Building bridges
to the future
SINCE 1907
INTEGRATED REPORT
& ANNUAL ACCOUNTS 2019-20
113TH YEAR
101
ABOUT TATA STEEL
Established in India as Asia’s first integrated private steel company in
1907, Tata Steel Limited (Tata Steel) is today one of the most profitable
and low-cost producers of steel in the world, with captive iron ore mines
and collieries located near our manufacturing facilities in Jamshedpur and
Kalinganagar. Our comprehensive portfolio of products and brands caters
to multiple industries and segments, making the steel we produce an
integral part of our everyday lives.
ABOUT THIS REPORT
Our Approach to Reporting
This is the fifth Integrated Report of Tata Steel Limited.
Our Integrated Report provides quantitative and
qualitative disclosures on our relationships with the
stakeholders and how our leadership, culture and
strategy are aligned to deliver value while managing risks
and changes in the external environment. Our Report
continues to evolve towards enhanced disclosures to
meet the requirements of our investors and
other stakeholders.
Reporting Principle
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 Integrated Reporting 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), the Securities and
Exchange Board of India (SEBI) and World Steel
Association (worldsteel).
Reporting Period
The information is reported for the period April 1, 2019 to
March 31, 2020. For KPIs, comparative figures for the last
three to five years have been incorporated in the Report
to provide a holistic view to our stakeholders.
Scope and Boundary
The Report predominantly covers information on
Tata Steel Limited, including the Tata Steel plants
(at Jamshedpur, Jharkhand and Kalinganagar, Odisha),
Raw Materials Division and Profit Centres. However,
certain sections of the report include KPIs (financial and
production) of our subsidiaries, Tata Steel BSL Limited
and Tata Steel Long Products Limited.
Approach to Materiality
The Report presents an overview of our business
and associated activities that help in long-term value
creation. Report content and presentation is based
on issues material to Tata Steel and its stakeholders.
Material issues are gathered from multiple channels and
forums of engagement across the organisation and from
external stakeholders. In FY 2018-19, Tata Steel updated
its Environmental, Social and Governance (ESG) material
issues and incorporated them in its long-term plans.
Management Responsibility
To optimise governance oversight, risk management
and controls, the contents 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 Safety, Health and
Sustainability; and the Company Secretary and Chief
Legal Officer (Corporate and Compliance).
Independent Assurance
Assurance on financial statements has been provided
by independent auditors Price Waterhouse & Co.
Chartered Accountants LLP and on 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/IRAC20192020
Forward-looking Statements
Certain statements in the Report regarding our
business operations may constitute forward-looking
statements. These include all statements other
than statements of historical facts, 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
Introducing Tata Steel
Performance Highlights
Corporate Portrait
Integrated Operations
Product Portfolio and
Geographic Presence
Board of Directors
Value Creation Imperatives
Introducing Our Capitals
Strategic Objectives
Performance Review
From the Chairman’s Desk
Management Speak
Our Strategy
Business Model
Opportunities
Risks
Stakeholder Engagement
Materiality
Strategy Planning
Strategic Review
Financial Capital
Manufactured Capital
Intellectual Capital
Human Capital
Natural Capital
Social and Relationship Capital
Governance
Awards and Recognitions
Statutory Reports
Board’s Report
Annexures
Financial Statements
Financial Highlights
Standalone
Consolidated
Notice
01
02
06
08
10
12
14
16
18
20
22
24
28
30
32
34
38
40
44
46
48
52
56
60
66
70
80
82
84
86
102
206
208
212
310
440
Building bridges to the future
SINCE 1907
We have helped shape India’s industrial narrative since the time we set up
our first steel plant in Jamshedpur to cater to local steel demand. More than
a century later, we continue to make the world’s most versatile material even
better to help create iconic structures and landmarks, as well as roads and
bridges to make life easier. In the meantime, we have navigated through the
ebb and flow of wars and pandemics, and highs and lows of the industry,
which have strengthened our resolve and resilience.
Today, as India takes confident strides towards economic ‘self-reliance’,
we remain committed to move forward on our intertwined growth
journey. Our desire to imagine, innovate and co-create a future with infinite
possibilities is reflected in our efforts to look beyond steel, adopt
next-generation technologies and make a meaningful positive impact on
over a billion lives.
Bogibeel Bridge, Assam, India
PERFORMANCE HIGHLIGHTS (TATA STEEL INDIA)
Today in perspective
Despite a challenging domestic demand environment, we managed to
increase our deliveries, remain profitable, launch new products and retain
our position as the largest steel manufacturer in India.
4% growth
in domestic deliveries despite
decline in domestic demand
8% growth
in crude steel production
with ramp up at TSBSL and
acquisition of Usha Martin’s
steel business by TSLP
8% growth
in domestic deliveries from
the Branded Products and
Retail segment
>35% share
in 5 out of 10 passenger cars
launched in FY 2019-20
amid intense competition in a
weak market
Corporate Overview
02
Performance Review
20
Our Strategy
28
Strategic Review
46
Statutory Reports
84
Financial Statements
206
Coil stack at Jamshedpur Steel Works
RECALIBRATING OPERATIONS
TO STRENGTHEN RESILIENCE
The COVID-19 outbreak has dampened
domestic demand. We pivoted business
decisions to achieve cash neutrality in our
operations by reducing spend, managing
working capital and reducing capital
expenditures.
‐ Both our acquisitions, TSBSL and the steel business
of Usha Martin Limited by TSLP, continue to deliver
operational improvement
‐ Managing risks at physical assets and across the
supply chain
‐ Ramped up mining operations to reduce iron ore buy
‐ Focussing on exports to offset weak demand in
domestic markets
Tata Steel India – Key Numbers
18.2 MnT
Crude steel production
16.97 MnT
`82,125 cr.
Deliveries
Turnover
`17,650 cr.
EBITDA
`10,400
EBITDA/tonne
`5,611 cr.
Profit After Tax (PAT)
Kalinganagar Steel Works
Tata Steel India - (Tata Steel Limited + TSBSL + TSLP)
TSBSL - Tata Steel BSL Limited
TSLP - Tata Steel Long Products Limited
2
3
INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
Building bridges to the future
SINCE 1907
By being
first and
efficient
We built Asia’s first private
integrated steel plant in
Jamshedpur, India.
We are the lowest cost steel
producer in the country.
We are the first steel
manufacturer in India to receive
CII’s GreenPro certification for
four of our products.
Sinter plant, Kalinganagar Steel Works
Our Kalinganagar plant
is the first and only
Indian manufacturing
facility to be included
in the World Economic
Forum’s Global
Lighthouse Network.
Thin slab caster and rolling facility at
Jamshedpur Steel Works
CORPORATE PORTRAIT
Building a sustainable enterprise
Tata Steel was established in 1907 out of the commitment to contribute to nation
building. Today, we are one of the world’s most geographically diversified steel
producers and are recognised as the hallmark for corporate citizenship and
business ethics.
Embodying the vision of the Tata group founder Jamsetji Nusserwanji Tata,
we have created a culture of continuous improvement, environmental
consciousness and giving back to the community. As India embarks on its journey
towards ‘self-reliance’, Tata Steel remains committed to being a reliable and
responsible partner in the nation’s progress.
20.6 MnTPA
Operational capacity in India
25 MnTPA
Target capacity in India
by 2025
>1.4 million
Lives reached through CSR initiatives
in FY 2019-20
Building a business that is as relevant and impactful tomorrow as it
is today calls for a culture of agility. At Tata Steel, we are leveraging
our innovation capabilities, technology leadership and sustainability
focus to create long-term value for our stakeholders.
Innovation
Technology
Sustainability
Creating solutions that
make a positive difference
to the society with
patents, new products and
materials, and developing
in-house technologies
Technology leadership
is a strategic enabler
to achieve sustainable
differentiation and create
innovative businesses
Remaining committed
to conserving natural
resources while ensuring
sustainable growth
and fostering strong
relationships with
communities
6
V I S I O N
We aspire to be the global steel industry benchmark
for Value Creation and Corporate Citizenship.
We make a difference through:
Our
People
Our
Offerings
Our
Conduct
Our
Policies
Our
Innovative
Approach
M I SS I O N
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 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.
VA LU E S
Integrity
We will be fair, honest, transparent and
ethical in our conduct; everything we
do must stand the test of
public scrutiny.
Excellence
We will be passionate about achieving
the highest standards of quality, always
promoting meritocracy.
Unity
We will invest in our people and
partners, enable continuous learning,
and build caring and collaborative
relationships based on trust and
mutual respect.
Responsibility
We will integrate environmental and
social principles in our businesses,
ensuring that what comes from the
people goes back to the people many
times over.
Pioneering
We will be bold and agile,
courageously taking on challenges,
using deep customer insight to
develop innovative solutions.
Jamshedpur Steel Works
7
INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR INTEGRATED OPERATIONS
Designed to deliver
operational excellence
We operate with a completely integrated value chain that extends
from mining to finished steel products, with a relentless focus on innovation
and cutting-edge technologies.
M A N U FAC T U R I N G FAC I L I T I E S I N I N D I A
JAMSHEDPUR
The Jamshedpur plant is our flagship facility and is among the first steel
plants in Asia. It is also the only facility in India to produce steel at the same
site continuously for over 100 years. In FY 2019-20, Tata Steel’s subsidiary,
Tata Steel Long Products Limited, acquired the steel business of Usha Martin
Limited with specialised ~1.0 MnTPA alloy-based manufacturing capacity in
long products, at Jamshedpur.
12 MnTPA*
Installed capacity
KALINGANAGAR
Commissioned in 2016, the Kalinganagar plant attained production levels
at its rated capacity in less than two years. A capacity expansion to 8 MnTPA
(Phase II) is currently underway, which will augment our product portfolio
with new value-added products while driving operational efficiency.
3 MnTPA
Installed capacity
DHENKANAL
Tata Steel BSL’s plant in Dhenkanal is one of India’s largest integrated steel
mills equipped with steelmaking and finishing facilities, with downstream
operations at Sahibabad (Uttar Pradesh), Khopoli (Maharashtra) and Hosur
(Tamil Nadu).
5.6 MnTPA
Installed capacity
*includes Steel Works, Jamshedpur (Tata Steel) and plant at Gamharia (TSLP)
8
R AW M AT E R I A L S
The making of steel involves complex metallurgical processes and technological expertise of the highest degree. We source
most of our required raw materials from our captive mines — which provide supply security and enable us to keep costs low
as well as drive resource efficiencies.
IRON ORE
‐ Sourced from the captive mines of
Noamundi in Jharkhand and Joda,
Katamati and Khondbond in Odisha
‐ Jamshedpur and Kalinganagar
procure 100% of their iron ore
requirements from captive mines
100%*
Captive iron ore sourcing
*TSJ and TSK
TSJ - Tata Steel Jamshedpur
TSK - Tata Steel Kalinganagar
COAL
‐ Sourced from two mine groups: Jharia
FERRO ALLOYS
‐ Supplied by the Ferro Alloys and
Group and West Bokaro Group
‐ Jharia has a leasehold area of 5,500
acres across two colliery groups
(Jamadoba and Sijua) and five operative
underground collieries
‐ West Bokaro has a leasehold area of
4,300 acres, with two open-cast sites, a
coal washing and processing capacity of
7 MnTPA, and a quick loading station
Minerals Division (FAMD), the largest
non-steel business unit of Tata Steel
‐ Minerals are sourced from chrome
and manganese ore reserves of
Odisha
India’s leading manganese alloy
producer
India’s leading supplier of dolomite
and pyroxenite
‐
‐
7 MnTPA
Coal washing and
processing capacity
#1
Producer of ferro chrome
9
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR PRODUCT PORTFOLIO AND GEOGRAPHIC PRESENCE
Diversified offerings
across market segments
AU T O M O T I V E
AG R I C U LT U R E
Market Sub-segments
Products and Brands
Market Sub-segments
Products and Brands
Auto OEMs*
(B2B)
Hot-rolled (HR), Cold-rolled (CR),
Coated Coils and Sheets
Agri Equipment (B2B)
Bearings
Auto Ancillaries
(B2B) (B2ECA)
HR, CR, Coated Steel Coils
and Sheets, Precision Tubes,
Tyre Bead Wires, Spring Wires,
Bearings
Fencing, Farming and
Irrigation (B2C)
Galvanised Iron (GI), Wires,
agricultural and garden tools,
conveyance tubes
2
S
S
CO N S T R U C T I O N
I N D U S T R I A L A N D G E N E R A L
E N G I N E E R I N G
Market Sub-segments
Products and Brands
Market Sub-segments
Products and Brands
Individual House
Builders (B2C)
Corporate and
Government Bodies
(B2B) (B2G)
Infrastructure (B2B)
Housing and
Commercial
(B2ECA)
Tata Tiscon (rebars), Tata Pravesh
(steel doors and windows),
Tata Shaktee (roofing sheets),
Tata Pipes (plumbing pipes),
Tata Structura (tubes)
Habinest (prefabricated houses),
AquaNest Water Kiosks, Ezynest
Modular Toilets, MobiNest
(office cabins), Nestudio (rooftop
houses), CanvaNest (EV charging
station), Smart Easy Nest (for
smart cities)
TMT rebars (higher dia rebars and
corrosion-resistant steel)
Tiscon readybuild (cut and bend
bars), Tata Structura (tubes), PC
Strands (LRPC)**, Tata Nirman,
Tata Aggreto, Ground Granulated
Blast Furnace Slag (GGBS), WAMA
– GC for walling
Panel and Appliances,
Fabrication and Capital
Goods, Furnitures
(B2ECA)
Tata Steelium (CR), Galvano
(Coated), Tata Astrum (HR),
Tata Structura (tubes), Tata
Astrum Super (for fabrication)
LPG (B2B)
Hot-rolled (HR)
Welding (B2B)
Wire rods
Transmission Power and
Distribution (B2B)
Tata Astrum Super
(for fabrication)
Process Industries
(Cement, Power) (B2B)
Tata Tiscrome (ferro chrome),
Tata Ferromag (ferro
manganese), boiler tubes,
Tata Pipes, Tata Ferroshots, Blast
Furnace (BF) slag, Metallics
Notes: B2B – Business to Business; B2C – Business to Consumer; B2G – Business to
Government; B2ECA – Business to Emerging Corporate Account
*OEM – Original Equipment Manufacturer
**LRPC – Low-relaxation Pre-stressed Concrete
S
S
S
4
3
S
S
S
12
S
11
10
1
21
6
13 20
16
7
17
9
18
14
S
15
19
S
5
8
OUR FOOTPRINT
(TATA STEEL LIMITED)
We are primarily involved in the business of
mining, steelmaking and downstream value-
added products and solutions. Our operational
footprint has been indicated on the map.
MANUFACTURING LOCATIONS
Jamshedpur
Flat products 8 MnTPA
Long products 3 MnTPA
Kalinganagar
Flat products 3 MnTPA
Nature of
operations
Zonal hubs
Locations
6 [Delhi, Faridabad, Nagpur,
Kolkata, Chennai and
Vijayawada]
Stockyards
18 [not on map]
Distributors
246 [not on map]
Dealers
13,050 [not on map]
S Steel Processing
Centres (SPCs)
31 SPCs across 11 locations
[Jamshedpur, Kalinganagar,
Chennai, Kolkata, Faridabad,
Manesar, Pune, Mumbai,
Indore, Delhi and Nagpur]
Sales offices
27
DOWNSTREAM OPERATIONS
RAW MATERIAL LOCATIONS
RAW MATERIALS REVENUE STREAM
(Ferro Alloys and Minerals)
Location
Nature of operations
Location
Nature of operations
Location
Nature of operations
1
Jamshedpur
2
3
4
5
Tarapur
Pithampur
Killa
Kharagpur
Tubes
Manufacturing
and Tinplate
Wire
Manufacturing
Bearings
Manufacturing
6
7
8
9
Noamundi
Joda East
Katamati
Khondbond
Iron Ore Mines and
Quarries
13
14
15
Joda
Bamnipal
Gopalpur
Ferro Alloys Plant
10
West Bokaro
Open Cast
Coal Mines
11
12
Jamadoba
Group
Sijua Group
Underground
Coal Mines
16
Sukinda
Chromite Mine
17
18
19
20
Joda West
Bamebari
Malda
Tiringpahar
Manganese
Mines
21
Gomardih
Dolomite Mine
10
INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
Note: Map not to scale
11
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
BOARD OF DIRECTORS
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
Member
Chairperson
Standing (Left to Right)
T. V. Narendran
Chief Executive Officer and
Managing Director
V. K. Sharma
Non-Executive Director
Peter Blauwhoff
Independent Director
Deepak Kapoor
Independent Director
Saurabh Agrawal
Non-Executive Director
3
4
5
6
5
6
1
4
6
1
3
5
1
4
Koushik Chatterjee
Executive Director and
Chief Financial Officer
3
4
5
Not in picture
Parvatheesam
Kanchinadham
Company Secretary & Chief Legal
Officer (Corporate & Compliance)
Sitting (Left to Right)
Aman Mehta
Independent Director
1
4
N. Chandrasekaran
Chairman
2
Mallika Srinivasan
Independent Director
2
6
O. P. Bhatt
Independent Director
1
2
3
12
13
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR VALUE CREATION IMPERATIVES
Identifying sustainable growth levers
Our stakeholders comprise providers of financial as well as non-financial capital.
Our value creation model leverages our core competencies and focusses on creating
a best-in-class integrated value chain.
At Tata Steel, we not only pursue financial outcomes but also invest in technology
and innovation, employee well-being, natural resources and communities.
CO N T R I B U T I N G T O G LO B A L G OA L S
Through our process of managing our capitals and creating value, we make significant contribution to the United Nations
Sustainable Development Goals (UN SDGs). Our priorities for sustainable development are aligned to those of India as well as the
steel industry. As a responsible corporate citizen, we have mapped our capitals to the 17 SDGs.
14
I M P E R AT I V E S F O R VA LU E C R E AT I O N
LEADERSHIP IN
INDIA
‐ Focussed on strengthening footprint in India
‐ Best positioned to leverage growth opportunities
in the country
‐ Enable growth without increasing leverage
PORTFOLIO
PRIORITIES
FINANCIAL
HEALTH
‐ Completion of capacity expansion at Kalinganagar by 5 MnTPA
‐ Focus on ramping up of Tata Steel BSL, downstream
value-addition, growing long products portfolio and driving
synergies from acquisitions
‐ Create a sustainable business in Europe
‐ Simplify and consolidate Tata Steel Group companies
‐ Focus on reducing leverage through higher operating cash flows,
monetisation of non-synergistic ventures and strategic restructuring
‐ Maintain well-spread debt maturity profile
‐ Derive cost effectiveness through structured continuous improvement
programmes (Shikhar25)
NEW
BUSINESSES
‐ Focus on the Services and Solutions portfolio
‐ Grow beyond steel – focus on new materials
‐
Incubate new businesses that can monetise our Intellectual Property
O U R I N T E R V E N T I O N S T O B E FU T U R E R E A DY
‐ Focus on safety leadership and strengthen
‐ Foster a culture of agility supported by adequate
processes
governance
‐ Leverage digital technology to enhance efficiency
and enable business transformation
‐ Focus on R&D and technology to achieve
technology leadership in the steel industry
‐ Build a culture and capability of breakthrough
innovation
‐ Transitioning to lower carbon intensive operations
‐ Be an employer of choice
15
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR INTRODUCING OUR CAPITALS
Ensuring optimal utilisation of resources
Staying true to our founding philosophy of ‘profits with a purpose’, we have adopted
a multi-capital approach in our thinking and reporting. Communicating our business
objectives using this approach helps our stakeholders identify the most significant
levers for value creation.
FI N A N C I A L
C A P I TA L
M A N U FAC T U R E D
C A P I TA L
I N T E L L E C T UA L
C A P I TA L
H U M A N
C A P I TA L
N AT U R A L
C A P I TA L
S O C I A L A N D
R E L AT I O N S H I P C A P I TA L
PG 48
PG 52
PG 56
PG 60
PG 66
PG 70
At Tata Steel, we strive to optimise returns
for providers of our financial capital.
We endeavour to maximise surplus funds
from both business operations and relevant
monetisation of assets and investments.
We continuously invest in our integrated
steel plants; iron-making, steelmaking and
rolling facilities and warehouses, along
with logistics operations, while ensuring
the safety and reliability of our operations.
Our focus on innovation and research
reinforces our drive for operational
efficiency and resource optimisation, while
adhering to Standard Operating Procedures.
We incorporate customer requirements
in our product development, while also
collaborating with experts for our Research
and Development efforts.
`60,436 cr.
Turnover
`15,096 cr.
EBITDA
14.09 MnT
Hot Metal Production
13.16 MnT
Crude Steel Production
12.32 MnT
Deliveries
`259 cr.
R&D spend
58
Patents granted
155
New products launched
Note: Above figures pertain to Tata Steel Limited
16
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.
We depend on natural resources such
as iron ore, coal and other minerals,
which constitute our key raw materials.
At the same time, land and water are
indispensable for our operations.
We strive for excellence in environmental
performance and resource efficiency to
mitigate our ecological footprint.
Our communities, customers and suppliers
are critical to our business continuity and
social license to operate. We believe in
building long-term, transparent and
trust-based relationships with them
through continuous stakeholder
engagement and innovation.
803 tcs/employee/year
Employee productivity
100%
Solid waste utilisation
>1.4 mn
Lives reached through CSR
6.9%
Women in workforce
17.5%
Affirmative action community
in workforce
2.31 tCO2/tcs
GHG emission intensity
0.73 m3/tcs
Effluent discharge intensity
83.1
Customer satisfaction index (Steel)
(out of 100)
1,330
Suppliers trained through VCAP*
*Vendor Capability Advancement Programme
17
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR STRATEGIC OBJECTIVES
Closing the gap with tomorrow
At Tata Steel, we aspire to be future-ready, structurally, financially and culturally, in our
pursuit to be the most valuable and respected steel company in the world. We have
identified four Strategic Objectives (SOs) to create sustainable and profitable growth.
SO1
I N D U S T RY L E A D E R S H I P I N S T E E L
SO3
I N S U L AT E R E V E N U E S FR O M S T E E L C YC L I C A L I T Y
Focus areas
Key performance indicators
Goals
Focus areas
Key performance indicators
Goals
‐
Increase capacity of India
operations by growing both
organically and inorganically
‐ Attain leadership position in
new segments and maintain
leadership position in existing
chosen segments
‐ Crude steel capacity
25 MnTPA by 2025
‐ Services and Solutions
‐ Revenue (% of total revenue)
~20% of revenue by 2025
‐ Market share
Foray into new segments
and sustain #1 position in
existing chosen segments
business
‐ Downstream products
‐ Volume (% of total volume)
‐ B2C business
‐ Volume (% of total volume)
Enhance the downstream
products business
Enhance volume in B2C
business
‐ New Materials Business
‐ Revenue (% of total revenue)
~10% of revenue by 2025
SO2
CO N S O L I DAT E P O S I T I O N A S A G LO B A L CO S T L E A D E R
SO4
I N D U S T RY L E A D E R S H I P I N CO R P O R AT E S O C I A L R E S P O N S I B I L I T Y
A N D S A FE T Y, H E A LT H A N D E N V I R O N M E N T
Focus areas
Key performance indicators
Goals
Focus areas
Key performance indicators
Goals
‐ Continue to invest in raw
material security
‐ Captive coal (%)
‐ Captive iron ore (%)
‐ Cost improvement and
‐ Value accrual
value enhancement through
Shikhar25 continuous
improvement programmes
Maintain cost leadership
at market price of raw
materials
Cost reduction and value
enhancement
‐ Achieve leadership in safety
‐ Fatality
‐ Loss Time Injury Frequency
Rate (LTIFR)
Zero fatality
‐ Become a benchmark in
‐ CO2 emission intensity
<2 tCO2/tcs by 2025
CO2 emission
‐ Reduce water consumption
‐ Specific water consumption
<3 m3/tcs by 2025
‐ Create value through circular
economy: LD slag utilisation
and steel recycling business
‐ % of LD slag utilisation
Sustain LD slag
utilisation at 100%
‐ Capacity of steel recycling
business
Enhance capacity of steel
recycling business
‐ Create lasting impact on the
‐ Number of lives reached
>2 million by 2025
communities in our operating
areas
18
19
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
PERFORMANCE REVIEW
Building bridges to the future
SINCE 1907
By fostering
innovation
We focus on developing novel processes
and products to stay ahead of the curve in
an environment of evolving customer needs,
competition from alternative materials and
dynamic regulations.
We are constantly creating innovative
and futuristic solutions for delivering
sustainable value.
SeFondre Lab - State-of-the-art Centre for Advanced Welding and Joining at Jamshedpur Steel Works
FY 2019-20 HIGHLIGHTS
119
Patents filed
58
Patents granted
50
Collaborations/memberships
(technical institutes)
Graphene Centre, Jamshedpur Steel Works
FROM THE CHAIRMAN’S DESK
Tata Steel India was successful in increasing
deliveries, being profitable, and launching new
products
Dear Shareholders,
It is my privilege to write to you and present
the Integrated Report for FY 2019-20.
In Europe, we maintained production levels
in FY 2019-20 in line with FY 2018-19.
I hope this letter finds you safe and in
good health.
In the past year, we implemented a number
of key strategic moves:
For most of FY 2019-20, the global steel
industry faced a number of challenges due
to global demand and geopolitical tensions
which have affected the contours of the
business environment in which we operate.
Next came the onset of the COVID-19
pandemic in the final quarter of the year,
which ushered in a new reality for industries
across the world.
Global GDP growth eased to 2.9% in 2019,
against an initial growth projection of 3.5%.
In India, growth slowed to 4.2% in FY 2019-20
against an initial growth projection of 7.5%
in the beginning of the year. India was just
beginning to show signs of coming out of
a protracted slowdown that began in early
2018 when COVID-19 arrived.
The impact of the slowing economy was also
felt in the global steel sector. Global crude
steel production reached 1,870 MnT in 2019,
registering a more modest growth of 3.4%
in 2019 against 4.6% in 2018. The Indian steel
sector registered a stark easing of growth
to 1.8% in 2019 compared to 7.7% growth
in the previous year. Domestic steel prices
declined sharply in FY 2019-20 (-15% year-
on-year, on average) due to weak demand
from key industries including automobile,
construction, and consumer durables.
Overcapacity in China also played a role in
the softness in steel prices last year.
Despite the difficult environment, Tata Steel
Group recorded a production increase of 5%
in FY 2019-20. Tata Steel India was successful
in increasing deliveries, being profitable,
and launching new products. Tata Steel
India delivered an EBITDA margin of 21%,
outperforming the global steel industry.
‐ We, through our subsidiary company,
acquired the steel business of Usha
Martin Limited.
‐ The integration of Tata Steel BSL Limited is
progressing well.
‐ We are well on course of reorganising
India subsidiaries into four segments:
Mining, Long Products, Downstream and
Infrastructure & Utilities.
‐ We made progress on the Tata Steel
Kalinganagar phase two expansion, with a
focus on the pellet plant and cold
rolling mill.
‐ We aggressively advanced our digital
transformation. Tata Steel Kalinganagar
became the only Indian manufacturing
facility to be designated as Industry
4.0 Lighthouse by the World Economic
Forum. We deployed 100+ data analytics
models across processes to drive insight-
based decision-making. Our connected
workforce programme leverages multiple
technologies and systems to pre-empt
unsafe incidents.
‐ We continued our focus and investments
in sustainable operations, improving
our measures on parameters such as
CO2 emission intensity, coke rate, energy
intensity, water consumption, among
others, in both our Jamshedpur and
Kalinganagar plants.
As we look ahead, it is important to gauge
COVID-19’s unprecedented impact on the
global economy. It is expected that global
growth will contract by over 3% in 2020, the
worst contraction since the 1930s. For the
first time since the Great Depression, both
advanced and developing economies are in
recession together. Tata Steel is confident
in its ability to navigate this period through
strong financial discipline, a reduction
in capital expenditure and cash flow
management.
The health and safety of its workforce has
always been paramount to Tata Steel. We
have been at the forefront of developing
industry-specific protocols that can be a
model—from testing parameters to contact
tracing, monitoring social distancing
norms, classifying employee risk levels, and
providing appropriate healthcare responses.
Within our communities, Tata Steel played a
key role in COVID-19 relief. Tata Main Hospital
(TMH) and Medica Hospitals at Kalinganagar,
Gopalpur and Joda have been designated as
hospitals for testing, treatment and isolation,
while TMH has been certified to carry out
RT-PCR tests for COVID-19. We ramped up
medical infrastructure in Jharkhand and
Odisha, adding over 1,200 isolation beds
and COVID-19 screening facilities. We have
provided support to nearly 1,00,000 migrant
workers, and are continuing to provide
sustenance to millions. In keeping with
the ethos of Tata Steel, there is still more
for us to do.
I would like to take this opportunity to thank
you for your continued trust, confidence,
and support.
Warm regards,
N. Chandrasekaran
Chairman
23
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 MANAGEMENT SPEAK
Demonstrating resilience
amid challenges
T. V. Narendran
Chief Executive Officer and
Managing Director
Koushik Chatterjee
Executive Director and
Chief Financial Officer
24
Q. The European business has
been in focus for a long time. How
do you envisage the Transformation
Programme to benefit the European
business?
The European business is an integral
part of Tata Steel. We had proposed to form
a joint venture with thyssenkrupp
to combine the steel businesses in Europe.
However, we could not proceed with
these plans as our proposal did not receive
the approval of the European Commission.
We continue with our efforts to make
our European operations more sustainable.
The transformation programme aims
to reduce cost of operations, improve
productivity, focus on marketing and sales,
and improve competitiveness both in the
UK and the Netherlands. During the year
under review, we realised benefits of about
£370 million, of which £200 million are
sustainable benefits. These benefits are
attributable to lower material costs and cost
takeout strategy, which were partly offset by
lower capacity utilization in Europe.
That said, significant market headwinds,
particularly in the last two quarters, and
the disruptions caused due to the COVID-19
pandemic, have added to the complexity
of implementing the programme. However,
the management and leadership team at
Tata Steel Europe remain committed
to making our European operations
self-sustaining in a phased manner and
generate better returns in the future.
Q. FY 2019-20 was a challenging
year. How do you view Tata Steel’s
performance in the year gone by?
Undoubtedly, FY 2019-20 was a challenging
year not just for Tata Steel, but for most
businesses across the globe. Almost all
countries faced a slowdown in economic
growth amidst rising trade tensions and
policy uncertainties. This had its bearing on
the steel industry as well, in terms of weak
demand and falling steel prices. Making
matters worse, the COVID-19 outbreak
in early 2020 brought global economic
activities to a near standstill as nationwide
lockdowns and social distancing norms
were imposed to contain the spread in the
affected countries.
Despite these challenges, Tata Steel
managed to increase deliveries, remain
profitable, launch new products and retain
its position as the largest steel manufacturer
in India. Our crude steel production in India
grew about 8% while deliveries increased by
4%. The ramp-up of operations at Tata Steel
BSL and the integration of the acquired steel
business of Usha Martin Limited with our
subsidiary Tata Steel Long Products enabled
us to continue delivering improvements in
operating KPIs, which translated into
better profitability.
We launched a transformation programme
at Tata Steel Europe to make our European
operations simpler, leaner and sustainable,
and generate savings across multiple
initiatives. Tata Steel Europe showed a
turnaround in performance with an EBITDA
of about £8 million in the fourth quarter
of FY 2019-20. However, profitability was
affected by weak market conditions,
aggravated by the pandemic impact.
Q. COVID-19 has severely affected
businesses across the globe. Can you
brief us on the impact the pandemic
has had on Tata Steel? What is your
strategy to navigate through the current
situation?
Being part of the essential services and
process industries, where continuous
operations of plant facilities are important,
the steel and mining sectors were exempt
from the lockdowns. However, several
steel-consuming sectors, particularly
automotive, infrastructure and construction,
were severely impacted, leaving a spill-over
effect on the steel industry. We witnessed
a fall in capacity utilisation levels, primarily
due to a significant reduction in demand
from our key customer segments.
Our mining operations continued to
operate normally, but operations at our
integrated steel facilities in Jamshedpur
and Kalinganagar, as well as at those
of our subsidiaries in Dhenkanal (Tata
Steel BSL) and Gamahria (Tata Steel Long
Products), had to reduce production
levels. Our downstream operations were
temporarily suspended. As a strategy to
offset weak domestic demand, we focussed
on increasing our sales to export markets.
Our European operations also adjusted
production levels to match lower demand.
With the easing of lockdown guidelines,
we are ramping up our operations. However,
we expect global steel demand to remain
subdued at least in the first half of
FY 2020-21. Although the manufacturing
sector is expected to stage a relatively
quick recovery, supply chain disruptions are
likely to continue. The key steel-consuming
sectors will continue to be sluggish.
25
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR MANAGEMENT SPEAK (contd)
We are making ourselves ready for a digital and more sustainable world.
We have embarked on a multi-year transformation journey to become an agile and
intelligent enterprise, and be the leader in digital steelmaking by 2025.
The road ahead is certainly challenging. We operate in a highly cyclical industry.
However, Tata Steel has always risen to challenges and emerged stronger through
downcycles, which bears testimony to its future readiness.
Thus, we are focussing on conserving cash
and ensuring adequate liquidity to ride
out any potential disruptions. We have
pivoted business decisions on cashflows and
successfully driven cash neutrality in our
operations by reducing spend, managing
working capital and curtailing capital
expenditure. Our liquidity at the end of
FY 2019-20 remained robust at ₹17,745 crore,
including cash and cash equivalents of
₹11,549 crore. We have also raised additional
funds to build a contingency buffer.
Q. Concerted efforts to combat
the pandemic are being made towards
saving lives and now livelihoods. How is
Tata Steel contributing to these efforts?
Our people are our biggest asset. We remain
committed to ensuring their safety and
well-being. Thus, our initial response was
to protect our employees and immediate
communities. Enhanced safety and hygiene
standards were implemented at our offices
and plants and social distancing norms
were enforced. We formulated policies to
promote safety and moved most of our
essential activities to digital platforms.
A novel initiative, the ‘pod concept’, has
been implemented by the health and safety
team to tackle the spread of COVID-19 within
the Company premises. Self-sufficient
groups of people having self-contained set
of skills to do an intended job have been
formed and deployed at manufacturing
and raw material locations as well as at
profit centres. The primary objective
of this initiative is to assure the health
and safety of our workforce and ensure
business continuity by limiting the spread
of COVID-19, if any, to a single ‘pod’. In case
any suspected or confirmed case is reported
within a ‘pod’, this initiative helps in the
contact tracing procedure.
Staying true to the Tata philosophy of the
community being a key stakeholder in
business, we worked to serve the society at
large. We are working with respective State
Governments and District Administrations
to extend support to those in need. Through
the Tata Steel Foundation, we reached out
to local residents in our areas of operations
in Jharkhand and Odisha. Our CSR teams
are working to provide food and medical
assistance across the country to migrant
workers. We are also working towards
providing sustainable livelihoods through
self-help schemes and are providing
essentials and safety support to vulnerable
communities. We have also stepped-up
medical facilities at designated hospitals to
ensure access to quality healthcare.
Q. What is your long-term plan to
strengthen the business of Tata Steel?
Our growth strategy
In line with the Tata Group objective, our
growth strategy is built on three pillars –
simplify, synergise and scale. We continue
to focus on making our India operations
stronger. Tata Steel BSL is integrating well
with Tata Steel. We are also in the process of
amalgamating Tata Steel BSL with Tata Steel
to simplify operations and derive synergies.
With the acquisition of the steel business of
Usha Martin Limited through our subsidiary
Tata Steel Long Products Limited, we aim to
enlarge our footprint in the long products
market. We are focussed on integrating and
stabilising the various operating units and
realising identified synergies in various areas
26
of operations of the newly-acquired steel
business. We are optimistic that these efforts
will translate into better profitability on a
consolidated basis.
The Phase II expansion at Tata Steel
Kalinganagar to augment the cumulative
capacity of the plant from 3 MnTPA to
8 MnTPA will help us consolidate our
presence in the high-end products segment.
Tata Steel Mining Limited, a wholly-owned
subsidiary of Tata Steel, signed 50-year
leases for Kamarda and Saruabil chromite
mines. Tata Steel Mining Limited also won
Sukinda chrome ore mines in the auction.
As for Europe, as mentioned earlier, we are
focussed on driving the transformation
programme to generate better returns from
our operations.
Tailor Welded Blanking Line (TWBL) at the Steelpark
Automotive Centre, UK
Digital transformation and
Industry 4.0
We are making ourselves ready for a digital
and more sustainable world. We have
embarked on a multi-year transformation
journey to become an agile and intelligent
enterprise and be the leader in digital
steelmaking by 2025. In the process, we
intend to achieve EBITDA improvements,
enhance our digital maturity and improve
our business practices.
Over the past few years, we have invested in
creating a robust IT infrastructure that has
helped improve our agility. It is these efforts
that have enabled us to respond to the
current COVID-19 situation. With the help of
our digital initiatives, we have transitioned
to a newer way of working wherein our
workforce continues to operate from home
and has adjusted well to the new normal.
Our aim is to make digital interventions
across the organisation, including in
operations, integrated supply chain,
planning and logistics, and marketing and
sales, among others. We are looking at
various initiatives to drive end-to-end cost
optimisation. We are also re-engineering
our procurement process by introducing
digital catalogue-based buying platforms,
commodity price prediction-aided
buying, analytics-powered negotiation
tools for category managers and
end-to-end contract lifecycle management
and analytics.
Tata Steel has made progress towards
imbibing Industry 4.0. We are happy to
report that Tata Steel is the only steel
company to have two of its facilities,
Tata Steel Kalinganagar, India and Tata Steel
IJmuiden, the Netherlands, recognised
as Industry 4.0 Lighthouses by the World
Economic Forum.
Focus on Sustainability
Imbibing an underlying responsibility
towards planet Earth in our operations,
ensuring the health and safety of people
at our workplaces, balancing economic
prosperity and generating social benefits for
the community are the norms by which
Tata Steel operates. As a responsible
corporate, Tata Steel supports the UN Global
Compact and strives to integrate its 10
principles in all facets of business.
Climate change is recognised globally
as one of the key risks in the 21st century.
Tata Steel is a signatory to the Task Force on
Climate Related Financial Disclosure (TCFD)
and has undertaken a climate change risk
assessment study in accordance with TCFD
recommendations. Specific mitigation
and contingency plans for each of the
identified risks are being integrated with the
Company’s long-term strategy.
Towards reducing our environmental
footprint, we plan to achieve carbon
emissions <2tCO2/tcs and specific water
consumption <3 m3/tcs by 2025 and
become carbon neutral in Europe by 2050.
Our efforts in the steel scrap recycling
business are primarily aimed at promoting
sustainable steelmaking and creating a
circular economy for steel.
With regard to health and safety, we are
committed to achieving ‘Zero Harm’ by
2025. We are leveraging technology to
improve our safety processes and health and
safety standards.
During the year under review, we reached
more than 1.4 million lives through our
CSR interventions in the areas of health,
access to drinking water, education,
livelihood, sports and infrastructure
development, among others. We plan to
make a meaningful difference to the lives of
more than 2 million people by 2025.
Q. How do you see the road ahead
for Tata Steel?
The road ahead is certainly challenging.
We operate in a highly cyclical industry.
However, Tata Steel has always risen to
challenges and emerged stronger through
downcycles, which bears testimony to its
future readiness. Since 1907, the grit and
determination of our people have enabled
us to overcome adversities and we believe
that this time too, we will learn, adapt and
take Tata Steel to greater heights.
IJmuiden Plant, The Netherlands
Suraksha Kendra, Jamshedpur Steel Works
27
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Control Room, Jamshedpur Steel Works
OUR STRATEGY
Building bridges to the future
SINCE 1907
By leveraging
technology
We are developing cutting-edge
technologies and designing solutions that
help transform processes, improve efficiencies
and enhance customer experience. We have
embarked on a long-term digital
technology-led business transformation
programme to drive value creation.
FY 2019-20 HIGHLIGHTS
`4,298 cr.
Savings through Shikhar25
Coke rate (TSJ)
353 kg/tonne
of hot metal
Coke rate (TSK)
364 kg/tonne
of hot metal
5.63 Gcal/tcs
Energy intensity (TSJ)
6.27 Gcal/tcs
Energy intensity (TSK)
BUSINESS MODEL (TATA STEEL LIMITED)
How we create value
I N P U T S
VA LU E C R E AT I O N A P P R OAC H
O U T P U T S
O U TCO M E S
Financial Capital
‐ Net worth (` crore)
‐ Net Debt (` crore)
76,838
36,907
Manufactured Capital
‐ Steel processing centres – Own (Nos.)
‐ TSJ installed capacity – Crude Steel (MnT)
‐ TSK installed capacity – Crude Steel (MnT)
31
11
3
Intellectual Capital
‐ Collaborations/memberships
(Technical Institutes) (Nos.)
‐ Patents filed*(Nos.)
‐ R&D spend (` crore)
50
1,177
259
Human Capital
‐ Employees on roll (Nos.)**
‐
Investment in employee training and
development: (` crore)
32,364
152.33
‐ Employee trained: (man-days)
2,52,681
Natural Capital
5.63
‐ TSJ - Energy intensity (Gcal/tcs)
‐ TSK - Energy intensity (Gcal/tcs)
6.27
‐ TSL - Specific water consumption (m3/tcs) 3.11
13
‐
‐ Capital spend on environment (` crore)
283
Import of raw materials (MnT)
Social and Relationship Capital
‐ Pan India dealers (Nos.)
‐ Pan India distributors (Nos.)
‐ Customer-facing processes (Nos.)
‐ Customer service teams (Nos.)
‐ Active supplier base (Nos.)
‐ CSR spend (` crore)
13,050
246
11
31
5,132
193
Our vision
We aspire to be the global
steel industry benchmark
for value creation and
corporate citizenship
Tata Code of
Conduct
Policies that govern
our business
Our Values
‐
INTEGRITY
‐ EXCELLENCE
‐ UNITY
‐ RESPONSIBILITY
‐ PIONEERING
Strategic Objectives
SO1
SO2
Industry leadership
in steel
Consolidate position
as a global cost
leader
SO3
SO4
Insulate revenues
from steel cyclicality
Industry leadership
in Corporate Social
Responsibility, and
Safety, Health and
Environment
TATA STEEL VALUE CHAIN
S
C
I
T
S
I
G
O
L
D
N
U
O
B
N
I
PROCESSED RAW
MATERIAL
MINING
Iron Making
Steelmaking
Rolling
(Flat and Long Products)
Processing
Centres
BY-PRODUCTS
PRODUCTS
S
C
I
T
S
I
G
O
L
D
N
U
O
B
T
U
O
CUSTOMERS
FY 2019-20
HIGHLIGHTS
13.16 MnT
Crude steel
production
14.09 MnT
Hot metal
production
12.32 MnT
Deliveries
7.71 MnT
Enriched/
value-added
product sales
~14 MnT
By-products
generated
Financial Capital
‐ Turnover (` crore)
‐ EBITDA (` crore)
‐ Savings through
Shikhar25 projects (` crore)
Intellectual Capital
60,436
15,096
4,298
‐ Patents granted* (Nos.)
534
Human Capital
12.7
‐ Health index (Score out of 16)
‐ Diversity - % women in the workforce#
6.9
‐ Employee productivity (tcs/employee/year)$ 803
17.5
‐ Affirmative Action workforce (%)
127
‐ LTI (Nos.)
0.52
‐ LTIFR (Index)
Natural Capital
‐ TSL - Solid waste utilisation (%)
‐ TSL - GHG emission intensity (tCO2/tcs)
‐ TSL - Dust emission intensity (kg/tcs)
‐ TSL - Effluent discharge intensity (m3/tcs)
‐ Total raw materials sites covered under
biodiversity management plans (%)
100
2.31
0.38
0.73
100
Social and Relationship Capital
‐ Suppliers assessed based on safety (Nos.)
‐ Customer satisfaction index
(Steel) (out of 100)
‐ Net Promoter Score (out of 100) -
Tata Tiscon
‐ Net Promoter Score (out of 100) -
Tata Shaktee
‐ Suppliers trained through
VCAP@ (Nos.)
‐ Quality/customer complaints (PPM)
‐ Lives reached through
CSR initiatives (Nos.)
‐ Truly loyal customers (%)
840+
83.1
82
77
1,330
583
>1.4 mn
75
*These numbers are cumulative values from FY 2014-15 to FY 2019-20
**Employees on roll - No. of permanent employees of company (officers + non-officers) except those on deputation + doctors on contract
30
$ Employee productivity is defined as amount of crude steel produced (in tonnes) per employee in the given year. Employee count here is segregated based on Works/Services
functions.
@ VCAP - Vendor Capability Advancement Programme
# Diversity - % women in the workforce is defined as percentage of permanent women employees (officers + non-officers) as per Employee on Roll (EOR)
report over total workforce as per EOR report (includes doctors on contract)
31
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
OPPORTUNITIES
Well positioned
to tap long-term potential
Tata Steel continuously monitors and leverages opportunities presented by the
external and internal environment while mitigating risks. Although the COVID-19
pandemic poses significant near-term challenges, we are recalibrating operations to
strengthen resilience and maintaining our buoyant long-term outlook.
INCREASING STEEL DEMAND IN INDIA
India’s per capita steel consumption is only one-third of the world average. Increasing
population, rapid urbanisation, mobility and infrastructure requirements and government
initiatives such as ‘Make in India’ are expected to boost steel demand growth. In addition,
the government’s focus on accelerating the rural economy and plans for building smart
cities, affordable housing, dedicated freight and high-speed rail corridors, are expected
to create significant demand for steel. The National Steel Policy (NSP) envisages per capita
steel consumption to almost double to 160 kg by 2030-31. With a leadership position in
chosen market segments and world-class production facilities, Tata Steel is well poised to
benefit from this large opportunity.
EVOLVING NEEDS OF CUSTOMERS
With changing demographics, rapid urbanisation and higher affordability, the nature
of steel consumption in sectors such as automobiles, white goods and other consumer
goods is fast evolving. Along with new products, there is a growing need for Services and
Solutions that provide convenience. Tata Steel sees significant headroom to grow in new
and under-penetrated categories. We are well positioned to capitalise on this opportunity
through our innovative Services and Solutions offerings for consumers and a strong new
product portfolio backed by robust R&D and a pipeline of innovations.
CLIMATE CHANGE DRIVING NEW BUSINESS MODELS
Today, climate change is the biggest risk facing ‘hard to abate’ sectors such as steel.
However, Tata Steel sees this as an opportunity to take a leadership role in the steel industry
by reducing our environmental footprint. Tata Steel Jamshedpur is already a national
benchmark in CO2 emission. We have constituted a Centre of Excellence on Climate Change
to implement various technology-enabled projects for CO2 reduction (use of hydrogen as a
potential alternate fuel, carbon capture and use, beneficiation of low-grade raw materials,
etc.). Tata Steel has also ventured into the steel recycling business to explore an alternative
business model that will leverage India’s expected increase in scrap availability to produce
steel with a lower carbon footprint. These initiatives will not only strengthen our future
readiness but also provide a competitive edge.
DIGITAL WAVE CREATING A SOURCE OF COMPETITIVE ADVANTAGE
The world of work is rapidly changing. Automation, big data, advanced analytics, flexible
sourcing and new business models are revolutionising businesses. The digital transformation
is not only bringing significant disruptions, but is also enabling a simpler, more agile and
efficient organisation. Tata Steel is also taking steps to scale Industry 4.0 technologies in its
operations. In 2019, Tata Steel Kalinganagar became the only Indian manufacturing facility to
be recognised as Industry 4.0 Lighthouses by the World Economic Forum.
STEEL INDUSTRY LEADERSHIP IN TECHNOLOGY AND INNOVATION
Tata Steel aspires to be a technology and innovation leader in the steel industry. Towards this
vision, Tata Steel leverages its inhouse potential and that of the external ecosystem through
carefully curated collaborations and partnerships. The VIVA (Ventures, Innoventure and
Alliances) team has been formed to explore innovation opportunities provided by
the external ecosystem and accelerate our journey towards achieving technology leadership.
Our collaborations with start-ups are expected to act as a catalyst for us to gain a competitive
edge in areas where we do not have the necessary solutions and capabilities.
DEMAND FOR NEW MATERIALS GAINS TRACTION
With the growth in the economy, there is a large opportunity for new materials and
applications in existing and emerging sectors. We are focussing on creating new businesses
in high-potential new materials such as Fibre Reinforced Polymer composite and graphene.
These new businesses are expected to contribute 10% of our revenues going forward and
reduce the impact of cyclicality of the steel business.
CULTURALLY READY TO LEVERAGE CURRENT AND FUTURE
OPPORTUNITIES
Tata Steel aspires to be the most valuable and respected steel company globally by being
future ready structurally, financially and culturally. Over the past decades, Tata steel has been
able to successfully create a culture of continuous improvement, ethics, safety, diversity,
environment consciousness and giving back to the community. However, to successfully ride
the wave of technology enabled disruption, Tata Steel is focussing on fostering a culture of
agility and innovation. In order to foster an agile mindset in the organisation, Tata Steel has
embarked on a journey to break silos, increase speed and collaboration, build accountability
and embed new ways of working.
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Ensuring effective
identification and mitigation
India is one of the most attractive regions globally for the steel industry. However, sensitivity
to economic cycles, stringent regulations, high cost of capital and logistical challenges,
among others, pose significant risks. At Tata Steel, we have identified and mapped the key risk
categories with our Strategic Objectives (SOs) to implement effective mitigation measures.
FI N A N C I A L R I S K S
Strategic Objectives
SO2
SO1
Capitals Impacted
Financial
The Company has a large debt portfolio and is
exposed to volatility in financial markets, which
can impact the access to and cost of capital.
The Company is also exposed to currency
volatility given its import requirements, foreign
currency debt as well as offshore operations.
Concerns over climate change within the
international financial community can adversely
affect credit appetite for the steel sector.
Disruption in operations and contraction in
demand due to the COVID-19 pandemic can lead
to liquidity challenges.
Mitigation strategies
The Company has been focussed on deleveraging through internal cash generation and
monetisation of non-core assets. It has consciously diversified its sources of capital to tap
alternative pools and exploit financing opportunities. The Company is also continuously
working towards increasing its debt maturity to provide additional flexibility to
the business.
A dedicated team manages the currency exposure guided by the hedging policy and
hedges its exposure on a rolling basis. The Company is focussed on reducing its carbon
footprint. It continues to improve its disclosure on sustainability performance through
various disclosure platforms and publishes its sustainability KPIs in accordance with
international reporting frameworks. In view of the COVID-19 pandemic, the Company has
taken measures to curtail business expenses, renegotiate payment terms with vendors,
reduce its capex commitment sharply and prune fixed costs. It has realigned its marketing
strategy by redistributing sales to areas less affected by the pandemic and by ramping up
exports. Liquidity has also been shored up by raising capital through banks
and bond markets.
R E G U L AT O RY R I S K S
Strategic Objectives
SO3
SO2
SO1
SO4
Capitals Impacted
Financial, Social and Relationship, Manufactured, Natural
The Company is exposed to stringent laws and
regulations in the areas of environment, trade
measures, competition and taxes, among others.
Any non-compliance to various laws and
regulations can weigh on the Company’s
operating performance and adversely impact
reputation. The frequent changes in existing
regulations and introduction of newer ones make
compliance more complex.
