquired
and applies the classification consistently. To the extent that a
tangible asset is consumed in developing an intangible asset,
the amount reflecting that consumption is capitalised as a part
of the cost of the intangible asset.
As the asset is not available for use, it is not depreciated. All
exploration and evaluation assets are monitored for indications
of impairment. An exploration and evaluation asset is no longer
classified as such when the technical feasibility and commercial
viability of extracting a mineral resource are demonstrable
and the development of the deposit is sanctioned by the
management. The carrying value of such exploration and
evaluation asset is reclassified to mining assets.
(k) Development expenditure for mineral reserves
Development is the establishment of access to mineral reserves
and other preparations for commercial production. Development
activities often continue during production and include:
sinking shafts and underground drifts (often called mine
development)
making permanent excavations
developing passageways and rooms or galleries
building roads and tunnels and
advance removal of overburden and waste rock.
Development (or construction) also includes the installation
of infrastructure (e.g., roads, utilities and housing), machinery,
equipment and facilities.
Development expenditure is capitalised and presented as part of
mining assets. No depreciation is charged on the development
expenditure before the start of commercial production.
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2. Significant accounting policies (Contd.)
(l) Provision for restoration and environmental costs
The Group has liabilities related to restoration of soil and other
related works, which are due upon the closure of certain of its
mining sites.
local
into account applicable
Such liabilities are estimated case-by-case based on available
legal
information, taking
requirements. The estimation is made using existing technology,
at current prices, and discounted using a appropriate discount
rate where the effect of time value of money is material. Future
restoration and environmental costs, discounted to net present
value, are capitalised and the corresponding restoration liability
is raised as soon as the obligation to incur such costs arises.
Future restoration and environmental costs are capitalised in
property, plant and equipment or mining assets as appropriate
and are depreciated over the life of the related asset. The effect
of time value of money on the restoration and environmental
costs liability is recognised in the consolidated statement of
profit and loss.
(m) Intangible assets
Patents, trademarks and software costs are included in the
consolidated balance sheet as intangible assets when it is
probable that associated future economic benefits would flow
to the Group. In this case they are measured initially at purchase
cost and then amortised on a straight-line basis over their
estimated useful lives. All other costs on patents, trademarks
and software are expensed in the consolidated statement of
profit and loss as and when incurred.
Expenditure on research activities is recognised as an expense
in the period in which it is incurred. Costs incurred on individual
development projects are recognised as intangible assets from
the date when all of the following conditions are met:
(i)
completion of the development is technically feasible
(ii)
it is the intention to complete the intangible asset and use
or sell it
(iii)
it is clear that the intangible asset will generate probable
future economic benefits
(iv)
adequate technical, financial and other resources to
complete the development and to use or sell the intangible
asset are available and
(v)
it
is possible to reliably measure the expenditure
attributable to the intangible asset during its development.
292292
Recognition of costs as an asset is ceased when the project is
complete and available for its intended use, or if these criteria
are no longer applicable.
Where development activities do not meet the conditions for
recognition as an asset, any associated expenditure is treated as
an expense in the period in which it is incurred.
Intangible assets acquired in a business combination are
identified and recognised separately from goodwill where they
satisfy the definition of an intangible asset and their fair values
can be measured reliably. The cost of such intangible assets is
their fair value at the acquisition date.
Subsequent to initial recognition, intangible assets with definite
useful lives acquired in a business combination are reported
at cost/deemed cost
less accumulated amortisation and
accumulated impairment losses.
(n)
Depreciation and amortisation of property, plant and
equipment and intangible assets
Depreciation or amortisation is provided so as to write off, on
a straight-line basis, the cost/deemed cost of property, plant
and equipment and intangible assets, including those held
under finance leases to their residual value. These charges
are commenced from the dates the assets are available for
their intended use and are spread over their estimated useful
economic lives or, in the case of leased assets, over the lease
period, if shorter. The estimated useful lives of assets and
residual values are reviewed regularly and, when necessary,
revised. No further charge is provided in respect of assets that
are fully written down but are still in use.
Depreciation on assets under construction commences only
when the assets are ready for their intended use.
The estimated useful lives for the main categories of property,
plant and equipment and other intangible assets are:
Freehold and long leasehold
buildings
Roads
Railway sidings
Plant and machinery
Furniture, fixture and office
equipment
Vehicles and aircraft
Assets covered under the
Electricity Act (life as prescribed
under the Electricity Act)
Estimated useful
life (years)
upto 60 years*
5 years
upto 35 years*
3 to 40 years*
3 to 25 years
4 to 20 years
3 to 34 years
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
2. Significant accounting policies (Contd.)
Patents and trademarks
Product and process
development costs
Computer software
Other assets
Estimated useful
life (years)
4 years
5 years
upto 8 years
1 to 15 years
Mining assets are amortised over the useful life of the mine or
lease period whichever is lower.
Major furnace relining expenses are depreciated over a period
of 10 years (average expected life).
Freehold land is not depreciated.
* For these class of assets, based on internal assessment and
independent technical evaluation carried out by chartered
engineers, the Company and some of its subsidiaries believe
that the useful lives as given above best represent the period
over which such Company expects to use these assets. Hence
the useful lives for these assets are different from the useful
lives as prescribed under Part C of Schedule II of the Companies
Act, 2013.
(o)
Impairment
At each balance sheet date, the Group reviews the carrying
values of its property, plant and equipment and intangible
assets to determine whether there is any indication that the
carrying value of those assets may not be recoverable through
continuing use. If any such indication exists, the recoverable
amount of the asset is reviewed in order to determine the extent
of impairment loss if any. Where the asset does not generate
cash flows that are independent from other assets, the Group
estimates the recoverable amount of the cash generating unit
to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell
and value in use. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset for which
the estimates of future cash flows have not been adjusted. An
impairment loss is recognised in the consolidated statement
of profit and loss as and when the carrying value of an asset
exceeds its recoverable amount.
Where an impairment loss subsequently reverses, the carrying
value of the asset (or cash generating unit) is increased to the
revised estimate of its recoverable amount, so that the increased
carrying value does not exceed the carrying value that would
have been determined had no impairment loss been recognised
for the asset (or cash generating unit) in prior years. A reversal of
an impairment loss is recognised in the consolidated statement
of profit and loss immediately.
(p) Leases
The Group determines whether an arrangement contains a lease
by assessing whether the fulfilment of a transaction is dependent
on the use of a specific asset and whether the transaction conveys
the right to use that asset to the Group in return for payment.
Where this occurs, the arrangement is deemed to include a lease
and is accounted for either as a finance or an operating lease.
Leases are classified as finance leases where the terms of the lease
transfer substantially all the risks and rewards of ownership to the
lessee. All other leases are classified as operating leases.
The Group as lessee
(i)
Operating lease – Rentals payable under operating leases are
charged to the consolidated statement of profit and loss on a
straight line basis over the term of the relevant lease unless another
systematic basis is more representative of the time pattern in which
economic benefits from the leased asset are consumed. Contingent
rentals arising under operating leases are recognised as an expense
in the period in which they are incurred.
In the event that lease incentives are received to enter into
operating leases, such incentives are recognised as a liability.
The aggregate benefit of incentives is recognised as a reduction
of rental expense on a straight line basis, except where another
systematic basis is more representative of the time pattern in
which economic benefits from the leased asset are consumed.
(ii)
Finance lease – Finance leases are capitalised at the commencement
of lease, at the lower of the fair value of the assets or the present
value of the minimum lease payments. The corresponding liability
to the lessor is included in the consolidated balance sheet as
a finance lease obligation. Lease payments are apportioned
between finance charges and reduction of the lease obligation so
as to achieve a constant rate of interest on the remaining balance
of the liability. Finance charges are recognised in the consolidated
statement of profit and loss over the period of the lease.
The Group as lessor
(i)
Operating lease – Rental income from operating leases is
recognised in the consolidated statement of profit and loss on a
straight line basis over the term of the relevant lease unless another
systematic basis is more representative of the time pattern in which
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Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
2. Significant accounting policies (Contd.)
economic benefits from the leased asset is diminished. Initial direct
costs incurred in negotiating and arranging an operating lease are
added to the carrying value of the leased asset and recognised on a
straight line basis over the lease term.
(ii)
Finance lease – When assets are leased out under a finance lease,
the present value of minimum lease payments is recognised as a
receivable. The difference between the gross receivable and the
present value of receivable is recognised as unearned finance
income. Lease income is recognised over the term of the lease
using the net investment method before tax, which reflects a
constant periodic rate of return.
(q) Stripping costs
The Group separates two different types of stripping costs that
are incurred in surface mining activity:
developmental stripping costs and
production stripping costs
Developmental stripping costs in order to obtain access to
quantities of mineral reserves that will be mined in future
periods are capitalised as part of mining assets. Capitalisation
of developmental stripping costs ends when the commercial
production of the mineral reserves begins.
A mine can operate several open pits that are regarded as separate
operations for the purpose of mine planning and production. In
this case, stripping costs are accounted for separately, by reference
to the ore extracted from each separate pit. If, however, the pits are
highly integrated for the purpose of mine planning and production,
stripping costs are aggregated too.
The determination of whether multiple pit mines are considered
separate or integrated operations depends on each mine’s
specific circumstances. The following factors normally point
towards the stripping costs for the individual pits being
accounted for separately:
mining of the second and subsequent pits is conducted
consecutively with that of the first pit, rather than
concurrently
separate investment decisions are made to develop each
pit, rather than a single investment decision being made at
the outset
the pits are operated as separate units in terms of mine
planning and the sequencing of overburden and ore
mining, rather than as an integrated unit
expenditure for additional infrastructure to support the
second and subsequent pits are relatively large
294294
the pits extract ore from separate and distinct ore bodies,
rather than from a single ore body.
The relative importance of each factor is considered by the
management to determine whether, on balance, the stripping
costs should be attributed to the individual pit or to the
combined output from the several pits.
Production stripping costs are incurred to extract the ore in the
form of inventories and/or to improve access to an additional
component of an ore body or deeper levels of material.
Production stripping costs are accounted for as inventories
to the extent the benefit from production stripping activity is
realised in the form of inventories.
The Group recognises a stripping activity asset in the production
phase if, and only if, all of the following are met:
it is probable that the future economic benefit (improved
access to the ore body) associated with the stripping
activity will flow to the Group
the Group can identify the component of the ore body for
which access has been improved and
the costs relating to the improved access to that component
can be measured reliably.
Such costs are presented within mining assets. After initial
recognition, stripping activity assets are carried at cost/deemed
cost accumulated amortisation and impairment. The expected
useful life of the identified component of the ore body is used to
depreciate or amortise the stripping asset.
(r) Financial Instruments
Financial assets and financial liabilities are recognised when
the Group becomes a party to the contractual provisions of the
instrument. Financial assets and liabilities are initially measured
at fair value. Transaction costs that are directly attributable to
the acquisition or issue of financial assets and financial liabilities
(other than financial assets and financial liabilities at fair value
through profit or loss) are added to or deducted from the fair
value measured on initial recognition of financial asset or
financial liability. The transaction costs directly attributable to
the acquisition of financial assets and financial liabilities at fair
value through profit and loss are immediately recognised in the
consolidated statement of profit and loss.
Effective interest method
The effective interest method is a method of calculating the
amortised cost of a financial instrument and of allocating
interest income or expense over the relevant period. The
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
2. Significant accounting policies (Contd.)
effective interest rate is the rate that exactly discounts future
cash receipts or payments through the expected life of the
financial instrument, or where appropriate, a shorter period.
(a) Financial assets
Cash and bank balances
Cash and bank balances consists of:
(i)
Cash and cash equivalents - which include cash in hand, deposits
held at call with banks and other short term deposits which are
readily convertible into known amounts of cash, are subject to an
insignificant risk of change in value and have maturities of less than
one year from the reporting date. These balances with banks are
unrestricted for withdrawal and usage.
(ii)
Other bank balances - which includes balances and deposits
with banks that are restricted for withdrawal and usage.
Financial assets at amortised cost
Financial assets are subsequently measured at amortised cost if these
financial assets are held within a business model whose objective is
to hold these assets in order to collect contractual cash flows and the
contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest on the
principal amount outstanding.
Financial assets measured at fair value
fair value through other
Financial assets are measured at
comprehensive income if these financial assets are held within a
business model whose objective is to hold these assets in order to
collect contractual cash flows or to sell these financial assets and the
contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest on the
principal amount outstanding.
The Group in respect of certain equity investments (other than in
associates and joint ventures) which are not held for trading has made
an irrevocable election to present in other comprehensive income
subsequent changes in the fair value of such equity instruments. Such
an election is made by the Group on an instrument by instrument basis
at the time of initial recognition of such equity investments. These
investments are held for medium or long term strategic purpose.
The Group has chosen to designate these investments in equity
instruments as fair value through other comprehensive income
as the management believe this provides a more meaningful
presentation for medium or long term strategic investments, than
reflecting changes in fair value immediately in the consolidated
statement of profit and loss.
Financial asset not measured at amortised cost or at fair value
through other comprehensive income is carried at fair value through
the consolidated statement of profit and loss.
Impairment of financial assets
Loss allowance for expected credit losses is recognised for financial
assets measured at amortised cost and fair value through other
comprehensive income.
The Group recognises life time expected credit losses for all trade
receivables that do not constitute a financing transaction.
For financial assets whose credit risk has not significantly
increased since initial recognition, loss allowance equal to twelve
months expected credit losses is recognised. Loss allowance equal
to the lifetime expected credit losses is recognised if the credit
risk on the financial asset has significantly increased since initial
recognition.
De-recognition of financial assets
The Group de-recognises a financial asset only when the contractual
rights to the cash flows from the asset expires, or it transfers the
financial asset and substantially all risks and rewards of ownership of
the asset to another entity.
If the Group neither transfers nor retains substantially all the risks
and rewards of ownership and continues to control the transferred
asset, the Group recognises its retained interest in the assets and an
associated liability for amounts it may have to pay.
If the Group retains substantially all the risks and rewards of
ownership of a transferred financial asset, the Group continues to
recognise the financial asset and also recognises a borrowing for the
proceeds received.
(b) Financial liabilities and equity instruments
Classification as debt or equity
Financial liabilities and equity instruments issued by the Group are
classified according to the substance of the contractual arrangements
entered into and the definitions of a financial liability and an equity
instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the
assets of the Group after deducting all of its liabilities. Equity instruments
are recorded at the proceeds received, net of direct issue costs.
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2. Significant accounting policies (Contd.)
When hedge accounting is applied:
Financial Liabilities
Trade and other payables are initially measured at fair value, net of
transaction costs, and are subsequently measured at amortised cost,
using the effective interest rate method where the time value of
money is significant.
Interest bearing bank loans, overdrafts and issued debt are initially
measured at fair value and are subsequently measured at amortised
cost using the effective interest rate method. Any difference
between the proceeds (net of transaction costs) and the settlement
or redemption of borrowings is recognised over the term of the
borrowings in the consolidated statement of profit and loss.
De-recognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the
Group’s obligations are discharged, cancelled or they expire.
Derivative financial instruments and hedge accounting
In the ordinary course of business, the Group uses certain derivative
financial instruments to reduce business risks which arise from its
exposure to foreign exchange base metal prices and interest rate
fluctuations. The instruments are confined principally to forward
foreign exchange contracts, forward rate agreements, cross currency
swaps, interest rate swaps and collar. The instruments are employed
as hedges of transactions included in the financial statements
or for highly probable forecast transactions/firm contractual
commitments. These derivatives contracts do not generally extend
beyond six months, except for certain currency swaps and interest
rate derivatives.
Derivatives are initially accounted for and measured at fair value from
the date the derivative contract is entered into and are subsequently
re-measured to their fair value at the end of each reporting period.
The Group adopts hedge accounting for forward, interest rate and
commodity contracts wherever possible. At the inception of each
hedge, there is a formal, documented designation of the hedging
relationship. This documentation includes, inter alia, items such as
identification of the hedged item transaction and nature of the risk
being hedged. At inception each hedge is expected to be highly
effective in achieving an offset of changes in fair value or cash
flows attributable to the hedged risk. The effectiveness of hedge
instruments to reduce the risk associated with the exposure being
hedged is assessed and measured at the inception and on an ongoing
basis. The ineffective portion of designated hedges is recognised
immediately in the consolidated statement of profit and loss.
for fair value hedges of recognised assets and liabilities, changes
in fair value of the hedged assets and liabilities attributable to the
risk being hedged, are recognised in the consolidated statement
of profit and loss and compensate for the effective portion of
symmetrical changes in the fair value of the derivatives.
for cash flow hedges, the effective portion of the change in
the fair value of the derivative is recognised directly in other
comprehensive income and the ineffective portion is recognised
in the consolidated statement of profit and loss. If the cash flow
hedge of a firm commitment or forecasted transaction results in
the recognition of a non-financial asset or liability, then, at the
time the asset or liability is recognised, the associated gains or
losses on the derivative that had previously been recognised
in equity are included in the initial measurement of the asset
or liability. For hedges that do not result in the recognition of
a non-financial asset or a liability, amounts deferred in equity
are recognised in the consolidated statement of profit and
loss in the same period in which the hedged item affects the
consolidated statement of profit and loss.
In cases where hedge accounting is not applied, changes in
the fair value of derivatives are recognised in the consolidated
statement of profit and loss as and when they arise.
Hedge accounting is discontinued when the hedging instrument
expires or is sold, terminated, or exercised, or no longer qualifies
for hedge accounting. At that time, any cumulative gain or loss on
the hedging instrument recognised in equity is retained in equity
until the forecasted transaction occurs. If a hedged transaction
is no longer expected to occur, the net cumulative gain or loss
recognised in equity is transferred to the consolidated statement
of profit and loss for the period.
(s) Employee benefits
Defined contribution plans
Payments to defined contribution plans are charged as an
expense as they fall due. Payments made to state managed
retirement benefit schemes are dealt with as payments to
defined contribution schemes where the Group’s obligations
under the schemes are equivalent to those arising in a defined
contribution retirement benefit scheme.
Defined benefit plans
For defined benefit retirement schemes, the cost of providing
benefits is determined using the Projected Unit Credit Method,
with actuarial valuation being carried out at each balance sheet
296296
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
2. Significant accounting policies (Contd.)
date. Re-measurement gains and losses of the net defined
benefit liability/(asset) are recognised immediately in other
comprehensive income. The service cost and net interest on the
net defined benefit liability/(asset) is recognised as an expense
within employment costs.
Past service cost is recognised as an expense when the plan
amendment or curtailment occurs or when any related
restructuring costs or termination benefits are recognised,
whichever is earlier.
The retirement benefit obligation recognised in the consolidated
balance sheet represents the present value of the defined-benefit
obligation as reduced by the fair value of plan assets.
Compensated absences
Compensated absences which are not expected to occur
within twelve months after the end of the period in which the
employee renders the related service are recognised based on
actuarial valuation at the present value of the obligation as on
the reporting date.
sheet date. Where the time value of money is material, provisions
are measured on a discounted basis.
Constructive obligation is an obligation that derives from an
entity’s actions where:
(a)
by an established pattern of past practice, published
policies or a sufficiently specific current statement, the
entity has indicated to other parties that it will accept
certain responsibilities and
(b)
as a result, the entity has created a valid expectation on
the part of those other parties that it will discharge those
responsibilities.
(v) Onerous contracts
A provision for onerous contracts is recognised when the
expected benefits to be derived by the Group from a contract are
lower than the unavoidable cost of meeting its obligations under
the contract. The provision is measured at the present value of
the lower of the expected cost of terminating the contract and
the expected net cost of continuing with the contract. Before a
provision is established, the Group recognises any impairment
loss on the assets associated with that contract.
(t)
Inventories
(w) Government grants
Inventories are stated at the lower of cost and net realisable value.
Cost is generally ascertained on a weighted average basis Costs
comprise direct materials and, where applicable, direct labour
costs and those overheads that have been incurred in bringing the
inventories to their present location and condition. Net realisable
value is the price at which the inventories can be realised in the
normal course of business after allowing for the cost of conversion
from their existing state to a finished condition and for the cost of
marketing, selling and distribution.
Government grants related to expenditure on property, plant
and equipment are credited to the consolidated statement of
profit and loss over the useful lives of qualifying assets or other
systematic basis representative of the pattern of fulfilment of
obligations associated with the grant received. Total grants
received less amounts credited to the consolidated statement
of profit and loss at the reporting date are included in the
consolidated balance sheet as deferred income.
Stores and spare parts are carried at lower of cost and net
realisable value.
(x)
Non-current assets held for sale and discontinued
operations
Provisions are made to cover slow moving and obsolete items
based on historical experience of utilisation on a product
category basis, which involves individual businesses considering
their product lines and market conditions.
(u) Provisions
Provisions are recognised in the consolidated balance sheet when
the Group has a present obligation (legal or constructive) as a
result of a past event, which is expected to result in an outflow of
resources embodying economic benefits which can be reliably
estimated. Each provision is based on the best estimate of the
expenditure required to settle the present obligation at the balance
Non-current assets and disposal groups classified as held for
sale are measured at the lower of their carrying value and fair
value less costs to sell.
Assets and disposal groups are classified as held for sale if their
carrying value will be recovered through a sale transaction rather
than through continuing use. This condition is only met when the
sale is highly probable and the asset, or disposal group, is available
for immediate sale in its present condition and is marketed for
sale at a price that is reasonable in relation to its current fair value.
The Group must also be committed to the sale, which should be
expected to qualify for recognition as a completed sale within
one year from the date of classification.
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2. Significant accounting policies (Contd.)
Where a disposal group represents a separate major line of
business or geographical area of operations, or is part of a
single coordinated plan to dispose of a separate major line of
business or geographical area of operations, then it is treated
as a discontinued operation. The post-tax profit or loss of
the discontinued operation together with the gain or loss
recognised on its disposal are disclosed as a single amount
in the consolidated statement of profit and loss, with all prior
periods being presented on this basis.
(y)
Income taxes
Tax expense for the year comprises of current and deferred
tax. The tax currently payable is based on taxable profit for the
year. Taxable profit differs from net profit as reported in the
consolidated statement of profit and loss because it excludes
items of income or expense that are taxable or deductible
in other years and it further excludes items that are never
taxable or deductible. The Group’s liability for current tax is
calculated using tax rates and tax laws that have been enacted
or substantively enacted in countries where the Company and
its subsidiaries operate by the end of the reporting period.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying value of assets and liabilities
in the financial statements and the corresponding tax bases
used in the computation of taxable profit, and is accounted for
using the balance sheet liability method. Deferred tax liabilities
are generally recognised for all taxable temporary differences.
In contrast, deferred tax assets are only recognised to the extent
that it is probable that future taxable profits will be available
against which the temporary differences can be utilised.
Deferred tax liabilities are recognised on taxable temporary
differences arising on investments in subsidiaries, joint ventures
and associates, except where the Group is able to control the
reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future.
The carrying value of deferred tax assets is reviewed at the end
of each reporting period and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available
to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is
realised based on the tax rates and tax laws that have been
enacted or substantially enacted by the end of the reporting
period. The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from the
298298
manner in which the Group expects, at the end of the reporting
period, to re-cover or settle the carrying value of its assets and
liabilities.
Deferred tax assets and liabilities are offset to the extent that
they relate to taxes levied by the same tax authority and they
are in the same taxable entity, or a Group of taxable entities
where the tax losses of one entity are used to offset the taxable
profits of another and there are legally enforceable rights to
set off current tax assets and current tax liabilities within that
jurisdiction.
Current and deferred tax are recognised as an expense or income
in the consolidated statement of profit and loss, except when they
relate to items credited or debited either in other comprehensive
income or directly in equity, in which case the tax is also recognised
in other comprehensive income or directly in equity.
Deferred tax assets include Minimum Alternate Tax (MAT) paid
in accordance with the tax laws in India, which is likely to give
future economic benefits in the form of availability of set off
against future income tax liability. MAT is recognised as deferred
tax assets in the consolidated balance sheet when the asset can
be measured reliably and it is probable that the future economic
benefit associated with the asset will be realised.
(z) Revenue
Revenue is measured at the fair value of consideration received
or receivable net of discounts, taking into account contractually
defined terms and excluding taxes and duties collected on
behalf of the government.
Sale of goods
Revenue from sale of goods is recognized when the company
has transferred to the buyer the significant risks and rewards
of ownership, no longer retains control over the goods sold,
the amount of revenue can be measured reliably, it is probable
that the economic benefits associated with the transaction will
flow to the company and the costs incurred or to be incurred in
respect of the transaction can be measured reliably. Depending
on the contractual terms, risks and rewards of ownership is
transferred when delivery is completed. In case of exports sale
delivery is completed on issuance of bill of lading.
Interest income
Interest income is accrued on a time proportion basis, by
reference to the principal outstanding and effective interest rate
applicable.
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
2. Significant accounting policies (Contd.)
Dividend income
Dividend income from investments is recognised when the right
to receive payment has been established.
Rental income
Rental income is recognised on a straight line basis over the
term of the relevant arrangements.
Commission income
Commission
been rendered.
income
is recognised when the services have
subsidiaries, associates and joint ventures are expressed in
` using exchange rates prevailing at the end of the reporting
period. Income and expense items are translated at the
average exchange rates for the period. Exchange differences
arising, if any, are recognised in other comprehensive income
and accumulated in a separate component of equity. On the
disposal of a foreign operation, all of the accumulated exchange
differences in respect of that operation attributable to the
Company are reclassified to the consolidated statement of profit
and loss.
Goodwill and fair value adjustments arising on the acquisition
of a foreign operation are treated as assets and liabilities of the
foreign operation and translated at the closing rate.
(aa) Foreign currency transactions and translation
(ab) Borrowing costs
The consolidated financial statements of the Group are presented
in (`), which is the functional currency of the Company and the
presentation currency for the consolidated financial statements.
In preparing the consolidated financial statements, transactions
in currencies other than the entity’s functional currency are
recorded at the rates of exchange prevailing on the date of the
transaction. At the end of each reporting period, monetary items
denominated in foreign currencies are re-translated at the rates
prevailing at the end of the reporting period. Non-monetary
items carried at fair value that are denominated in foreign
currencies are re-translated at the rates prevailing on the date
when the fair value was determined. Non-monetary items that
are measured in terms of historical cost in a foreign currency are
not translated.
Exchange differences arising on translation of long term foreign
currency monetary items recognised in the consolidated financial
statements before the beginning of the first Ind AS financial
reporting period in respect of which the Group has elected to
recognise such exchange differences in equity or as part of cost
of assets as allowed under Ind As 101-“First time adoption of
Indian Accounting Standard” are recognised directly in equity or
added/deducted to/from the cost of assets as the case may be.
Such exchange differences recognised in equity or as part of cost
of assets is recognised in the consolidated statement of profit
and loss on a systematic basis.
Exchange differences arising on the retranslation or settlement
of other monetary items are included in the consolidated
statement of profit and loss for the period.
For the purpose of presenting the consolidated financial
statements, the assets and liabilities of the Company’s foreign
Borrowings costs directly attributable to the acquisition,
construction or production of qualifying assets, which are assets
that necessarily take a substantial period of time to get ready
for their intended use or sale, are added to the cost of those
assets, until such time as the assets are substantially ready for
the intended use or sale.
Investment income earned on temporary investment of specific
borrowings pending their expenditure on qualifying assets is
recognised in the consolidated statement of profit or loss.
Discounts or premiums and expenses on the issue of debt
securities are amortised over the term of the related securities
and included within borrowing costs. Premiums payable on early
redemptions of debt securities, in lieu of future finance costs, are
written off as borrowing costs when paid.
(ac) Earnings per share
Basic earnings per share has been computed by dividing the
consolidated profit or loss for the year attributable to equity
holders by the weighted average number of shares outstanding
during the year. Partly paid up shares are included as fully paid
equivalents according to the fraction paid up.
Diluted earnings per share has been computed using the
weighted average number of shares and dilutive potential
shares except where the result would be anti dilutive.
(ad) Recent Accounting Pronouncements
(“MCA”) has notified the
Ministry of Corporate Affairs
Companies
(Indian Accounting Standards) Amendment
Rules, 2018 containing the following new amendments
to Ind AS which the company has not applied as they
299299
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
2. Significant accounting policies (Contd.)
are effective for annual periods beginning on or after
April 1, 2018.
Ind AS 115 – Revenue from contracts with customers.
Ind AS 21 – The Effect of Changes in Foreign Exchange Rates.
Ind AS 115 – “Revenue from Contracts with Customers”
Ind AS 115 establishes a single model for entities to use in
accounting for revenue arising from contracts with customers.
Ind AS 115 will supersede the current revenue recognition
standards, Ind AS 18 “Revenue” and Ind AS 11 “Construction
Contracts” when it becomes effective.
The core principle of Ind AS 115 is that, an entity should recognize
revenue to depict the transfer of promised goods and services
to customers in an account that reflects the consideration to
which the entity expects to be entitled in exchange for these
goods or services. The new standard also requires enhanced
disclosures about the nature, amount, timing and uncertainty
of revenue.
The Group is in the process of evaluating the impact of adoption
of Ind AS 115 on its consolidated financial statements.
Ind AS 21 – The Effect of Changes in Foreign Exchange Rates
The amendment clarifies the date of the transaction for the
purpose of determining the exchange rate to use on initial
recognition of the related asset, expense or income, when an
entity has received or paid advance consideration in a foreign
currency.
The Group is in the process of evaluating the impact of adoption
of amendment to Ind AS 21 on its consolidated financial
statements.