Mitigation strategies
The Company is deeply committed to complying with existing laws and regulations and
has a policy of zero tolerance to non-compliance which is an integral part of its culture
and operating philosophy. It has invested in systems and processes to drive compliance
across the organisation. Employees are regularly sensitised about the need to comply and
educated about the compliance requirements of the role. Technology has been deployed
to track the compliance within the required timeframe, with suitable escalations and
reviews. Investments needed to comply with regulatory requirements are prioritised
within the capital expenditure approval framework.
34
M AC R O E CO N O M I C A N D M A R K E T R I S K S
Strategic Objectives
SO3
SO1
Capitals Impacted
Financial, Social and Relationship, Manufactured
Steel demand is dependent on economic growth.
Slowdown in the economy coupled with excess
capacity can adversely affect steel demand
and pricing. It is also affected by trade barriers
and protectionist policies. These can lead to
steel price variability and impact operating
performance. The Company is exposed to
competition from other materials or alternative
steelmaking technologies. These factors can
impact steel prices, demand for steel and
operating performance. COVID -19 is expected
to have a significant impact on the economy
in terms of contraction in underlying demand,
disruption in manufacturing and supply chain
operations across the country, labour issues,
liquidity issues, etc., adversely affecting steel
prices and cashflows.
Mitigation strategies
The Company continues to enhance its footprint in India by building a diversified
portfolio of customers from a range of industries across the length and breadth of the
country to counter slowdown in any one sector or region by diverting sales to other
sectors/regions. Dedicated marketing and sales teams service customers and build deep
customer engagement by customising products, improving reliability and providing
value-added services. Tata Steel has invested in building a strong marketing franchise
with well-regarded brands and a large network of dealers and retailers across the country.
This helps in increasing the stickiness of sales and reducing the exposure to business
cycles. It has also built distribution channels internationally to enable exports as and
when desired.
The Company has forayed into ready-to-use steel for the construction industry and
expanded its retail offering by introducing products such as steel doors and windows,
and furniture to enlarge retail customer base. The Company is also diversifying its product
offering beyond steel products by introducing new materials such as composites,
Fibre Reinforced Products, etc.
The Company has taken numerous steps to deal with challenges in the operating as
well as the macro-environment arising out of the COVID-19 pandemic and the ensuing
lockdown imposed by the Government to minimise the impact by increasing its market
share and increasing exports.
A scenario planning exercise was conducted to assess and plan for a range of outcomes.
In the immediate aftermath of the lockdown, production was reduced and sales were
diverted to exports. As the lockdown is getting lifted, sales are being gradually shifted to
areas less affected by the pandemic with the objective of ramping up sales in line with
the recovery in the market. The Company has also ramped up exports in the interim.
The Company continues to closely monitor the developments on the ground as it seeks
to align its operations in line with the evolving market conditions.
O P E R AT I O N A L R I S K
Strategic Objectives
SO4
SO1
Capitals Impacted
Financial, Manufactured, Natural
The steel industry is capital intensive and
maintenance of critical equipment is vital.
Conventional maintenance practices may be
inadequate towards maintenance of critical,
obsolete/ageing equipment and fire in confined
spaces and beyond, leading to unplanned
interruptions of operational processes.
Mitigation strategies
The Company focusses on the formulation and execution of advanced maintenance
practices to improve plant availability and reliability.
Best-in-class practices and technology for detection and protection of critical installations
have been implemented. Strong quality assurance processes are in place to ensure
reliability of equipment. Inventory levels have been optimised to achieve reduction in
working capital without interruption of operations.
In 2019, Tata Steel Kalinganagar became the only Indian manufacturing plant to be
included in the World Economic Forum’s Global Lighthouse Network, a community of
manufacturers showing leadership in applying Industry 4.0 technologies to drive financial
and operational impact.
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S A FE T Y R I S K S
Strategic Objectives
SO4
The Company operates across multiple
manufacturing locations and is subject to
various stringent safety laws and regulations.
Non-adherence to process and employee safety
requirements, provisions of safety laws and
regulations may impact business continuity
and reputation.
Capitals Impacted
Human, Manufactured
Mitigation strategies
The Company has built a strong safety management system that encompasses the
ecosystem of its operations. Business Continuity Management process has been
institutionalised through the development of Crisis Management Centre (Tactical
Centre) and Governance of Onsite Emergency Plans. The Process Safety Centre of
Excellence has been created for standardised implementation of the Process Safety
Framework in all high-hazard processes. Safety trainings are conducted to meet the
requirements of employees, contractors and other relevant stakeholders as a part
of the safety competency and capability enhancement initiative. Safety is key to our
business operations and is a core business result for all employees in their performance
management system.
CO M M U N I T Y R I S K S
Strategic Objectives
SO4
Capitals Impacted
Social and Relationship, Manufactured
The Company is responsible towards the local
communities residing around its manufacturing
locations. The absence of continuous dialogue
with communities on newer manifestations
of vulnerability, societal advancement as a
right dialectic between cultural and livelihood
aspirations, and newer paradigms to foster
development will dilute the relationship based on
trust and lead to loss of reputation and disruption
of operations.
Mitigation strategies
The Company’s signature CSR programmes are designed to create replicable
large-scale models to address the most pressing community challenges on education,
health, tribal identity and livelihoods. Focussed programmes on disability, agriculture,
water conservation, rural sport, nutrition and urban slum development emphasise on
continuous reduction of inequities in society and empower the local community.
Deep relationships with communities have enabled the Company to respond to the
prevailing COVID-19 pandemic where it has meaningfully reached more than 0.5 million
lives across the country, on time. The Company is deeply committed to co-creating
scalable solutions for the communities it serves.
S U P P LY C H A I N R I S K S
Strategic Objectives
SO2
SO1
Capitals Impacted
Financial, Manufactured
The supply chain network is subjected to
physical and environmental destructions, trade
restrictions due to geopolitical tensions and
disruptions at suppliers. The developing rail,
road, port infrastructure, handling facilities and
dependence on outsourced partners may lead to
disruption of operations.
Mitigation strategies
The Company has a dedicated team focussed on managing its supply chain. It is
continuously working towards diversification in sourcing and expanding its vendor
base from other geographies to manage supply chain disruptions. The Company
has partnered with ports, shipping companies and logistics service providers,
including Indian Railways and trucking companies. Measures such as logistics network
optimisation, improving the operational capacity at loading/unloading points and
upgradation of existing facilities are being undertaken.
I N F O R M AT I O N S E C U R I T Y R I S K S
Strategic Objectives
SO2
SO1
Capitals Impacted
Financial, Intellectual
The Company focusses on increasing interactions
through digital platforms with customers,
suppliers and other stakeholders of the Company,
placing a greater need to secure the IT systems
and infrastructure vulnerable to cyber-attacks.
Breach of information security due to cyber-
attacks and non-compliance to IT legislations and
regulations may lead to business disruption and
imposition of penalties.
Mitigation strategies
The Company has invested heavily in managing its IT network.
Mechanisms are in place to capture alerts and triggers from external sources and
any information security related incidents. Migration of production servers to cloud
are under various stages of implementation. The Company is working on building a
next-generation security operations centre and controls. The Company is also building
capacity and resilience in network through migration to SDWAN (Software Defined Wide
Area Network).
Significant efforts have been made to increase awareness in addition to investment in
cyber insurance. The Company has enacted various policies and procedures to ensure
data privacy. Proactive software asset management ensures compliance.
CO M M O D I T Y R I S K S
C L I M AT E C H A N G E R I S K S
Strategic Objectives
SO2
SO1
Capitals Impacted
Financial, Manufactured
Strategic Objectives
SO4
Capitals Impacted
Financial, Natural, Social and Relationship, Manufactured
The cost of operations gets significantly impacted
by commodity pricing. Volatility in the supply
and prices of commodities accentuated by
exchange rate fluctuations, given there are a
number of imported raw materials,
can impact profitability.
Mitigation strategies
Changing prices of coal and iron are generally reflected through adjustments in steel
prices, which help in managing long-term price trends. The Company also enters into
long term contracts with raw material vendors for a bulk of its requirements instead of
depending entirely on the spot market. In addition, the Company also hedges certain
commodities in the derivatives market to address short-term volatility.
Stringent climate laws and regulations for
accelerating transition to a low-carbon economy,
technology disruptions and shifting customer
preferences to alternative materials may
adversely impact profit margins.
Risk assessment for key vendors is performed to assess the capability of vendors in
meeting the supply requirements. Necessary clauses are incorporated in vessel contracts
to safeguard the Company’s interests in case of potential delays.
36
Mitigation strategies
The Company has adopted the Task Force on Climate-related Financial Disclosures (TCFD)
framework and strengthened its internal governance, disclosures and policy advocacy for
transitioning to a lower carbon regime of operations.
Over the last five years, there has been significant reduction in coke rates and dust
emissions along with 100% slag utilisation, increase in scrap usage and focus on scrap
recycling. To build internal R&D capabilities in carbon reduction and other sustainability
measures, the Company is looking at collaborations with R&D institutes, academia and
technology suppliers. The Company continues to build new portfolio in Value-added
Products, Services & Solutions and New Materials Business to establish new markets and
consumer segments.
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Solidifying bonds with partners in progress
At Tata Steel, we consider our stakeholders as partners in long-term value creation. We have
developed a robust stakeholder engagement process to foster and nurture relationships,
which helps improve strategy development and decision making.
Delivering on stakeholder needs,
interests and expectations are
core to the way we operate.
In FY 2018-19, we conducted
a pan-India stakeholder
engagement exercise to revisit
the Environmental, Social and
Governance (ESG) issues that are
material to value creation amid
the evolving global sustainability
landscape. In FY 2019-20, we
launched a Responsible Supply
Chain Policy for our vendor
partners and suppliers.
Our key stakeholders comprise
investors, customers, vendors,
government and regulatory
bodies, employees, communities
as well as the media and industry
bodies. We periodically engage
with them either through
focussed groups or individually.
For effective communication,
we use a wide range of tools and
platforms such as our Company
website, newsletters, e-mails,
social media and press releases.
38
INVESTORS
CUSTOMERS
VENDOR PARTNERS
Value proposition
Consistent returns on
investments
Why they are important
Providers of financial
resources essential to fund
growth
Strong brands, differentiated
products and solutions,
engineering support, partnering
for growth
Building capabilities through
skill development, growth
opportunity, safe operations,
opportunity to innovate
Reason for any business to
exist; provide us an opportunity
to build long-term mutually
beneficial relationships
Provide us operational leverage
to optimise value chain, be
cost competitive and exceed
customer expectations
How we engage
Investor and analyst meets
‐
‐ Periodic meetings
‐ Annual Report and media
updates on performance
‐ Customer meetings
‐ Multi-stakeholder platforms
‐ Conferences
‐ Construction conclaves
‐ Zonal and similar meets
‐ Vendor meet
‐ Annual sustainability meet
‐ Vendor satisfaction survey
‐ Vendor Capability
Advancement Programme
‐ Vendor grievance redressal
Committee
‘Speak Up’ Toll-free number
‐
‐ Workshops
ESG emphasis
‐ Carbon emission,
‐ Health, safety and human
renewable and clean
energy and air pollution
‐ Technology, product and
process innovation
‐ Embed sustainability in
supply chain
rights
‐ Carbon emission, water, air
pollution, waste management
and renewable and clean
energy
‐ Embed sustainability in supply
chain and promote circular
economy
‐ Health, safety and human rights
‐ Key environmental issues such
as carbon emission, water and
energy
‐ Embed sustainability in supply
chain and promote circular
economy
Departments engaging with
stakeholders
Marketing and Sales, Procurement,
Corporate Sustainability, Environment,
Corporate Social Responsibility,
Corporate and Regulatory Affairs, and
Research and Development
Identify
stakeholders
Connect
Communicate
Engage
Collaborate and Partner
Stakeholder
groups
Investors, customers, vendor partners,
government and regulatory bodies,
employees, communities, media and
industry bodies
GOVERNMENT AND
REGULATORY BODIES
Value proposition
Advocacy towards shaping
policies for the future
Why they are important
Co-develop and comply
with legislations and policies
applicable to our business to
ensure continuity
How we engage
‐ Representations at relevant
ministries and regulatory
authorities at the Central
and State levels
‐ Expert speak platform
for capacity building on
regulations and policy
ESG emphasis
‐ Carbon emission, energy
efficiency and waste
management
‐ Education in community
development
‐ Setting agenda for future
regulations and going
beyond compliance
EMPLOYEES
COMMUNITY
MEDIA AND
INDUSTRY BODIES
Fair wages, good relations,
opportunity for learning and
growth and well-being
Significant and lasting
positive impact on
communities proximate to our
operating locations
Sharing best practices,
training, research and ideas
that enhance the overall
industry performance
Key to the success of our
business; their efforts are
instrumental in delivering our
strategies and for sustained
business growth
Thriving and engaged
communities vital to our
social license to operate
Media: To reach out to the
society and communicate our
vision and brand
Industry bodies: To engage with
regulatory bodies and discuss
matters of mutual interest
‐ Monthly online meet with the
CEO and MD and informal meets
with the senior leadership
‐ Employee engagement survey
‐ Employee happiness study
‐ Joint forums between employee
unions and management
Internal communication
‐
‐ Public hearings
‐ Meetings with community
leaders and the CSR Advisory
Council
‐ Community welfare
‐
programmes
‘Samvaad’ – provides an
annual platform for tribal
communities to lead their
development agenda
‐ Press conferences and
media events
‐ Regional and national
events such as conclaves
and conferences of
industry bodies
‐ Senior leadership are part
of various industry bodies
and committees
‐ Talent retention
‐ Local sourcing of labour
‐ Welfare practices for
non-officers
‐ Better healthcare facilities
‐ Address water scarcity
‐ Livelihood generation and skill
development
‐ Health, safety and human
rights
‐ Carbon emission, water
and energy
‐ Embed sustainability in
supply chain and promote
circular economy
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Actions to realise our priorities
Materiality enables us to identify, prioritise, track and report the most
important sustainability issues under economic and environment, social and
governance (ESG) that have a significant impact on our business.
Tata Steel conducted an extensive stakeholder
engagement exercise in FY 2018-19 to identify
the top 20 ESG issues that are material to the
organisation. The economic material issues
were revisited through various stakeholder
engagement processes and business reviews by
the senior leadership. These issues are of high
importance to our stakeholders and integral
to our vision of being the ‘global steel industry
benchmark in value creation and
corporate citizenship’.
ADDRESSING MATERIAL ISSUES
Tata Steel’s strategy and planning process
incorporates the material issues by mapping
them to its long-term Strategic Objectives
(SOs). These issues are reviewed monthly by
the respective owners and quarterly by the
senior management.
E CO N O M I C
Strategic Objectives
Capitals Impacted
SO1
SO2
SO3
Material Issues
Measures
Linked Key Performance Indicators (KPI)
Business
growth
‐ Focus on organic and inorganic growth
‐ Strengthening of the New Materials and
Service and Solutions businesses
‐ Crude steel capacity
‐ Percentage of total revenue from the New Materials Business
‐ Percentage of total revenue from the different Services and
‐ Foraying into newer segments such as oil and
Solutions business
Long-term
profitability
gas and lifting and excavation
Increase in the sales of downstream products
‐
‐ Maintain leadership in chosen segments
‐ Enhancement of raw material security
‐ Enhancement of operational efficiency
‐ Shikhar25 cost management initiatives
Product quality
‐ Product and process innovation
‐ Value engineering and customer service teams
‐
Innovative routes to market
‐ Volume of B2C business and revenue generated from
downstream products
‐ Market share
‐ EBITDA
‐ Volume of B2C business
‐ Captive coal (%) and captive iron ore (%)
‐ Savings through Shihkar25 initiatives
‐ Pan India dealers and distributors
‐ Customer satisfaction index
‐ Quality complaints
‐ Brand equity index
‐ New products and services
Industry leadership in steel
SO1
SO2 Consolidate position as a global cost leader
SO3
SO4
Insulate revenues from steel cyclicality
Industry leadership in Corporate Social
Responsibility, and Safety, Health
and Environment
40
Financial Capital
Human Capital
Manufactured Capital
Natural Capital
Intellectual Capital
Social and Relationship Capital
E N V I R O N M E N T
Strategic Objectives
Capitals Impacted
SO2
SO4
Material Issues
Measures
Renewable and clean
energy
‐ Significant renewable energy potential identified across all
locations
Waste management
‐ Recovery and reuse of metal from steelmaking slag
‐ Sustained 100% solid waste utilisation in FY 2019-20 at
Jamshedpur and Kalinganagar
Water
consumption
and effluent
discharge
‐ Minimising freshwater consumption by upgradation of existing
water treatment and cooling tower systems to increase its
efficiency and reusing treated waste water from Sewage
Treatment Plant at Bara for industrial purpose
‐ Undertaken river basin study to identify watershed-level risks
at Jamshedpur
Linked Key Performance Indicators (KPI)
‐ Renewable Purchase Obligation
‐ Power generated through renewable
sources
‐ LD slag utilisation
‐ Solid waste utilisation
‐ Material efficiency
‐ Specific water consumption
‐ Effluent discharge intensity
Energy efficiency
‐ Process optimisation initiatives such as waste heat recovery
‐ Energy intensity
systems and by-product gas utilisation
Air pollution
Supply chain
sustainability
CO2 emission
Biodiversity
‐
Investment in air pollution control equipment
‐ Dust emission intensity
‐ Formulation and release of Responsible Supply Chain Policy and
guidelines for supply chain partners
‐ Deploying Responsible Supply Chain Policy in FY 2020-21
‐ Suppliers trained for SA 8000
‐ Suppliers assessed for SA 8000
‐ Suppliers assessed on safety parameters
‐ Four transition risks and six opportunities identified for Tata Steel
India, based on the TCFD framework
‐ GHG emission intensity
‐ Total GHG emissions for all major
‐ Pursuing collaborations with technology experts to abate
geographies
carbon emission
‐ Formation of a governance structure (Centre of Excellence for
Biodiversity Management) for biodiversity management at
all locations
‐ Development of Biodiversity Management Plans (BMPs) for eight
mining locations and Tata Steel BSL at Dhenkanal
‐
No. of locations having BMPs
Circular economy
‐ Steel scrap processing unit under commissioning at Rohtak,
Haryana with a 5,00,000 tonne per year capacity
‐ Advocacy with various government and industry bodies to build
scrap utilisation networks
‐ Capacity of scrap recycling business
‐
Solid waste utilisation
Sir Dorabji Tata Biodiversity Park in West Bokaro
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S O C I A L
Strategic Objectives
Capitals Impacted
SO4
G OV E R N A N C E
Strategic Objectives
Capitals Impacted
SO1
SO2
SO3
SO4
Material Issues
Measures
Linked Key Performance Indicators (KPI)
Material Issues
Measures
Occupational Health
and Safety (OHS)
‐ Leadership capability development at all levels to achieve
zero harm
Identification and mitigation of hazards and risks
‐
‐ Reduction in safety incidents on road and rail to ensure zero
‐ LTIFR
‐ Fatalities
‐ Health index
Labour relations
fatalities inside plant premises
‐ Excellence in Process Safety Management (PSM)
‐ Establishment of industrial hygiene and improvement in
occupational health
‐ Concluded wage revision with structural changes
‐
Introduction of Leave Bank to enable employees to assist
co-workers in need
‐ Performance in Employee Engagement
Survey
Drinking water
‐
Installation and repair of drinking water facilities through CSR
interventions
‐ No. of water harvesting structures
constructed
Local sourcing of
labour
‐ Recruiting indigenous (SC/ST) people in the workforce
‐
Improving vendors’ share of business from SC/ST
communities by training them to match the Company’s
requirements for various products and services
‐ Number of local suppliers
‐ % of Affirmative Action (AA) community in
the workforce
‐ Volume of sourcing from AA community
Talent retention
‐ Address contemporary needs of employees such as a
five-day work week, work-from-home, satellite office
operation for spouses, childcare facilities, career break
opportunities, paternity leave, etc.
‐ Attract and retain diverse talent including Persons with
Disabilities (PWDs) and LGBTQ+ community
‐ Development of workforce capability through various
programmes; fostering a diverse workforce through MOSAIC*
framework
*MOSAIC - Company’s diversity and inclusion initiative
vendors
‐ Attrition rate
‐
Investment in employee training and
development
Going beyond
compliance and
setting trends for
future regulations
Greater stakeholder
engagement
‐ Strengthened collaborations with technical institutes, technology
start-ups and academia for technology leadership, climate change
and other environmental issues
Linked Key Performance Indicators (KPI)
No. of collaborations with external
partners
‐ Enhancement of specialised channels such as public meetings,
vendor-focussed committees, Speak Up toll-free number, platforms
such as conference and construction conclave, zonal and similar
events
Performance in various surveys
conducted periodically for
stakeholder categories, including:
‐ Customer Satisfaction Survey
‐ Vendor Satisfaction Survey
Greater sustainability
disclosures
‐ Consistent improvement in our disclosures through the
Framework, worldsteel indicators and UNGC* Communication on
Progress
‐ Updating website periodically to enhance transparency
Scores and rating achieved in:
‐ CDP
‐ DJSI assessment
‐ Worldsteel recognitions
Technology,
product and process
innovation
‐ Ventures, Innoventure and Alliance management function formed
in FY 2019-20 to focus on monetising our Intellectual Property,
leverage the start-up ecosystem and build strategic collaborations
with the academia and industry
In-house Innovent platform to support consumer in innovation for
generating key customer insights
‐
‐ Developed 155 new products in FY 2019-20, including those for
high-strength automotive structural applications
No. of new products developed
‐ No. of patents received
‐
‐ No. of start-ups engaged
‐ No. of alliances created
Technical knowledge
transfer and capacity
building for relevant
partners
‐ Engagement with supply chain partners on Responsible Supply
Chain Policy
‐ Conduct Vendor Capacity Advancement Programmes (VCAP)
‐ No. of VCAPs conducted
‐ No. of vendor development projects
Responsible advocacy
for the steel and
mining sector
‐ Engaging with industry bodies and peer networks in sharing best
practices, training, research and ideas that enhance the overall
performance of the industry
*UNGC: United Nations Global Compact
Maternal and Newborn Survival Initiative (MANSI)
42
100 years of Tata Workers’ Union
43
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
STRATEGY PLANNING
The future depends on what we do today
Our strategy is linked to our Vision, Mission and Values. As part of our
integrated strategy planning process, we examine both the external and
internal business environment and factor in potential risks and opportunities
that could disrupt the industry. Materiality assessment provides deeper
insights to the changing needs of all our stakeholders.
Our long-term strategies and annual business plans are formulated as an
outcome of the integrated strategy planning process. The overall strategy
and plans are cascaded down to individual divisions/departments with
clearly defined responsibilities across all employee levels.
STRATEGY PLANNING PROCESS
VISION
MISSION
VALUES
Material
issues
Internal
context
STRATEGY
DEVELOPMENT
Strategic Objectives and Enablers
Long-term Strategy
Leadership
direction
External
context
ENTERPRISE RISK
MANAGEMENT
Identification
Assessment
Mitigation
Review and Monitoring
Strengths and Weaknesses
Opportunities and Threats
STRATEGY
DEPLOYMENT
Long-term Plan
Annual Business Plan
44
While Tata Steel has consistently been one of the most profitable and lowest cost producers of steel1 in the world, the Company needs to
address challenges such as improving productivity, maintaining cost competitiveness and being agile and innovative in a rapidly evolving
business environment.
Tata Steel aspires to be future ready structurally, financially and culturally in its pursuit to be the most valuable and respected steel company in
the world. Towards this aspiration and to further strengthen Tata Steel’s leadership position, we have defined a set of Strategic Objectives (SOs)
and a set of core capabilities known as ‘Strategic Enablers’ to achieve the SOs.
STRATEGIC OBJECTIVES
SO1
INDUSTRY LEADERSHIP
IN STEEL
Scale of operations is a
pre-requisite for the steel
industry leadership.
SO3
INSULATE REVENUES
FROM STEEL
CYCLICALITY
The steel industry is cyclical
in nature. It is essential to
build a portfolio of products
and services that can provide
protection from cyclicality and
lend stability and momentum to
our revenues and profitability.
SO2
CONSOLIDATE
POSITION AS A
GLOBAL COST LEADER
We aspire to be a global
benchmark in operational
efficiency, ensure raw material
security and strengthen our
logistics network.
SO4
INDUSTRY LEADERSHIP
IN CSR AND SHE
We aspire to be a leader in
sustainable business practices.
As a responsible organisation,
we are committed towards
creating and providing a
safe working environment
for our people, carrying out
environment-friendly business
operations and improving the
quality of life of the communities
we operate in.
STRATEGIC ENABLERS (SEs)
Employer of choice
People are key for an
organisation aspiring to
strengthen its leadership
position, and being an employer
of choice is a significant aspect of
our strategy.
Leadership in steel
technology
To prepare for disruptions in the
future, our ability to innovate and
develop new products, improve
processes, develop technologies
and transform business models
is critical.
1 Comparison of cost is done at crude steel level
Agility and innovation
Leverage digital technology
It is essential to focus on creating
the right organisational culture
that encourages agility and
innovation.
Digitalisation is critical for
attaining technology leadership
in the Industry 4.0 era and
drive innovation.
45
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR STRATEGIC REVIEW
Building bridges to the future
SINCE 1907
By driving
sustainability
At Tata Steel, we constantly endeavour
to minimise our environmental footprint
despite being part of a ‘hard to abate’
industry. Our inclusive programmes,
along with our partnerships with various
organisations, enable us to further deepen
our engagement with communities.
Through our corporate governance policies
and frameworks, we embed sustainability in
all we do.
Dairy farming activities at Gopalpur
Thousand Schools Programme at Joda Mines
Dow Jones Sustainability
Indices
Ranked fourth in
global steel sector
in 2019
CDP
Rated ‘B’ in Climate
Change and Water
related disclosures
in 2019
World Steel Association
Recognised as
‘Steel Sustainability
Champion’ for
three years in a row
Great Place to Work®
Institute
Recognised
among India’s
Best Workplaces:
Manufacturing for
the year 2019
Financial capital
Managing finances prudently
At Tata Steel, we strive to optimise returns for providers of
our financial capital. We endeavour to maximise surplus
funds from both business operations and monetisation of
assets and investments as relevant.
We invest our surplus in attractive growth opportunities in
our core market. We also continue to optimally raise finance
based on prevailing market conditions at the best possible
cost and on flexible terms given the cyclical nature of the
steel industry.
Impact on SDGs
FY 2019-20 Highlights
13.76%
PBET/Turnover
9.54%
ROCE
9.02%
Return on Average Net Worth
₹57.11
Basic Earnings Per Share
PBET - Profit Before Exceptional items and Taxes
ROCE - Return on Average Capital Employed
Strategic linkage
Material issues addressed
SO1
SO2
SO3
‐ Business growth
‐ Long-term profitability
‐ Tied up US$ 525 million in External Commercial
Borrowing (ECB) and domestic term loans to meet capex
requirements of ₹2,000 crore in India
‐ Funded the acquisition of steel business of UML* by
subscribing to the rights issue of TSLP** during FY 2019 - 20
‐ Sufficient working capital lines established for smooth
business operations
SO1 - Industry leadership in steel SO2 - Consolidate position as a global cost leader SO3 - Insulate revenues from steel cyclicality
* UML - Usha Martin Limited
** TSLP - Tata Steel Long Products Limited
HOW DO WE MANAGE OUR
FINANCIAL CAPITAL
Financial capital is generated annually
from surplus arising from current business
operations and through financing
activities, including raising debt and
equity aligned with market conditions
and internal strategic planning, as well as
optimal asset monetisation.
We ensure that the regular operations
are at an optimum level. Our operational
KPIs are compared with internal and
external benchmarks to achieve best
production, higher productivity and yields.
We have continuous cross-functional
improvement programmes under Total
Quality Management (TQM) and Shikhar25
wherein TQM techniques are routinely
deployed for operations, maintenance
process improvements, operational
efficiency, product mix optimisation,
waste reduction and recycling, energy
efficiency and procurement optimisation.
They lead to cost optimisation. Our
innovative marketing initiatives and
various ongoing digital programmes
provide better customer connect and
reach, and higher realisations. This
operational efficiency enables us to
generate positive cash flows from
operations.
We have a robust financial planning
process that assesses the requirement of
funds for sustainable business operations
as well as for investments towards
present and future business sustainability
and growth opportunities. The fund
requirement over business surplus and
retained earnings are met by raising funds
as per market conditions to reduce finance
cost and have flexible terms in line with
the cyclical nature of the steel industry.
We continuously work towards aligning
the debt maturity profile to the long
gestational nature of steel projects while
maintaining a flexible capital structure in
line with business needs, which results in
significant savings in interest costs and
ensures maintenance of desired liquidity
levels. Foreign exchange risks are actively
managed with adequate hedging.
We deleverage our balance sheet through
internal cash flows and asset monetisation.
The funds generated are allocated to
strategic investments in subsidiaries,
inter corporate loans and investments
in capital assets. The surplus funds are
invested in short-term instruments.
MANAGING CAPITAL INPUTS
We tied up $525 million through ECB and
domestic term loans of ₹2,000 crore to
meet the capex requirement in India.
We have established ₹3,000 crore of Letter
of Credit lines for the Phase II expansion
of Kalinganagar.
We have judiciously availed Government
schemes and policies during the year
which led to lower tax charge and outgo
due to rationalisation of Corporate Income
tax rates from 30% to 22% and settlement
of 234 Central Excise and Service Tax
disputes under the tax amnesty scheme
known as Sabka Vishwas Legal Dispute
Resolution Scheme (SVLDRS).
To tide over the pandemic-induced
business disruptions in the domestic
market, sufficient short-term liquidity of
₹4,800 crore was arranged. Our innovative
financing strategy for coal procurement
helped us to deleverage by ₹360 crore.
In addition, we generate cost savings from
business process improvements (TQM
initiatives and Shikhar25).
MANAGING CAPITAL OUTCOMES
Our India operations were strengthened
by the acquisition of the steel business of
UML, by our subsidiary TSLP, increasing
and stabilising production at Tata Steel
BSL acquired in FY 2018-19. We continue
to utilise trade finance products to realise
funds from business cash flows in advance
to deleverage the balance sheet.
The credit rating agencies, Standard
& Poor’s (S&P) and Brickworks have
retained their existing credit rating on
the Company. However, based on the
prevailing situation, the outlook has been
revised to ‘Stable’.
STRATEGIC FOCUS
‐ Drive growth without increasing
leverage; enhance internal cash
generation through efficiency and
productivity
‐ Focus on divestments; build synergies
from acquisitions
‐ Allocate capital efficiently
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Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
OUR CAPITALS
FINANCIAL CAPITAL (contd)
WAY FORWARD
Deleverage balance sheet
through internal cash flows
and asset monetisation
Align debt maturity profile
to the long gestational
nature of steel projects
Maintain flexible capital
structure in line with the
business needs
Allocate funds to efficient
and value-accretive
opportunities.
EBITDA/TURNOVER
(%)
PBET/TURNOVER
(%)
RETURN ON AVERAGE
CAPITAL EMPLOYED
(%)
29.38
23.14
16.26
MOVEMENT IN TURNOVER
Turnover was at ₹60,436 crore, down 14%
year-on-year due to a decline in steel prices
and a drop in steel deliveries.
MOVEMENT IN EBITDA
EBITDA was at ₹15,096 crore, down 27%
year-on-year, primarily due to lower
deliveries and decrease in steel prices.
INCREASE IN CAPITAL
EXPENDITURE
Capital expenditure was ₹4,749 crore,
higher by 29% than the previous year,
due to spend against the ongoing projects,
majorly at the Phase II expansion project
at Kalinganagar.
INCREASE IN CASH FLOWS
Net increase in cash and cash equivalents
was ₹449 crore as against a decrease of
₹4,044 crore in the previous year, due to
release in working capital and increase in
short-term borrowings.
26.11
24.98
22.44
18.25
16.53
11.38
7.48
13.1
13.76
9.8
9.54
5.57
FY16
FY17
FY18
FY19
FY20
FY16
FY17
FY18
FY19
FY20
FY16
FY17
FY18
FY19
FY20
PBET - Profit Before Exceptional items and Taxes
RETURN ON AVERAGE
NET WORTH
(%)
BASIC EARNINGS PER SHARE
(₹/share)
NET DEBT/EQUITY
(Times)
15.43
90.41
0.5
0.49
0.44
0.42
9.02
6.83
7.21
57.11
38.57
31.74
0.15
50
51
The RATH is a steel structure
inspired by the dual narrative
of the Sun Temple and the
Rath Yatra (Chariot Festival)
at Bhubaneswar
1.89
8.05
FY16
FY17
FY18
FY19
FY20
FY16
FY17
FY18
FY19
FY20
FY16
FY17
FY18
FY19
FY20
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Manufactured capital
Maintaining cost and quality leadership
Tata Steel continuously invests in improving the efficiency
of its iron-making, steelmaking and rolling facilities and
warehouses, along with logistics operations, while ensuring
the safety and reliability of its operations.
We have been strengthening our operations through a
combination of organic and inorganic growth initiatives.
Our steelmaking operations have secure raw material supply
from captive iron ore mines, which enables us to maintain
and drive efficiencies.
Impact on SDGs
FY 2019-20 Highlights
13.16 MnT
Crude steel production
12.32 MnT
Deliveries
Strategic linkage
Material issues addressed
SO1
SO2
‐ Business growth
‐ Long-term profitability
‐ Product quality, price offerings and
delivery
‐ Efficient operations and value chain are critical
to meet growth aspirations and address the
evolving needs of customers
‐ We continue to invest in facilities that enable
‐ Technology, product and process
us to be a leader in steel technology
innovation
SO1 - Industry leadership in steel SO2 - Consolidate position as a global cost leader
TATA STEEL JAMSHEDPUR (TSJ)
The Jamshedpur plant is the flagship facility
of Tata Steel. Continuous improvement
efforts over the years have helped us sustain
production levels and progress towards
operational excellence. In the process,
we have also lowered our coke rate, reduced
waste generation, improved waste utilisation
and maximised energy and material
efficiency. The facility produced over 10 MnT
of crude steel in FY 2019-20. Consistent focus
on asset management using data analytics
and predictive modelling has resulted
in more than 90% availability of our key
manufacturing units at Jamshedpur.
of 1.5 MnT of gross coke, Sinter Plant with a
gross production capacity of 5.75 MnT, Steel
Melting Shop with the largest Converter in
India (310-tonne), and Hot Strip Mill designed
to produce high-strength steel for various
segments with a wide range of features (up
to 1,200 million pascals tensile strength, 2,050
mm width and 25 mm thickness of Hot
Rolled Coils).
The plant’s cost competitiveness is driven
by automation and proximity to ports and
captive mines. TSK recently became the first
Indian plant to be included in the elite Global
Lighthouse Network of the World Economic
Forum for its leadership in applying Industry
4.0 technologies. In line with the Company’s
objectives, TSK has continued on its journey
of operational excellence. In FY 2019-20, the
fuel rate at the blast furnace was improved
substantially through increased Pulverised
Coal Injection (PCI), thereby improving cost,
CO2 emission and energy intensity. The plant
achieved 99.7% capacity utilisation during
the period under review.
Availability of critical manufacturing units
at TSJ in FY 2019-20
COKE RATE*
(Kg/tonne of hot metal)
TSJ
TSK
Good
ENERGY INTENSITY
(Gcal/tonne of crude steel)
TSJ
TSK
Good
1
6
5
0
8
3
0
6
3
4
3
4
8
4
3
9
9
3
2
5
3
4
6
3
3
5
3
9
4
8
.
9
2
7
.
7
7
5
.
7
6
5
.
7
6
5
.
Coke Ovens
Blast Furnaces
Agglomerates
Steelmaking
>99%
>96%
>92%
>93%
TATA STEEL KALINGANAGAR
(TSK)
Phase I (3 MnTPA) of TSK started commercial
production in June 2016 and attained
production levels at its rated capacity in less
than two years. The plant embodies scale
and technological excellence in steelmaking
with a 3.3 MnT Blast Furnace (4,330 cubic
metre capacity), two Coke Ovens that are
stamp charged gas recovery type batteries
.
1
3
7 6
6
5
.
.
7
2
3 6
6
5
.
FY16
FY17
FY18
FY19
FY20
FY16
FY17
FY18
FY19
FY20
* Defined as amount (in kilograms) of coke (fuel made from heating coal) used to produce
one ton of hot metal (liquid iron) during iron making process
53
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MANUFACTURED CAPITAL (contd)
RAW MATERIAL MINING AND
PROCESSING
Tata Steel is India’s most integrated steel
company with captive mines of iron ore and
collieries located around its manufacturing
facilities. The highest standards of
environmental management are followed
in mining locations while using the best
available technologies.
IRON AND STEEL MAKING
We produce steel through the conventional
blast furnace route. Raw materials are
converted to hot metal and crude steel
through various processes including coke
making, sinter making and palletisation.
The processes are designed to deliver high
productivity with the available resources
while managing slag rate and steelmaking
requirements.
ROLLING AND PROCESSING
The rolling mills help in manufacturing
a diverse product mix with customised
shapes, sizes, and various chemical and
technical properties. Aligned with customer
specifications and requirements, these
products undergo stringent quality checks
and assurance processes. We also produce a
range of value-added products for the retail
markets and provide customised solutions to
industrial buyers.
OUR ASSETS
Process
Mining and
Beneficiation
Iron and
Steelmaking
Rolling mills
Facilities/Equipment
Iron ore, coal, chrome and manganese ore mines
‐
‐ Heavy earth-moving machines
‐ Beneficiation plant
‐ Logistics and handling facilities
‐ Bell-less top charge high-capacity blast furnaces
‐ Basic oxygen furnace for steelmaking
‐ Coke, sinter and pelletising plants
‐ Raw material handling facilities
‐ Online granulation of blast furnace slag
‐ Stamp charging battery
‐ Coke Dry Quenching (CDQ)
‐ Desulphurisation facility
‐ Secondary steelmaking
‐ Flat and long products mills
‐ Wire rods/drawing facilities
‐ Tube-making facility
‐ Slab to coil facility
‐ Billet to bar/rod facility
‐ Rolling Tandem Mill for pickling and rolling
‐ Hot dip galvanising facility
Sardar Patel Stadium, Ahmedabad —
We are proud to be the major steel
supplier to this world-class project,
having supplied 75% of the rebars,
besides 41,000 couplers and 8,400
threads to expedite the completion.
By-products
processing
‐ Metal recovery plant
‐ Slag processing plant
INBOUND LOGISTICS
Tata Steel’s operations are strategically
located for inbound supplies and import of
raw materials sourced from around the world
routed through the major ports of Dhamra,
Paradip and Haldia. Given the challenges
of logistics in eastern India, a multi-modal
logistics chain, which includes roads, railways
and shipping, is used. Currently, inbound
logistics for raw material transportation is
completely dependent on the Indian Railways.
Inbound logistics ensures uninterrupted
supply of >40 MnTPA of raw materials from
ports and captive mines through railway
wagons, ensuring quality and optimal cost.
OUTBOUND LOGISTICS
Outbound logistics is dependent 60-75% on
railways and 20-40% on roadways at various
locations. It consists of a network of warehouses
and Steel Processing Centres (SPCs), ensuring
timely delivery and transportation of finished
products to meet on-time delivery expectations
of customers through a network of hubs and
stockyards at strategic locations across India to
ensure delivery cycles as low as 48 hours from
the stockyards.
BY-PRODUCTS MANAGEMENT
Our Industrial By-products Management
Division (IBMD) deals in a variety of
by-products and scrap in the entire steel value
chain and fundamentally operates on the
3R principle of Recover, Reuse and Recycle.
Over the years, IBMD has become a profit
centre by virtue of managing by-products
and creating value out of waste. In
FY 2019-20, India’s first steam ageing facility
for ‘accelerated weathering’ of LD slag was
commissioned at TSJ. Also, IBMD supplied its
highest ever scrap of 960 kilotonnes to steel
melt shops, facilitating lower volume
GHG emissions at TSJ and TSK.
54
55
WAY FORWARD
Expedite commissioning of the pellet plant and cold
rolling mill at Kalinganagar
Improve availability and utilisation of plants to achieve
best-in-class levels
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Intellectual capital
Fostering a culture of innovation
Strategic linkage
Material issues addressed
SO1
SO2
SO3
SO4
‐ Business growth
‐ Product quality, price offerings and
delivery
‐ Focus on innovation, technology, digital and a
culture of continuous improvement
‐ Building a sustainable business portfolio,
‐ Technology, product and process
which is resilient to steel business cyclicality
innovation
SO1 - Industry leadership in steel SO2 - Consolidate position as a global cost leader SO3 - Insulate revenues from steel cyclicality
SO4 - Industry leadership in Corporate Social Responsibility, and Safety, Health and Environment
Tata Steel aspires to be among the top five innovation
driven steel companies in the world. We are building on our
capabilities in digital and technology, besides also fostering
a culture of innovation to maintain our industry leadership
position and cost competitiveness.
Over the past decades, we have built a strong culture of
continuous improvement by leveraging best practices in
TQM. Our Shikhar25 programme, which is targeted towards
improvement in operational efficiency, has enabled us to
generate significant savings.
Impact on SDGs
FY 2019-20 Highlights
₹259 cr.
R&D spend
₹4,298 cr.
Savings through Shikhar25
58
Patents granted
155
New products launched
New product is defined as a product developed at
Tata Steel through new processes and technology
and then commercialised
We believe that building a process and
culture of breakthrough innovation in the
organisation will enable the Company to
further enhance its competitive advantage.
A key aspect of this is Technology Leadership
and with this objective in mind, Tata Steel has
identified Technology Leadership Areas that
focus on breakthrough innovation in selected
opportunity areas. Technology roadmaps
have been planned and work is being done in
utilising low-quality raw materials, new and
innovative coatings on steel, development
of carbon capture and usage technologies,
generation and use of hydrogen in the steel
making process, materials for mobility of the
future and reduction in water consumption.
These are designed to significantly increase
current competitiveness (e.g. use low-grade
raw materials) and to provide long-term
sustainability by reducing CO2 and other
environmental footprint.
Focussing on consumer-in innovation,
our Innovent team continues to recognise
and work on the unarticulated needs of
customers. During the year under review,
Tata Steel added French Doors to its portfolio
in the homemaking space. The doors, with
aesthetic look and greater security for areas
leading to balconies, gardens and lobbies,
are being piloted in Punjab and Kerala.
Urban infrastructure is another area of
interest for Innovent. Integrated charging
infrastructure for Electric Vehicles (EV) offers
significant market potential. This has been
piloted in Hyderabad where 15 canopy
structures have been successfully installed for
EV charging stations.
A core enabling team comprising Ventures,
Innoventure and Alliance Management has
been set up to monetise our intellectual
property, leverage the start-up ecosystem
and build strategic collaborations with
academia and industry bodies.
Fibre Reinforced Polymer (FRP) structure at Jamshedpur Steel Works
RESEARCH AND DEVELOPMENT
INFRASTRUCTURE
A strong R&D team with specialisation
in myriad fields has delivered on several
projects in the domain of sustainability, cost
reduction and new product development.
A pilot plant of the scale of 5 Tonnes per
Day (TPD) is being installed at one of our
steelmaking plants to capture CO2 from
blast furnace gas. To generate value from
waste, R&D has successfully established a
process for using water-cooled and air-cooled
ferrochrome slag material in applications
such as bitumen road, concrete and fly ash
slag bricks. An in-house patented technology
was implemented in coke ovens whereby
some portion of the expensive coking coal
can be replaced by non-coking coal aided
by adding a cost-effective polymer. R&D has
demonstrated (at pilot scale) a process for
converting non-coking coal to coke by rapid
heating through microwave energy.
Tata Steel, along with a leading automotive
player, has developed a new design for the
tipper body using a new grade of high-
strength steel that lowers weight by 200-300
kg without compromising on strength.
KEY DEVELOPMENTS IN
ALTERNATE MATERIALS
New Materials Business (NMB): The
business was set up to explore opportunities
in materials beyond steel and to partially
insulate our revenues from steel cyclicality.
The business, which has two verticals
– Composites and Graphene Business,
completed its first full year of business i
n FY 2019-20.
57
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 OUR CAPITALS
INTELLECTUAL CAPITAL (contd)
interiors and is working closely with key
production units of the Railways.
Graphene Business: This business
focusses on the production of graphene
powder, graphene master batches and
graphene-enriched products. The business
has strengthened its position in coated
solutions through its offering of liquid,
dry and aerosol-based formulations.
In FY 2019-20, around 1,500 tonnes of
graphene-coated ‘cut and bend’ superlinks
(GFX Ultima) were sold.
KEY PRODUCT DEVELOPMENTS
During the year under review, we developed
155 new products including grades for
high-strength automotive structural
applications. Our continuous efforts towards
enriching customer experience by delivering
innovative products resulted in Tata Steel
winning the ‘Innovative supplier of the year
2019’ award for developing the S460MC
grade of steel.
On the long products front, we
commercialised high-strength, high-ductility
rebar grade – Fe600 HD. We also developed
low nitrogen steel grade (WR3M) wire rods
through the Electric Arc Furnace (EAF) route
for welding electrode wire application.
Fibre Reinforced Polymer (FRP) based
Composite Pressure Vessels
Fibre Reinforced Polymer (FRP): In addition
to providing FRP pipes and streetlight poles,
NMB launched a wide range of FRP solutions.
‐
‐
In the infrastructure segment, a wide range
of FRP solutions were launched, including
FRP street furniture, gazebos, fencing,
and a range of decorative and translucent
poles. Building on the success of installing
India’s first FRP foot overbridge in March
2019, NMB completed two more successful
FRP bridge projects in FY 2019-20.
In the industrial segment, FRP pressure
vessels for water filtration, FRP tanks
and chemical equipment for paper and
pulp, textile and iron and steel industries
were supplied. These products are best
equipped to tackle corrosion and are
lightweight, thereby offering a long
maintenance-free service life.
‐ Following the initial success of supplying
FRP components to the Indian Railways,
NMB has entered into railway coach
DIGITAL TRANSFORMATION
Tata Steel has embarked on a multi-year
transformation journey to become an agile,
digital and intelligent enterprise and the
leader in digital steelmaking by 2025.
In the process, we intend to generate EBIDTA
improvements of $2 billion, enhance our
digital maturity and improve our work
practices to be more insightful as
an organisation.
Cloud, data and artificial Intelligence (AI) are
the engines driving this transformation.
Over the past couple of years, investments
made to create a robust IT infrastructure
have helped improve our agility. This
has also enabled us to respond to the
current COVID-19 situation wherein ~8,000
employees are logging into enterprise
applications and ~3,500 virtual meetings are
being conducted daily as a majority of our
workforce continue to
operate from home. We are proactively
monitoring and managing our network.
Our cybersecurity cell can pre-empt a
significant amount of ever-increasing
intrusion attempts.
Improved IT infrastructure and a disciplined
approach to data capturing have led to
higher generation, and secured transmission
and storage of data. In FY 2019-20, data
generation increased to 20 TB/month with
volumes growing 2.5 times over the previous
year. This enabled us to deploy 100+ data
analytics models across processes to drive
insight-based decision-making. Parallelly,
we are developing a Maintenance
Technology Roadmap (MTR), which will
help identify sensorisation needs and
enable predictive maintenance for
mission-critical equipment.
Tata Steel Kalinganagar was recognised
as Industry 4.0 Lighthouse by the World
Economic Forum in 2019. It is the only
Indian site to feature in the network of
26 lighthouse factories across the
globe for demonstrating leadership in
leveraging Industry 4.0 technologies
to drive financial and operational
improvements.
Control Room, Kalinganagar Steel Works
Through initiatives such as Smart Asset
Maintenance, we have achieved higher
asset availability at lower maintenance cost.
The Asset Monitoring & Diagnostic Centre
(AMDC) allows us to remotely monitor
critical equipment and initiate preventive
maintenance when required. Integrated
and remote operations involving high level
of automation, sensor and camera density,
combined with data analytics, has enabled us
to operate remotely.
With a strong IT backbone and streamlined
data, we are well poised to integrate AI in
our processes. We view AI as a tool that will
allow us to be more cognitive as an enterprise
WAY FORWARD
to our internal processes, externalities and
stakeholders. In our business-first approach
to AI, we have identified user stories where
AI will drive tangible benefits.
Our Connected Workforce Platform leverages
multiple technologies and systems to
pre-empt unsafe incidents. It also enables
policy interventions to ensure safety and
security of our employees and assets.
Our initiatives on demand estimation through
satellite imagery and socio-economic data
analytics and e-commerce platforms such as
Aashiyana, DigECA and COMPASS, provide
alternative channels to reach our customers.
Going forward, we are looking at Integrated
Supply Chain Planning and Logistics,
combined with Integrated Margin Monitor,
as themes and tools to drive end-to-end
cost optimisation. We are re-engineering
our procurement process by introducing a
digital catalogue-based buying platform,
commodity price prediction-aided buying,
analytics-powered negotiation tools
and end-to-end contract lifecycle
management and analytics. The focus is
also on technology-enabled BPaaS* for key
corporate functions to streamline our
existing processes.
* BPaaS - Business Process as a Service
Continue to work on
identified projects in areas
where we want to build
technology leadership
in ‘first to the world’
products and processes
Deepen our collaboration
with start-ups, identified
academia, research
centres, consortium and
associations, to accelerate
innovation
Strengthen our alternate
materials play by
collaborating with a
network of technology and
manufacturing partners
to realise the objective of
insulating the business
from steel cyclicality
Transition from physical
to Virtual Command
Centres (VCCs) for
each business vertical
to enable centralised
and decentralised
interventions seamlessly
Fibre Reinforced Polymer (FRP) bridge at Jamshedpur Steel Works
58
59
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Creating an agile
and inclusive workforce
Our people are our greatest strength. We are committed
to their well-being, which is demonstrated through our
industry-leading people practices and a track record in
industrial harmony of over 90 years.
We aspire to be an employer of choice in the steel
industry, taking care of the needs of a diverse workforce of
officers, unionised employees and contract workers.
We continuously strive to develop their capabilities and
skills. Our Occupational Health and Safety (OHS) practices
reflect our commitment to safety and care.
Impact on SDGs
FY 2019-20 Highlights
803 tcs/employee/year
Employee productivity
7
Smart classroom solutions
installed at training locations
>50,000
Certifications of safety and
skill enhancement of contract
workforce
Strategic linkage
Material issues addressed
SE
SO4
‐ Occupational Health & Safety
‐ Labour relations – fair wages
‐ Gender equality
‐
‐ Local sourcing of labour
‐ Talent retention
Intolerance to sexual harassment
‐
Investing in people and striving to be
employer of choice
‐ Creating a safe and healthy workplace
‐ Care for the communities and people we
reach in our operating areas through our
CSR practices.
SE - To be an employer of choice
SO4 - Industry leadership in Corporate Social Responsibility, and Safety, Health and Environment
FOCUS AREAS
Fostering a culture of agility
Agility has been identified as one of the
important levers to ensure Tata Steel is
prepared for the future. During the year
under review, several initiatives were
undertaken both in new and existing
businesses, along with enabling functions
such as HR, Procurement, Finance and
Accounts, to simplify existing processes
while promoting higher collaboration,
accountability and ownership.
The learnings from the initiatives have
helped articulate the overall change narrative
and create the blueprint for horizontal
deployment across the organisation. Going
forward, specific initiatives will be deployed
in other parts of the organisation, customised
to the need of individual units.
Strengthening people strategies
A high quality, motivated workforce is a key
enabler for achieving our strategic objectives.
As we continue to strengthen our industry
leadership position, it will be critical for us to
enhance and leverage the capabilities and
enthusiasm of our people. With this in mind,
we have formulated our people strategies
across three thrust areas to build and nurture
our human capital.
Occupational Health and
Safety (OHS)
We aim to ensure safe, healthy and
high-quality lives for our employees. Being in
an inherently hazardous industry, we ensure
the highest degree of physical, mental and
social well-being of people in and around
our plants. We are ‘Committed to Zero’ harm,
with the target of achieving zero Lost Time
Injuries (LTIs). We aspire to be a leader in
safety and health in the steel industry.
Human Resource Management
Our people practices are aimed at developing
a culture of care, commitment, engagement
and harmony across the workforce.
There is increased focus on encouraging
diversity through the inclusion of women,
LGBTQ+ community, underprivileged
sections and people who are specially-abled.
At the same time, we strive to increase
productivity while containing wage cost.
We thus rationalise, upskill and redeploy
workforce without disturbing the industrial
harmony that has been the bedrock of our
organisation.
Human Rights
We employ a huge workforce, directly or
indirectly, across our value chain. Given the
size of our operations, there are inherent
risks of human rights violation with potential
repercussions on our reputation. We are
therefore responsible and accountable for
upholding human rights across our value
chain, which includes our operations,
supply chain, communities and business
relationships.
OHS: USING TECHNOLOGY TO
MAKE OUR OPERATIONS SAFE
AND SECURE
Making our operations safe and secure
using technology and minimising manual
intervention is our top priority. With an
increased footprint of operations after the
acquisition of TSBSL and the steel business
of UML by TSLPL, corporate safety has
taken on the task of capability building and
handholding the new units on the latest
safety management systems and processes.
Introduction of process safety management
and contractor safety management,
and creation of the Safety, Health and
Environment (SHE) risk matrix are some of the
strategic interventions in this direction.
We are continuously improving our systems
and processes through a standardised
approach to keep all units fatality-free.
SAFETY GOVERNANCE
Our safety governance structure is driven
by the Safety, Health and Environment
Committee of the Board (chaired by an
Independent Director) and the Apex Safety
Council (chaired by the CEO & MD). The
Safety Excellence Journey (SEJ) committee
(chaired by the Vice President – Safety,
Health & Sustainability), under the guidance
of the Apex Safety Council, works on policy
formulation. Their directives are cascaded
through six apex safety subcommittees
(each chaired by a Vice President), and further
to Divisional Implementation Committees
and Area Implementation Committees.
The implementation of directives is ensured
through a monthly review process across the
organisation.
Blast Furnace, Kalinganagar Steel Works
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HUMAN CAPITAL (contd)
Key Initiatives for Safety and Health in FY 2019-20
Build (safety) leadership capability at
all levels to achieve zero harm
~42%
reduction in red risk*
incidents
~65%
reduction in
process-related red risk
incidents from FY 2018-19
~24%
reduction in contractor-
related red risk incidents
from FY 2018-19
Improve competency and capability
for hazard identification and risk
management
~300
supervisors and senior associates
from various Centre of Excellence
(CoE) departments trained on Process
Safety Management
10
safety standards simplified,
including development of
e-learning modules
Contractor safety risk management
840+
high-risk job vendors assessed, of
which 246 upgraded to 4-star rating
and one to 5-star rating
100%
contractor employees trained and
certified on various skills
FATALITY
(Nos.)
5
LOST TIME INJURY (LTI)
(Nos.)
Good
HUMAN RESOURCE
MANAGEMENT
127
3
3
80
67
68
64
2
2
Elimination of safety incidents in
road and rail
Sustained zero fatality in road
incidents in the last five years
Safety command centre with video
wall and an ANPR# system developed
FY16
FY17
FY18
FY19
FY20
FY16
FY17
FY18
FY19
FY20
Excellence in Process Safety
Management (PSM)
Developed online PSM dashboard
with centralised monitoring and
escalation mechanism to identify
deviations from design intent
A ‘tactical centre’ has been
established for business continuity
management during emergency
situations
Establish industrial hygiene and
improve occupational health
Improvement in Health
Index from 12.62 in
FY 2018-19 to 12.70 in
FY 2019-20
~7,600
employees trained to
improve competency on
first-aid and CPR
* Red risks are those that have fatality potential
# ANPR - Automatic Number Plate Recognition
15
hazard control projects
implemented in TSJ
and Jharia Division for
reduction of exposure
level
LOST TIME INJURY
FREQUENCY RATE (LTIFR)
(Index)
Good
HEALTH INDEX
(Score out of 16)
Good
0.52
12.37
12.59
12.47
12.62
12.7
0.37
0.29
0.29
0.23
Women @ Mines : Tata Steel is the first company in India to deploy women in all shifts in mines
FY16
FY17
FY18
FY19
FY20
FY16
FY17
FY18
FY19
FY20
62
Employee Productivity
Improving employee productivity is of
utmost importance to remain competitive.
We increased productivity from 800 tcs/
employee/year in FY 2018-19 to 803 tcs/
employee/year in FY 2019-20. Our efforts to
identify and manage redundancy through
programmes such as right skilling, Sunhere
Bhavishya Ki Yojna (SBKY) and Job-for-Job
scheme continued. We also made significant
progress in simplifying the organisation
structure, systems and processes. Several
programmes were also conducted to
sensitise our employees on productivity
improvement. During the year, the
acquired steel business of Usha Martin
Limited was successfully integrated into
Tata Steel Long Products.
Diversity and inclusion
We continue to place significant importance
on Diversity and Inclusion (D&I) in the
workplace. MOSAIC, our D&I committee,
covers four aspects – Gender, Persons
with Disabilities (PwDs), LGBTQ+ and
different sections of the society (e.g., the AA
community).
MOSAIC - Tata Steel’s Diversity & Inclusion initiative
WINGS - Tata Steel’s LGBTQ+ Employee Resource Group
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HUMAN CAPITAL (contd)
We have taken several steps that are the first
of their kind in the manufacturing sector.
Some of these are:
‐ Extension of all HR benefits to partners of
colleagues from the LGBTQ+ community,
similar to those applicable to employee
spouses (such as housing and
medical benefits)
‐ Deployment of women employees in all
three shifts in some of our mining locations
through our Women@Mines initiative
‐ Deployment of women employees in A
and B shifts in some departments
in manufacturing
‐ Pride Campaign across locations and
Launch of Wings (an LGBTQ+ Employee
Resource Group)
‐ Rollout of the Equal Opportunity Policy
along with policies on external
recruitment and medical benefits for
PwDs, among others
We are continuing our efforts on hiring and
creating infrastructure for a diverse workforce
as well as retaining and developing
women leaders.
Women Of Mettle - A pioneering scholarship programme to induct women into the manufacturing sector
WORKFORCE CAPABILITY DEVELOPMENT
Tata Steel has a Workforce Capability and
Capacity Framework to assess capability
needs for skill and competency building,
customer focus, organisational performance,
innovation, health and safety, environment,
and business ethics. We are continuously
upgrading our training infrastructure,
methodologies and programmes:
‐ Customised awareness programmes on
sustainability were conducted for Tata
Steel employees and external stakeholders
such as suppliers and the community
‐ A smart classroom solution installed at
seven training locations for capability
building of workforce in line with the
Company’s drive to embrace digital
technologies
‐ The School of Excellence initiative
introduced in prioritised areas of steel
plant operations and maintenance with
the objective of developing world-class
technical competencies
‐ Certification of more than 50,000 contract
workforce successfully carried out in
FY 2019-20, demonstrating our focus
on safety and skill enhancement of the
contract workforce
EMPLOYEES TRAINED
(Mandays)
Good
TRAINING PER EMPLOYEE
Good
(Mandays/Employee/Year)
3,34,050
7.81
7.52
2,63,050
2,52,681
2,48,000
5.62
1,93,924
4.6
2.65
Employee on the shopfloor at Jamshedpur Steel Works
FY16
FY17
FY18
FY19
FY20
FY16
FY17
FY18
FY19
FY20
64
DIGITAL INITIATIVES
We continued our focus on digitalisation with
several projects being implemented
to improve employee experience and
data-driven decision making. The ‘Connected
Workforce System’ was implemented to
improve the safety of the contract workforce
engaged at our plants. It has enabled
real-time tracking, access control and
biometric attendance. Our talent
management suite, ‘TalentPro’ was
implemented to have unified performance
management. Real-time dashboards using
Tableau provide insights on employee cost,
diversity and productivity.
FUTURE-READY WORKFORCE
We have embarked on a ‘visioning
exercise’ and formulated the people vision,
‘Unleashing the Collective Possibilities
of People’, in line with our aspiration of
becoming an ‘Employer of Choice’ and
being future-ready. The exercise is aimed
at enabling our workforce to realise their
individual potential, which would
then collectively help achieve the
organisation’s goals.
To realise this vision, a taskforce in the form of
HR labs has been constituted to work on the
following four areas:
Culture
Systematically bring desired
cultural change at Tata Steel
Career
Enable careers in tune with a
changing Tata Steel
Value Creation
Create value through people
interventions
User Experience
Radically enhance employee
experience
HUMAN RIGHTS
Tata Steel is committed to upholding
human rights across its value chain.
Our commitment is reflected in the following
policy documents (for more information,
visit www.tatasteel.com). The implementation
of the Human Rights Policy at workplace is
done through the adoption of the principles
of SA 8000 and the United Nations Global
Compact based on the Universal Declaration
of Human Rights (UDHR) and International
Labour Organisation (ILO) conventions.
HUMAN RIGHTS POLICIES
‐ Tata Code of Conduct (TCoC)
‐ Social Accountability Policy (Human Rights
at the Workplace)
‐ Prevention of Sexual Harassment (POSH)
and Anti Sexual Harassment Initiative
(ASHI)
‐ Safety Principles and Occupational Health
‐ Affirmative Action
‐ Corporate Social Responsibility and
Accountability
We actively seek to strengthen our
mechanism to prevent and mitigate adverse
human rights issues through SA8000 audits
of our workplace. Appropriate corrective and
remedial measures (checks and balances)
have been identified to address any
non-compliances. Tata Steel underwent the
SA8000 recertification audit in FY 2019-20,
and successfully retained the certification
till 2022.
APPROACH TO PROTECTING
HUMAN RIGHTS
For full-time employees
Tata Steel is an equal opportunity employer
and does not discriminate on the basis
of gender, caste, religion or disability.
During recruitments, we exercise positive
discrimination in favour of socially
disadvantaged communities, provided the
prospective candidates fulfil our merit-based
criteria. Our systems and processes in this
regard are monitored for compliance and are
subject to continuous improvement through
the SA 8000 standards and third-party
verification. MOSAIC – our D&I committee
– sensitises the workforce to undertake
initiatives on promoting diversity.
For supply chain partners
All our business associates are mandated to
conform to and sign the Business Associates
Code of Conduct, which lays down
human rights and safety requirements.
The procurement team undertakes sample
assessments for human rights (for potential
high-risk suppliers) to ensure compliance.
Earlier this year, the Tata Steel Responsible
Supply Chain policy was released.
It communicates how Tata Steel will engage
with its supply partners and sets out
expectations and minimum standards for fair
business practices, health and safety, human
rights and environmental performance.
These aspects will be used for evaluation
and contract approvals for our supply
chain partners.
For contract workers
A dedicated contractor’s cell was established
to ensure that no human rights violations
take place at the workplace. The cell also
looks at corrective and preventive measures
to deal with cases of violations of our
TCoC and Social Accountability Policy.
The contractor safety management process
ensures that a safe and healthy workplace is
provided to the entire contract workforce.
Periodic assessments and ratings are carried
out to upgrade the contractor’s safety
standards.
For indigenous communities
Tata Steel’s operations require significant
resettlement and rehabilitation of indigenous
communities residing in the proximity of its
operating sites. Our Affirmative Action Policy
and Corporate Social Responsibility and
Accountability Policy lay down the rules of
engagement with the affected parties.
The CSR team ensures that Tata Steel upholds
the highest standards of human rights as
part of rehabilitation and resettlement, both
before and after project completion.
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Optimising resources for a brighter future
Steel is a fundamental requirement for infrastructure
augmentation and hence, plays a key role in overall
economic development and nation building. We are
committed to using the most efficient routes, minimising
waste generation and mitigating impact on natural capital.
Impact on SDGs
FY 2019-20 Highlights
3.11 m3/tcs
Specific water consumption
0.38 kg/tcs
Specific dust emission
`283 cr.
Capital spend on environment
>4.5 lakh
Trees planted across locations
using the eco-restoration
methodology and Miyawaki
plantation techniques
Strategic linkage
Material issues addressed
SO2
SO4
‐ CO2 emission
‐ Water consumption and effluent discharge
‐ Waste management
‐ Renewable and clean energy
‐ Biodiversity
‐ Energy efficiency
‐ Air pollution
‐ Circular economy
‐ Supply chain sustainability
‐ Achieve <2 tCO2/tcs GHG emission
intensity by 2025
‐ Achieve specific water consumption
<3 m3/tcs by 2025
‐ Sustain LD slag utilisation at 100%
‐ Ensure no net loss of biodiversity at
our mining locations
SO2 - Consolidate position as a global cost leader SO4 - Industry leadership in Corporate Social Responsibility, and Safety, Health and Environment
The traditional method of steel production
through the blast furnace route is
resource-intensive and has significant carbon
footprint. We aspire to take our carbon
emissions to <2 tCO2/tcs for our
India operations, attain zero waste and
reduce specific water consumption to
<3 m3/tcs by 2025.
We continue our pursuit of establishing
best-in-class facilities and constantly invest
to upgrade manufacturing and distribution
facilities to improve operational and
environmental performance. In FY 2019-20,
₹283 crore was invested on environmental
management system upgradations focussed
on improvement in air emissions, water
management, imbibing circular economy
principles and conservation of biodiversity.
We have implemented environmental
management systems in accordance with
ISO 14001, which provides the necessary
framework for managing compliance and
improving environmental performance.
We maintain accredited laboratories for
environmental performance assessment.
GHG MANAGEMENT
We recognise our obligation to work towards
mitigation of climate change related risks and
are committed to addressing the challenges
of transitioning to a lower carbon regime.
We believe that steel is an integral part of the
solution for the transition due to its unique
property of infinite recyclability, albeit with
some risk of downcycling.
Our integrated steel works at Jamshedpur is
the most efficient steel plant in India. A Centre
of Excellence with cross-functional members
is working to identify and implement
projects for CO2 reduction. In FY 2019-20,
integrated steel operations at Jamshedpur
and Kalinganagar abated 0.5 MnT of CO2 by
implementing process improvements and
energy conservation projects.
The R&D team is collaborating with
technology companies and academia to
work on a wide range of technologies, which
includes carbon capture, use and storage
(CCUS), hydrogen-based steelmaking and new
smelting technologies.
With an objective of greening the power mix,
a study was undertaken with the help of
The Energy and Resources Institute to assess
the deployment potential of renewable
energy across all our sites. A significant
renewable energy potential (~180 MW)
has been identified and projects are being
undertaken to deploy the same in a
phased manner.
We continue to work on developing HIsarna,
a new smelting reduction technology for
which we own the intellectual property rights.
This technology will facilitate steelmaking
without the need for coke making or
agglomeration processes, thereby improving
efficiency, reducing energy consumption
and lowering CO2 emissions. The pilot plant
is located at the Tata Steel Group’s IJmuiden
site in the Netherlands. We are now exploring
options to scale up HIsarna in India with a view
of developing a strategic roadmap to achieve
a quantum reduction in emissions over 2030
and 2050.
DUST AND GASEOUS EMISSION
Air pollution (specially dust emissions)
is a material issue for Tata Steel. As our
Jamshedpur unit is in the midst of the
city, our efforts in upgrading air pollution
control equipment and better environment
management have resulted in a 25% reduction
in dust emission since FY 2016-17. With the
crude steel production ramping up to
3 MnTPA at the Kalinganagar unit, established
operations of pollution control system have
resulted in a 56% reduction in dust emissions
from the first year of operations in FY 2016-17.
WATER MANAGEMENT
Water is a critical resource in steelmaking
and is used extensively as a coolant. Since
our operations in India are located near rivers
(Subarnarekha for Jamshedpur plant and
Baitarani for Kalinganagar plant), it provides
a strategic advantage. In FY 2019-20, specific
consumption of freshwater at Jamshedpur was
at an all-time best at 2.8 m3/tcs, which is also
an Indian steel industry benchmark.
While there is a huge manmade water
reservoir, Dimna Lake in Jamshedpur, which
supplements the drinking water requirement
of the township, a river basin study was
undertaken in FY 2019-20 with the help of CII
Triveni Water Institute to assess watershed
level risks for long-term supply of water for
the Jamshedpur plant and the communities
residing in the vicinity. The findings will
be used to plan and implement water
conservation initiatives at the river basin level
to sustain river flow in the long term.
67
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NATURAL CAPITAL (contd)
SOLID WASTE MANAGEMENT
We have been pioneering value creation from
the industrial by-products in our quest to
contribute to a sustainable ecosystem in the
iron and steel industry. The use of by-products
has contributed to material efficiency rate in
the steel industry. We handle about 14 MnTPA
of by-products spanning across 20+ product
categories comprising more than 250+ SKUs.
In FY 2019-20, material efficiency saw a significant
improvement to 98.9% at Jamshedpur and
100% at Kalinganagar. We achieved industry
benchmark of 100% solid waste utilisation at our
facilities in Jamshedpur and Kalinganagar. With
the objective of harnessing ‘Value from Waste
& By-Products’, we are committed to becoming
a knowledge-driven business unit leveraging
digital and innovation as the key pillars.
We commissioned India’s first steam ageing
facility at Jamshedpur for accelerated weathering
of LD slag to develop environment-friendly
aggregates for road construction replacing
natural aggregates. We have created two brands,
Tata Aggreto and Tata Nirman, which have
found a wide range of applications in national
highway projects and the construction industry
in India. We achieved benchmark of 100% steel
slag utilisation at our facilities in Jamshedpur
and Kalinganagar. We won the Environmental
Stewardship award at ET Now and World
CSR Congress, for our sustainable usage of
steelmaking slag in road applications.
CIRCULAR ECONOMY
Steel has a unique property of being infinitely
recyclable with some risk of downcycling.
Primarily, the Electric Arc Furnace (EAF)
method for steelmaking, with lower
carbon footprint, is used for re-melting
of steel. Higher usage of scrap in India is
currently limited due to lower availability
of scrap and a fragmented scrap supply
chain. As an initiative to be future ready and
establish the supply chain for scrap, we set
up our Steel Recycling Business in FY 2018-19.
The first steel scrap processing unit is being
commissioned at Rohtak in Haryana, with an
initial capacity of 5 lakh tonnes per annum.
LIFE CYCLE ASSESSMENT
We developed an in-house Life Cycle
Assessment (LCA) model for our TSJ and
TSK Works in FY 2019-20 in alignment with
ISO 14040 and ISO 14044. This LCA study, its
68
approach and the model was critically reviewed
by an external subject matter expert. This has
ensured that the environment impact of all the
products being manufactured at Jamshedpur
and Kalinganagar from cradle to gate using the
LCA methodology is now available. In order
to extend the scope of our LCA work and to
cover the products manufactured through
our Steel Processing Centres (SPC), a separate
study was also carried out covering the SPCs
in Jamshedpur. The LCA study was completed
along with the development of dedicated LCA
models for the steel wire products of Tata Steel’s
Tarapur Wire Division. Going forward, we plan
to cover all our operating sites and also include
the products under our New Material Business
through the LCA study. We are collaborating with
a leading industry association to develop Type 1
Ecolabel Standard for TMT rebars in India, which
will assess the life cycle sustainability impact of
TMT rebars.
BIODIVERSITY MANAGEMENT
We have been a pioneer in undertaking
biodiversity initiatives at our raw material
locations with the help of International Union
for Conservation of Nature (IUCN). To further
augment efforts across all our sites, a Centre of
Excellence for Biodiversity Management has
been constituted to strategically formulate and
implement Biodiversity Management Plans
(BMPs). The larger objective is to ensure no net
loss of biodiversity in the areas that we operate.
Our current operations in India are not located
in any of the identified biodiversity hotspots or
protected areas. In FY 2019-20, more than
4.5 lakh trees were planted across locations using
the eco-restoration methodology and Miyawaki
plantation techniques.
In FY 2019-20, a 100-hectare Tata Biodiversity Park
was developed in West Bokaro in Jharkhand by
reclaiming mined-out areas. The Park has seven
smaller areas including a butterfly park and a
niche reptile park. The Park also has a rainwater
harvesting structure with a catchment area of
152 hectares and can conserve 1,500 million
gallons of rainwater. It has a dedicated 2-acre
patch for the development of native
forest species.
GHG EMISSIONS FROM INDIAN STEELMAKING OPERATIONS
(million tCO2)
Steelmaking Sites
India (TSJ+TSK)
Scope
Scope1
Scope 1.1
Scope 2
Scope 3
Overall
FY16
21.02
2.31
0.74
-1.19
22.89
FY17
25.53
3.69
1.11
-2.21
28.11
FY18
26.52
3.96
1.17
-1.99
29.66
FY19
27.14
4.53
1.17
-1.81
31.03
FY20
26.53
4.53
1.08
-1.75
30.39
Emissions based on CO2 data collection user guide, version 9, World Steel Association
DUST EMISSION INTENSITY*
Good
(kg/tcs)
TSJ
TSK
GHG EMISSION INTENSITY
Good
(tCO2/tcs)
TSJ
TSK
3
1
.
8
0
3
.
3
.
2
9
2
.
2
5
6
.
2
3
.
2
4
5
9 2
2
.
.
2
5
4
.
2
7
2
.
2
5
0
.
4
4
0
.
6
6
0
.
1
4
0
.
6
0
.
7
5
0
.
7
3
0
.
3
3
0
.
FY16
FY17
FY18
FY19
FY20
FY16
FY17
FY18
FY19
FY20
* Defined as amount of dust (in kilograms) emitted from stacks for producing one ton of crude steel
NITROGEN OXIDES (NOx)
EMISSION INTENSITY#
(kg/tcs)
Good
TSJ
TSK
SULPHUR OXIDES (SOx)
EMISSION INTENSITY##
(kg/tcs)
Good
TSJ
TSK
6
9
1
.
9
9
1
.
1
9
0
.
9
7
0
.
1
6
0
.
2
7
0
.
1
7
0
.
4
5
0
.
6
4
0
.
2
5
0
.
5
7
0
.
1
7
0
.
5
7
0
.
4
6
0
.
8
2
0
.
1
3
0
.
SPECIFIC WATER
CONSUMPTION*
(m3/tcs)
TSJ
TSK
6
6
7
.
9
3
.
4
3
8
3
.
6
7
4
.
8
6
3
.
Good
9
2
.
4
5
1
4
.
7
2
3
.
8
.
2
FY16
FY17
FY18
FY19
FY20
FY16
FY17
FY18
FY19
FY20
FY16
FY17
FY18
FY19
FY20
EFFLUENT DISCHARGE
INTENSITY$
(m3/tcs)
Good
TSJ
TSK
SOLID WASTE UTILISATION@
Good
(%)
TSJ
TSK
MATERIAL EFFICIENCY
(%)
Good
TSJ
TSK
0
0
1
9
9
0
0
1
0
0
1
4
.
2
9
.
9
2
9
.
9
3
1 9
9
.
6
4
9
0
0
1
.
9
6
9
.
9
8
9
0
0
1
.
6
0
8
4
.
2
8
2
2
7
8
.
.
4
4
8
6
6
2
1
.
2
0
1
.
1
0
1
.
2
9
0
.
6
8
0
.
9
5
0
.
9
2
0
.
4
2
0
.
FY16
FY17
FY18
FY19
FY20
FY16
FY17
FY18
FY19
FY20
FY16
FY17
FY18
FY19
FY20
WAY FORWARD
In line with our strategic goal of being the industry leader in environmental management, we will continue investing in
technologies and processes to further improve our performance in GHG emissions, water management, waste utilisation
and biodiversity management. We are also accounting for possible regulatory, market and climate changes in the future by
continually evaluating risks and opportunities and adapting accordingly through various interventions such as expanding
our steel recycling business, improving by-product business, carrying out life cycle assessments and embedding the
principles of circular economy.
#Defined as amount of nitrogen oxides (in kilograms) emitted from stacks for producing one ton of crude steel
##Defined as amount of sulphur oxides (in kilograms) emitted from stacks for producing one ton of crude steel
*Defined as freshwater consumption per tonne of crude steel produced (at TSK, water loss at clarifier is excluded in the calculation)
$ Defined as effluent discharged (in cubic metres) from operational premises for producing one ton of crude steel
@Defined as amount of solid waste used internally or externally + sold outside as a percentage of total solid waste generation
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Social and relationship capital
Co-creating a shared future
Our Customers
Strategic linkage
Material issues addressed
SO1
SO3
‐ Business growth
‐ Product quality
‐ Long-term profitability
‐ Greater stakeholder engagement
‐ Technology, product and process
innovation
To meet our objective of becoming the industry
leader in steel and insulating revenue from steel
cyclicality, we are going beyond traditional
products by offering a range of customised
services, solutions and value-added products
across existing and new customer segments.
At Tata Steel, we believe a successful business is built on
time-tested relationships based on mutual trust, respect
and benefits. These relationships provide the requisite
confidence to drive sustained growth through business and
economic cycles.
Our sensitivity to emerging customer needs with improved
products and innovative services, creation of mutual
value with suppliers, and commitment to improve lives in
the communities we serve have contributed to creating
significant social and relationship capital.
Impact on SDGs
FY 2019-20 Highlights
Our Suppliers
>1.4 million
Lives reached through CSR
1,330
Suppliers trained through VCAP*
83.1
Customer Satisfaction Index (Steel)
*Vendor Capability Advancement Programme
Strategic linkage
Material issues addressed
SO2
SO4
‐ Technical knowledge transfer
‐ Capacity building for relevant partners
‐ Supply chain sustainability
‐ Greater stakeholder engagement
‐ Local sourcing of labour
Maintain cost leadership and care for people
across our supply chain through partnerships
with our suppliers.
Our Communities
Strategic linkage
Material issues addressed
SO4
‐ Greater stakeholder engagement
‐ Drinking water
Industry leadership in CSR and SHE
‐
‐ Articulating globally relevant change models
to address core challenges to the significant
and lasting well-being of communities
proximate to our operations
SO1 - Industry leadership in steel SO2 - Consolidate position as a global cost leader SO3 - Insulate revenues from steel cyclicality
SO4 - Industry leadership in Corporate Social Responsibility, and Safety, Health and Environment
Tata Steel and Council of Scientific and Industrial Research (CSIR) collaboration workshop
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SOCIAL AND RELATIONSHIP CAPITAL (contd)
M A N AG I N G R E L AT I O N S H I P S W I T H C U S T O M E R S
In line with the motto of ‘reshaping our business for
tomorrow’, Tata Steel is serving the growing needs of our
three customer groups – B2B (Business Accounts), B2C
(Individual Consumers) and B2ECA (Emerging Corporate
Accounts) by offering differentiated products, services
and solutions. Over the years, Tata Steel has traversed the
customer relationship journey from a preferred supplier
to a differentiated and innovative partner. This has helped
us create unique value propositions.
Use of digital platforms and analytics is enabling
Tata Steel to transform itself into the steel company
of tomorrow by focussing on identifying potential
consumers, participating in the customer decision
journey, enhancing buying experience and improving
reach in underserved areas.
‘Home of Delhi’ - An initiative to engage with architects, developers and builders
KEY CUSTOMER SERVICES INITIATIVES
B2B segment
B2ECA segment
B2C segment
Focus area
Value proposition
Focus area
Value proposition
Focus area
Value proposition
Early Vendor
Involvement
Co-creation with
stakeholders
Online supply
chain visibility for
B2B customers
(COMPASS)
Tata Steel’s well-equipped R&D
setup has enabled Early Vendor
Involvement (EVI) for upcoming
automotive models and new
OEMs entering the Indian market
by providing solutions on weight
reduction, crash worthiness and
vehicular design.
Tata Steel has launched #Converse
to Construct - Conversations that
builds Tomorrow, a platform to
engage with stakeholders across
the construction sector that
allows sharing and co-creation of
ideas to enable the adoption of
faster, sustainable and modern
construction practices comparable
with global benchmarks.
‐ Provides customers with
additional visibility on their
Tata Steel account, helping
them plan their working
capital better
‐ Allows customers to view
Tata Steel’s response on
enquiries, order amendments,
purchase order placements and
status checks, including
geo-tracking of in-transit orders
in selected cases
‐ Being rolled out to project
distributors, Original Equipment
(OE) customers, wires
customers, tubes customers;
plan to roll out to automotive
customers in FY 2020-21
Serving
fragmented
retailers/
fabricators
Digital
enablement of
ECAs (DigEca)
ECA financing
Tata Astrum Super, a premium
brand for HR Cut to Length (CTL)
sheets, aims to address the pain
points of the fragmented mix of
comparatively small retailers and
fabricators. Tata Steel has created
differentiation through:
‐ On-the-fly laser marking of HR
coils (patent filed) - a global first
‐ Development of Retail
Dedicated Service Centres to
enable sales per piece of Tata
Astrum sheets - an industry first
‐ Enables ordering of special
products and performs lost
sales analysis using deeper
analytics
‐ Enables capability building
of channel partners through
webinars and mobile devices
‐ URJA for ECAs is aimed at
meeting affordable and
accessible financing
‐ Connects potential borrowers
(ECA customers) to multiple
lenders, thereby enabling access
to financing at competitive rates
E-commerce
platform
One-stop digital
shop
Enhancing reach
‐ Tata Steel Aashiyana is India’s
‐
premier home building
e-commerce platform for early
engagement with Individual
Home Builders (IHBs) and
Influencers
It has recorded 1.3 million+
visitors, 46,000+ registrations
and 10,000+ customers since
the launch, registering gross
revenues of ₹316 crore in
FY 2019-20
‐ Tata Basera, a synergy initiative
led by Tata Steel with other
Tata Group companies such as
Voltas, Croma, Tata AIG, Tata
Capital and Tata Sky, aims to
bring the best offers from the
most trusted Tata brands
to an IHB
In FY 2019-20, this offer was
up and running in 240 districts
with 2,800+ dealers, generating
additional business of ₹150 crore
for Tata Steel and ₹3 crore for
other Tata brands
‐
‐ Paras, a geospatial satellite
image analytics solution,
helps identify potential rural
customers in select locations
and customise our offerings to
local needs
Tata Steel Aashiyana - India’s premier home building e-commerce platform
OEM: Original Equipment Manufacturers
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SOCIAL AND RELATIONSHIP CAPITAL (contd)
KEY INITIATIVES TO ENHANCE
VALUE FOR CUSTOMERS
IN FY 2019-20
Automotive: Tata Steel continues to retain its
leadership position in the automotive segment.
In FY 2019-20, the share of business in new
‐
passenger cars launched was over 35% in
five out of 10 new launches.
‐ We continued to roll out the Value Analysis
and Value Engineering (VAVE) module and
advanced material data for existing models
and in-production support.
Construction: We participated in 26
marquee projects of national and regional
importance with significant share of supplies
– longest river bridge (New Ganga Bridge),
tallest building in NCR (The Amaryllis),
the world’s largest cricket stadium (Sardar
Vallabhbhai Patel Stadium), 701 km long
‘Corridor of Prosperity’ connecting Mumbai
and Nagpur – Maharashtra Samruddhi
Mahamarg.
Engineering segment: We continued to
increase our presence by enriching our
product mix and entering new markets.
ECA segments: With the introduction
of seven new products, we have further
deepened our focus in chosen micro
segments such as ATM safe, railways and
metro coaches and wagons, transmission line
towers and solar.
We have entered into strategic partnerships
with experts in various technical domains
through the Skill India programme for Skill
development of the ECA workforce.
Safety focus is transferred to the business
partners through dedicated engagement
Steel Quarantine cabins from Nest-In
74
programmes such as Safety First in
partnership with the National Safety Council
of India. The programme has created 1,600+
Safety Champions across ECA customer
organisations for promoting safe practices.
Services and Solutions: Tata Steel has
further strengthened its position in the
Services and Solutions space by providing
better consumer experience and expanding
its product portfolio.
‐ Tata Pravesh, the wood finish steel doors
and windows brand, has expanded
its branded showroom footprint to
250+ outlets (privileged dealers) across
145 districts.
‐ Nest-In, the construction solutions brand
from Services and Solutions, continues to
grow rapidly and has installed over 5 lakh
square feet of housing units and nearly
9,000 EzyNest units. Nest-In is actively
contributing to India’s fight against the
pandemic by redesigning its MobiNest
solution into multiple ready-to-use
offerings.
Isolation and Quarantine Cabins
Developed in collaboration with
Tata Projects, Tata Consulting Engineers
and Tata Main Hospital
Multi-purpose Portable Cabins
Can be easily redesigned as ICU cabins,
temporary doctor clinics, mobile testing
centres and more
Utilities
Portable toilets that are critical at many
isolation facilities
WAY FORWARD
To serve customers in the B2C and
B2ECA space in the best possible
way, Tata Steel is leveraging the
nationwide professional distribution
network that has been built over
the years.
CUSTOMER SATISFACTION
INDEX – STEEL
(Score out of 100)
Good
80.4
81.3
81.4
81.6
83.1
FY16
FY17
FY18
FY19
FY20
CUSTOMER COMPLAINTS
(ppm)
Good
773
652
611
583
444
FY16
FY17
FY18
FY19
FY20
The one-stop digital shop
programme, Tata Basera, will run
across more than 300 districts across
India in FY 2020-21.
M A N AG I N G R E L AT I O N S H I P W I T H S U P P L I E R S
Supplier management at Tata Steel
focusses on maintaining and enhancing
the performance of supplier partners to
meet the growing and varying needs of the
organisation. This is achieved through various
cross-functional initiatives such as Supplier
Relationship Management (SRM) programme,
vendor development, vendor due diligence
for assessing and inducting new and capable
vendors and Vendor Capability Advancement
Programme (VCAP).
Supplier Relationship Management
(SRM) programme
The SRM programme is aimed at building
collaborations with strategic vendors for
managing and enhancing value delivery
through innovative solutions.
During FY 2019-20, multiple technology
sessions were conducted on various
technologies and innovation areas with our
strategic vendor partners, which helped in
creating a pipeline of innovative ideas.
Engagement with raw material
suppliers
Developing supplier partnerships through
long-term projects in the imported coal value
chain is critical for reducing the overall cost of
production in the long term. Understanding
of strategic plans of key suppliers and
creation of mutually beneficial products have
helped maximise the supply of coal that has
higher Value-in-Use (VIU) and that is most
suitable for our coke plant configuration.
We have ensured supply security by
developing new relationships in Russia,
Canada and Indonesia. The supply chain
has also been optimised to enhance
competitiveness vis-à-vis the traditional
source, Australia. We have also created
alternative supply chain models for coking
coal enabled by vendor-managed inventory
at Indian ports. This has facilitated supply
chain security, credit enhancement and
optimisation of inventory, which has led to
efficient management of complex multi-site
operations.
Value created for suppliers
in FY 2019-20
Vendor Development programme and VCAP
aim to partner and support suppliers to
enhance their capability through continuous
improvement, thereby creating a competitive
vendor base across Tata Steel.
During FY 2019-20, we initiated 20 vendor
development programmes, which led to
value creation and operational improvements
in productivity, plant availability, reduction
of rework, improved delivery compliance and
higher quality of supplies.
1,330 suppliers were covered by VCAP
through various topics such as TQM, finance,
skill development, operational excellence,
ethics, safety, cost management and
sustainability. 175 tier-I employees of vendors
have been trained on managerial topics such
as TQM, sustainability and safety culture.
Further, during FY 2019-20, 284 suppliers
were trained on Tata Code of Conduct and
SA 8000, and 50 suppliers were assessed on
human rights (SA 8000) compliance and due
diligence.
Further, to support local communities and
encourage the inclusion of marginalised
sections of the society, we help develop
entrepreneurial capabilities by creating
positive differentiation through our
Affirmative Action (AA) programme. Nearly
35% of our supply chain partners are local,
of which 70 are AA suppliers and DP vendors
(displaced due to greenfield project).
Strategic Supplier Meet 2019
WAY FORWARD
We are actively working on the
implementation of innovative and
structured financing solutions such
as Receivable Purchase Agreement
with major suppliers and ramping up
vendor-managed inventory coverage.
We plan to roll out our new Supply
Sustainability Policy to all our
vendors, and conduct focussed
interactions and assessment of
200+ selected suppliers (first phase)
on four aspects – fair business
practices, health and safety,
human rights and environmental
protection.
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SOCIAL AND RELATIONSHIP CAPITAL (contd)
E N A B L I N G B E T T E R Q UA L I T Y O F L I FE F O R CO M M U N I T I E S
Our overarching vision of ‘an equitable
and enlightened society where every
individual realises his or her potential with
dignity’ guides our partnerships with and
services to communities. In keeping with
this, we undertook an extensive exercise
to understand the perceptions of the
communities we would serve for the
next 10 years.
This exercise focusses particularly on:
‐ How societal vulnerability will evolve
‐ What the rights-based paradigm for the
vulnerable will look like
‐ How social and environmental concerns
will converge
‐ What will be the role of grassroots
governance and leadership
‐ Where business skills and expertise can
play a role in advancing societal well-being
The rich insights we gathered rejuvenated
our long-term development plan that has
guided our Corporate Social Responsibility
(CSR) strategy for the past couple of years.
The views of communities are also prescient
considering the outbreak of the pandemic
towards the end of FY 2019-20.
We designed our CSR strategy around
three objectives:
Actualise change models to address
core development gaps in Jharkhand
and Odisha, while being replicable at a
national scale (through four signature
programmes)
Enable significant and lasting
improvement of communities staying
close to our operating locations
(through nine Proximate Community
Development programmes)
Embed a societal perspective in key
business decisions as an enabler to
ensuring community interests (through
three key approaches)
To gain an independent perspective, we take
into account the advice of many nationally
reputed development experts who form
our CSR Advisory Council to critically
evaluate the strategy of our initiatives, their
implementation and the impact they create.
We have the privilege of partnering with
some of India’s prominent organisations
in the development space such as Tata
Trusts, A Society for Promotion of Inclusive
and Relevant Education (ASPIRE) and the
American India Foundation, among others.
We leverage technology that has a direct
impact on development outcomes, for
example, a digital app that tracks high-risk
pregnancies and infants on a real-time
basis. The app enables swift action by
community health workers. The Data,
Evaluation, Learning, Technology and
Analysis (DELTA) digital system of Tata Trusts
uses community volunteers to map the entire
population along the route, connecting Tata
Steel’s primary manufacturing facilities at
Jamshedpur and Kalinganagar.
In a pro-active response to the pandemic’s
advance in India, we have been spearheading
a deep-dive into both the urban and rural
communities in Jharkhand and Odisha since
late March 2020 under a ten-point agenda,
#CombatCovid-19. It includes provision
of food and dry rations with hygiene
kits to vulnerable communities, enabling
income-generation opportunities,
co-ordinating volunteer assistance to assuage
the anxieties of citizens in light of uncertainty,
supporting migrant labour across India to
connect with their families besides provision
of relief materials, and creating market
linkages for farmers to ensure their crops get
a fair price amid the lockdown.
We are also contributing to creating
additional public healthcare capacities in
some operating districts to aid communities
and the state to battle this health crisis.
Meanwhile, we are honouring our
commitment to communities to improve access to healthcare services with particular focus on infants and pregnant women,
school education for children, dropouts from mainstream education and critical support for livelihoods both to farming
communities as well as to aspirants for skilled jobs from our operating geographies.
Tata Steel’s CSR has been recognised in several forums. We won the prestigious Dun & Bradstreet Corporate Award 2019 for the
fifth consecutive year in the Corporate Social Responsibility (CSR) category. Our Maternal and Newborn Survival Initiative (MANSI)
was recognised at the 14th National Convention of United Nations Global Compact Network India in May 2019 and was accorded
‘Honourable Mention’ at the National CSR Awards in October 2019. MANSI’s digital response system, ‘Operation Sunshine’ for
health workers to address pregnant women and babies at high risk was selected as State Innovation Intervention by the National
Health Mission (NHM), Jharkhand and the poster was presented at the 6th National Summit on Good and Replicable Practices and
Innovations in Public Healthcare System in India organised by the Ministry of Health and Family Welfare, Government of India, in
November 2019.
Proximate Community Development (PCD) programmes
Initiatives
Impact
SDGs
Addressing needs of communities and key
stakeholders by:
(a) Ensuring access to comprehensive
‐ Over 1 million lives reached through our PCD programmes in
FY 2019-20
‐ 17,032 farmers benefited through agriculture productivity
primary healthcare
techniques
(b) Sustained availability of safe drinking
‐ 177 water harvesting structures constructed largely for agricultural
water
use and partly for domestic use
(c) Enhancing household incomes
‐ 700+ children covered from ~3,000, with 189 mainstreamed;
through agriculture, its associated
activities and skill-based training for
employment and entrepreneurship
10 residential and non-residential facilities in Jamshedpur (capacity
of 1,000) under Masti Ki Pathshala
‐ 5,504 youth enrolled, 2,733 youth trained and 2,197 youth placed/
(d) Enabling basic school education
self-employed by various skill enhancement programmes
(at least till grade 10) for all children
as well as scholarships to meritorious
students
(e) Addressing urban child labour and
(f)
re-introducing children to educational
mainstream
Improving the nutritional levels of
families as well as that of children in
public schools
(g) Sensitisation of society towards
Persons With Disabilities (PWDs);
(h) Nurturing sporting talent
(i) Promoting community self-reliance
by deepening grassroots governance
mechanisms in villages, particularly
focussing on women leaders
‐ 311 persons reached through Sabal Centre and various disability
linked programmes
‐ 14,822 women reached under empowerment programmes through
SHGs and ~5,000 women engaged in enterprise development and
social activities
‐ 53,844 youth engaged through different sports activities
‐ 454 youth experienced outdoor leadership camps
‐
In response to the COVID-19 pandemic, we reached out to
communities towards the end of March 2020, impacting over 23,000
lives as a precursor to a coordinated response that eventually
reached out to around 8,02,095 lives in subsequent months
• Local capacity was created to make three-ply cloth masks across
our operational areas to cater to communities most exposed to
the outbreak while generating income opportunities for
1,538 people from vulnerable communities
• Leveraged technology to bridge information gaps and extend
sustained support to frontline health workers and reached
5,763 lives
• A digital volunteering programme reached out to 311 people
from vulnerable communities
• Distributed 15,625 warm wholesome meals to those rendered
most vulnerable by the lockdown
Employee volunteering programme
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SOCIAL AND RELATIONSHIP CAPITAL (contd)
Signature Programmes
Initiatives
A society where the health and survival of
women and children before, during and
after childbirth is a priority reaching out to
97,000 people
A society where all children go to school
and have access to high-quality education
to prepare them for a successful future
covering 12 blocks
Empowered tribal communities to lead
their development agenda, residing
in an ecosystem that recognises and
appreciates tribal values and living,
reaching out to five tribes
A vibrant Jamshedpur- Kalinganagar
corridor where local communities
participate in and bring about significant
enhancement in their social, natural and
cultural capital, reaching out to 25,000
families in 21 panchayats
Impact
SDGs
‐ Reached 58,620 mothers and children and enabled the reach of
ASHA system to their homes
‐ Sexual and reproductive health knowledge to 15,800 adolescents
‐ ~2,00,000 children’s lives impacted through the Thousand Schools
Programme
‐ Almost all blocks in Odisha are now child labour-free zones
‐ 30,000 members of the community formed child rights
protection forums
‐ 32 community-run Education Resource Centres in Odisha
reached 3,400 youth
‐ 25% of the government schools in Keonjhar reached, covering
around 5,900 school management committee members,
10,000 children through Learning Enrichment Programme centres
and 2,500 children through non-residential bridge courses under
the district saturation model (Keonjhar, Odisha)
‐ Samvaad ecosystem reached 16,000+ people for the first time since
inception in 2014
‐ 2,115 participants from 159 tribes of 13 countries attended Samvaad
2019 and 738 people representing 125 tribes of 25 states were at
seven regional editions of Samvaad
‐ 94 tribal youth from 21 states covering 54 tribes participated in the
Tribal Leadership Programme
‐ 23,005 students of Jharkhand and Odisha studied five tribal
languages in 464 language centres
‐ Strategies, outcomes and prospective activities for the key
objectives of the Development Corridor project were formulated;
detailed village development and panchayat development plans
were uploaded on the DELTA dashboard developed by Tata Trusts;
rejuvenation of infrastructure of 100 anganwadi centres of the
Kolhan region were undertaken
‘Apka Sarkar Apke Dwar’ initiative undertaken to address
socio-economic issues
‐
‐ Gram Sabhas organised in 34 panchayats involving communities,
Panchayat Raj Institution (PRI) members and opinion leaders to
strengthen grassroots governance mechanism
‐ 91 PWDs in Jajpur district supported to receive their disability
certificates and learn about relevant government schemes
‐ 306 facilities estimated at over ₹6 crore enabled by the district
authorities in the areas of education, Anganwadi and other
basic infrastructure
‐ Orientation and discussions for five districts held with senior district
officials; interactive platforms set up with PRI members and
the communities
Inauguration of Naval Tata Hockey Academy, Odisha
Samvaad - A Tribal Conclave
Embed a societal perspective in key business decisions
Initiatives
Impact
SDGs
Ensuring community interests are considered
in business strategy by continually engaging
our employees across geographies to utilise
their talent and resolve pressing issues faced by
communities in daily life
‐ By way of encouraging volunteering to resolve around
200 social issues within our community in FY 2019-20, we
achieved 21,228 volunteering hours
‐ 5,651 volunteers participated and 103 social issues addressed
LIVES REACHED
THROUGH ALL CSR INITIATIVES
(Million)
ADDITIONAL
IMPACT AREAS
(Nos.)
1.4
Description
Mother and children covered through the
MANSI project
Children covered through intensive programmes
in the Thousand Schools project (cumulative for
each year from the start of the project)
Youth who completed training in skill
development courses and placed / self-employed
Women engaged through Self Help Groups
Volunteering hours
1.2
1.1
FY18
FY19
FY20
WAY FORWARD
FY18
FY19
FY20
59,494
58,935
58,620
42,800
1,50,000
2,00,000
1,948
2,001
2,197
9,969
10,092
10,158
9,136
14,822
21,228
As we navigate through a potentially tumultuous FY 2020-21, Tata Steel stands firm on its commitment to serve the needs
of communities, especially the vulnerable and marginalised whom we have served for well over a century. We will continue
to pursue our 10-year plan while being open to community feedback and contributing to a new way of life. We promise to
continue embodying the spirit of our founder’s immortal words, “In a free enterprise, the community is not just another
stakeholder but the very purpose of its existence.”
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Compliance, Ethics and Sustainability
ingrained in our governance
L E A D E R S H I P I N CO M P L I A N C E
At Tata Steel, we manage our businesses responsibly and in compliance with
the statutory requirements of the locations in which we operate.
We do not tolerate any violation of laws,
codes of conduct or internal regulations.
The Management is fully committed to
compliance and the senior leaders serve as
anchors and have a pivotal role to play in
implementing the compliance interventions.
The compliance management framework
is managed by the in-house compliance
function. The function is headed by the
Company Secretary and Chief Legal Officer
(Corporate & Compliance), who is primarily
responsible for overseeing and managing
regulatory compliances. The function
is adequately staffed with compliance
managers who are responsible for
establishing business and industry-specific
standards in all units across the organisation.
Adherence to compliance obligations
is among the subjects covered in audits
by the Tata Steel Internal Audit function.
Observations from such audits are placed
before the Audit Committee and the
Board of Directors.
CO R P O R AT E E T H I C S
Ethical behaviour is intrinsic to the way we conduct our business. At Tata Steel, we are committed to complying with all
regulatory laws and corporate governance guidelines, and adopting global best practices. The Tata Code of Conduct
(TCoC) is a testament to our commitment towards shared values and principles, which is deployed through the
Management of Business Ethics (MBE) framework. The framework is based on four pillars:
Leadership
Engagement
Compliance
Structure
Communication
and Training
Measurement of
Effectiveness
At the beginning of each year, objectives and strategies related to the MBE are set at the corporate level, which are then cascaded
to divisions and departments, ensuring alignment across the organisation. An appropriate tone is set at the top, with the leaders as
role models and effectively designed policies and robust processes playing a pivotal role in instilling ‘Values’ in our employees.
Tata Steel won the World’s Most Ethical Companies award in 2020, an award instituted by Ethisphere Institute, for the 9th time.
Leadership Engagement
The governance structure of Tata Steel is
an amalgamation of oversight of the Board,
Management (through various committees)
and the central Ethics team. It includes
Departmental Ethics Coordinators (DECs) and
Ethics Champions. The Chief Ethics Counsellor
has the overall responsibility for driving MBE
initiatives and reports to the CEO & MD, who
is also the Principal Ethics Officer. Leadership
engagement on topics such as sustainability,
corporate social responsibility, corporate
governance and membership in different
industry bodies have helped the organisation
augment its reputation at local, national and
international levels.
Compliance Structure
Tata Steel has established the standards of
ethical conduct required of its stakeholders
through TCoC procedures and other
applicable guidelines and policies such as
Whistle-blower Policy for Directors and
Employees, Whistle-blower Policy for Business
Associates, Whistle-blower Protection Policy
for Business Associates, Gifts and Hospitality,
and Conflict of Interest Policy for Employees
and Prevention of Sexual Harassment Policy.
S U S TA I N A B I L I T Y
Policies on Anti-Bribery Anti-Corruption
(ABAC) and Anti-Money Laundering (AML)
were released in November 2019. We have
put in place an implementation framework
through focussed classroom training as well
as web-based training. All our policies are
accessible through the ‘Ethics Compliance
Register – DARPAN’ on the Company’s
intranet as well as on the mobile app.
Communication and Training
For reinforcing TCoC and the policies
related to it, a multi-year training and
communication programme encompassing
classroom and online sessions has been
implemented. These programmes are
customised to different platforms for suited
target audience such as leadership team,
employees, vendors and contract employees.
‘Ethics Month’ was organised on the theme,
‘Integrity Matters’ in July 2019. Various events
such as street plays for contract employees,
sessions for business associates, round tables
involving the senior leadership team, and
town halls were conducted. Snippet story
series, ‘Neeti Katha’ was released on key
aspects of prevention of sexual harassment
and travel policies.
Measurement of Effectiveness
The effectiveness of the ethics programme
is measured by the number of concerns
reported, poll surveys, MBE survey,
benchmarking exercises and internal
MBE assessments.
Whistle-blower Cases* (Nos.)
Received
881
Closed
602
Open
279
Sexual Harassment Cases (Nos.)
Received
34
Closed
26
Open
8
Training on ethics
Category
Officers
Frontline employees
Contract employees
Man-hours
17,064
2,763
24,307
*exclusive of sexual harassment cases
Steel Sustainability
Champion 2019 by
worldsteel
The sustainability agenda at Tata Steel is
driven by the CSR and Sustainability, and
Safety, Health and Environment Committee
of the Board. The senior leadership team
is responsible for deploying the long-term
sustainability plan of the organisation in
line with the macroeconomic context and
UN SDGs. The team also conducts periodic
reviews of all sustainability facets and
apprises the Board on a quarterly basis.