300300
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
3. Property, plant and equipment
[Item No. I(a), Page 280]
Land
including
roads
Buildings
Plant and
Machinery
Furniture,
Fixtures
and Office
Equipments
(FFOE)
Vehicles
Leased
FFOE and
Vehicles
Railway
Sidings
(` crore)
Total
Cost/Deemed cost as at April 1, 2017
Additions relating to acquisitions
Additions
Disposals
Re-classified as held for sale
Other re-classifications
Exchange differences on consolidation
Cost /Deemed cost as at March 31, 2018
Accumulated Impairment as at
April 1, 2017
Charge for the year
Disposals
Other re-classifications
Exchange differences on consolidation
Accumulated impairment as at
March 31, 2018
Accumulated Depreciation as at
April 1, 2017
Charge for the year
Disposals
Re-classified as held for sale
Other re-classifications
Exchange differences on consolidation
Accumulated depreciation as at
March 31, 2018
Net carrying value as at April 1, 2017
Net carrying value as at March 31, 2018
16,545.43
7.90
65.67
(33.48)
-
-
369.71
16,955.23
273.45
7.06
-
-
41.78
322.29
11,141.07
15.53
334.24
(60.58)
-
-
717.56
93,461.77
882.70
5,917.97
(555.88)
(0.67)
44.16
5,139.38
12,147.82 1,04,889.43
1,980.46
249.73
23.99
(30.10)
-
39.49
283.11
91.36
(66.53)
27.34
270.22
2,302.85
543.43
0.91
110.46
(10.52)
-
-
23.67
667.95
3.67
0.57
(0.03)
-
0.60
4.81
351.68
0.41
28.07
(39.35)
-
-
1.89
342.70
0.26
0.12
-
-
0.10
0.48
0.69
-
-
-
-
-
0.09
0.78
-
-
-
-
-
-
1,349.53
-
32.94
-
-
-
14.76
1,23,393.60
907.45
6,489.35
(699.81)
(0.67)
44.16
6,267.06
1,397.23 1,36,401.14
2,523.00
15.43
-
-
-
2.15
17.58
123.10
(96.66)
27.34
354.34
2,931.12
397.54
3,698.14
29,245.93
332.58
170.85
0.29
144.68
33,990.01
106.13
(0.02)
-
-
1.44
505.09
444.28
(12.84)
-
2.86
474.91
4,607.35
4,983.82
(392.05)
(0.10)
(2.95)
3,387.66
37,222.31
88.70
(10.30)
-
0.09
8.20
419.27
32.35
(23.38)
-
0.82
0.78
181.42
15,874.44
16,127.85
7,193.20
7,257.36
62,235.38
65,364.27
207.18
243.87
180.57
160.80
0.02
-
-
0.05
0.36
0.40
0.42
57.60
-
-
9.16
211.44
5,712.90
(438.59)
(0.10)
0.82
3,882.20
43,147.24
1,189.42
1,168.21
86,880.59
90,322.78
301301
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
3. Property, plant and equipment (Contd.)
[Item No. I(a), Page 280]
Land
including
roads
Buildings
Plant and
Machinery
Vehicles
Leased
FFOE and
Vehicles
Railway
Sidings
Furniture,
Fixtures
and Office
Equipments
(FFOE)
(` crore)
Total
Cost/Deemed cost as at April 1, 2016
Additions
Disposals
Disposal of group undertakings
Re-classified as held for sale
Other re-classifications
Exchange differences on consolidation
Cost /Deemed cost as at March 31, 2017
Accumulated Impairment as at April 1, 2016
Charge for the year
Disposals
Re-classified as held for sale
Other re-classifications
Exchange differences on consolidation
Accumulated impairment as at March 31, 2017
Accumulated Depreciation as at April 1, 2016
Charge for the year
Disposals
Disposal of group undertakings
Re-classified as held for sale
Other re-classifications
Exchange differences on consolidation
Accumulated depreciation as at March 31, 2017
Net carrying value as at April 1, 2016
Net carrying value as at March 31, 2017
16,499.12
299.98
(20.26)
(15.77)
-
8.02
(225.66)
16,545.43
302.36
10.16
-
-
(0.78)
(38.29)
273.45
289.34
108.39
-
-
-
(0.02)
(0.17)
397.54
15,907.42
15,874.44
11,057.73
977.74
(130.22)
(290.07)
-
0.14
(474.25)
11,141.07
250.67
22.21
(0.01)
-
(0.02)
(23.12)
249.73
3,828.48
432.02
(83.59)
(158.18)
-
(2.17)
(318.42)
3,698.14
6,978.58
73,865.03
25,780.03
(1,013.11)
(1,576.92)
(457.29)
44.83
(3,180.80)
93,461.77
2,323.42
245.82
(47.51)
(255.12)
(55.97 )
(230.18)
1,980.46
28,831.82
4,698.62
(849.83)
(1,122.48)
(102.72)
29.97
(2,239.45)
29,245.93
42,709.79
7,193.20 62,235.38
(i) Net carrying value of land including roads comprises of:
414.35
157.13
(4.43)
(3.14)
-
3.00
(23.48)
543.43
3.91
(0.10)
-
-
-
(0.14)
3.67
266.29
91.55
(4.03)
(0.04)
-
(3.07)
(18.12)
332.58
144.15
207.18
335.35
26.80
(8.91)
(1.22)
-
-
(0.34)
351.68
0.40
(0.09)
-
-
-
(0.05)
0.26
143.25
34.07
(6.50)
-
-
(0.02)
0.05
170.85
191.70
180.57
0.33
0.38
-
-
-
-
(0.02)
0.69
-
-
-
-
-
-
-
0.05
0.26
-
-
-
-
(0.02)
0.29
0.28
0.40
756.84
609.28
-
-
-
-
(16.59)
1,02,928.75
27,851.34
(1,176.93)
(1,887.12)
(457.29)
55.99
(3,921.14)
1,349.53 1,23,393.60
2,898.89
278.00
(47.52)
(255.12)
(56.77)
(294.48)
2,523.00
33,460.62
5,416.15
(943.95)
(1,280.70)
(102.72)
24.69
(2,584.08)
33,990.01
66,569.24
1,189.42 86,880.59
18.13
-
-
-
-
(2.70)
15.43
101.39
51.24
-
-
-
-
(7.95)
144.68
637.32
Leasehold land
Cost/Deemed cost
Accumulated depreciation and impairment
Freehold land including roads
302302
(` crore)
As at
March 31, 2018
As at
March 31, 2017
30.78
1.39
29.39
26.84
1.22
25.62
16,098.46
15,848.82
16,127.85
15,874.44
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
3. Property, plant and equipment (Contd.)
[Item No. I(a), Page 280]
(ii) Net carrying value of building comprises of:
Leasehold building
Cost/Deemed cost
Accumulated depreciation and impairment
Freehold building
(iii) Net carrying value of plant and machinery comprises of:
Assets held under finance leases
Cost/Deemed cost
Accumulated depreciation and impairment
Owned assets
(iv)
Net carrying value of furniture, fixtures and office equipments comprises of:
Furniture and fixtures
Cost/Deemed cost
Accumulated depreciation and impairment
Office equipments
Cost/Deemed cost
Accumulated depreciation and impairment
(` crore)
As at
March 31, 2018
As at
March 31, 2017
457.70
223.65
234.05
359.11
175.92
183.19
7,023.31
7,010.01
7,257.36
7,193.20
(` crore)
As at
March 31, 2018
As at
March 31, 2017
4,565.81
2,300.73
2,265.08
4,286.06
2,066.55
2,219.51
63,099.19
60,015.87
65,364.27
62,235.38
(` crore)
As at
March 31, 2018
As at
March 31, 2017
173.14
118.17
54.97
494.81
305.91
188.90
243.87
142.38
101.88
40.50
401.05
234.37
166.68
207.18
(v)
`115.35 crore (2016-17: `284.22 crore) of borrowing costs has been capitalised during the year on qualifying assets under construction
using capitalisation rate ranges between 0.20% to 9.00% (2016-17: 0.34% to 9.50%).
303303
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
3. Property, plant and equipment (Contd.)
[Item No. I(a), Page 280]
(vi)
Rupee liability has increased by `44.16 crore (2016-17: `136.22 crore) arising out of retranslation of long-term foreign currency loans and
liabilities for procurement of property, plant and equipment. This increase has been adjusted against the carrying cost of assets and has
been depreciated over their remaining useful life. The depreciation for the current year is higher by `1.40 crore (2016-17: `3.60 crore) on
account of this adjustment.
(vii) During the year, the Group recognised an impairment charge of ₹1,161.93 crore (2016-17: ₹503.46 crore) for property, plant and
equipment including capital work in progress. The impairment charge was primarily contained in the Indian, European and overseas
mining businesses.
Within the Indian operations, the Group has recognised an impairment charge of ₹33.99 crore (2016-17: Nil) in respect of expenditure
incurred on a project where in progress has been slow over the years due to certain hindrances. The impairment recognised is included
within other expenses in the consolidated statement of profit and loss.
Within the European business, consistent with annual test for impairment of goodwill as at March 31, 2018, property, plant and equipment
(including capital work in progress) were also tested for impairment as at that date where indicators of impairment existed. The outcome of
the test indicated that the value in use of certain downstream and distribution businesses against which the property, plant and equipment
(including capital work in progress) is included, using a discount rate of 8.2% p.a. (2016-17: 7.8% p.a.) was lower than its carrying value
due to losses generated during the year in those CGU’s and/or forecasting losses in the annual plan. Accordingly an impairment charge of
₹223.25 crore was recognised. The impairment recognised is included within other expenses in the consolidated statement of profit and
loss.
During the year ended March 31, 2017, the Group recognised an impairment charge of `410.87 crore against property, plant and
equipment including capital work in progress of the European business. The impairment was contained in Strip Products MLE `79.04
crore, Longs UK `35.13 crore, Speciality and bar business `122.95 crore, Packaging `79.04 crore, Tubes `17.56 crore and other smaller UK
downstream business `77.15 crore.
Within the overseas mining businesses, volatility in commodity prices triggered an impairment assessment for mining operations carried
out by the Group in Canada. This resulted in an impairment charge of ₹903.01 crore (2016-17: Nil) being recognised during the year
ended March 31, 2018. The recoverable value was based on value in use using cash flow projections for 16 years and a discount rate of 8%
p.a. The impairment recognised is included within exceptional items in the consolidated statement of profit and loss.
During the year ended March 31, 2017 an impairment charge of ₹90.52 crore was recognised within the South East Asian business which
primarily relates to the Thailand operations. The impairment recognised was included within exceptional items in the consolidated
statement of profit and loss.
The balance impairment charge recognised during the year ended March 31, 2018 amounting to ₹1.68 crore (2016-17: ₹2.07 crore) relates
to other smaller businesses within the Group.
The Group has conducted sensitivity analysis on the impairment tests of the carrying value in respect of Group’s CGUs and property,
plant and equipment. The management believes that no reasonably possible change in any of the key assumptions used in the value in
use calculations would cause the carrying value of property, plant and equipment in any CGU to materially exceed its value in use, other
than in respect of the remaining property, plant and equipment at the Strip Products UK business which had a carrying value as at March
31, 2018 of ₹2,555.91 crore (2016-17: ₹1,392.94 crore) and at the overseas Canadian mining business which had a carrying value as at
March 31, 2018 of ₹4,712.76 crore (2016-17: ₹4,969.78 crore). At the Strips product UK business site, the value in use is dependant on
sustaining the improvement to UK Steel market margins and the implementation of a business transformation plan. For the Canadian
mining operations, the value in use is dependant on improvement in commodity prices and realisation of cost savings in operation. A
reasonably possible change in any of these key assumptions would increase the likelyhood of impairment losses in the future.
(viii) The details of property, plant and equipment pledged against borrowings is presented in Note 23, Page 335.
304304
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
4. Leases
The Group has taken certain land, buildings, plant and machinery under operating and/or finance leases. The following is a summary of the
future minimum lease rental payments under non-cancellable operating leases and finance leases entered into by the Group.
A. Operating leases:
Significant leasing arrangements include lease of land for periods ranging between 12 to 99 years renewable on mutual consent, lease of
office spaces, assets dedicated for use under long term arrangements and time charter hire vessels with lease period varying from 2 to 7 years.
Payments under long term arrangements involving use of dedicated assets are allocated between those relating to the right to use of assets,
executory services and for output based on the underlying contractual terms and conditions. Any change in the allocation assumptions may
have an impact on lease assessment and/or lease classification. Payments linked to changes in inflation index under lease arrangements have
been considered as contingent rent and recognised in the consolidated statement of profit and loss as and when incurred.
Future minimum lease payments under non-cancellable operating leases are as below:
Not later than one year
Later than one year but not later than five years
Later than five years
As at
March 31, 2018
759.27
1,565.42
1,745.51
4,070.20
(` crore)
As at
March 31, 2017
678.10
1,483.23
2,576.31
4,737.64
During the year ended March 31, 2018, total operating lease rental expense recognised in the consolidated statement of profit and loss was
`850.74 crore (2016-17: `958.18 crore) including contingent rent of `31.20 crore (2016-17: `37.07 crore).
B. Finance leases:
Significant leasing arrangements include assets dedicated for use under long term arrangements. The arrangements cover a substantial part
of the economic life of the underlying asset and generally contain a renewal option on expiry. Payments under long term arrangements
involving use of dedicated assets are allocated between those relating to the right to use of assets, executory services and for output based
on the underlying contractual terms and conditions. Any change in the allocation assumptions may have an impact on lease assessment and/
or lease classification.
The minimum lease payments and minimum lease payments excluding future finance charges in respect of arrangements classified as finance
leases is as below:
Not later than one year
Later than one year but not later than five years
Later than five years
Total future minimum lease commitments
Less: future finance charges
Present value of minimum lease payments
Disclosed as:
Non-current borrowings (Refer Note 23, Page 335)
Other financial liabilities - Current (Refer Note 24, Page 339)
As at March 31, 2018
As at March 31, 2017
(` crore)
Minimum Lease
payments
652.42
2,076.10
4,481.29
7,209.81
4,088.70
3,121.11
2,868.80
252.31
3,121.11
Minimum lease
payments less
future finance
charges
252.31
832.86
2,035.94
3,121.11
Minimum Lease
payments
592.56
2,019.93
4,739.86
7,352.35
4,306.89
3,045.46
2,826.83
218.63
3,045.46
Minimum lease
payments less
future finance
charges
218.63
758.00
2,068.83
3,045.46
305305
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
5. Goodwill on consolidation
[Item No. I(c) Page 280]
Cost as at beginning of the year
Addition relating to acquisitions
Exchange differences on consolidation
Cost as at end of the year
Impairment as at beginning of year
Exchange differences on consolidation
Impairment as at end of the year
Net carrying value as at beginning of the year
Net carrying value as at end of the year
As at
March 31, 2018
4,740.30
142.43
634.82
5,517.55
1,245.57
172.53
1,418.10
3,494.73
4,099.45
(` crore)
As at
March 31, 2017
5,529.07
-
(788.77)
4,740.30
1,461.51
(215.94)
1,245.57
4,067.56
3,494.73
(a)
(b)
Addition to goodwill during the year ended March 31, 2018 relates to the acquisition of the remaining 74% equity stake by the Company
in one of its joint venture “ Bhubaneshwar Power Private Limited “. The goodwill relates to synergies from combining the acquiree activities
with those of the Group to meet the growing demand for power. Detailed disclosure in respect of the acquisition is provided in Note 41
Page 362.
The carrying value predominantly relates to the goodwill that arose on the acquisition of erstwhile Corus Group Plc. and has been tested
against the recoverable amount of Strip Products Mainland Europe cash generating unit (CGU) by the Tata Steel Europe, a wholly owned
subsidiary of the Group. This goodwill relates to expected synergies from combining Corus’ activities with those of the Group and to assets,
which could not be recognised as separately identifiable intangible assets. The goodwill is tested annually for impairment more frequently
if there are any indications that the goodwill may be impaired. The recoverable amount of Strip Products Mainland Europe CGU has been
determined from a value in use calculation. The calculation uses cash flow forecasts based on the most recently approved financial budgets
and strategic forecasts which cover a period of three years and future projections taking the analysis out to 15 years. Key assumptions for
the value in use calculation are those regarding expected changes to selling prices and raw material costs, EU steel demand, exchange
rates and a discount rate of 8.2% p.a. (March 31, 2017: 7.8% p.a.). Changes in selling prices, raw material costs, exchange rates and EU
steel demand are based on expectations of future changes in the steel market based on external market sources. A nil growth rate is used
to extrapolate the cash flow projections beyond the three-year period of the financial budgets to 15 years The pre-tax discount rate is
derived from the Tata Steel Europe (TSE) weighted average cost of capital (WACC) and the WACCs of its main European steel competitors.
The outcome of the Group’s goodwill impairment test as at March 31, 2018 for the Strip Products Mainland Europe CGU resulted in no
impairment of goodwill (March 31, 2017: Nil).
The management believes that no reasonably possible change in any of the key assumptions used in the value in use calculation would cause
the carrying value of the CGU to materially exceed its value in use.
306306
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
6. Other intangible assets
[Item No. I(d), Page 280]
Patents
and
Trademarks
Development
costs
Software
costs
Mining
assets
Other
intangible
assets
Cost/Deemed cost as at April 1, 2017
Additions relating to acquisitions
Additions
Disposals
Exchange differences on consolidation
Cost/Deemed cost as at March 31, 2018
Accumulated impairment as at April 1, 2017
Exchange differences on consolidation
Accumulated impairment as at March 31, 2018
Accumulated amortisation as at April 1, 2017
Charge for the year
Disposals
Exchange differences on consolidation
Accumulated amortisation as at
March 31, 2018
Net carrying value as at April 1, 2017
Net carrying value as at March 31, 2018
10.16
-
2.31
-
1.52
13.99
-
-
-
7.71
0.64
-
0.99
9.34
2.45
4.65
239.22
-
-
-
39.59
278.81
-
-
-
159.29
36.14
-
28.91
224.34
425.29
0.02
83.99
(5.61)
26.99
530.68
0.42
0.05
0.47
241.36
66.39
(5.54)
8.58
310.79
2,399.45
-
82.61
-
35.46
2,517.52
122.57
3.04
125.61
948.12
147.80
-
7.99
1,103.91
93.94
90.20
0.03
-
-
184.17
30.65
-
30.65
26.71
10.69
-
-
37.40
(` crore)
Total
3,168.06
90.22
168.94
(5.61)
103.56
3,525.17
153.64
3.09
156.73
1,383.19
261.66
(5.54)
46.47
1,685.78
79.93
54.47
183.51
219.42
1,328.76
1,288.00
36.58
116.12
1,631.23
1,682.66
307307
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
6. Other intangible assets (Contd.)
[Item No. I(d), Page 280]
Cost/Deemed cost as at April 1, 2016
Additions
Disposals
Disposal of group undertakings
Other re-classifications
Exchange differences on consolidation
Cost/Deemed cost as at March 31, 2017
Accumulated impairment as at April 1, 2016
Charge for the year
Disposals
Other re-classifications
Exchange differences on consolidation
Accumulated impairment as at March 31, 2017
Accumulated amortisation as at April 1, 2016
Charge for the year
Disposals
Disposal of group undertakings
Other re-classifications
Exchange differences on consolidation
Accumulated amortisation as at March 31, 2017
Net carrying value as at April 1, 2016
Net carrying value as at March 31, 2017
Patents
and
Trademarks
9.27
0.08
-
(0.40)
-
1.21
10.16
-
-
-
-
-
-
5.97
0.71
-
(0.40)
-
1.43
7.71
3.30
2.45
Development
costs
Software
costs
Mining
assets
488.08
35.23
(257.13)
(0.68)
-
(26.28)
239.22
-
-
-
-
-
-
390.73
45.43
(257.13)
(0.68)
-
(19.06)
159.29
97.35
79.93
314.85
141.81
(14.56)
(5.12)
(1.78)
(9.91)
425.29
0.50
0.20
-
(0.21)
(0.07)
0.42
213.24
47.40
(14.52)
(1.66)
(1.47)
(1.63)
241.36
101.11
183.51
2,204.28
800.46
-
-
(609.35)
4.06
2,399.45
124.45
1.13
-
-
(3.01)
122.57
758.55
188.31
-
-
-
1.26
948.12
1,321.28
1,328.76
Other
intangible
assets
2,634.23
1.22
(2,346.10)
-
-
(195.41)
93.94
1,401.79
-
(1,265.72)
-
(105.42)
30.65
1,192.52
4.56
(1,080.39)
-
-
(89.98)
26.71
39.92
36.58
(` crore)
Total
5,650.71
978.80
(2,617.79)
(6.20)
(611.13)
(226.33)
3,168.06
1,526.74
1.33
(1,265.72)
(0.21)
(108.50)
153.64
2,561.01
286.41
(1,352.04)
(2.74)
(1.47)
(107.98)
1,383.19
1,562.96
1,631.23
(i)
Mining assets represent expenditure incurred in relation to acquisition of mines, mine development expenditure post establishment of
technical and commercial feasibility and restoration obligations as per applicable regulations.
(ii)
During the year ended March 31, 2017, the Group recognised an impairment charge of ₹1.13 crore which was contained within Indian
operations and related to expenditure incurred in respect of certain mines which are not in operation.
308308
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
7. Equity accounted investments
[Item No. I(f ), Page 280]
(a)
Investment in associates:
(i)
The Group has no material associates as at March 31, 2018. The aggregate summarised financial information in respect of the Group’s
immaterial associates accounted for using the equity method is as below:
Carrying value of the Group’s interest in associates*
Group’s share in profit/(loss) for the year of associates*
Group’s share in other comprehensive income for the year of associates
Group’s share in total comprehensive income for the year of associates
(` crore)
As at
March 31, 2018
301.23
As at
March 31, 2017
231.62
Year ended
March 31, 2018
58.93
(0.31)
58.62
Year ended
March 31, 2017
44.00
(5.02)
38.98
(ii)
(iii)
Fair value of investments in equity accounted associates for which published price quotation is available, which is a level 1 input as at March
31, 2018 is `102.76 crore (March 31, 2017: `130.35 crore). The carrying value of such investments is Nil (March 31, 2017: Nil) as the Group’s
share of losses in such associates exceeds the cost of investments made.
Share of unrecognised loss in respect of equity accounted associates amounted to `93.59 crore for the year ended March 31, 2018
(March 31, 2017: `105.17 crore). Cumulative share of unrecognised losses in respect of equity accounted associates as at March 31, 2018
amounted to `304.13 crore. (March 31, 2017: `209.08 crore)
(iv)
The Group did not recognise any impairment in respect of its equity accounted associates during the current year as well as in the
previous year.
(b)
Investment in joint ventures:
(i)
The Company holds 51% of the equity share capital in T M International Logistics Limited, Jamshedpur Continuous Annealing and
Processing Company Private Limited and T M Mining Company Limited. However, decisions in respect of activities which significantly
affect the risks and rewards of these businesses, require an unanimous consent of all the shareholders. These entities have therefore been
considered as joint ventures.
309309
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
7. Equity accounted investments (Contd.)
[Item No. I(f ), Page 280]
(ii)
The Group has no material joint ventures as at March 31, 2018. The aggregate summarised financial information in respect of the Group’s
immaterial joint ventures that are accounted for using the equity method is as below:
Carrying value of the Group’s interest in joint ventures*
Group’s share in profit/(loss) for the year of joint ventures*
Group’s share in other comprehensive income for the year of joint ventures
Group’s share in total comprehensive income for the year of joint ventures
(` crore)
As at
March 31, 2018
1,479.99
As at
March 31, 2017
1,362.32
Year ended
March 31, 2018
115.17
16.27
131.44
(` crore)
Year ended
March 31, 2017
(36.35)
6.22
(30.13)
(iii)
Share of unrecognised losses in respect of equity accounted joint ventures amounted to `49.15 crore for the year ended March 31, 2018
(March 31, 2017: `26.12 crore). Cumulative share of unrecognised losses in respect of equity accounted joint ventures as at March 31, 2018
amounted to `1,033.76 crore. (March 31, 2017: `966.87 crore).
(iv)
The Group did not recognise any impairment in respect of its equity accounted joint ventures during the current year as well as in the
previous year.
(c) Summary of carrying value of Group’s interest in equity accounted investees:
Carrying value of immaterial associates
Carrying value of immaterial joint ventures
(d) Summary of Group’s share in profit/(loss) for the year of equity accounted investees:
Share of profit/(loss) in immaterial associates
Share of profit/(loss) in immaterial joint ventures
As at
March 31, 2018
301.23
1,479.99
1,781.22
(` crore)
As at
March 31, 2017
231.62
1,362.32
1,593.94
Year ended
March 31, 2018
58.93
115.17
174.10
(` crore)
Year ended
March 31, 2017
44.00
(36.35)
7.65
310310
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
7. Equity accounted investments (Contd.)
[Item No. I(f ), Page 280]
(e) Summary of Group’s share in other comprehensive income for the year of equity accounted investees:
Share of other comprehensive income in immaterial associates
Share of other comprehensive income of immaterial joint venture
Year ended
March 31, 2018
(0.31)
16.27
15.96
Year ended
March 31, 2017
(5.02)
6.22
1.20
* Group’s share in net assets and profit/(loss) of equity accounted investees has been determined after giving effect for subsequent amortisation/
depreciation and other adjustments arising on account of fair value adjustments made to the identifiable net assets of the equity accounted
investees as at the date of acquisition and other adjustment e.g. unrealised profits on inventories etc., arising under the equity method of
accounting.
8.
Investments
[Item No. I(g)(i) and II(b)(i), Page 280]
(A) Non-current
(a)
Investments carried at amortised cost:
Investments in government or trust securities
Investments in bonds and debentures
(b)
Investments carried at fair value through other comprehensive income:
Investments in equity shares#
(c)
Investments carried at fair value through profit and loss:
Investments in bonds and debentures
Investments in equity shares
Investments in mutual funds
(B) Current
Investments carried at fair value through profit and loss:
Investments in mutual funds
(` crore)
As at
March 31, 2018
As at
March 31, 2017
0.02
0.20
0.22
876.65
876.65
141.04
120.45
70.92
332.41
1,209.28
0.02
0.17
0.19
4,858.56
4,858.56
294.46
36.84
-
331.30
5,190.05
(` crore)
As at
March 31, 2018
As at
March 31, 2017
14,908.97
14,908.97
5,673.13
5,673.13
311311
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
8.
Investments (Contd.)
[Item No. I(g)(i) and II(b)(i), Page 280]
(i)
Carrying value and market value of quoted and unquoted investments is as below:
(a)
Investment in quoted instruments:
Aggregate carrying value
Aggregate market value
(b)
Investment in unquoted instruments:
Aggregate carrying value
(` crore)
As at
March 31, 2018
As at
March 31, 2017
753.87
753.87
4,735.27
4,735.27
15,364.38
6,127.91
(ii)
Cumulative gain on de-recognition of investments carried at fair value through other comprehensive income during the year amounted
to `3,427.46 crore (2016-17: `1.75 crore).
Fair value of such investments as on the date of de-recognition was `3,782.76 crore (2016-17: `2.93 crore).
# includes unquoted equity instruments for which cost has been considered as an appropriate estimate of fair value because of a wide range
of possible fair value measurements and cost represents the best estimate of fair value within that range.
9. Loans
[Item No. I(g)(ii) and II(b)(v), Page 280]
A. Non-current
(a) Security deposits
Unsecured, considered good
Unsecured, considered doubtful
Less: Allowance for credit losses
(b) Loans to related parties
Unsecured, considered good
Unsecured, considered doubtful
Less: Allowance for credit losses
(c) Other loans
Unsecured, considered good
Unsecured, considered doubtful
Less: Allowance for credit losses
312312
(` crore)
As at
March 31, 2018
As at
March 31, 2017
197.71
2.18
2.18
197.71
7.52
192.31
192.31
7.52
512.11
1,313.60
1,313.60
512.11
717.34
197.25
1.31
1.31
197.25
13.53
168.78
168.78
13.53
162.28
1,201.47
1,201.47
162.28
373.06
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
9. Loans (Contd.)
[Item No. I(g)(ii) and II(b)(v), Page 280]
B. Current
(a) Security deposits
Unsecured, considered good
Unsecured, considered doubtful
Less: Allowance for credit losses
(b) Loans to related parties
Unsecured, considered good
Unsecured, considered doubtful
Less: Allowance for credit losses
(c) Other loans
Unsecured, considered good
Unsecured, considered doubtful
Less: Allowance for credit losses
(` crore)
As at
March 31, 2018
As at
March 31, 2017
43.69
0.23
0.23
43.69
46.22
783.36
783.36
46.22
166.57
2.08
2.08
166.57
256.48
34.77
0.23
0.23
34.77
-
778.83
778.83
-
189.73
2.07
2.07
189.73
224.50
(i)
Security deposits are primarily in relation to public utility services and rental agreements. Security deposits include deposit with Tata Sons
`1.25 crore (March 31, 2017: `1.25 crore).
(ii)
Non-current loans to related parties represent loans given to joint ventures `188.95 crore (March 31, 2017: `172.76 crore) and associates
`10.88 crore (March 31, 2017: `9.55 crore) out of which `188.95 crore (March 31, 2017: `165.83 crore) and `3.36 crore (March 31, 2017:
`2.95 crore) respectively is impaired.
(iii) Current loans to related parties represent loans given to joint ventures `829.58 crore (March 31, 2017: `778.83 crore) out of which `783.36
crore (March 31, 2017: `778.83 crore) is impaired.
(iv) There are no outstanding debts from directors or other officers of the Company.
313313
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
10. Other financial assets
[Item No. I(g)(iv) and II(b)(vii), Page 280]
A. Non-current
(a)
Interest accrued on deposits, loans and advances
Unsecured, considered good
Unsecured, considered doubtful
Less: Allowance for credit losses
(b)
Earmarked balances with bank
(c) Other balances with banks
(d) Other financial assets
Unsecured, considered good
Unsecured, considered doubtful
Less: Allowance for credit losses
B. Current
(a)
Interest accrued on deposits and loans
Unsecured, considered good
Unsecured, considered doubtful
Less: Allowance for credit losses
(b) Other financial assets
Unsecured, considered good
(` crore)
As at
March 31, 2018
As at
March 31, 2017
2.25
0.27
0.27
2.25
21.25
63.77
0.64
-
-
0.64
87.91
2.43
0.27
0.27
2.43
40.87
12.67
29.61
117.42
117.42
29.61
85.58
(` crore)
As at
March 31, 2018
As at
March 31, 2017
43.28
149.54
149.54
43.28
556.43
556.43
599.71
60.57
107.70
107.70
60.57
327.25
327.25
387.82
(i)
Non-current earmarked bank balances represent deposits and balances in escrow account not due for realisation within 12 months from
the balance sheet date. These are primarily placed as security with government bodies, margin money against issue of bank guarantees
and deposits made against contract performance.
(ii) Other non-current balances with banks represent bank deposits not due for realisation within 12 months from the balance sheet date.
(iii) Non-current other financial assets as at March 31, 2017, include advance for repurchase of equity shares in Tata Teleservices Limited (TTSL)
from NTT Docomo Inc, `144.07 crore out of which `117.42 crore was impaired.
(iv)
Current other financial assets include amount receivable from post-employment benefit fund `302.14 crore (March 31, 2017: `259.16
crore) on account of retirement benefit obligations paid by the Group directly.
314314
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
11. Retirement benefit assets and obligations
[Item No. I(h), II(c), V(c) and VI(c) Pages 280 and 281]
(I) Retirement benefit assets
A. Non-current
(a)
(b)
Pension
Retiring gratuities
B. Current
(a)
Retiring gratuities
(II) Retirement benefit obligations
A. Non-current
Pension
Retiring gratuities
Post-retirement medical benefits
(a)
(b)
(c)
(d) Other defined benefits
B. Current
Pension
Retiring gratuities
Post-retirement medical benefits
(a)
(b)
(c)
(d) Other defined benefits
As at
March 31, 2018
20,570.52
0.35
20,570.87
(` crore)
As at
March 31, 2017
1,752.14
0.50
1,752.64
(` crore)
As at
March 31, 2018
2.91
2.91
As at
March 31, 2017
-
-
As at
March 31, 2018
1,096.53
67.70
1,150.39
201.94
2,516.56
As at
March 31, 2018
9.23
3.69
89.53
7.91
110.36
(` crore)
As at
March 31, 2017
1,005.03
233.05
1,201.83
226.36
2,666.27
(` crore)
As at
March 31, 2017
26.43
3.29
54.80
10.68
95.20
(i) Detailed disclosure in respect of post retirement defined benefit schemes is provided in Note 38, Page 348.
(ii) Other defined benefits include long service awards, packing and transportation, farewell gifts etc.
315315
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
12. Income taxes
[Item No. I(j) and V(e), Pages 280 and 281]
A.
Income tax expenses/(benefit)
Indian Companies are subject to income tax in India on the basis of their standalone financial statements. As per the Income Tax Act 1961,
Companies are liable to pay income tax based on the higher of regular income tax payable or the amount payable based on the provisions
applicable for Minimum Alternate Tax (MAT). MAT paid in excess of regular income tax during a year can be carried forward for a period of
fifteen years and can be offset against future tax liabilities arising from regular income tax.
Indian Companies can carry forward business loss for a maximum period of eight assessment years immediately succeeding the assessment
year to which the loss pertains. Unabsorbed depreciation can be carried forward for an indefinite period.
Companies can claim tax exemptions/deductions under specific sections of the Income Tax Act, 1961 subject to fulfilment of prescribed
conditions as may be applicable.
Apart from India, major tax jurisdictions for the Group include Singapore, Thailand, United Kingdom and Netherlands. The number of years that
are subject to tax assessments varies depending on the tax jurisdiction.
The reconciliation of estimated income tax to income tax expense is as below:
Profit/(loss) before tax
Tax on income at different rates
Additional tax benefit for capital investment including research & development expenditures
Items not deductible/income exempt from tax
Undistributed earning of subsidiaries, joint ventures and equity accounted investees
Income tax expense at applicable tax rates applicable to individual entities
(a)
(b)
(c)
(d)
(e) Deferred tax assets not recognised because realisation is not probable
(f ) Adjustments to taxes in respect of prior periods
(g)
(h)
Tax expense as reported
Utilisation/credit of unrecognised tax losses, unabsorbed depreciation and other tax benefits
Impact of changes in tax rates(i)
(` crore)
Year ended
March 31, 2018
21,109.75
Year ended
March 31, 2017
2,473.63
4,995.26
(0.04)
(26.78)
244.32
4.09
791.54
(7.29)
(2,723.14)
127.43
3,405.39
1,307.06
(32.16)
(131.77)
338.64
7.76
1,871.81
8.96
(592.29)
-
2,778.01
(i)
Indian Finance Act, 2018, changed the statutory tax rate applicable for Indian companies having turnover of more than `250 crore (including
surcharge and cess) from assessment year 2019-20. The Company and its Indian subsidiaries have accordingly re-measured deferred tax
balances expected to reverse in future periods based on the revised applicable rate.