80
INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
81
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 AWARDS AND RECOGNITIONS
1 World Economic Forum’s Global Lighthouse recognition
for our Kalinganagar Plant - a first for India
2 CII GreenCo Star Performer Award 2019
3 Dun & Bradstreet Corporate Award 2019 in the category
of Corporate Social Responsibility
4 Honoured as ‘Business Transformer’ at the 14th Annual
CIO100 Awards, 2019
5
Best Integrated Report Award 2018 by the Asian Centre for
Corporate Governance and Sustainability in September 2019
2
4
3
5
1
82
83
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
Statutory
Reports
Board’s Report
Annexure 1
- Dividend Distribution Policy
Annexure 2
- Management Discussion Analysis
Annexure 3
- Annual Report on CSR Activities
Annexure 4
- Corporate Governance Report
Annexure 5
- Particulars of Remuneration
Annexure 6
- Financial Information of Subsidiary
Companies
Annexure 7
- Information on Subsidiaries or
Associates (including Joint Ventures)
Annexure 8
- Secretarial Audit Report
Annexure 9
- Extract of Annual Return
Annexure 10 - Particulars of Loans, Guarantees or
Investments
86
102
105
131
134
155
160
170
171
174
197
Annexure 11 -
Particulars of Energy Conservation,
198
Technology Absorption and Foreign
Exchange Earnings and Outgo
BOARD’S REPORT
To the Members,
Your Directors take pleasure in presenting the 5th Integrated Report (prepared as per the framework set forth by the International Integrated
Reporting Council) and the 113th Annual Accounts on the business and operations of Tata Steel Limited (‘Company’), along with the summary
of standalone and consolidated financial statements for the year ended March 31, 2020.
A. Financial Results
Particulars
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 and amortisation expenses
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
86
(` crore)
Standalone
Consolidated
2019-20
60,435.97
2018-19
70,610.92
2019-20
1,39,816.65
2018-19
1,57,668.99
45,574.40
50,047.98
1,22,353.59
1,28,285.65
14,861.57
404.12
15,265.69
3,031.01
12,234.68
3,920.12
20,562.94
2,405.08
22,968.02
2,823.58
20,144.44
3,802.96
17,463.06
1,843.49
19,306.55
7,533.46
11,773.09
8,440.73
29,383.34
1,420.58
30,803.92
7,660.10
23,143.82
7,341.83
8,314.56
16,341.48
3,332.36
15,801.99
-
8,314.56
(1,703.58)
6,610.98
(132.82)
6,743.80
-
-
-
-
-
6,743.80
-
-
(648.87)
6,094.93
27,694.90
6,743.80
266.15
66.97
(345.18)
-
33,894.34
1,489.67
297.71
1,787.38
32,106.96
-
16,341.48
(114.23)
16,227.25
5,694.06
10,533.19
-
-
-
-
-
10,533.19
-
-
(50.22)
10,482.97
18,700.25
10,533.19
266.12
92.99
3.88
1.49
29,065.68
1,145.92
224.86
1,370.78
27,694.90
187.97
3,520.33
(3,752.05)
(231.72)
(2,568.41)
2,336.69
(1,120.74)
15.51
(1,136.25)
(27.98)
(1,164.23)
1,172.46
1,556.54
(384.08)
4,482.83
5,655.29
14,056.43
1,556.54
266.15
66.97
4,459.24
40.32
19,913.35
1,488.13
297.40
1,785.53
18,127.82
224.70
16,026.69
(120.97)
15,905.72
6,718.43
9,187.29
(98.60)
(9.64)
(88.96)
-
(88.96)
9,098.33
10,218.33
(1,120.00)
7.79
9,106.12
7,801.99
10,218.33
266.12
92.99
(425.92)
(1,995.47)
15,425.80
1,144.76
224.61
1,369.37
14,056.43
INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
Notes:
(1)
On January 28, 2019, T S Global Holdings Pte. Ltd. (‘TSGH’) (an indirect
wholly-owned subsidiary of the Company) entered into definitive
agreements with HBIS Group Co. Ltd. (‘HBIS’) to divest its entire equity
stake in NatSteel Holdings Pte. Ltd. (‘NSH’) and Tata Steel (Thailand)
Public Company Ltd. (‘TSTH’). During the year under review, TSGH
decided not to pursue the proposed transaction with HBIS, for want of
regulatory approvals.
As on March 31, 2020, active discussions and engagement with other
potential buyer(s) demonstrate that the Management of the Group is
committed to sell the disposal group and there is an active programme for
completing the sale.
In accordance with Ind AS 105, “Non-current Assets Held for Sale and
Discontinued Operations”, the assets and liabilities of businesses forming
part of the disposal group have been classified as held for sale.
(2)
During the year under review, exceptional items (Consolidated Accounts)
primarily represent:
a)
b)
c)
d)
e)
f)
g)
Impairment charges `3,197 crore in respect of property, plant and
equipment (including capital work-in-progress and capital advances,
right of use assets and intangible asset) primarily at Tata Steel
Europe (‘TSE’), Global mineral entities, Tata Steel Special Economic
Zone Limited, and at Tata Steel BSL Limited (‘TSBSL’) along with
impairment of Goodwill at Bhubaneshwar Power Private Limited.
Restructuring provisions amounting to `161 crore at TSE.
Expenses incurred on stamp duty and registration fees for a
portion of land parcels and mines acquired as part of business
combination `27 crore and provision for coal block performance
guarantee `134 crore at Tata Steel Long Products Limited
(formerly Tata Sponge Iron Limited).
Provision
amounting to `42 crore at TSBSL.
for
impairment of doubtful
capital
advances
Fair valuation loss on investment in preference shares held at
one of the associate companies amounting to `250 crore at
Tata Steel Limited (Standalone).
Provision for demands and claims amounting to `196 crore relating
to certain statutory demands and claims on environment and mining
matters including `86 crore relating to SVLDRS - Sabka Vishwas Legal
Dispute Resolution Scheme at Tata Steel Limited (Standalone).
Provision for Employee Separation Scheme (‘ESS’) under Sunehere
Bhavishya Ki Yojana (‘SBKY’) scheme amounting to `107 crore at Tata
Steel Limited (Standalone).
Partly offset by,
h)
i)
j)
Restructuring and write back of provisions which primarily
includes write-back of
required at
Tata Steel BSL Limited `154 crore and settlement credit received at
The Indian Steel & Wire Products Ltd. `18 crore.
liabilities no
longer
Profit on sale of subsidiaries amounting to `149 crore and profit on
liquidation of group companies amounting to `41 crore at TSE.
Gain on recovery of advances earlier provided for amounting to
`1 crore at Tata Steel Limited (Standalone).
The exceptional
items
2018-19 primarily include:
(Consolidated Accounts)
in Financial Year
a)
b)
c)
Provision of `172 crore in respect of advances with public bodies paid
under protest by Tata Steel BSL Limited.
Impairment charges `10 crore in respect of property, plant and
equipment (including capital work-in-progress and capital advances)
and intangible assets at TSBSL.
Provision for demands and claims amounting to `329 crore relating
to certain statutory demands and claims on environment and mining
matters at Tata Steel Limited (Standalone).
d)
for Employee Separation Scheme
Provision
(‘ESS’) under
Sunehere Bhavishya Ki Yojana (‘SBKY’) scheme amounting to
`35 crore at Tata Steel Limited (Standalone).
Partly offset by:
e)
sale of non-current
to
Profit on
`180 crore, primarily
in TRL Krosaki Refractories Limited (an
associate of the Company) and certain other subsidiaries and joint
ventures.
investments amounting
f)
Restructuring and write back of provisions amounting
to
`245 crore which primarily include write-back of liabilities no longer
required at TSBSL and arbitration settlement at Tata Steel Utilities
and Infrastructure Limited (formerly Jamshedpur Utilities & Services
Company Limited), partly offset by charge at TSE.
1. Dividend Distribution Policy
In terms of Regulation 43A of the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations,
2015, (‘SEBI Listing Regulations’) the Board of Directors of the
Company (‘the Board’) formulated and adopted the Dividend
Distribution Policy (‘the Policy’). As per the Policy, the Company,
after considering various external factors that may have an impact on
the business as well as internal factors such as the long-term growth
strategy of the Company and the liquidity position including working
capital requirements and debt servicing obligations, will endeavour
to pay dividend up to 50% of profit after tax of the Company, subject
to the applicable rules and regulations.
The Policy is annexed to this report (Annexure 1) and is also available
on our website at https://www.tatasteel.com/media/6086/dividend-
policy-final.pdf
2. Dividend
(equity)
The Board has recommended a dividend of `10 per
fully
paid-up Ordinary
fully
112,64,90,211
paid-up Ordinary Shares of face value `10 each, for the year ended
March 31, 2020. (Dividend for Financial Year 2018-19: `13 per fully
paid-up Ordinary Share on 112,64,89,680 fully paid-up Ordinary
Shares of face value `10 each).
Share on
The Board has also recommended a dividend of `2.504 per partly
paid-up Ordinary (equity) Share on 7,76,36,788 partly paid-up Ordinary
Shares of face value `10 (paid up `2.504 per share) each for the year
ended March 31, 2020. [Dividend for Financial Year 2018-19: `3.25 per
partly paid-up Ordinary Share on 7,76,36,705 partly paid-up Ordinary
Shares of face value `10 each (paid-up `2.504 per share)].
The Board has recommended dividend based on the parameters
laid down in the Dividend Distribution Policy and will be paid out of
profits for the year.
The dividend on Ordinary Shares (fully paid-up as well as
partly paid-up) is subject to the approval of the Shareholders at the
Annual General Meeting (‘AGM’) scheduled to be held on Thursday,
August 20, 2020.
The dividend once approved by Shareholders will be paid on and
from Monday, August 24, 2020. If approved, the dividend would
result in a cash outflow of `1,145.93 crore. The dividend on Ordinary
87
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
Shares (fully paid-up as well as partly paid-up) is 100% of the paid-up
value of each share. The total dividend pay-out works out to 16.99%
(Previous Year: 17%) of the net profit of the standalone results.
Pursuant to the Finance Act, 2020, dividend income is taxable in the
hands of the shareholders effective April 1, 2020 and the Company is
required to deduct tax at source from dividend paid to the Members
at prescribed rates as per the Income Tax Act, 1961.
The Register of Members and Share Transfer Books of the Company
(for fully paid-up as well as partly paid-up shares) will remain
closed from Saturday, August 8, 2020 to Thursday, August 20, 2020
(both days inclusive) for the purpose of payment of the dividend for
the Financial Year ended March 31, 2020.
3. Transfer to Reserves
The Board of Directors has decided to retain the entire amount of
profit for Financial Year 2019-20 in the statement of profit and loss.
4. Capex and Liquidity
During the year under review, the Company, on a consolidated basis
spent `10,398 crore on capital projects across India, Europe and
Canada largely towards on-going projects in India (Kalinganagar
plant and Tata Steel BSL Limited), essential sustenance, and
replacement schemes.
The Company’s liquidity position remains strong at `17,745 crore
as on March 31, 2020, comprising `11,549 crore in cash and cash
equivalent and balance in undrawn credit lines.
5. Management Discussion and Analysis
The Management Discussion and Analysis as
in
terms of the SEBI Listing Regulations is annexed to the report
(Annexure 2).
required
B. Integrated Report
In keeping with the Company’s valued tradition of “thinking about
society and not just the business”, in 2016, we transitioned from
compliance-based reporting to governance-based reporting by
adopting the framework developed by the International
Integrated Reporting Council.
We present to you our 5th Integrated Report which highlights
the measures taken by the Company that contribute to long-term
sustainability and value creation, while embracing different skills,
continuous innovation, sustainable growth, and a better quality
of life.
C. Operations and Performance
1. Tata Steel Group
During the year under review, the Tata Steel Group (‘the Group’)
recorded total deliveries of 26.68 MnT (previous year: 26.80 MnT).
The steel deliveries decreased at Tata Steel Limited by 2.9% and
at Tata Steel Europe by 4%. This decrease was off-set by higher
deliveries at Tata Steel BSL Limited (‘TSBSL’) by 16%. The increase
at TSBSL is due to ramp-up of operations. Further, in the previous
Financial Year 2018-19, deliveries prior to the acquisition of TSBSL
on May 18, 2018 under Insolvency and Bankruptcy Code were not
included. Further, the acquisition of the steel business of Usha
Martin Limited by Tata Steel Long Products Limited (‘TSLP’)
(formerly Tata Sponge Iron Limited) on April 9, 2019, also increased
the total deliveries of the Group by 0.51 MnT. The turnover for the
Group was at `1,39,817 crore during the Financial Year 2019-20
(previous year: `1,57,669 crore), a decrease of 11% over the previous
year due to decline in realisations across geographies along with
lower deliveries. Further, the EBITDA for the Group was `17,735
crore during the Financial Year 2019-20 as compared to `29,770
crore in the previous year.
During the year under review, the Group reported a consolidated
profit after tax (including discontinued operations) of `1,172 crore as
against a profit of `9,098 crore in the previous year. The decrease was
mainly due to lower operating profits attributable to decline in the
steel prices during the year, higher exceptional charge, partly offset
by lower tax expenses primarily on account of re-measurement of
deferred tax liabilities based on the new lower rate of Income tax
prescribed under Section 115BAA of the Income Tax Act,1961, along
with creation of deferred tax assets at some of its foreign entities.
2. India
During the year under review, total deliveries at Tata Steel Limited
(Standalone) were at 12.32 MnT (previous year: 12.69 MnT),
recording a decrease of 2.9% over the previous year. Turnover was
`60,436 crore (previous year: `70,611 crore), decrease of 14.4%
than that of the previous year. EBITDA from Tata Steel Limited
(Standalone) was `15,096 crore (previous year: `20,744 crore), 27.2%
lower than that of the previous year.
During the year under review, the crude steel production in
India increased by 8% to 18.20 MnT with ramp up at TSBSL and
acquisition of steel business of Usha Martin Limited by TSLP. TSBSL
achieved best ever crude steel production and sales at 4.46 MnT
and 4.14 MnT, respectively due to improved maintenance practices,
higher capacity utilisations, and marketing synergies. TSLP which
acquired steel making facility of Usha Martin Limited, during the
year, achieved crude steel production of 0.58 MnT while deliveries
stood at 0.51 MnT.
Total deliveries of Tata Steel from its Indian operations (including
TSBSL and TSLP) stood at 16.97 MnT i.e. 4% higher than the previous
year. The turnover and EBITDA (excluding inter-company eliminations
and adjustments) was `82,125 crore and `17,650 crore, respectively.
During the year under review, Sukinda Chromite mine and Gomardih
Dolomite mine leases expired on March 31, 2020, as per the mining
regulations . Tata Steel Mining Limited (formerly T S Alloys Limited),
a wholly-owned subsidiary of the Company, has won the Sukinda
Chrome ore mines in the auction and the lease grant process is
underway. Further, Tata Steel Mining Limited also signed 50 year
88
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR leases for Kamarda and Saruabil Chrome mines. With these mines,
Tata Steel Mining Limited is well placed to cater to its global customer
base as well as requirements of the Group.
D. Key Developments
Amalgamation and Joint Venture
3. Europe
During the year under review, liquid steel production from European
operations was 10.26 MnT (previous year: 10.31 MnT). Deliveries from
European operations decreased by 4% to 9.29 MnT primarily due to
overall weakness in economic activities. Turnover from operations
was `55,939 crore (previous year: `64,777 crore). The decrease in
turnover was primarily due to sharp decline in European steel prices
and lower deliveries, resulting in loss of `664 crore at the EBITDA level.
The Company is committed to make its European operations simpler,
leaner, and sustainable. It has launched a transformation programme
to generate savings across multiple initiatives.
4. Impact of COVID-19
The outbreak of COVID-19 pandemic has led to an unprecedented
health crisis and has disrupted economic activities and global trade
while weighing on consumer sentiments. Consequently, the global
steel demand is expected to be sharply lower in 2020.
The Government of India had imposed a stringent nationwide
lockdown with effect from March 25, 2020 which has severely
impacted manufacturing activities. Though the Steel and Mining
sectors were exempt from the lockdown measures, they were
subject to certain guidelines. Steel demand was affected as key
steel consuming sectors struggled to operate amidst weakening
economic activities, working capital constraints, shortage of
manpower, and logistical issues.
In Europe, the outbreak of COVID-19 has further accentuated
the sustained weak steel demand. The share of steel imports to
total consumption in the European Union continues to remain at
elevated levels which is a cause of concern.
The risk-intelligent culture embedded across the Company has
helped in developing and adopting a multi-pronged strategy to
effectively respond to the evolving pandemic situation. The health
and safety of our employees and the communities in which we
operate continues to be the foremost priority of the Company. The
Company is focussed on running operations safely and efficiently to
service our customers. The operations have been aligned with the
prevailing market conditions by reducing upstream operations while
curtailing downstream operations. Cross-functional teams worked
to manage supply chain and logistics issues within the constraints
imposed by the lockdown to ensure that plant could operate as
planned. With domestic markets closed due to the lockdown, there
was a shift to export sales which were ramped up sharply. The
Company is also focussed on liquidity management to face any future
disruption in business conditions. Funds were raised to manage
liquidity considering the heightened uncertainty over the extent of
impact on underlying demand conditions.
Amalgamation of Bamnipal Steel Limited and Tata Steel BSL
Limited into and with Tata Steel Limited
During the year under review, the Board of Directors of the Company,
at its meeting held on April 25, 2019, approved the amalgamation of
Bamnipal Steel Limited and Tata Steel BSL Limited, into and with the
Company by way of a composite scheme of amalgamation.
The Company received a ‘no objection’ to the scheme from the
National Stock Exchange of India Limited and BSE Limited on
August 26, 2019 and has filed an application before the National
Company Law Tribunal, Mumbai Bench for necessary directions. The
amalgamation is subject to approval from shareholders and other
regulatory authorities.
Joint Venture between Tata Steel and thyssenkrupp AG
During the year under review, the Company and thyssenkrupp AG
decided not to pursue the proposed transaction to form a joint
venture to combine their steel businesses in Europe. The decision
was taken after careful evaluation of the viability of the proposal in
light of the feedback received from the European Commission ('EC').
Thereafter, on June 11, 2019, EC formally announced its decision to
prohibit the proposed joint venture.
Acquisitions & Investments
Acquisition of Bhushan Energy Limited
During the year under review, Tata Steel BSL Limited (‘TSBSL’), an
indirect subsidiary of the Company, completed the acquisition of
controlling stake in Bhushan Energy Limited (now Angul Energy
Limited) (‘BEL’), pursuant to the Resolution Plan as approved by the
National Company Law Tribunal (Principal Bench, New Delhi) vide its
Order dated May 30, 2019, under Corporate Insolvency and Resolution
Process of the Insolvency and Bankruptcy Code, 2016. Consequently,
BEL became a subsidiary of TSBSL effective June 1, 2019.
Investment in Tata Steel Long Products Limited
Pursuant to the Rights Issue of Tata Steel Long Products Limited
(formerly Tata Sponge Iron Limited) ('TSLP'), on July 24, 2019,
the Company acquired 2,58,43,967 Equity Shares of face value of
`10 each of TSLP at a price of `500 per equity share (including a
premium of `490 per equity share) aggregating to `1,292.20 crore.
As a result of this, the Company's holding in TSLP increased from
54.50% to 75.91%. The name change of TSLP from Tata Sponge
Iron Limited to Tata Steel Long Products Limited is effective
August 20, 2019.
89
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 Divestments
NatSteel Holdings Pte. Ltd. (‘NSH’) and Tata Steel (Thailand)
Public Company Ltd. (‘TSTH’)
During the year under review, T S Global Holdings Pte. Ltd. (‘TSGH’),
an indirect wholly-owned subsidiary of the Company, for want
of regulatory approvals, decided not to pursue the proposed
transaction with HBIS Group Co. Ltd. (‘HBIS’), to divest its entire
equity stake in NSH (100%) and TSTH (67.9%) to a company in which
70% equity stake would be held by an entity controlled by HBIS and
the balance 30% by TSGH.
The Company is in discussions with other investor(s) in continuation
of its strategy to find a partner for the South-East Asian business.
Financing
Issuances of Debt Securities
During the Financial Year 2019-20 and till date of the report, the Company has allotted the following Unsecured, Rated, Listed, Redeemable,
Non-Convertible Debentures (‘NCDs’) of face value of `10,00,000 each to identified investors on private placement basis:
Particulars of Allotment
6,700 – 7.70% NCDs aggregating to `670 crore
10,250 – 7.85% NCDs aggregating to `1,025 crore
5,100 – 7.85% NCDs aggregating to `510 crore
10,000 – 7.70% NCDs (floating coupon) aggregating to `1,000 crore
Series A: 5,000 – 7.85% NCDs (floating coupon) aggregating to `500 crore;
Series B: 5,000 – 7.95% NCDs aggregating to `500 crore
10,000 – 8.25% NCDs aggregating to `1,000 crore
4,000 – 8.08% NCDs (floating coupon) aggregating to `400 crore
Date of Allotment
March 13, 2020
April 17, 2020
April 22, 2020
April 27, 2020
April 30, 2020
May 20, 2020
June 3, 2020
Tenure
5 years
3 years
3 years
3 years
3 years
3 years 6 months
3 years
3 years
Date of Maturity
March 13, 2025
April 17, 2023
April 21, 2023
April 27, 2023
April 28, 2023
October 30, 2023
May 19, 2023
June 2, 2023
Refinancing at Tata Steel Netherlands
During the year under review, Tata Steel Netherlands Holdings B.V.
(‘TSNHBV’), an indirect wholly-owned subsidiary of the Company,
executed agreements for the refinancing of its bank debt. TSNHBV
has raised term loan facilities of EUR 1.75 billion. This represents a
reduction of EUR 500 million versus the external debt outstanding
in Tata Steel Europe as of March 2019, enabling the standalone
European business to have a more robust balance sheet while it is
also putting in significant efforts at restructuring and improving its
operating performance.
Credit Rating
subsidiary
In April 2020, S&P Global Ratings (‘S&P‘) revised the
issuer
credit rating of the Company as well as the long-term foreign
currency issuer credit rating for ABJA Investment Co. Pte. Ltd., a
from
of
wholly-owned
‘BB-’/Outlook: Stable to ‘B+’/Outlook: Negative. S&P also revised
the
issuer credit rating of Tata Steel UK Holdings Ltd., an
indirect subsidiary of the Company from ‘B+'/Outlook: Stable to
‘B'/Outlook: Negative. The revision in ratings was primarily on
account of COVID-19 pandemic related disruptions and the
consequent economic effects.
Company,
the
Similarly, in April 2020, Moody’s Investor Service (‘Moody’s’) revised
the outlook for the Company’s Corporate Family Rating from Stable
to Review for Downgrade and affirmed the rating ‘Ba2’. Moody’s has
also revised the Corporate Family Rating of Tata Steel UK Holdings
Ltd. from ‘B2'/Outlook: Stable to ‘B3'/Outlook: Review for Downgrade.
The revision was also triggered in anticipation that the Company
would face challenges due to the COVID-19 pandemic led economic
downturn coupled with the weak credit profile of the Company.
90
E. Sustainability
The Company is committed to steel production using the most
efficient routes, minimising waste generation and mitigating impact
on natural capital. The sustainability approach of the Company
emphasises integrated thinking and balances the impact and
outcome of six capitals viz. Financial, Manufactured, Intellectual,
Human, Social and Relationship, and Natural. Aspirations of taking
our carbon emissions to <2 tCO2/tcs, attaining zero waste, reducing
specific water consumption to <3 m3/tcs, and doubling our CSR reach
by 2025 are significant facets of this strategy.
New initiatives undertaken by the Company in the Financial Year
2019-20 find their genesis in our aspiration of minimising the carbon
footprint. The Company undertook third party studies which helped
in identifying a renewable energy potential of ~180 MW across
locations. This will help the Company in increasing the proportion of
the renewable energy in its power mix.
The Company is a signatory to the Task Force of Climate Related
Financial Disclosure for climate change and is in the process of
identifying transition risks to decarbonise its operations over
a period. Several transition risks and opportunities have been
identified as part of this assessment. Specific mitigation and
contingency plans for each of the identified risks are being
integrated with Company’s long-term strategy.
The Company is committed to serve its customers through a
portfolio of eco-friendly products and disclosure of the impact
of the products on environment by using Life Cycle Assessment
(‘LCA’) methodology. In Europe, almost entire product range
of the European operations is certified to be at the BES 6001
sustainable sourcing standard. During the year under review,
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Tata Steel Europe received a ‘Steelie’ award from World Steel
Association for ‘Excellence in Life Cycle Assessment’ in recognition
of its development of a sustainability development tool for use in
the new product development processes in its European operations.
Tata Steel Europe has also published Environmental Product
Declarations (‘EPD’), setting out the environmental characteristics
of products throughout their life-cycle, for a large number of its
products manufactured in Europe. Further, the Company will strive
to maintain its global leadership by publishing EPDs on an increased
proportion of its global product offering.
The Company identified supply chain sustainability as a key material
issue in the materiality exercise conducted in the Financial Year
2018-19. In order to take this forward, the Tata Steel Responsible
Supply Chain Policy was adopted in February 2020. The expectations
with respect to sustainability from supply chain partners, viz.
vendors, Steel Processing Centres and distributors, as well as the way
the Company would engage with them on the subject have been laid
down in the aforesaid policy.
In order to augment the effort of the Company towards conservation
of biodiversity at its operational sites, the Company constituted a
Centre of Excellence for Biodiversity Management to strategically
formulate and implement Biodiversity Management Plan. During
the year under review, more than 4 lakh trees were planted across
locations using eco-restoration methodology and Miyawaki
plantation techniques.
The continued focus on ‘Sustainability’ has helped the operations
of the Company, in India as well as Europe, to be recognised as two
of the six Sustainability Champions by World Steel Association for
three consecutive years. Also, the Jamshedpur Works was awarded
the ‘GreenCo Star Performer’ award for sustained excellence in
environmental management and the Global Wires division of the
Company was awarded the ‘GreenCo Gold Rating’ for excellence in
environmental management, by the CII Green Business Centre.
Environment
The Company is committed to responsible use and protection of
environment through resource conservation, pollution control, and
sustainable practices for waste management. The Company focusses
on operational excellence through “Prevent, Minimise, Recover,
Reuse and Recycle” approach. The Company continues its pursuit of
establishing best-in-class facilities and channelising its investment
to upgrade manufacturing and distribution facilities to improve
operational and environmental performance.
The Company has
implemented environmental management
systems in accordance with international standard ISO 14001, which
provides the necessary framework for managing compliance and
improving environmental performance. The Company maintains
accredited laboratories for environmental performance assessment.
The Safety, Health, & Environment Committee of the Board provides
oversight and necessary guidance on environmental matters. The
Company has dedicated Environment Management teams at all its
operating locations. The Company endeavours to practice responsible
advocacy on regulatory issues and actively participates in World
Steel Association Environment Policy Committee, World Economic
Forum, Central Pollution Control Board’s National Taskforce in India,
Eurofer (the European Confederation of Iron and Steel Producers),
and various other organisations. The Company engages with various
organisations such as Confederation of Indian Industry-Centre of
Excellence for Sustainable Development, Confederation of Indian
Industry-Sohrabji Godrej Green Business Centre, the Indian Institute
of Metals, The Energy and Resources Institute, The Federation of
Indian Chambers of Commerce and Industry, Federation of Indian
Mineral Industries, and Insolvency and Bankruptcy Board of India
amongst others on diverse issues.
Climate Change
Climate change is one of the most pressing issues the world faces
today and the Company recognises its obligation to work towards
mitigation of climate change related risks and strives to address
the challenges of transitioning to a lower carbon regime. The
Company firmly believes that, steel is an integral part of the solution
for transitioning to lower carbon economy because of its unique
property of infinite recyclability.
The Company aspires to achieve global benchmark levels of
< 2 tCO2/tcs emissions by 2025 for Indian operations and to become
carbon neutral by 2050 in Europe. The Company’s site in IJmuiden
in the Netherlands is one of the most carbon efficient integrated
steelworks in the world while, the Company’s integrated steelworks
at Jamshedpur is the most efficient steel plant in India. The
Company has established Energy Efficiency and Carbon Reduction
programmes at all its Steel Plants in the Netherlands, UK, and India
to pursue short-term energy efficiency initiative and to work on
long-term decarbonisation initiatives. The Research & Development
team is collaborating with technology companies and academia to
work on wide range technologies which, inter alia, includes carbon
capture, use and storage (‘CCUS’), hydrogen-based steelmaking
and new smelting technologies. The Company has set up a Steel
Recycling business in an endeavour to bring good practices in Indian
scrap market and make more scrap available for conversion to steel.
The Company continues to work on developing HIsarna, a new
smelting reduction technology to produce steel without the need
for coke making or agglomeration processes, thereby improving
efficiency,
reducing CO2
emissions. The pilot plant is located at the Company’s IJmuiden site
in the Netherlands. The Company is exploring to scale up HIsarna in
India to pursue the development of a strategic roadmap to achieve
quantum reduction over 2030 and 2050 horizons.
reducing energy consumption and
Health and Safety
Health and Safety Management remains the Company’s foremost
priority and we are committed to achieve ‘Zero Harm’ by 2025.
In pursuit of this objective, the Company has been working on
six strategies viz. build safety leadership capability at all levels
to achieve zero harm, achieve zero harm to contract employees
91
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 improve competency and capability
by strengthening deployment of contractor safety management
standard,
for hazard
identification & risk management, improve road & rail safety across
the Company, excellence in process safety management, and
establish industrial hygiene and improve occupational health.
across India covering 15,000 employees and contract employees.
In order to develop competency in first-aid and Cardiopulmonary
resuscitation (CPR) ~7,600 employees were trained across India. High
risk cases of about 52%, relating to life style diseases, have been
transformed to moderate or low risk category.
improve the health and safety standards of
During the year under review, the Company undertook several
its
initiatives to
employees, including rolling out a reward and recognition policy
for Indian operations to encourage positive safety behaviour among
employees, commissioning a ‘safety leadership development centre’
to enhance the competency of the workforce and provide safety
induction training, and establishing ‘Tactical Centre’ for business
continuity management during emergency situations. Group
companies including Tata Steel Europe formed HSE Performance
Improvement Teams to improve safety at workplace through learning
and sharing of best practices.
A focussed effort was also made to improve the deployment of
competent contract workforce in high hazard operations. For
effective
learning and deployment of Safety Standard across
organisation, ten Safety Standards were simplified and e-learning
modules were developed.
Contractor employee’s fatality remains the topmost safety concern
for the Company. It is with deep regret that the Company reports
three fatalities in India involving our contractor partners. During the
year under review, three distinct Safety campaigns viz. ‘Zero Harm’,
ECAUP (Elimination of Commonly Accepted Unsafe Practice) and
‘Fall from Height’ were launched across locations to address gaps
and improve safety awareness. Monthly review of red risk incidents
by the Senior Leadership helped in achieving ~44% reduction
of high potential incidents vis-à-vis previous year. Further, the
initiative to roll out Process Safety through ‘Centre of Excellence’
methodology gained momentum. Currently, the process safety has
been rolled out to 46 departments and the balance departments
will be covered in the Financial Year 2020-21. The Company has been
awarded for the best practice on ‘Managing Process Safety Critical
Equipment for Barrier Effectiveness’ at the World Steel Safety and
Health Recognition function held at Mexico in 2019.
The Company is leveraging digital technology through usage of
Smart Safety Wearable’ developed in-house, in collaboration with
Tata Communications, for online tracking of health parameters of
workers who are in isolated workplaces at Jamshedpur. In order
to improve safe behaviour on road, a video analytic system was
installed at Jamshedpur including the first Automatic Number
Plate Recognition (‘ANPR’) system. Further to strengthen CCTV
visualisation, local command centres were established across
various locations.
Towards Occupational Health, the Company has implemented
Industrial Hygiene hazard control measures to minimise the exposure
level at Jamshedpur. Theme based health awareness campaigns
on heat stress, hypertension, diabetes, and obesity were organised
During the year under review, the Company has also undertaken
other initiatives such as leadership coaching and site interventions
at both integrated sites, putting in place new governance and review
structures, accelerating the deployment of standards and codes
of practices around coil banding, and initiative towards a more
digital approach to support site health and safety teams and the
development of management systems in line with ISO 45001.
At Tata Steel Europe, Health and safety continues to be of utmost
priority. It is with deep regret that the Company reports two fatalities
in Europe during the year. In consultation with the senior leadership,
several measures including a health and safety transformation plan
which focusses upon five key areas viz. transformational leadership,
collaborative development and deployment, digitally enabled,
company wide support, standards and integration, and workforce
engagement, have been developed.
Research and Development
In line with the aspiration to be amongst the top five innovation
driven steel companies globally, the Company has ushered in
Technology Leadership Areas (‘TLAs’). Cross-functional teams have
been constituted and projects have commenced based on TLAs.
During the year under review, the Research and Development (‘R&D’)
conducted by the Company has demonstrated a process at lab scale
for rapid heating of non-coking coal to coke, through microwave
energy. The Company also targets to upscale the technology for
continuous coke making. Further, with an aim to create ‘Value from
Waste’, the Company established a process for using water-cooled
and air-cooled ferrochrome slag material in applications such as
bitumen road, concrete, and fly ash slag bricks.
Conservation of the environment and sustainability has always
been an important area for the Company. Accordingly, the
Company has installed a pilot plant of the scale 5 Tonnes per
Day (TPD) at one of our steelmaking plants to capture CO2 from
Blast Furnace gas. Further, the Company has also developed
an advance oxidation process for cyanide removal and the
fabrication and installation of the commercial plant of the capacity
@ 100 m3/hr is under progress. Amongst the notable customer
collaborations, the Company has worked jointly with a leading
automotive player in designing the tipper body using a new
grade of high strength steel which has resulted in reduction of
the weight of the tipper body by 200 kg without compromising
on its strength.
In Europe, R&D has contributed to various new products and
implementation of new process control models and other process
improvements. The Company has introduced the Valast range
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BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR of abrasion resistant grades, the new Cr6+ free TCCT (Trivalent
Chromium Coating Technology) as replacement for ECCS (Electrolytic
Chrome Coated Steel) and CFPA (Chromium Free Passivation
Alternative) products for packaging, and MagiZinc full finish.
The Company also worked towards continuously optimising coal
blending, improving safety and preventing damage by prediction of
coiling through a new model CISCA (Cooling Induced Shape Change
Algorithm), and automatically detecting of stickers in the casters
at an early stage. Further, R&D has also been vital in getting many
potential new products to reach higher Technology Readiness Levels
throughout the year and to support the customer interactions on a
technical level.
R&D continues to help the Company in its drive to become more
sustainable and environmentally friendly. The HIsarna project has
demonstrated its potential to solve certain issues faced by the steel
industry in dealing with circularity and climate change. R&D will
continue to support this development and be heavily involved in the
technical discussions for upscaling the process in India and IJmuiden.
New Product Development
During the year under review, the Company developed 155
new products in India, which inter alia include the JSH440WN
& JSH590RN grades and S420MC for high strength automotive
structural applications. The new grades of steel are targeted to be
used in upcoming automotive models. The Company was awarded
the “Innovative Supplier of the year 2019” for its customer centric
approach and innovation in the product development.
In the long products segment, the Company commercialised high
strength, high ductility rebar grade – Fe600 HD. Further, the Company
also developed low N2 Steel grade [WR3M] wire rod for welding
electrode wire application through Electric Arc Furnace (EAF) route.
In Europe, 22 new products were launched during the year. These
launches include major developments for engineering, automotive
and construction markets. A notable example of product launch
includes the Valast®450, XPF ®800 Tubes and Celsius®460. Valast®450
hot rolled abrasion resistant product offers the widest strip product
with superior surface quality, guaranteed impact strength and
flexible length sheets at a competitive price to the yellow goods
and heavy vehicles market. The XPF®800 Tubes, offers customers a
cost-effective alternative for manufacturing automotive components
such as twist beams. The Celsius®460 NH Tube is the strongest hot
formed structural hollow section ever produced by the Company,
offering customers up to 20% weight saving with no weldability
penalty. Further, Packaging department has further developed
and commercialised its already launched polymer laminated steel
Protact® range of products.
Customer Relationship
During the year under review, the Company continued to enhance
its relationship with automotive manufacturers and their large
value chain partners. In addition, the Company also revived its
Customer Service Team (‘CST’) approach of nurturing relationships
with automotive manufacturers and continued to provide value
upliftment across the Original Equipment Manufacturers (‘OEM’)
supply chain ecosystem. The Company also extended its Early Vendor
Involvement (‘EVI’) partnership for the upcoming models of the
OEMs. The Company has offered solutions on weight reduction, crash
worthiness, and vehicular design from material perspective to its
customers through its equipped Research and Development setup.
In addition, the Company continued to roll out its Value Analysis &
Value Engineering (‘VAVE’) module and advanced material data for
existing models and in-production support.
During the year under review, ‘Tata Tiscon’, the Company’s rebar
brand, increased its footprint in the rural hinterland through active
engagement with Mason Community under the MITR programme.
The programme has over 25,000 Active Masons in the Community
who contribute to more than 25% volume for the brand. The Company,
through Tata Tiscon’s Innovative Discovery programme, engaged
with over 7,500 architects and engineers. These engagements were
aimed at enhancing the Individual House Building construction
ecosystem of the country.
During the year under review, Tata Shaktee, the Company’s flagship
brand in the field of galvanised corrugated sheets, completed
20 years. The Company reached out to almost 2,00,000 people across
more than 4,000 villages across 16 states and 65 districts of rural
India, through its on-ground bike campaign ‘Gaon Gaon Shaktee
Ki Chaon’. The campaign, aimed at category conversion of ‘Kachcha
House’ owners to Tata Shaktee GC Sheets, and garnered over
1,500 leads and registrations of over 55,000 people. Tata Shaktee
reached out to over 5,000 farmers across 120 districts in India via
127 Kisan Meets conducted on the occasion of Kisan Diwas. This
programme also helped the Company to enhance its relationship
with the fabricator community via Shakteeman, the digital
Fabricator Loyalty Scheme. The Company has introduced a reward
based programme with the aim to increase the fabricator loyalty
for Tata Shaktee.
The Company’s e-selling platform
‘Aashiyana’ which caters to
multiple B2C brands crossed a turnover of `316 crore as against
`100 crore in the previous year. B2ECA (Business to Emerging
Corporate Accounts) consisting of brands such as Tata Astrum (HR),
Tata Steelium (CRCA) and Galvano (coated) is a ~4 MnTPA business
and continues to grow. During the year under review, the Company
partnered with various institutions to bring together various thought
leaders and ECAs to understand the upcoming technologies in
the microsegments we serve. Collaborative Reform with ECA for
Advanced Technical Enhancement (‘CREATE’) was conducted with
over 25 ECA customers to generate cost and weight savings ideas
via redesigning of components. A knowledge sharing platform
ECA-Talks was conceptualised where the senior leadership team of
key ECA customers shared current trends and future expectations
for their respective micro-segments. Further, under the Skilling India
Initiative, training programmes were organised for the workforce of
93
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 ECA customers to develop technical capabilities. Fabricators were
identified as key influencers to scale up Tata Astrum Super (unique
laser marked Hot Rolled coils) and several fabricator meets were
conducted to strengthen brand awareness. Both, COMPASS a digital
supply chain visibility solution rolled for B2B and DigEca, an initiative
that captures lead management for ECAs received traction from
distributors & customers. DigEca has been rolled out to all ECAs to
drive supply chain agility and improve visibility to customers. The
Company has also completed digital analytics based projects named
Paras, Amrit, and Ascend pertaining to a digital method of market
demand assessment and improvement in product value realisation.
In the B2B sector, the Company has launched #Converse to Construct-
Conversations that builds Tomorrow – a platform to interact and
share ideas with different stakeholders of the construction sector
that would enable adoption of faster, sustainable and modern
construction practices in line with global benchmarks. The Company
has also collaborated with the World Steel Association (through
ConstructSteel forum) and Indian Steel Association to support them
in their efforts to improve steel intensity in construction in India.
In the Engineering Segment (Pre-Engineered Building, Lifting &
Excavation, Construction & Projects and Oil & Gas), ‘Building India
Together’ was rolled out to drive customer engagement initiatives
such as CST, VAVE, Technology Day and Joint Milestones celebration
across key customer accounts across India.
During the year under review, the Company’s “Tata Pravesh Pioneers”
programme was
launched to capture customer testimonials
encapsulating their experiences with the products and service. The
Company also launched ‘Griha Pravesh’, an Influencer Management
Programme, to build a web of influencers such as architects, interior
designers, civil and structural engineers and to create Tata Pravesh
footprint across India.
The Company appointed dedicated Key Account Managers for
Nest-in offerings, for repeat customers in order to understand and
meet customised requirements, as well as receive and implement their
feedback. The Company has installed over 1,800 EzyNest (modular
toilets) units for repeat customers as part of their CSR initiatives across
India with an AMC contract for many of them. Further, the Company
has also received AquaNest (water ATMs) orders from such customers.
Nest-In effectively uses demo units and open house visits to clear any
customer concerns on quality and guide them on the aesthetics of
Nestudio – a premium prefabricated living solution. The Company
has listed all Nest-In offerings on the Government e-Marketplace
portal where procurements are made by Government Officers.
In Europe, the Company partners with customers to help them excel
in their market, co-creating more sustainable value throughout
the entire value chain. As part of its Transformation Programme,
the Company has integrated its existing initiatives on ‘Customer
Excellence’ and ‘Future Value Chain’ and undertaken initiatives to
optimise the mix, and identify and capture additional opportunities
in the market. ‘Commercial Excellence’ improvements have been
acknowledged in the Tata Business Excellence Model assessment.
The Company also has a value chain transformation programme
previously known as
‘Future Value Chain’ which focusses on
driving service and quality improvements. European operations
are increasing its focus on business development to achieve a
balanced portfolio in terms of both products and customer setup.
The Company maintains its differentiation strategy, which aims to
increase the proportion of high margin differentiated products. As
part of the strategy, the Company has launched 22 new products in
Europe during the year. These launches include major developments
for the engineering, automotive, packaging, and construction
markets. Along with products, the Company also offers services
such as Electronic Data Interchange, Track and Trace, Early Vendor
Involvement, Design and Engineering support, Building Information
Modelling, Life Cycle Analysis, and Technical Support.
Corporate Social Responsibility
The objective of the Company’s Corporate Social Responsibility
(‘CSR’) initiatives is to improve the quality of life of communities
through long-term value creation for all stakeholders. The Company
has in place a CSR policy which provides guidelines to conduct CSR
activities of the Company. The CSR policy is available on the website
of the Company at https://www.tatasteel.com/media/11804/tata-
steel-csr-policy-latest-2019.pdf
focussed on
For decades, the Company has pioneered various CSR initiatives.
The Company continues to remain
improving
the quality of life. During the year under review, the Company
addressed key development challenges faced by communities
we serve, thus reaching out to the lives of over 1.4 million people
through innovative initiatives in health, drinking water, education,
livelihood, sports, infrastructure development, amongst others. The
Company’s signature CSR programmes have been recognised as
models of positive change that address critical development issues
at a greater scale in areas of school education, maternal and neonatal
health, tribal identity, and building of a multi thematic corridor of
well-being connecting its areas of operations in Jharkhand and
Odisha. The Company is working closely with tribal communities
in its areas of operation in India. The Company has partnered with
the State Governments of Jharkhand and Odisha and with various
reputed national and international development organisations in
delivering its programmes.
The Company’s CSR efforts have been recognised through various
awards conferred on it. The most significant achievement has been
the Maternal And Newborn Survival Initiative receiving recognition
in the inaugural National CSR Awards instituted by the Ministry of
Corporate Affairs, Government of India at New Delhi. During the year
under review, the Company spent `192.99 crore on CSR activities.
The Annual Report on CSR activities, in terms of Section 135 of the
94
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Companies Act, 2013 ('the Act') and the Rules framed thereunder, is
annexed to this report (Annexure 3).
regular dialogues with
Tata Steel Europe conducts
local
communities to understand and address their concerns relating
to their activities and its impact on the environment as well as our
sustainability goals and improvement targets. Local communities
are part of the sustainable economy, as we help each other to
coexist and collaborate successfully with a good understanding of
the mutual benefits that we provide to one another. The Company
runs regular programmes to invite the community to see our work
as well as enjoy and see the important wildlife and flora that flourish
on its sites. The Company sponsors local activities and support
charities. In IJmond, the Company celebrated the annual Tata Steel
Chess Tournament that attracts thousands of players and spectators
and boosts the local tourism economy in the off-season in January.
The Company also sponsors local sports teams and children’s events,
most notably in recent years the Tata Kids of Steel® triathlons that
enthuse kids to be physically proactive. The Company also engages
with communities as an existing and potential workforce, running
programmes to involve young people, and girls in particular, so
that they can discover the interesting career opportunities that our
organisation offers.
F. Corporate Governance
At Tata Steel, we ensure that we evolve and follow the corporate
governance guidelines and best practices diligently, not just to boost
long-term shareholder value, but also to respect the interests of the
minority. We consider it our inherent responsibility to disclose timely
and accurate information regarding the operations and performance,
leadership, and governance of the Company.
In accordance with our Vision, the Group aspires to be the global
steel
industry benchmark for value creation and corporate
citizenship. The Group expects to realise its Vision by taking such
actions, as may be necessary in order to achieve its goals of value
creation, safety, environment and people.
Pursuant to the SEBI Listing Regulations, the Corporate Governance
Report along with the Certificate from a Practicing Company
Secretary, certifying compliance with conditions of Corporate
Governance, is annexed to this report (Annexure 4).
Meetings of the Board and Committees of the Board
The Board met five times during the year under review. The
intervening gap between the meetings was within the period
prescribed under the Act and the SEBI Listing Regulations. The
Committees of the Board usually meet the day before or on the
day of the formal Board meeting, or whenever the need arises for
transacting business. Details of composition of the Board and its
Committees as well as details of Board and Committee meetings
held during the year under review are given in the Corporate
Governance Report.
Selection of New Directors and Board Membership Criteria
The Nomination and Remuneration Committee (‘NRC’) works with
the Board to determine the appropriate characteristics, skills and
experience for the Board as a whole as well as for its individual
members with the objective of having a Board with diverse
backgrounds and experience in business, finance, governance, and
public service. Characteristics expected of all Directors include
independence, integrity, high personal and professional ethics,
sound business judgement, ability to participate constructively in
deliberations, and willingness to exercise authority in a collective
manner. The Company has in place a Policy on appointment &
removal of Directors (‘Policy’).
The salient features of the Policy are:
•
•
•
•
•
It acts as a guideline for matters relating to appointment and
re-appointment of directors
It contains guidelines for determining qualifications, positive
attributes of directors, and independence of a Director
It lays down the criteria for Board Membership
It sets out the approach of the Company on board diversity
It lays down the criteria for determining independence of a
director, in case of appointment of an Independent Director
During the year under review, there has been no change to the Policy.
The Policy is available on the website of the Company at https://www.
tatasteel.com/media/6816/policy-on-appointment-and-removal-
of-directors.pdf
Familiarisation Programme for Directors
As a practice, all new Directors (including Independent Directors)
inducted to the Board go through a structured orientation
programme. Presentations are made by the Senior Management
giving an overview of the operations, to familiarise the new Directors
with the Company’s business operations. The new Directors are given
an orientation on the products of the business, group structure and
subsidiaries, Board constitution and procedures, matters reserved for
the Board, and the major risks and risk management strategy of the
Company. Visits to plant and mining locations are organised for the
new Directors to enable them to understand the business better.
During the year under review, no new Independent Directors were
inducted to the Board. Details of orientation given to the existing
in the areas of strategy, operations &
independent directors
industry
governance, safety, health and environment, and
trends, are available on
the Company at
https://www.tatasteel.com/investors/corporate-governance/
compliance/
the website of
95
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 Evaluation
The Board evaluated the effectiveness of its functioning, that of the
Committees and of individual Directors, pursuant to the provisions
of the Act and SEBI Listing Regulations.
The Board sought
parameters including:
the
feedback of Directors on various
• Degree of
fulfillment of key
towards
stakeholders (by way of monitoring corporate governance
practices, participation in the long-term strategic planning, etc.);
responsibilities
• Structure, composition, and
role clarity of
the Board
and Committees;
• Extent of co-ordination and cohesiveness between the Board
and its Committees;
• Effectiveness of the deliberations and process management;
• Board/Committee culture and dynamics; and
• Quality of
relationship between Board Members and
the Management.
The above criteria are broadly based on the Guidance Note on
Board Evaluation issued by the Securities and Exchange Board of
India on January 5, 2017.
The Chairman of the Board had one-on-one meetings with
each
Independent Director and the Chairman of NRC had
one-on-one meetings with each Executive and Non-Executive,
Non-Independent Directors. These meetings were
intended
inputs on effectiveness of the Board/
to obtain Directors’
Committee processes.
In a separate meeting of Independent Directors, performance of
Non-Independent Directors, the Board as a whole, and the Chairman
of the Company was evaluated, taking into account the views of
Executive Directors and Non-Executive Directors.
The Nomination and Remuneration Committee reviewed the
performance of the individual directors and the Board as a whole.
In the Board meeting that followed the meeting of the independent
directors and the meeting of Nomination and Remuneration
Committee, the performance of the Board, its committees, and
individual directors was discussed.
The evaluation process endorsed the Board Members’ confidence
in the ethical standards of the Company, the resilience of the Board
and the Management in navigating the Company during challenging
times, cohesiveness amongst the Board Members, constructive
relationship between the Board and the Management, and the
openness of the Management in sharing strategic information
to enable Board Members to discharge their responsibilities and
fiduciary duties.
In the coming year, the Board intends to enhance focus on
sustainability and digital interventions.
96
Remuneration Policy for the Board and Senior Management
Based on the recommendations of NRC, the Board has approved
the Remuneration Policy for Directors, Key Managerial Personnel
(‘KMPs’), and all other employees of the Company. As part of the
policy, the Company strives to ensure that:
•
•
•
the level and composition of remuneration is reasonable and
sufficient to attract, retain, and motivate Directors of the quality
required to run the Company successfully;
relationship between remuneration and performance is clear
and meets appropriate performance benchmarks; and
remuneration to Directors, KMPs, and Senior Management
involves a balance between fixed and incentive pay, reflecting
short, medium, and
long-term performance objectives
appropriate to the working of the Company and its goals.
The salient features of the Policy are:
•
•
It lays down the parameters based on which payment of
remuneration (including sitting fees and remuneration) should
be made to Independent Directors and Non-Executive Directors.
It lays down the parameters based on which remuneration
(including fixed salary, benefits and perquisites, bonus/
performance linked incentive, commission, retirement benefits)
should be given to whole-time directors, KMPs, and rest of
the employees.
•
It lays down the parameters for remuneration payable to Director
for services rendered in other capacity
During the year under review, there has been no change to the Policy.
The Policy is available on the website of the Company at https://www.
tatasteel.com/media/6817/remuneration-policy-of-directors
-etc.pdf
Particulars of Employees
Disclosures pertaining to remuneration and other details as required
under Section 197(12) of the Act read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules,
2014 are annexed to this report (Annexure 5).
In terms of the provisions of Section 197(12) of the Act read with Rules
5(2) and 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, a statement showing the names
and other particulars of employees drawing remuneration in excess
of the limits set out in the said Rules forms part of this report.
Directors
Re-appointments of Independent Directors
The shareholders of
the AGM held on
the Company at
July 19, 2019, approved the re-appointment of Ms. Mallika Srinivasan
(DIN:00037022) as
Independent Director of the Company, to
hold office for a second term effective August 14, 2019 through
May 20, 2022. At the said AGM, the shareholders also approved the
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR re-appointment of Mr. O. P. Bhatt (DIN:00548091) as Independent
Director of the Company, to hold office for a second term effective
August 14, 2019 through June 9, 2023.
Re-appointment of Director retiring by rotation
In terms of the provisions of the Act, Mr. N. Chandrasekaran
(DIN:00121863), Director of the Company, retires at the ensuing AGM
and being eligible, seeks re-appointment.
The necessary resolution for re-appointment of Mr. N. Chandrasekaran
forms part of the Notice convening the ensuing AGM scheduled to be
held on August 20, 2020.
The profile and particulars of experience, attributes, and skills that
qualify Mr. Chandrasekaran for Board membership, are disclosed in
the said Notice.
Independent Directors’ Declaration
The Company has received the necessary declaration from each
Independent Director in accordance with Section 149(7) of the Act
and Regulations 16(1)(b) and 25(8) of the SEBI Listing Regulations, that
he/she meets the criteria of independence as laid out in Section 149(6)
of the Act and Regulations 16(1)(b) of the SEBI Listing Regulations.
In the opinion of the Board, there has been no change in the
circumstances which may affect their status as
independent
directors of the Company and the Board is satisfied of the integrity,
expertise, and experience (including proficiency in terms of Section
150(1) of the Act and applicable rules thereunder) of all Independent
Directors on the Board. In terms of Section 150 read with Rule 6 of
the Companies (Appointment and Qualification of Directors) Rules,
2014, Independent Directors of the Company have undertaken
requisite steps towards the inclusion of their names in the data bank
of Independent Directors maintained with the Indian Institute of
Corporate Affairs.
Key Managerial Personnel
In terms of Section 203 of the Act, the Key Managerial Personnel of the
Company are Mr. T. V. Narendran, Chief Executive Officer & Managing
Director, Mr. Koushik Chatterjee, Executive Director & Chief Financial
Officer, and Mr. Parvatheesam Kanchinadham, Company Secretary &
Chief Legal Officer (Corporate & Compliance). During the year under
review, there was no change in the Key Managerial Personnel.
Audit Committee
The Audit Committee was constituted in the year 1986. The Committee
has adopted a Charter for its functioning. The primary objective of
the Committee is to monitor and provide effective supervision of the
Management’s financial reporting process, to ensure accurate and
timely disclosures, with the highest levels of transparency, integrity
and quality of financial reporting.
The Committee comprises Mr. O. P. Bhatt (Chairman), Mr. Aman
Mehta, Dr. Peter Blauwhoff, Mr. Saurabh Agrawal, and Mr. Deepak
Kapoor. The Committee met 7 times during the year under review,
the details of which are given in the Corporate Governance Report.
During the year under review, there were no instances when
the
the Audit Committee were not
accepted by the Board.
recommendations of
Internal Control Systems
The Company’s internal control systems are commensurate with
the nature of its business, the size, and complexity of its operations
and such internal financial controls with reference to the Financial
Statements are adequate.
Risk Management
The Enterprise Risk Management (‘ERM’) process, which is based
on
international standards such as Committee of Sponsoring
Organisation of the Treadway Commission (‘COSO’) and ISO 31000,
is an integral part of the Company’s strategy. The ERM framework
includes identification of risks and risk owners for regular tracking,
mitigation, and reporting of risks to help the Company meet its
business objectives. Communication and training is an essential
part of the framework. The framework also requires an integrated
approach towards managing risks.
Risk governance is driven by the Board of Directors through the
Risk Management Committee (‘RMC’) of the Board. The RMC is
responsible for reviewing and strengthening the risk management
policies and processes adopted by the Company. It also reviews the
potential risks facing the Company and the progress of the mitigation
plans. The Company has also set up a management committee called
the Group Risk Review Committee (‘GRRC’) which is responsible
for the implementation of ERM process across the Company.
The GRRC is focussed on enhancing the risk culture within the
Company and driving the mitigation of identified risks in an
optimal manner.
A dedicated ERM team has been set up to ensure deployment of
the ERM process across the organisation, including Tata Steel Group
Companies. The ERM team is led by Group Head – Corporate Finance
& Risk Management who acts as the Chief Risk Officer (‘CRO’) of the
Company. The CRO regularly reports to the RMC and the GRRC on the
progress of the implementation of ERM and the status of the potential
risks based on the assessment of risks and the mitigation strategies.
The Company has adopted a bottom up and top-down approach to
drive enterprise risk management. The bottom-up process includes
identification and regular assessment of risks by respective business
units and cross-functional teams across the Company and planning of
mitigation strategies in a structured manner. This is complemented by
a top-down approach where the senior management identifies and
assesses long-term, strategic and macro risks for the Company. Risks
97
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 are consolidated under major risk themes at the organisational level
to create focus areas and prioritise mitigation strategies. The ERM
process is integrated with core processes such as Corporate Audit,
Corporate Strategy and Planning, and Capital Allocation. Regular
training and communication is carried out across the Company
to develop a uniform understanding of the risk process and risk
terminology. An in-house built IT system has been deployed across
the organisation to enable recording and review of risks through live
dashboards and real-time monitoring of data. The ERM process has
matured over the years and is today embedded across the Company.
Over the years, Tata Steel has made significant progress in its journey
towards risk intelligence. We are pleased to report that the Company
has been adjudged ‘Firm of the Year - Metals & Mining’ at the 6th
CNBC-TV18 India Risk Management Awards.
Vigil Mechanism
The Company has a Vigil Mechanism that provides a formal channel
for all its Directors, employees, and vendors to approach the
Chairman of the Audit Committee and make protected disclosures
about the unethical behaviour, actual or suspected fraud or violation
of the Tata Code of Conduct (‘TCoC’). No person is denied access
to the Chairman of the Audit Committee. In addition, Directors,
employees, and vendors, may approach the Chief Ethics Counsellor
to make any such protected disclosure.
The Vigil Mechanism includes policies viz. the Whistle-blower Policy
for Directors & Employees, the Whistle-blower Policy for Business
Associates, the Whistle-blower Protection Policy for Business
Associates (vendors/customers), the Policy for Receipts of Gift
and Hospitality, the Conflict of Interest Policy for Employees, the
Anti-Bribery & Anti-Corruption (‘ABAC’) policy, and Anti-Money
Laundering (‘AML’) policy.
The Whistle-blower Policies for Directors & Employees and Business
Associates are an extension of the TCoC that encourage every
Director, employee, and Business Associate to promptly report any
actual or possible violation of the TCoC or any event that he or she
becomes aware of that could affect the business or reputation of
the Company. During the year under review, the Company revised
the Whistle-blower policy for Directors and Employees to include
‘reporting of incidents of leak or suspected leak of Unpublished Price
Sensitive Information (UPSI)’ as required in terms of the provisions
of the Securities and Exchange Board of India (Prohibition of Insider
Trading) Regulations, 2015, as amended.
The Whistle-blower Protection Policy for Business Associates
including vendors and customers provides protection to Business
Associates from any victimisation or unfair trade practices by the
Company.
During the year under review, ABAC and AML policies were adopted.
The key elements of the policies are risk assessment, third party due
diligence, training & awareness, and audit & reporting.
98
The Policy for Receipts of Gift and Hospitality requires its employees
to take the right decisions when they are offered gifts or hospitality
while conducting business or official transactions on behalf of the
Company. The Policy is in consonance with ABAC and AML policies.
The Company has also adopted a Conflict of Interest policy that
requires employees to act in the best interest of the Company without
any conflicts and declare conflicts, if any (real, potential or perceived).
for
The Whistle-blower Reward and Recognition Guidelines
employees has been
implemented to encourage employees
to genuinely blow the whistle on any misconduct or unethical
activity taking place in the Company. The disclosures reported are
addressed in the manner and within the time frames prescribed in
the Whistle-blower Policy.
During the year under review, the Company undertook a series of
communication and training programmes for internal stakeholders
and vendors, with the aim to create awareness amongst them
about the Company’s values, TCoC and other ethical practices of
the Company. An e-learning module on ABAC Policy was launched
by the Company in February, 2020 to sensitise the employees on the
relevant laws and policies. The Company also introduced a structured
yet informal platform “Stay in Touch” for its employees to interact
with Chief Ethics Counsellor to understand the issues and integrate
employees with the Company’s Culture through an open discussion.
The Company also undertook various theme based campaigns, town
hall, and departmental events. ‘Neeti Katha’ i.e. story-telling through
snippet series on scenarios of ‘The ethics of travel’ and ‘Prevention
of Sexual Harassment’ were mailed to employees as part of the
awareness campaign. The Company also celebrates the month of July
as Ethics Month with all communication and programmes centered
around the theme “Integrity Matters”. This practice has helped in
reinforcing employee involvement in driving the Management of
Business Ethics.
The Company has developed a robust system to raise concerns on
unethical behaviour, taken efforts to make stakeholders aware of
such systems as well as of their responsibility to report such concerns
and practice non-retaliation. The strong mechanism to address such
concerns instills in our stakeholders the confidence to report ethical
violations. The Company has also leveraged digitalisation for training
and communication, thereby resulting in greater clarity on the
subject and system amongst the stakeholders.
The Company takes pride in winning the World’s Most Ethical
Companies (‘WME’) award for the 9th time.
During the year under review, the Company received 881
whistle-blower complaints of which as on March 31, 2020, 602
complaints were investigated and appropriate actions were taken
and investigations were underway for the remaining 279 complaints.
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Disclosure as per the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013
Accordingly, pursuant to Section 134(5) of the Act, the Board of
Directors, to the best of its knowledge and ability confirms that:
The Company has zero tolerance towards sexual harassment at
the workplace. The Company has adopted a policy on prevention,
prohibition and redressal of sexual harassment at workplace in line
with the provisions of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 and the Rules
made thereunder.
The Company has complied with the provisions relating to the
constitution of the Internal Complaints Committee as per the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013.
During the year under review, the Company received 34 complaints
of sexual harassment, of which 26 complaints have been resolved by
taking appropriate actions and 8 complaints are under investigation.
Related Party Transactions
In line with the requirements of the Act and the SEBI Listing
Regulations, the Company has formulated a Policy on Related Party
Transactions and the same can be accessed on the Company’s website
at https://www.tatasteel.com/media/5891/policy-on-related-party-
transactions.pdf
During the year under review, all related party transactions entered
into by the Company, were approved by the Audit Committee and
were at arm’s length and in the ordinary course of business. Prior
omnibus approval is obtained for related party transactions which
are of repetitive nature and entered in the ordinary course of
business and on an arm’s length basis. The Company did not have any
contracts or arrangements with related parties in terms of Section
188(1) of the Act. Also, there were no material related party contracts
entered into by the Company. Accordingly, the disclosure of related
party transactions as required under Section 134(3)(h) of the Act in
Form AOC-2 is not applicable to the Company for FY 2019-20 and
hence does not form part of this report.
related party
Details of
the
Company, in terms of Ind AS-24 are disclosed in notes to the
standalone/consolidated financial statements forming part of this
Integrated Report.
transactions entered
into by
Directors’ Responsibility Statement
Based on the framework of internal financial controls and compliance
systems established and maintained by the Company, work
performed by the internal, statutory, cost, and secretarial auditors
and external agencies including audit of internal financial controls
over financial reporting by the statutory auditors and the reviews
performed by Management and the relevant Board Committees,
including the Audit Committee, the Board is of the opinion that the
Company’s internal financial controls were adequate and effective
during Financial Year 2019-20.
a)
b)
c)
d)
e)
f)
in the preparation of the annual accounts, the applicable
accounting standards have been followed and that there are no
material departures;
they have selected such accounting policies and applied them
consistently and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the
state of affairs of the Company at the end of the Financial Year
and of the profit of the Company for that period;
they have taken proper and sufficient care for the maintenance
of adequate accounting records
in accordance with the
provisions of the Companies Act, 2013 for safeguarding the
assets of the Company and for preventing and detecting fraud
and other irregularities;
they have prepared the annual accounts on a going
concern basis;
they have laid down internal financial controls to be followed
by the Company and that such internal financial controls are
adequate and are operating effectively;
they have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are
adequate and operating effectively.
Business Responsibility Report
The Securities and Exchange Board of India (‘SEBI’) requires
companies to prepare and present to stakeholders a Business
Responsibility Report (‘BRR’)
in the prescribed format. SEBI,
however, allows companies to follow an internationally recognised
framework to report on the initiatives undertaken by the Company
on environmental, social, and governance perspective. Further, SEBI
has on February 6, 2017, advised companies that are required to
prepare BRR to transition towards an Integrated Report.
As stated earlier in the Report, the Company has followed the
framework of the International Integrated Reporting Council
to report on all the six capitals that are used to create long-term
stakeholder value. Our Integrated Report has been assessed and
KPMG has provided the required assurance. We have also provided
the requisite mapping of principles between the Integrated Report,
the Global Reporting Initiative (‘GRI’) and the BRR as prescribed by
SEBI. The same is available on our website www.tatasteel.com
Subsidiaries, Joint Ventures and Associates
We have 220 subsidiaries and 50 associate companies (including
28
joint ventures) as on March 31, 2020. During the year
under review,the Board of Directors reviewed the affairs of
material subsidiaries.
99
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 We have, in accordance with Section 129(3) of the Act prepared
Consolidated Financial Statements of the Company and all its
subsidiaries, which form part of the Integrated Report. Further,
the report on the performance and financial position of each
subsidiary, associate, and joint venture and salient features of their
Financial Statements in the prescribed Form AOC-1 is annexed to this
report (Annexure 6).
In accordance with the provisions of Section 136 of the Act and
the amendments thereto, and the SEBI Listing Regulations the
audited Financial Statements, including the consolidated financial
statements and related information of the Company and financial
statements of the subsidiary companies are available on our website
www.tatasteel.com
The names of companies that have become or ceased to be
subsidiaries, joint ventures and associates during the year under
review are disclosed in an annexure to this report (Annexure 7).
The Board of Directors of the Company has, on the recommendation
of the Audit Committee, approved the appointment of M/s. Shome
& Banerjee as the cost auditors of the Company (Firm Registration
No. 000001) for the year ending March 31, 2021.
M/s. Shome & Banerjee have vast experience in the field of cost
audit and have been conducting the audit of the cost records of the
Company for the past several years.
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 ratifying the proposed remuneration of `20 lakh plus applicable
taxes and reimbursement of out-of-pocket expenses payable to the
Cost Auditors for the Financial Year ending March 31, 2021.
Auditors
Statutory Auditors
Members of the Company at the AGM held on August 8, 2017,
approved the appointment of Price Waterhouse & Co Chartered
Accountants LLP (Registration No. 304026E/E300009), Chartered
Accountants, as the statutory auditors of the Company for a period
of five years commencing from the conclusion of the 110th AGM
held on August 8, 2017 until the conclusion of 115th AGM of the
Company to be held in the year 2022.
In terms of the provisions relating to statutory auditors forming part
of the Companies Amendment Act, 2017, notified on May 7, 2018,
ratification of appointment of Statutory Auditors at every AGM is
no more a legal requirement. Accordingly, the Notice convening
the ensuing AGM does not carry any resolution on ratification of
appointment of Statutory Auditors.
The report of the Statutory Auditor forms part of the Integrated
Report and Annual Accounts 2019-20. The said report does not
contain any qualification, reservation, adverse remark or disclaimer.
During the year under review, the Auditors did not report any matter
under Section 143(12) of the Act, therefore no detail is required to be
disclosed under Section 134(3)(ca) of the Act.
Cost Auditors
In terms of Section 148 of the Act, the Company is required to
maintain cost records and have the audit of its cost records
conducted by a Cost Accountant. Cost records are prepared and
maintained by the Company as required under Section 148(1) of the
Act. The Cost Audit Report of the Company for the Financial Year
ended March 31, 2019 was filed by the Company in XBRL mode, on
August 30, 2019.
Secretarial Auditors
Section 204 of the Act inter alia requires every listed company to
annex to its Board’s report, a Secretarial Audit Report, given in the
prescribed form, by a Company Secretary in practice.
The Board had appointed Parikh & Associates, (Registration
No. P1988MH009800) Practicing Company Secretaries, as the
Secretarial Auditor to conduct Secretarial Audit of the Company for
the Financial Year 2019-20 and their report is annexed to this report
(Annexure 8). There are no qualifications, observations, adverse
remark or disclaimer in the said Report.
Extract of Annual Return
The extract of the Annual Return in Form MGT-9, as per provisions
of the Act and Rules thereto, is annexed to this report (Annexure 9).
The extract of Annual Return in Form MGT-9 as per provisions
of the Act and Rules thereto is also available on the Company’s
website at https://www.tatasteel.com/media/12336/mgt-9.pdf
Significant and Material Orders passed by the Regulators or
Courts
There has been no significant and material order passed by the
regulators or courts or tribunals impacting the going concern status
and the Company’s future operations. However, Members’ attention
is drawn to the statement on contingent liabilities, commitments in
the notes forming part of the Financial Statements.
Particulars of Loans, Guarantees or Investments
Particulars of loans, guarantees given, and investments made during
the year under review in accordance with Section 186 of the Act is
annexed to this report (Annexure 10).
100
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Energy Conservation, Technology Absorption and Foreign
Exchange Earnings and Outgo
the energy conservation,
Details of
technology absorption
and foreign exchange earnings and outgo are annexed to this
report (Annexure 11).
Deposits
During the year under review, the Company has not accepted
any deposits from public in terms of the Act. Further, no amount
on account of principal or interest on deposits from public was
outstanding as on the date of the balance sheet.
Secretarial Standards
The Company has in place proper systems to ensure compliance
with the provisions of the applicable Secretarial Standards issued by
The Institute of Company Secretaries of India and such systems are
adequate and operating effectively.
G. Acknowledgements
We thank our customers, vendors, dealers, investors, business
associates, and bankers for their continued support during the year.
We place on record our appreciation of the contribution made by
employees at all levels. Our resilience to meet challenges was made
possible by their hard work, solidarity, co-operation and support.
We thank the Government of India, the State Governments, and the
Governments in the countries where we have operations and other
regulatory authorities and government agencies for their support
and look forward to their continued support in the future.
Mumbai
June 29, 2020
On behalf of the Board of Directors
sd/-
N. CHANDRASEKARAN
Chairman
DIN: 00121863
101
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 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
1.3
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
its meeting held on
April 20, 2017.
‘Listing Regulations’) at
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 or 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
102
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
the magnitude
of earning over
of earnings will significantly
impact the dividend
declaration decisions of the Company.
long haul,
the
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.
the
Cost of borrowings: The Board will analyse
requirement of necessary
the
funds considering
long-term or short-term projects proposed to be
undertaken by the Company and the viability of the
raising funds from alternative sources vis-à-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,
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
affects the profits and can impact the decision for
dividend declaration during a particular year.
• The liquidity position of the Company including its working
capital requirements and debt servicing obligations.
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.
4.3
Agreements with lending institutions/Bondholders/
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
5.1 External Factors
• 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 trend of the performance/reputation of the Company
that has been during the past years determine the
expectation of the shareholders.
6. Target Dividend
6.1
The Company has adopted a progressive dividend policy,
intending to maintain or grow the dividend each year.
6.2
7.
7.1
The Company targets to pay dividend up to 50% of profit
after tax of the Company subject to the applicable rules
and regulations.
Circumstances Under which the Shareholders
Can or Cannot Expect Dividend
The Board shall consider the factors provided above 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.
8. Manner of Dividend Payout
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)
b)
c)
Interim dividend, if any, shall be declared by the Board.
Before declaring
interim dividend, the Board shall
consider the financial position of the Company that allows
the payment of such dividend.
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.
103
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
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.
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.
9.
9.1
Policy as to how the Retained Earnings will be
Utilised
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.
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
10. Provisions in Regard to Various Classes of
necessary as per any regulatory amendments.
Shares
10.1 The Company has only one class of equity shareholders and
does not have any issued preference share capital. However,
in case the Company issues different class of equity shares at
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.
10.2 The payment of dividend shall be based on the respective
rights attached to each class of shares as per their terms of issue.
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.
13.2 Such amended Policy shall be periodically placed before the
Board for adoption immediately after such changes.
14. 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.
104
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
ANNEXURE 2
Management Discussion and Analysis
I. Overview
The objective of this report is to convey the Management’s
perspective on the external environment and steel industry, as
well as strategy, operating and financial performance, material
developments in human resources and industrial relations, risks and
opportunities, and internal control systems and their adequacy in the
Company during the Financial Year 2019-20. This 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, as amended and regulations issued by the Securities and
Exchange Board of India (‘SEBI’) from time to time.
Your attention is also drawn to sections on Opportunities, Risks
and Strategy Planning forming part of the Integrated Report.
II. External Environment
1. Macroeconomic Condition
With continued weakness in global trade and investment, global
growth slumped to 2.9% in 2019, leading to varying degrees of
deceleration in economies around the globe. Rising geopolitical
tensions, worsening trade relations among some nations, trade
policy uncertainties, and stress in key emerging market economies
continued to impact global economic activity. Intensifying social
unrest in several countries and weather-related disasters also
contributed to declining global economic activity.
Growth in the advanced economies slowed down to 1.7% in 2019 as
compared to 2.2% in 2018. The US economy slowed to 2.3% in 2019
on account of rising geopolitical tensions and policy uncertainty.
Growth in the European region also slowed to 1.2% in 2019. The
industrial sector in Germany struggled with lower demand from
Asia and disruptions to car production. Uncertainty related to Brexit
also weighed on growth in the European region. Growth in Japan
was at 0.7% owing to the impact of Typhoon Hagibis, increase in
value-added tax, and overall slowdown in manufacturing and
exports – particularly those to China. Growth in China dropped
to 6.1% in 2019 owing to lower investor sentiment and cooling
domestic demand.
In India, growth slowed down to 4.2% in 2019. This economic
slowdown can be attributed to weak investments and declining
consumer demand. Further, several sectors such as real estate,
aviation, automobile, and construction sectors suffered a consistent
decline in demand. The banking sector and financial services also
witnessed significant pressure of non-performing assets.
Overall,
increasing trade tensions, worsening financial market
sentiments, intense social unrest across many countries, and sluggish
economic growth led to slowdown in global economy.
2. Economic Outlook
In view of the COVID-19 pandemic, there remains considerable
uncertainty around the global economic forecast for 2020. According
to the International Monetary Fund (‘IMF’), global economy is
projected to contract sharply by 4.9% in 2020, surpassing the decline
seen during the global financial crisis a decade ago. Stark differences
will be observed between impact of the pandemic on advanced
economies, and emerging markets and developing economies owing
to differences in governance capacity, health care systems, strength
of financial institutions, and currency strength.
Growth is expected to be slower in most advanced economies.
Countries in the emerging market and developing economies will
also witness a slump in growth due to external demand shock,
tightening in global financial conditions, and a plunge in commodity
prices. In China, where recovery from the sharp contraction in the first
quarter is underway, growth is projected at 1% in 2020, supported in
part by policy stimulus. The IMF projects a partial recovery in 2021,
however, the level of GDP growth is expected to remain below the
pre-COVID-19 trend, with uncertainty about strength of the rebound.
India’s economy in the Financial Year 2020-21 is projected to grow
at a slower pace following a longer period of lockdown and slower rate
of recovery than anticipated. Effective policies and fiscal measures by
the Government will be essential to forestall contraction of growth.
III. Steel Industry
1. Global Steel Industry
Global crude steel production in 2019 saw a growth of 3.4% over
2018 to reach 1,869.69 MnT. This increase was primarily due to the
growth in steel consumption in infrastructure, manufacturing, and
equipment sectors. The automotive production trended down across
most countries over the second half of 2019 which had an impact on
the steel demand towards the end of the year.
China continued to be the world’s largest steel producer with increase
in production by 8.3% to reach 996 MnT. China contributed to 53%
of the global crude steel production in 2019. While steel demand
remained relatively strong, the country faced significant downside
risks due to broader global uncertainty and tighter environmental
regulations. In United States, crude steel production went up to
88 MnT, recording an increase of 1.5% over 2018, owing to lower
global automotive production and prevailing trade tensions. In
Japan, steel consumption declined largely due to a slowdown in
manufacturing during 2019. The country produced 99 MnT of crude
105
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 steel last year, a decrease of 4.8% compared to 2018. In Europe, crude
steel production slumped to 159 MnT in 2019, recording a decrease
of 4.9% over 2018. The decrease was on account of challenges faced
with oversupply and trade tensions.
to reduce significantly with consumers deferring discretionary
spends in the near term. Effective government stimulus and return
of consumer confidence is likely to be the key driver for a gradual
recovery over the second half of the Financial Year 2020-21.
In 2019, India became the second largest crude steel producing
country in the world, with a crude steel production of 111 MnT, an
increase of 1.8% over the previous year. However, the growth rate
was much lower compared to the previous year. Growth in the
construction sector weakened due to falling investments in fixed
asset formation. Sharp fall in the private consumption led to weaker
growth in automotive and consumer durables. The tighter liquidity
conditions due to defaults in NBFC sector impacted credit availability.
The automotive sector was also impacted by factors such as
regulatory changes, rise in ownership cost, and shared economy
while, the capital goods sector continued to remain weak
due to the decreasing output and stagnant investment in the
manufacturing sector.
2. Outlook for Steel Industry
The COVID-19 pandemic has severely affected economies and
industries globally and the steel industry is no exception. Therefore,
outlook for the steel industry includes scenarios regarding the
pandemic’s speed of propagation, possible recurrence, near-term
impact of measures being taken to contain the outbreak, and the
effectiveness of the stimulus announced by the Governments of
various nations.
After slower than expected growth in 2019, steel demand is estimated
to contract significantly in the Financial Year 2020-21. According to the
World Steel Association (‘WSA’), it is possible that the impact on steel
demand in relation to the expected contraction in GDP may turn out
to be less severe than that seen during the erstwhile global financial
crisis. In comparison with other sectors, the manufacturing sector is
expected to rebound quicker though supply chain disruptions are
likely to continue.
Most of the steel producing regions are expected to witness a
decline in crude steel output due to production cuts amidst ongoing
lockdowns. However, it is expected that compared to other countries,
China will move faster towards normalisation of economic activity as it
was the first country to come out of the COVID-19 crisis. Governments
of different nations have announced sizeable stimulus packages
which are expected to favour steel consumption through investment
in infrastructure and other incentives for the steel industry.
India depends
largely on migrant
In India, muted demand and oversupply is likely to result in
suppressed steel prices and capacity utlisation in the near term.
Since
labour, restarting
construction and infrastructure projects will be a challenge.
The demand from infrastructure, construction, and real estate
sectors is likely to be subdued in the first half of the Financial Year
2020-21 due to the lockdown during the first quarter followed by
the monsoons during the second quarter. Further, the demand
from automobile, white goods, and capital goods sectors is likely
106
IV. Strategy
During the year under review, the Company continued to focus on
operational and marketing excellence to counter adverse business
conditions. The Company aspires to be the most valuable and
respected steel company in the world for which it has taken steps
to be structurally, financially, and culturally future-ready. The
Company continues to place special emphasis on strengthening
its financial profile to enable future growth and to achieve volume
growth while remaining cost competitive. The ongoing integration
and improvement initiatives undertaken at Tata Steel BSL Limited
(formerly Bhushan Steel Limited) and Tata Steel Long Products
Limited (formerly Tata Sponge Iron Limited) have helped to unlock
synergies and improve cost competitiveness while enhancing the
capacity utilisation of the production units. The focus on driving
digital transformation and greater efficiency through One IT and an
integrated supply chain structure continue to unlock value for the
Company. The Services and Solutions portfolio and New Materials
Business (Graphene & Fibre Reinforced Polymer) have put in place
the requisite enablers for the Company to scale up.
Building a culture of Agility and Innovation has been identified as an
important lever to make the Company fit for the future. The Company
has taken many initiatives to inculcate Agility in the organisation
through experiments on agile ways of working in new businesses
and enabling functions in core businesses along with process
simplification. The learnings from the experiments will be used
to create the blueprint for organisation wide deployment over the
next couple of years. During the year under review, the Innovation
framework in the Company was strengthened by putting in place the
required teams and governance structure.
The Company has made significant progress in Leadership in
technology, a key aspect of the Company’s strategy. Several
Technology Leadership Areas are being worked upon enabled by
creating required knowledge partnerships and leveraging the agility
and innovativeness of start-ups. The Company has made progress
towards imbibing Industry 4.0 and is the only steel company to have
two digital lighthouses, as recognised by World Economic Forum.
leadership
The Company aspires
position in the industry and is pursuing the following priorities in
the medium term:
further strengthen
its
to
Industry leadership in Steel: India is amongst the fastest growing
steel markets in the world. In order to meet the increasing demand, the
Company has expanded its operations organically and inorganically
and is also continuing to strengthen its long products portfolio
to participate in the growing market. Towards this objective, the
Company through its subsidiary, Tata Steel Long Products Limited
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR (formerly Tata Sponge Iron Limited), is focussed on ramping up the
acquired steel business of Usha Martin Limited. The Company also
aspires to attain a leadership position in new segments such as
Lifting and Excavation, Oil and Gas, Pre-Engineered Buildings, etc.
and to maintain leadership position in segments such as Automotive,
Emerging Corporate Accounts (Small and Medium Enterprises),
Individual House Builders, amongst others.
Consolidate position as global cost leader: The Company aims to
continue to be one of the lowest cost producers of steel in the world.
Over the years, the Company has improved its operating parameters
to reach global benchmark levels. Post acquisition of Tata Steel BSL
Limited and steel business of Usha Martin Limited, focussed synergy
programmes have been put in place to ensure horizontal deployment
of the Company’s process capabilities in the acquired assets.
Further, during the year under review, the Company, through its
Shikhar25 programme, achieved performance improvements of
`4,298 crore (including `1,965 crore value protection initiatives).
Insulate revenues from steel cyclicality: Steel industry is cyclical
in nature. In order to insulate revenues from steel cyclicality, the
Company is focussing on the branded retail business and downstream
product portfolio. The Company has embarked on building a Services
& Solutions (‘S&S’) business which offers steel-based solutions for
end user needs and which are seeing significant growth. Leveraging
our deep knowledge of customer needs and ability to execute
insight-driven
innovation, we believe that this portfolio will
provide a significant competitive advantage to the Company,
contributing to 20% of revenue going forward. The Company
is also scaling up a portfolio of offerings in materials other than
steel – currently focussing on Fibre Reinforced Polymer and
Graphene. S&S and new materials businesses will provide added
impetus to the Company’s differentiated play and provide a unique
growth opportunity.
Industry leader in Corporate Social Responsibility and Safety,
Health and Environment: As one of the leading steel producers
in the world, the Company also aspires to be a leader in sustainable
business practices in the industry. Towards this objective, the
Company is taking steps to reduce its environment footprint.
The Company has entered the steel scrap recycling business to
promote sustainable steel making and to create a formal circular
economy for steel. The first scrap recycling unit under this initiative is
being developed in Rohtak, Haryana. The Company formed Carbon
Impact Centre to have a focussed intervention to drive low carbon
transition and initiatives and to achieving a goal of Carbon neutrality
in the long-term. Initiatives are taken to reduce dependency on fossil
fuel. The Company has also completed the phase 1 of feasibility study
for Renewable potential assessment at Jamshedpur, Kalinganagar
and raw material locations. On the longer horizon, the Company
continues to explore and invest in technologies involving sustainable
production, storage and use of Hydrogen across the steel value chain,
carbon capture, use and storage and HIsarna technology to reduce
its carbon footprint. The Company is also focussed on effective
by-product management.
The Company also recognises the need to create a safe and healthy
environment for all its employees and other stakeholders and desires
to be an industry leader in the Safety, Health & Environment and
Corporate Social Responsibility (‘CSR’). This will be achieved through
enhanced focus on reducing unsafe incidents at the workplace
as well as reducing carbon emissions and consumption of natural
resources such as water. The Company will continue to deepen the
engagement with communities, aiming to change many more lives
through its CSR initiatives.
Strategic enablers: In order to be future-ready, the Company is
focussed on creating an organisation culture which is built on a
strong foundation of agility and innovation. People are the key asset
for any organisation and hence, the Company continues to direct
its efforts towards building a future-ready, engaged, and diverse
workforce. The Company is also focussed on investing in various
digital initiatives, enabling new business models, and enhancing the
digital maturity of the organisation. A structure and engagement
mechanism for partnering with start-ups, academia, and other R&D
organisations is set up and a team to monetise existing intellectual
property owned by the Company is formed.
V. Operational Performance
1. Tata Steel Group
During the year under review, the consolidated steel production
for Tata Steel group (‘the Group’) was 28.46 MnT recording a 5%
increase over that of the previous year. The Group recorded total
deliveries of 26.68 MnT as against 26.80 MnT in previous year. The
steel deliveries decreased at Tata Steel Limited by 2.9% and at Tata
Steel Europe by 4%. This decrease was off-set by higher deliveries at
Tata Steel BSL Limited (‘TSBSL’) by 16%. The increase at TSBSL is due to
ramp-up of operations. Further, in the previous year, deliveries prior
to the acquisition of TSBSL on May 18, 2018 under the Insolvency and
Bankruptcy Code were not included. Further, the acquisition of steel
business of Usha Martin Limited by Tata Steel Long Products Limited
(formerly Tata Sponge Iron Limited) on April 9, 2019 also increased
the total deliveries of the Group by 0.51 MnT.
The turnover for the Group was at `1,39,817 crore during the Financial
Year 2019-20, a decrease of 11% over the previous financial year.
The decrease is due to decline in realisations across geographies
along with lower deliveries.
The EBITDA of the Group was `17,735 crore during the Financial Year
2019-20 as compared to `29,770 crore in the previous year.
107
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 2. Tata Steel Limited (Standalone)
The turnover and profit/(loss) figures of Tata Steel Limited
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 20
60,436
15,096
8,315
6,611
8,447
6,744
(` crore)
FY 19
70,611
20,744
16,341
16,227
10,647
10,533
a) Operations
Hot Metal
Crude Steel
Saleable Steel
Sales
FY 20
14.09
13.16
12.88
12.32
(mn tonnes)
Change (%)
(1)
(1)
(1)
(3)
FY 19
14.24
13.23
12.98
12.69
The saleable steel production and sales
years is as follows:
Production and Sales of Steel Division (kt)
trend over
the
Production
Sales
8
9
6
9
,
3
4
5
9
,
1
5
3
1
1
,
3
7
9
0
1
,
7
3
2
2
1
,
1
5
1
2
1
,
0
8
9
2
1
,
2
9
6
2
1
,
8
7
8
2
1
,
2
2
3
2
1
,
FY16
FY17
FY18
FY19
FY20
During the year under review, the saleable steel production stood at
12.88 MnT which is lower by ~0.79% and saleable steel sales stood at
12.32 MnT which is lower by ~2.9% as compared to the previous year.
The hot metal production stood at 14.09 MnT which is 1.05% lower
than that of the previous year.
i) Tata Steel Jamshedpur
the Financial Year 2019-20, Tata Steel Jamshedpur
During
(‘TSJ’) produced 10.19 MnT of crude steel
(previous year:
10.22 MnT). The decrease was due to operational challenges at
steel works. During the year under review, there was lower specific
consumption of lime, ferro alloys, and specific energy.
ii) Tata Steel Kalinganagar
During the year under review, Tata Steel Kalinganagar (‘TSK’)
produced 2.96 MnT of crude steel (previous year: 3.01 MnT).
108
This decrease was due to interruption in the operations of the
blast furnace.
During the year under review, TSK achieved higher consumption
of agglomerates and higher pulverised coal injection which had
led to lower coke consumption and lower flux consumption. The
operations at TSK have in place environmental management systems
and comprehensive processes for ensuring health and safety of
people, plant, and equipment. The plant is designed to have minimal
water foot print, 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. TSK achieved successful commissioning of Ladle Furnace
facility at Steel Making. TSK developed 26 new products during the
year under review.
TSK has embarked on the second phase of capacity expansion to take
the total capacity of the plant to 8 MnT per annum.
b) Marketing and Sales Initiatives
During the Financial Year 2019-20, the Company recorded sales
of 12.32 MnT which is 2.9% lower than that of previous year. This
decrease is attributable to lower than expected sales in the month of
March 2020 on account of the nationwide lockdown imposed by the
Government of India, to contain the spread of COVID-19.
The break-up of sales in our various segments and the break-up of
domestic sales to exports are as follows:
Automotive & Special products
Branded Products, Retail & Solutions
Industrial Products & Projects
Domestic
Exports
Domestic + Exports
Transfers (Wires, Tubes, Agrico, Tinplate)
Total Deliveries
FY 20
1.45
3.82
4.61
9.88
1.50
11.38
0.94
12.32
(mn tonnes)
FY 19
2.12
3.90
4.69
10.71
1.06
11.77
0.92
12.69
The key business initiatives, and achievements in the Financial Year
2019-20 are given below:
Automotive and Special Products: The automotive
industry
continued to witness strong headwinds with sharp decline across
in steel-intensive passenger vehicle
all segments especially
and commercial vehicle segments. The Company registered
annual sales of 1.45 MnT with an increase in share of high-end
sales (outer panels, coated supplies, and high tensile grades
>440 MPa in hot-rolled and cold-rolled steel) from 19.5% in the
previous year to 25% in the current financial year. During the year
under review, the Company also secured more than 35% share in five
out of ten new passenger cars launched.
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
The Company’s efforts in strengthening relationship was backed
by the recognition received from automakers. Major recognition
received during the year was the “Overall Performance Award”
from a major passenger vehicle (PV) maker for exhibiting exemplary
performance in quality, cost, delivery and development for the fifth
consecutive year. During the year under review, the Company (along
with Jamshedpur Continuous Annealing and Processing Company
Private Limited) also received a Certificate of Appreciation from a
Japanese PV manufacturer for improving process quality.
Branded Products, Retail, and Solutions: During the Financial Year
2019-20, the Company’s annual sales of Branded products was at
3.82 MnT. The B2C segment achieved sales volume of 1.63 MnT, and
Tata Shaktee achieved a sales volume of 182 kt, with the launch and
scale up of new products such as WAMA (wall profile) (4.3 kt) and Long
Length Galvanised Corrugate Steel sheets (7.4 kt) contributing to the
sales. Tata Kosh achieved its best-ever sales of 43 kt in Financial Year
2019-20. Further, through the Tata Steel channel, 15 kt of Tata Shaktee
and 37 kt of Tata Kosh of TSBSL were sold during the current period.
During the current year, the B2ECA (Business to Emerging Corporate
Accounts) business clocked a volume of 2.2 MnT and in the process
serviced more than 9,000 customers. Value-Added Products
contributed to 23% of overall ECA Volumes which grew by 17% as
against that of previous year. This was achieved through development
and access to key micro-segments such as ATM safe, Railways & Metro
coach, Wagons, Transmission Line tower, Pre-Engineered Buildings,
Solar, and introduction of segment specific seven new products.
Emerging Corporate Accounts (ECA) business ventured into retail
space through Tata Astrum Super Brand. The ECA business spread
across 15 states with 21 distributors, has sold Tata Astrum Super
Brand through 550 retailers and has reached more than 2,500 end
user fabricators. ECA Brands won 14 Awards and recognitions in the
Financial Year 2019-20 including CII Customer Centricity Award. Tata
Steel is the first Steel company to win this award.
Industrial Products, Projects, and Exports: The year witnessed
stable growth in Infrastructure, Railways, Pre-Engineered Building
(‘PEB’), and Oil & Gas (‘O&G’) segments and de-growth in LPG, Real
Estate, and Lifting & Excavation (‘L&E’) segments. As a result, the
vertical achieved total sales of 4.61 MnT in the Financial Year 2019-20.
The Company continued to enrich its product portfolio with a
focus on Engineering and Value-Added Products (VAP). Railways
segment grew by 39% year-on-year from 39 kt to 54 kt. Precision
Tubes segment reported sales at 107 kt reflecting a growth of
16% year-on-year. Sales of Value-Added Rebars also grew by
16% year-on-year to 56 kt. The Engineering Segment achieved
best-ever sales and recorded a growth of 5% year-on-year. O&G
segment recorded 3x growth in sales on account of approvals
from major Oil Marketing Companies for API X60. The Company
significantly increased its market share in L&E and PEB segments with
an enriched product basket offering and engagement through value
creation and cost saving initiatives such as Value Analysis and Value
Engineering and Re-nesting exercises with key players in the industry.
As a recognition for the work on development of high strength
grades, the Company was bestowed the “Innovation Award” by the
market leader of earth moving equipment OEM and the “Best Supplier
Award” from the market leader of mobile and tower cranes OEM.
In the Construction space, the Company maintained its focus
on offering services and solutions through Cut & Bend. Tiscon
Readybuild recorded sales of 138 kt in Financial Year 2019-20.
India’s first Branded Welded Wire Fabric “Sm@rtFAB” achieved
1.29 kt sales thereby recording a 20% year-on-year growth in sales.
The Company also supplied ~111 kt rebars (~10% of total project
sales) to 26 marquee projects in India, viz. Longest River bridge
– New Ganga Bridge, Tallest building in NCR – ‘The Amaryllis’,
701 km ‘Corridor of Prosperity’ connecting Mumbai and Nagpur
– Maharashtra Samruddhi Mahamarg, and World’s largest Cricket
Stadium: Sardar Vallabhbhai Patel Stadium, Ahmedabad.
In International market, the Company continues to expand its reach
to new geographies such as Kuwait, Qatar, and Philippines, etc.
while continuing to maintain its presence in Middle-East ('ME'),
neighbouring countries, and South-East Asia ('SEA') markets. With
success and learning from domestic PEB market, the Company also
ventured in the PEB segment for the first time in ME and SEA. With
enhanced focus, the Company’s VAP sales doubled in the export
market (52 kt in the Financial Year 2018-19 and 110 kt in the Financial
Year 2019-20).
Further, a specific drive was undertaken to optimise supply chain
cost for exports between our two plants – TSK and TSJ, and three
sea ports – Dhamra, Haldia, and Paradip. Container Exports have
commenced from Vishakhapatnam port, thereby reducing dispatch
cost and increasing options of vessel availability.
Services and Solutions: The Company has strengthened its position
in the Services and Solutions space by providing better consumer
experience and expanding product portfolio. During the year under
review, Tata Pravesh Doors and Windows registered 30% increase in
turnover as compared to the previous year. Since inception 1,00,000
Tata Pravesh units have been installed and more than 20,000
consumers have been served. Nest-In, the construction solutions
brand, continued to grow rapidly. This business has executed orders
worth `64 crore and achieved an order book of `91 crore in the
Financial Year 2019-20. Since inception, Nest-In has installed over
5 lakh square feet of housing and nearly 9,000 EzyNest units.
Digital Initiatives: The Company’s first of its kind portal for the
Individual Home Builder (IHB), Tata Steel Aashiyana, achieved a
turnover of `316 crore in the Financial Year 2019-20, recording a
200% growth over that of the previous year. Tata Basera, a Tata Group
level synergy initiative led by Tata Steel, has expanded its reach to
more than 240 districts. The Tata Basera programme offers special
benefits from five Tata Group companies to IHB who purchase Tata
Tiscon/Pravesh Doors. These digital initiatives are helping reach
hitherto unserved territories, allowing the Company to serve new
markets and customers.
109
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 Apart from Aashiyana, Tata Steel has also scaled up various digital
initiatives in multiple customer segments. COMPASS, a digital supply
chain visibility solution rolled for B2B, and DigEca, an initiative
that captures lead management for ECAs received traction from
distributors and customers. The Company also completed Digital
Analytics based projects named Paras, Amrit, and Ascend for market
demand assessment and improvement in product value realisation.
of idlers, screen, and liners. These have resulted in significant increase
in working life of these components. Graphene-doped fabrics are
resistant to water, stain, and odour, and are ideal for techwraps
and trolley-bags.
NMB is currently poised to work collaboratively with a network of
technology and manufacturing partners to realise the above stated
vision of overcoming the cyclicality of the steel business.
c) Sustainable Steel Business Initiatives
i) New Materials Business
The New Materials Business ('NMB') was set-up to partially insulate
revenues from cyclicality of the steel business and respond to the
growing demands of alternative materials. NMB has two verticals
(a) Composites and (b) Graphene.
Composites: The Composites business focusses on Fibre Reinforced
Polymer (‘FRP’) composites with products mainly made of Glass
Reinforced Polymer (‘GRP’). FRP is a composite material comprising
glass/carbon/other fibres, embedded in a polymer matrix. Its key
benefits include lightweight, corrosion resistance, high strength
to weight ratio, and design freedom. The FRP business completed
its first full year of commercial operations and expanded its market
presence through successful product launches in three segments:
Infrastructure, Industries, and Railways. Apart from the two key
products in the infrastructure sector, GRP pipes and streetlight poles,
NMB launched a wide range of FRP solutions in the city infrastructure
segment. These FRP solutions include FRP street furniture, gazebos,
fencing, and a range of decorative and translucent poles. Building
on the success of installing India’s first FRP foot-over bridge in
March 2019, NMB completed two more successful FRP bridge
projects during the year. The Company is now well placed to offer
FRP bridges in a number of sectors including roadways, railways,
waterways, harbours, and ports, golf clubs and theme parks, and
process industries.
In the Industries segment, FRP pressure vessels for water filtration,
and FRP tanks and chemical equipment for paper and pulp, textile,
and iron and steel industries have been supplied. These products
are best placed to tackle corrosive atmosphere and tailored for
being lightweight and offering long maintenance free service life.
In the railways sector, following the initial success of supplying FRP
components to the Indian Railways, NMB has entered the business
of furnishing railway coach interiors, and is working closely with key
railway production units and zonal railways.
Graphene: The Graphene Business unit focusses on the production of
graphene powder, graphene master batches, and graphene enriched
products. It has strengthened its position in coated solutions through
its offerings of liquid, dry, and aerosol based formulations. During the
year under review, nearly 1,500 tons of graphene-coated “cut and
bend” super links (GFX Ultima) were sold. Graphene-doped polymer
formulations were developed and deployed in the steel plant in form
ii) Steel Recycling business
In the Financial Year 2018-19, the Company entered the Steel Recycling
Business which entails setting up of Steel Scrap Recycling Plants
across India. It is primarily a sustainability initiative, as the process of
steel manufacturing through recycling of steel scrap has much lesser
carbon footprints. The first Steel Recycling Unit (0.5 MnT capacity) is
being set up at Rohtak and will be commissioned in the Financial Year
2020-21. Steel production capacity in India is planned at ~300 MnT
by 2030, out of which 35-40% is envisaged through the scrap route.
The Indian scrap industry is highly fragmented and unorganised with
long and complex supply chains. The small aggregators collect scrap
from various sources and sell unprocessed scrap with inconsistent
quality. The industry, employing about a million people, is not a part
of the formal economy, and the workforce lacks social security. The
operations are manual and there are concerns towards safety and
environmental issues. There is a lack of requisite policy framework
for the industry. This initiative of Tata Steel aims to provide the
much-needed fillip to the Steel Scrap Industry by making available
quality processed scrap, streamlining the currently unorganised
scrap supply chain, enhancing the transparency, and lowering
the dependency on imports. Digital Platform as well as Channel
Networks will be established to collect scrap from various segments
such as Households, Industries, and End of Life Vehicles. The scrap will
be processed through mechanised equipment viz. shredder, shears,
balers, etc. and will be used as an input raw material for downstream
steel making through Electric Arc Furnaces.
The Steel Recycling Business has the potential of transforming the
Scrap Industry in India.
d) Business Improvement Initiatives
i) Total Quality Management and Shikhar25 (Operational
Improvement Programmes)
The Total Quality Management ('TQM') way of working has been
the hallmark of Tata Steel for past many years. TQM techniques
are
for all operation and maintenance
process improvements.
routinely deployed
Shikhar25, a focussed EBITDA improvement programme, works
across departments of Tata Steel to improve operational efficiency,
lower costs, optimise product mix, reduce and recycle waste, and
maximise energy and material efficiency, through 25 IMPACT
centres including 4 new IMPACT centres viz. TSK Shared Services,
110
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Raw Material Procurement, Outbound Supply Chain, and Advocacy.
Post acquisition of TSBSL and steel business of Usha Martin Limited
by TSLP, the focus has been on synergy for optimal utilisation of
shared resources across Tata Steel to generate maximum value.
Preparing the workforce for Industry 4.0
In the present continuously evolving scenario, businesses across the
globe are deploying advanced analytics and digital transformation to
change the way they function. The Company has been a front runner
and has made significant investments in these areas to develop
capability as well as infrastructure. The current year has been a
testimony to the efforts in these areas as the greenfield plant of TSK
was adjudged Manufacturing Lighthouse by the World Economic
Forum for showing leadership in applying fourth industrial revolution
technologies to drive financial and operational impact. Further, the
Company is making steady progress in using Industry 4.0 techniques
in the following areas:
• Safety: Contract Workforce Safety & Management, Road Safety
Management through use of video analytics
• Plant Operations: Usage of advanced analytics in improving
yield, throughput, and quality. Digital twins and Artificial
Intelligence have aided product quality prediction, and
integrated and smart mining
• Maintenance: Smart plant maintenance through Maintenance
Technology Roadmap and Smart Asset Management System
• Logistics: Artificial intelligence based operations and logistics
planning, and analytics powered network optimisation for
reduced costs and improved fulfilment
• Marketing & Sales: Online and Channel Sales enabled through
digital platforms such as Aashiyana, COMPASS, DigEca, etc.
enabled digital sales of products and services
• Procurement: Use of digital negotiation factory and vendor
performance analysis, integrated margin management tools for
flux and coal for optimised buying
• Finance & HR: Smart closure of financial accounts, chatbots,
and robotic process automation for seamless and enhanced
stakeholder experience. Artificial intelligence aided recruitment,
mass customisation of policies and overall employee experience
During the year under review, approximately 600+ projects were
implemented and achieved savings of `4,298 crore.
ii) Strategic Procurement Initiatives
The Company took several new initiatives for its raw material
procurement which have resulted in substantial savings in the cost
and working capital
• Digital journey: The Company implemented a customised
in-house e-auction tool to secure its metallurgical coal supplies
digitally. The result of the online reverse auction conducted by
Tata Steel Coal Strategic procurement team in October 2019
resulted in single day market drop of $12/t to $133/t (highest
in the last 3 years). The fixed price trades through e-auction
tool have resulted in an overall spend reduction due to drop
in market prices impacting overall metallurgical coal buy. The
Company also invested in developing a predictive analytics tool
for forecasting coking coal prices by incorporating 13,000+ data
inputs such as weather, ports congestions, policy changes (China
and global macro variables).
•
Implementation of Vendor Managed Inventory at Indian ports
for coal and supplier credit enhancement resulted in free up of
non-fund based working capital lines.
• Group synergies through centralised procurement, technical
optimisation, and knowledge sharing resulted in substantial
savings mainly coming from the acquired TSBSL plant.
e) Performance of Business Units
i. Ferro Alloys and Minerals Division
Our Ferro Alloys and Minerals Division (‘FAMD’) is one of the
leading producer of ferro chrome and manganese alloys in India.
Its production facilities (from Mines to Market) are integrated with
production bases spanning across four Indian States and having
customers across the world. FAMD has captive plants at Joda,
Bamnipal and Gopalpur (since June 2018) and has Ferro Processing
Centres (‘FPCs’) under a business partnering agreement for
production of Chrome and Manganese alloys.