316316
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
12. Income taxes (Contd.)
[Item No. I(j) and V(e), Pages 280 and 281]
B. Deferred tax assets/(liabilities)
(i) Components of deferred tax assets and liabilities as at March 31, 2018 is as below:
Balance
as at
April 1, 2017
Recognised/
(reversed) in
consolidated
statement of
profit or loss
during the
year
Recognised
in other
comprehensive
Income during
the year
Recognised
in equity
during the
year
Addition
relating to
acquisitions
during the
year
Other
reclassifications
during the year
Exchange
differences on
consolidation
during the
year
(` crore)
Balance
as at
March 31, 2018
Deferred tax assets/(liabilities):
Tax-loss carry forwards
Expenses allowable for tax
purposes when paid/ written off
MAT credit entitlement
Others
1,009.20
2,151.80
1,513.30
104.10
4,778.40
Deferred tax (assets)/liabilities:
Property plant and equipment
13,182.77
Intangible assets
Retirement benefit assets/
liabilities
Trade and other receivables
65.74
90.40
1,716.86
(177.93)
(84.02)
164.79
1,619.70
134.54
37.58
2,655.29
583.70
13,922.61
194.91
3,022.32
Net Deferred tax assets/
(9,144.21)
(1,402.62)
(liabilities):
Disclosed as :
Deferred tax assets
Deferred tax liabilities
885.87
10,030.08
(9,144.21)
-
-
731.38
33.58
764.96
-
-
(296.47)
-
(296.47)
1,061.43
-
-
-
-
(21.76)
(22.00)
-
0.15
(43.61)
(6.21)
36.09
0.23
-
-
-
-
-
-
(6.21)
6.21
36.09
(36.09)
0.23
(43.84)
287.25
32.35
-
19.02
338.62
(9.59)
13.77
218.96
90.45
313.59
25.03
2,991.55
1,984.22
2,160.66
321.64
7,458.07
13,337.83
117.09
2,668.18
869.06
16,992.16
(9,534.08)
1,035.80
10,569.88
(9,534.08)
317317
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
12. Income taxes (Contd.)
[Item No. I(j) and V(e), Pages 280 and 281]
Components of deferred tax assets and liabilities as at March 31, 2017 is as below:
Balance
as at
April 1, 2016
Recognised/
(reversed) in
consolidated
statement of
profit or loss
during the
year
Recognised
in other
comprehensive
Income during
the year
Recognised in
equity during
the year
Addition
relating to
acquisitions
during the
year
Other
reclassifications
during the year
Exchange
differences on
consolidation
during the year
Balance
as at
March 31, 2017
(` crore)
Deferred tax assets/
(liabilities):
Tax-loss carry forwards
Expenses allowable
for tax purposes when
paid/ written off
MAT credit entitlement
Others
Deferred tax (assets)/
liabilities:
Property plant and
equipment
Intangible assets
Retirement benefit
assets/ liabilities
Trade and other
receivables
Others
Net Deferred tax
assets/(liabilities):
Disclosed as :
Deferred tax assets
Deferred tax liabilities
2,477.63
1,670.47
(1,290.76)
513.19
275.81
22.37
4,446.28
1,243.92
52.15
518.50
-
-
-
(0.25)
(0.25)
-
-
-
-
-
10,771.67
2,386.98
-
(10.84)
28.12
1,808.61
29.01
(848.36)
-
(703.84)
501.29
165.06
0.46
-
-
-
130.03
13,239.72
(8,793.44)
(177.88)
1,554.81
(1,036.31)
13.82
(689.56)
689.31
-
(10.84)
10.84
-
-
-
-
-
-
-
15.51
-
5.31
20.82
(20.82)
627.45
9,420.89
(8,793.44)
0.24
(3.39)
(6.43)
-
(9.58)
-
-
-
-
(177.91)
(28.47)
1,009.20
2,151.80
-
(0.90)
(207.28)
1,513.30
73.37
4,747.67
34.96
13,182.77
8.61
(181.52)
65.74
90.40
(83.11)
583.70
7.77
7.77
(17.35)
(9.78)
(230.84)
23.56
(30.73)
13,891.88
(9,144.21)
885.87
10,030.08
(9,144.21)
(ii)
Deferred tax assets, have been recognised based on an evaluation of whether it is probable that taxable profits will be earned in future
accounting periods considering all the available evidences, including approved budgets and forecasts by the Board of the respective
entities.
(iii)
Deferred tax assets have not been recognised in respect of tax losses of `39,386.36 crore (March 31, 2017: `48,456.27 crore) as its recovery
is not considered probable in the foreseeable future. Such losses primarily relate to the Group’s European operations.
318318
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
12. Income taxes (Contd.)
[Item No. I(j) and V(e), Pages 280 and 281]
(iv)
Unrecognised tax losses in respect of which deferred tax asset has not been recognised expire unutilised based on the year of origination
as below:
Within five years
Later than five years but less than ten years
Later than ten years but less than twenty years
No expiry
(` crore)
As at
March 31, 2018
6,822.88
2,139.61
10.28
30,413.59
39,386.36
(v)
Unused tax credits and other deductible temporary differences in respect of which deferred tax asset has not been recognised expire
unutilised based on the year of origination as below:
Within five years
No expiry
(` crore)
As at
March 31, 2018
836.67
742.77
1,579.44
(vi)
At the end of the reporting period, aggregate amount of temporary difference associated with undistributed earnings of subsidiaries
for which deferred tax liability has not been recognised is `10,815.63 crore (March 31, 2017: `10,228.02 crore). No liability has been
recognised in respect of such difference because the Group is in a position to control the timing of reversal of the temporary difference
and it is probable that such difference will not reverse in the foreseeable future.
13. Other assets
[Item No. I(k) and II(e), Page 280]
A. Non-current
(a) Capital advances
Unsecured, considered good
Unsecured, considered doubtful
Less: Provision for doubtful advances
(b) Advance with public bodies
Unsecured, considered good
Unsecured, considered doubtful
Less: Provision for doubtful advances
(` crore)
As at
March 31, 2018
As at
March 31, 2017
502.36
93.22
93.22
502.36
880.48
24.01
24.01
880.48
618.16
88.61
88.61
618.16
1,804.44
12.76
12.76
1,804.44
319319
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
13. Other assets (Contd.)
[Item No. I(k) and II(e), Page 280]
(c) Prepaid lease payments for operating leases
947.54
912.70
(` crore)
As at
March 31, 2018
As at
March 31, 2017
(d) Capital advances to related parties
Unsecured, considered good
(e) Others
Unsecured, considered good
Unsecured, considered doubtful
Less: Provision for doubtful advances
B. Current
(a) Advance with public bodies
Unsecured, considered good
Unsecured, considered doubtful
Less: Provision for doubtful advances
(b) Prepaid lease payments for operating leases
(c) Advance to related parties
Unsecured, considered good
(d) Others
Unsecured, considered good
Unsecured, considered doubtful
Less: Provision for doubtful advances
32.02
32.54
214.74
10.09
10.09
214.74
2,577.14
294.15
19.34
19.34
294.15
3,661.99
(` crore)
As at
March 31, 2018
As at
March 31, 2017
2,120.06
2.83
2.83
2,120.06
1,394.09
2.85
2.85
1,394.09
13.66
13.56
82.55
5.14
892.71
102.87
102.87
892.71
3,108.98
794.56
139.13
139.13
794.56
2,207.35
(i)
(ii)
Advance with public bodies primarily relate to input credit entitlements and amounts paid under protest in respect of demands and
claims from regulatory authorities.
Prepaid lease payments for operating leases relate to land leases classified as operating since title is not expected to transfer at the end of
the lease term and that land has an indefinite economic life.
(iii) Other assets include advances against supply of goods/services and advances paid to employees.
320320
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
14. Inventories
[Item No. II(a), Page 280]
(a)
Raw materials
(b) Work-in-progress
(c)
(d)
(e)
Finished and semi-finished goods
Stock-in-trade
Stores and spares
Included above, goods-in-transit:
(i)
(ii)
(iii)
(iv)
Raw materials
Finished and semi-finished goods
Stock-in-trade
Stores and spares
As at
March 31, 2018
9,551.29
5,145.30
9,787.47
66.94
3,780.04
28,331.04
1,939.01
123.02
31.99
155.60
2,249.62
(` crore)
As at
March 31, 2017
8,020.23
4,378.75
9,045.31
139.91
3,219.62
24,803.82
650.30
138.55
97.09
142.85
1,028.79
Value of inventories above is stated after provisions (net of reversal) of `526.77 crore (March 31, 2017: `539.33 crore) for write-down to net
realisable value and provision for slow moving and obsolete items.
15. Trade receivables
[Item No. II(b)(ii), Page 280]
(a) Unsecured considered good
(b) Unsecured considered doubtful
Less: Allowance for credit losses
As at
March 31, 2018
12,415.52
250.26
12,665.78
250.26
12,415.52
As at
March 31, 2017
11,586.82
226.86
11,813.68
226.86
11,586.82
In determining allowance for credit losses of trade receivables, the Group has used a practical expedient by computing the expected credit
loss allowance based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward
looking information. The expected credit loss allowance is based on ageing of the receivables that are due and rates used in the provision
matrix.
321321
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
15. Trade receivables (Contd.)
[Item No. II(b)(ii), Page 280]
(i) Movements in allowance for credit losses of receivables is as below:
Balance at the beginning of the year
Charge during the year
Utilised during the year
Disposal of group undertakings
Reclassified as held for sale
Exchange differences on consolidation
Balance at the end of the year
(ii) Ageing of trade receivables and credit risk arising there from is as below :
Year ended
March 31, 2018
226.86
55.67
(24.36)
(28.18)
-
20.27
250.26
(` crore)
Year ended
March 31, 2017
319.95
26.60
(42.44)
(38.58)
(1.09)
(37.58)
226.86
Amounts not yet due
One month overdue
Two months overdue
Three months overdue
Between three to six months overdue
Greater than six months overdue
Amounts not yet due
One month overdue
Two months overdue
Three months overdue
Between three to six months overdue
Greater than six months overdue
As at March 31, 2018
Gross
credit risk
11,124.82
621.91
161.60
219.77
146.18
391.50
12,665.78
Subject to credit
insurance cover
7,102.01
298.09
115.51
142.03
72.38
70.44
7,800.46
Allowance for
credit losses
8.12
0.78
3.27
0.98
16.05
221.06
250.26
As at March 31, 2017
Gross
credit risk
10,643.96
471.47
113.74
77.79
126.21
380.51
11,813.68
Subject to credit
insurance cover
6,737.16
211.79
73.66
22.14
53.20
72.18
7,170.13
Allowance for
credit losses
1.11
0.37
0.02
2.81
13.85
208.70
226.86
(` crore)
Net
credit risk
4,014.69
323.04
42.82
76.76
57.75
100.00
4,615.06
(` crore)
Net
credit risk
3,905.69
259.31
40.06
52.84
59.16
99.63
4,416.69
(iii)
The Group considers its maximum exposure to credit risk with respect to customers as at March 31, 2018 to be `4,615.06 crore
(March 31, 2017: `4,416.69 crore), which is the fair value of trade receivables after allowance for credit losses and considering insurance
cover.
The Group’s exposure to customers is diversified and there is no concentration of credit risk with respect to any particular customer.
(iv) There are no outstanding receivable due from directors or officers of the respective entities.
322322
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
16. Cash and cash equivalents
[Item No. II(b)(iii), Page 280]
Cash in hand
Cheques, drafts on hand
Remittances in-transit
(a)
(b)
(c)
(d) Unrestricted balances with banks
(i) Currency profile of cash and cash equivalents is as below:
INR
GBP
EURO
USD
Others
Total
INR-Indian rupees, GBP- Great Britain Pound, USD-United States Dollars.
Others primarily include SGD-Singapore Dollars, CAD- Canadian Dollars and THB-Thai Baht.
17. Other balances with bank
[Item No. II(b)(iv), Page 280]
Earmarked balances with bank
(i) Currency profile of earmarked balances with bank is as below:
INR
USD
Total
INR-Indian rupees, USD-United States dollars.
As at
March 31, 2018
1.50
30.46
53.20
7,698.34
7,783.50
(` crore)
As at
March 31, 2017
0.80
29.44
59.27
4,742.78
4,832.29
As at
March 31, 2018
5,132.75
1,449.48
528.09
190.76
482.42
7,783.50
(` crore)
As at
March 31, 2017
1,444.16
614.63
(70.44)
2,037.50
806.44
4,832.29
(` crore)
As at
March 31, 2018
154.35
154.35
As at
March 31, 2017
88.76
88.76
As at
March 31, 2018
139.65
14.70
154.35
(` crore)
As at
March 31, 2017
74.16
14.60
88.76
(ii)
Earmarked balances with bank represent balances held for unpaid dividends, margin money/fixed deposits against issue of bank
guarantees and deposits made against contract performance.
323323
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
17. Other balances with bank (Contd.)
[Item No. II(b)(iv), Page 280]
(iii)
In accordance with the MCA notification G.S.R. 308(E) dated March 30, 2017, details of Specified Bank Notes (SBN) and Other Denomination
Notes (ODN) held and transacted during the period from November 8, 2016 to December 30, 2016, is as below:
Closing cash in hand as on November 8, 2016
Add: Unpermitted receipts
Add: Permitted receipts
Less: Unpermitted payments
Less: Permitted payments
Less: Amounts deposited in Banks
Closing cash in hand as on December 30, 2016
(a) Unpermitted receipts include:
SBNs
54,93,500
1,15,20,000
23,36,000
70,000
-
1,89,80,000
2,99,500
ODNs
15,07,262
-
7,81,04,948
-
1,23,92,544
6,21,24,540
50,95,126
(`)
Total
70,00,762
1,15,20,000
8,04,40,948
70,000
1,23,92,544
8,11,04,540
53,94,626
1.
Company hospital receipts `1,06,21,500 which includes receipts at Tata Main Hospital, Jamshedpur of `1,04,34,000. Since Tata Main
Hospital is the only hospital equipped with modern facilities and super-speciality services in the region, on advice from the district
administration, specified notes were accepted.
2. Refund of advances by employees & internal departments `74,500.
3. Canteen receipts of `5,90,500 are primarily received from Contractor’s employees.
4. Refund of advance by Steel Welfare Workers Society `2,33,500.
(b)
Unpermitted payments represents amount collected by Company’s employees and exchanged for new notes against their individual
Permanent Account Number.
324324
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
18. Assets and liabilities held for sale
[Item No. III and VII, Pages 280 and 281]
(i)
On May 1, 2017, Tata Steel UK Limited, a wholly owned indirect subsidiary of the Company completed the sale of its Speciality Steels business
which was classified as held for sale as at March 31, 2017. Following such classification, a write down of ₹196.63 crore was recognised to
reduce the carrying value of assets in the disposal group to their fair value less costs to sell during the year ended March 31, 2017. The
impairment charge was included within profit/loss of discontinued operations in the consolidated statement of profit and loss.
The major classes of assets and liabilities classified as held for sale as on the reporting date for the above is set out below:
Assets classified as held for sale:
Inventories
Trade receivables
Cash and bank balances
Other financial assets
Less: Write down to fair value less costs to sell (including exchange on translation)
Liabilities classified as held for sale:
Non-current financial liabilities
Provisions
Other Non-current liabilities
Trade payables
Other financial liabilities
Short term provisions
Current tax liabilities
Other Current liabilities
As at
March 31, 2018
As at
March 31, 2017
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
778.12
292.50
1.03
2.78
1,074.43
(181.32)
893.11
8.89
10.03
0.01
228.51
2.49
27.16
0.46
12.21
289.76
(ii)
As at March 31, 2017, the Group had classified assets with carrying value of ₹98.31 crore pertaining to the South East Asian operations as
held for sale. Such assets with carrying value of ₹95.93 crore as at March 31, 2018, continue to be classified as held for sale since the Group
expects to recover the carrying value principally through sale. On November 15, 2017, the Group has entered into an asset sale agreement
with a buyer and remains committed to the plan of disposal.
(iii)
As at March 31, 2018, the Group has classified certain assets and liabilities held within a disposal group with net carrying value of ₹6.43 crore
(2016-17: Nil) in respect of one of its Indian subsidiary since the Group expects to recover the carrying value principally through sale due to
changes in technology and adverse market condition affecting the business.
The major classes of assets and liabilities classified as held for sale for the above is set out below:
Assets classified as held for sale:
Property, plant and equipment
Inventories
Trade receivables
Other non financial assets
Liabilities classified as held for sale:
Trade payables
As at
March 31, 2018
As at
March 31, 2017
0.06
5.08
1.25
0.15
6.54
0.11
0.11
-
-
-
-
-
-
-
325325
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
19. Equity share capital
[Item No. IV(a), Page 281]
Authorised:
1,75,00,00,000
35,00,00,000
2,50,00,000
60,00,00,000
Issued:
1,12,75,20,570
7,76,97,280
Ordinary Shares of `10 each
(March 31, 2017: 1,75,00,00,000 Ordinary Shares of `10 each)
"A" Ordinary Shares of `10 each
(March 31, 2017: 35,00,00,000 "A" Ordinary Shares of `10 each)
Cumulative Redeemable Preference Shares of `100 each
(March 31, 2017: 2,50,00,000 Shares of `100 each)
Cumulative Convertible Preference Shares of `100 each
(March 31, 2017: 60,00,00,000 Shares of `100 each)
Ordinary Shares of `10 each
(March 31, 2017: 97,21,26,020 Ordinary Shares of `10 each)
Ordinary Shares of `10 each (Partly Paid up)
(March 31, 2017: Nil)
Subscribed and Paid up:
1,12,53,16,422
7,76,34,625
Ordinary Shares of `10 each fully paid up
(March 31, 2017: 97,00,47,046 Ordinary Shares of `10 each)
Ordinary Shares of `10 each (` 2.50 each paid up)
(March 31, 2017: Nil)
Amount paid up on 3,89,516 Ordinary Shares forfeited
(March 31, 2017: 3,89,516 Shares of `10 each)
(` crore)
As at
March 31, 2018
As at
March 31, 2017
1,750.00
1,750.00
350.00
350.00
250.00
250.00
6,000.00
6,000.00
8,350.00
8,350.00
1,127.52
972.13
77.70
-
1,205.22
972.13
1,125.31
970.04
19.44
0.20
-
0.20
1,144.95
970.24
(i)
Subscribed and paid up capital excludes 11,68,393 (March 31, 2017: 11,68,393) Ordinary Shares of face value `10 each fully paid up held
by a wholly owned subsidiary of the Company.
326326
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
19. Equity share capital (Contd.)
[Item No. IV(a), Page 281]
(ii) Details of movement in subscribed and paid up share capital is as below:
Ordinary shares of `10 each
Balance at the beginning of the year
Fully paid shares allotted during the year(a),(b)
Partly paid shares allotted during the year(b)
Balance at the end of the year
As at
March 31, 2018
As at
March 31, 2017
No. of shares
` crore
No. of shares
` crore
97,00,47,046
15,52,69,376
7,76,34,625
1,20,29,51,047
970.04
155.27
19.44
1,144.75
97,00,47,046
-
-
97,00,47,046
970.04
-
-
970.04
(a)
(b)
450 Ordinary Shares of face value of `10 per share were allotted on May 15, 2017 at a premium of `290 per share to shareholders whose
shares were kept in abeyance in the Rights Issue made in 2007.
During the year ended March 31, 2018, the Company allotted 15,52,68,926 fully paid Ordinary Shares of face value of `10 each for cash
at a price of `510 per fully paid share (including a premium of `500 per fully paid share) aggregating to `7,918.72 crore and 7,76,34,625
partly paid Ordinary Shares of face value of `10 each (paid up value `2.504 per share) for cash at a price of `615 per partly paid share
(including a premium of `605 per partly paid share) aggregating to `1,195.57 crore pursuant to the Rights Issue of 2018.
Tata Sons Limited had undertaken to subscribe, on its own account and through any nominated entity or person belonging to the promoter
Group, to the full extent of their Rights Entitlement in the Issue in accordance with Regulation 10(4)(a) of the Takeover Regulations.
(iii) Proceeds from the Rights Issue, 2018 have been utilised in the following manner:
Particulars
Repayments of loan
Expenses towards general corporate purpose
Issue expense
Total
(` crore)
Proposed to be
utilised in FY’18
5,000.00
1,500.00
-
6,500.00
Utilised till
March 31, 2018
5,000.00
1,500.00
-
6,500.00
To be
utilised in FY’19
1,950.00
630.44
33.85
2,614.29
(iv)
As at March 31, 2018, 3,00,395 Ordinary Shares (March 31, 2017: 3,01,183 Ordinary Shares) are kept in abeyance in respect of Rights Issue
of 2007.
As at March 31, 2018, 1,25,624 Ordinary Shares and 62,655 partly paid Ordinary Shares are kept in abeyance in respect of Rights
Issue of 2018.
(v) Details of shareholders holding more than 5 percent shares in the Company is as below:
Name of shareholders
(a) Tata Sons Limited
(b) Life Insurance Corporation of India
As at
March 31, 2018
As at
March 31, 2017
No. of ordinary
shares
%
No. of ordinary
shares
%
38,09,73,085
10,83,88,660
31.64
9.00
28,88,98,245
12,20,50,996
29.75
12.57
327327
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
19. Equity share capital (Contd.)
[Item No. IV(a), Page 281]
(vii) 1,27,40,651 shares (March 31, 2017: 1,55,10,420 shares) of face
value of `10 per share represent the shares underlying GDRs
which were issued during 1994 and 2009. Each GDR represents
one underlying Ordinary Share.
(b)
(vii) The rights, powers and preferences relating to each class of
share capital and the qualifications, limitations and restrictions
thereof are contained in the Memorandum and Articles of
Association of the Company. The principal rights are as below:
A. Ordinary Shares of `10 each
(i)
(ii)
(iii)
In respect of every Ordinary Share (whether fully paid or partly
paid), voting right shall be in the same proportion as the capital
paid up on such Ordinary Share bears to the total paid up
Ordinary Capital of the Company.
The dividend proposed by the Board of Directors is subject to
the approval of the Shareholders in the ensuing Annual General
Meeting, except in case of interim dividend.
In the event of liquidation, the Shareholders of Ordinary Shares
are eligible to receive the remaining assets of the Company after
distribution of all preferential amounts, in proportion to their
shareholding.
(i)
(ii)
B.
‘A’ Ordinary Shares of `10 each
(a)(i) The holders of ‘A’ Ordinary Shares shall be entitled to such rights
of voting and/or dividend and such other rights as per the terms
of the issue of such shares, provided always that:
−
−
in the case where a resolution is put to vote on a poll, such
differential voting entitlement (excluding fractions, if any)
will be applicable to holders of ‘A’ Ordinary Shares.
in the case where a resolution is put to vote in the meeting
and is to be decided on a show of hands, the holders of
‘A’ Ordinary Shares shall be entitled to the same number of
votes as available to holders of Ordinary Shares.
(ii)
The holders of Ordinary Shares and the holders of ‘A’ Ordinary
Shares shall vote as a single class with respect to all matters
submitted for voting by shareholders of the Company and shall
exercise such votes in proportion to the voting rights attached to
such shares including in relation to any scheme under Sections
391 to 394 of the Companies Act, 1956.
328328
The holders of ‘A’ Ordinary Shares shall be entitled to dividend
on each ‘A’ Ordinary Share which may be equal to or higher
than the amount per Ordinary Share declared by the Board for
each Ordinary Share, and as may be specified at the time of the
issue. Different series of ‘A’ Ordinary Shares may carry different
entitlements to dividend to the extent permitted under applicable
law and as prescribed under the terms applicable to such issue.
C. Preference Shares
The Company has two classes of preference shares
i.e.
Cumulative Redeemable Preference Shares (CRPS) of `100 per
share and Cumulative Convertible Preference Shares (CCPS) of
`100 per share.
Such shares shall confer on the holders thereof, the right to a
fixed preferential dividend from the date of allotment, at a rate
as may be determined by the Board at the time of the issue, on
the capital for the time being paid up or credited as paid up
thereon.
Such shares shall rank for capital and dividend (including all
dividend undeclared upto the commencement of winding up)
and for repayment of capital in a winding up, pari passu inter
se and in priority to the Ordinary Shares of the Company, but
shall not confer any further or other right to participate either
in profits or assets. However, in case of CCPS, such preferential
rights shall automatically cease on conversion of these shares
into Ordinary Shares.
(iii)
The holders of such shares shall have the right to receive
all notices of general meetings of the Company but shall
not confer on the holders thereof the right to vote at
any meetings of the Company save to the extent and in
the manner provided in the Companies Act, 1956, or any
re-enactment thereof.
(iv)
CCPS shall be converted into Ordinary Shares as per the terms,
determined by the Board at the time of issue; as and when
converted, such Ordinary Shares shall rank pari passu with the
then existing Ordinary Shares of the Company in all respects.
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
20. Hybrid perpetual securities
[Item No. IV(b), Page 281]
The details of movement in hybrid perpetual securities is as below:
Balance at the beginning of the year
Balance at the end of the year
(` crore)
As at
March 31, 2018
2,275.00
2,275.00
As at
March 31, 2017
2,275.00
2,275.00
The Company had issued hybrid perpetual securities of `775.00 crore and `1,500.00 crore in May 2011 and March 2011 respectively. These
securities are perpetual in nature with no maturity or redemption and are callable only at the option of the Company. The distribution on these
securities are 11.50% p.a. and 11.80% p.a. respectively, with a step up provision if the securities are not called after 10 years. The distribution
on the securities may be deferred at the option of the Company if in the six months preceding the relevant distribution payment date, the
Company has not made payment on, or repurchased or redeemed, any securities ranking pari passu with, or junior to the instrument. As these
securities are perpetual in nature and the Company does not have any redemption obligation, these have been classified as equity.
21. Other equity
[Item No. IV(c), Page 281]
A. Retained earnings
The details of movement in retained earnings is as below:
Balance at the beginning of the year
Profit /(loss) for the year
Remeasurement of defined employee benefit plans
Dividend
Tax on dividend
Distribution on hybrid perpetual securities
Tax on distribution on hybrid perpetual securities
Transfers within equity(i)
Adjustment for change in ownership interests
Other movements
Balance at the end of the year
As at
March 31, 2018
As at
March 31, 2017
(11,447.01)
13,434.33
(2,780.05)
(970.05)
(188.17)
(266.13)
92.70
3,426.26
6,500.11
-
7,801.99
(2,415.49)
(4,240.80)
(3,549.43)
(776.97)
(147.74)
(266.10)
92.09
(3.76)
(133.01)
(5.80)
(11,447.01)
(i)
primarily relates to cumulative gain on sale of investments carried at fair value through other comprehensive income transferred from
investment revaluation reserve.
B.
Items of other comprehensive income
(a) Cash flow hedge reserve
The cumulative effective portion of gain or losses arising on changes in the fair value of hedging instruments designated as cash flow hedges
are recognised in cash flow hedge reserve. Such changes recognised are reclassified to the consolidated statement of profit and loss when the
hedged item affects the profit or loss or are included as an adjustment to the cost of the related non-financial hedged item.
329329
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
21. Other equity (Contd.)
[Item No. IV(c), Page 281]
The Group has designated certain foreign currency forward contracts, commodity contracts, interest rate swaps and collar as cash flow hedges
in respect of foreign exchange, commodity price and interest rate risks.
The details of movement in cash flow hedge reserve is as below:
Balance at the beginning of the year
Other comprehensive income recognised during the year
Balance at the end of the year
(i) Details of other comprehensive income recognised during the year is as below:
Fair value changes recognised during the year
Fair value changes reclassified to the consolidated statement of profit and loss/cost of hedged items
Tax impact on above (net)
As at
March 31, 2018
105.99
(96.00)
9.99
(` crore)
As at
March 31, 2017
(10.34)
116.33
105.99
Year ended
March 31, 2018
(579.05)
454.47
28.58
(96.00)
(` crore)
Year ended
March 31, 2017
344.74
(188.96)
(39.45)
116.33
During the year, ineffective portion of cash flow hedges recognised in the consolidated statement of profit and loss amounted to Nil
(2016-17: Nil).
(ii)
The amount recognised in cash flow hedge reserve (net of tax) is expected to impact the consolidated statement of profit and loss as
below:
- within the next one year: gain of `6.24 crore (2016-17: gain of `105.99 crore)
- later than one year: gain of `3.75 crore (2016-17: Nil)
(b)
Investment revaluation reserve
The cumulative gains and losses arising on fair value changes of equity investments measured at fair value through other comprehensive
income are recognised in investment revaluation reserve. The balance of the reserve represents such changes recognised net of amounts
reclassified to retained earnings on disposal of such investments.
The details of movement in investment revaluation reserve is as below:
Balance at the beginning of the year
Other comprehensive income recognised during the year
Transfers within equity
Balance at the end of the year
330330
As at
March 31, 2018
3,788.40
(205.55)
(3,427.62)
155.23
(` crore)
As at
March 31, 2017
2,955.52
834.63
(1.75)
3,788.40
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
21. Other equity (Contd.)
[Item No. IV(c), Page 281]
(c) Foreign currency translation reserve
Exchange differences arising on translation of assets, liabilities, income and expenses of the Group’s foreign subsidiaries, associates and joint
ventures are recognised in other comprehensive income and accumulated separately in foreign currency translation reserve. The amounts
recognised are transferred to the consolidated statement of profit and loss on disposal of the related foreign subsidiaries, associates and joint
ventures.
The details of movement in foreign currency translation reserve is as below:
Balance at the beginning of the year
Other comprehensive income recognised during the year
Balance at the end of the year
C. Other reserves
(a) Securities premium
(` crore)
As at
March 31, 2018
8,534.47
(1,550.19)
6,984.28
As at
March 31, 2017
6,495.52
2,038.95
8,534.47
Securities premium is used to record premium received on issue of shares. The reserve is utilised in accordance with the provisions of the Indian
Companies Act, 2013 (the “Companies Act”).
The details of movement in securities premium is as below:
Balance at the beginning of the year
Received on issue of shares during the year
Share issue expenses written off during the year
Balance at the end of the year
(b) Debenture redemption reserve
As at
March 31, 2018
18,871.66
8,939.59
(33.85)
27,777.40
(` crore)
As at
March 31, 2017
18,871.66
-
-
18,871.66
The Companies Act, 2013 requires that a Company which issues debentures, shall create a debenture redemption reserve out of profits of the
Company available for payment of dividend. The Company is required to maintain a debenture redemption reserve of 25% of the value of
debentures issued, either by a public issue or on a private placement basis. The amounts credited to the debenture redemption reserve cannot
be utilised by the Company except to redeem debentures.
The details of movement in debenture redemption reserve is as below:
Balance at the beginning of the year
Balance at the end of the year
As at
March 31, 2018
2,046.00
2,046.00
(` crore)
As at
March 31, 2017
2,046.00
2,046.00
331331
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
21. Other equity (Contd.)
[Item No. IV(c), Page 281]
(c) General reserve
Under the erstwhile Companies Act 1956, a general reserve was created through an annual transfer of net profit at a specified percentage in
accordance with applicable regulations. Consequent to the introduction of the Companies Act, 2013 the requirement to mandatorily transfer
a specified percentage of net profit to general reserve has been withdrawn.
The details of movement in general reserve is as below:
Balance at the beginning of the year
Balance at the end of the year
(d) Capital redemption reserve
(` crore)
As at
March 31, 2018
12,181.97
12,181.97
As at
March 31, 2017
12,181.97
12,181.97
The Companies Act, 2013 requires that where a Company purchases its own shares out of free reserves or securities premium account, a
sum equal to the nominal value of the shares so purchased shall be transferred to a capital redemption reserve account and details of such
transfer shall be disclosed in the balance sheet. The capital redemption reserve may be applied by the Company, in paying up unissued shares
of the Company to be issued to shareholders of the Company as fully paid bonus shares. The Group established this reserve pursuant to the
redemption of preference shares issued in earlier years.
The details of movement in capital redemption reserve is as below:
Balance at the beginning of the year
Balance at the end of the year
(e) Special reserve
(` crore)
As at
March 31, 2018
133.11
133.11
As at
March 31, 2017
133.11
133.11
Special reserve represents reserve created by certain Indian subsidiaries of the Company pursuant to the Reserve Bank of India Act, 1934 (the
“RBI Act”) and other related applicable regulations. Under the RBI Act, a non-banking finance company is required to transfer an amount not
less than 20% of its net profit to a reserve fund before declaring any dividend. Appropriation from this reserve fund is permitted only for the
purposes specified by the RBI.
The details of movement in special reserve is as below:
Balance at the beginning of the year
Transfers within equity
Balance at the end of the year
As at
March 31, 2018
6.66
0.92
7.58
(` crore)
As at
March 31, 2017
6.19
0.47
6.66
332332
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
21. Other equity (Contd.)
[Item No. IV(c), Page 281]
(f) Others
Others primarily represent amount appropriated out of profit or loss for unforeseen contingencies. Such appropriations are free in nature.
The details of movement in others is as below:
Balance at the beginning of the year
Additions during the year
Transfer to consolidated statement of profit and loss
Transfers within equity
Changes in ownership interests
Other movements
Balance at the end of the year
D. Share application money pending allotment
The details of movement in share application money pending allotment is as below:
Balance at the beginning of the year
Application money received during the year
Allotment of equity shares during the year
Balance at the end of the year
22. Non- controlling interests
As at
March 31, 2018
352.82
-
-
0.28
-
-
353.10
(` crore)
As at
March 31, 2017
223.17
191.39
(40.22)
(7.99)
1.75
(15.28)
352.82
As at
March 31, 2018
0.01
0.02
(0.01)
0.02
(` crore)
As at
March 31, 2017
-
0.01
-
0.01
Non-controlling interests represent proportionate share held by minority shareholders in the net assets of subsidiaries which are not wholly
owned by the Company.