During the Financial Year 2019-20, Sukinda Chromite mine and
leases expired as per the mining
Gomardih Dolomite mine
regulations on March 31, 2020. The Sukinda Chromite Mines was put
up for auction. Tata Steel Mining Limited (formerly T S Alloys Limited),
a subsidiary of Tata Steel Limited had participated in mining auction
in Odisha and won the auction for the mine. The Gomardih Dolomite
mine is yet to be auctioned.
The production and sales performance is as below:
Production and Sales of FAMD (kt)
0
2
3
1
,
7
2
3
1
,
0
7
2
1
,
1
4
2
1
,
1
4
4
1
,
4
1
1
1
,
8
1
3
1
,
8
2
1
1
,
Production
Sales
0
4
7
5
8
5
FY16
FY17
FY18
FY19
FY20
Due to the outbreak of the COVID-19 pandemic, the Government
of India had imposed a stringent nationwide lockdown with effect
from March 25, 2020, which brought the business to a sudden halt in
111
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 the last week of March 2020. During the Financial Year 2019-20, the
production was lower than previous year by 19%. However, the sales
increased by 18% as compared to that of previous year.
During the year under review, the operation of manganese
Business
Integrated
in Joda received the certifications under
Management System.
ii. Tubes Division
The Company’s Tubes Strategic Business Unit
leading
manufacturer of pipes and tubes in India having its manufacturing
facility situated at Jamshedpur with an annual production capacity
of around ~500 kt. The three main lines of businesses are conveyance
tubes (Tata Pipes), structural tubes (Tata Structura), precision tubes
for auto and boiler segments.
is a
The production and sales performance is as below:
Production and Sales of Tubes Division (kt)
Production
Sales
2
6
4
9
5
4
7
8
4
3
8
4
9
0
5
1
1
5
3
2
5
4
2
5
8
1
5
9
0
5
iii. Industrial By-Products and Management Division
The Company’s 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 Tata
Steel. IBMD manages ~14 MnT per annum of by-products spanning
across 20+ product categories with more than 250 stock keeping
units. The division achieved a total sales volume of ~10 MnT per
annum in the Financial Year 2019-20.
With the objective of harnessing ‘Value from waste and by-products’,
IBMD is committed to becoming a knowledge driven business unit
leveraging digital and innovation as key pillars. The division has also
explored into downstream value enhancement of by-products which
serve as quality benchmarks in the industry.
During the Financial Year 2019-20, the synergy initiatives in the
IBMD gained momentum. India’s first Steam Ageing facility for
“Accelerated Weathering” of LD slag was commissioned at TSJ and
IBMD commenced the sales of value-added flat product seconds.
The by-product utilisation at the plant and sales are given below:
By Product Utilisation at Plant and Sales of IBMD (kt)
By Product Utilisation
Sales
7
0
9
0
9
7
4
9
1
0
3
2
0
8
9
4
8
9
0
2
9
2
1
3
5
9
3
5
9
3
FY16
FY17
FY18
FY19
FY20
During the Financial Year 2019-20, by-product utilisation at plant was
same as compared to that of previous year whereas sales dropped
by ~6.5%. Despite the nationwide lockdown on account of COVID-19
pandemic during end of March 2020, which disrupted the supply
chain, the division managed to timely evacuate the by-products from
the plant to ensure smooth operations of the plant. The BF Slag was
dispatched to the Dhamra port for exports, Coal Tar was dispatched
by rake for the first time ever and the coal dispatches to institutional
customers were continued through rakes.
IBMD has developed a new product in the form of paver block made
from LD slag, which enables waste utilisation such as LD slag, and
helps to protect the environment and yield a value to the business.
Further, Air Cooled Blast Furnace slag is used as a natural aggregate
for road making.
FY16
FY17
FY18
FY19
FY20
During the Financial Year 2019-20, the growth of the automotive
sector declined by ~13% while the infrastructure and construction
sector grew by 4-5%. The division produced less by 1% and sold less
by 3% than that of previous year. However, the division maintained
its 8% market share. During the year, the division launched two new
products viz. Graphene coated tubes, Hat Profiles (Purlin Application)
and Galvanised Plain tubes (from TSBSL).
During the year under review:
•
‘Tata Structura’ the structural hollow steel branded product
has been accorded the
in both B2C
and B2B segment.
‘Superbrand’ status
• Tata Structura and Tata Pipes received the GreenPro certificate in
the 3rd edition of GreenPro summit organised by Confederation
of Indian Industry.
• HF2 Warrior team of Standard Tube Mill received the
‘Par Excellence award’ at National level organised by Quality
Circle Federation of India
• Tata Structura was awarded ‘India’s Most Trusted Brand Award
2019’ by the International Brand Consulting Corporation.
112
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR During the year under review, Tata Aggreto won the “Environmental
Stewardship” award at ET Now World CSR Congress, for its sustainable
usage in road construction (~120 kt was utilised in construction of
National Highways 32 and 33).
Bearings, Centre Bearings, and Magneto Bearings. The division is the
only bearings manufacturer in India to win the TPM Award (2004)
from Japan Institute of Plant Maintenance, Tokyo.
The production and sales performance is as below:
iv. Wires Division
The Company’s Global Wires India ('GWI') Business Unit is the largest
manufacturer of steel wires in India. The plants are located at Tarapur,
Pithampur, and Jamshedpur, and contribute to nearly 65% of its
sales volume, with remaining 35% being catered by Wires Processing
Centres. GWI caters to the requirements of the Indian Automobile,
Construction, and rural markets with various products.
The production and sales performance is as below:
Production and Sales of Wires Division (kt)
Production
Sales
0
1
3
2
0
3
1
2
3
0
2
3
0
6
3
6
6
3
3
8
3
5
8
3
7
7
3
3
7
3
FY16
FY17
FY18
FY19
FY20
Due to the COVID-19 pandemic, the industry is facing new challenges
over and above de-growth in automotive segment. The nationwide
lockdown in the last week of March 2020, affected the business and
operational performance of the division. During the year under
review, the production was lower by 1.5% and sales lower by 3.2% as
compared to those of the previous year.
During the year under review, the Spring Steel plant achieved
Level – 1 of GWOEM (Global Wires Operational Excellence Model), as
part of world-class quality initiative, leading to operational excellence
(yield improved by 17%, internal rejections reduced by 38%, and
customer complaints reduced by 60%). The division also achieved
higher sale of wires through online portal “Aashiyana”.
Tata Wiron received the ‘National Award for Marketing Excellence
in Iron and Steel Industry’ and the ‘Antardrishti’ campaign received
‘National Award for Marketing Excellence’ for the Best Rural
Marketing Campaign.
v. Bearings Division
its manufacturing
Our Bearings Division is one of the India’s largest quality bearing
facility situated at
manufacturers, having
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
the product range includes Ball Bearings, Taper Roller Bearings, Hub
Unit Bearings, Clutch Release Bearings, Double Row Angular Contact
Production and Sales of Bearings Division (mn nos.)
Production
Sales
7
63
3
8
3
8
3
8
3
9
3
7
3
7
3
0
3
0
3
FY16
FY17
FY18
FY19
FY20
During the year under review, the growth in the automotive sector
and the tractor industry declined due to lack of any programme to
boost the sector. The COVID-19 pandemic also adversely affected the
business environment towards the end of March 2020. Compared to
the previous year, production in the division was lower by 19% and
sales were lower by 18%.
3. PERFORMANCE OF MAJOR SUBSIDIARIES
i. Tata Steel BSL Limited
Tata Steel BSL limited (‘TSBSL’) (formerly Bhushan Steel Limited)
was acquired on May 18, 2018 through the Corporate Insolvency
Resolution Process ('CIRP') under the Insolvency and Bankruptcy
Code ('IBC'). On June 1, 2019, TSBSL completed the acquisition of
Bhushan Energy Limited (now Angul Energy Limited) through the
CIRP under IBC.
The turnover and profit and loss of TSBSL for the Financial Year
2019-20 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 20
18,199
2,370
(686)
(617)
(686)
(617)
(` crore)
FY 19
18,376
3,033
(922)
(881)
(922)
(881)
The production and sales performance of TSBSL is given below:
Crude Steel
Saleable Steel
Sales
FY 20
4.46
4.25
4.14
(mn tonnes)
Change (%)
25
21
16
FY 19
3.58
3.50
3.57
113
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 During the Financial Year 2019-20, the saleable steel production
stood at 4.25 MnT and crude steel production stood at 4.46 MnT
recording an increase of ~21% and ~25% respectively as compared
to that of the previous year. The increase at TSBSL is due to
ramp-up of operations. Further, in the previous year, deliveries prior to
the acquisition of TSBSL on May 18, 2018 under IBC were not included.
Post the acquisition, many improvement projects were undertaken
at TSBSL. TSBSL plans to sweat all the assets and reach higher level of
capacity utilisation. In order to maximise capacity utilisation, TSBSL
undertook the following initiatives;
• Development of value added products – TSBSL developed new
grades in Oil and Gas segment as well as adhesive coated material
for auto sector for brake application (as an import substitute).
• Development of new customers & market – During the year
under review, TSBSL appointed six new distributors across
India. Also, new customers were added in the OEM segment to
increase the market presence and secure good share of business
in OEM segment.
Value creation through synergy initiative with parent organisation
– TSBSL technical and quality teams are working closely with the
Tata Steel teams to develop high-end HR grade operational
capability for high-end segments and to increase the volumes in
branded products.
Operational Excellence: Be1 Programme
This is a flagship multi-dimensional excellence programme driving
operational, commercial, financial, and capability excellence. These
programmes enabled building a robust pipeline of improvement
initiatives which will continue to deliver value over medium and
long-term and strengthen TSBSL’s financial position. The pipeline
was built by conducting more than 50 idea generation workshops
involving employees across all levels to the shop floor. These initiatives
are focussed on cost reduction, throughput debottlenecking, and
value creation.
Key initiatives on cost that drove value across the organisation
include – fuel rate reduction, power cost reduction, Value-in-Use
driven buying of all Raw Materials, Suppliers Days for best cost,
country sourcing of Refractories and Graphite Electrodes, and
HR barter with other steel players for logistics cost reduction.
initiatives on throughput
Key
include debottlenecking across
upstream and downstream units, DRI (Direct Reduced Iron) kilns
operationalisation, and horizontally deploying
standardised
maintenance practices
for critical equipment. Besides these,
initiatives focussed on value creation including diversifying end
customer segments (especially non-auto), creating a full potential
and GTM (Geometry Technology Module) view for strengthening
114
export volumes, and reducing order delivery time through design of
HR buffer for downstream plants.
In addition, the programme focussed on leveraging group synergies
with Tata Steel to increase use of captive raw material, combined
cargo planning (inbound and outbound), inter-plant synergies, and
manufacture of Tata Steel branded products at TSBSL plants at arm’s
length. The plant achieved multiple Business Process Developments
best demonstrated performance throughout the year across both
cost and throughput Key Performance Indicators.
TSBSL started using digital tools to create sustainable value. A few
key highlights from digital include the Digital Twin for steel melting
shop which helped debottleneck throughput, GPS tracking of all
outbound trucks from gate entry to customer unloading.
The benefits achieved from these initiatives in the Financial Year
2019-20 is approximately `1,950 crore.
The turnover of TSBSL was marginally lower due to lower market
realisation, partly offset by higher volumes. The loss before tax was
lower due to lower interest cost as in the previous year TSBSL had
Inter-Corporate Deposits to be discharged.
ii. Tata Steel Long Products Limited
Pursuant to the Business Transfer Agreement entered into between
the Company and Usha Martin Limited (‘UML’) on September 22, 2018
and its subsequent novation in favour of Tata Steel Long Products
Limited (‘TSLP’) (formerly Tata Sponge Iron Limited), a subsidiary
of the Company, the steel business of UML was acquired by TSLP on
April 9, 2019 (other than transfer of some of the assets including iron
ore mines, coal mines, and certain land parcels). Further, the transfer
of iron ore mines and coal mines was completed on July 3, 2019.
is unique
TSLP’s current product portfolio
in nature and
complementary to Tata Steel product basket. It primarily deals in
two products viz. DRI (Direct Reduced Iron/Sponge Iron) and Special
Steel. DRI is highly commoditised in nature and used as a Raw material
(substitute to the steel scrap) in the electric arc furnaces or induction
furnaces. Special steel is used for high-end and critical applications
such as forging, bearings, fasteners, spring, etc. This has enabled the
Company to complete its offering in the Automotive sector for critical
long products-based components apart from being a leader in flat
products-based parts/components.
“Shikhar”
launched
TSLP immediately after acquisition has engaged in transformation
(multi-divisional, cross
programme and
functional improvement initiative that aims to drive break through
improvement projects) to achieve operational excellence and get
the synergy benefits for long-term sustainability. The programme
generated more than 1,100 ideas and TSLP successfully implemented
majority of those, resulting in total savings of ~ `300 crore.
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR The turnover and profit/(loss) for the Financial Year 2019-20
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 20
3,490
184
(369)
(530)
(355)
(516)
(` crore)
FY 19
992
156
188
188
124
124
Steel Business of UML was acquired on April 9, 2019, hence the
Financial Year 2018-19 numbers of steel business are not available for
comparison and analysis.
The production and sales performance is given below:
Crude Steel
Saleable Steel
Sales
FY 20
0.58
0.48
0.51
(mn tonnes)
Change (%)
N.A.
N.A.
N.A.
FY 19
-
-
-
During the Financial Year 2019-20, TSLP produced 765 kt of sponge
and 585 kt of steel. The deliveries of sponge were at 626 kt and
511 kt of steel. The turnover of the current year includes sale of sponge
iron and steel whereas that of previous year includes only sale of
sponge iron. TSLP reported losses mainly due to higher depreciation
and higher finance cost along with higher exceptional charges post
acquisition of steel business of UML.
iii. Tata Steel Europe
The eurozone economy grew by 1.2% in 2019 compared to 1.9%
in 2018. Growth was negatively impacted by a slowing Chinese
economy and US protectionism. Growth in the United Kingdom
('UK') economy was 1.4% in 2019 although uncertainty regarding
Brexit continued to persist.
European steel spot prices, based on Hot Rolled Coil ('HRC') in
Germany (parity point), weakened significantly during the year
to €469/t, a decrease of €82/t. The decrease was driven by lower
demand and continuing high levels of imports.
Following the completion of appropriate approvals and the
passing of required legislation in the UK and European Union ('EU'),
the UK left the EU on January 31, 2020 and entered a transition period
which currently ends on December 31, 2020. The UK Government
intends to have concluded a Free Trade Agreement ('FTA') by the end
of December 2020. This in itself is a demanding timeline, and until
the terms of the FTA are understood, strategic planning for the future
under new trade arrangements remains a challenge. There could be
a scenario under which the UK does not conclude an FTA before the
end of December 2020.
Tata Steel Europe (‘TSE’) is well prepared for a “No Deal” event and
has taken mitigating steps which would avoid significant cost and
disruption to the Company, fully documenting plans for reference
and deployment as required.
During March 2020, the COVID-19 pandemic accelerated with many
countries taking actions to restrict movement of people and to
shutdown industrial activities to contain the spread of COVID-19.
The key steel consuming industries reduced production amidst
weakening economic activities, national lockdowns, shortage of
manpower, and logistical issues and thus steel demand reduced.
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 20
55,939
(664)
(5,012)
9,837
(3,511)
11,337
(` crore)
FY 19
64,777
5,414
(1,078)
(1,147)
(1,405)
(1,475)
The production and sales performance of TSE (continuing operations)
is given below:
Liquid Steel Production
Deliveries
FY 20
10.26
9.29
(mn tonnes)
Change (%)
(1)
(4)
FY 19
10.31
9.64
TSE’s production in the Financial Year 2019-20 was almost at par with
that of previous year. The deliveries were lower by 4% over that of
previous year.
During the year under review, the revenue was at `55,939 crore, lower
by 14% from that of previous year due to decrease in average revenue
per tonne, along with lower deliveries, due to lower steel demand
in Europe. The profit before tax in the Financial Year 2019-20 was
significantly higher primarily on account of gain from interest waiver
of £1.12 billion (`10,088 crore) on the waived inter-company loan of
£0.77 billion (`6,981 crore) due to restructuring of inter-company debt
during the second quarter of Financial Year 2019-20. However, the
same was eliminated on consolidation in the group accounts, partly
offset by higher exceptional charge mainly on impairment of PPE.
The principal activities of TSE in the Financial Year 2019-20 comprised
the manufacture and sale of steel products. TSE’s 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 the Financial Year 2019-20 these plants produced
10.3 MnT (previous year: 10.3 MnT) of liquid steel.
115
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 Whilst TSE seeks to increase its differentiated/premium business,
which 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.
Strip Products Mainland Europe – Liquid steel production at
IJmuiden Steel Works, Netherlands during the Financial Year 2019-20
at 6.8 MnT was 0.3 MnT lower than that of previous year, reflecting
the weaker market circumstances. Record annual output of 1.4 MnT
was achieved at the Direct Sheet Plant. The impact of COVID-19
was still relatively limited in the Financial Year 2019-20. During the
year under review, Strip Products Mainland Europe continued with
the Transformation Programme which is targeting improvements
to delivery and yield performance, commercial mix, and reducing
operating costs and unplanned downtime. Further, progress was also
achieved in its ‘Strategic Asset Roadmap’ (STAR) capital investment
programme to support the strategic growth of differentiated, high
value products in the automotive, lifting and excavating, and energy
and power market sectors.
Implementation of the ‘Roadmap 2030’ continued, which contains
a series of measures to eliminate the environmental impact (noise,
dust, odour) of Strip Products Mainland Europe.
Strip Products UK – Liquid steel production at Port Talbot Steel
Works, Wales during the Financial Year 2019-20 was at 3.5 MnT, 0.3
MnT higher than that of the previous year due to an outage to extend
the life of Blast Furnace-5 taken in the previous year. During the
Financial Year 2019-20, Strip Products UK extended the successful
‘Sustainable Operational Excellence’ programme across the hub
with many areas entering the sustainable phase after achieving a
significant impact on daily management activities in the first phase.
Following the ‘Delivering Our Future’ improvement initiative, work
began on folding the activities into the European Transformation
programme. The Port Talbot Hot Strip Mill recorded its highest ever
availability with inherent capability to exceed record production.
New Products
TSE introduced 22 new products into the Group’s product portfolio.
Major new products are:
• Valast range of abrasion resistant steel grades
for the
engineering sector;
• MagiZinc full finish for the automotive market;
• Chromium-6 free Trivalent Chromium Coating Technology
(TCCT) as replacement for Electrolytic Chromium Coated (ECCS)
and Chromium Free Passivation Alternative (CFPA) products for
the packaging market.
Differentiated products accounted for 37% of TSE’s portfolio.
Strategic Activities
During the year under review, the Company and thyssenkrupp AG
decided not to pursue the proposed transaction to form a joint
venture to combine their steel businesses in Europe. The decision
was taken after careful evaluation of the viability of the proposal in
light of the feedback received from the European Commission ('EC').
Thereafter, on June 11, 2019, EC formally announced its decision to
prohibit the proposed joint venture.
On September 2, 2019, TSE announced that it had signed a definitive
agreement with JFE Shoji Trade Corporation (JFE) for the sale of
Cogent Power Inc (manufacturer of cores for electrical distribution
transformers in Canada and a part of Cogent business unit). The sale
of CPI to JFE completed on September 20, 2019. TSE also announced
that despite exploring all options it was unable to find a viable option
for Orb Electrical Steels and therefore decided to close the site.
Orb Electrical Steels was a manufacturer of Grain Oriented Electrical
Steel in Wales, UK and a part of Cogent business unit.
During the year under review, TSE commenced a company-wide
Transformation programme to improve the performance of the
business, helping it to become more sustainable and enabling
investments necessary to secure its long-term future. Improvements
in performance will come from productivity improvements, increased
sales of higher-value steels, and employment cost savings. In the
Financial Year 2019-20, the Transformation programme delivered
over £200 million worth of sustainable benefits.
Awards and Accolades
TSE won a Steelie Award for ‘Excellence in Life Cycle Assessment’ from
the Word Steel Association. The award for developing a life cycle tool
to assess the sustainability of new product recognises TSE’s leading
contribution to sustainability in the steel industry.
iv. South East Asia Operations
On January 28, 2019, the Company through its subsidiary T S Global
Holdings Pte. Ltd. (‘TSGH’), had entered into definitive agreements
with HBIS Group Co. Ltd. (‘HBIS’) to divest its entire equity stake in
NatSteel Holdings Pte. Ltd. (‘NSH’) and Tata Steel (Thailand) Public
Company Ltd. (‘TSTH’).
Therefore, in accordance with Ind AS 105, “Non-current Assets Held
for Sale and Discontinued Operations”, the assets and liabilities of
businesses forming part of the disposal group were classified as
held for sale as on March 31, 2019 and were presented separately in
the Consolidated Balance Sheet as on March 31, 2019. In the results
as on March 31, 2019, these companies had been disclosed within
discontinued operations.
During the year under review, TSGH decided not to pursue the
proposed transaction with HBIS, for want of regulatory approvals.
While, the termination of definitive agreements with HBIS was
116
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR beyond
the management’s control, active discussions and
engagement with other potential buyer(s) demonstrate that the
management is committed to sell the disposal group and there is an
active programme in process for completing the sale.
The conditions for classification as held for sale, therefore, continue
to be met and the businesses would continue to be classified as held
for sale as on March 31, 2020.
Profit of `10 crore for the financial Year 2019-20 (Previous Year loss
of `89 crore) is reported under “discontinued operations” in the
Statement of Profit and Loss for the period ended March 31, 2020.
The assets and liabilities of the entities held for sale have been
separately disclosed in the Balance Sheet as at March 31, 2020. The
Company has taken an impairment charge of `1,175 crore recognised
for fair value measurement loss of NSH operations within profit/loss
from discontinued operations in its consolidated financial statements.
v. Tata Metaliks Limited
Tata Metaliks Limited (‘TML’) has its manufacturing plant at Kharagpur,
West Bengal which produces annually 300 kt of pig iron and 200 kt of
ductile iron pipes. Pig iron is marketed in the brand name ‘Tata eFee’
(world’s first brand) and ductile iron pipe is marketed in the brand
name ‘Tata Ductura’.
During the year under review, the pig iron business was volatile
and had a weak demand due to slow down of auto sector and
low realisation, while the Ductile Iron pipe business was stable
as it is driven by Government investment in water and sanitation
infrastructure projects.
During the year under review, as part of the Digitisation journey,
TML implemented smart machines, business on mobile, and data
analytics in plant operation, maintenance, procurement, marketing
& sales, HRM, project management, and finance & accounts. TML also
introduced robotics in plant operation.
The turnover and profit/(loss) figures of TML for the Financial Year
2019-20 are as follows:
Turnover
Profit before tax (PBT)
Profit after tax (PAT)
FY 20
2,051
201
166
(` crore)
FY 19
2,155
212
182
During the Financial Year 2019-20, the production of Pig Iron ('PI') was
at 320 kt, higher by 35 kt than that of previous year due to improved
productivity of the furnace. The production of ductile iron pipes was
at 225 kt, lower by 4% than that of previous year due to weak demand
and adverse product mix. Deliveries of PI were at 519 kt, higher
by 31 kt than that of previous year and deliveries of ductile pipes
were at 218 kt lower by 8% than that of previous year. The turnover
declined by 5% due to decrease in realisation as there was a decline
in steel prices. This resulted in 9% decline in profit after tax from that
of previous year.
vi. The Tinplate Company of India Limited
The Tinplate Company of India Limited (‘TCIL’) is the largest
indigenous producer of tin-coated and tin-free steel used for
metal packaging. TCIL has also been ‘value-adding’ its products
by 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 approximately 379 kt of tinplate and tin-free steel.
The turnover and profit/(loss) figures of TCIL for the Financial Year
2019-20 are as follows:
Turnover
Profit before tax (PBT)
Profit after tax (PAT)
FY 20
2,123
104
95
(` crore)
FY 19
2,611
92
58
During the Financial Year 2019-20, the production was 340 kt with
an overall capacity utilisation of 90%. The production was lower by
18 kt than that of previous year. Deliveries were at 311 kt, lower by
32 kt than that of previous year owing to lower market demand. The
turnover declined by ~19% due to lower market realisation and profit
before tax increased by ~13% than that of previous year.
TCIL’s product mix continues to serve end-uses such as edible oils,
paints, pesticides, battery jackets, aerosol cans, processed foods,
and crown corks. The products continue to be supplied in sheet
and coil form. TCIL continued with its customer-focussed initiatives,
in a structured way. One such initiative 'Pragati', consists of cross
functional teams with members from TCIL and the customers, that
addresses issues related to process efficiency and yields at the
customers’ end. This has helped the organisation to further improve
relationships with customers. TCIL, over the last two years, has been
preparing for emerging domestic competition. The implementation
of these plans has created a favourable impact on the customers
which is visible through the VOC (voice-of-customer) captured
through various interactions.
TCIL completed the installation of Multi-Roll Leveller at both the ETLs
(Extract, Transform and Load), to improve the shape characteristics
of the product to International Standards. A cross-functional team
based approach to improve the surface quality has been effective
to prevent fine surface defects. TCIL has successfully commissioned
its second Printing line at Solution Centre to meet the evolving
printed sheet requirements both in the domestic and international
markets. TCIL also has been working on new products/variants (1.6%
of total production in FY 2020) to sustain its leadership position in
the domestic market (44% market share) and to cater to different
needs of customers.
After receiving the second level Total Productive Maintenance
('TPM') award, TCIL’s focus is on the deployment of TPM - Level 3.
Two more pillars (Roll Management and Supply Chain Management)
have been added to the existing 8-Pillar TPM Structure and, these
ten pillars will bring further improvements in process and internal
117
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 efficiencies for sustained operations. TCIL has undertaken cost
control measures such as efficient utilisation of raw materials,
reduction in power consumption (Variable Frequency Drives for
high power motors, LED lamps across Plant), reduction in fuel
and water consumption, reduction in consumables, reduction in
number of strip breakages at mills and improvement in throughput.
The focus on environment management was through on-line
monitoring of effluent & stack data (being shared with Jharkhand
State Pollution Control Board on-line), rain water harvesting
recharging system constructed in Tinplate Hospital, General Office
and in Works, Compost from Canteen food waste, Recovery of water
from waste water of ETLs.
The
of
operations
Management Systems.
TCIL
are
certified
to
Integrated
vii. Tata Steel Downstream Products Limited
(‘TSDPL’)
Tata Steel Downstream Products Limited
(formerly
Tata Steel Processing and Distribution Limited) is a leader in the
organised Steel Service Centre business in India. TSDPL has a
pan India presence with ten steel processing plants and thirteen
distribution and sales locations. Value-added offerings of TSDPL
include slitting, cut-to-length, blanking, corrugation, plate burning,
fabrication, component manufacturing, and steel intensive products
and applications. TSDPL’s products and services conform to
world-class quality standards in meeting customers’ demand. Its
entire operations including supply chain runs on a state-of-the-art
ERP (Enterprise Resource Planning) system.
The key highlights on the performance during the Financial Year
2019-20 are as follows:
• TSDPL increased its processing capacity by commissioning a
state of the art cut-to-length line to process high strength HR coil
up to 12 mm at Kalinganagar and Pune
• Tada plant completed the expansion to handle higher volumes
and more value-add services such as plate bending, blasting, and
painting facility
• TSDPL Introduced several new products and service offerings
which included extra high strength, scale brushed, edge trimmed,
and stress relieved cut sheets and plates from Kalinganagar,
processed electrical sheet and stamped components in Pantnagar
region, floor and wall mounted IT racks and security safes
The turnover and profit/(loss) figures of TSDPL for the Financial Year
2019-20 are as follows:
FY 20
3,108
95
61
(` crore)
FY 19
4,281
118
76
Turnover
Profit before tax (PBT)
Profit after tax (PAT)
118
During the year under review, the production from tolling business
was at 1,836 kt, lower by ~12% than that of the previous year, due
to lower businesses from Tata Steel and distribution business was at
627 kt, lower by ~23% than that of previous year due to lower demand
in auto segment. The deliveries from tolling business was 1,799 kt
which was in line with the previous year. The deliveries in distribution
business was 609 kt, lower by ~24% than that of the previous year
due to lower demand from auto segments. The turnover for the
financial year declined by ~27% due to adverse market conditions,
attributable to lower realisation and lower volumes from distribution
business. The profit before tax declined by ~19%.
Awards and Accolades:
National Safety Council of India awarded TSDPL’s Pune plant with a
Bronze Trophy for the assessment period of CY 2016-18 and ‘Suraksha
Puraskar’ and Jamshedpur plant “Prashansa Patra”.
viii. Bhubaneshwar Power Private Limited
The turnover and profit/(loss) figures of Bhubaneshwar Power Private
Limited (‘BPPL’) for the Financial Year 2019-20 are as follows:
Turnover
Profit before tax (PBT)
Profit after tax (PAT)
FY 20
510
(9)
25
(` crore)
FY 19
541
64
60
Uninterrupted power supply and cost of power is a challenge for
large power intensive process industries. Industries which produce
365 days per annum, continue to depend on thermal power plants for
their base load requirements.
BPPL is in the business of generation of power. It owns 135 MW
(2x67.5 MW) coal based power plant in Odisha. BPPL supplies
120.5 MW power to Tata Steel and Tata Steel Mining Limited (formerly
T S Alloys Limited).
During the year under review, the plant operated at a load factor
of 78.51%, and generated 931 million units of power, as against
924 million units in the previous year. The plant availability has come
down from 94% to 87.47% attributable to operational disturbance
due to cyclone FANI and adverse coal supplies.
During the Financial Year 2019-20, the turnover of BPPL was ~6%
lower than that of previous year, due to lower cost of generation as
the revenue model is cost plus contract. Profit before tax declined
mainly as previous year included a one-time gain of ~`50 crore on
fair valuation of loans. However, profit after tax increased due to
an accounting credit on re-assessment of deferred tax assets and
liabilities post adoption of lower tax rate which were announced
during the year.
ix. Creative Port Development Private Limited
in
Creative Port Development Private Limited
possession of a 54 years concession from the Government of Odisha
(‘CPDPL’)
is
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR for development of a Greenfield Seaport at Chaumukh Village, in
Balasore District, Odisha on a “BOOST” basis (Build, Own, Operate,
Share & Transfer). CPDPL is availing this concession through a
Special Purpose company “Subarnarekha Port Private Limited”
and is in possession of all the statutory approvals for the project.
In Phase – 1, the port will have an initial capacity of 25 MnT per
annum with a potential to expand to 150 MnT per annum. CPDPL is
already in possession of the port land and is in the advanced stage
of getting the required land for railway corridor and construction
of access road.
VI. FINANCIAL PERFORMANCE
1.
Tata Steel Limited (Standalone)
During the Financial Year 2019-20, the Company recorded a profit
after tax of `6,744 crore (previous year: `10,533 crore). The decrease is
primarily on account of decline in realisations, lower deliveries, lower
finance income, higher finance cost, and higher exceptional charges
as compared to that of the previous year. The basic and diluted
earnings per share for the Financial year 2019-20 were at `57.11 per
share (previous year: Basic: `90.41 per share, diluted: `90.40 per share).
The analysis of major items of the financial statements is given below:
a) Revenue from operations
Sale of products
Sale of power and water
Other operating revenue
Total revenue from operations
FY 20
57,168
1,648
1,620
60,436
FY 19
67,214
1,709
1,688
70,611
(` crore)
Change (%)
(15)
(4)
(4)
(14)
During the year under review, sale of products was lower as compared
to that of the previous year, primarily due to lower realisations
and decline in volumes. Ferro Alloys and Mineral Division (FAMD)
registered lower revenue owing to lower sales of Ferro Chrome along
with decline in prices due to depressed demand in the international
markets. Wires and Tubes division registered lower revenue due to
decrease in realisations and volumes.
b) Purchases of stock-in-trade
Purchases of stock-in-trade
FY 20
1,563
FY 19
1,808
(` crore)
Change (%)
(14)
During the year under review, Purchases of stock-in-trade was lower
as compared to that of the previous financial year due to lower
purchases of wire rods, imported rebars, hot rolled coils, cold rolled
coils, and slabs, owing to lower requirement.
c) Cost of materials consumed
Cost of materials consumed
FY 20
17,407
FY 19
19,840
(` crore)
Change (%)
(12)
During the year under review, cost of materials consumed decreased
primarily due to lower cost of imported coal, along with lower
consumption of coal and purchased pellet. Moreover, cost of ferro
alloys and other raw materials also declined.
d) Employee benefits expense
Employee benefits expense
FY 20
5,037
(` crore)
Change (%)
(2)
FY 19
5,131
During the year under review, the employee benefits expense
decreased primarily on account of reversal of excess provision post
finalisation of wage agreements. The decrease was partly offset by
increase due to change in the actuarial estimates owing to change
in discounting rates along with normal salary revisions and its
consequential impact on the retirement provisions.
e) Depreciation and amortisation expense
Depreciation and amortisation
expense
FY 20
3,920
(` crore)
Change (%)
3
FY 19
3,803
The increase in depreciation is due to higher charge on Right of Use
assets post implementation of Ind AS 116.
f) Other expenses
Other expenses
FY 20
22,132
FY 19
23,823
(` crore)
Change (%)
(7)
Other expenditure represents the following expenditure:
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
Other expenses
Less:-Expenditure (other than
interest) transferred to capital &
other accounts
Total Other expenses
(` crore)
FY 19 Change (%)
14
4,040
5
61
8
2,950
7
88
(6)
211
3
2,823
3
2,722
(6)
4,320
(19)
72
(13)
2,003
(31)
1,201
11
133
(4)
189
FY 20
4,616
65
3,181
94
198
2,906
2,795
4,047
59
1,751
832
147
180
2
1
2,929
3,809
(1,671)
(800)
22,132
23,823
50
(23)
109
(7)
119
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 Other expenses were lower as compared to those of the previous
financial year primarily on account of lower freight and handling
charges mainly due to favourable rates, decrease in royalty expense
along with rates and taxes on reversal of excess provision, higher one
time charges in previous year not present in current year, partly offset
by, higher repairs to machinery mainly due to IT transformation
initiatives. Consumption of stores and spares increased primarily due
to charging of project expenses on account of Kalinganagar Phase-II,
majorly eliminated through transfer to capital account.
g) Finance costs and net finance costs
Finance costs
Net Finance costs
FY 20
3,031
2,861
(` crore)
Change (%)
7
377
FY 19
2,824
600
During the year under review, finance costs increased mainly
on account of issue of Non-Convertible Debentures along with
higher interest cost on finance lease obligations primarily due to
implementation of Ind AS 116.
Net finance charges were higher on account of lower interest
income on inter-corporate deposits along with lower gain on sale
of mutual funds.
h) Exceptional items
Exceptional items
FY 20
(1,704)
(` crore)
Change (%)
N.A.
FY 19
(114)
The details of exceptional items for the current year and previous
year are as follows:
• Provision for Impairment of investments/doubtful advances
amounting to `1,150 crore (previous year: `12 crore) relates
to provision recognised for impairment of investments in
subsidiaries and joint ventures, net of reversal of `1 crore on
account of recovery of advances made to a joint venture.
• Provision for demands and claims amounting to `110 crore
(previous year: `329 crore) relating to certain statutory demands
and claims on environment and mining matters.
• Provision for demands and claims amounting to `86 crore
(previous year: NIL) relating to SVLDRS Sabka Vishwas Legal
Dispute Resolution Scheme.
• Profit on sale of non-current
in TRL Krosaki
Refractories Limited (an associate of the Company) Nil (previous
year: `262 crore).
investments
i) Property, plant and equipment (PPE) including intangibles
and right of use assets
Property, Plant and Equipment
Capital work-in-progress
Intangible assets
Intangible assets under
development
Right of use Assets
Total Property, plant and
equipment(PPE) including
intangibles & right of use
assets
FY 20
66,392
8,070
728
177
4,113
FY 19
70,417
5,686
805
110
0
79,480
77,018
(` crore)
Change (%)
(6)
42
(10)
61
N.A.
3
The movement in total PPE including intangible assets is higher
primarily on account of increase in Right of Use Assets post
implementation of Ind AS 116 along with increase in capital
work-in-progress mainly at Kalinganagar Phase-II, partly offset by
depreciation charge during the year.
j) Investments
Investment in Subsidiary, JVs
and Associates
Investments - Non-current
Investments - Current
Total Investments
FY 20
26,578
20,283
3,235
50,096
FY 19
4,438
34,492
477
39,407
(` crore)
Change (%)
499
(41)
578
27
The increase in investments was predominantly on account of
higher investments in equity shares of subsidiaries mainly in T Steel
Holdings Pte. Ltd. and in Tata Steel Long Products Limited (formerly
Tata Sponge Iron Ltd.) along with increase in current investments in
mutual funds. Decrease in other non-current investments is mainly
in the preference shares of T Steel Holdings Pte. Ltd. on conversion
to equity shares.
k) Inventories
• Provision for Employee Separation scheme (ESS) under Sunehere
Bhavishya Ki Yojana (‘SBKY’) scheme amounting to `107 crore
(previous year: `35 crore).
• Fair valuation loss on preference share investment held by the
Company in some of its affiliates `250 crore (previous year: Nil)
Finished and semi-finished
goods including stock-in-trade
Work-in-progress
Raw materials
Stores and spares
Total Inventories
120
FY 20
4,777
7
3,586
2,347
10,717
FY 19
4,205
14
4,496
2,540
11,255
(` crore)
Change (%)
14
(52)
(20)
(8)
(5)
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Raw material inventories decreased over that of previous year mainly
due to decrease in coal inventory owing to lower rates and quantities.
Inventory of stores and spares decreased mainly on account of
planned reduction.
Finished and semi-finished inventory increased as compared to that
of the previous year mainly due to increase in quantities, partly offset
by lower rates.
l) Trade receivables
Gross trade receivables
Less: allowance for credit losses
Net trade receivables
FY 20
1,050
33
1,017
(` crore)
Change (%)
(25)
(5)
(25)
FY 19
1,398
35
1,363
Decrease in trade receivables as compared to that of previous year
is primarily due to lower month-end sales owing to nationwide lock
down post outbreak of COVID-19.
m) Gross debt and Net debt
Gross debt
Less: Cash and Bank balances
(incl. Non-current balances)
Less: Current investments
Net Debt
FY 20
41,423
1,281
3,235
36,907
FY 19
29,701
753
477
28,471
(` crore)
Change (%)
39
70
578
30
Gross debt was higher due to drawal of short-term loans and
other term loans, issue of non-convertible Debentures, drawal
of External Commercial Borrowings (ECB) and increase in finance
lease obligations post implementation of Ind AS 116, partly offset
by scheduled repayments of non-convertible debentures and
re-payments of ECB and term loans.
Net debt was higher as compared to that of the previous year. This
is attributable to increase in Gross debt, partly offset by increase in
current investments along with cash and bank balances.
n) Cash Flows
Net Cash from/(used in)
operating activities
Net Cash from/(used in)
investing activities
Net Cash from/(used in)
financing activities
Net increase/(decrease) in
cash and cash equivalents
FY 20
FY 19
13,454
15,193
(17,635)
(16,350)
4,630
(2,887)
449
(4,044)
(` crore)
Change (%)
(11)
(8)
260
111
Net cash flow from/(used in) operating activities
During the year under review, the net cash generated from operating
activities was `13,454 crore as compared to `15,193 crore during
the previous year. The cash inflow from operating profit before
working capital changes and direct taxes during the current year was
`13,768 crore as compared to inflow of `19,949 crore during the
previous year due to lower operating profits. Cash inflow from
working capital changes in 2019-20 is mainly due to decrease in
Non-current/Current financial and other assets by `1,442 crore and
decrease in inventories by `533 crore, partly offset by decrease in
Non-current/current financial and other liabilities/provisions by `471
crore. The income taxes paid during the current year was `1,819 crore
as compared to `4,533 crore during previous financial year primarily
due to change in corporate tax rates.
Net cash flow from/(used in) investing activities
During the year under review, the net cash outflow from investing
activities amounted to `17,635 crore as compared to `16,350 crore
during the previous year. The outflow during the current year
broadly represents, investments in subsidiaries `8,945 crore, capex of
`4,749 crore, net purchase of current investments of `2,662 crore and
inter-corporate deposits given of `1,527 crore.
Net cash flow from/(used in) financing activities
During the year under review, the net cash inflow from financing
activities was `4,630 crore as compared to an outflow of
`2,887 crore during the previous year. The inflow during the
current year broadly
from borrowings
(net of repayments) `9,772 crore, partly offset by payment of interest
`3,084 crore, payment of dividend including taxes `1,787 crore.
represents proceeds
o) Changes in Key Financial Ratios
The change in the key financial ratios as compared to previous year
is stated below:
Inventory Turnover (days)
Debtors Turnover (days)
Current Ratio (Times)
Interest Coverage Ratio1 (Times)
Debt Equity2 (Times)
Net Debt Equity (Times)
EBITDA Margin (%)
Net Profit Margin (%)3
Return on average Net worth3 (%)
FY 20
70
7
0.81
4.37
0.55
0.49
24.98
11.16
9.02
(` crore)
FY 19 Change (%)
16
(14)
10
(54)
27
18
(15)
(25)
(42)
60
8
0.73
9.57
0.44
0.42
29.38
14.92
15.43
1) Interest Coverage Ratio: Decreased primarily on account of lower
operating profits.
2) Debt Equity Ratio: Increased primarily on account of increase in
borrowings over the Financial Year 2018-19.
121
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 3) Net Profit Margin and Return on average net worth:
Decreased primarily on account of decrease in net profits primarily
attributable to lower operating profits and higher exceptional
charges during the Financial Year 2019-20.
2. Tata Steel Limited (Consolidated)
The consolidated profit after tax (including discontinued operations)
of the Company was `1,172 crore as against `9,098 crore in the
previous year. The decrease was mainly due to lower operating profits
due to falling steel prices during the year and higher exceptional
charges, partly offset by lower tax expenses during the year primarily
on account of re-measurement of deferred tax liabilities based on the
new lower rate of Income tax prescribed under Section 115BAA of
the Income Tax Act,1961 along with creation of deferred tax assets at
some of the foreign entities.
The analysis of major items of the financial statements is given below.
(Note: The financials of Tata Steel Long Products Limited ('TSLP') for
the Financial Year 2018-19 pertain only to the sponge business of TSLP,
since the steel business of Usha Martin Limited ('UML') was acquired on
April 9, 2019.)
Revenue from TSLP increased post of acquisition of steel business of
UML reflect revenue from sponge and steel businesses.
b) Purchases of stock-in-trade
Tata Steel (Standalone)
TSBSL
TSE
TSLP
Others
Eliminations & Adjustments
Total purchases of stock-in-
trade
FY 20
1,563
3
3,110
0
4,199
(4,079)
(` crore)
FY 19 Change (%)
(14)
1,808
(58)
7
(35)
4,814
na
0
(31)
6,110
34
(6,171)
4,796
6,568
(27)
Expense was lower mainly at TSE primarily on account of decrease
in external steel purchases across a number of operating units,
consistent with lower deliveries. At Tata Steel (Standalone), the
expense was lower due to lower purchases of wire rods, imported
rebars, hot rolled coils, cold rolled coils and slabs owing to
lower requirement.
a) Revenue from operations
c) Cost of materials consumed
Tata Steel (Standalone)
TSBSL
TSE
TSLP
Others
Eliminations & Adjustments
Total revenue from operations
FY 20
60,436
18,199
55,939
3,490
41,786
(40,033)
139,817
(` crore)
FY 19 Change (%)
(14)
(1)
(14)
252
(9)
7
(11)
70,611
18,376
64,777
992
45,885
(42,972)
157,669
The consolidated revenue from operations was lower as compared to
that of the previous year primarily due to decline in realisations across
geographies along with lower deliveries.
Tata Steel Europe ('TSE') reported decrease mainly on account of
decrease in average revenue per tonne, lower deliveries by 4% along
with adverse forex impact on translation.
The revenue from Tata Steel BSL Limited ('TSBSL') marginally
decreased mainly due to
lower realisation, partly offset by
higher volumes as the previous period was consolidated only
from May 18, 2018.
Tata Steel (Standalone)
TSBSL
TSE
TSLP
Others
Eliminations & Adjustments
Total cost of materials
consumed
FY 20
17,407
10,816
22,784
2,392
31,981
(32,136)
(` crore)
FY 19 Change (%)
(12)
10
(3)
238
(6)
4
19,840
9,840
23,407
709
34,049
(33,536)
53,244
54,309
(2)
Consumption was marginally lower mainly on account of decrease at
Tata Steel (Standalone) due to lower cost of consumption of imported
coal as well as other raw materials owing to decrease in prices.
Tata Steel Europe reported marginal decrease in GBP terms along
with favourable exchange impact on translation.
Cost at TSLP increased post acquisition of steel business of UML.
Others primarily reflects decline in transactions at T S Global Minerals
Holdings Pte Ltd. due to sale of Black Ginger 461 Pty. Ltd. and lower
activities at T S Global Procurement and Natsteel Asia which are
majorly eliminated on consolidation.
122
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR d) Employee benefits expense
Other expenditure represents the following expenditure:
Tata Steel (Standalone)
TSBSL
TSE
TSLP
Others
Total employee benefits expense
FY 20
5,037
410
11,961
192
934
18,534
(` crore)
FY 19 Change (%)
(2)
5,131
25
327
(4)
12,444
328
45
15
812
(1)
18,759
Decrease in expenses was mainly at TSE primarily at Strip Products
Ijmuiden (driven by decrease of FTE– Full Time Equivalency) and at
Cogent Power post disposal along with favourable exchange impact
on translation.
Expense at Tata Steel (Standalone) decreased mainly on account of
reversal of excess provisions post finalisation of wage agreements.
Expense at TSBSL reflects an increase mainly because the previous
period was consolidated only from May 18, 2018. The increase is also
attributable to change in the actuarial estimates owing to change in
discounting rates.
Expense at TSLP increased post acquisition of steel business of UML.
e) Depreciation and amortisation expense
Tata Steel (Standalone)
TSBSL
TSE
TSLP
Others
Total depreciation and
amortisation expense
FY 20
3,920
1,452
2,355
311
403
(` crore)
FY 19 Change (%)
3
3,803
18
1,228
22
1,936
2,584
12
11
363
8,441
7,342
15
This expense was higher than that of previous year mainly on
account of higher depreciation on Right of Use assets post
implementation of Ind AS 116.
increased post acquisition of steel
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
Other expenses
Less: Expenditure (other than
interest) transferred to capital &
other accounts
Total Other expenses
FY 20
11,626
108
6,754
94
599
4,720
2,652
8,929
2,325
1,824
1,174
352
239
(` crore)
FY 19 Change (%)
4
(19)
1
7
33
(3)
(1)
6
(33)
(17)
(21)
29
(8)
11,160
133
6,672
88
451
4,865
2,681
8,389
3,455
2,191
1,485
272
260
6
174
7,262
8,134
(2,318)
(1,664)
46,345
48,746
(97)
(11)
39
(5)
Expense was lower mainly at Tata Steel (Standalone) on account
of decrease in freight and handling charges, decrease in royalty
expense along with rates and taxes on reversal of excess provision,
higher one-time charges in previous year not present in current year.
TSE reported decrease mainly on account of lower consumption of
stores and spares, lower level of repairs and maintenance, power
cost, lower rent due to impact of Ind AS 116, and lower other general
expenses along with favourable exchange impact on translation.
These decreases were partly offset by purchase of emission rights as
against sale during the previous year.
Decrease in ‘Others’ was mainly at T S Global Holdings on account of
favourable exchange rate movement.
Increase in other expenses at TSBSL is primarily because the previous
period was consolidated only from May 18, 2018. The increase is also
attributable to higher stores and spares consumption, higher repairs
to machinery, offset by lower rental expenses.
The expense at TSLP
business of UML
f) Other expenses
Tata Steel (Standalone)
TSBSL
TSE
TSLP
Others
Eliminations & Adjustments
Total other expenses
FY 20
22,132
4,875
18,205
962
2,360
(2,189)
46,345
(` crore)
FY 19 Change (%)
(7)
5
(3)
927
(37)
(10)
(5)
23,823
4,661
18,826
94
3,770
(2,428)
48,746
Other expenses at TSLP
business of UML.
g) Finance costs
Tata Steel (Standalone)
TSBSL
TSE
TSLP
Others
Eliminations & Adjustments
Finance costs
increased post acquisition of steel
FY 20
3,031
1,655
3,249
293
4,609
(5,304)
7,533
(` crore)
FY 19 Change (%)
7
2,824
(42)
2,834
(30)
4,631
9,591
3
(37)
7,270
(46)
(9,902)
(2)
7,660
123
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 h) Net Finance costs
Tata Steel (Standalone)
TSBSL
TSE
TSLP
Others
Eliminations & Adjustments
Net Finance costs
FY 20
2,861
1,604
2,024
242
1,069
(1,838)
5,962
(` crore)
FY 19 Change (%)
377
600
(41)
2,727
(56)
4,592
663
(43)
280
281
20
(1,531)
(10)
6,626
Finance cost was lower mainly due to repayment of external
borrowings taken by Bamnipal Steel Limited for the acquisition
of TSBSL. Decrease at TSBSL mainly relates to repayment of funds
provided by Bamnipal Steel Limited for the acquisition which was
majorly eliminated on consolidation. Decrease at TSE was mainly due
to decrease in borrowings post restructuring of debt in September
2019, majorly eliminated on consolidation.
•
Impairment charges of `3,197 crore in respect of property, plant
and equipment (including Capital Work-in-Progress, right of
use assets, goodwill, capital advances and intangible asset) at
Tata Steel Europe, Global mineral entities, Tata Steel Special
Economic Zone, Tata Steel BSL Limited and Bhubaneshwar Power
Private Limited.
• Restructuring provisions amounting to `161 crore at TSE.
• Provision for Employee Separation Scheme (‘ESS’) under Sunehere
Bhavishya Ki Yojana (‘SBKY’) scheme amounting to `107 crore at
Tata Steel Limited (Standalone).
• Expenses incurred on stamp duty and registration fees for a
portion of land parcels and mines acquired as part of business
combination `27 crore and provision for coal block performance
guarantee `134 crore at TSLP.
• Notional fair valuation loss on preference share investment held
by the Company in one of its affiliates `250 crore at Tata Steel
Limited (Standalone).
Increase in finance cost at TSLP was post acquisition of steel
business of UML.
Partly offset by,
Net finance charge was lower in line with decrease in finance cost.
Expense was lower at TSE mainly due to higher finance income on
refinancing of Senior Facilities Agreement (SFA). Expense was higher
at Tata Steel (Standalone) mainly on account of interest income
in previous year from inter-corporate deposits given to Bamnipal
Steel Limited for acquisition of TSBSL, which was eliminated
on consolidation.
i) Exceptional items
Tata Steel (Standalone)
TSBSL
TSE
TSLP
Others
Eliminations & Adjustments
Total exceptional items
FY 20
(1,704)
69
(2,221)
(161)
(659)
924
(3,752)
(` crore)
FY 19 Change (%)
N.A.
(114)
N.A.
41
N.A.
(69)
N.A.
0
N.A.
79
N.A.
(58)
N.A.
(121)
Exceptional
primarily represent:
items
during
the
Financial
Year
2019-20,
• Provision for demands and claims amounting to `110 crore
relating to certain statutory demands and claims on environment
and mining matters at Tata Steel Limited (Standalone).