The balance of non-controlling interests as at the end of the year is as below:
Non-controlling interests
(` crore)
As at
March 31, 2018
936.52
As at
March 31, 2017
1,601.70
In September 2017, the UK Pensions Regulator (tPR) had approved a Regulated Apportionment Arrangement (RAA) in respect of the British Steel
Pension Scheme (BSPS) which separated the scheme from Tata Steel UK (TSUK), a wholly owned indirect subsidiary of the Company. This was
accompanied by a one-time settlement payment and a transfer of a 33% minority stake in TSUK to the BSPS trustees.
333333
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
22. Non- controlling interests (Contd.)
The table below provides information in respect of subsidiaries which include material non-controlling interests as at March 31, 2018:
Name of subsidiary
Country of
incorporation
and operation
% of non-
controlling
interests
as at March
31, 2018
% of non-
controlling
interests
as at March
31, 2017
Profit/(loss)
attributable to
non-controlling
interests for
the year ended
March 31, 2018
(` crore)
Non-controlling
interests as at
March 31, 2018
Tata Steel UK Limited
United Kingdom
33.33%
-
4,389.78
(623.46)
The tables below provide summarised information in respect of consolidated balance sheet as at March 31, 2018, consolidated statement of
profit and loss and consolidated cash flows for the year ended March 31, 2018, in respect of the Tata Steel UK Limited:
Summarised balance sheet information
Particulars
Non-current assets
Current assets
Total assets
Non-current liabilities
Current liabilities
Net assets
Summarised profit & loss information
Particulars
Revenue
Profit/(loss) for the year
Total comprehensive income for the year
Summarised cash flow information
Particulars
Net cash from/(used in) operating activities
Net cash from/(used in) investing activities
Net cash from/(used in) financing activities
Effect of exchange rate on cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
334334
(` crore)
As at
March 31, 2018
31,672.43
7,208.45
38,880.88
18,458.11
22,293.33
(1,870.57)
(` crore)
As at
March 31, 2018
20,632.85
12,064.97
10,607.87
(` crore)
As at
March 31, 2018
(3,304.20)
(957.39)
3,991.68
46.92
481.75
258.76
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR 23. Borrowings
[Item No. V(a)(i) and VI(a)(i), Page 281]
A. Non-current
(a)
Secured
(i)
(ii)
(iii)
Loans from Joint Plant Committee - Steel Development Fund
Term loans from banks and financial institutions
Finance lease obligations
(b) Unsecured
Bonds and debentures
(i)
(ii) Non-convertible preference shares
(iii)
(iv)
(v) Deferred payment liabilities
(vi) Other loans
Term loans from banks and financial institutions
Finance lease obligations
B. Current
(a)
Secured
(i)
(ii)
(iii) Other Loans
Loans from banks and financial institutions
Repayable on demand from banks and financial institutions
(b) Unsecured
Loans from banks and financial institutions
Commercial papers
(i)
(ii)
(iii) Other loans
(` crore)
As at
March 31, 2018
As at
March 31, 2017
2,494.42
17,825.17
471.29
20,790.88
29,456.43
19.97
19,942.61
2,397.51
6.11
175.59
51,998.22
72,789.10
2,420.65
14,864.85
440.08
17,725.58
21,219.30
19.97
22,613.77
2,386.75
9.61
47.29
46,296.69
64,022.27
(` crore)
As at
March 31, 2018
As at
March 31, 2017
5,541.48
139.62
37.69
5,718.79
9,257.82
73.65
834.72
10,166.19
15,884.98
4,848.96
127.92
19.41
4,996.29
9,918.07
2,323.54
1,090.20
13,331.81
18,328.10
(i)
As at March 31, 2018, `26,819.90 crore (March 31, 2017: `22,911.97 crore) of the total outstanding borrowings (including current
maturities) were secured by a charge on property, plant and equipment, inventories and receivables.
335335
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
23. Borrowings (Contd.)
[Item No. V(a)(i) and VI(a)(i), Page 281]
(ii) The security details of major borrowings as at March 31, 2018 is as below:
(a) Loan from Joint Plant Committee-Steel Development Fund
It is secured by mortgages on, all present and future immovable properties wherever situated and hypothecation of movable assets,
excluding land and building mortgaged in favour of Government of India under the deed of mortgage dated April 13, 1967 and in
favour of Government of Bihar under two deeds of mortgage dated May 11, 1963, immovable properties and movable assets of the Tube
Division, Bearing Division, Ferro Alloys Division and Cold Rolling Complex (West) at Tarapur and all investments and book debts of the
Company subject to the prior charges created and/or to be created in favour of the bankers for securing borrowing for the working capital
requirement and charges created and/or to be created on specific items of machinery and equipment procured/to be procured under
deferred payment schemes/bill re-discounting schemes/asset credit schemes.
The loan is repayable in 16 equal semi-annual instalments after completion of four years from the date of the tranche.
The Company has filed a writ petition before the High Court at Kolkata in February 2006 claiming waiver of the outstanding loan and
interest and refund of the balance lying with Steel Development Fund and the matter is subjudice.
The loan includes funded interest `855.09 crore (March 31, 2017: `781.32 crore).
It includes `1,639.33 crore (March 31, 2017: `1,639.33 crore) representing repayments and interest on earlier loans for which applications
of funding are awaiting sanction and is not secured by charge on movable assets of the Company.
(b) Loans from banks/financial institution
Majority of secured borrowings from banks and financial institutions relates to the senior facility arrangement of Tata Steel Europe, a wholly
owned indirect subsidiary of the Company. These facilities are secured by guarantees and debentures granted by material subsidiaries of
Tata Steel Europe (other than Tata Steel Nederland B.V. and its subsidiaries) and by a pledge over the shares in Tata Steel Nederland B.V.
(iii) The details of major unsecured borrowings as at March 31, 2018 is as below:
(a)
Commercial papers
Commercial papers raised by the Group are short-term in nature ranging between one to three months.
(b) Bonds and debentures
Debentures issued by the Company and its Indian subsidiaries are non convertible in nature with interest rates ranging from 2%
to 11%.
ABJA Investment Company Pte Ltd. a wholly owned subsidiary of the Company has issued bonds that are listed on the Singapore Stock
Exchange and Frankfurt Stock Exchange. Details of the bonds outstanding at the end of the reporting period is as below:
Issued on
January 2018
January 2018
July 2014
July 2014
May 2013
336336
Currency
Initial principal due
(in millions)
Outstanding principal
(in millions)
Interest rate
Redeemable on
USD
USD
USD
USD
SGD
1,000
300
1,000
500
300
As at
March 31, 2018
1,000
300
1,000
500
300
As at
March 31, 2017
-
-
1,000
500
300
5.45%
4.45%
5.95%
4.85%
4.95%
January 2028
July 2023
July 2024
January 2020
May 2023
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
23. Borrowings (Contd.)
[Item No. V(a)(i) and VI(a)(i), Page 281]
(c) Loans from banks and financial institutions
Details of loans from banks and financial institutions availed by the Company is as below:
(i)
Rupee loan amounting `4,450 crore (March 31, 2017: `4,450.00 crore) is repayable in 17 quarterly instalments. The Company on
March 15, 2018 gave prepayment notice to the lenders for an amount of `1,950.00 crore. The remaining amount is repayable in 9
quarterly instalments commencing from March 31, 2023.
(ii)
Rupee loan amounting `750.00 crore (March 31, 2017: Nil) is repayable in 3 equal annual instalments commencing from
May 21, 2021.
(iii)
USD 7.86 million equivalent to `51.24 crore (March 31, 2017: 7.86 million equivalent to `50.98 crore) is repayable on March 1, 2021.
(iv)
USD 200 million equivalent to `1,303.65 crore (March 31, 2017: USD 200.00 million equivalent to `1,297.10 crore) loan is repayable
in 3 equal annual instalments commencing from February 18, 2020.
(v)
Rupee loan amounting `2,000.00 crore (March 31, 2017: `2,000.00 crore) is repayable in 10 semi-annual instalments commencing
from April 30, 2019.
(vi)
Rupee loan amounting `646.16 crore (March 31, 2017: `650.00 crore) is repayable in 18 semi-annual instalments, the next instalment is due
on August 14, 2018.
(vii) Euro 21.62 million equivalent to `174.68 crore (March 31, 2017: Euro 27.02 million equivalent to `187.18 crore) loan is repayable in 8 equal
semi-annual instalments; the next instalment is due on July 6, 2018.
(viii) Euro 4.69 million equivalent to `37.92 crore (March 31, 2017: Euro 9.39 million equivalent to `65.02 crore) loan is repayable in 2 equal semi-
annual instalments, the next instalment is due on July 2, 2018.
(ix)
Rupee loan amounting `823.84 crore (March 31, 2017: `850.00 crore) is repayable in 14 semi-annual instalments, the next instalment is
due on June 15, 2018.
(x)
Rupee loan amounting `1,485 crore (March 31, 2017: Nil) is repayable in 19 semi-annual instalments, the next instalment is due on May
28, 2018.
(xi)
Euro 85.98 million equivalent to `694.80 crore (March 31, 2017: Euro 105.08 million equivalent to `727.98 crore) loan is repayable in
9 equal semi-annual instalments, the next instalment is due on April 27, 2018.
Interest rates on the above term loans from banks and financial institutions range between 8.20 % to 8.75 % for rupee term loans and
between 0.12 % to 4.80 % for foreign loans.
(d) Finance lease obligations
The Group has taken certain items of plant and machinery on lease for business purpose. In addition, the Group has entered into long
term arrangements whose fulfillment is dependent on the use of dedicated assets. Some of these arrangements have been assessed as
being in the nature of lease and have been classified as a finance lease.
Finance lease obligations represent the present value of minimum lease payments payable over the lease term. The arrangements have
been classified as secured or unsecured based on the legal form.
337337
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
23. Borrowings (Contd.)
[Item No. V(a)(i) and VI(a)(i), Page 281]
(iv) Currency and interest exposure of borrowings including current maturities at the end of the reporting period is as below:
As at March 31, 2018
As at March 31, 2017
Fixed
rate
13,635.17
196.48
1,136.68
22,184.41
1,823.48
38,976.22
Floating
rate
13,925.16
3,756.56
16,761.01
17,783.20
944.90
53,170.83
Total
27,560.33
3,953.04
17,897.69
39,967.61
2,768.38
92,147.05
Fixed
rate
15,862.80
172.69
957.11
14,348.92
1,722.96
33,064.48
Floating
rate
10,819.76
4,643.07
14,270.14
19,089.66
1,127.38
49,950.01
(` crore)
Total
26,682.56
4,815.76
15,227.25
33,438.58
2,850.34
83,014.49
INR
GBP
EURO
USD
Others
Total
INR-Indian rupees, GBP- Great Britain Pound, USD-United States Dollars.
(a) Others primarily include SGD-Singapore Dollars, CAD- Canadian Dollars and THB-Thai Baht.
(b)
Majority of floating rate borrowings are bank borrowings bearing interest rates based on LIBOR, EURIBOR or local official rates. Of the total
floating rate borrowings as at March 31, 2018, `9,105.81crore (March 31, 2017, `10,881.83 crore) has been hedged using interest rate
swaps and collars, with contracts covering a period of more than one year.
(v) Maturity profile of borrowings including current maturities is as below:
Not later than one year or on demand
Later than one year but not two years
Later than two years but not three years
Later than three years but not four years
Later than four years but not five years
More than five years
Less: Future finance charges
Less: Capitalisation of transaction costs
As at
March 31, 2018
19,681.09
8,853.85
17,995.05
12,589.58
4,412.46
34,260.93
97,792.96
4,088.70
1,557.21
92,147.05
(` crore)
As at
March 31, 2017
19,392.30
2,415.91
13,407.73
12,316.42
12,126.29
29,031.25
88,689.90
4,306.89
1,368.52
83,014.49
(vi)
Some of the Group’s major financing arrangements include financial covenants, which require compliance to certain debt-equity ratios
and debt coverage ratios by entities within the Group who have availed such borrowings. Additionally, certain negative covenants may
limit the Group’s ability to borrow additional funds or to incur additional liens, and/or provide for increased costs in case of breach.
338338
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
24. Other financial liabilities
[Item No. V(a)(iii) and VI(a)(iv), Page 281]
A. Non-current
(a)
(b)
Interest accrued but not due
Creditors for other liabilities
B. Current
Current maturities of long-term borrowings
Current maturities of finance lease obligations
Interest accrued but not due
(a)
(b)
(c)
(d) Unclaimed dividends
(e)
Creditors for other liabilities
As at
March 31, 2018
18.17
87.66
105.83
(` crore)
As at
March 31, 2017
12.37
96.41
108.78
As at
March 31, 2018
3,220.66
252.31
817.35
68.81
5,432.65
9,791.78
(` crore)
As at
March 31, 2017
445.49
218.63
752.02
62.81
4,836.56
6,315.51
(i)
(ii)
Current maturities of long-term borrowings include `1,950.00 crore (March 31, 2017: Nil) in respect of a Rupee loan for which the Company
has given prepayment notice to the lenders on March 15, 2018 and hence these have been classified as current.
Non-current and current creditors for other liabilities include:
(a) creditors for capital supplies and services of `3,219.87 crore (March 31, 2017: `3,076.96 crore).
liability for employee family benefit scheme `184.39 crore (March 31, 2017: `173.35 crore).
(b)
25. Provisions
[Item No. V(b) and VI(b), Page 281]
A. Non-current
Employee benefits
Insurance provisions
(a)
(b)
(c) Others
As at
March 31, 2018
2,479.01
858.44
1,000.79
4,338.24
(` crore)
As at
March 31, 2017
2,583.23
882.46
814.00
4,279.69
339339
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
25. Provisions (Contd.)
[Item No. V(b) and VI(b), Page 281]
B. Current
Employee benefits
(a)
(b) Others
As at
March 31, 2018
442.33
827.31
1,269.64
(` crore)
As at
March 31, 2017
398.94
588.44
987.38
(i)
(ii)
(iii)
Non current and current provision for employee benefits include provision for leave salaries `1,082.50 crore (March 31, 2017: `1,132.17
crore) and provision for early separation and disability `1,763.11 crore (March 31, 2017 : `1,789.59 crore).
As per the leave policy of the Company and its Indian subsidiaries, an employee is entitled to be paid the accumulated leave balance on
separation. The Company and its Indian subsidiaries present provision for leave salaries as current and non-current based on actuarial
valuation considering estimates of availment of leave, separation of employee, etc.
Insurance provisions relate to Crucible Insurance Company which underwrites marine cargo, public liability and retrospective hearing
impairment policies of Tata Steel Europe, a wholly owned indirect subsidiary of the Company. These provisions represent losses incurred
but not yet reported in respect of risks retained by the Group rather then passed to third party insurers and include amounts in relation to
certain disease insurance claims. Such provisions are subject to regular review and are adjusted as appropriate. The value of final insurance
settlements is uncertain and so is the timing of the expenditure.
(iv) Others primarily include:
(a)
provision for compensatory afforestation, mine closure and rehabilitation obligations and other environmental remediation
obligation `906.92 crore (March 31, 2017: `730.87 crore). These amounts become payable upon closure of the mines/sites and are
expected to be incurred over a period of 1 to 34 years.
(b)
Provision in respect of onerous leases. The outstanding term of these leases ranges between 1 to 16 years.
(v) The details of movement in provision balances is as below:
As at March 31, 2018
Insurance
Provisions
882.46
-
(81.41)
-
-
(54.95)
112.34
858.44
Others
1,402.44
310.98
-
85.37
(2.79)
(87.89)
119.99
1,828.10
(` crore)
Total
2,284.90
310.98
(81.41)
85.37
(2.79)
(142.84)
232.33
2,686.54
Balance at the beginning of the year
Charged during the year
Released during the year
Addition relating to acquisitions
Disposal of group undertakings
Utilised during the year
Exchange differences on consolidation
Balance at the end of the year
340340
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
25. Provisions (Contd.)
[Item No. V(b) and VI(b), Page 281]
As at March 31, 2017
Balance at the beginning of the year
Charged during the year
Disposal of group undertakings
Utilised during the year
Classified as held for sale
Exchange differences on consolidation
Balance at the end of the year
26. Deferred income
[Item No. V(d) and VI(d), Page 281]
A. Non-current
(a) Grants relating to property, plant and equipment
(b)
(c) Others
Revenue grants
B. Current
(a) Grants relating to property, plant and equipment
(b) Others
Insurance
Provisions
960.51
126.23
-
(49.87)
-
(154.41)
882.46
Others
1,438.47
537.03
(351.73)
(113.51)
(9.57)
(98.25)
1,402.44
(` crore)
Total
2,398.98
663.26
(351.73)
(163.38)
(9.57)
(252.66)
2,284.90
As at
March 31, 2018
1,452.30
10.61
63.67
1,526.58
(` crore)
As at
March 31, 2017
1,979.05
19.84
58.70
2,057.59
As at
March 31, 2018
0.83
5.38
6.21
(` crore)
As at
March 31, 2017
0.22
22.30
22.52
Grants relating to property, plant and equipment relates to duty saved on import of capital goods and spares under the EPCG scheme. Under
the scheme, certain entities within the Group are committed to export prescribed times of the duty saved on import of capital goods over a
specified period of time. In case such commitments are not met, the entities would be required to pay the duty saved along with interest to
the regulatory authorities. Such grants recognised are released to the consolidated statement of profit and loss based on fulfillment of related
export obligations.
During the year, an amount of `528.20 crore (2016-17: `351.73 crore) was released from deferred income to the consolidated statement of
profit and loss on fulfillment of export obligations.
341341
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
27. Other liabilities
[Item No. V(f ) and VI(f ), Page 281]
A. Non-current
(a)
Statutory dues
(b) Other credit balances
B. Current
Advances received from customers
(a)
Employee recoveries and employer contributions
(b)
(c)
Statutory dues
(d) Other credit balances
As at
March 31, 2018
35.47
322.69
358.16
(` crore)
As at
March 31, 2017
55.31
171.20
226.51
As at
March 31, 2018
583.70
100.35
6,215.59
32.62
6,932.26
(` crore)
As at
March 31, 2017
548.42
65.89
3,683.41
17.55
4,315.27
(i)
Statutory dues primarily relate to payables in respect of GST, excise duties, service tax, sales tax, VAT, tax deducted at source and royalties.
28. Trade payables
[Item No. VI(a)(ii), Page 281]
(a)
(b)
Creditors for supplies and services
Creditors for accrued wages and salaries
29. Revenue from Operations
[Item No. I, Page 282]
(a)
(b)
(c)
(d)
Sale of products
Sale of power and water
Income from town, medical and other services
Other operating revenue
342342
As at
March 31, 2018
16,000.61
4,413.20
20,413.81
(` crore)
As at
March 31, 2017
14,543.26
4,031.20
18,574.46
Year ended
March 31, 2018
1,29,924.37
1,698.35
118.77
1,274.88
1,33,016.37
(` crore)
Year ended
March 31, 2017
1,15,055.90
1,418.87
207.80
737.37
1,17,419.94
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
30. Other income
[Item No. II, Page 282]
Finance income
Net gain/(loss) on sale of non-current investments
(a) Dividend income
(b)
(c)
(d) Net gain/(loss) on investments carried at fair value through profit and loss
(e) Gain/(loss) on sale of property plant and equipment including intangible assets (net of loss on
assets sold/scrapped/written off )
Gain/(loss) on cancellation of forwards, swaps and options
(f )
(g) Other miscellaneous income
Year ended
March 31, 2018
82.99
233.65
-
680.76
(49.29)
(` crore)
Year ended
March 31, 2017
73.03
184.76
0.97
316.95
0.15
(79.33)
40.67
909.45
(67.95)
19.56
527.47
(i)
Dividend income includes income from investments carried at fair value through other comprehensive income of `23.39 crore (2016-17:
`11.41crore)
(ii)
Finance income includes:
(a)
income from financial assets carried at amortised cost of `223.30 crore (2016-17: `172.25 crore).
(b)
income from financial assets carried at fair value through profit and loss `10.35 crore (2016-17: `12.51 crore).
31. Employee benefits expense
[Item No. IV(d), Page 282]
(a)
(b)
(c)
Salaries and wages
Contribution to provident and other funds
Staff welfare expenses
Year ended
March 31, 2018
14,310.95
2,783.51
511.73
17,606.19
(` crore)
Year ended
March 31, 2017
14,011.31
2,735.44
505.47
17,252.22
(i)
During the year, the Company has recognised an amount of `19.04 crore (2016-17: `18.13 crore) as remuneration to key managerial
personnel. The details of such remuneration is as below:
(a) Short term employee benefits
(b) Post employment benefits
(c) Other long term employee benefits
(` crore)
Year ended
March 31, 2018
19.03
(0.02)
Year ended
March 31, 2017
17.13
0.71
0.03
19.04
0.29
18.13
343343
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
32. Finance costs
[Item No. IV(e), Page 282]
Interest expense on:
(a) Bonds, debentures, bank borrowings and others
(b) Finance leases
Less: Interest capitalised
33. Depreciation and amortisation expense
[Item No. IV(f ), Page 282]
Depreciation of tangible and amortisation of intangible assets
Less : Reclassified to discontinued operations
Less : Amount released from grants received
34. Other expenses
[Item No. IV(g), Page 282]
Consumption of stores and spares
Repairs to buildings
Repairs to machinery
Relining expenses
Fuel oil consumed
Purchase of power
Conversion charges
Freight and handling charges
Rent
Royalty
Rates and taxes
Insurance charges
(a)
(b)
(c)
(d)
(e)
(f )
(g)
(h)
(i)
(j)
(k)
(l)
(m) Commission, discounts and rebates
(n) Allowance for credit loss/provision for advances
(o)
Excise duty (including recovered on sales)
(p) Others
(` crore)
Year ended
March 31, 2018
Year ended
March 31, 2017
5,213.56
403.58
5,617.14
115.35
5,501.79
4,978.26
378.16
5,356.42
284.22
5,072.20
Year ended
March 31, 2018
5,974.56
-
12.90
5,961.66
(` crore)
Year ended
March 31, 2017
5,702.56
16.89
12.79
5,672.88
Year ended
March 31, 2018
8,658.01
101.75
5,922.87
151.62
544.28
4,840.03
2,692.82
8,101.02
2,439.43
1,657.68
1,245.40
292.59
258.31
101.85
860.62
4,487.66
42,355.94
(` crore)
Year ended
March 31, 2017
7,881.07
100.95
5,332.98
141.00
467.12
4,753.71
2,343.14
7,268.08
2,364.10
1,188.46
1,644.30
426.13
235.01
45.95
5,120.52
5,307.19
44,619.71
(i)
Others include foreign exchange loss `1,356.71 crore (2016-17: gain `576.57 crore)
(ii)
Revenue expenditure charged to the consolidated statement of profit and loss in respect of research and development activities
undertaken during the year is `672.28 crore (2016-17: `646.24 crore)
344344
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
35. Exceptional items
[Item No. VII, Page 282]
Exceptional items are those which are considered for separate disclosure in the financial statements considering their size, nature or
incidence. Such items included within the consolidated statement of profit and loss are detailed below:
(a)
Profit on sale of investments in subsidiaries, associates and joint ventures amounting to Nil (2016-17: `22.70 crore).
(b) Profit on sale of assets Nil (2016-17: profit of `85.87 crore).
(c)
(d)
Provision for advances paid for repurchase of equity shares in Tata Teleservices Limited from NTT Docomo Inc. of `26.65 crore
(2016-17: `125.45 crore) and other provisions of `0.60 crore (2016-17: Nil).
Impairment loss recognised in respect of property, plant and equipment (including capital work-in-progress) and intangible assets
`903.01 crore (2016-17: `267.93 crore).
Impairment loss recognised relates to the reportable segments as below. The same has however been shown as an exceptional item in the
segment report and does not form part of segment result.
Tata Steel India
Other Indian Operations
Tata Steel Europe
South East Asian Operations
Rest of the World
Year ended
March 31, 2018
-
-
-
-
903.01
903.01
(` crore)
Year ended
March 31, 2017
-
1.44
148.37
118.12
-
267.93
(e)
Provision of ₹3,213.68 crore (2016-17: `218.25 crore) is in respect of certain statutory demands and claims relating to environment and
mining matters, net of liability towards district mining fund no longer required written back.
(f )
Provision of `107.60 crore (2016-17: `207.37 crore) on account of employee separation in relation to the Indian operations
(g)
Restructuring and other provisions of `13,850.66 crore represents gain arising on modification of benefit structure for members of the
new pension scheme (NBSPS) versus their benefits under Tata Steel Europe’s British Steel Pension Scheme (BSPS) offset by settlement
charges for those members who did not join the NBSPS and one-off costs (2016-17: loss of `3,613.80 crore primarily on account of
curtailment charge relating to closure of BSPS to future accrual).
345345
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
36. Discontinued operations
[Item No. XI, Page 282]
On February 9, 2017, Tata Steel UK Limited, a wholly owned indirect subsidiary of the Company announced a definitive sales agreement
to dispose off the trade and other assets of its Speciality Steels business. The disposal was completed on May 1, 2017.
On May 31, 2016 the Group had disposed off the trade and other assets of its Long Products business in the UK to Greybull Capital LLP.
The above businesses were classified as discontinued operations till the date of sale during the year ended March 31, 2018 and 2017.
The results of discontinued operations in each of the reporting periods is summarised below:
Revenue from operations
Other income
Expenses
Raw materials consumed
Purchases of finished, semi-finished and other products
Changes in inventories of finished and semi-finished goods, work-in-progress and stock-in-trade
Employee benefit expense
Finance costs
Depreciation and amortisation expense
Other expenses
Profit/(loss) before tax from discontinued operations
Tax expenses:
(a) Current tax
(b) Deferred tax
Profit/(loss) after tax from discontinued operations
Profit/(loss) on disposal of discontinued operations
Total Profit/(loss) from discontinued operations
Year ended
March 31, 2018
159.15
-
159.15
(` crore)
Year ended
March 31, 2017
3,123.77
0.05
3,123.82
86.03
-
(21.66)
51.22
0.09
-
(9.83)
105.85
53.30
-
-
-
53.30
5.15
58.45
943.45
53.33
-
981.05
39.34
16.89
1,860.62
3,894.68
(770.86)
8.01
10.31
(2.30)
(778.87)
(3,085.32)
(3,864.19)
Profit/(loss) from discontinued operations for the year ended March 31, 2018, includes reversal of provision amounting to ₹49.28 crore held in
respect of Long Products business in the UK classified as held for sale during the previous years.
During the year ended March 31, 2017, an impairment charge of ₹196.63 crore was recognised being write down to fair value less cost to sale
for assets in relation to the Speciality Steels business classified as held for sale.
During the year ended March 31, 2018, discontinued operations resulted in an outflow of Nil (March 31, 2017: ₹500.59 crore) to the Group’s
net operating cash flows, an outflow of Nil (March 31, 2017: ₹105.39 crore) in respect of investing activities and an outflow of Nil (March 31,
2017: Nil) in respect of financing activities.
346346
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
37. Earnings per share
[Item No. XVII, XVIII and XIX, Page 283]
The following table reflects the profit and shares data used in the computation of basic and diluted earnings per share.
(a)
Profit/(loss) after tax from continuing operations
Less: Distribution on hybrid perpetual securities (net of tax)
Profit/(loss) after tax from continuing operations attributable to Ordinary Shareholders -
for Basic and Diluted EPS (A)
Profit/(loss) after tax from discontinued operations attributable to Ordinary Shareholders -
for Basic and Diluted EPS (B)
Year ended
March 31, 2018
13,375.88
173.43
13,202.45
(` crore)
Year ended
March 31, 2017
(376.61)
174.01
(550.62)
58.45
(3,864.19)
Profit/(loss) after tax from continuing and discontinued operations attributable to Ordinary
Shareholders - for Basic and Diluted EPS (A+B)
13,260.90
(4,414.81)
(b) Weighted average number of Ordinary Shares for Basic EPS
Add: Adjustment for shares held in abeyance
Weighted average number of Ordinary Shares and potential
ordinary shares for Diluted EPS
(c)
Nominal value of Ordinary Shares (`)
(d)
Basic Earnings per Ordinary Share (`) - continuing operations
Diluted Earnings per Ordinary Share (`) - continuing operations
Basic Earnings per Ordinary Share (`) - discontinued operations
Diluted Earnings per Ordinary Share (`) - discontinued operations
Basic Earnings per Ordinary Share (`) - continuing and discontinued operations
Diluted Earnings per Ordinary Share (`) - continuing and discontinued operations
Nos.
1,03,50,31,235
1,55,646
1,03,51,86,881
Nos.
1,02,93,39,036
71,573
1,02,94,10,609
10.00
127.56
127.54
0.56
0.56
128.12
128.10
10.00
(5.35)
(5.35)
(37.54)
(37.54)
(42.89)
(42.89)
(i)
(ii)
Basic and diluted earnings per share for the year ended March 31, 2017, has been adjusted retrospectively for the bonus element in
respect of rights issue made during the year ended March 31, 2018.
As at March 31, 2018, 28,69,886 options (2016-17: Nil) were excluded from the computation of weighted average number of ordinary
shares for diluted earnings per share as these were anti-dilutive.
347347
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
38. Employee benefits
A. Defined contribution plans
The Group participates in a number of defined contribution plans on
behalf of relevant personnel. Any expense recognised in relation to
these schemes represents the value of contributions payable during
the period by the Group at rates specified by the rules of those plans.
The only amounts included in the consolidated balance sheet are
those relating to the prior months contributions that were not due
to be paid until after the end of the reporting period.
The major defined contribution plans operated by the Group are as
below:
(a) Provident fund and pension
The Company and its Indian subsidiaries provide provident fund
benefits for eligible employees as per applicable regulations
wherein both employee’s and the Company/Indian Subsidiaries
make monthly contributions at a specified percentage of the
eligible employee’s salary. Contributions under such schemes
are made either to a provident fund set up as an irrevocable
trust by the Company/Indian Subsidiaries to manage the
investments and distribute the amounts entitled to employees
or to state managed funds.
Benefits provided under plans wherein contributions are made
to state managed funds and the Company/Indian Subsidiaries
do not have a future obligation to make good short fall if any,
are treated as a defined contribution plan.
(b) Superannuation fund
The Company and some of its Indian subsidiaries have a
superannuation plan for the benefit of its employees. Employees
who are members of the defined benefit superannuation plan
are entitled to benefits depending on the years of service and
salary drawn.
Separate
irrevocable trusts are generally maintained for
employees covered and entitled to benefits. The Company
and its Indian subsidiaries contribute up to 15% of the eligible
employees’ salary or `1,00,000, whichever is lower, to the trust
every year. Such contributions are recognised as an expense as
and when incurred. The Company and its Indian subsidiaries
does not have any further obligations beyond this contribution.
The contributions recognised as an expense in the consolidated
statement of profit and loss during the year on account of
defined contribution plans amounted to `1,185.05 crore
(2016-17: `803.22 crore).
B. Defined benefit plans
The defined benefit plans operated by the Group are as below:
(a) Provident fund and pension
Provident
fund benefits provided under plans wherein
contributions are made to an irrevocable trust set up by the
Company/Indian subsidiaries to manage the investments and
distribute the amounts entitled to employees are treated as a
defined benefit plan as the Company/Indian subsidiaries are
obligated to provide the members a rate of return which should,
at the minimum, meet the interest rate declared by Government
administered provident fund. A part of the Company’s/
Indian subsidiaries contribution is transferred to Government
administered pension fund. The contributions made by the
Company/Indian subsidiaries and the shortfall of interest, if any,
are recognised as an expense in profit or loss under employee
benefits expense.
In accordance with an actuarial valuation of provident fund
liabilities of Company and its Indian subsidiaries based on
guidance issued by Actuarial Society of India and based on the
assumptions as mentioned below, there is no deficiency in the
interest cost as the present value of the expected future earnings
of the fund is greater than the expected amount to be credited
to the individual members based on the expected guaranteed
rate of interest of Government administered provident fund.
Key assumptions used for actuarial valuation are as below:
Year ended
March 31, 2018
7.50%
8.55%
8.55% - 8.75%
Year ended
March 31, 2017
7.00%
8.65%
8.75% - 8.76%
Discount rate
Guaranteed rate of return
Expected rate of return on
investment
(b) Retiring gratuity
The Company and its Indian subsidiaries have an obligation
towards gratuity, a defined benefit retirement plan covering
eligible employees. The plan provides for a lump-sum payment
to vested employees at retirement, death while in employment
or on termination of employment of an amount equivalent to
15 to 30 days salary payable for each completed year of service.
Vesting occurs upon completion of five years of service. The
Company and its Indian subsidiaries make annual contributions
to gratuity funds established as trusts or insurance companies.
The Company and its Indian subsidiaries accounts for the
liability for gratuity benefits payable in the future based on an
actuarial valuation.