• Gain on recovery of advances earlier provided for, amounting to
`1 crore at Tata Steel Limited (Standalone).
• Write back of provisions amounting to `154 crore which primarily
includes write-back of liabilities no longer required at TSBSL and
settlement credit received at The Indian Steel & Wire Products
Ltd. `18 crore.
• Profit on sale of subsidiaries `149 crore, profit on liquidation of
group companies `41 crore at TSE.
The exceptional items in financial Year 2018-19 primarily include:
• Provision for demands and claims amounting to `329 crore
relating to certain statutory demands and claims on environment
and mining matters at Tata Steel Limited (Standalone).
• Provision of `172 crore in respect of advances with public bodies
paid under protest by TSBSL.
• Provision
for Employee Separation Scheme
(‘ESS’) under
Sunehere Bhavishya Ki Yojana (‘SBKY’) scheme amounting to
`35 Crore at Tata Steel Limited (Standalone).
•
Impairment charges of `10 Crore in respect of property, plant and
equipment (including Capital Work-in-Progress and capital asset)
and intangible asset at TSBSL.
Partly offset by,
• Provision for demands and claims amounting to `86 crore relating
to SVLDRS Sabka Vishwas Legal Dispute Resolution Scheme at
Tata Steel Limited (Standalone).
• Profit on sale of non-current
investments amounting to
`180 crore, primarily in TRL Krosaki Refractories Limited (an
associate of the Company).
• Provision for impairment of doubtful capital advances amounting
to `42 crore at TSBSL.
• Restructuring and write back of provisions amounting to `245
crore which primarily includes write-back of liabilities no longer
required at TSBSL and arbitration settlement at Tata Steel Utilities
124
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR and Infrastructure Limited (formerly Jamshedpur Utilities &
Services Company Limited), partly offset by charge at TSE.
l) Trade receivables
j) Property, plant and equipment (PPE) including intangibles
and right of use assets
Tata Steel (Standalone)
TSBSL
TSE
TSLP
Others
Eliminations & Adjustments
Total property, plant and
equipment (PPE) including
intangibles & right of use assets
FY 20
79,480
30,491
24,158
4,646
11,488
(270)
(` crore)
FY 19 Change (%)
3
3
10
1,940
10
(75)
77,018
29,673
21,880
228
10,441
(154)
149,993
139,086
8
Increase in PPE and intangibles was mainly due to increase in
Right of Use Assets post implementation of Ind AS 116 along with
acquisition of steel business of UML. Increase at TSE was mainly on
account of additions and increase in capital work in progress along
with increase on account of exchange impact on translation.
k) Inventories
FY 20
(` crore)
FY 19 Change (%)
Finished and semi-finished goods
including stock in Trade
Work-in-progress
Raw materials
Stores and spares
Total Inventories
12,520
11,152
4,273
9,513
4,763
31,069
4,592
11,425
4,487
31,656
12
(7)
(17)
6
(2)
Tata Steel (Standalone)
TSBSL
TSE
TSLP
Others
Eliminations & Adjustments
Inventories
FY 20
10,717
4,839
12,859
797
1,990
(133)
31,069
(` crore)
FY 19 Change (%)
(5)
6
(6)
591
(7)
13
(2)
11,255
4,582
13,714
115
2,141
(151)
31,656
Tata Steel (Standalone)
TSBSL
TSE
TSLP
Others
Eliminations & Adjustments
Net trade receivables
FY 20
1,017
702
5,645
156
10,690
(10,325)
7,885
(` crore)
FY 19 Change (%)
(25)
1,363
1
697
1
5,607
99
78
(31)
15,453
9
(11,387)
(33)
11,811
Decrease in ‘Others’ was primarily at T S Global Procurement mainly
due to decline in securitisation transactions. Decrease at Tata Steel
Limited (Standalone) was primarily due to lower deliveries during
the month of March 2020 along with lower prices. These decreases
were partly offset by acquisition of steel business of UML by TSLP.
m) Gross debt and Net debt
Gross debt
Less: Cash and Bank
balances (incl. Non-current
balances
Less: Current investments
Net debt
FY 20
116,328
(` crore)
FY 19 Change (%)
15
100,816
8,117
3,412
3,432
104,779
2,525
94,879
138
36
10
Net debt was higher by `9,900 crore over that of previous year.
Gross Debt at `1,16,328 crore was higher by `15,512 crore as
compared to that of previous year. Increase in Gross Debt was mainly
on account of recognition of lease obligations post transition to Ind
AS 116 along with higher borrowings at TSLP due to acquisition of
steel business of UML, higher proceeds from borrowings (net of
repayment) mainly at Tata Steel (Standalone) along with adverse
exchange impact on translation being `4,095 crore. These increases
were partly offset by marginal decrease at Tata Steel Europe.
The increase in Net Debt was in line with increase in gross debt partly
offset by increase in cash and bank balances mainly at T S Global
Holdings (‘TSGH’) and Tata Steel (Standalone). Moreover, there was
increase in current investments mainly at Tata Steel (Standalone),
partly offset by decline at TSBSL.
n) Cash Flows
Decrease was primarily at Tata Steel (Standalone), mainly in raw
materials and stores and spares, offset by increase in finished and
semi-finished goods. Tata Steel Europe reported decrease on
account of lower raw material and WIP inventory. These decreases
were partly offset by acquisition of steel business of UML by TSLP.
Increase at TSBSL was mainly due to higher stock of finished goods
along with higher stores and spares, partly offset by decrease in raw
material inventory.
Net Cash from/(used in)
operating activities
Net Cash from/(used in)
investing activities
Net Cash from/(used in)
financing activities
Net increase/(decrease) in cash
and cash equivalents
FY 20
(` crore)
FY 19 Change (%)
20,169
25,336
(14,530)
(29,211)
(20)
50
(1,695)
(673)
(152)
3,944
(4,548)
187
125
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 Net cash flow from/(used in) operating activities
During the year under review, the net cash from operating activities
was `20,169 crore as compared to `25,336 crore during the previous
year. The cash inflow from operating profit before working capital
changes and direct taxes during the year under review was
`18,078 crore as against `27,840 crore during the previous year,
reflecting higher operating profits. Cash inflow from working capital
changes during the current period was `4,196 crore, primarily due
to decrease in inventories by `1,562 crore and Non-current/Current
financial and other assets `4,631 crore, partly offset by decrease
in Non-current/Current financial and other liabilities/provisions
by `1,997 crore. The payment of income taxes during the year
under review was `2,106 crore as compared to `5,094 crore during
the previous year.
Net cash flow from/(used in) investing activities
During the year under review, the net cash outflow from investing
activities was `14,530 crore as against an outflow of `29,211 crore
during the previous year. The outflow in the financial Year 2019-20
broadly represents capex of `10,398 crore, acquisition of subsidiaries/
undertakings amounting to `4,433 crore, (mainly at TSLP – steel
business of UML, BEL acquisition at TSBSL), along with purchase
(net of sale) of current investments amounting to `766 crore.
Net cash flow from/(used in) financing activities
During the year under review, net cash outflow from financing
activities was `1,695 crore as against outflow of `673 crore during
the previous year. The net outflow primarily represents interest paid
`7,419
taxes
`1,815 crore, partly offset by proceeds from borrowings (net of
repayment) `7,607 crore.
crore and payment of dividend
including
o) Changes in Key Financial Ratios
The details of changes in the key financial ratios as compared to
previous year is stated below:
Inventory Turnover (days)
Debtors Turnover (days)
Current Ratio (Times)
Interest Coverage Ratio1 (Times)
Debt Equity (Times)
Net Debt Equity (Times)
EBITDA Margin2 (%)
Net Profit Margin3 (%)
Return on average Net worth3 (%)
FY 20
85
26
1.40
1.68
1.58
1.42
12.68
0.84
1.59
(` crore)
FY 19 Change (%)
19
(8)
1
(62)
4
(0)
(33)
(85)
(88)
72
28
1.39
4.38
1.51
1.43
18.88
5.77
13.67
1) Interest Coverage Ratio: Decreased primarily on account of
lower operating profits attributable to lower volumes and lower
realisations across geographies.
126
2) EBITDA Margin: Decreased primarily on account of decrease in
operating profits.
3) Net Profit margin and Return on average net worth: Decreased
primarily on account of decrease in net profits attributable to
lower operating profits and higher exceptional charge during
the current year.
VII. Human Resources Management & Industrial
Relations
Human resource has always been one of the most valued stakeholders
for the Company. The Company has a culture of working together
through joint consultation between Union and Management and
a very strong commitment towards community development.
Our people practices have enabled us to create an environment of
collaboration and connect, which has aided us to achieve industrial
harmony of over 91 years.
Improving employee productivity is of utmost importance to the
organisation. During the year under review, employee productivity
improved from 800 tonnes of crude steel/employee/year to
803 tonnes of crude steel/employee/year with the employees on roll
in Tata Steel Limited moving from 32,984 to 32,364.
During the year under review, the Company embarked on major
improvements in areas of diversity and inclusion. The Company
was the first in the country to deploy women in all shifts in its mines
through an initiative called ‘Women@Mines’. The Company also
rolled out a policy on equal rights for LGBTQ+ employees to enable
partners of colleagues from the LGBTQ+ community to avail all
benefits meant for employees’ spouse. Efforts have been taken on
hiring and creating infrastructure for diverse workforce as well as
retaining and developing women leaders. Our continuous efforts in
this direction have led to increase in gender diversity from 6.5% to
6.9% of the total workforce.
Digitalisation has been one of the most focussed area for the
Management. Various projects such as
‘Connected Workforce
system’ to improve safety of contract workforce; 'TalentPro' to
have a unified view of talent and performance management along
with learning; and real-time dashboards using analytics tool such
as 'Tableau' to provide insights on employee cost, diversity and
workforce productivity were implemented to improve employee
experience and data driven decision making.
In order to fulfill the Company’s commitment towards enhancing the
skills of its workforce, ‘School of Excellence’- an initiative to develop
world-class technical competencies for employees, was introduced.
During the year under review, over 50,000 contract workforce
completed such certification.
During the year under review, the Company was certified as
Great Place to Work in the Great Place to Work study conducted for
the year 2020. The Company was also declared as one of the top 30
‘India’s Best Places to Work in the Manufacturing sector’ by Great
Place to Work for the 3rd year in a row.
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR In Europe, the Company is committed to provide an environment
that recognises and values the differences in employee backgrounds
and skills. The aim is to provide equal opportunity for all employees
regardless of gender, sexual orientation, part-time or fixed term
status, parental responsibilities, marital status, race, disability, colour,
national or ethnic, and to maximise the benefits available from a
diverse workforce.
In Europe, the Company strives to ensure that well-developed policies
and procedures are in place for consulting and negotiating with trade
unions, the European works council and employee representatives,
so that views of employees can be considered in making decisions
that are likely to affect their interests. UK Steel Enterprise Limited, a
subsidiary of Tata Steel Europe, helps the economic regeneration of
communities affected by changes in the UK steel industry and it has
rolled out support measures to businesses across all steel sectors in
the UK to help create new job opportunities for steel communities.
VIII. Digital Transformation
The Company
is on a multi-year digital enabled Business
Transformation journey intending to be the leader in Digital Steel
making by 2025 through adoption of Digital Technologies. In
the process, the Company intends to improve EBITDA, enhance
digital maturity, and improve work practices to be more intelligent,
insightful, and agile as an organisation.
Cloud, Data, and Artificial Intelligence (AI) are the key drivers of this
transformation. The substantial investments made in Network, Cloud,
and Cyber-security over the last couple of years has laid a strong
foundation for a rapid and sustainable business transformation.
The Company has developed a Maintenance Technology Roadmap
(‘MTR’) to improve the sensor density on mission critical equipment
to enable Predictive Maintenance. As a first step, an Asset Monitoring
& Diagnostic Centre (‘AMDC’) has been set up for remote condition
monitoring of such critical equipment. All these initiatives have
accelerated data generation to ~20TB/month with data volumes
growing 2.5x year-on-year. Leveraging the data, 100+ data analytics
models have been deployed across processes to drive insights-based
decision making.
Since the early stages of our transformation journey, the Company
has acknowledged that Data Analytics and AI will have numerous
applications in steel manufacturing. AI will allow the Company to
be more cognitive of its internal processes, the externalities, and
stakeholder expectations. A business first approach to AI helps
drive this agenda through identifying user stories that drive clear
tangible business benefits. The Company uses data analytics to
arrive at optimum Coke, Pellet, and Sinter quality to improve the
yield and throughput of the Blast Furnaces. Through Advanced
Analytics the Company modelled the iron making process inside a
Blast Furnace which reduces coke consumption and further yield
improvement. Advanced Analytics models are guiding our operators
on the optimum casting speed in the Continuous Casting process to
arrive at the target properties at the lowest cost and time. Operations
Research based models are driving logistics cost optimisation and
yield and throughput improvement through efficient production
planning. All such initiatives are governed and monitored in
order to gain cost improvements. The Company broadly classifies
the Analytics solutions into three stages: 1) Smart Assistance, 2)
Intelligence Augmentation, and 3) Zero Human intervention. The
Company started off the journey by driving Advanced Analytics,
which is the precursor to AI adoption.
As a result of early adoption and perseverance, Tata Steel Ijmuiden,
Netherland (in 2018) and Tata Steel Kalinganagar, India (in 2019)
have been recognised as Industry 4.0 Lighthouses by World
Economic Forum.
The Company targets to be a Zero Harm organisation and ensure
safety and security for our employees and assets. We have built a
Connected Workforce solution that gives us end-to-end visibility
of the work patterns of the contract workforce across the plants. It
helps us pre-empt unsafe incidents while improving the workforce
productivity through analytics. We are using Video Analytics to detect
the right usage of Personal Protective Equipment on the shop-floor,
to monitor traffic inside the plant premises to improve road safety.
The pioneering e-commerce initiatives such as Aashiyana (for the
Individual House Builders), DigECA (for the Micro, Medium and Small
Enterprises), and COMPASS (for our large industrial accounts) are
well poised to be the main stay of how business will be conducted
going forward – with minimal in-person interactions. Key to all such
initiatives are the Company’s Channel Partners and the Sampoorna
digital platform is enabling efficient distribution and enhancing
customer experience through better collaboration along the
distribution network. In the previous year, the Company piloted a
solution that used satellite image and socio-economic data analytics
for demand estimation of some of the product segments with success.
This solution will prove essential in the era of social distancing where
the Company can remotely identify demand hotspots and direct
sales efforts towards it.
The prevalent level of sensorisation, automation, and camera
density combined with data analytics allowed the Company’s
managers to manage operations remotely with a skeletal workforce
during the National Lockdowns. Together, these technologies form
the foundation to enable truly Integrated & Remote Operations
and Smart Asset Maintenance from Mines to Mills. Sensorisation,
via MTR programme, and AMDC have enabled “Remote Read &
Diagnose” capabilities with focus on enabling “Remote Write”
capabilities going forward.
The Company is looking at Integrated Supply Chain Planning &
Logistics combined with Integrated Margin Monitor as themes & tools
to drive end-to-end cost optimisation. The procurement processes
are being platformatised through introduction of digital catalogue-
based buying, commodity price prediction aided buying, analytics
powered negotiation tools and end-to-end contract
lifecycle
management. A Virtual Command Centre ('VCC') is envisaged to
127
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 enable centralised and decentralised interventions seamlessly. This
will eliminate the need for any Physical Command Centres, which are
resource intensive in building and maintaining. A VCC would ideally
be a device agnostic app with defined access and control as per roles,
responsibilities, profiles, and decision journeys, orchestrated via AI.
IX. IMPACT OF COVID-19 PANDEMIC ON THE
COMPANY
The COVID-19 pandemic has posed unprecedented disruptions
in business operations of companies all over the globe. At Tata
Steel, the first and foremost priority is the health and safety of the
employees and the communities in which the Company operates.
The Company has been operating its facilities in accordance with the
advisories issued from time to time, by the Central, State and local
Governments, including the prescribed hygiene and safety standards
and social distancing norms.
a) Impact on the operations
In view of the nationwide lockdown imposed to combat the
COVID-19 pandemic and the slowdown in economic activity, there
has been a significant reduction in demand in key steel consuming
segments such as automotive, infrastructure, construction, real
estate, capital goods, consumer durables amongst others. The
steel consuming
industries have reduced production amidst
weakening economic activities, shortage of manpower, working
capital constraints, and logistical issues, thereby impacting steel
demand adversely.
Being part of the essential services and process industries where the
continuous operations of the facilities is important, the Company's
steel and mining operations were exempt from lockdown measures,
subject to certain guidelines. The Company's mining operations
continued to operate normally. However, the Company operated
its facilities at Jamshedpur and Kalinganagar at reduce production
levels on account of lack of demand from customers. Production
at downstream facilities was temporarily suspended. Operations
at Strategic Business Units such as Bearings, Tubes, and Wires
were also halted. Supply chain activities were affected and all
despatches were stopped.
At locations where operations were continuing, the Company
adopted safety & hygiene standards at shop floor and offices and
implemented social distancing norms, work from home, workforce
deployment plan, and staggered shift timing for safety of the
employees. The Company has also put in place digital interventions
to ensure smooth functioning of essential services.
With the phased removal of the lockdown restrictions in India, the
Company’s upstream steel making operations have been ramped
up and are currently operating at about 80% utilisation levels. The
downstream units have reopened and are steadily ramping up.
In Europe, shutdown measures
implemented by national
governments starting from March 2020 significantly impacted
128
manufacturing activity and steel-using industrial sectors. The
Company maintained
its operations while following national
government advice to protect employees, contract workers, and
the communities in which it operates. The Company is managing
production levels at European mills to match the lower demand
levels in Europe. The Company continues to operate at about 70%
utilisation level. All four blast furnaces across the two steelmaking
hubs – in IJmuiden, the Netherlands, and Port Talbot, Wales are
being operated at reduced levels. Liquid steel production is also
aligned to lower demand levels. The Company has taken necessary
steps to ensure health and safety of its workforce without affecting
its business continuity plans.
b) Impact on the profitability, cash flow, liquidity and
financials
The impact on the operations of the Company on account of the
COVID-19 pandemic, led to decline in steel deliveries which resulted
in decline in earnings and increase in inventories. Post relaxation
of the lockdown, the plant production is gradually ramping up and
the inventory is being liquidated based on market demand and off-
take. The Company’s digital initiatives have enabled compliance
of the internal financial controls and reporting of the Company.
The Company has been fulfilling its legal obligations as required for
execution of the existing contracts/agreements.
The Company continues to have a strong liquidity position. In
response to the COVID-19, the Company is focussed on conserving
cash and liquidity and is reducing the cost base to align with the
operating and market situation with strong focus on working capital
management. The Company has raised funds since April 2020 through
issue of Non-Convertible Debentures and Commercial Papers.
The Company has always strived to have a balanced maturity profile
and a judicious mix of funding instruments which help in minimising
costs while providing flexibility in managing cashflows. Taking its
cashflows and liquidity position into account, the Company is in a
position to service its debt and other financing arrangements. The
Company has chosen not to avail the moratorium offered by RBI on
interest and principal payments, demonstrating its ability to service
its debt obligations.
In Europe too, cost reduction is a key focus. The Company has
implemented various measures across the European operations
including, aligning production to demand
levels, maximising
flexible working practices, liaising with governments across different
territories to seek further support, and reducing all non-essential
spend. The measures are expected to help the Company to minimise
costs and preserve cash. The Company’s European operations
have no debt repayments under its main financing facility until
2025 and therefore the focus is on conserving cash through cost
reduction measures.
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR c) Outlook of steel market
The nationwide lockdown in India resulted in complete halt of
activity across steel consuming sectors, both construction and
manufacturing. While gradual resumption of business activities
coupled with stimulus measures announced by government are
expected to help revive the business activity, steel demand recovery
is likely to be slower due to the unavailability of labour and weaker
consumption growth. During H1 FY2021, most of the construction
demand is expected to be driven by government infrastructure
projects and rural construction. However, deferment of purchases
of automotive and consumer durables coupled with weaker private
investments and fragile exports is likely to keep steel consumption
and consequently steel manufacturing at lower levels.
In Europe, the COVID-19 pandemic has led to a downgrading of
Europe’s economic outlook and steel consumption forecasts. The
situation has led to a reduction in industrial activity across Europe.
While national lockdowns are now being eased in some countries,
the automotive, engineering and construction sectors are showing
slow signs of recovery. As a result, steel manufacturing is expected to
be low in line with lesser demand. However, demand for packaging
and plating steels used in food products and batteries continues to
be strong through the pandemic and the outlook remains strong.
d) Corporate Social Responsibility – helping the community
in the wake of COVID-19 pandemic
Apart from ensuring smooth operations at its facilities, the Company
has also undertaken various initiatives to help combat the COVID-19
situation. Tata Steel Medical Services has established 1,200 beds and
more than 100 dedicated critical care beds in Jharkhand and Odisha,
to cater to those affected with COVID-19. The testing laboratory
established at Jamshedpur was amongst the first to be established
outside the government sector and two more laboratories are in the
process of being established in Odisha. Tata Steel Medical Services has
also contributed to extensive screening and testing in these regions.
The Company through Tata Steel Foundation (TSF) and with the
help of district administrations has reached out to citizens in the
communities where the Company operates i.e. Jharkhand and
Odisha. The Company has taken steps to provide food, sustainable
livelihood to the communities and migrant labourers of the region,
and ration and safety support to the vulnerable communities. The
Company has also augmented the medical facilities at the designated
hospitals for medical treatment.
X. RISKS AND OPPORTUNITIES
The Company operates in an increasingly complex, volatile and
uncertain business environment with stringent regulatory and
environmental requirements. The Company aspires to create long-
term value for its stakeholders by embedding risk intelligence and
building resilience within the organisation.
In this journey towards risk intelligence, a robust risk governance
is developed across the organisation and is driven by the Board of
Directors through the Risk Management Committee (‘RMC’) of the
Board. The Company has also set up a management committee called
the Group Risk Review Committee (‘GRRC’) which is responsible for
the implementation of ERM process across the Company.
The Company has implemented an Enterprise Risk Management
(‘ERM’) framework to provide a holistic view of aggregated risk
exposures as well as to facilitate more informed decision-making.
The ERM framework includes identification of risks and risk owners
for regular tracking, mitigation, and reporting of risks to help the
Company meet its business objectives. The Company through the
ERM framework has identified key risks under various categories such
as financial risks, macroeconomic and market risks, operational risks,
safety risks, commodity risks, supply chain risks, information security
risks, regulatory risks, climate change risks, and community risks. The
Company has also mapped the severity of these risks and the likely
impact on the Company and has developed mitigation strategies to
eliminate or minimise the impact of the risks.
The COVID-19 outbreak is an unprecedented event and has certainly
posed challenges for the Company. The risk intelligent culture
embedded across the Company has helped in developing and
adopting a multi-pronged strategy to effectively respond to the
evolving pandemic situation. Operations were aligned with the
prevailing market conditions by reducing upstream operations while
curtailing downstream operations. Cross functional teams worked
to manage supply chain and logistics issues within the constraints
imposed by the lockdown to ensure that plant could operate
as planned. The Company also focussed on cash and liquidity
management to face any future disruption in business conditions.
Alongside identification of risks, the Company has a continuous
process of monitoring and leveraging opportunities presented
by the external and internal environment. Despite the immediate
challenges posed by the COVID-19 pandemic, the Company will
continue to leverage opportunities provided by the near-term and
long-term macro and business environment. The Company has
identified various opportunities for growth and improvement and
has developed strategies to leverage these opportunities. These
opportunities include identifying potential for organic and inorganic
growth, foraying into new lines of business to cater to evolving
needs of customers as well as to make the business more sustainable,
developing business models to address issues on climate change, and
embarking on the path of digital transformation to be a technology
leader in the industry and to gain a competitive advantage over
other players.
A detailed overview on the risk landscape and mitigation strategies
as well as the strategies for capitalising on opportunities in business
is provided in the “Risk and Opportunities” Section forming part of
the Integrated Report.
129
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 XI. INTERNAL CONTROL SYSTEMS AND INTERNAL
AUDIT
The Company has an Internal Financial Controls (‘IFC’) framework,
commensurate with the size, scale, and complexity of the Company’s
operations. The framework has been designed to provide reasonable
assurance with respect to recording and providing reliable financial
laws,
and operational
safeguarding assets from unauthorised use, executing transactions
with proper authorisation, and ensuring compliance with
corporate policies.
information, complying with applicable
The Board of Directors and the Audit Committee are responsible
for ensuring that these controls are adequate and operating
effectively. The Financial Statements are prepared on the basis of
the Significant Accounting Policies that are carefully selected by
the Management. These policies are supported by the Corporate
Accounting and Systems that apply to the entity to implement the
tenets of Corporate Governance and the Significant Accounting
Policies uniformly across the Company. The Company has laid down
Standard Operating Procedures and policies to guide the operations
of the business. Business heads are responsible to ensure compliance
with the policies and procedures laid down by the Management.
Robust and continuous internal monitoring mechanisms ensure
timely identification of risks and issues. The Company has deployed
SAP Governance, Risk and Compliance (GRC) to test the effectiveness
of the internal controls. The controls have been documented and
embedded in the business processes.
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 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 at its
meetings reviews the reports submitted by the Internal Auditor.
Also, the Audit Committee at frequent intervals has independent
sessions with the statutory auditor and the Management to discuss
the adequacy and effectiveness of internal financial controls.
XII. STATUTORY COMPLIANCE
The Company has in place adequate systems and processes to ensure
that it is in compliance with all applicable laws. The Company Secretary
& Chief Legal Officer (Corporate & Compliance) is responsible for
implementing the systems and processes for monitoring compliance
with the applicable laws and for ensuring that the systems and
processes are operating effectively. The Chief Executive Officer
and Managing Director, places before the Board, at each meeting,
a certificate of compliance with the applicable laws. The Company
Secretary & Chief Legal Officer (Corporate & Compliance) also
confirms compliance with Company law, SEBI Regulations and other
corporate laws applicable to the Company.
130
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH 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.
the
Social
Corporate
Overview
of
Responsibility (‘CSR’) Policy
Our CSR initiatives are guided by our CSR Policy (‘Policy’)
adopted by
the Board of Directors on September 17,
2014. The Policy is available on the Company’s website at
https://www.tatasteel.com/corporate/our-organisation/policies/
Our CSR activities focus on initiatives in the themes of education,
health, water, livelihood, rural and urban infrastructure and are
in alignment with key focus areas of the Tata Group. We also
undertake community-centric interventions in the areas of
sports, disaster relief, environment, and ethnicity.
II.
Composition of CSR and Sustainability
Committee of the Board
At the helm of our CSR governance structure is the Corporate
Social Responsibility and Sustainability Committee of the Board
that comprises Mr. Deepak Kapoor (Chairperson), Mr. O. P. Bhatt,
Mr. T. V. Narendran, and Mr. Koushik Chatterjee. During the year
under review the Committee met three times.
III. CSR Advisory Council
We have a CSR Advisory Council comprising 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’s approach towards CSR.
IV. CSR Delivery Arms
In terms of the Companies Act, 2013, ('Act') companies are
allowed to carry out their CSR activities through companies
incorporated under Section 8 of the Act as well as 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 Foundation (‘TSF’), a Section 8 Company incorporated
under the Act. The main objective of the formation of TSF is
to consolidate, strengthen, and broaden the CSR programme
deployment as well as create a distinct brand identity for it.
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.
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 object of the society is to provide facilities for technical
and other skill enhancement trainings within the nation.
Initiatives Foundation
Tata Steel Family
(‘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.
V. Financial Details
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:
Total amount to be spent for the Financial
Year
(a)
(b) Amount spent
(c) Amount unspent, if any
(` crore)
8,676.66
173.53
173.53
192.99
Nil
The manner in which the amount is spent on CSR activities
undertaken during the year review is given as an annexure to
this report. Details of CSR projects undertaken during the year
under review along with its impact is discussed in the Social and
Relationship Capital Section of the Integrated Report.
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Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
VI. Responsibility Statement
We hereby affirm that the CSR Policy, as approved by the Board of Directors of the Company, has been implemented and the Corporate
Social Responsibility and Sustainability Committee monitors the implementation of CSR Projects and activities in compliance with our
CSR objectives and CSR Policy of the Company.
sd/-
Deepak Kapoor
Chairman
CSR and Sustainability Committee
DIN: 00162957
June 29, 2020
sd/-
T. V. Narendran
Chief Executive Officer &
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:
(2)
(3)
(4)
(5)
(6)
(7)
(` crore)
(8)
CSR project or activity identified
Sector in which
the project is
covered
Location of project (District & State)
Promoting health care
including preventive
Healthcare and Sanitation
Health
Total
Making Available safe
Drinking Water
Drinking
Water
Total
Promotion of education
including special
education
Education
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
Amount
outlay
Amount spent
on the projects
or programmes
during current
reporting period
Cumulative
amount spent on
the projects or
programmes upto
current reporting
period
Amount
spent: Direct
or through
implementing
agency
62.30
44.37
479.10
62.30
44.37
479.10
16.14
6.00
70.71
16.14
6.00
70.71
88.29
73.92
346.14
Total
88.29
73.92
346.14
Employment enhancing
Vocational skills especially to
Women, Children, Differently
abled
Livelihood
Livelihood enhancement
projects
Total
Jharkhand - East Singhbhum, West
Singhbhum, Dhanbad, Ramgarh,
Ranchi
Odisha - Ganjam, Jajpur,
Kendujhar, Sundargarh
36.88
24.48
157.59
36.88
24.48
157.59
Direct,
TSRDS,
TCS,
TSFIF,
TSF
Direct,
TSRDS,
TSF
Direct,
TSRDS,
TCS,
TSF
Direct,
TSRDS,
TCS,
TSSDS,
TSF
(1)
Sl.
No.
1
2
3
4
5
132
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
(1)
Sl.
No.
6
7
8
9
(2)
(3)
(4)
(5)
(6)
(7)
(` crore)
(8)
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
Cumulative
amount spent on
the projects or
programmes upto
current reporting
period
Amount
spent: Direct
or through
implementing
agency
Environmental sustainability,
protection of flora & fauna,
agro forestry, animal welfare,
resource conservation,
maintaining quality of soil,
air, water
Total
Environment
Jharkhand - East Singhbhum,
Ramgarh
Odisha - Jajpur, Kendujhar
West Bengal - Burdwan
3.16
2.76
20.88
Direct,
TSRDS,
TSZS
Protection and restoration of
national heritage, Promotion
of art, culture, handicrafts,
setting up public libraries etc
Ethnicity
Jharkhand - East Singhbhum, West
Singhbhum, Ramgarh, Ranchi
Odisha - Kendujhar, Jajpur
Total
Promotion of Rural,
Nationally recognised,
Paralympic and Olympic
sports especially training
Total
Sports
Jharkhand - East Singhbhum, West
Singhbhum, Dhanbad, Ramgarh,
Ranchi
Odisha - Ganjam, Jajpur,
Kendujhar, Sundargarh
Rural development
projects (infrastructure
and other developments)
Rural & Urban
Infrastructure
Jharkhand - East Singhbhum, West
Singhbhum, Dhanbad, Ramgarh
Odisha - Ganjam, Jajpur,
Kendujhar
3.16
2.76
20.88
13.31
9.57
36.58 TCS
13.31
9.57
36.58
17.22
8.16
43.78
17.22
8.16
43.78
21.60
8.66
90.29
Direct,
TSRDS,
TSF
Direct,
TSRDS,
TSF
Total
21.60
8.66
90.29
10
Disaster management,
including relief, rehabilitation
and reconstruction activities
Disaster
Management
Odisha - Ganjam, Jajpur
Total
Total Direct expenses of
projects & programmes (A)
Overhead Expenses
(restricted to the 5% of total
CSR expenditure) (B)
Total (A) + (B)
-
-
5.88
5.88 Direct
5.88
5.88
258.90
183.80
1,250.95
13.10
9.19
58.13
272.00
192.99
1,309.08
Note: Cumulative amount spent on the projects or programmes upto current reporting period has been calculated from Financial Year 2014-15 onwards.
133
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 ANNEXURE 4
Corporate Governance Report
Company’s Corporate Governance Philosophy
Corporate Governance
is the creation and enhancement of
long-term sustainable value for our stakeholders, comprising
regulators, employees, customers, vendors,
investors, and the
society at large, through ethically driven business practice. Effective
corporate governance practices constitute the strong foundation
on which successful commercial enterprises are built to last. Strong
leadership and effective corporate governance practices have been
the Company’s hallmark inherited from its culture and ethos. 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.
The Company is in compliance with the requirements stipulated
under Regulations 17 to 27 read with Schedule V and clauses (b) to
(i) of Regulation 46(2) of the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations,
2015 (‘SEBI Listing Regulations’), as applicable, with regard to
corporate governance.
To
further strengthen our Company’s corporate governance
philosophy, the Company has also adopted the Tata Business
Excellence Model.
Code of conduct
The Company has a strong legacy of fair, transparent and ethical
governance practices.
The Company has adopted the Tata Code of Conduct (‘TCoC/Code’)
for Executive Directors (‘EDs’), Senior Management Personnel
and other Executives and Employees, which is available on the
website of the Company 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 (‘NEDs’) of the Company which includes
the Code of Conduct of Independent Directors (‘IDs’) which suitably
incorporates the duties of Independent Directors as laid down in the
Companies Act, 2013 (‘the Act’). The same is available on the website
of the Company www.tatasteel.com The Company has received
confirmation from the NEDs and IDs regarding compliance of the
Code, for the year under review.
Tata Code of Conduct for Prevention of Insider
Trading and Code of Corporate Disclosure Practices
In accordance with the Securities and Exchange Board of India
(Prohibition of Insider Trading) Regulations, 2015 ('SEBI Insider
Trading Regulations'), as amended from time to time, the Board of
Directors of the Company has adopted the Tata Code of Conduct for
Prevention of Insider Trading and the Code of Corporate Disclosure
Practices (‘Insider Trading Code’). The Insider Trading Code was last
amended by the Board of Directors on December 18, 2019, to be in
compliance with the SEBI Insider Trading Regulations.
Mr. Parvatheesam Kanchinadham, Company Secretary & Chief Legal
Officer (Corporate & Compliance) of the Company is the ‘Compliance
Officer’ in terms of this Insider Trading Code.
Board of Directors
The Board of Directors ('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 a mix of EDs, NEDs, and IDs to maintain the
Board’s independence and separate its functions of governance
and management. As on March 31, 2020, the Board comprised
ten members, two of whom are EDs, three are NEDs and five
including a Woman Director. The Board periodically
are
in
evaluates the need for change
its composition and size.
Detailed profile of our Directors
is available on our website
www.tatasteel.com/corporate/our-organisation/leadership/
IDs,
The composition of the Board is in conformity with Regulation 17
of the SEBI Listing Regulations read with Section 149 of the Act. As
on date of this report, none of our Directors serve as Director or
as IDs in more than seven listed companies and none of the EDs
serve as IDs on any listed company. Further, none of our IDs serve as
Non-Independent Director of any company on the board of which
any of our Non-Independent Director is an ID.
Independent Directors are non-executive directors as defined under
Regulation 16(1)(b) of the SEBI Listing Regulations read with Section
149(6) of the Act along with rules framed thereunder. In terms of
Regulation 25(8) of the SEBI Listing Regulations, they have confirmed
134
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR that they are not aware of any circumstance or situation which exists or
may reasonably be anticipated that could impair or impact their ability
to discharge their duties. Based on the declarations received from the
Independent Directors, the Board of Directors has confirmed that they
meet the criteria of independence as mentioned under Section 149
of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations and
that they are independent of the management. Further, the IDs have
in terms of Section 150 of the Act read with Rule 6 of the Companies
(Appointment & Qualification of Directors) Rules, 2014, confirmed
that they have enrolled themselves in the Independent Directors’
Databank maintained with the Indian Institute of Corporate Affairs.
The Company has issued formal letters of appointment to the IDs.
As required under Regulation 46 of the SEBI Listing Regulations, as
amended, the terms and conditions of appointment of IDs including
their role, responsibility and duties are available on our website at
https://www.tatasteel.com/media/2917/terms-and-conditions-of-
appointment-of-independent-directors.pdf
During the Financial Year 2019-20, none of our Directors acted as
Member in more than 10 committees or as Chairperson in more than
5 committees across all listed entities where they serve as a Director.
There are no inter-se relationships between our Board Members.
Table A: Composition of the Board and Directorships held as on March 31, 2020
Name of the Director
No. of directorship in other
Indian Public Companies(1)
Member
Non-Executive, Non-Independent Directors
Chairperson
No. of Board Committee
positions in other Indian
Public Companies(2)
Chairperson
Member
Directorship in other listed entity
(Category of Directorship)
Mr. N. Chandrasekaran
(Chairman)
DIN: 00121863
Mr. Saurabh Agrawal
DIN: 02144558
Mr. V. K. Sharma
DIN: 02449088
Independent Directors
Ms. Mallika Srinivasan
DIN: 00037022
Mr. O. P. Bhatt
DIN: 00548091
5
4
-
3
-
-
2
2
3
4
-
-
-
-
1
a)
b)
c)
d)
e)
a)
b)
a)
b)
a)
a)
b)
c)
d)
Tata Consultancy Services Limited
(Non-Executive, Non-Independent)
Tata Motors Limited
(Non-Executive, Non-Independent)
Tata Consumer Products Limited
(formerly Tata Global Beverages Limited)
(Non-Executive, Non-Independent)
The Tata Power Company Limited
(Non-Executive, Non-Independent)
The Indian Hotels Company Limited
(Non-Executive, Non-Independent)
The Tata Power Company Limited
(Non-Executive, Non-Independent)
Tata AIG General Insurance Company Limited (Debt Listed)
(Non-Executive, Non-Independent)
ACC Limited
(Non-Executive, Non-Independent)
Mahindra & Mahindra Limited
(Nominee Director)
The United Nilgiri Tea Estates Company Limited
(Non-Executive, Non-Independent)
Tata Consultancy Services Limited
(Non-Executive, Independent)
Hindustan Unilever Limited
(Non-Executive, Independent)
Tata Motors Limited
(Non-Executive, Independent)
Aadhar Housing Finance Limited (Debt Listed)
(Non-Executive, Independent)
-
2
-
-
4
135
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 No. of directorship in other
Indian Public Companies(1)
No. of Board Committee
positions in other Indian
Public Companies(2)
Chairperson
Member
Chairperson
Member
Directorship in other listed entity
(Category of Directorship)
Name of the Director
Dr. Peter Blauwhoff
DIN: 07728872
Mr. Aman Mehta
DIN: 00009364
Mr. Deepak Kapoor
DIN: 00162957
Executive Directors
Mr. T. V. Narendran
DIN: 03083605
-
-
-
3
-
4
3
4
-
2
1
-
-
5
3
-
Mr. Koushik Chatterjee
DIN: 00004989
2
3
1
4
-
Wockhardt Limited
(Non-Executive, Independent)
Godrej Consumer Products Limited
(Non-Executive, Independent)
Max Financial Services Limited
(Non-Executive, Independent)
Vedanta Limited
(Non-Executive, Independent)
HCL Technologies Limited
(Non-Executive, Independent)
Tata Steel Long Products Limited
(formerly Tata Sponge Iron Limited)
(Non-Executive, Non-Independent)
Tata Steel BSL Limited
(formerly Bhushan Steel Limited)
(Non-Executive, Non-Independent)
TRF Limited
(Non-Executive, Non-Independent)
Tata Metaliks Limited
(Non-Executive, Non-Independent)
The Tinplate Company of India Limited
(Non-Executive, Non-Independent)
Tata Steel Long Products Limited
(formerly Tata Sponge Iron Limited)
(Non-Executive, Non-Independent)
Tata Steel BSL Limited
(formerly Bhushan Steel Limited)
(Non-Executive, Non-Independent)
TRF Limited
(Non-Executive, Non-Independent)
a)
b)
c)
d)
a)
a)
b)
c)
a)
b)
c)
d)
e)
Notes:
(1)
(2)
Directorships in other Indian Public Companies (listed and unlisted) excludes Tata Steel Limited and Section 8 companies.
In terms of Regulation 26(1)(b) of the SEBI Listing Regulations, the disclosure includes chairmanship/membership of the Audit Committee
and Stakeholders’ Relationship Committee
(listed and unlisted) excluding Tata Steel Limited.
Indian Public companies
Further, membership includes position as Chairperson of committees.
in other
Selection of New Directors and Board Membership Criteria
Key Board Qualifications, Expertise and Attributes
The Nomination and Remuneration Committee (‘NRC’) formulates
and recommends to the Board 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’
is available on our
https://www.tatasteel.com/media/6816/policy-on-
website
appointment-and-removal-of-directors.pdf
independence
at
136
The Members of the Board are committed to ensuring that the Board
is in compliance with the highest standards of corporate governance.
The table below summarises the key skills, expertise, competencies
and attributes which are taken into consideration by the NRC while
recommending appointment of Directors to the Board:
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Table B: Director skills, expertise, competencies and attributes desirable in Company’s business and sector in which it functions
Leadership
Strategy
Operations
Technology
Finance
Governance
Areas of Skills/Expertise/Competence
N. Chandrasekaran
Mallika Srinivasan
O. P. Bhatt
Peter (Petrus) Blauwhoff
Aman Mehta
Deepak Kapoor
V. K. Sharma
Saurabh Agrawal
T. V. Narendran
Koushik Chatterjee
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
Familiarisation Programme
Independent Directors)
for Directors
(including
As a practice, all new Directors (including Independent Directors)
inducted to the Board are given a formal orientation. The familiarisation
programme for our Directors is customised to suit their individual
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.
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
Government/
Regulatory Affairs
*
*
*
*
*
*
*
*
*
*
As stated in the Board's Report, the details of orientation given to
our existing Independent Directors are available on our website
https://www.tatasteel.com/media/12333/familiarization-programme-for-
independent-directors-for-website.pdf
Board Evaluation
The NRC has formulated a Policy for evaluation of the Board, its
Committees and Directors and the same has been approved and
adopted by the Board. The details of Board Evaluation forms part of
the Board's Report.
Remuneration Policy for Board and Senior Management
The Board has approved the Remuneration Policy for Directors,
Key Managerial Personnel (‘KMP’) and all other employees of
the Company. The same is available on our website https://www.
tatasteel.com/media/6817/remuneration-policy-of-directors-etc.pdf
Details of remuneration for Directors in Financial Year 2019-20 are
provided in Table C below.
Table C: Shares held and cash compensation paid to Directors for the year ended March 31, 2020
Name
Fixed Salary
Basic
Perquisite/
Allowance
Total Fixed
Salary
Commission(6) Sitting Fees
Total
Compensation
Fully paid-up
Ordinary Shares
held (Nos.)
Partly paid-up
Ordinary Shares
held (Nos.)
(` lakh)
Non-Executive, Non-Independent Directors
Mr. N. Chandrasekaran(1)
–
Mr. Saurabh Agrawal(2)
–
Mr. V. K. Sharma(3)
–
Independent Directors
Ms. Mallika Srinivasan
Mr. O. P. Bhatt
Dr. Peter Blauwhoff(4)
Mr. Aman Mehta
Mr. Deepak Kapoor
Executive Directors
Mr. T. V. Narendran(5)
Mr. Koushik Chatterjee(5)
150
135
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
222.01
239.95
372.01
374.95
–
–
75
120
170
100
90
100
750
650
2.80
5.60
2.90
3.20
7.20
6.80
5.60
5.70
2.80
5.60
77.90
123.20
177.20
106.80
95.60
105.70
2,00,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,122.01
1,024.95
2,032
1,531
139
105
Notes:
(1)
(2)
(3)
As a Policy, Mr. N. Chandrasekaran, Chairman has abstained from receiving commission from the Company.
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 sitting fees is paid to Mr. V. K. Sharma and the commission is paid to Life Insurance Corporation of India.
137
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
(4)
(5)
(6)
Dr. Peter Blauwhoff serves as an Independent Director of Tata Steel
Europe (‘TSE’) and as an Independent Chairman and Member of
Supervisory Board of Tata Steel Nederland BV (‘TSN BV’). Towards this,
he additionally receives an annual Board fee of £70,000 from TSE and
annual Board fee of €80,000 plus expenses allowance of €1,500 from
TSN BV. The fee paid is consistent with the market practices and is
aligned to the benchmark figures published by global consulting firms.
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’ remuneration in lieu thereof.
Commission relates to the Financial Year ended March 31, 2020, which
was approved by the Board on June 29, 2020 and will be paid during the
Financial Year 2020-21.
(7)
The Company does not have any stock option plan. Accordingly, none
of our Directors hold stock options as on March 31, 2020.
Board Meetings
Scheduling and selection of agenda items for Board Meetings
Tentative dates for Board Meetings in the ensuing Financial Year
are decided in advance and communicated to the members of the
Board. The information, as required under Regulation 17(7) read with
Schedule II Part A of the SEBI Listing Regulations, is made available to
the Board. The agenda and explanatory notes are sent to the Board in
advance. The Board periodically reviews, (a) compliance reports of all
laws applicable to the Company; (b) reviews minutes of the meetings
of board of directors of the unlisted subsidiaries of the Company.
The Board meets at least once a quarter to review the quarterly
financial results and other agenda items. Additional meetings are
held when necessary. Committees of the Board usually meet the day
before or on the day of the formal Board meeting, or whenever the
need arises for transacting business. The recommendations of the
Committees are placed before the Board for necessary approval.
5 Board meetings were held during the Financial Year ended
March 31, 2020. These were held on April 25, 2019, August 7, 2019,
November 6, 2019, December 18, 2019, and February 7, 2020. The gap
between any two Board meetings during the year under review did
not exceed one hundred and twenty days. The requisite quorum was
present for all the meetings.
Table D: Attendance details of Directors for the year ended
March 31, 2020 are given below:
Name of the Director
Category
No. of Meetings
held during
tenure
No. of Meetings
Attended
NED
NED
NED
Mr. N. Chandrasekaran
(Chairman)
Mr. Saurabh Agrawal
Mr. V. K. Sharma
Ms. Mallika Srinivasan ID
ID
Mr. O. P. Bhatt
ID
Dr. Peter Blauwhoff
ID
Mr. Aman Mehta
Mr. Deepak Kapoor
ID
ED
Mr. T. V. Narendran
Mr. Koushik Chatterjee ED
138
5
5
5
5
5
5
5
5
5
5
5
4
4
4
5
5
5
4
5
5
Video/tele-conferencing facilities are also used to facilitate Directors
travelling/residing abroad or at other locations, to participate
in the meetings.
All the Directors, except Ms. Mallika Srinivasan, were present
at the AGM of the Company held on Friday, July 19, 2019.
Ms. Mallika Srinivasan was unable to participate at the AGM due to
personal exigency.
Meeting of the Independent Directors
Pursuant to the provisions of the Act, the Independent Directors met
on November 5, 2019 and December 18, 2019 without the presence of
Non-Independent Directors and Members of the Management.
The performance evaluation process of Directors including the
Chairman and of the Board and its Committees was initiated in
March 2020. A meeting of the Independent Directors for performance
evaluation was scheduled to be held in the last week of March 2020.
However, due to outbreak of COVID-19, the meeting of Independent
Directors was rescheduled and held on June 27, 2020.
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
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 processes and controls including compliance with laws,
Tata Code of Conduct and Insider Trading Code, Whistle-blower
Policies and related cases thereto. The Committee also reviews matters
under the Prevention of Sexual Harassment at Workplace Policy.
The Board of Directors of the Company adopted the Audit
Committee Charter (which includes terms of reference as provided
under the Act and SEBI Listing Regulations) on March 31, 2015 which
was revised on March 2, 2017 and February 8, 2019.
The Company Secretary and Chief Legal Officer (Corporate &
Compliance) 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, as required.
7 meetings of the Committee were held during the year ended
March 31, 2020. These meetings were held on April 25, 2019,
August 7, 2019, October 23, 2019, November 5, 2019, November 11,
2019, January 18, 2020, and February 7, 2020. The requisite quorum
was present for all the meetings. All decisions at the Audit Committee
meetings were taken unanimously.
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Table E: The composition of the Committee and the
attendance details of the Members for the year ended
March 31, 2020 are given below:
Table F: The composition of the Committee and the
attendance details of the Members for the year ended
March 31, 2020 are given below:
Names of Members
Category
No. of Meetings
held during
tenure
No. of meetings
attended
Names of Members
Category
No. of Meetings
held during
tenure
No. of meetings
attended
Mr. O.P. Bhatt
(Chairperson)
Mr. Aman Mehta
Dr. Peter Blauwhoff
Mr. Saurabh Agrawal
Mr. Deepak Kapoor1
ID
ID
ID
NED
ID
7
7
7
7
6
7
6
6
7
5
1.
Mr. Deepak Kapoor was appointed as Member of Audit
Committee at the Board Meeting held on April 25, 2019 and was
not a Member of the Audit Committee at the time of the Audit
Committee meeting on April 25, 2019.
Mr. O. P. Bhatt, Chairperson of the Audit Committee was present at
the AGM of the Company held on Friday, July 19, 2019.
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 by 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.
Ms. Mallika Srinivasan
(Chairperson)
Mr. O. P. Bhatt
Mr. N. Chandrasekaran NED
ID
ID
2
2
2
2
2
2
Ms. Mallika Srinivasan, Chairperson of the NRC was not present at the
last AGM of the Company held on Friday, July 19, 2019 due to personal
exigency. Mr. O. P. Bhatt, Independent Director, was present at the
AGM as authorised by the Chairperson of the NRC.
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, which shall indicate the
initiatives to be undertaken by the Company, recommend the
amount of expenditure the Company should incur on Corporate
Social Responsibility
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,
manufacturing, natural, social, intellectual and human capital.
(‘CSR’) activities and to monitor
The Board has adopted the NRC Charter (which includes terms of
reference as provided under the Act and SEBI Listing Regulations)
for the functioning of the Committee on May 20, 2015 which
was revised on March 29, 2019, basis the amendments in SEBI
Listing Regulations.
The Board has approved a Charter for the functioning of the
Committee, on March 31, 2015, which was
last revised on
March 2, 2017.
The CSR policy is available on our website at https://www.tatasteel.
com/media/11804/tata-steel-csr-policy-latest-2019.pdf
The NRC also assists the Board in discharging its responsibilities
relating to compensation of the Company’s Executive Directors
and Senior Management. The Committee has
formulated
Remuneration Policy for Directors, KMPs and all other employees
of the Company and the same is available on Company's website at
https://www.tatasteel.com/media/6817/remuneration-policy-
of-directors-etc.pdf. The criteria
to
Non-Executive Directors is available on our website at https://www.
The
tatasteel.com/investors/corporate-governance/compliance/
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 for its approval, the base salary, incentives/
commission, other benefits, compensation or arrangements and
executive employment agreements for the Executive Directors.
for making payments
2 meetings of the Committee were held during the year ended
March 31, 2020. These meetings were held on April 25, 2019,
and November 6, 2019. The requisite quorum was present for
all the meetings.
3 meetings of the Committee were held during the year ended
March 31, 2020. These meetings were held on April 24, 2019,
November 5, 2019 and February 6, 2020. The requisite quorum was
present for all the meetings.
Table G: The composition of the Committee and the
attendance details of the Members for the year ended
March 31, 2020 are given below:
Names of Members
Category
Mr. Deepak Kapoor
(Chairperson)
Mr. O. P. Bhatt
Mr. T. V. Narendran
Mr. Koushik Chatterjee
ID
ID
ED
ED
No. of Meetings
held during
tenure
No. of meetings
attended
3
3
3
3
3
3
3
3
Mr. Deepak Kapoor, Chairperson of CSR&S Committee was present at
the AGM of the Company held on Friday, July 19, 2019.