348348
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
38. Employee benefits (Contd.)
(c) Post retirement medical benefits
Under this unfunded scheme, employees of the Company and
some of its subsidiaries receive medical benefits subject to
certain limits on amounts of benefits, periods after retirement
and types of benefits, depending on their grade and location at
the time of retirement. Employees separated from the Company
and its subsidiaries under an early separation scheme, on
medical grounds or due to permanent disablement are also
covered under the scheme. The Company and such subsidiaries
account for the liability for post-retirement medical scheme
based on an actuarial valuation.
(d) Tata Steel Europe’s pension plan
In September 2017, the UK Pensions Regular (tPR) had approved
a Regulated Apportionment Arrangement(RAA) in respect of the
British Steel Pension Scheme (BSPS) which separated the scheme
from Tata Steel UK (TSUK), a wholly owned indirect subsidiary
of Tata Steel Europe, and a number of affiliated companies. This
was accompanied by a one-time settlement payment as well as
transfer of a 33% minority stake in TSUK to the BSPS trustees. All
BSPS members were subsequently given the choice to switch
to a new pension scheme (‘NBSPS’) with modified benefits,
or remain in the BSPS. 69% of the BSPS membership opted to
transfer to the NBSPS and based on the consequent allocation
of liabilities, in accordance with the agreements reached with
the Pension Protection Fund (PPF) and the trustees of pension
schemes, assets of the legacy scheme were split, with the NBSPS
being created on March 28, 2018.
Tata Steel Europe a wholly owned indirect subsidiary of the
Company, operates a number of defined benefit pension and
post-retirement schemes covering the majority of its employees.
The benefits offered by these schemes are largely based on
pensionable pay and years of service at retirement. With the
exception of certain unfunded arrangements, the assets of
these schemes are held in administered funds that are legally
separated from Tata Steel Europe. For those pension schemes
set up under a trust, the trustees are required by law to act in the
best interests of the schemes beneficiaries in accordance with
the scheme rules and relevant pension legislation. The trustees
are generally responsible for the investment policy with regard
to the assets of the fund, after consulting with the sponsoring
employer.
Tata Steel Europe accounts for all pension and post-retirement
defined benefit arrangements using Ind AS 19 ‘Employee
Benefits’, with independent actuaries being used to calculate
the costs, assets and liabilities to be recognised in relation
to these schemes. The present value of the defined benefit
obligation, the current service cost and past service costs are
calculated by these actuaries using the Projected unit credit
method. However, the ongoing funding arrangements of each
scheme, in place to meet their long term pension liabilities,
are governed by the individual scheme documentation and
national legislation.
The principal defined benefit pension scheme of Tata Steel Europe
as at March 31, 2017 was the BSPS, which is the main scheme
for historic and present employees based in the UK. The main
scheme for historic and present employees in the Netherlands is
the SPH which, from July 7, 2015, switched from being classified
as a defined benefit scheme to a defined contribution scheme.
(e) Other defined benefits
Other benefits provided under unfunded schemes include
pension payable to directors on their retirement, farewell gifts
and reimbursement of packing and transportation charges to
the employees based on their last drawn salary.
The defined benefit plans expose the Group to a number of
actuarial risks as below:
(i)
Investment risk: The present value of the defined benefit
plan liability is calculated using a discount rate determined
by reference to government/high quality bond yields. If the
return on plan asset is below this rate, it will create a plan
deficit.
(ii)
Interest risk: A decrease in the bond interest rate will
increase the plan liability. However, this will be partially
offset by an
in the return on plan’s debt
investments.
increase
(iii) Salary risk: The present value of the defined benefit plan
liability is calculated by reference to the future salaries of
plan participants. As such, an increase in salary of the plan
participants will increase the plan’s liability.
(iv) Longevity risk: The present value of the defined benefit
plan liability is calculated by reference to the best estimate
of the mortality of plan participants both during and after
their employment. An increase in the life expectancy of the
plan participants will increase the plan’s liability.
(v)
Inflation risk: Some of the Group’s Pension obligations
are linked to inflation, and higher inflation will lead to
higher liabilities (although), in most cases, caps on the level
of inflationary increases are in place to protect the plan
against extreme inflation).
349349
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
38. Employee benefits (Contd.)
C. Details of defined benefit obligations and plan assets:
(a) Retiring gratuity:
(i) The following table sets out the amounts recognised in the consolidated financial statements in respect of retiring gratuity:
Change in defined benefit obligations:
Obligation at the beginning of the year
Addition relating to acquisitions
Current service cost
Interest cost
Benefits paid
Remeasurement (gain)/loss
Adjustment for arrear wage settlement
Obligation at the end of the year
Change in plan assets:
Fair value of plan assets at the beginning of the year
Addition related to acquisitions
Interest income
Remeasurement gain/(loss) excluding amount included in employee benefits expense
Employers' contribution
Benefits paid
Fair value of plan assets at the end of the year
Amounts recognised in the consolidated balance sheet consist of:
Fair value of plan assets
Present value of obligations
Recognised as:
Retirement benefit assets - Non-current
Retirement benefit assets - Current
Retirement benefit obligation - Non-current
Retirement benefit obligation - Current
350350
(` crore)
Year ended
March 31, 2018
Year ended
March 31, 2017
2,981.18
0.31
144.26
198.80
(282.60)
(163.03)
87.55
2,966.47
2,824.78
-
131.24
205.11
(336.57)
156.62
-
2,981.18
(` crore)
Year ended
March 31, 2018
Year ended
March 31, 2017
2,745.34
0.27
190.40
8.21
236.72
(282.60)
2,898.34
2,646.07
-
198.90
56.93
179.87
(336.43)
2,745.34
As at
March 31, 2018
2,898.34
2,966.47
(68.13)
(` crore)
As at
March 31, 2017
2,745.34
2,981.18
(235.84)
0.35
2.91
(67.70)
(3.69)
(68.13)
0.50
-
(233.05)
(3.29)
(235.84)
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
38. Employee benefits (Contd.)
Expense recognised in the consolidated statement of profit and loss consist of:
Employee benefits expense:
Current service costs
Net interest expense
Other comprehensive income:
Return on plan assets excluding amount included in employee benefits expense
Actuarial (gain)/loss arising from changes in demographic assumption
Actuarial (gain)/loss arising from changes in financial assumption
Actuarial (gain)/loss arising from changes in experience adjustments
Expense/(gain) recognised in the consolidated statement of profit and loss
(ii) Fair value of plan assets by category of investments is as below:
Asset category (%)
Quoted
Equity instruments
Debt instruments
Unquoted
Debt instruments
Insurance products
Others
(` crore)
Year ended
March 31, 2018
Year ended
March 31, 2017
144.26
8.40
152.66
(8.21)
(37.89)
(100.93)
(24.21)
(171.24)
(18.58)
131.24
6.21
137.45
(56.93)
-
160.54
(3.92)
99.69
237.14
(` crore)
As at
March 31, 2018
As at
March 31, 2017
0.01
20.89
20.90
1.02
68.69
9.39
79.10
100.00
0.21
29.53
29.74
0.42
69.32
0.52
70.26
100.00
The Group’s investment policy is driven by considerations of maximising returns while ensuring credit quality of debt instruments. The asset
allocation for plan assets is determined based on prescribed investment criterias and is also subject to other exposure limitations. The Group
evaluates the risks, transaction costs and liquidity for potential investments. To measure plan assets performance, the Group compares actual
returns for each asset category with published benchmarks.
(iii) Key assumptions used in the measurement of retiring gratuity is as below:
(a) Discount rate (per annum)
(b)
Rate of escalation in salary (per annum)
(%)
As at
March 31, 2018
7.50 - 8.00%
4.00 - 10.00%
As at
March 31, 2017
7.00 - 7.50%
5.00 - 10.00%
351351
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 38. Employee benefits (Contd.)
(iv)
Weighted average duration of the retiring gratuity obligation ranges between 6 to 23 years (March 31, 2017: 6 to 22 years).
(v) The Group expects to contribute `69.09 crore to the plan during the financial year 2018-19.
(vi)
The table below outlines the effect on retiring gratuity obligations in the event of a decrease/ increase of 1% in the assumptions used.
As at March 31, 2018
Assumption
Discount rate
Rate of escalation in salary
As at March 31, 2017
Assumption
Discount rate
Rate of escalation in salary
Change in assumption
Increase by 1%, decrease by 1%
Increase by 1%, decrease by 1%
Impact on obligation
Decrease by `191.44 crore, increase by `216.40 crore
Increase by ` 214.20 crore, decrease by `190.33 crore
Change in assumption
Increase by 1%, decrease by 1%
Increase by 1%, decrease by 1%
Impact on obligation
Decrease by `210.17 crore, increase by `245.32 crore
Increase by ` 239.40 crore, decrease by `210.16 crore
The above sensitivities may not be representative of the actual change as it is unlikely that the change in assumptions would occur in isolation
of one another as some of the assumptions may be correlated.
(b) Tata Steel Europe’s Pension Plan
(i)
The following table sets out the amounts recognised in the consolidated financial statements in respect of Tata Steel Europe’s pension
plans.
(` crore)
Year ended
March 31, 2018
Year ended
March 31, 2017
1,21,946.21
128.76
180.26
3,021.56
(15,708.68)
1.76
-
(8.58)
-
(14,240.82)
(23,588.78)
-
13,102.79
84,834.48
1,21,336.52
834.31
-
3,583.16
3,627.07
18,662.81
105.39
-
895.79
-
(6,832.59)
(878.23)
(19,388.02)
1,21,946.21
Change in defined benefit obligations:
Obligation at the beginning of the year
Current service cost
Costs relating to scheme change
Interest cost
Past service cost
Remeasurement (gain)/loss
Employees contribution
Employers contribution
Curtailments
Settlements
Benefits paid
Obligations of companies disposed off
Exchange differences on consolidation
Obligation at the end of the year
352352
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR 38. Employee benefits (Contd.)
Change in plan assets:
Fair value of plan assets at beginning of the year
Interest income
Remeasurement gain/(loss)
Employers contribution
Employees contribution
Settlements
Benefits paid
Assets of companies disposed off
Exchange differences on consolidation
Fair value of plan assets at end of the year
Amounts recognised in the consolidated balance sheet consist of:
Fair value of plan assets
Present value of obligations
Recognised as:
Retirement benefit assets - Non-current
Retirement benefit obligation - Current
Retirement benefit obligation - Non-current
(` crore)
Year ended
March 31, 2018
Year ended
March 31, 2017
1,22,611.14
3,098.82
(1,733.96)
4,910.04
-
(15,597.09)
(23,563.03)
-
14,522.09
1,04,248.01
1,31,204.14
3,890.54
14,560.97
526.94
105.39
-
(6,797.46)
(562.06)
(20,317.32)
1,22,611.14
As at
March 31, 2018
1,04,248.01
84,834.48
19,413.53
(` crore)
As at
March 31, 2017
1,22,611.14
1,21,946.21
664.93
20,570.52
(9.41)
(1,147.58)
19,413.53
1,752.14
(27.07)
(1,060.14)
664.93
353353
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 38. Employee benefits (Contd.)
Expense recognised in the consolidated statement of profit and loss consist of:
Employee benefits expense:
Current service costs
Past service costs
Net interest expense/(income)
Curtailments
Exceptional item:
Past service costs
Settlements
Costs relating to scheme changes
Other comprehensive income:
Return on plan assets excluding amount included in employee benefits expense
Actuarial (gain)/loss arising from changes in demographic assumptions
Actuarial (gain)/loss arising from changes in financial assumption
Actuarial (gain)/loss arising from changes in experience adjustments
Expense/(gain) recognised in the consolidated statement of profit and loss
(ii) Fair value of plan assets by category of investments is as below:
Assets category (%)
Quoted
(a)
(b)
(c)
(d)
(e) Others
Equity - UK Entities
Equity - Non-UK Entities
Bonds - Fixed rate
Bonds - Indexed linked
Unquoted
(a)
(b) Others
Property
354354
Year ended
March 31, 2018
(` crore)
Year ended
March 31, 2017
128.76
(17.17)
(77.26)
-
(15,691.51)
1,356.27
180.26
(14,120.65)
1,733.96
-
(4,068.81)
4,070.57
1,735.72
(12,384.93)
834.31
3,627.07
(307.38)
895.79
-
-
-
5,049.79
(14,560.97)
(702.58)
20,199.17
(833.78)
4,101.84
9,151.63
As at
March 31, 2018
As at
March 31, 2017
(%)
0.69
7.64
45.55
31.74
0.21
85.83
11.46
2.71
14.17
100.00
0. 79
8.79
39.71
42.20
0.23
91.72
8.49
(0.21)
8.28
100.00
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR 38. Employee benefits (Contd.)
(iii) Key assumptions used in the measurement of pension benefits is as below:
(a) Discount rate
(b)
(c)
Rate of escalation in salary
Inflation rate
As at
March 31, 2018
1.37-4.10%
0.0-2.0%
1.0-3.1%
As at
March 31, 2017
0.5-4.1%
1.0-3.0%
1.0-2.0%
Demographic assumptions are set having regard to the latest trends in life expectancy, plan experience and other relevant data, including
externally published actuarial information within each national jurisdiction. The assumptions are reviewed and updated as necessary as part
of the periodic actuarial funding valuations of the individual pension and post-retirement plans. For the NBSPS the liability calculations as
at 31 March 2018 use the Self-Administered Pension Schemes 2 (SAPS 2) base tables, S2NMA/S2DFA with the 2015 CMI projections with a
1.50% (2016-17: 1.50%) pa long term trend applied from 2007 to 2016 (adjusted by a multiplier of 1.15 (2016-17: 1.15) for males and 1.21
(2016-17: 1.21) for females). In addition, future mortality improvements are allowed for in line with the 2016 CMI Projections with a long term
improvement trend of 1% per annum. This indicates that today’s 65 year old male member is expected to live on average to approximately 86.2
years (2016-17: 86 years) of age and a male member reaching age 65 in 15 years time is then expected to live on average to 87 years (2016-17:
87 years) of age.
(iv)
Weighted average duration of the pension obligations is 14.5 years (March 31, 2017: 16 years).
(v) The Group expects to contribute Nil to the plan during the financial year 2018-19.
(vi)
The table below outlines the effect on pension obligations in the event of a decrease/ increase of 10 bps in the assumptions used.
As at March 31, 2018
Assumption
Discount rate
Rate of escalation in salary
Change in assumption
Increase by 10 bps, decrease by 10 bps
Increase by 10 bps, decrease by 10 bps
Inflation rate
Mortality rate
Increase by 10 bps, decrease by 10 bps
One year increase/decrease in life expentancy
Impact on obligation
Decrease by 1.4%, increase by 1.4%
Not applicable as pensionable earnings is
capped
Increase by 1.0%, decrease by 1.0%
Increase by 5.1%, decrease by 5.1%
As at March 31, 2017
Assumption
Discount rate
Rate of escalation in salary
Inflation rate
Mortality rate
Change in assumption
Increase by 10 bps, decrease by 10 bps
Increase by 10 bps, decrease by 10 bps
Increase by 10 bps, decrease by 10 bps
One year increase/decrease in life expentancy
Impact on obligation
Decrease by 1.5%, increase by 1.5%
Increase by 0.3%, decrease by 0.3%
Increase by 1.2%, decrease by 1.2%
Increase by 5.1%, decrease by 5.1%
The above sensitivities may not be representative of the actual change as it is unlikely that the change in assumptions would occur in isolation
of one another as some of the assumptions may be correlated.
355355
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 38. Employee benefits (Contd.)
(c) Post retirement medical and other defined benefit plans
(i)
The following table sets out the amounts recognised in the consolidated financial statements in respect of post retirement medical and
other defined benefit plans.
Change in defined benefit obligations:
Obligations at the beginning of the year
Current service costs
Interest costs
Remeasurement (gain)/loss:
(i)
(ii)
(iii) Actuarial (gain)/loss arising from changes in experience adjustments
Exchange differences on consolidation
Benefits paid
Past service costs
Obligations at the end of the year
Actuarial (gain)/loss arising from changes in demographic assumptions
Actuarial (gain)/loss arising from changes in financial assumptions
Amounts recognised in the consolidated balance sheet consist of:
Present value of obligations
Recognised as:
(a) Retirement benefit obligation - Current
(b) Retirement benefit obligation - Non-current
Expense recognised in the consolidated statement of profit and loss consist of:
Employee benefits expense:
Current service costs
Past service costs
Interest costs
Other comprehensive income:
Actuarial (gain)/loss arising from changes in demographic assumption
Actuarial (gain)/loss arising from changes in financial assumption
Actuarial (gain)/loss arising from changes in experience adjustments
Expense/(gain) recognised in the consolidated statement of profit and loss
356356
As at March 31, 2018
Others
Medical
As at March 31, 2017
Others
Medical
(` crore)
1,256.63
22.01
85.62
(20.53)
(55.95)
15.59
-
(63.45)
-
1,239.92
181.29
13.04
10.40
1,097.49
19.89
82.41
(1.46)
(6.77)
(6.18)
5.26
(12.35)
(24.61)
158.62
(0.02)
128.33
(10.23)
-
(61.50)
0.26
1,256.63
154.42
11.83
9.04
-
8.98
5.95
(0.20)
(14.49)
5.76
181.29
(` crore)
As at March 31, 2018
As at March 31, 2017
Medical
1,239.92
Others
158.62
Medical
1,256.63
89.53
1,150.39
7.73
150.89
54.80
1,201.83
Others
181.29
10.04
171.25
(` crore)
As at March 31, 2018
Others
Medical
As at March 31, 2017
Others
Medical
22.01
-
85.62
107.63
(20.53)
(55.95)
15.59
(60.89)
46.74
13.04
(24.61)
10.40
(1.17)
19.89
0.26
82.41
102.56
(1.46)
(6.77)
(6.18)
(14.41)
(15.58)
(0.02)
128.33
(10.23)
118.08
220.64
11.83
5.76
9.04
26.63
-
8.98
5.95
14.93
41.56
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR 38. Employee benefits (Contd.)
(ii) Key assumptions used in the measurement of post-retirement medical and other defined benefits is as below:
(a) Discount rate
(b)
(c)
Rate of escalation in salary
Inflation rate
As at March 31, 2018
Medical
7.50%
N.A.
5.00-8.00%
Others
0.51-7.50%
4.00-15.00%
4.00-7.00%
As at March 2017
Medical
7.00-7.50%
N.A.
6.00-8.00%
Others
0.51-7.75%
4.95-15.00%
4.00-8.00%
(iii)
Weighted average duration of post-retirement medical benefit obligations ranges between 7-10 years (March 31, 2017: 4-10 years).
Weighted average duration of other defined benefit obligations ranges between 6-33 years (March 31, 2017: 6-32 years).
(iv)
The table below outlines the effect on post-retirement medical benefit obligations in the event of a decrease/increase of 1% in the
assumptions used:
As at March 31, 2018
Assumption
Discount rate
Medical cost inflation rate
As at March 31, 2017
Assumption
Discount rate
Medical cost inflation rate
Change in assumption
Increase by 1%, decrease by 1%
Increase by 1%, decrease by 1%
Impact on obligation
Decrease by `155.67 crore, increase by `195.50 crore
Increase by `183.59 crore, decrease by `147.90 crore
Change in assumption
Increase by 1%, decrease by 1%
Increase by 1%, decrease by 1%
Impact on obligation
Decrease by `166.77 crore, increase by `213.97 crore
Increase by `203.91 crore, decrease by `162.92 crore
(v)
The table below outlines the effect on other defined benefit obligations in the event of a decrease/increase of 1% in the assumptions used:
As at March 31, 2018
Assumption
Discount rate
Rate of escalation in salary
Inflation rate
As at March 31, 2017
Assumption
Discount rate
Rate of escalation in salary
Inflation rate
Change in assumption
Increase by 1%, decrease by 1%
Increase by 1%, decrease by 1%
Increase by 1%, decrease by 1%
Impact on obligation
Decrease by `15.15 crore, increase by `18.02 crore
Increase by `10.31 crore, decrease by `8.95 crore
Increase by `5.80 crore, decrease by `5.15 crore
Change in assumption
Increase by 1%, decrease by 1%
Increase by 1%, decrease by 1%
Increase by 1%, decrease by 1%
Impact on obligation
Decrease by `13.27 crore, increase by `14.18 crore
Increase by `14.29 crore, decrease by `12.42 crore
Increase by `11.62 crore, decrease by `9.96 crore
The above sensitivities may not be representative of the actual change as it is unlikely that the change in assumptions would occur in isolation
of one another as some of the assumptions may be correlated.
357357
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
39. Contingencies and commitments
Customs, Excise Duty and Service Tax
A. Contingencies
In the ordinary course of business, the Group faces claims and
assertions by various parties. The Group assesses such claims and
assertions and monitors the legal environment on an on-going basis,
with the assistance of external legal counsel, wherever necessary.
The Group records a liability for any claims where a potential loss is
probable and capable of being estimated and discloses such matters
in its consolidated financial statements, if material. For potential
losses that are considered possible, but not probable, the Group
provides disclosure in the consolidated financial statements but
does not record a liability in its accounts unless the loss becomes
probable.
The following is a description of claims and assertions where a
potential loss is possible, but not probable. The Group believes
that none of the contingencies described below would have a
material adverse effect on the Group’s financial condition, results of
operations or cash flows.
Litigations
The Group is involved in legal proceedings, both as plaintiff and as
defendant. There are claims which the Group does not believe to be
of material nature, other than those described below.
Income Tax
The Group has ongoing disputes with income tax authorities relating
to tax treatment of certain items. These mainly include disallowance
of expense, tax treatment of certain expenses claimed by the Group
as deductions and the computation of, or eligibility of the Group’s
use of certain tax incentives or allowances.
Most of these disputes and/or disallowances, being repetitive in
nature, have been raised by the income tax authorities consistently
in most of the years.
As at March 31, 2018, there are matters and/or disputes pending in
appeal amounting to `1,504.72 crore (March 31, 2017: `1,442.26
crore) which includes `9.96 crore (March 31, 2017: `7.02 crore) in
respect of equity accounted investees.
The details of significant demands is as below:
Interest expenditure on loans taken by the Company for acquisition
of a subsidiary has been disallowed in assessments with tax demand
raised for `1,250.16 crore (inclusive of interest) (March 31, 2017:
`1,217.79 crore). The Company has deposited `665.00 crore (March
31, 2017: `515.00 crore) as part payment as a precondition to obtain
stay of demand. The Company expects to sustain its position on
ultimate resolution of the appeals.
358358
As at March 31, 2018, there were pending litigation for various
matters relating to customs, excise duty and service taxes involving
demands of `1,021.16 crore (March 31, 2017: `804.84 crore), which
includes `44.96 crore (March 31, 2017: `43.35 crore) in respect of
equity accounted investees.
The details of significant demands is as below:
The Company has a Chrome ore beneficiation plant at Sukinda which
was 100% EOU engaged in the manufacture and export of Chrome
concentrates. During the period from Aug 2011 to Jun 2016, chrome
concentrates were cleared to some customers in Domestic tariff area
on payment of appropriate Excise duty leviable on such goods after
availing the benefit of exemption under notification No.23/2003-
CE dated 31.03.2003. However, the Excise department has raised
the demand for alleged short payment of duty on the ground that
exemption notification mentioned above is not applicable to the
company and hence custom duty is payable instead of Excise duty.
The amount involved comprising of demand and penalty is ₹121
crore (March 31, 2017: Nil). An appeal is being filed against the order
before CESTAT, Kolkata.
Sales Tax /VAT
The total sales tax demands that are being contested by the Group
amounted to `667.40 crore (March 31, 2017: `438.06 crore), which
includes `27.74 crore (March 31, 2017: `28.10 crore) in respect of
equity accounted investees.
The details of significant demands is as below:
The Company transfers its goods manufactured at Jamshedpur works
plant to various depots/branches located across the country without
payment of Central Sales tax as per the provisions of the Act and submits
F-Form in lieu of the stock-transfers made during a particular period.
These goods are then sold to various customers outside the states
from these depots/branches and the value of these sales are disclosed
in the periodical returns filed as per the Jharkhand Vat Act 2005. The
Commercial Tax Department has raised the demand of Central Sales
tax by levying tax on the differences between Value of sales outside the
states and value of F-Form submitted for stock transfers during sales
tax assessments. The amount involved under various assessment years
from 2011-12 to 2014-15 is ₹ 312 crore out of which ₹ 125 crore (March
31, 2017: Nil) has been considered as contingent liability.
Other taxes, dues and claims
Other amounts for which the Group may contingently be liable
aggregate to `10,782.16 crore (March 31, 2017: `9,424.36 crore),
which includes `77.10 crore (March 31, 2017: `71.77 crore) in respect
of equity accounted investees.
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR 39. Contingencies and commitments (Contd.)
The details of significant demands is as below:
(a)
(b)
Claim by a party arising out of conversion arrangement- `195.79
crore (March 31, 2017: `195.82 crore). The Company has not
acknowledged this claim and has instead filed a claim of `141.23
crore (March 31, 2017: `139.65 crore) on the party. The matter is
pending before the Calcutta High Court.
The State Government of Odisha introduced “Orissa Rural
Infrastructure and Socio Economic Development Act, 2004” with
effect from February 2005 levying tax on mineral bearing land
computed on the basis of value of minerals produced from the
mineral bearing land. The Company had filed a Writ Petition
in the High Court of Orissa challenging the validity of the Act.
Orissa High Court held in December 2005 that State does not
have authority to levy tax on minerals. The State of Odisha filed
an appeal in the Supreme Court against the order of Orissa High
Court and the case is pending in Supreme Court. The potential
liability, as at March 31, 2018 would be approximately `6,521.05
crore (March 31, 2017: `5,880.83 crore).
(c)
The Company pays royalty on Iron ore on the basis of quantity
removed from the leased area at the rates based on notification
by the Ministry of Mines, Government of India and the price
published by India Bureau of Mines (IBM) on a monthly basis.
A demand of `411.08 crore has been raised by Deputy Director
of Mines, Joda, claiming royalty at sized ore rates on despatches
of ore fines. The Company has filed a revision petition on
November 14, 2013 before the Mines Tribunal, Government of
India, Ministry of Mines, New Delhi, challenging the legality and
validity of the demand raised and also to grant refund of royalty
paid in excess by the Company. Mines tribunal vide its order
dated November 13, 2014 has stayed the demand of royalty on
iron ore for Joda east of `314.28 crore upto the period ending
March 31, 2014. For the demand of `96.80 crore for April, 2014
to September, 2014, a separate revision application was filed
before Mines Tribunal. The matter was heard by Mines Tribunal
on July 14, 2015 and stay was granted on the total demand
with directive to Government of Odisha not to take any coercive
action for realisation of this demanded amount. Likely demand of
royalty on fines at sized ore rates as on March 31, 2018: `1,036.53
crore (March 31, 2017: `847.96 crore).
(d)
Demand notices were originally issued by the Deputy Director of
Mines, Odisha amounting to ₹3,828 crore for excess production
over the quantity permitted under the mining plan, environment
clearance or consent to operate, pertaining to 2000-01 to 2009-10.
The demand notices have been raised under Section 21(5) of the
Mines & Minerals (Development and Regulations) Act (MMDR).
The Company filed revision petitions before the Mines Tribunal
against all such demand notices. Initially, a stay of demands was
granted, later by order dated October 12, 2017, the issue has been
remanded to the state for reconsideration of the demand in the
light of Supreme Court judgement passed on August 2, 2017.
The Hon’ble Supreme Court subsequently pronounced
its
judgment in the Common Cause case on August 2, 2017 wherein
it directed that compensation equivalent to the price of mineral
extracted in excess of environment clearance or without forest
clearance from the forest land be paid.
In pursuance to the Judgment of Hon’ble Supreme Court,
demand/show cause notices amounting to ₹3,873.35 crore have
been issued by the Deputy Director of Mines, Odisha and the
District Mining Office, Jharkhand.
In respect of the above demands:
as directed by the Hon’ble Supreme Court, the Company
has provided and paid for iron ore and manganese ore
an amount of ₹614.41 crore for production in excess of
environment clearance to the Deputy Director of Mines,
Odisha.
the Company has provided and paid under protest
an amount of ₹56.97 crore for production in excess of
environment clearance to the District Mining Office,
Jharkhand.
the Company has challenged the demands amounting to
₹132.91 crore for production in excess of lower of mining
plan and consent to operate limits raised by the Deputy
Director of Mines, Odisha before the Mines Tribunal and
obtained a stay on the matter. Demand amount of ₹132.91
crore has been considered as contingent liability.
the Company has made a comprehensive submission
before the Deputy Director of Mines, Odisha against show
cause notices amounting to ₹694.02 crore for production in
violation of mining plan, Environment Protection Act, 1986
and Water (Prevention & Control of Pollution) Act, 1981.
There has been a demand amounting to ₹234.74 crore from
the Deputy Director of Mines, Odisha for production in
excess of the Environmental Clearance in April 2018 against
which suitable legal remedy is being explored. Demand
of ₹234.74 crore has been provided and ₹694.02 crore has
been disclosed as contingent liability.
the Company based on
internal assessment has
its
provided an amount of ₹1,412.89 crore against demand
notices amounting to ₹2,140.30 crore received from the
359359
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
39. Contingencies and commitments (Contd.)
District Mining Office, Jharkhand for production in excess
of environment clearance and the balance amount of
₹727.41 crore has been considered as contingent liability.
The Company has however been granted a stay by the
Revisional Authority, Ministry of Coal, Government of India
against such demand notices.
(f )
B. Commitments
(a)
The Group has entered into various contracts with suppliers
and contractors for the acquisition of plant and machinery,
equipment and various civil contracts of capital nature
amounting to `8,001.50 crore, which includes `4.83 crore
in respect of equity accounted investees as at March, 2017
(`6,748.77 crore, which includes `35.90 crore in respect of
equity accounted investees as at March 31, 2017).
Other commitments amounts to `0.01 crore which includes Nil
in respect of equity accounted investees as at March 31, 2018
(`0.01 crore which includes Nil in respect of equity accounted
investees as at March 31, 2017).
The Company has given undertakings to: (a) IDBI not to
dispose of its investment in Wellman Incandescent India Ltd.,
(b) IDBI and ICICI Bank Ltd. (formerly ICICI) not to dispose of its
investment in Standard Chrome Ltd., (c) Mizuho Corporate Bank
Limited and Japan Bank for International Co-operation, not to
dispose of its investments in Tata NYK Shipping Pte Limited, (to
retain minimal stake required to be able to provide a corporate
guarantee towards long-term debt), (d) ICICI Bank Limited to
directly or indirectly continue to hold atleast 51% shareholding
in Jamshedpur Continuous Annealing and Processing Company
Private Limited.
Tata Steel Limited and Bluescope Steel Limited have given
undertaking to State Bank of India not to reduce collective
shareholding in Tata Bluescope Steel Limited (TBSL), below 51%
without prior consent of the Lender. Further, the Company has
given an undertaking to State bank of India to intimate them
before diluting its shareholding in TBSL below 50%.
The Company, as a promoter, has pledged 4,41,55,800
equity shares of Industrial Energy Limited with Infrastructure
Development Finance Corporation Limited.
The Company along with TS Alloys Limited (Promoters) has
given an undertaking to Power Finance Corporation Limited
(PFC) and Rural Electrification Corporation Limited (REC)
(Lenders) not to dispose off/transfer their equity holding 51%
of total equity in Bhubaneswar Power Private Limited (BPPL) till
the repayment of entire loan by BPPL to the lenders without
(b)
(c)
(d)
(e)
360360
prior written approval of the lenders. The Company along with
TS Alloys Limited has pledged 60% of their equity contribution
in BPPL to PFC, PFC being the security agent.
T S Global Minerals Holdings Pte Ltd. (formerly known as Tata
Steel Global Minerals Holdings Pte Ltd.), an indirect subsidiary
and Riversdale Mining Pty Limited (formerly Riversdale Mining
Limited) have executed a deed of cross charge in favour of
each other to secure the performance of obligation under Joint
Venture agreement and funding requirements of the Joint
Venture Minas De Benga (Mauritius) Limited (formerly Rio Tinto
Benga (Mauritius) Limited) upto a maximum amount of US$ 100
million on the shares of Minas De Benga (Mauritius) Limited and
all of its present and future benefits and rights under the joint
venture agreement.
(g)
The Group has given guarantees aggregating `205.73 crore
(March 31, 2017: `223.78 crore) details of which are as below:
(i)
(ii)
(iii)
in favour of Timken India Limited for `1.07 crore (March
31, 2017: `1.07 crore) on behalf of Timken India Limited to
Commissioner of Customs in respect of goods imported.
in favour of Mizuho Corporate Bank Ltd., Japan for
`27.33 crore (March 31, 2017: `45.38 crore) against the
loan granted to a joint venture Tata NYK Shipping Pte.
Limited.
in favour of The President of India for `177.18 crore (March
31, 2017: `177.18 crore) against performance of export
obligation under the various bonds executed by a joint
venture Jamshedpur Continuous Annealing & Processing
Company Private Limited.
(iv)
in favour of President of India for `0.15 crore (March 31,
2017: `0.15 crore) against advance license.
40. Other significant litigations
(a)
Odisha legislative assembly issued an amendment to Indian
Stamp Act on May 09, 2013 and inserted a new provision
(Section 3A) in respect of stamp duty payable on grant/ renewal
of mining leases. As per the amended provision, stamp duty is
levied equal to 15% of the average royalty that would accrue
out of the highest annual extraction of minerals under the
approved mining plan multiplied by the period of such mining
lease. The Company had filed a writ petition challenging the
constitutionality of the Act on July 5, 2013. The Hon’ble High
Court, Cuttack passed an order on July 9, 2013 granting interim
stay on the operation of the Amendment Act, 2013. As a result
of the stay, as on date, the Act is not enforceable and any
demand received by the Company is not liable to be proceeded
with. Meanwhile, the Company received demand notices for
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
40. Other significant litigations (Contd.)
the various mines at Odisha totalling to ₹5,579 crore (March
31, 2017: ₹5,579 crore). The Company has concluded that it is
remote that the claim will sustain on ultimate resolution of the
legal case by the courts.
In April, 2015 the Company has received an intimation from
Government of Odisha, granting extension of validity period
for leases under the MMDR Amendment Act, 2015 up to March
31, 2030 in respect of eight mines and up to March 31, 2020
for two mines subject to execution of supplementary lease
deed. Liability has been provided in the books of accounts as
on March 31, 2018 as per the existing provisions of the Stamp
Act 1899 and the Company has since paid the stamp duty and
registration charges totalling ₹413.72 crore (March 31, 2017:
₹413.72 crore) for supplementary deed execution in respect of
eight mines out of the above mines.
(b)
Noamundi Iron Mine of TSL was due for its third renewal with
effect from January 01, 2012. The application for renewal was
submitted by the company within the stipulated time, but it
remained pending consideration with the State and the mining
operations were continued in terms of the prevailing law.
By a judgment of April 2014 in the case of Goa mines, the
Supreme Court took a view that second and subsequent renewal
of mining lease can be effected once the State considers the
application and decides to renew the mining lease by issuing
an express order. State of Jharkhand issued renewal order to
the company on December 31, 2014. The State, however, took
a view on an interpretation of Goa judgment that the mining
carried out after expiry of the period of second renewal was
‘illegal’ and hence, issued a demand notice of ₹3568.00 crore
being the price of iron ore extracted. The said demand has been
challenged by the Company before the Jharkhand Hight Court.
The mining operations were suspended from August 01, 2014.
Therefore, upon issuance of express order, Company paid
₹152.00 crore under protest, so that mining can be resumed.
The Mines and Minerals Development and Regulation (MMDR)
Amendment Ordinance 2015 promulgated on January 12, 2015
provides for extension of such mining leases whose applications
for renewal have remained pending with the State(s). Based on
the new Ordinance, Jharkhand Government revised the Express
Order on February 12, 2015 for extending the period of lease up
to March 31, 2030 with following terms and conditions:
value of Iron ore produced by alleged unlawful mining
during the period January 1, 2012 to April 20, 2014 for
₹2,994.49 crore to be decided on the basis of disposal of
our writ petition before Hon’ble High Court of Jharkhand.
value of iron ore produced from April 21, 2014 to July 17,
2014 amounting to ₹421.83 crore to be paid in maximum 3
installments.
value of Iron Ore produced from July 18, 2014 to August 31,
2014 i.e. ₹152.00 crore to be paid immediately.
District Mining Officer Chaibasa on March 16, 2015 has issued
demand notice for payment of ₹421.83 crore, payable in three
monthly installments. The Company replied on March 20, 2015,
since the lease has been extended by application of law till
March 31, 2030, the above demand is not tenable. The Company
paid ₹50.00 crore under protest on July 27, 2015, because the
State had stopped issuance of transit permits.
Another writ petition has been filed before Hon’ble High Court
of Jharkhand and heard on September 9, 2015. An interim
order has been given by Hon’ble High Court of Jharkhand on
September 18, 2015 wherein court has directed the company to
discharge the liability of one of the demands raised by the State
and pay the amount of ₹371.83 crore in 3 equal installments,
first installment by October 15, 2015, second installment by
November 15, 2015 and third installment by December 15, 2015.
In view of the interim order of Hon’ble High Court of Jharkhand
₹124 crore was paid on September 28, 2015, ₹124.00 crore was
paid on November 12, 2015 and ₹123.83 crore on December 14,
2015 under protest.
The case is pending at Hon’ble High court for disposal. The
State issued similar terms and conditions to other mining
lessees in the State rendering the mining as illegal. On a correct
application of Goa judgment read with the amendment in the
year 2015, the company expects that it is remote that the claim
of the State will sustain and consequently, the demands raised
by the State would be quashed by the courts.
361361
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
41. Acquisition of subsidiaries
On February 1, 2018, the Company acquired the remaining 74% stake in its joint venture Bhubaneshwar Power Private Limited from JL Power
ventures.
Fair value of identifiable assets acquired and liabilities assumed as on the date of acquisition on a provisional basis is as below:
Non-current assets
Property,plant and equipment
Capital work-in-progress
Other Intangible assets
Income tax assets
Other assets
Current assets
Inventories
Trade receivables
Cash and bank balances
Financial assets
Other assets
Total assets
Non-current liabilities
Long term borrowings
Long term provisions
Deferred tax liabilities
Current liabilities
Short term borrowings
Trade payables
Financial liabilities
Short term provisions
Retirement benefit obligations
Other liabilities
Total liabilities
Net assets (A)
Consideration paid
Fair value of previously held equity interest
Consideration paid including fair value of previously held equity interest (B)
Goodwill (B-A)
362362
(` crore)
Fair value as at
February 1, 2018
907.45
0.89
90.22
1.47
21.01
1,021.04
15.37
19.86
18.19
0.36
10.48
64.26
1,085.30
618.24
0.31
36.09
654.64
43.58
25.74
84.73
0.04
0.04
74.37
228.50
883.14
202.16
(` crore)
255.00
89.59
344.59
142.43
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
41. Acquisition of subsidiaries (Contd.)
The Group recognised a fair value gain of `46.30 crore during the year ended March 31, 2018 on remeasurement of its previously held equity
interest in Bhubaneshwar Power Private Limited as on the date of acquisition.
From the date of acquisition, Bhubaneshwar Power Private Limited contributed `74.20 crore to revenue from operations and a loss of
`6.29 crore to profit before taxation (Pre-consolidation adjustments).
42. Disposal of subsidiaries
Tata Steel UK Limited a wholly owned indirect subsidiary of the Company disposed off the trade and other assets of Speciality Steels Limited
to Liberty Steels Limited on May 1, 2017. A profit of `5.15 crore was recognised on disposal being the difference between the fair value of
consideration received and the carrying values of the net assets disposed off.
The Group also completed the sale of Saw Pipe Mills in Hartepool to Liberty House Group at a loss of `27.05 crore during the year ended
March 31, 2018.
During the year ended March 31, 2017 the Group completed the sale of its Long products business in the UK to Greybull Capital LLP and of its
subsidiary Kalzip (Guangzhou) Limited to Shangai Qinheng International Trade Co. Ltd.
(i)
Details of net assets disposed off and profit/(loss) on disposal is as below:
Non-current assets
Property,plant and equipment
Other Intangible assets
Deferred tax Assets
Current assets
Inventories
Trade receivables
Cash and bank balances
Non-current liabilities
Long term borrowings
Long term provisions
Financial liabilities
Retirement benefit obligations
Current liabilities
Short term borrowings
Trade payables
Short term provisions
Current tax liabilities
(` crore)
Year ended
March 31, 2018
Year ended
March 31, 2017
13.72
-
-
13.72
849.62
218.77
3.73
1,072.12
9.43
10.64
0.02
-
20.09
2.40
382.12
9.42
-
393.94
608.17
3.56
20.82
632.55
1,421.22
1,887.12
30.99
3,339.33
193.07
49.43
-
318.38
560.88
18.07
1,973.29
314.52
7.81
2,313.69
Carrying value of net assets disposed off
671.81
1,097.31
363363
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
42. Disposal of subsidiaries (Contd.)
Sale consideration
Carrying value of net assets disposed off
Adjustments in respect of:
Exchange differences recycled to consolidated statement of profit and loss
Transaction costs
Pension curtailments
Impairment adjustments in relation to assets disposed
Profit/(Loss) on disposal
(ii) Details of net cash flow arising on disposal is as below:
Consideration received/(paid) in cash and cash equivalents
Consideration received in the form of preference shares
Deferred consideration
Less: Cash and cash equivalents disposed off
Net cash flow arising on disposal
Year ended
March 31, 2018
475.99
(671.81)
(195.82)
(` crore)
Year ended
March 31, 2017
(1,169.18)
(1,097.31)
(2,266.49)
-
(18.27)
-
192.19
(21.90)
42.01
48.87
(887.01)
-
(3,062.62)
Year ended
March 31, 2018
475.99
(55.02)
(386.75)
-
34.22
(` crore)
Year ended
March 31, 2017
(1,169.18)
-
87.82
30.99
(1,112.35)
364364
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR 43. Capital Management
The Group’s capital management is intended to create value for shareholders by facilitating the achievement of long term and short term goals
of the Group.
The Group determines the amount of capital required on the basis of annual business plan of entities within the Group coupled with long term
and short term strategic investment and expansion plans. The funding needs are met through equity, cash generated from operations, long
and short term bank borrowings and issue of non-convertible debt securities.
The Group monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Group.
Net debt includes interest bearing borrowings less cash and cash equivalents, other bank balances (including non-current and earmarked
balances) and current investments.
The table below summarises the capital, net debt and net debt to equity ratio of the Group.
Equity share capital
Hybrid perpetual securities
Other equity
Equity attributable to shareholders of the Company
Non controlling interests
Total Equity (A)
Non-current borrowings
Current borrowings
Current maturities of non-current borrowings and finance lease obligations
Gross Debt (B)
Total Capital (A+B)
Gross Debt as above
Less: Current investments
Less: Cash and cash equivalents
Less: Other balances with bank (including non-current and earmarked balances)
Net Debt (C)
As at
March 31, 2018
1,144.95
2,275.00
57,450.67
60,870.62
936.52
61,807.14
72,789.10
15,884.98
3,472.97
92,147.05
1,53,954.19
92,147.05
14,908.97
7,783.50
239.37
69,215.21
(` crore)
As at
March 31, 2017
970.24
2,275.00
34,574.08
37,819.32
1,601.70
39,421.02
64,022.27
18,328.10
664.12
83,014.49
1,22,435.51
83,014.49
5,673.13
4,832.29
142.30
72,366.77
Net debt to equity(i)
1.37
1.72
(i) Net debt to equity ratio as at March 31, 2018 and March 31, 2017 has been computed based on average equity.
365365
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386 44. Disclosures on financial instruments
This section gives an overview of the significance of financial instruments for the Group and provides additional information on balance sheet
items that contain financial instruments.
The details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income
and expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 2(r),
Page 294 to the consolidated financial statements.
(a) Financial assets and liabilities
The following tables present the carrying value and fair value of each category of financial assets and liabilities as at March 31, 2018 and
March 31, 2017.
As at March 31, 2018
Amortised
cost
Fair value
through other
comprehensive
income
Derivative
instruments
in hedging
relationship
Derivative
instruments
not in hedging
relationship
Fair value
through
statement of
profit and loss
Total
carrying
value
(` crore)
Total fair
value
Financial assets:
Cash and bank balances
Trade receivables
Investments
Derivatives
Loans
Other financial assets
Financial liabilities:
Trade and other payables
Borrowings
Derivatives
Other financial liabilities
8,022.87
12,415.52
0.22
-
973.82
602.60
22,015.03
20,413.81
92,147.05
-
6,424.64
1,18,985.50
-
-
876.65
-
-
-
876.65
-
-
-
-
-
-
-
-
87.89
-
-
87.89
-
-
350.37
-
350.37
-
-
-
92.22
-
-
92.22
-
-
203.46
-
203.46
-
-
15,241.38
-
-
-
15,241.38
8,022.87
12,415.52
16,118.25
180.11
973.82
602.60
38,313.17
8,022.87
12,415.52
16,118.25
180.11
973.82
602.60
38,313.17
-
-
-
-
-
20,413.81
92,147.05
553.83
6,424.64
1,19,539.33
20,413.81
92,019.74
553.83
6,424.64
1,19,412.02
366366
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR 44. Disclosures on financial instruments (Contd.)
As at March 31, 2017
Amortised
cost
Fair value
through other
comprehensive
income
Derivative
instruments
in hedging
relationship
Derivative
instruments
not in hedging
relationship
Fair value
through
statement of
profit and loss
Total carrying
value
(` crore)
Total fair
value
Financial assets:
Cash and bank balances
Trade receivables
Investments
Derivatives
Loans
Other financial assets
Financial liabilities:
Trade and other payables
Borrowings
Derivatives
Other financial liabilities
4,974.59
11,586.82
0.19
-
597.56
419.86
17,579.02
18,574.46
83,014.49
-
5,760.17
1,07,349.12
-
-
4,858.56
-
-
4,858.56
-
-
-
-
-
-
-
-
90.42
-
90.42
-
-
221.47
-
221.47
-
-
-
96.79
-
-
6,004.43
-
-
96.79
-
6,004.43
4,974.59
11,586.82
10,863.18
187.21
597.56
419.86
28,629.22
4,974.59
11,586.82
10,863.18
187.21
597.56
419.86
28,629.22
-
-
632.18
-
632.18
-
-
-
-
-
18,574.46
83,014.49
853.65
5,760.17
1,08,202.77
18,574.46
84,870.68
853.65
5,760.17
1,10,058.96
(i)
Investment in mutual funds and derivative instruments (other than those designated in a hedging relationship) are mandatorily classified
as fair value through the statement of profit and loss).
(b)
Fair value hierarchy
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped
into Level 1 to Level 3, as described below.
Quoted prices in an active market (Level 1): This level of hierarchy includes financial assets and liabilities, that are measured by reference
to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of investments in quoted equity
shares and mutual funds.
Valuation techniques with observable inputs (Level 2): This level of hierarchy includes financial assets and liabilities, measured using
inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or
indirectly (i.e., derived from prices). This level of hierarchy includes the Group’s over-the-counter (OTC) derivative contracts.
Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy includes financial assets and liabilities
measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in
part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in
the same instrument nor are they based on available market data. This category includes investment in unquoted equity shares.
367367
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
44. Disclosures on financial instruments (Contd.)
Financial assets:
Investments in mutual funds
Investments in equity shares
Investments in bonds and debentures
Derivative financial assets
Financial liabilities:
Derivative financial liabilities
Financial assets:
Investments in mutual funds
Investments in equity shares
Investments in bonds and debentures
Derivative financial assets
Financial liabilities:
Derivative financial liabilities
Notes:
Level 1
Level 2
14,979.89
662.37
91.30
-
15,733.56
-
-
-
-
49.74
180.11
229.85
553.83
553.83
Level 1
Level 2
5,673.13
4,490.38
244.72
-
10,408.23
-
-
-
-
49.74
187.21
236.95
853.65
853.65
(` crore)
As at March 31, 2018
Total
Level 3
-
334.73
-
-
334.73
-
-
14,979.89
997.10
141.04
180.11
16,298.14
553.83
553.83
(` crore)
As at March 31, 2017
Total
Level 3
-
405.02
-
-
405.02
5,673.13
4,895.40
294.46
187.21
11,050.20
-
-
853.65
853.65
(i) Current financial assets and liabilities are stated at carrying value which is approximately equal to their fair value.
(ii)
Derivatives are fair valued using market observable rates and published prices together with forecasted cash flow information where
applicable.
(iii)
(iv)
(v)
Investments carried at fair value are generally based on market price quotations. The investments included in the level 3 of the fair value
hierarchy have been valued using the cost approach to arrive at their fair value. Cost of unquoted equity instruments has been considered
as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate
of fair value within that range.
Fair value of borrowings which have a quoted market price in an active market is based on its market price which is categorised as level
1. Fair value of borrowings which do not have an active market or are unquoted is estimated by discounting expected future cash flows
using a discount rate equivalent to the risk-free rate of return adjusted for credit spread considered by lenders for instruments of similar
maturities which is categorised as level 2 in the fair value hierarchy.
Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in
any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily
indicative of the amounts that the Group could have realised or paid in sale transactions as of respective dates. As such, fair value of
financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date.
(vi) There have been no transfers between Level 1 and Level 2 for the years ended March 31, 2018 and March 31, 2017.
368368
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
44. Disclosures on financial instruments (Contd.)
(vii) Reconciliation of level 3 fair value measurement is as below:
Balance at the beginning of the year
Addition during the year
Fair value changes during the year
Exchange differences on consolidation
Balance at the end of the year
(c) Derivative financial instruments
As at
March 31, 2018
405.02
-
(72.68)
2.39
334.73
(` crore)
As at
March 31, 2017
406.02
27.89
(28.65)
(0.24)
405.02
Derivative instruments used by the Group include forward exchange contracts, interest rate swaps, currency swaps, options, commodity
futures interest rate caps and collars. These financial instruments are used to hedge future transactions and cash flows and are subject to hedge
accounting under Ind AS 109 “Financial Instruments” to the extent possible. The Group does not hold or issue derivative financial instruments
for trading purposes. All transactions in derivative financial instruments are undertaken to manage risks arising from underlying business
activities.
The following table sets out the fair value of derivatives held by the Group as at the end of the reporting period.
(i)
(ii)
(iii)
Foreign currency forwards, futures and options
Commodity futures and options
Interest rate swaps and collars
Classified as :
Non-current
Current
As at March 31, 2018
As at March 31, 2017
(` crore)
Assets
133.23
32.42
14.46
180.11
29.16
150.95
Liabilities
532.38
18.92
2.53
553.83
85.04
468.79
Assets
165.07
0.66
21.48
187.21
83.17
104.04
Liabilities
823.57
11.46
18.62
853.65
179.98
673.67
As at the end of the reporting period, total notional amount of outstanding foreign currency contracts, commodity futures, options, interest
rate swap and collars that the Group has committed to is as below:
Foreign currency forwards, futures and options
(i)
(ii) Commodity futures and options
(iii)
Interest rate swaps and collars
As at
March 31, 2018
7,072.23
150.07
1,764.39
8,986.69
(US$ million)
As at
March 31, 2017
7,282.80
122.39
1,872.57
9,277.76
369369
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
44. Disclosures on financial instruments (Contd.)
(d) Transfer of financial assets
The Group transfers certain trade receivables under discounting arrangements with banks and financial institutions. Some of such arrangements
do not qualify for de-recognition due to recourse arrangement being in place. Consequently, the proceeds received from transfer are recorded
as short-term borrowings from banks and financial institutions.
The carrying value of trade receivables not de-recognised along with the associated liabilities is as below:
(` crore)
Trade receivables
As at March 31, 2018
Carrying
value of
assets
transferred
583.18
Carrying value
of associated
liabilities
583.18
As at March 31, 2017
Carrying
value of
assets
transferred
691.42
Carrying value
of associated
liabilities
691.42
(e) Financial risk management
(a) Market risk - Foreign currency exchange rate risk:
In the course of its business, the Group is exposed primarily to
fluctuations in foreign currency exchange rates, commodity
prices, interest rates, equity prices, liquidity and credit risk,
which may adversely impact the fair value of its financial
instruments.
Entities within the Group have a risk management policy which
not only covers the foreign exchange risks but also other risks
associated with the financial assets and liabilities. The risk
management policy is approved by the Board of Directors. The
risk management framework aims to:
(i)
create a stable business planning environment by reducing
the impact of currency, commodity prices and interest rate
fluctuations on the entity’s business plan.
(ii)
achieve greater predictability to earnings by determining
the financial value of the expected earnings in advance.
(i) Market risk
Market risk is the risk of any loss in future earnings, in realisable
fair values or in future cash flows that may result from a change
in the price of a financial instrument. The value of a financial
instrument may change as a result of changes in interest rates,
foreign currency exchange rates, commodity prices, equity
price fluctuations, liquidity and other market changes. Future
specific market movements cannot be normally predicted with
reasonable accuracy.
The fluctuation in foreign currency exchange rates may have
potential impact on the consolidated statement of profit and
loss and equity, where any transaction references more than
one currency or where assets/liabilities are denominated in a
currency other than the functional currency of the respective
consolidated entities.
Considering the countries and economic environment in which
the Group operates, its operations are subject to risks arising
from fluctuations in exchange rates in those countries. The risks
primarily relate to fluctuations in US Dollar, Great British Pound,
Euro, Singapore dollar, and Thai Baht against the respective
functional currencies of the Company and its subsidiaries.
Entities as per their risk management policy, use foreign
exchange and other derivative
instruments primarily to
hedge foreign exchange rate exposure. Any weakening of the
functional currency may impact the Group’s cost of imports and
cost of borrowings and consequently may increase the cost of
financing the Group’s capital expenditures.
A 10% appreciation/depreciation of foreign currencies with
respect to the functional currency of the entities within the
Group would result in an decrease/increase in the Group’s net
profit and equity before considering tax impacts by approximately
`680.05 crore for the year ended March 31, 2018, (`885.74 crore
for the year ended March 31, 2017) and increase/decrease
in carrying value of property, plant and equipment (before
considering depreciation impact) by approximately `148.81
crore as at March 31, 2018 (March 31, 2017: `185.49 crore).
370370
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
44. Disclosures on financial instruments (Contd.)
The foreign exchange rate sensitivity is calculated by assuming
a simultaneous parallel foreign exchange rates shift of all the
currencies by 10% against the functional currency of the entities
within the Group .
The sensitivity analysis has been based on the composition of the
Group’s financial assets and liabilities as at March 31, 2018 and
March 31, 2017 excluding trade payables, trade receivables, other
derivative and non-derivative financial instruments not forming a
part of debt and which do not present a material exposure. The
period end balances are not necessarily representative of the
average debt outstanding during the period.
(b) Market risk - Interest rate risk:
Interest rate risk is measured by using the cash flow sensitivity
for changes in variable interest rates. Any movement in the
reference rates could have an impact on the Group’s cash flows
as well as costs.
The Group is subject to variable interest rates on some of its
interest bearing liabilities. The Group’s interest rate exposure is
mainly related to debt obligations.
Based on the composition of debt as at March 31, 2018 and
March 31, 2017 a 100 basis points increase in interest rates would
increase the Group’s finance costs and thereby consequently
reduce net profit and equity before considering tax impacts by
approximately `425.06 crore for the year ended March 31, 2018
(2016-17: `421.73 crore).
The risk estimates provided assume a parallel shift of 100 basis
points interest rate across all yield curves. This calculation also
assumes that the change occurs at the balance sheet date and has
been calculated based on risk exposures outstanding as at that
date. The period end balances are not necessarily representative of
the average debt outstanding during the period.
(c) Market risk - Equity price risk:
Equity price risk is related to the change in market reference
price of investments in equity securities held by the Group.
The fair value of quoted investments held by the Group exposes
the Group to equity price risks. In general, these investments are
not held for trading purposes.
The fair value of quoted investments in equity classified
as fair value through other comprehensive income/profit and
loss as at March 31, 2018 and March 31, 2017 was `662.37 crore
and `4,490.38 crore respectively.
A 10% change in equity prices of such securities held as at
March 31, 2018 and March 31, 2017 would result in an impact
of `66.24 crore and `449.03 crore respectively on equity before
considering tax impact.
(ii) Commodity risk
The Group makes use of commodity futures contracts
and options to manage its purchase price risk for certain
commodities. Across the Group forward purchases are also
made of zinc, tin and nickel to cover sales contracts with fixed
metal prices.
There was no significant market risk relating to the consolidated
statement of profit and loss since the majority of commodity
derivatives are treated as cash flow hedges with movements
being reflected in equity and the timing and recognition in
the consolidated statement of profit and loss would depend
on the point at which the underlying hedged transactions are
recognised.
(iii) Credit risk
Credit risk is the risk of financial loss arising from counter-party
failure to repay or service debt according to the contractual terms
or obligations. Credit risk encompasses both the direct risk of
default and the risk of deterioration of creditworthiness as well as
concentration risks.
Entities within the Group have a policy of dealing only with credit
worthy counter parties and obtaining sufficient collateral, where
appropriate as a means of mitigating the risk of financial loss from
defaults.
Financial
instruments that are subject to credit risk and
concentration thereof principally consist of trade receivables,
loans receivables,
investments, cash and cash equivalents,
derivatives and financial guarantees provided by the Group.
None of the financial instruments of the Group result in material
concentration of credit risk.
The carrying value of financial assets represents the maximum
credit risk. The maximum exposure to credit risk was ₹29,301.93
crore and ₹16,268.24 crore as at March 31, 2018 and March
31, 2017 respectively, being the total carrying value of trade
receivables, balances with bank, bank deposits, investments in
mutual funds, loans, derivative assets and other financial assets.
The risk relating to trade receivables is presented in Note 15,
Page 321.
371371
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
44. Disclosures on financial instruments (Contd.)
(iv) Liquidity risk
The Group’s exposure to customers is diversified and there
is no concentration of credit risk with respect to any particular
customer as at March 31, 2018 and March 31, 2017.
In respect of financial guarantees provided by the Group to banks
and financial institutions, the maximum exposure which the Group
is exposed to is the maximum amount which the Group would have
to pay if the guarantee is called upon. Based on the expectation at
the end of the reporting period, the Group considers that it is more
likely than not that such an amount will not be payable under the
guarantees provided.
Liquidity risk refers to the risk that the Group cannot meet
liquidity risk
its financial obligations. The objective of
management is to maintain sufficient liquidity and ensure that
funds are available for use as per requirements.
The Group has obtained fund and non-fund based working
capital lines from various banks. Furthermore, the Group
has access to funds from debt markets through commercial
paper programs, non-convertible debentures and other debt
instruments. The Group invests its surplus funds in bank fixed
deposits and mutual funds, which carry no or low mark to
market risk.
The following table shows a maturity analysis of the anticipated cash flows including future interest obligations for the Group’s derivative
and non-derivative financial liabilities on an undiscounted basis, which therefore differ from both carrying value and fair value. Floating rate
interest is estimated using the prevailing interest rate at the end of the reporting period. Cash flows in foreign currencies are translated using
the period end spot rates.
Non-derivative financial liabilities:
Borrowings including interest obligations
Trade payables
Other financial liabilities
Carrying
value
Contractual
cash flows
less than one
year
(` crore)
between one to
five years
As at March 31, 2018
More than five
years
92,147.05
20,413.81
6,424.64
1,18,985.50
1,15,955.68
20,413.81
6,424.64
1,42,794.13
20,549.46
20,413.81
6,318.81
47,282.08
54,309.71
-
27.60
54,337.31
41,096.51
-
78.23
41,174.74
Derivative financial liabilities
553.83
553.83
468.79
85.04
-
(` crore)
Non-derivative financial liabilities:
Borrowings including interest obligations
Trade payables
Other financial liabilities
Carrying
value
Contractual
cash flows
less than one
year
between one to
five years
As at March 31, 2017
More than five
years
83,014.49
18,574.46
5,760.17
1,07,349.12
1,05,464.32
18,574.46
5,760.17
1,29,798.95
21,183.49
18,574.46
5,651.39
45,409.34
50,574.60
-
36.29
50,610.89
33,706.23
-
72.49
33,778.72
Derivative financial liabilities
853.65
853.65
673.67
96.76
83.22
372372
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
45. Segment reporting
The Group is engaged in the business of manufacturing and distribution of steel products across the globe. Operating segments have
been identified based on how the Chief Operating Decision Maker (CODM) reviews and assesses the Group’s performance, which is on the
basis of the different geographical areas wherein major entities within the Group operate.
(i) The Group’s reportable segments and segment information is presented below:
Segment revenue
External revenue
Intersegment revenue
Total Revenue
Segment results before exceptional items,
interest, tax and depreciation :
Segment results include:
Share of profit/(loss) of joint ventures and
associates
Reconciliation to profit/ (loss) for the year:
Finance income
Finance cost
Depreciation and amortisation expenses
Profit before exceptional items and tax
Exceptional items (refer Note 35, Page 345)
Profit before tax
Tax
Profit after tax from continuing operations
Profit after tax from discontinued operations
Net profit/(loss) for the year
Segment assets
Segment assets include:
Equity accounted investments
Segment liabilities
Additions to non-current assets
Tata Steel
India
Other
Indian
operations
Tata Steel
Europe
Other trade
related
operations
South-
East Asian
operations
Rest of the
world
Inter-
segment
eliminations
(` crore)
Total
53,398.85
48,741.51
7,120.52
4,519.45
60,519.37
53,260.96
15,799.94
11,952.75
7,915.39
5,142.09
1,507.06
1,557.75
9,422.45
6,699.84
955.97
59,755.60
52,017.48
229.85
67.48
59,985.45
52,084.96
3,792.04
2,059.04
3,258.07
25,772.72
20,493.30
27,831.76
23,751.37
2,050.20
9,135.50
7,653.25
306.50
482.65
9,442.00
8,135.90
454.32
751.99
607.54
-
22.41
751.99
629.95
(3.69)
-
-
(34,936.65)
(27,143.04)
(34,936.65)
(27,143.04)
(1,003.85)
1,33,016.37
1,17,419.94
-
-
1,33,016.37
1,17,419.94
22,044.93
580.08
4,704.91
261.62
531.27
(19.56)
(985.70)
17,025.37
115.87
(30.01)
2.07
2.53
79.20
48.29
-
-
(23.04)
(13.16)
-
-
-
-
174.10
7.65
929.15
517.57
5,501.79
5,072.20
5,961.66
5,672.88
11,510.63
6,797.86
9,599.12
(4,324.23)
21,109.75
2,473.63
3,405.39
2,778.01
17,704.36
(304.38)
58.45
(3,864.19)
17,762.81
(4,168.57)
2,09,757.94
1,73,333.24
1,17,765.08
1,09,180.60
7,258.99
5,532.26
69,078.02
43,687.31
58,307.52
43,413.50
5,429.16
5,091.43
7,479.19
7,904.66
(55,560.02)
(41,476.52)
1,385.66
1,281.31
11.43
25.62
373.53
275.26
-
-
10.60
11.75
-
-
-
-
1,781.22
1,593.94
64,365.30
62,542.95
2,424.34
3,846.73
4,463.50
3,274.90
321.06
419.81
91,793.30
73,061.71
4,405.39
3,665.80
39,365.64
33,208.34
0.20
3.17
2,675.68
2,724.50
48.56
5.38
2,866.28
2,205.11
672.84
216.67
(57,578.90)
(43,105.29)
-
-
1,47,950.80
1,33,912.22
7,872.39
8,157.56
Figures in italics represents comparative figures of previous year.
373373
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
45. Segment reporting (Contd.)
(ii) Details of revenue by nature of business is as below:
Steel
Others
Year ended
March 31, 2018
1,19,823.05
13,193.32
1,33,016.37
(` crore)
Year ended
March 31, 2017
1,05,611.52
11,808.42
1,17,419.94
Revenue from other businesses primarily relate to ferro alloys, power, and water, town and medical services.
(iii) Details of revenue based on geographical location of customers is as below:
India
Outside India
Year ended
March 31, 2018
56,912.64
76,103.73
1,33,016.37
(` crore)
Year ended
March 31, 2017
50,982.81
66,437.13
1,17,419.94
Revenues outside India include: Asia excluding India `14,509.78 crore (2016-17: `12,573.84 crore), UK `13,789.57 crore (2016-17: `14,138.80
crore) and other European countries `39,020.03 crore (2016-17: `31,850.38 crore).
(iv) Details of non-current assets (property, plant and equipment, capital work-in-progress, intangibles and goodwill on
consolidation) based on geographical area is as below:
India
Outside India
As at
March 31, 2018
80,930.93
31,788.37
1,12,719.30
(` crore)
As at
March 31, 2017
81,097.26
26,693.42
1,07,790.68
Non-current assets outside India include: Asia excluding India `1,477.15 crore (March 31, 2017: `1,546.00 crore), UK `6,662.42 crore (March
31, 2017: `4,623.19 crore) and other European countries `17,292.55 crore (March 31, 2017: `13,918.25 crore).
Notes:
(i)
Segment performance is reviewed by the CODM on the basis of profit or loss from continuing operations before finance income/cost,
depreciation and amortisation and tax expenses. Segment results reviewed by the CODM also exclude income or expenses which are
non-recurring in nature and are classified as exceptional item. Information about segment assets and liabilities provided to the CODM,
however, include the related assets and liabilities arising on account of items excluded in measurement of segment results. Such amounts,
therefore, form part of the reported segment assets and liabilities.
(ii) No single customer represents 10% or more of the Group’s total revenue during the year ended March 31, 2018 and March 31, 2017
(iii) The accounting policies of the reportable segments are the same as of the Group’s accounting policies.
374374
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR 46. Related party transactions
The Group’s related parties primarily consists of its associates and joint ventures, Tata Sons Limited including its subsidiaries and joint
ventures. The Group’s routinely enters into transactions with these related parties in the ordinary course of business at market rates and
terms. Transactions and balances between the Company, its subsidiaries and fellow subsidiaries are eliminated on consolidation.
The following table summarises the related-party transactions and balances included in the consolidated financial statements for the year
ended/as at March 31, 2018 and March 31, 2017.
Purchase of goods
Sale of goods
Services received
Services rendered
Interest income recognised
Interest expenses recognised
Dividend paid
Dividend received
Provision for receivables recognised during the year
Management contracts
Sale of investments
Finance provided during the year
Associates
692.98
591.96
1,124.54
814.09
9.87
13.88
11.21
14.57
-
-
-
-
-
-
18.48
23.83
-
-
3.08
0.86
-
-
-
Joint
ventures
171.98
261.68
2,551.86
1,942.58
1,758.87
1,894.82
104.01
102.17
4.62
0.39
-
-
-
-
50.69
48.36
5.35
-
3.57
1.89
-
-
46.82
Tata Sons, its
subsidiaries and
joint ventures
840.61
1,055.02
482.94
190.15
66.79
111.40
1.31
0.85
-
-
19.23
16.16
295.61
236.48
10.46
0.54
-
-
186.54
131.22
(` crore)
Total
1,705.57
1,908.66
4,159.34
2,946.82
1,835.53
2,020.10
116.53
117.59
4.62
0.39
19.23
16.16
295.61
236.48
79.63
72.73
5.35
-
193.19
133.97
3,782.76
3,782.76
-
-
-
46.82
375375
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
46. Related party transactions (Contd.)
Outstanding loans and receivables
Provision for outstanding loans and receivables
Outstanding payables
Guarantees provided outstanding
Subscription to rights issue
Associates
Joint
ventures
Tata Sons, its
subsidiaries and
joint ventures
(` crore)
Total
-
7.00
-
7.00
124.62
95.19
3.39
2.98
51.16
56.52
-
-
-
-
1,267.11
1,056.44
977.80
944.66
263.32
435.89
204.51
222.56
20.54
82.03
-
-
289.25
288.21
-
-
1,412.27
1,233.66
981.19
947.64
603.73
780.62
204.51
222.56
-
-
3,420.56
-
3,420.56
-
Figures in italics represents comparative figures of previous years.
(i) The details of remuneration paid to the managerial personnel is provided in Note 31, Page 343.
During the year ended March 31, 2018, value of shares subscribed by key managerial personnel and their relatives under rights issue is
`2,87,476.00 (2016-17: Nil)
The Group paid dividend of `27,420.00 (2016-17: `21,936.00) to key managerial personnel and `3,310.00 (2016-17: `2,648.00) to
relatives of key managerial personnel during the year ended March 31, 2018.
(ii) During the year, the Group has contributed `493.14 crore (2016-17: `401.92 crore) to post employment benefit plans.
As at March 31, 2018, amount receivable from post-employment benefit funds is `302.14 crore (March 31, 2017: `259.16 crore) on account
of retirement benefit obligations paid by the Group directly.
(iii) Transactions with joint ventures have been disclosed at full value and not at their proportionate share.
376376
Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
47. On September 19 2017, the Company and Thysenkrupp AG signed a Memorandum of Understanding to create a new 50:50 joint venture.
The proposed combination of business would be formed through a non cash transaction framework, based on fair valuation where both
shareholders would contribute assets, debt and liabilities of businesses to achieve an equal shareholding in the venture. Currently due
diligence is in process and the transaction is subject to execution of final agreements and obtaining corporate authorisation including
the Company’s Board and Shareholder’s approval. Completion is also conditional on certain closing conditions including obtaining the
requisite competition and antitrust approvals.
48. The National Company Law Tribunal, New Delhi Bench, has approved the terms of the Resolution Plan submitted by the Company, to
acquire Bhushan Steel Limited (“BSL”) pursuant to a Corporate Insolvency Resolution process implemented under the Insolvency and
Bankruptcy Code 2016 (the “Resolution Plan”), and the terms of the Resolution Plan are now binding.
Pursuant to the Resolution Plan, Bamnipal Steel Limited (“BNPL”) a wholly-owned subsidiary of the Company, will subscribe to 72.65% of
the equity share capital of BSL for an aggregate amount of ₹158.89 crore and provide additional funds aggregating of ₹ 35,041.11 crores
by way of debt/convertible debt.
Upon implementation of the Resolution Plan, the Company will hold 72.65% of the paid up share capital of BSL. The remaining 27.35% of
BSL’s share capital will be held by BSL’s existing shareholders and the financial creditors who receive shares in exchange for the debt owed
to them. The funds received by BSL as debt and equity will be used to settle the debts owed to the existing financial creditors of BSL, by
payment of ₹35,200 crores.
The Competition Commission of India had earlier approved the Resolution Plan.
49. Dividend
The dividend declared by the Company is based on the profits available for distribution as reported in the Standalone financial statements
of the Company. On May 16, 2018, the Board of Directors of the Company have proposed a dividend of ₹10 per Ordinary share of ₹10 each
and ₹2.504 per partly paid Ordinary share of ₹10 each (paid up ₹2.504 per share) in respect of the year ended March 31, 2018 subject to
the approval of shareholders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of ₹1,380.30 crore
inclusive of dividend distribution tax of ₹235.55 crore.
50. Previous year figures have been recasted/restated wherever necessary.
377377
Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
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Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
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Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
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Integrated Report 1-72Statutory Reports 73-180Financial Statements 181-386
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Notes FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTSConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
Notice
388
Notice
Notice is hereby given that the 111th Annual General Meeting
of the Members of Tata Steel Limited will be held on Friday,
July 20, 2018, at 3.00 p.m. IST at the Birla Matushri Sabhagar, 19,
Sir Vithaldas Thackersey Marg, Mumbai 400 020, to transact the
following business:
Ordinary Business:
Item No. 1 – Adoption of Audited Standalone Financial Statements
To receive, consider and adopt the Audited Standalone Financial
Statements of the Company for the Financial Year ended March 31, 2018
and the Reports of the Board of Directors and the Auditors thereon.
Item No. 2 – Adoption of Audited Consolidated Financial Statements
receive, consider and adopt
To
the Audited Consolidated
Financial Statements of the Company for the Financial Year ended
March 31, 2018 and the Report of the Auditors thereon.
Item No. 3 – Declaration of Dividend
To declare dividend of:
₹10/- per fully paid Ordinary (equity) Share of face value ₹10/-
each (‘fully paid shares’) for the Financial Year 2017-18.
₹2.504 per partly paid Ordinary (equity) Share of face value ₹10/-
each (‘partly paid shares’) (paid-up ₹2.504 per share) for the
Financial Year 2017-18.
Item No. 4 – Re-Appointment of a Director
To appoint a Director in the place of Mr. N. Chandrasekaran
(DIN:00121863), who retires by rotation in terms of Section 152(6) of
the Companies Act, 2013 and, being eligible, seeks re-appointment.
Special Business:
Item No. 5 – Appointment of Mr. Saurabh Agrawal as a Director
To consider and if thought fit, to pass the following resolution as an
Ordinary Resolution:
“RESOLVED THAT Mr. Saurabh Agrawal (DIN:02144558), who was
appointed by the Board of Directors as an Additional Director of
the Company effective August 10, 2017 and who holds office up to
the date of this Annual General Meeting of the Company in terms
of Section 161 of the Companies Act, 2013 (‘Act’) and Article 121 of
the Articles of Association of the Company and who is eligible for
appointment and has consented to act as a Director of the Company
and in respect of whom the Company has received a notice in
writing from a Member under Section 160 of the Act proposing his
388388
candidature for the office of Director of the Company, be and is hereby
appointed as a Director of the Company liable to retire by rotation.”
Item No. 6 – Re-appointment of Mr. Koushik Chatterjee as
Whole Time Director designated as Executive Director and Chief
Financial Officer and payment of remuneration
To consider and if thought fit, to pass the following resolution as an
Ordinary Resolution:
“RESOLVED THAT pursuant to the provisions of Sections 196,
197, 203 and other applicable provisions, if any, read along with
Schedule V of the Companies Act, 2013, as amended (‘Act’), and
the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, as amended from time to time, the consent of
the Company be and is hereby accorded to the re-appointment and
terms of remuneration of Mr. Koushik Chatterjee (DIN:00004989) as
Whole Time Director designated as Executive Director and Chief
Financial Officer (‘ED & CFO’) of the Company for a period of five
years with effect from November 9, 2017 to November 8, 2022 upon
the terms and conditions set out in the Statement annexed to the
Notice convening the 111th Annual General Meeting, including the
remuneration to be paid in the event of loss or inadequacy of profits
in any financial year during his said tenure within the overall limits
of Section 197 of the Act with liberty to the Board of Directors (the
‘Board’ which term includes a duly constituted Committee of the
Board of Directors) to alter and vary the terms and conditions of the
said re-appointment as it may deem fit and in such manner as may
be agreed to between the Board and ED & CFO.
RESOLVED FURTHER THAT the Board be and is hereby authorised to
take all such steps as may be necessary, proper and expedient to give
effect to this Resolution.”
Item No. 7 – Ratification of Remuneration of Cost Auditors
To consider and if thought fit, to pass the following resolution as an
Ordinary Resolution:
(Audit and Auditors) Rules, 2014,
“RESOLVED THAT pursuant to Section 148 and other applicable
provisions, if any, of the Companies Act, 2013 read with the
Companies
including any
amendment, modification or variation thereof, the Company
hereby ratifies the remuneration of ₹18 lakh plus applicable taxes
and out-of-pocket expenses payable to Messrs Shome & Banerjee,
Cost Accountants (Firm Registration Number - 000001) who have
been appointed by the Board of Directors on the recommendation
of the Audit Committee, as the Cost Auditors of the Company, to
conduct the audit of the cost records maintained by the Company
as prescribed under the Companies (Cost Records and Audit) Rules,
2014, as amended, for the Financial Year ending March 31, 2019.
NoticeINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR RESOLVED FURTHER THAT the Board of Directors (the ‘Board’
which term includes a duly constituted Committee of the Board of
Directors) be and is hereby authorised to do all such acts, deeds,
matters and things as may be considered necessary, desirable and
expedient for giving effect to this Resolution and/or otherwise
considered by them to be in the best interest of the Company.”
Item No. 8 – Issue of Non-Convertible Debentures on private
placement basis not exceeding ₹12,000 crore
To consider and if thought fit, to pass the following resolution as a
Special Resolution:
“RESOLVED THAT pursuant to the provisions of Sections 23, 42,
71 and other applicable provisions, if any, of the Companies Act,
2013 (‘Act’) read with the Companies (Prospectus and Allotment
of Securities) Rules, 2014 and the Companies (Share Capital and
Debentures) Rules, 2014, including any amendment, modification or
variation thereof for the time being in force, and subject to all other
applicable regulations, rules, notifications, circulars and guidelines
prescribed by the Securities and Exchange Board of India (‘SEBI’), as
amended, including the SEBI (Issue and Listing of Debt Securities)
Regulations, 2008, as amended, the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, as amended, and the
enabling provisions of the listing agreements entered into with
the stock exchanges where the ordinary (equity) shares or other
securities of the Company are listed (the ‘Stock Exchanges’), and
subject to the applicable regulations, rules, notifications, circulars
and guidelines prescribed by the Reserve Bank of India (‘RBI’), the
Memorandum of Association and the Articles of Association of the
Company, and subject to such approvals, consents, permissions and
sanctions as may be required from the Government of India, SEBI,
RBI, the Stock Exchanges or any regulatory or statutory authority as
may be required (the ‘Appropriate Authority’) and subject to such
conditions and/or modifications as may be prescribed or imposed by
the Appropriate Authority while granting such approvals, consents,
permissions and sanctions, which may be agreed to by the Board of
Directors of the Company (hereinafter referred to as the ‘Board’ which
term shall be deemed to include any Committee(s) constituted/to be
constituted by the Board to exercise its powers including the powers
conferred by this Resolution), subject to the total borrowings of the
Company not exceeding the borrowing powers approved by the
Members from time to time under Section 180(1)(c) of the Act, the
consent of the Members of the Company be and is hereby accorded
to the Board and the Board be and is hereby authorised to create,
offer, invite for subscription, issue and allot, from time to time, in
one or more tranches and/or series, whether secured or unsecured,
cumulative or non-cumulative,
listed or unlisted, redeemable
non-convertible debentures including but not limited to bonds
and/or other debt securities, denominated in Indian rupees or any
foreign currency (‘NCDs’), aggregating to an amount not exceeding
₹12,000 crore or its equivalent in one or more currencies, at par or
at premium or at a discount, either at issue or at redemption, on
a private placement basis, during the period of one year from the
date of this Annual General Meeting or such other period as may be
permitted under the Act and other applicable laws, as the Board in
its absolute discretion deems fit and on such terms and conditions as
may be decided by the Board.
RESOLVED FURTHER THAT for the purpose of giving effect to this
Resolution, the Board be and is hereby authorised on behalf of the
Company to determine the terms of issue including the class of
investors to whom the NCDs are to be issued, time, the number of
NCDs, tranches, issue price, tenor, interest rate, premium/discount,
listing (in India or overseas) and to do all such acts, deeds, matters
and things and deal with all such matters and take all such steps as
may be necessary and to sign and execute any deeds/documents/
undertakings/agreements/papers/writings, as may be required in
this regard and to resolve and settle all questions and difficulties that
may arise at any stage from time to time.
RESOLVED FURTHER THAT the Board be and is hereby authorised to
delegate all or any of the powers conferred herein to any Committee
of Directors or any Director(s) or executive(s)/officer(s) of the
Company to do all such acts, deeds, matters and things as also to
execute such documents, writings, etc. as may be necessary to give
effect to this Resolution.”
NOTES:
(a) The Statement, pursuant to Section 102 of the Companies Act,
2013 with respect to Item Nos. 5 to 8 forms part of this Notice.
Additional information, pursuant to Regulations 26(4) and 36(3)
of the SEBI (Listing Obligations and Disclosures Requirements)
Regulations, 2015, and Secretarial Standard on General Meetings
issued by The Institute of Company Secretaries of India in
respect of Directors seeking appointment/re-appointment at the
Annual General Meeting (‘Meeting’) is furnished as annexure to
the Notice.
(b) A MEMBER ENTITLED TO ATTEND AND VOTE AT THE ANNUAL
GENERAL MEETING IS ENTITLED TO APPOINT A PROXY TO
ATTEND AND VOTE AT THE MEETING ON HIS/HER BEHALF.
SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY.
(c) Members are requested to note that a person can act as a proxy
on behalf of Members not exceeding 50 in number and holding
in the aggregate not more than 10% of the total share capital of
the Company carrying voting rights. A Member holding more
than 10% of the total share capital of the Company carrying
voting rights may appoint a single person as proxy and such
person shall not act as proxy for any other person or shareholder.
(d) The instrument of proxy, in order to be effective, must be
received at the Registered Office of the Company not less than
48 hours before the commencement of the Meeting. A Proxy
Form is annexed to this Notice. Proxies submitted on behalf
of
limited companies, societies, etc. must be supported
by an appropriate resolution or authority as applicable.
(e) Corporate members
their authorised
representatives to attend the Annual General Meeting are
intending
to send
389389
requested to send a certified copy of the Board Resolution to the
Company, authorising their representative to attend and vote on
their behalf at the Meeting.
(f ) In case of joint holders attending the Meeting, only such joint
holders who are higher in the order of the names will be entitled
to vote.
(g) Members/proxies/authorised representatives are requested to
bring the duly filled Attendance Slip enclosed herewith to attend
the Meeting.
(h) The Register of Members and Share Transfer Books of the
Company will be closed from Saturday, July 7, 2018 to Friday,
July 20, 2018 (both days inclusive) for the purpose of Annual
General Meeting and dividend (on fully paid as well as partly paid
Ordinary Shares) for Financial Year 2017-18.
(i)
If dividend on both fully paid Ordinary Shares and partly paid
Ordinary Shares (collectively ‘Ordinary Shares’) as recommended
by the Board of Directors is approved at the Meeting, payment of
such dividend will be made on and from Monday, July 23, 2018,
as under:
(n) Section 20 of the Companies Act, 2013 permits service of
documents on Members by a company through electronic mode.
Hence, in accordance with the Companies Act, 2013 read with
the Rules framed thereunder, the Integrated Report 2017-18 is
being sent through electronic mode to those Members whose
e-mail addresses are registered with the Company/Depository
Participant unless any Member has requested for a physical copy
of the Report. For Members who have not registered their e-mail
addresses, physical copies of the Integrated Report 2017-18 are
being sent by the permitted modes. Members may note that the
Integrated Report 2017-18 will also be available on the Company’s
website www.tatasteel.com
(o) Members holding shares in physical form are requested to
consider converting their holding to dematerialised form to
eliminate all risks associated with physical shares for ease of
portfolio management. Members may contact the Company or
TSR Darashaw Limited for assistance in this regard.
(p) To support the ‘Green Initiative’, Members who have not
registered their e-mail addresses are requested to register the
same with TSR Darashaw Limited/Depository Participant.
In respect of Ordinary shares held in physical form, to all those
Members whose names appear in the Company’s Register of
Members after giving effect to valid transfers in respect of
transfer requests lodged with the Company on or before the
close of business hours on Friday, July 6, 2018.
In respect of Ordinary Shares held in electronic form, to all
beneficial owners of the shares, as per details furnished by the
Depositories for this purpose, as of the close of business hours
on Friday, July 6, 2018.
Members are requested to provide Bank details to facilitate
payment of dividend, etc., either in electronic mode or for
printing on the payment instruments.
(j) Relevant documents referred to
in the Notice and the
accompanying Statement are open for inspection by Members at
the Registered Office of the Company during business hours on
all working days, up to the date of the Meeting.
Updation of Members’ Details:
The format of the Register of Members prescribed by the Ministry
of Corporate Affairs under the Companies Act, 2013 requires the
Company/Registrars and Transfer Agents to record additional details
of Members, including their Permanent Account Number details
(PAN), e-mail address, bank details for payment of dividend, etc.
Further, the Securities and Exchange Board of India has mandated
the submission of PAN by every participant in the securities market.
A form for capturing the above details is appended in the Integrated
Report 2017-18. Members holding shares in physical form are
requested to submit the filled-in form to the Company or its Registrars
and Transfer Agents. Members holding shares in electronic form
are requested to submit the details to their respective Depository
Participants.
Process and manner for voting through electronic means:
(k) Members desiring any information as regards the Accounts are
requested to write to the Company at an early date so as to
enable the Management to keep the information ready at the
Meeting.
1.
(l)
As per the provisions of the Companies Act, 2013, facility for
making nomination is available to the Members in respect of the
shares held by them. Nomination forms can be obtained from the
Company’s Registrars and Transfer Agents by Members holding
shares in physical form. Members holding shares in electronic
form may obtain Nomination forms from their respective
Depository Participant.
(m) The attention of Members is particularly drawn to the Corporate
Governance Report forming part of the Directors’ Report in
respect of unclaimed and unpaid dividends and transfer of
dividends/shares to the Investor Education and Protection Fund.
390390
In compliance with Section 108 of the Companies Act, 2013,
Rule 20 of the Companies (Management and Administration)
Rules, 2014 and Regulation 44 of the Securities and Exchange
Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015, each as amended from time to time and the
Secretarial Standard on General Meetings (‘SS-2’) issued by
The Institute of Company Secretaries of India, the Company is
pleased to provide to its Members the facility to cast their votes
electronically, through e-voting services provided by National
Securities Depository Limited (‘NSDL’), on resolutions set forth in
this Notice. The Members may cast their votes using an electronic
voting system from a place other than the venue of the Annual
General Meeting (‘remote e-voting’) and the services will be
provided by NSDL. Instructions for remote e-voting (including
process and manner of e-voting) are given herein below. The
NoticeINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
resolutions passed by remote e-voting are deemed to have
been passed as if they have been passed at the Annual General
Meeting. The Notice of the Annual General Meeting indicating
the instructions of remote e-voting process along with printed
Attendance Slip and Proxy Form can be downloaded from the
NSDL’s website www.evoting.nsdl.com or the Company’s website
www.tatasteel.com
2.
The facility for voting through electronic voting system or ballot
paper shall be made available at the Annual General Meeting
and the Members (including proxies) attending the Meeting
who have not cast their vote by remote e-voting shall be able to
exercise their right to vote at the Annual General Meeting.
3.
Members who have cast their vote by remote e-voting prior to
the Annual General Meeting may attend the Meeting but shall
not be entitled to cast their vote again.
The process and manner for remote e-voting are as under:
A.
i.
ii.
In case a Member receives an e-mail from NSDL (for Members
whose e-mail addresses are registered with the Company/
Depository Participant(s)):
Open the e-mail and also open PDF file namely ‘TSL remote
e-voting.pdf’ with your 8 digit Client ID for NSDL account, last 8
digits of Client ID for CDSL account or Folio No. for shares held in
physical form, as password. The said PDF file contains your User
ID and password/PIN for remote e-voting. Please note that the
password is an ‘initial password’.
NOTE: Shareholders already registered with NSDL for e-voting
will not receive the PDF file ‘TSL remote e-voting.pdf’. They can
use their existing password to log in and cast their vote.
the
internet browser and
Open
following
URL: https://www.evoting.nsdl.com/ The browser may be
accessed either on computer or mobile.
type
the
iii. Click on Shareholder’s section – Login
iv. A new screen will open. Enter your User ID, your Password and a
Verification Code as shown on the screen. Alternatively, if you are
already registered for NSDL e-services i.e. IDeAS, you can log-in
at https://eservices.nsdl.com with your existing IDeAS login and
password for casting your vote electronically.
NOTE: Shareholders who have forgotten the User Details/
Password can use ‘Forgot User Details/Password?’ (who are
holding shares in Demat account with NSDL or CDSL) or ‘Physical
User Reset Password?’ (who are holding physical shares) option
available on www.evoting.nsdl.com If the Shareholder is still
unable to get the password by aforesaid options, the Shareholder
can send a request to evoting@nsdl.co.in mentioning his/her
Demat account number/folio number, PAN, name and registered
address.
In case Shareholders are holding shares in demat mode
with NSDL, User ID is the combination of 8 character DPID +
8 character Client ID.
Example: If your DP ID is IN300*** and Client ID is 12******
then your User ID is IN300***12******
In case Shareholders are holding shares in demat mode with
CDSL, User ID is the combination of 16 digit Beneficiary ID.
Example: If your Beneficiary ID is 12************** then your
User ID is 12**************
In case Shareholders are holding shares in physical mode,
User ID is the combination of EVEN No. + Folio No.
Example: If EVEN is 108384 (fully paid shares) and Folio is
S1******** then User ID is 108384S1******** and,
If EVEN is 108385 (partly paid shares) and Folio is PV********
then User ID is 108385PV********
v.
If you are logging-in for the first time, please enter the User ID
and password provided in the PDF file attached with the e-mail
as initial password. Click Login. If your e-mail-id is not registered,
initial password will be communicated on your registered
address.
vi. The Password Change Menu will appear on your screen. Change
the password/PIN with new password of your choice, making
sure that it contains a minimum of eight digits or characters or a
combination of both.
vii. Please take utmost care to keep your password confidential.
Login to the e-voting website will be disabled upon five
unsuccessful attempts to key in the correct password. In such
an event, you will need to go through the ‘Forgot User Details/
Password?’ or ‘Physical User Reset Password?’ option available on
www.evoting.nsdl.com to reset the password. After entering your
password, tick on Agree to ‘Terms and Conditions’ by selecting on
the check box. Now click on the ‘Log in’ button. Home page of
remote e-voting will open.
viii. Once the remote e-voting home page opens, click on remote
e-voting > Active e-Voting Cycles.
ix. Select ‘EVEN’ (E-Voting Event Number) of Tata Steel Limited
which is 108384 for fully paid Ordinary Shares and 108385 for
partly paid Ordinary Shares. Now you are ready for remote
e-voting as Cast Vote page opens.
x.
Cast your vote by selecting appropriate option and click on
‘Submit’ and also ‘Confirm’ when prompted.
xi. Upon confirmation, the message ‘Vote cast successfully’ will be
displayed. You can take print out of the same by clicking on the
print option on the confirmation page.
xii. Once the vote on the resolution is cast, the Member shall not be
allowed to change it subsequently.
xiii. Institutional Shareholders (i.e., other than individuals, HUF, NRI,
etc.) are required to send scanned copy (PDF/JPG format) of the
relevant Board Resolution/Authority
letter, etc., together with
attested specimen signature of the duly authorised signatory(ies)
who is/are authorised to vote, to the Scrutiniser through e-mail to
tsl.scrutinizer@gmail.com with a copy marked to evoting@nsdl.co.in
on or before the closing of e-voting.
391391
In case a Member receives physical copy of the Notice of
Annual General Meeting (for Members whose e-mail addresses
are not registered with the Company/Depository Participant(s)
or requesting physical copy):
(Membership No. FCS 8331) of M/s Parikh & Associates, Practising
Company Secretaries, as the Scrutiniser to scrutinise the remote
e-voting process as well as voting at the Annual General Meeting
in a fair and transparent manner.
B.
i.
ii.
Initial password is provided in the enclosed Attendance Slip(s)
along with EVEN (E-Voting Event Number), User ID and password.
Please follow all steps from SI. No. (ii) to SI. No. (xiii) as above in (A),
to cast your vote.
Other Instructions:
i.
ii.
In case of any queries, you may refer the Frequently Asked
Questions (FAQs) for Shareholders and User Manual on E-Voting
System for Shareholders, available at the ‘downloads’ section of
www.evoting.nsdl.com or call on toll free no.: 1800-222-990 or
send a request at evoting@nsdl.co.in
The remote e-voting period commences on Monday, July 16, 2018
(9.00 a.m. IST) and ends on Thursday, July 19, 2018 (5.00 p.m. IST).
During this period, Members of the Company holding shares either
in physical form or in dematerialised form, as on the cut-off date
of Friday, July 13, 2018, may cast their vote by remote e-voting.
The remote e-voting module shall be disabled by NSDL for voting
thereafter. Once the vote on a resolution is cast by the Member, the
Member shall not be allowed to change the vote subsequently.
iii. You can also update your mobile number and e-mail address in
the user profile details of the folio which may be used for sending
future communication(s).
iv. The voting rights of Members shall be in proportion to their
share of the paid-up equity share capital of the Company as on
the cut-off date i.e Friday, July 13, 2018 and as per the Register of
Members of the Company.
v.
Any person, who acquires shares of the Company and
becomes a Member of the Company after dispatch of the
Notice of Annual General Meeting and holding shares as of the
cut-off date, i.e Friday, July 13, 2018 may obtain the login ID
and password by sending a request at evoting@nsdl.co.in or
csg-unit@tsrdarashaw.com (RTA e-mail). However, if you are
already registered with NSDL for remote e-voting then you can
use your existing User ID and password for casting your vote. If
you have forgotten your password, you can reset your password
by using ‘Forgot User Details/Password?’ or ‘Physical User Reset
Password’ option available on www.evoting.nsdl.com or contact
NSDL at the following Toll Free No.: 1800-222-990 or e-mail at
evoting@nsdl.co.in
vi. Please note, only a person whose name is recorded in the Register
of Members or in the Register of Beneficial Owners maintained by
the depositories as on the cut-off date shall be entitled to avail
the facility of voting, either through remote e-voting or voting at
the Annual General Meeting through e-voting or ballot paper.
vii. The Board of Directors has appointed Mr. P. N. Parikh
(Membership No. FCS 327) or failing him Mr. Mitesh Dhabliwala
392392
viii. At the Annual General Meeting, at the end of the discussion
of the resolutions on which voting is to be held, the Chairman
shall, with the assistance of the Scrutiniser, allow voting for all
those Members who are present but have not cast their vote
electronically using the remote e-voting facility.
ix. The Scrutiniser shall immediately after the conclusion of voting
at the Annual General Meeting, first count the votes cast at
the Annual General Meeting, thereafter unblock the votes
cast through remote e-voting in the presence of at least two
witnesses not in the employment of the Company and make, not
later than 48 hours of conclusion of the Meeting, a consolidated
Scrutiniser’s Report of the total votes cast in favour or against, if
any, to the Chairman or a person authorised by him in writing
who shall countersign the same.
x.
The Chairman or a person authorised by him in writing shall
declare the result of voting forthwith.
xi. The results declared along with the Scrutiniser’s Report shall be
placed on the website of the Company www.tatasteel.com and
on the website of NSDL www.evoting.nsdl.com immediately
after the result is declared by the Chairman or any other person
authorised by the Chairman and the same shall be communicated
to BSE Limited and National Stock Exchange of India Limited,
where the shares of the Company are listed. The results shall also
be displayed on the notice board at the Registered Office of the
Company.
xii. In case of any grievances with respect to the facility for voting
by electronic means, Members are requested to contact
Mr. Amit Vishal, Senior Manager at amitv@nsdl.co.in or
evoting@nsdl.co.in or on (+91 22 2499 4360/1800-222-990)
or write at NSDL, Trade World, ‘A’ wing, 4th Floor, Kamala Mills
Compound, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013.
By Order of the Board of Directors
sd/-
PARVATHEESAM K.
Company Secretary
ACS: 15921
Mumbai
May 16, 2018
Registered Office:
Bombay House, 24, Homi Mody Street,
Fort, Mumbai - 400 001
Tel: +91 22 6665 8282 Fax: +91 22 6665 7724
CIN: L27100MH1907PLC000260
Website: www.tatasteel.com
E-mail: cosec@tatasteel.com
NoticeINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Statement pursuant to Section 102(1) of the
Companies Act, 2013, as amended (‘Act’)
The following Statement sets out all material facts relating to Item
Nos. 5 to 8 mentioned in the accompanying Notice.
Item No. 5:
Based on the recommendation of the Nomination and Remuneration
Committee, the Board of Directors (‘Board’), appointed Mr. Saurabh
Agrawal as an Additional (Non-Executive) Director of the Company,
liable to retire by rotation, on August 7, 2017 effective August 10, 2017.
Pursuant to the provisions of Section 161 of the Act and Article 121
of the Articles of Association of the Company, Mr. Saurabh Agrawal
will hold office up to the date of the ensuing Annual General Meeting
(‘AGM’) and is eligible to be appointed as a Director of the Company.
The Company has, in terms of Section 160 of the Act, received a
notice in writing, from a member, proposing the candidature of
Mr. Agrawal for the office of Director. Mr. Agrawal once appointed will
be liable to retire by rotation and will be subject to the Company’s
Policy on Retirement of Directors.
The Company has received from Mr. Agrawal (i) Consent in writing
to act as Director in Form DIR-2 pursuant to Rule 8 of the Companies
(Appointment and Qualification of Directors) Rules, 2014 and
(ii) Intimation in Form DIR-8 in terms of the Companies (Appointment
and Qualification of Directors) Rules, 2014, to the effect that he is not
disqualified under Section 164(2) of the Act.
The profile and specific areas of expertise of Mr. Agrawal are provided
as annexure to this Notice.
None of the Directors and Key Managerial Personnel of the Company
or their respective relatives, except Mr. Agrawal, to whom the
resolution relates, is concerned or interested in the Resolution
mentioned at Item No. 5 of the Notice.
The Board recommends the resolution set forth in Item No. 5 for the
approval of the Members.
Item No. 6:
Mr. Koushik Chatterjee was appointed as the Whole Time
Director and Group Chief Financial Officer of your Company
for a period of five years with effect from November 9, 2012 till
November 8, 2017 and the said appointment was approved by the
Shareholders at the Annual General Meeting of the Company held on
August 14, 2013. Based on the recommendation of the Nomination
and Remuneration Committee (‘NRC’), the Board of Directors (‘Board’),
on October 30, 2017, re-appointed Mr. Chatterjee as a Whole Time
Director, designated as Executive Director and Chief Financial Officer
(‘ED & CFO’) for a further period of five years with effect from
November 9, 2017 to November 8, 2022, subject to approval of the
Shareholders.
on the Board in 2012 as Executive Director. During his tenure in the
Company, he has led the Company’s finance function and provided
financial stewardship in the areas of financial strategy, large and
complex financing in India and overseas, mergers and acquisitions,
risk management, controlling, investor relations and taxation. He has
also been deeply involved in portfolio restructuring and turnaround
situations, public policy on financial governance and pension
restructuring in the UK.
On the recommendations of the NRC, the Board at its meeting held
on October 30, 2017 and May 16, 2018 approved the terms and
conditions of Mr. Koushik Chatterjee’s re-appointment, subject to the
approval of the Shareholders.
The main terms and conditions relating to the re-appointment of
Mr. Koushik Chatterjee as ED & CFO are as follows:
(1) Period: For a period of 5 years, i.e from November 9, 2017 to
November 8, 2022.
(2) Nature of Duties: The ED & CFO shall devote his whole time
and attention to the business of the Company and perform such
duties as may be entrusted to him by the Board and/or CEO &
Managing Director of Tata Steel Limited from time to time and
separately communicated to him and exercise such powers as
may be assigned to him, subject to the superintendence, control
and directions of the Board and/or CEO & Managing Director of
Tata Steel Limited in connection with and in the best interests of
the business of the Company and the business of one or more of
its associated companies and/or subsidiaries, including performing
duties as assigned to the ED & CFO from time to time by serving on
the boards of such associated companies and/or subsidiaries or any
other executive body or any committee of such a company.
(3) A. Remuneration:
a) Basic Salary
Current Basic Salary of `10,25,000/- per month, up to a maximum
of `15,00,000/- per month, with annual increments effective April 1,
each year, as may be decided by the Board, based on merit and taking
into account the Company’s performance for the year.
b) Benefits, perquisites and allowances
Details of Benefits, Perquisites and Allowances are as follows:
i.
Rent-free residential accommodation (furnished or otherwise)
with the Company bearing the cost of repairs, maintenance
and utilities (e.g. gas, electricity and water charges) for the said
accommodation.
OR
House Rent, House maintenance and utility allowances
aggregating 85% of Basic Salary.
Mr. Chatterjee joined the Company in 1995. He was appointed as the
Vice President Finance in 2004, Group CFO in 2008 and appointed
ii.
Hospitalisation, Transport, Telecommunication and other
facilities:
393393
a. Hospitalisation and major medical expenses for self, spouse
and dependent parents and children;
may be agreed to between the Board and the ED & CFO, subject
to such approvals as may be required.
b. Car, with driver provided, maintained by the Company for
official and personal use; and
c.
Telecommunication facilities including broadband, internet, fax.
iii. Other perquisites and allowances as given below, subject to
maximum of 55% limit of the annual basic salary.
The categories of perquisites/allowances to be included within
the 55% limit would be-
a. Monthly Supplementary Allowances/Personal Accident
Insurance/Club Membership fees – 38.34%
b. Leave Travel Concession/Allowance – 8.33%
c. Medical Allowance – 8.33%
iv. Contribution to Provident Fund, Superannuation Fund and
Gratuity Fund, as per the Rules of the Company.
v.
Mr. Chatterjee will be entitled to leave in accordance with the
rules of the Company. Privilege leave earned but not availed by
him would be encashable in accordance with the Rules of the
Company.
c) Bonus/performance linked incentive/commission
Mr. Chatterjee shall be entitled to bonus/performance linked
incentive, Long Term Incentive Plan (‘LTIP’) and/or commission
based on certain performance criteria laid down by the Board and/
or Committee thereof, subject to overall ceilings stipulated in Section
197 of the Companies Act, 2013. The specific amount of bonus/
performance linked incentive, LTIP and/or Commission will be based
on performance as evaluated by the Board or a Committee thereof,
duly authorised in this behalf.
B. Minimum Remuneration:
Notwithstanding anything to the contrary herein contained where
in any financial year during the currency of the tenure of Mr. Koushik
Chatterjee, the Company has no profits or its profits are inadequate,
the Company will pay him remuneration by way of salary, benefits
and perquisites and allowances, bonus/performance
linked
incentive, Long Term Incentive Plan as approved by the Board.
(4) Other Terms of Appointment:
i.
ii.
The ED & CFO, so long as he functions as such, undertakes not to
become interested or otherwise concerned, directly or through
his spouse and/or children, in any selling agency of the Company.
The terms and conditions of the re-appointment of the ED & CFO
and/or this Agreement may be altered and varied from time to
time by the Board as it may, in its discretion deem fit, irrespective
of the limits stipulated under Schedule V to the Act or any
amendments made hereafter in this regard in such manner as
iii. The appointment may be terminated earlier, without any
cause, by either Party by giving to the other Party six months’
notice of such termination or the Company paying six months’
remuneration which shall be limited to provision of Salary,
Benefits, Perquisites, Allowances and any pro-rated Incentive
Remuneration (paid at the discretion of the Board), in lieu of such
notice.
iv. The employment of the ED & CFO may be terminated by the
Company without notice or payment in lieu of notice:
a. if the ED & CFO is found guilty of any gross negligence, default
or misconduct in connection with or affecting the business
of the Company or any subsidiary or associated company to
which he is required by the Agreement to render services; or
b. in the event of any serious or repeated or continuing breach
(after prior warning) or non-observance by the ED & CFO of
any of the stipulations contained in the Agreement; or
c.
in the event the Board expresses its loss of confidence in the
ED & CFO.
v.
In the event the ED & CFO is not in a position to discharge his
official duties due to any physical or mental incapacity, the Board
shall be entitled to terminate his contract on such terms as the
Board may consider appropriate in the circumstances.
vi. Upon the termination by whatever means of ED & CFO’s
employment under the Agreement:
a. He shall immediately cease to hold offices held by him in
any holding company, subsidiaries or associate companies
without claim for compensation for loss of office by virtue of
Section 167(1)(h) of the Act and shall resign as trustee of any
trusts connected with the Company.
b. He shall not, without the consent of the Board and/or the
CEO & Managing Director of Tata Steel Limited, at any time
thereafter represent himself as connected with the Company
or any of its subsidiaries and associated companies.
vii. All Personnel Policies of the Company and the related rules
which are applicable to other employees of the Company shall
also be applicable to the ED & CFO unless specifically provided
otherwise.
viii. If and when the Agreement expires or is terminated for any
reason whatsoever, Mr. Chatterjee will cease to be the ED & CFO
and also cease to be a Director of the Company. If at any time,
the ED & CFO ceases to be a Director of the Company for any
reason whatsoever, he shall cease to be the ED & CFO and the
Agreement shall forthwith terminate. If at any time, the ED & CFO
ceases to be in the employment of the Company for any reason
whatsoever, he shall cease to be a Director and ED & CFO of the
Company.
394394
NoticeINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR
ix. The terms and conditions of re-appointment of ED & CFO
also include clauses pertaining to adherence to the Tata
Code of Conduct, protection and use of intellectual property,
non-competition, non-solicitation post termination of agreement
and maintenance of confidentiality.
The profile and specific areas of expertise of Mr. Chatterjee are
provided as annexure to this Notice.
None of the Directors and Key Managerial Personnel of the Company
or their respective relatives, except Mr. Chatterjee, to whom the
resolution relates, is concerned or interested in the Resolution
mentioned at Item No. 6 of the Notice.
In compliance with the provisions of Sections 196, 197, 203 and other
applicable provisions of the Act, read with Schedule V to the Act,
the approval of the Members is sought for the re-appointment and
terms of remuneration of Mr. Koushik Chatterjee as Whole Time
Director designated as Executive Director and Chief Financial Officer as
set out above.
The Board recommends the resolution set forth in Item No. 6 for the
approval of the Members.
Item No. 7:
The Company is required under Section 148 of the Act read with the
Companies (Cost Records and Audit) Rules, 2014, as amended from
time to time, to have the audit of its cost records for products covered
under the Companies (Cost Records and Audit) Rules, 2014 conducted
by a Cost Accountant in Practice. The Board of Directors of the Company
has on the recommendation of the Audit Committee approved the
appointment and remuneration of Messrs Shome & Banerjee, Cost
Accountants as the Cost Auditor of the Company for the Financial
Year 2018-19.
In accordance with the provisions of Section 148(3) of the Act read
with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the
remuneration payable to the Cost Auditors as recommended by the
Audit Committee and approved by the Board of Directors has to be
ratified by the Members of the Company. Accordingly, the consent of
the Members is sought for passing an Ordinary Resolution as set out
at Item No. 7 of the Notice for ratification of the remuneration payable
to the Cost Auditors of the Company for the Financial Year ending
March 31, 2019.
None of the Directors and Key Managerial Personnel of the Company
or their respective relatives is concerned or interested in the
Resolution mentioned at Item No. 7 of the Notice.
The Board recommends the resolution set forth in Item No. 7 for the
approval of the Members.
Item No. 8:
Over the last few years, the Company has been investing in its
steelmaking facilities in India while continuing to upgrade its
facilities in Europe and South-East Asia. Following the successful
implementation of Phase I of the Kalinganagar Project, the Company
would now pursue the next phase of expansion of capacity in
Kalinganagar by 5 MnTPA from 3 MnTPA to 8 MnTPA. The Company
is also exploring options for inorganic growth and has submitted
resolution plans in respect of certain companies undergoing the
corporate insolvency resolution process under the Insolvency and
Bankruptcy Code. The Company was declared as the successful
resolution applicant by the Committee of Creditors of Bhushan Steel
Limited (‘BSL’) on March 22, 2018, subject to obtaining necessary
regulatory approvals, including approval from the National Company
Law Tribunal (‘NCLT’). Further, the NCLT (Principal Bench, New Delhi)
vide its Order dated May 15, 2018 has approved the Resolution
Plan submitted by the Company for acquiring the controlling stake
of BSL. In light of the organic and inorganic growth strategy of the
Company, the Company would require significant financial capital. In
line with past strategy, the Company will seek to balance its growth
ambitions with its goal of having a healthy balance sheet. Moreover,
organic growth projects will be phased keeping in mind the financial
health of the Company.
As a step towards improving its capital structure, the Company
recently completed a Rights Issue of Equity Shares to its existing
Shareholders. The Company also seeks to continuously optimise
its borrowings by ensuring they are aligned in terms of quantum,
risk, maturity and cost with its earnings profile. The Company also
opportunistically taps debt capital markets from time to time to meet
a portion of its borrowing needs, which often presents windows of
opportunity to raise capital that is cost-effective, has better terms and
can help lengthen its maturity profile. The flexibility to raise capital
through issue of market instruments becomes more important in
view of the changing regulatory landscape, with the guidelines
released by central bank requiring large borrowers to meet a portion
of incremental funding needs through market mechanism.
The provisions of Sections 23, 42 and 71 of the Act read with Rule
14(2)(a) of the Companies (Prospectus and Allotment of Securities)
Rules, 2014 (the ‘PAS Rules’), provide that a company shall not
make a private placement of its securities unless the proposed
offer of securities or invitation to subscribe to the securities has
been previously approved by the Members of the Company by a
special resolution. The second proviso to Rule 14(2)(a) of the PAS
Rules provides that in case of an offer or invitation to subscribe to
Non-Convertible Debentures (‘NCDs’) on private placement basis, the
Company can obtain prior approval by means of a special resolution
once a year for all offers or invitations for such NCDs during the year.
The pricing for any instrument which may be issued by the Company
on the basis of the Resolution set out at Item No. 8 of the Notice
will be done by the Board (which term includes a duly constituted
Committee of the Board of Directors) in accordance with applicable
laws including the SEBI (Issue and Listing of Debt Securities)
Regulations, 2008 and foreign exchange regulations, as may be
applicable.
395395
The Members of the Company through the resolution passed by
Postal Ballot on August 1, 2014 had approved the borrowing limits
pursuant to the provisions of the Section 180(1)(c) of the Act of
₹70,000 crore or the aggregate of the paid-up capital and free
reserves of the Company, whichever is higher. As on March 31, 2018,
the net worth of the Company is ₹63,790 crore and the total debt
of the Company is ₹28,126 crore including outstanding NCDs of
₹10,346 crore.
Accordingly, the Company is seeking approval from its Members
under Sections 23, 42, 71 and other applicable provisions, if any,
of the Act, read together with the PAS Rules and Companies
(Share Capital and Debentures) Rules, 2014, as amended, to issue
securities, as set out in the Special Resolution at Item No. 8 of the
Notice, not exceeding ₹12,000 crore through issuance of NCDs in the
international and/or domestic capital markets, within a period of one
year from the date of the 111th Annual General Meeting.
None of the Directors and Key Managerial Personnel of the Company
or their respective relatives is concerned or interested in the
Resolution mentioned at Item No. 8 of the Notice.
The Board recommends the resolution set forth in Item No. 8 for the
approval of the Members.
By Order of the Board of Directors
sd/-
PARVATHEESAM K.
Company Secretary
ACS: 15921
Mumbai
May 16, 2018
Registered Office:
Bombay House, 24, Homi Mody Street,
Fort, Mumbai - 400 001
Tel: +91 22 6665 8282 Fax: +91 22 6665 7724
CIN: L27100MH1907PLC000260
Website: www.tatasteel.com
E-mail: cosec@tatasteel.com
396396
NoticeINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Annexure to the Notice
Details of the Directors seeking appointment/re-appointment in the forthcoming Annual General Meeting
[Pursuant to Regulations 26(4) and 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
and Secretarial Standard on General Meetings]
Profile of Mr. Natarajan Chandrasekaran
Mr. Natarajan Chandrasekaran
(54)
was appointed as a Member of the
Board effective January 13, 2017 and
as Chairman of the Board effective
February 7, 2017.
Mr. Chandrasekaran is the Executive
Chairman of Tata Sons Limited and
the former Chief Executive Officer and
Managing Director of Tata Consultancy
IT
Services (‘TCS’), a
leading global
solution and consulting firm, a position he had held since 2009.
Mr. Chandrasekaran holds a Bachelor’s degree in Applied Science. He
also holds a Master’s degree in Computer Applications from Regional
Engineering College, Trichy, Tamil Nadu, India.
He was also appointed as a director on the board of India’s Central
Bank, the Reserve Bank of India in 2016. He has served as the
chairperson of IT Industry Governors at the World Economic
Forum, Davos, in 2015-16. He has been playing an active role in the
Indo-US and India-UK CEO Forums. He is also part of India’s business
taskforces for Australia, Brazil, Canada, China, Japan and Malaysia.
He served as the chairman of Nasscom, the apex trade body for IT
services firms in India in 2012-13 and continues to be a member of its
governing executive council.
Mr. Chandrasekaran has received several awards and recognition in
the business community. He was honoured with the ’Business Leader
Award’ at the ET Awards for Corporate Excellence 2016. He was also
awarded Qimpro Platinum Standard Award 2015 (business) and
Business Today’s Best CEO 2015 (IT and ITEs). He was voted the ‘Best
CEO’ for the fifth consecutive year by the Institutional Investor’s 2015
Annual All-Asia Executive Team rankings. During 2014, he was voted
as one of CNBC TV 18 Indian Business Icons. He was also awarded
CNN-IBN
in the business category.
Mr. Chandrasekaran was presented with the ’Best CEO for 2014’
award by Business Today for the second consecutive year. He has also
received the Medal of the City of Amsterdam - Frans Banninck Coqc
- in recognition of his endeavour to promote trade and economic
relations between Amsterdam and India.
Indian of the Year 2014
Mr. Chandrasekaran was conferred with an honorary doctorate
by JNTU, Hyderabad, India (2014). He has received an honorary
doctorate
from Nyenrode Business Universiteit, Netherland’s
top private business school (2013). He has also been conferred
honorary degrees by many Indian universities such as the Gitam
University, Visakhapatnam, Andhra Pradesh (2013); KIIT University,
Bhubaneswar, Odisha (2012) and the SRM University, Chennai, Tamil
Nadu (2010).
Particulars of experience, attributes or skills that qualify the
candidate for Board membership
Under the leadership of Mr. Chandrasekaran, TCS became one of the
largest private sector employer in India with the highest retention
rate in a globally competitive industry. Under Mr. Chandrasekaran’s
leadership, TCS was rated as the world’s most powerful brand in IT
services in 2015 and was recognised as a Global Top Employer by
the Top Employers Institute across 24 countries. A technopreneur
known for his ability to make big bets on new technology,
Mr. Chandrasekaran shaped TCS’s strong positioning in the emerging
digital economy with a suite of innovative digital products and
platforms for enterprises, some of which have since scaled into
sizeable new businesses.
Mr. Chandrasekaran having been the CEO of TCS brings with him
valuable experience in managing the issues faced by large and
complex organisations. The Company and the Board will immensely
benefit by
leadership capability,
general business acumen and knowledge of complex financial and
operational issues faced by the Company.
leveraging his demonstrated
Mr. Chandrasekaran also brings rich experience in various areas of
business, technology, operations, societal and governance matters.
Board Meeting Attendance and Remuneration
During the year, Mr. Natarajan Chandrasekaran attended all seven
Board Meetings that were held. Details regarding the compensation
is provided in the Directors’ Report and in the Corporate Governance
Report forming part of the Directors’ Report.
Bodies Corporate (other than Tata Steel Limited) in which
Mr. Natarajan Chandrasekaran holds Directorships and
Committee Membership
Directorships
Tata Sons Limited
Tata Consultancy Services Limited
Tata Motors Limited
The Indian Hotels Company Limited
The Tata Power Company Limited
TCS Foundation (Section 8 company)
Tata Global Beverages Limited
Jaguar Land Rover Automotive Plc
Reserve Bank of India
397397
Chairperson of Board Committees
Profile of Mr. Saurabh Agrawal
Tata Consultancy Services Limited
Corporate Social Responsibility Committee
Executive Committee of the Board
The Tata Power Company Limited
Executive Committee of the Board
Member of Board Committees
Tata Sons Limited
Nomination and Remuneration Committee
Special Committee
Tata Consultancy Services Limited
Nomination and Remuneration Committee
Tata Motors Limited
Nomination and Remuneration Committee
The Indian Hotels Company Limited
Nomination and Remuneration Committee
The Tata Power Company Limited
Nomination and Remuneration Committee
Tata Global Beverages Limited
Nomination and Remuneration Committee
Reserve Bank of India
Human Resource Management Sub-committee
Jaguar Land Rover Automotive Plc
Nomination and Remuneration Committee
Disclosure of Relationship inter-se between Directors, Manager
and other Key Managerial Personnel
is no
inter-se
There
relationship between Mr. Natarajan
Chandrasekaran, other Members of the Board and Key Managerial
Personnel of the Company.
Shareholding in the Company
Mr. Natarajan Chandrasekaran does not hold any Equity Shares of
the Company.
398398
Mr. Saurabh Agrawal (48) was appointed
as a Member of the Board effective
August 10, 2017.
Mr. Agrawal joined Tata Sons Limited
in June 2017 as Group Chief Financial
Officer and was appointed as the
Executive Director of Tata Sons
in
November 2017. Prior to joining the
Tata Group, he was the Head of Strategy
at the Aditya Birla Group. In a career spanning over two decades
Mr. Agrawal has also been the Head of Corporate Finance Business of
Standard Chartered Bank in South Asia and the Head of Investment
Banking for India in Bank of America Merrill Lynch.
Mr. Agrawal holds a graduate degree in chemical engineering, with
honours, from the Indian Institute of Technology, Roorkee and holds
a Post-Graduate Diploma in Management from Indian Institute of
Management, Calcutta.
Particulars of experience, attributes or skills that qualify the
candidate for Board membership
Mr. Agrawal has a wide-ranging experience in strategy and capital
markets where he had a ringside view of the evolution of Indian
economy since the mid-90s. He has advised clients on transactions
valued more than US$16 billion. In addition, Mr. Agrawal has helped
various large Indian and Global corporates raise over US$10 billion
from the capital markets.
Mr. Agrawal has experience across strategy and execution, covering
a wide range of industries. Mr. Agrawal’s leadership capabilities, his
rich experience in portfolio optimisation, investment management
and capital allocation and his deep understanding of the complex
strategic and financial issues will strengthen the Board’s collective
vision, knowledge, capabilities and experience.
Board Meeting Attendance and Remuneration
During the year, Mr. Agrawal attended four Board Meetings held post
his appointment as Director. Details regarding the compensation is
provided in the Directors’ Report and in the Corporate Governance
Report forming part of the Directors’ Report.
Bodies Corporate (other than Tata Steel Limited) in which
Mr. Saurabh Agrawal holds Directorships and Committee
Membership
Directorships
Tata Sons Limited
Tata Capital Limited
Tata AIA Life Insurance Company Limited
Tata AIG General Insurance Company Limited
Tata Teleservices Limited
NoticeINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR The Tata Power Company Limited
Tata Sky Limited
Candid Fruits Private Limited
Chambal Natural Fruits Private Limited
Gradis Trading Private Limited
Natural Fruits Private Limited
Natural Whole Fruits Private Limited
Chairperson of Board Committees
Tata Capital Limited
Risk Management Committee
Finance and Asset Liability Supervisory Committee
Tata Teleservices Limited
Audit Committee
Nomination and Remuneration Committee
Finance Committee
Tata AIG General Insurance Company Limited
Nomination and Remuneration Committee
Member of Board Committees
Tata Capital Limited
Nomination and Remuneration Committee
Tata Teleservices Limited
Share/Warrant/Debenture Allotment & Transfer Committee
Network and Technical Committee
Tata AIA Life Insurance Company Limited
Investment Committee
Nomination and Remuneration Committee
Audit Committee
With Profits Committee
The Tata Power Company Limited
Audit Committee
Tata Sky Limited
Nomination and Remuneration Committee
Tata AIG General Insurance Company Limited
Investment Committee
Disclosure of Relationship inter-se between Directors, Manager
and other Key Managerial Personnel
There is no inter-se relationship between Mr. Saurabh Agrawal,
other Members of the Board and Key Managerial Personnel of the
Company.
Shareholding in the Company
Mr. Saurabh Agrawal does not hold any Equity Shares of the Company.
Profile of Mr. Koushik Chatterjee
Mr. Koushik Chatterjee (49) was inducted
as a Whole Time Director of the Company
effective November 9, 2012
and
re-appointed as Whole Time Director
effective November 9, 2017 designated
as Executive Director and Chief Financial
Officer.
Mr. Chatterjee joined the Company in
1995 in Jamshedpur. He was transferred
to Tata Sons Limited in 1999 in the Group Executive Office. He
became General Manager - Corporate Finance, Tata Sons Limited in
2002. Mr. Chatterjee re-joined the Company on August 1, 2003 and
was appointed the Vice President (Finance) effective August 1, 2004.
He was appointed as the Group CFO in 2008 and appointed to the
Board in 2012 as Executive Director. During the last 14 years in the
Company, he has led the Company’s finance function and provided
financial stewardship in the areas of financial strategy, large and
complex financing in India and overseas, mergers and acquisitions,
risk management, controlling, investor relations and taxation. He has
also been deeply involved in portfolio restructuring and turnaround
situations, public policy on financial governance and pension
restructuring in the UK. During his tenure, Mr. Chatterjee led the
overseas acquisitions of the Company in South-East Asia and Europe.
During his tenure in the Company, he has led the Company to raise
over US$60 billion of gross capital funding including refinancing
through a variety of multi-currency instruments covering several
instrument structures
including Leveraged buyout structure,
Syndicated loans, Convertible bonds, Rupee and Dollar bonds, ECA
financing, Equity and structured equity. He provided leadership
and hands-on experience in developing M&A strategy, transaction
planning, structuring and execution planning for acquisitions with
transactions value aggregating to more than US$15 billion in India,
Europe, Canada, Africa, Thailand, Singapore and Australia. He also
steered the Company in developing and execution of a structured
divestment strategy with multiple portfolio exits aggregating over
US$3 billion.
In recent times, he led the negotiations with multiple stakeholders
including the consortium of Unions in the UK, the Government of UK,
the Pension Regulator and the British Steel Pension Scheme Trustees
for structural de-risking and delinking of the defined benefit pension
scheme from the business ensuring a sustainable future for both the
employees and the Company.
Mr. Chatterjee has been a member of the Primary Market Advisory
Committee of the SEBI and was member of the task force set up by SEBI
that drafted the Takeover Code. He was also the member of the Global
Preparers Forum, the advisory body to the International Accounting
Standards Board London. He is currently the member of International
Integrated Reporting Council, Global Task Force on Climate Related
Financial Disclosures set up by the Financial Stability Board and has
been member of several B20 Task Forces under the Chairmanship
of Turkey, China and Germany. He is a frequent speaker in various
399399
conferences in India and abroad and has been recognised as one
of India’s best CFO by several organisations like CNBC, Asiamoney,
Chartered Institute of Management Accountants UK.
Bodies Corporate (other than Tata Steel Limited) in which
Mr. Koushik Chatterjee holds Directorships and Committee
Membership
Mr. Koushik Chatterjee is an Honours Graduate in Commerce from
Calcutta University and a Fellow Member of the Institute of Chartered
Accountants of India.
Particulars of experience, attributes or skills that qualify the
candidate for Board membership:
Mr. Koushik Chatterjee has valuable experience in managing the
issues faced by large and complex corporations as a result of his
services at Tata Sons and Tata Steel.
Mr. Chatterjee brings to the Board extensive experience in the areas
of controllership, financial stewardship, business responsibility
(including re-structuring and turnaround of large organisations),
business development (mergers, acquisitions and divestments),
strategy and execution of large and complex financing, strategic
communication, risk management, crisis leadership, public affairs,
legal, compliance and governance.
Mr. Chatterjee’s experience demonstrates his leadership capability,
general business acumen and knowledge of complex financial and
operational issues that large corporations face.
By virtue of his background and experience Mr. Chatterjee has an
extraordinarily broad and deep knowledge of the steel and mining
industry. His experiences will enable him to provide the Board with
valuable insights on a broad range of business, social and governance
issues that are relevant to the Company.
His re-appointment will strengthen the Board’s knowledge,
capability, experience and execution of the Company’s strategy
Board Meeting Attendance and Remuneration
During the year, Mr. Chatterjee attended all seven Board Meetings
held. Mr. Chatterjee, being an Executive Director, was not paid any
sitting fees for attending the meetings of the Board/Committees.
Details regarding the compensation is provided in the Directors’
Report and in the Corporate Governance Report forming part of the
Directors’ Report.
Directorships
Tata Steel Europe Limited
Tata Metaliks Limited
The Tinplate Company of India Ltd
Tata Steel Special Economic Zone Limited
Tata Steel Foundation (Section 8 Company)
Dimna Steel Limited
Bistupur Steel Limited
TS Global Holdings Pte. Ltd.
TS Global Minerals Holdings Pte. Ltd.
TS Global Procurement Co. Pte. Ltd.
World Steel Association
Member of Board Committees
Tata Metaliks Limited
Nomination and Remuneration Committee
The Tinplate Company of India Ltd.
Nomination and Remuneration Committee
Tata Steel Special Economic Zone Limited
Nomination and Remuneration Committee
Tata Steel Europe Limited
Audit Committee
Executive Committee
Board Pension Committee
Disclosure of Relationship inter-se between Directors, Manager
and other Key Managerial Personnel
There is no inter-se relationship between Mr. Koushik Chatterjee,
other Members of the Board and Key Managerial Personnel of the
Company.
Shareholding in the Company
Mr. Koushik Chatterjee holds 1,531 fully paid Ordinary Shares and
105 partly paid Ordinary Shares of the Company.
400400
NoticeINTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR Route Map to the AGM Venue
Notes
Notes
Notes
To,
TSR Darashaw Limited/Depository Participant
______________________________________
______________________________________
______________________________________
I/We request you to record the following information against my/our Folio No./DP ID/Client ID:
Updation of Shareholders Information
General Information:
Folio No./DP ID/Client ID:
Name of the first named Shareholder:
PAN:*
CIN/Registration No.:*
(applicable to Corporate Shareholders)
Tel. No. with STD Code:
Mobile No.:
E-mail id:
*Self attested copy of the document(s) enclosed.
Bank Details:
IFSC:
(11 digit)
MICR:
(9 digit)
Bank A/c Type:
Bank A/c No.: *
Name of the Bank:
Bank Branch Address:
*A blank cancelled cheque is enclosed to enable verification of bank details.
I/We hereby declare that the particulars given above are correct and complete. If the transaction is delayed because of
incomplete or incorrect information, I/We would not hold the Company/RTA responsible. I/We undertake to inform any
subsequent changes in the above particulars as and when the changes take place. I/We understand that the above details shall
be maintained till I/We hold the securities under the above mentioned Folio No.
Place:
Date:
_________________________
Signature of Sole/First holder
Note:
Shareholders holding shares in physical mode and having Folio No(s) should provide the above information to our RTA,
TSR Darashaw Limited. Shareholders holding Demat shares are required to update their details with the Depositary Participant.
T HIS PA G E H AS BEE N IN TE N TIO N ALLY LEFT BLA N K
INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR
Tata Steel Limited
Registered Office: Bombay House, 24, Homi Mody Street, Fort, Mumbai - 400 001.
Tel.: +91 22 6665 8282 • Fax: +91 22 6665 7724 • Corporate Identity No.: (CIN) – L27100MH1907PLC000260
Website: www.tatasteel.com • Email: cosec@tatasteel.com
Attendance Slip
(To be presented at the entrance)
111TH ANNUAL GENERAL MEETING ON FRIDAY, JULY 20, 2018, AT 3.00 P.M. (IST)
at Birla Matushri Sabhagar,19, Sir Vithaldas Thackersey Marg, Mumbai - 400 020.
Folio No.
DP ID No.
Name of the Member:
Name of the Proxyholder:
Client ID No.
Signature:
Signature:
I hereby record my presence at the 111th Annual General Meeting of the Company held on Friday, July 20, 2018, at 3.00 p.m. IST at Birla Matushri
Sabhagar, 19, Sir Vithaldas Thackersey Marg, Mumbai – 400 020.
1. Only Member/Proxyholder can attend the Meeting.
2. Member/Proxyholder should bring his/her copy of the Integrated Report for reference at the Meeting.
Tata Steel Limited
Registered Office: Bombay House, 24, Homi Mody Street, Fort, Mumbai-400 001.
Tel.: +91 22 6665 8282 • Fax: +91 22 6665 7724 • Corporate Identity No.: (CIN) – L27100MH1907PLC000260
Website: www.tatasteel.com • Email: cosec@tatasteel.com
Proxy Form
(Pursuant to Section 105(6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014, as amended)
Name of the Member(s) :
Registered address :
E-mail Id :
Folio No./Client ID No.
DP ID No.
I/We, being the Member(s) holding
Equity Shares of Tata Steel Limited, hereby appoint
1.
Name:
Address:
2.
Name:
Address:
3.
Name:
Address:
E-mail Id:
Signature:
E-mail Id:
Signature:
E-mail Id:
Signature:
or failing him
or failing him
as my/our Proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 111th Annual General Meeting of the Company to be held
on Friday, July 20, 2018, at 3.00 p.m. IST at Birla Matushri Sabhagar, 19, Sir Vithaldas Thackersey Marg, Mumbai-400 020 and at any adjournment
thereof in respect of such Resolutions as are indicated below:
** I wish my above Proxy to vote in the manner as indicated in the box below:
Resolution
No.
Ordinary Business
Resolution
For
Against
1
Consider and adopt the Audited Standalone Financial Statements for the
Financial Year ended March 31, 2018 and the Reports of the Board of Directors
and Auditors thereon
Resolution
No.
Ordinary Business
Resolution
For
Against
2
3
4
Consider and adopt the Audited Consolidated Financial Statements for the
Financial Year ended March 31, 2018 and the Report of the Auditors thereon
Declaration of Dividend on fully paid and partly paid Ordinary Shares for
Financial Year 2017-18
Appointment of Director in place of Mr. N. Chandrasekaran (DIN: 00121863),
who retires by rotation and being eligible, seeks re-appointment
Special Business
5
6
7
8
Appointment of Mr. Saurabh Agrawal (DIN: 02144558) as a Director
Re-Appointment of Mr. Koushik Chatterjee (DIN: 00004989) as Whole Time
Director designated as Executive Director and Chief Financial Officer and
payment of remuneration
Ratification of remuneration of Messrs Shome & Banerjee, Cost Auditors of the
Company
Issue of Non-Convertible Debentures on private placement basis not exceeding
`12,000 crore
Signed this
day of
2018
Affix
Revenue
Stamp
Signature of Shareholder
Signature of Proxyholder(s)
NOTES:
1.
** 2.
3.
4.
This Form of Proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company at Bombay
House, 24, Homi Mody Street, Fort, Mumbai-400 001 not less than 48 hours before the commencement of the Meeting.
This is only optional. Please put a ‘√’ in the appropriate column against the Resolutions indicated in the Box. If you leave the ‘For’ or
‘Against’ column blank against any or all the Resolutions, your Proxy will be entitled to vote in the manner as he/she thinks appropriate.
Appointing Proxy does not prevent a Member from attending in person if he so wishes.
In case of joint holders, the signature of any one holder will be sufficient, but names of all the joint holders should be stated.
Tata Steel Limited
Bombay House, 24 Homi Mody Street, Mumbai - 400 001
www.tatasteel.com
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