139
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 Risk Management Committee
for
framing,
The Company has constituted a Risk Management Committee
(‘RMC’)
implementing and monitoring the risk
management policy of 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)
c)
Overseeing key risks, including strategic, financial, operational,
IT (including cyber security) 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.
Developing risk management policy and risk management
system/framework for the Company.
4.
5.
Dr. Hans Fischer ceased to be a Member of Management of RMC
effective April 25, 2019 and Dr. Henrik Adam was appointed as the
Member of Management of the RMC effective November 5, 2019.
Consequent to superannuation, Mr. Anand Sen and Mr. N. K. Misra
ceased to be the Members of Management of the RMC effective
September 30, 2019 and December 31, 2019 respectively.
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, issue of new/duplicate certificates, general
meetings and such other grievances as may be raised by the security
holders from time to time.
The Committee also reviews:
The Board has adopted a Charter for RMC Committee on May 20, 2015.
a)
3 meetings of the Committee were held during the year ended
March 31, 2020. These meetings were held on April 25, 2019,
November 5, 2019 and February 7, 2020. The requisite quorum was
present for all the meetings.
Table H: The composition of the Committee and the
attendance details of the Members for the year ended
March 31, 2020 are given below:
Name of the Director
Category
No. of Meetings
held during
tenure
No. of meetings
attended
Mr. Aman Mehta
(Chairperson)1
Mr. O. P. Bhatt1
Dr. Peter Blauwhoff2
Mr. Deepak Kapoor3
Mr. Saurabh Agrawal
Mr. T. V. Narendran
Mr. Koushik Chatterjee
Dr. Henrik Adam4
Dr. Hans Fischer4
Mr. Sandip Biswas
Mr. Anand Sen5
Mr. N. K. Misra5
ID
ID
ID
ID
NED
ED
ED
MoM
MoM
MoM
MoM
MoM
MoM – Member of Management.
3
1
2
1
3
3
3
2
1
3
1
3
3
1
2
1
3
3
3
2
1
3
1
2
Mr. O. P. Bhatt ceased to be Chairperson and Member of the RMC
effective April 25, 2019 and Mr. Aman Mehta was appointed as the
Chairperson of the RMC effective April 25, 2019.
Measures taken
by Shareholders;
for effective exercise of voting rights
b)
c)
Service standards adopted by the Company in respect of
services rendered by our Registrars & Transfer Agent;
Measures rendered and initiatives taken for reducing quantum
of unclaimed dividends and ensuring timely receipt of dividend/
annual report/notices and other information by Shareholders.
The Board has adopted a Charter (which includes terms of reference
as provided under the Act and SEBI Listing Regulations) for the
functioning of the SRC on April 11, 2014 which was revised on
February 8, 2019.
1 meeting of the Committee was held during the year ended
March 31, 2020 on February 6, 2020. The requisite quorum was
present for the meeting.
Table I: The composition of the Committee and the
attendance details of the Members for the year ended
March 31, 2020 are given below:
Name of the Director
Category
Mr. V. K. Sharma1
Mr. Deepak Kapoor1
Mr. T. V. Narendran
Mr. Koushik Chatterjee
NED
ID
ED
ED
No. of Meetings
held during
tenure
1
1
1
-
No. of meetings
attended
1
1
1
-
1.
Mr. Deepak Kapoor ceased to be the Chairperson of SRC effective
April 25, 2019 and continues to be a Member of SRC. Mr. V. K. Sharma
was appointed as Chairperson and Member of SRC effective even date.
Dr. Peter Blauwhoff was appointed as Member of the RMC at the Board
Meeting held on April 25, 2019 and was not a Member of the RMC at the
time of the RMC meeting on April 25, 2019.
Mr. V. K. Sharma, Chairperson of Committee was present at the AGM
of the Company held on Friday, July 19, 2019.
Mr. Deepak Kapoor ceased to be a Member of the RMC effective
April 25, 2019.
In terms of Regulation 6 and Schedule V of the SEBI Listing
the Board has appointed Mr. Parvatheesam
Regulations,
1.
2.
3.
140
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Kanchinadham, Company Secretary & Chief Legal Officer (Corporate
& Compliance) as the Compliance Officer of the Company.
August 6, 2019, November 5, 2019 and February 6, 2020. The
requisite quorum was present for all the meetings.
The details of investor complaints received and resolved during
the Financial Year ended March 31, 2020 are given in Table J. The
complaints relate to non-receipt of annual report, dividend, share
transfers and other investor grievances.
Table K: The composition of the Committee and the
attendance details of the Members for the year ended
March 31, 2020 are given below:
Table J: Details of investor complaints received and resolved
during the year ended March 31, 2020:
Names of Members
Category
No. of Meetings
held during
tenure
No. of meetings
attended
Opening as on April 1, 2019
Received during the year
Resolved during the year
Closing as on March 31, 2020
0
290
290
0
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.
4 meetings of the Committee were held during the year ended
March 31, 2020. These meetings were held on April 24, 2019,
General Information for Shareholders
General Body Meetings
Table L: Location and time, where last three AGMs were held:
Dr. Peter Blauwhoff
(Chairperson)
Mr. Deepak Kapoor1
Ms. Mallika Srinivasan2
Mr. V. K. Sharma2
Mr. T. V. Narendran
Dr. Hans Fischer3
Dr. Henrik Adam3
ID
ID
ID
NED
ED
MoM
MoM
MoM – Member of Management.
4
1
3
3
4
1
3
4
1
2
3
4
1
3
1.
2.
3.
Mr. Deepak Kapoor ceased to be a member of the SH&E Committee
effective April 25, 2019.
Ms. Mallika Srinivasan and Mr. V. K. Sharma were appointed as the
members of the SH&E Committee effective April 25, 2019.
Dr. Hans Fischer ceased to be a Member of Management of the SH&E
Committee and Dr. Henrik Adam was appointed as the Member of
Management of the SH&E Committee effective August 6, 2019.
Financial Year
Ended
Date
Time
Venue
Special Resolution(s) Passed
March 31, 2019 July 19, 2019
March 31, 2018 July 20, 2018
March 31, 2017 August 8, 2017
3:00 p.m. (IST)
Birla Matushri Sabhagar,
19, Sir Vithaldas
Thackersey Marg,
Mumbai – 400 020
(i)
Re-appointment of Ms. Mallika Srinivasan (DIN: 00037022)
as an Independent Director of the Company.
(ii) Re-appointment of Mr. O. P. Bhatt (DIN: 00548091) as an
Independent Director of the Company.
Issue of Non-Convertible Debentures on private placement
basis not exceeding `12,000 crore
Issue of Non-Convertible Debentures on Private Placement
basis not exceeding `10,000 crore
No extraordinary general meeting of the Company was held during the Financial Year 2019-20.
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.
141
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 Table M: Annual General Meeting 2020:
Day & Date
Time
Venue
Thursday, August 20, 2020
3:00 p.m. (IST)
In view of the continuing COVID-19 pandemic, the Ministry of Corporate Affairs has vide its circular dated
May 5, 2020 read with circulars dated April 8, 2020 and April 13, 2020 (collectively referred to as ‘MCA Circulars’) permitted
the holding of the Annual General Meeting (‘AGM’) through VC/OAVM, without the physical presence of the Members at
a common venue. In compliance with the provisions of the Act, SEBI Listing Regulations, and MCA Circulars, the AGM of
the Company is being held through VC/OAVM. The deemed venue of the AGM shall be Bombay House, 24, Homi Mody
Street, Fort, Mumbai – 400 001
April 1 to March 31
Financial Year
Book Closure Dates Saturday, August 8, 2020 to Thursday, August 20, 2020 (Both days inclusive)
Dividend Payment
Date
On and from Monday, August 24, 2020, if approved by shareholders at the AGM
Note: SEBI vide its circular SEBI/HO/CFD/CMD1/CIR/P/2020/79 dated May 12, 2020 granted relaxations to the listed entities
in relation to compliance with certain provisions of SEBI Listing Regulations in view of the COVID-19 situation, accordingly,
where the Bank details are unavailable for electronic transfer, the Company shall dispatch the dividend warrant/Bankers’
cheque/demand draft to Members, at the earliest once the normalcy is restored.
Disclosures regarding the re-appointment of Director
In terms of relevant provisions of the Act, as amended,
liable to retire
Mr. N. Chandrasekaran
by rotation at the ensuing AGM and being eligible, seeks
re-appointment.
(DIN:00121863)
is
The Board recommends the above re-appointment for approval of
the Shareholders at the ensuing AGM.
The detailed profile of Mr. Chandrasekaran and particulars of his
experience, skills or attributes that qualify him for Board Membership
is provided in the Notice convening the AGM.
Communication to the Shareholders
We send quarterly, half-yearly, and yearly 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 online
filing systems. The same are also available on the Company’s website
www.tatasteel.com
The Company’s website is a comprehensive reference on it’s
leadership, management, vision, mission, policies, corporate
governance,
relations, products and
investor
processes and updates and news. The section on ‘Investors’ serves
to inform the Shareholders, by giving complete financial details,
sustainability,
142
stock exchange compliances
including shareholding patterns
and updated credit ratings amongst others, corporate benefits,
information relating to Stock Exchanges, information on unclaimed
dividend of Shareholders, details of Registrars & Transfer Agent and
frequently asked questions. Investors can also submit their queries
by submitting ‘Shareholder Query Form’ and get feedback online.
The section on ‘Media’ includes all major press reports and releases,
awards and campaigns by the Company, amongst others.
Investor grievance and share transfer system
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.
During the Financial Year 2018-19, the SEBI and MCA have mandated
the existing members of the Company who hold securities in physical
form and intend to transfer their securities after April 1, 2019, can
do so only in dematerialised form. Therefore, Members holding
shares in physical form were requested to consider converting their
shareholding to dematerialised form.
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
Depository Participant (‘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.
Shareholders should communicate with TSR Darashaw Consultants
Private Limited, (formerly TSR Darashaw Limited) the Company’s
Registrars and Transfer Agent (‘RTA’) quoting their folio number or
Depository Participant ID (‘DP ID’) and Client ID number, for any
queries to their securities.
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR 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 and no penalties and/or
strictures have been imposed on the Company in this regard. There
has been no instance of non-compliance with any legal requirements
particularly with any requirement of the Corporate Governance
Report, during the year under review.
None of the Company’s listed securities are suspended from trading.
During the year under review, the Company did not raise any funds
through preferential allotment or qualified institutions placement
as specified under Regulation 32(7A) of the SEBI Listing Regulations.
However, during the year under review, the Company has issued
Non-Convertible Debentures ('NCDs') on private placement basis,
listed on debt market segment of BSE Limited. The Company affirms
that there has been no deviation or variation in utilisation of proceeds
of the listed NCDs of the Company.
Certificates from Practising Company Secretaries
As required by Regulation 34(3) and Schedule V of the SEBI Listing
Regulations, the certificate given under Part E by Parikh & Associates,
(Firm Registration No. P1988MH009800), Practicing Company
Secretaries, is annexed to this report.
As required by Clause 10 (i) of Part C under Schedule V of the
SEBI Listing Regulations, the Company has received a certificate
from Parikh & Associates (Firm Registration No. P1988MH009800),
Practicing Company Secretaries certifying that none of our Directors
have been debarred or disqualified from being appointed or
continuing as Directors of the Company by SEBI or MCA or such other
statutory authority.
CEO and CFO certification
As required under Regulation 17(8) read with Schedule II Part B of
the SEBI Listing Regulations, the Chief Executive Officer & Managing
Director and Executive Director & Chief Financial Officer have given
appropriate certifications to the Board of Directors.
Reconciliation of Share Capital Audit
In terms of Regulation 40(9) and 61(4) of the SEBI 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
National Securities Depository Limited (‘NSDL’) and Central
(collectively
Depository Services
‘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 Depositories). The Audit Report
(‘CDSL’)
Limited
(India)
is disseminated to the Stock Exchanges on quarterly basis and
is also available on our website https://www.tatasteel.com/
investors/stock-exchange-compliances/reconciliation-of-share-
capital-audit-reports/
Related Party Transactions
All transactions entered into with related parties as defined under
the Act, and Regulation 23 of the SEBI Listing Regulations, each as
amended, 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. Certain transactions which were
repetitive in nature were approved through omnibus route by the
Audit Committee. The Company has not entered into any materially
significant related party transaction. The Board of Directors has
approved and adopted a Policy on Related Party Transactions and
the same is updated from time to time. The Policy is available on the
Company’s website https://www.tatasteel.com/media/5891/policy-
on-related-party-transactions.pdf
During the Financial Year 2019-20, the Company did not have any
material pecuniary relationship or transactions with Non-Executive
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.
The Board has received disclosures from KMPs and Members of
Senior Management 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
https://www.tatasteel.com/media/5890/policy-on-determining-
material-subsidiaries.pdf The Company is in compliance with the
provisions governing material subsidiaries.
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 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, in addition, Directors, employees, and
vendors, may approach the Chief Ethics Counsellor to make any
such protected disclosure. During the year under review, no person
has been denied access to the Chairman of the Audit Committee.
Details of the Vigil Mechanism are given in the Board’s Report.
review,
the year under
the
During
Whistle-blower policy for Directors and Employees to include
‘reporting of incidents of leak or suspected leak of Unpublished
Price Sensitive Information (UPSI)’ as required in terms of the
provisions of the SEBI Insider Trading Regulations as amended.
the Company
revised
143
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 The revised Policy is available on the Company’s website at
https://www.tatasteel.com/corporate/our-organisation/policies/
Disclosures as per the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013
The disclosure regarding the complaints of sexual harassment are
given in the Board’s Report.
Consolidated Fees paid to Statutory Auditors
During the Financial Year 2019-20, the total fees for all services paid
by the Company and its subsidiaries, on a consolidated basis, to Price
Waterhouse & Co Chartered Accountants LLP, Statutory Auditors
(Firm Registration Number: 304026E/E-300009) of the Company is
as under:
Table N: Consolidated fees paid to statutory auditors:
Particulars
Services as statutory auditors
Taxation matters and audit
Other services
Out-of-pocket expenses
Total
(` crore)
Amount
27.92
2.85
9.53
1.32
41.62
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-up and
Partly paid-up Ordinary Shares under the Depository System are
INE081A01012 and IN9081A01010 respectively.
The Company has 118,85,40,293 Ordinary Shares (including Fully
paid-up and Partly paid-up Ordinary Shares) representing 98.71%
of the Company’s share capital which is dematerialised as on
March 31, 2020.
Further, outstanding GDR Shares 1,25,61,401 (March 31, 2019:
1,34,73,958) of face value `10 per share represent the shares
underlying GDRs which were issued during 1994 and 2010. Each GDR
represents one underlying Fully paid-up Ordinary Share.
Designated e-mail address for investor services
To serve our investors better and as required under Regulation
46(2)(j) of the SEBI Listing Regulations, the designated e-mail
address for investor complaints is cosec@tatasteel.com The e-mail
address for grievance redressal is 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 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 the Company had been made a party. However, these cases
are not material in nature.
Commodity Price Risk
Commodities are critical inputs to the manufacturing of steel.
Volatility in commodity prices is an inherent market risk for the
Company as it impacts the profitability and cash flows. However,
steel prices, over the long-term, tend to follow the trend of
commodity prices which provides a natural hedge to the business.
In India, the Company has captive iron ore that meet 100% of its iron
ore requirements and coal mines which meet about a quarter of its
coking coal requirement. These captive mines provide a structural
hedge to the price risk of these commodities.
A dedicated commodity sourcing team has been set up, which
engages with key raw material producers across the globe and the
commodity market at large to optimise sourcing. The team also
does a regular risk assessment of the supply chain and proactively
engages in diversification of vendors, geographies, development
of substitutes, and value-in-use ('VIU') optimisation framework
to mitigate, to the extent practical, the impact of disruptions in
the supply chain.
To address the short-term price volatility, the Company also hedges certain commodities in the derivatives market. Exposure of the Company
to commodity and commodity risk faced by the Company throughout the year:
1.
2.
Total exposure of the listed entity to commodities: `11,965 crore
Exposure of the listed entities to various commodities (based on materiality):
Exposure in
INR towards
the particular
commodity (` crore)
Exposure in Quantity
terms towards the
particular commodity
(Tonnes)
8,542
900
88,01,000
1,05,000
% of such exposure hedged through commodity derivatives
Domestic Market
International Market
OTC
Nil
Nil
Exchange
Nil
Nil
OTC
Nil
Nil
Exchange
Nil
Nil
Total
Nil
Nil
Commodity Name
Coal
Refractories
144
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Compliance with discretionary requirements
All mandatory requirements of the SEBI Listing Regulations have
been complied with by the Company. The status of compliance with
the discretionary requirements, as stated under Part E of Schedule II
to the SEBI Listing Regulations are as under:
Shareholder Rights: The half-yearly financial performance of the
Company is sent to all the Members whose e-mail IDs are registered
with the Company/Depositories. The results are also available on the
Company’s website at https://www.tatasteel.com/investors/financial-
performance/financial-results/
The Board: As on the date of the Report, the positions of the
Chairman and
separate.
Mr. N. Chandrasekaran is the Non-Executive Chairman of the Board
and Mr. T. V. Narendran is the Chief Executive Officer & Managing
Director of the Company.
the Chief Executive Officer are
Modified opinion(s) in Audit Report: The Auditors have expressed
an unmodified opinion in their report on the financial statements
of the Company.
Reporting of Internal Auditor: The Internal Auditor reports to the
Audit Committee.
Maintenance of Chairman’s office: The Non-Executive Chairman
has a separate office which is not maintained by the Company.
Table O: Distribution of Shareholding of Ordinary Shares
Fully paid-up Ordinary Shares
Share Holding
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
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
2020
28,060
1,40,836
2,65,965
1,37,982
1,30,363
1,02,596
36,562
29,040
2,796
1,812
287
8,76,299
2019
23,884
1,20,513
2,37,534
1,24,173
1,23,759
96,515
34,385
28,091
2,775
1,841
323
7,93,793
2020
3.20
16.07
30.35
15.75
14.88
11.71
4.17
3.31
0.32
0.21
0.03
100.00
2019
3.01
15.18
29.93
15.64
15.59
12.16
4.33
3.54
0.35
0.23
0.04
2019
23,884
8,09,676
69,86,169
96,55,582
1,79,62,365
2,98,88,109
2,43,91,805
5,57,76,758
1,92,47,829
4,49,56,780
91,67,90,723
100.00 112,64,90,211 112,64,89,680
2020
28,060
9,44,762
79,28,111
1,09,44,618
1,91,59,949
3,21,16,622
2,61,32,184
5,74,75,276
1,94,09,285
4,18,34,519
91,05,16,825
2020
0.00
0.09
0.71
0.97
1.70
2.85
2.32
5.10
1.72
3.71
80.83
100.00
2019
0.00
0.07
0.62
0.86
1.60
2.65
2.17
4.95
1.71
3.99
81.38
100.00
Partly paid-up Ordinary Shares
Share Holding
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
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
2020
5,765
56,521
70,096
16,807
9,405
6,972
2,893
2,493
362
305
41
1,71,660
2019
5,793
58,209
72,068
16,844
9,326
6,458
2,436
1,899
253
257
45
1,73,588
2020
3.36
32.93
40.83
9.79
5.48
4.06
1.69
1.45
0.21
0.18
0.02
100.00
2019
3.34
33.53
41.52
9.70
5.37
3.72
1.40
1.09
0.15
0.15
0.03
100.00
2020
5,765
3,29,688
17,21,756
12,81,572
14,07,722
23,14,888
21,77,708
52,71,622
25,56,671
78,88,152
5,26,81,244
7,76,36,788
2019
5,793
3,39,421
17,64,981
12,75,721
13,88,448
21,22,136
18,15,750
40,32,985
18,11,588
69,21,073
5,61,58,809
7,76,36,705
2020
0.01
0.43
2.22
1.65
1.81
2.98
2.80
6.79
3.29
10.16
67.86
100.00
2019
0.01
0.44
2.27
1.64
1.79
2.73
2.34
5.19
2.33
8.92
72.34
100.00
Transfer of Unclaimed Dividend and Shares to Investor
Education and Protection Fund (IEPF)
Pursuant to the provisions of the Act, read with Investor Education
Protection Fund Authority (Accounting, Audit, Transfer and Refund)
Rules, 2016, as amended (‘Rules’), the dividends, unclaimed for
a period of seven years from the date of transfer to the Unpaid
Dividend Account of the Company are liable to be transferred to
the IEPF. Accordingly, unclaimed dividends of Shareholders for
FY 2012-13 lying in the unclaimed dividend account of the Company
as on September 15, 2020 will be due for transfer to IEPF on the
145
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 due date i.e. September 16, 2020. 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 consecutive period of seven years
from the date of transfer of the dividend to the unpaid dividend
account is also mandatorily required to be transferred to the IEPF
Authority established by the Central Government.
The Company had 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 September 18, 2019. The communication was also published in
national English and local Marathi newspapers.
The details of unclaimed dividends and shares transferred to IEPF
within statutory timelines during Financial Year 2019-20 are as follows:
Financial Year
Amount of Unclaimed
Dividend Transferred (`)
Number of Shares
Transferred
2011-2012
8,20,10,532
6,66,186
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 web-form IEPF-5.
Upon submitting a duly completed form, Shareholders are required
to take 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
instructions for the web-form can be downloaded from our website
www.tatasteel.com under ‘unclaimed dividend’ tab in ‘investor’
section and simultaneously from the website of Ministry of Corporate
Affairs at www.iepf.gov.in
Table P: The status of dividend remaining unclaimed is given hereunder:
Unclaimed Dividend Status
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
2011-12
Transferred to the
IEPF of the Central
Government
For the Financial
Years 2012-13 to
2018-19
Amount lying in
respective Unpaid
Dividend Accounts
Whether it can
be claimed
Can be claimed from
Action to be taken
Yes
Yes
Yes
Office of Registrar of Companies,
Central Government Office Building,
‘A’ Wing, 2nd Floor, Next to Reserve
Bank of India, CBD, Belapur – 400 614
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 5
Submit web-form
the
Registered Office of the Company
addressed to the Nodal Officer along
with complete documents.
to
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 Consultants Private
Limited,
TSR Darashaw
Limited) Registrars and Transfer Agent
(formerly
Letter on plain paper
The Company has hosted on its website the details of the unclaimed dividend/unclaimed shares/interest/principal amounts for the
Financial Year 2018-19 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
Act, as amended).
Table Q: Details of date of declaration & due date for transfer to IEPF:
Dividend Per Fully paid-up
Ordinary Share
8
10
8
8
10
10
13
Dividend Per Partly paid-up
Ordinary Share
-
-
-
-
-
2.504
3.25
Date of Declaration
Due date for Transfer to IEPF
August 14, 2013
August 14, 2014
August 12, 2015
August 12, 2016
August 8, 2017
July 20, 2018
July 19, 2019
September 16, 2020
September 16, 2021
September 16, 2022
September 17, 2023
September 9, 2024
August 22, 2025
August 22, 2026
Financial Year
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
146
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
Shareholders are requested to contact the RTA for encashing the
unclaimed dividend/interest/principal amount, if any, standing to
the credit of their account.
encashment/delay in transit amongst others. They 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:
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 Act, may submit
to RTA the prescribed Forms SH-13/SH-14. The Nomination
Form can be downloaded
the Company’s website
www.tatasteel.com under the section ‘Investors’.
from
Shares held in Electronic Form
Shareholders holding shares in electronic form may please note that
instructions regarding change of address, bank details, 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-mail ids,
nomination and power of attorney should be given to the Company’s
RTA i.e. TSR Darashaw Consultants Private Limited (formerly TSR
Darashaw Limited).
Updation of bank details for remittance of dividend/cash
benefits in electronic form
The 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 SEBI 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
•
•
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 Consultants Private Limited, (formerly 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.
Shareholders to note that those who are unable to receive the
dividend directly in their bank accounts through Electronic Clearing
Service or any other electronic means, due to non-registration of
the Electronic Bank Mandate, the Company shall dispatch the
dividend warrant/Bankers’ cheque/demand draft to such Members,
upon normalisation of postal services and other activities that have
been disrupted due to outbreak of COVID-19 pandemic.
Listing on Stock Exchanges
As on March 31, 2020, the Company has issued Fully paid-up Ordinary
Shares and Partly paid-up 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.
Table R: ISIN and Stock Code 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
INE081A01012
(Fully paid-up
Ordinary Shares)
Stock Code
500470
(Fully paid-up
Ordinary Shares)
IN9081A01010
(Partly paid-up
Ordinary Shares)
890144
(Partly paid-up
Ordinary Shares)
INE081A01012
(Fully paid-up
Ordinary Shares)
TATASTEEL
(Fully paid-up
Ordinary Shares)
IN9081A01010
(Partly paid-up
Ordinary Shares)
TATASTEELPP
(Partly paid-up
Ordinary Shares)
147
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 Table S: International Listings of securities issued by the
Company are as under:
Global Depository Receipts (‘GDRs’) as on March 31, 2020:
Table T (i): Perpetual Hybrid Securities in the form of
Non-Convertible Debentures as on March 31, 2020, are
listed on the Wholesale Debt Market segments of the Stock
Exchanges as under:
GDRs
ISIN
Listed on
1994
US87656Y1091
Luxembourg
Stock Exchange
2009
US87656Y4061
London Stock
Exchange
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 T (ii): Unsecured Redeemable Non-Convertible Debentures (‘NCDs’) as on March 31, 2020, are listed on the Wholesale
Debt Market segment of the Stock Exchanges as under:
Coupon Rate (%)
ISIN
Principal
Amount
Maturity
Amount
Date
9.15
2.00
8.15
INE081A08207
500.00
500.00
January 24, 2021
INE081A08181
1,500.00
1,500.00
April 23, 2022
INE081A08215
1,000.00
1,000.00
October 1, 2026
10.25
INE081A08140
500.00
10.25
INE081A08157
2,500.00
9.8359
INE081A08223
4,315.00
166.67
166.67
166.66
833.34
833.33
833.33
1,078.75
1,078.25
1,078.25
1,078.25
December 22, 2028
December 22, 2029
December 22, 2030
January 6, 2029
January 6, 2030
January 6, 2031
February 28, 2031
March 1, 2032
March 1, 2033
March 1, 2034
7.70
INE081A08231
670.00
670.00
March 13, 2025
Notes:
Credit Ratings
AA by CARE & AA (Stable)
by Brickwork
AA by CARE & AA (Positive)
by Brickwork
AA by CARE & AA (Positive)
by Brickwork
AA by CARE
AA CARE and AA India
Ratings
AA CARE and AA India
Ratings
(` in crore)
Name of the Stock
Exchange on which the
NCDs are listed
NSE
NSE
BSE
NSE
BSE
BSE
(a)
10.40% NCDs (ISIN: INE081A08124) aggregating to `650.9 crore were redeemed on the due date, May 15, 2019.
(b)
11% NCDs (ISIN: INE081A08132) aggregating to `1,500 crore was redeemed on May 17, 2019 (May 19, 2019, the due date for redemption
of the said NCDs was a non-business day. In accordance with the terms of issue, the NCDs were therefore redeemed on the previous
working day i.e. May 17, 2019).
Credit Rating
Details on credit rating are provided in the Board’s Report and the same is available on our website www.tatasteel.com
148
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Market Information
Table U: Market Price Data– High, Low (based on daily closing price) and volume (no. of shares traded) during each month in
the Financial Year 2019-20 of Fully Paid-up Ordinary Shares, on BSE and NSE:
BSE Limited (BSE)
National Stock Exchange of India Limited (NSE)
Month
April 2019
May 2019
June 2019
July 2019
August 2019
September 2019
October 2019
November 2019
December 2019
January 2020
February 2020
March 2020
Yearly
High (`)
556.45
554.85
510.70
510.50
419.55
377.50
391.00
432.00
474.70
501.95
477.95
387.60
556.45
Low (`)
510.90
463.20
472.75
414.70
333.35
331.40
324.80
385.20
399.45
438.75
381.55
254.15
254.15
Volume (No. of
shares traded)
1,02,33,971
1,43,00,089
91,37,696
1,18,09,542
1,82,09,556
1,69,15,494
1,75,14,183
2,11,60,284
1,88,10,200
1,31,56,437
1,58,25,002
2,33,54,235
19,04,26,689
High (`)
557.20
554.95
510.70
510.30
420.00
377.35
390.20
432.10
474.75
502.10
477.60
387.50
557.20
Low (`)
510.75
462.95
472.30
415.05
333.70
331.40
324.80
385.10
399.65
446.25
381.75
254.05
254.05
Volume (No. of
shares traded)
18,42,30,066
24,58,69,834
17,86,69,420
18,38,03,593
28,18,93,711
25,87,61,325
28,23,70,517
37,59,26,811
35,40,75,114
27,21,37,707
28,55,01,434
40,58,67,529
3,30,91,07,061
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 above Table containing Market Information.
TABLE V: Performance of the share price of the Company in comparison to broad-based indices like BSE and Nifty Sensex are
given below:
Month
April 2019
May 2019
June 2019
July 2019
August 2019
September 2019
October 2019
November 2019
December 2019
January 2020
February 2020
March 2020
Closing Price of Equity
Shares at BSE
556.45
487.90
504.40
431.90
344.95
359.80
380.50
427.40
472.00
438.75
381.55
269.75
BSE SENSEX
39,031.55
39,714.20
39,394.64
37,481.12
37,332.79
38,667.33
40,129.05
40,793.81
41,253.74
40,723.49
38,297.29
29,468.49
Closing Price of Equity
Shares at NSE
557.20
488.30
504.40
432.05
344.90
360.50
380.55
427.50
472.05
438.70
381.75
269.60
Nifty
11,748.15
11,922.80
11,788.85
11,118.00
11,023.25
11,474.45
11,877.45
12,056.05
12,168.45
11,962.10
11,201.75
8,597.75
Secretarial Audit
Green Initiative
The Board of Directors has appointed Parikh and Associates (Firm
Registration No. P1988MH009800), Practising Company Secretaries,
to conduct secretarial audit of its records and documents for the
Financial Year 2019-20. The secretarial audit report confirms that
the Company has complied with all applicable provisions of the
Companies Act 2013, Secretarial Standards, Depositories Act, 2018,
SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, SEBI (Prohibition of Insider Trading) Regulations, 2015, each
as amended and all other regulations and guidelines of SEBI as
applicable to the Company. The Secretarial Audit Report forms part
of the Board’s 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 RTA.
Shareholders who have not registered their e-mail addresses 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 No.
149
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 Major Plant Locations:
Tata Steel Kalinganagar Plant
Tata Steel Limited
Kalinganagar Industrial Complex
Duburi, Dist. Jajpur
Odisha – 755 026
Tata Steel Jamshedpur Plant
Tata Steel Limited
P.O. Bistupur
Jamshedpur – 831 001
Cold Rolling Mill Complex, Bara
Tata Steel Limited
P.O. Agrico, P.S. Sidhgora
Block: Jamshedpur, Dist. Purbi Singhbhum
Pin – 831 009
Tata Steel Growth Shop
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
Wire Division, Tarapur
Tata Steel Limited - Wire Division
Plot F8 & A6, Tarapur MIDC
P.O. Boisar, Dist. Palghar – 401 506
Bamebari Iron & Manganese Mine
Tata Steel Limited
P.O. Bamebari, Joda, Dist. Keonjhar
Odisha – 758 086
Wire Division, Indore
Indore – Tata Steel Limited, Wire Division
Plot 14/15/16 & 32 Industrial Estate
Laxmibai Nagar, Fort Indore
Madhya Pradesh - 452 006
Tiringpahar Iron & Manganese Mine
Tata Steel Limited
P.O. Bamebari, Joda, Dist. Keonjhar
Odisha – 758 086
Wire Division, Pithampur
Pithampur 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
Sukinda Chromite Mine
Tata Steel Limited
P.O. Kalarangiatta, Dist. Jajpur
Odisha – 755 028
Noamundi Iron Mine
Tata Steel Limited
West Singhbhum, Noamundi
Jharkhand – 833 217
Ferro Alloys Plant, Bamnipal
Tata Steel Limited
P.O. Bamnipal, Dist. Keonjhar
Odisha – 758 082
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 Alloys Plant, Joda
Tata Steel Limited
Dist. Keonjhar, Odisha – 758 034
Ferro Chrome Plant, Gopalpur
Tata Steel Limited
P.O. Chamakhandi, Chatrapur Tahsil
Dist. Ganjam, Odisha – 761 020
Cold Rolling Complex (West)
Tata Steel Limited
Plot No. S 76, Tarapur Industrial Area
P Box 22, Tarapur Industrial Estate Post Office
District Palghar, Maharashtra – 401 506
Joda West Iron & Manganese Mine
Tata Steel Limited
P.O. Bichakundi, Joda, Dist. Keonjhar
Odisha – 758 034
150
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Name, designation & address of
Compliance Officer:
Mr. Parvatheesam Kanchinadham,
Company Secretary & Chief Legal Officer
(Corporate & Compliance)
Bombay House, 24, Homi Mody Street, Fort,
Mumbai – 400 001.
Tel.: +91 22 6665 7330
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
E-mail: ir@tatasteel.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
Stock Exchanges:
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-400051.
Tel.: +91 22 2659 8100; Fax: +91 22 2659 8120
Website: www.nseindia.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
For the convenience of investors based
in the following cities, correspondence/
documents will also be accepted at the
following branches/agencies of TSR Darashaw
Consultants Private Limited (formerly TSR
Darashaw Limited):
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
Kolkata
Tata Centre, 1st Floor,
43, Jawaharlal Nehru Road,
Kolkata – 700 071
Contact person: Mr. Rijit Mukherjee
Tel.: +91-33-2288 3087
Fax: +91-33-2288 3062
E-mail: tsrdlcal@tsrdarashaw.com
Central Depository Services (India) Limited
Marathon Futurex, A-Wing, 25th Floor,
NM Joshi Marg,
Lower Parel (East), Mumbai – 400 013.
Tel.: +91 22 2305 8640/8624/8639/8663
E-mail: helpdesk@cdslindia.com,
Investor Grievance: complaints@cdslindia.com
Website: www.cdslindia.com
New Delhi
Plot No. 2/42, Sant Vihar,
Ansari Road Daryaganj,
New Delhi – 110 002
Contact person: Mr. Shyamalendu Shome
Tel.: +91-11-2327 1805
Fax: +91-11-23271802
E-mail: tsrdldel@tsrdarashaw.com
Registrars and Transfer Agents:
TSR Darashaw Consultants Private Limited
(formerly TSR Darashaw Limited)
CIN: U74999MH2018PTC307859
Unit: Tata Steel Limited,
6-10, Haji Moosa Patrawala Industrial Estate,
Near 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. (IST) to 3.30 p.m. (IST)
E-mail: csg-unit@tsrdarashaw.com
Website: www.tsrdarashaw.com
Investor Contact:
Registered Office:
Bombay House, 24, Homi Mody Street,
Fort, Mumbai – 400 001.
Tel.: +91 22 6665 8282;
E-mail: cosec@tatasteel.com
Website: www.tatasteel.com
CIN: L27100MH1907PLC000260
Jamshedpur
Bungalow No. 1, ‘E’ Road,
Northern Town Bistupur,
Jamshedpur – 831 001
Contact person: Mr. Subrato Das
Tel.: +91-657-2426 616
Fax: +91-657-2426 937
E-mail: tsrdljsr@tsrdarashaw.com
Ahmedabad
Shah Consultancy Services Ltd.
3, Sumatinath Complex,
Pritam Nagar Akhada Road, Ellisbridge,
Ahmedabad – 380 006
Contact person: Mr. Suresh Shah
Tel.: +91-79-2657 6038
Fax: +91-79-2657-6038
E-mail: shahconsultancy8154@gmail.com
Bengaluru
503 Barton Centre, 5th Floor
84, Mahatma Gandhi Road,
Bengaluru – 560 001
Contact person: Mr. Jaymohan K.
Tel.: +91-80-2532 0321
Fax: +91-80-2558 0019
E-mail: tsrdlbang@tsrdarashaw.com
151
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 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
Remuneration Policy of Directors, KMPs
& Other Employees
Tata Code of Conduct
Criteria for Making Payments to
Non-Executive Directors
Corporate Social Responsibility Policy
Code of Conduct for Non-Executive
Directors
Policy on Related Party Transactions
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
Reconciliation of Share Capital Audit
Report
Website Details/Links
https://www.tatasteel.com/media/6086/dividend-policy-final.pdf
https://www.tatasteel.com/corporate/our-organisation/leadership/
https://www.tatasteel.com/media/2917/terms-and-conditions-of-appointment-of-independent-
directors.pdf
https://www.tatasteel.com/media/6816/policy-on-appointment-and-removal-of-directors.pdf
https://www.tatasteel.com/media/12333/familiarization-programme-for-independent-directors-
for-website.pdf
https://www.tatasteel.com/media/6817/remuneration-policy-of-directors-etc.pdf
https://www.tatasteel.com/media/1864/tcoc.pdf
https://www.tatasteel.com/media/3931/criteria-of-making-payments-to-neds.pdf
https://www.tatasteel.com/media/1879/csr-policy-version-20.pdf
https://www.tatasteel.com/media/3930/tcoc-non-executive-directors.pdf
https://www.tatasteel.com/media/5891/policy-on-related-party-transactions.pdf
https://www.tatasteel.com/media/5890/policy-on-determining-material-subsidiaries.pdf
https://www.tatasteel.com/media/9942/whistle-blower-policy-for-business-associates.pdf
https://www.tatasteel.com/media/11322/revised-whistleblower-policy-december-18-2019.pdf
https://www.tatasteel.com/media/6843/code-of-corporate-disclosure-practices.pdf
https://www.tatasteel.com/media/6844/tata-steel-determination-of-materiality-policy.pdf
https://www.tatasteel.com/media/6845/tata-steel-document-retention-policy.pdf
https://www.tatasteel.com/media/7526/posh.pdf
https://www.tatasteel.com/investors/stock-exchange-compliances/reconciliation-of-share-capital-
audit-reports/
152
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR 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 at www.tatasteel.com
I confirm that the Company has in respect of the Financial Year ended March 31, 2020, 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 & Managing Director as on March 31, 2020.
sd/-
T. V. NARENDRAN
Chief Executive Officer &
Managing Director
DIN: 03083605
Practising Company Secretaries’ Certificate on Corporate Governance
Mumbai
June 29, 2020
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, 2020, 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 and considering the relaxations granted by the Ministry of Corporate Affairs and Securities and Exchange Board of
India warranted due to the spread of the COVID-19 pandemic, we certify that the Company has complied with the conditions of Corporate
Governance as stipulated in the SEBI Listing Regulations for the year ended March 31, 2020.
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
June 29, 2020
For Parikh & Associates
Practising Company Secretaries
sd/-
P. N. PARIKH
FCS: 327 CP: 1228
UDIN: F000327B000393588
153
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
Practising Company Secretaries’ Certificate on Directors
To,
The Members
Tata Steel Limited
Bombay House, 24-Homi Mody Street,
Fort, Mumbai – 400 001
We have examined the relevant registers, records, forms, returns and disclosures received from the Directors of Tata Steel Limited having
CIN: L27100MH1907PLC000260 and having registered office at Bombay House, 24, Homi Mody Street, Fort, Mumbai – 400 001 (hereinafter
referred to as 'the Company'), produced before me/us by the Company for the purpose of issuing this Certificate, in accordance with
Regulation 34(3) read with Schedule V Para-C Sub-clause 10(i) of the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015.
In our opinion and to the best of our information and according to the verifications (including Directors Identification Number ('DIN') status
at the portal www.mca.gov.in) as considered necessary and explanations furnished to us by the Company & its officers and considering
the relaxations granted by the Ministry of Corporate Affairs and Securities and Exchange Board of India warranted due to the spread of the
COVID-19 pandemic, we hereby certify that none of the Directors on the Board of the Company as stated below for the Financial Year ended
March 31, 2020 have been debarred or disqualified from being appointed or continuing as Directors of companies by the Securities and
Exchange Board of India, Ministry of Corporate Affairs ('MCA'), or any such other Statutory Authority.
Sl. No. Name of Director
N. Chandrasekaran
1.
Saurabh Agrawal
2.
V. K. Sharma
3.
Mallika Srinivasan
4.
O. P. Bhatt
5.
Dr. Peter Blauwhoff
6.
Aman Mehta
7.
Deepak Kapoor
8.
T. V. Narendran
9.
Koushik Chatterjee
10.
DIN
00121863
02144558
02449088
00037022
00548091
07728872
00009364
00162957
03083605
00004989
Date of Appointment in Company *
January 13, 2017
August 10, 2017
August 24, 2018
May 21, 2012
June 10, 2013
February 7, 2017
March 29, 2017
April 1, 2017
August 14, 2014**
November 9, 2012
*The date of appointment is as per the MCA Portal.
**Mr. T. V. Narendran was appointed as the Managing Director of the Company effective September 19, 2013 and the said appointment was approved by the
Shareholders at the Annual General Meeting held on August 14, 2014.
Ensuring the eligibility for the appointment/continuity of every Director on the Board is the responsibility of the management of the Company.
Our responsibility is to express an opinion on these based on our verification. This certificate 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.
For Parikh & Associates
Practising Company Secretaries
sd/-
P. N. PARIKH
FCS: 327 CP: 1228
UDIN: F000327B000393621
Mumbai
June 29, 2020
154
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR ANNEXURE 5
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]
Ratio of the remuneration of each Director to the median remuneration of all the employees of the Company and % increase
in remuneration of Director/KMP of the Company for the Financial Year:
Median remuneration of all the employees of the Company for the Financial Year 2019-20
The percentage increase in the median remuneration of employees in the Financial Year 2019-20
The number of permanent employees on the rolls of Company as on March 31, 2020
`10,67,548
6.89%
32,364
Name of Director
Non-Executive Directors
Mr. N. Chandrasekaran(1)
Mr. V. K. Sharma(2)
Mr. Saurabh Agrawal(3)
Independent Directors
Ms. Mallika Srinivasan
Mr. O. P. Bhatt
Dr. Peter Blauwhoff
Mr. Aman Mehta
Mr. Deepak Kapoor
Executive Directors/KMP
Mr. T. V. Narendran(4)
Mr. Koushik Chatterjee(4)
Mr. Parvatheesam Kanchinadham
Remuneration for
Financial Year 2019-20
(` lakh)
% increase in
remuneration
Ratio of remuneration to median
remuneration of all employees(5)
-
77.90
-
123.20
177.20
106.80
95.60
105.70
1,122.01
1,024.95
256.62
-
*
-
(4.50)
(7.03)
(9.34)
0.84
(7.28)
(0.06)
(5.28)
#
-
*
-
11.54
16.60
10.00
8.96
9.90
105.10
96.01
-
*Since remuneration of Mr. V. K. Sharma for FY 2018-19 is only for part of the year, the ratio of his remuneration is not comparable and hence increase in
remuneration is not stated.
#Since remuneration of Mr. Parvatheesam Kanchinadham for FY 2018-19 is only for part of the year, the increase in remuneration is not stated.
Notes:
(1) As a policy, Mr. N. Chandrasekaran, Chairman, has abstained from receiving commission from the Company and hence not stated.
The sitting fees (`2.9 lakh) is paid to Mr. V. K. Sharma and the commission (`75 lakh) is paid to Life Insurance Corporation of India.
(2)
In line with the internal guidelines of the Company no payment is made towards commission to the Non-Executive Directors of the
(3)
Company, who are in full time employment with any other Tata Company and hence not stated.
Mr. T. V. Narendran and Mr. Koushik Chatterjee do not receive any remuneration or commission from any of the subsidiary companies in
which they are Members of the Board.
The ratio of remuneration to median remuneration is based on remuneration paid during the period April 1, 2019 to March 31, 2020.
(5)
(4)
During the year, the average percentage increase in salary of the Company’s employees, excluding the Key Managerial Personnel (‘KMP’) was
4.17%. The total remuneration of the KMPs for the Financial Year 2019-20 was `2,403.58 lakh as against `2,374.69 lakh during the previous year.
The percentage increase in remuneration during the Financial Year 2019-20 to Mr. T. V. Narendran, CEO & Managing Director was (0.06)% and
to Mr. Koushik Chatterjee, Executive Director & CFO was (5.28)%. Remuneration is as per the remuneration policy of the Company.
Mumbai
June 29, 2020
On behalf of the Board of Directors
sd/-
N. CHANDRASEKARAN
Chairman
DIN: 00121863
155
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
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Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
ANNEXURE 7
Companies that have become/ceased to be Company’s Subsidiaries or
Associate Companies (including Joint Venture Companies)
The name of company which has become Subsidiary during the year:
Sl. No. Name of the company
Subsidiary
1.
Angul Energy Limited (formerly Bhushan Energy Limited)*
The names of companies which have ceased to become Subsidiaries or Associate Companies (including Joint Venture Companies)
during the year:
NatSteel (Xiamen) Limited
Automotive Laser Technologies Limited
Harrowmills Properties Limited
British Tubes Stockholding Limited
CPN (85) Limited
Midland Steel Supplies Limited
Kalimati Coal Company Pty. Ltd.
Cogent Power Inc.
NatSteel Vina Co. Ltd.
Tata Steel International (Singapore) Pte. Ltd.
Esmil B.V.
Beheermaatschappij Industriele Produkten B.V.
Tata Steel Nederland Star-Frame BV
Corus Primary Aluminium B.V.
Corus Steel Service STP LLC
Corus Ukraine Limited Liability Company
Tata Steel International (Canada) Holdings Inc
Tata Steel International (Finland) OY
Sl. No. Name of the company
Subsidiary
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
Associate
1.
2.
3.
Hewitt Robins International Ltd.
Hewitt Robins International Holdings Ltd.
Angul Energy Limited (formerly Bhushan Energy Limited)*
*During the year under review, the Company through its indirect subsidiary, Tata Steel BSL Limited, completed the acquisition of controlling stake in Bhushan
Energy Limited (name changed to Angul Energy Limited effective February 27, 2020), pursuant to the Resolution Plan as approved by the National Company Law
Tribunal (Principal Bench, New Delhi) vide its Order dated May 30, 2019, under the Corporate Insolvency and Resolution Process of the Insolvency and Bankruptcy
Code, 2016. Accordingly, Angul Energy Limited has ceased to be an indirect associate company of the Company and is now an indirect subsidiary company.
Note:
Dutch Lanka Trailer LLC ('DLT'), ceased to be a step down associate of the Company effective December 5, 2018, due to divestment of stake by TRF Limited
(associate of the Company and indirect holding company of DLT).
Mumbai
June 29, 2020
170
On behalf of the Board of Directors
sd/-
N. CHANDRASEKARAN
Chairman
DIN: 00121863
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
ANNEXURE 8
Form No. MR-3
Secretarial Audit Report for the Financial Year Ended March 31, 2020
(Pursuant to Section 204 (1) of the Companies Act, 2013 and 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, to the extent 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 and considering
the relaxations granted by the Ministry of Corporate Affairs and
Securities and Exchange Board of India warranted due to the spread
of the COVID-19 pandemic, we hereby report that in our opinion, the
Company has, during the audit period covering the Financial Year
ended on March 31, 2020, 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, 2020
according to the provisions of:
(i)
(ii)
(iii)
(iv)
The Companies Act, 2013
made thereunder;
(the Act) and
the
rules
The Securities Contract (Regulation) Act, 1956 (‘SCRA’) and the
rules made thereunder;
The Depositories Act, 1996 and the Regulations and Bye-laws
framed thereunder;
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)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
The Securities and Exchange Board of India (Substantial
Acquisition of Shares and Takeovers) Regulations, 2011;
The Securities and Exchange Board of India (Prohibition of
Insider Trading) Regulations, 2015;
The Securities and Exchange Board of India (Issue of
Capital and Disclosure Requirements) Regulations, 2018
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)
The Securities and Exchange Board of India (Issue and
Listing of Debt Securities) Regulations, 2008;
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, 2018. (Not applicable to the
Company during the audit period)
(vi) Other laws applicable specifically to the Company namely:
1.
2.
3.
4.
The Mines Act, 1952 and
made thereunder.
the
rules,
regulations
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.
171
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
5.
Environment Protection Act, 1986 and
notifications issued thereunder.
the
rules,
(ISIN: INE081A08231) are listed and traded on WDM segment
of BSE Limited.
2.
The following shares, earlier kept in abeyance were allotted to
the Shareholders during Fiscal 2020:
• 210 Ordinary Shares of face value `10/- per share at a
premium of `290/- per share and 154 Ordinary Shares of
face value `10/- per share at a premium of `590/- (in lieu
of the entitlement of Cumulative Convertible Preference
shares) on rights basis to one shareholder, earlier kept in
abeyance, pursuant to the Rights Issue – 2007.
• 167 Ordinary Shares of face value `10/- per share at a
premium of `500/- per share and 83 Partly paid-up Ordinary
Shares of face value `10/- per share (paid up `2.504 per
share) at a price of `615/- per share including a premium
of `605/- per share, paid-up `154/- each, on rights basis to
one shareholder, earlier kept in abeyance, pursuant to the
Rights Issue – 2018.
3.
4.
5.
6.
has
Company
The
10.40% NCDs
redeemed
(ISIN: INE081A08124) aggregating `650.90 crore on the due
date, May 15, 2019 and (ii) 11% NCDs (ISIN: INE081A08132)
aggregating `1,500 crore on the due date, May 17, 2019.
(i)
On August 6, 2019, T S Global Holdings Pte. Ltd. (‘TSGH’), an
indirect wholly-owned subsidiary of the Company, for want
of regulatory approvals, decided not to pursue the proposed
transaction with HBIS Group Co. Ltd. (‘HBIS’), to divest its
entire stake in NatSteel Holdings Pte. Ltd. (100%) and Tata Steel
(Thailand) Public Company Ltd. (67.9%) to a company in which
70% equity stake would be held by an entity controlled by HBIS
and the balance by TSGH.
On July 24, 2019, the Company acquired 2,58,43,967 Rights
Equity Shares of Tata Steel Long Products Limited ('TSLP')
(formerly Tata Sponge Iron Limited) at an issue price of `500/-
per Rights Equity Share (including a premium of `490/- per
Rights Equity Share) aggregating to `1,292.20 crore. As a result of
this acquisition of equity shares pursuant to the rights issue, the
Company's holding in TSLP increased from 54.50% to 75.91%.
On June 11, 2019, the European Commission formally
announced its decision to prohibit the proposed European
steel
joint venture between Tata Steel Limited and
thyssenkrupp AG. The Company and thyssenkrupp AG
decided not to pursue the proposed transaction to form a
joint venture to combine their steel businesses in Europe after
careful evaluation of the viability of the proposal in light of the
feedback received from the European Commission.
6.
Factories Act, 1948 and allied State Laws.
We have also examined compliance with the applicable clauses
of the following:
(i)
(ii)
Secretarial Standards issued by The Institute of Company
Secretaries of India with respect to board and general meetings.
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.
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.
Decisions at the Board Meetings were taken unanimously.
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.
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.
1.
The Committee of Directors of the Company vide Circular
Resolution – CR No. 19 dated March 13, 2020, approved
the allotment of 6,700 – 7.70% Unsecured, Rated, Listed,
Redeemable, Non-Convertible Debentures ('NCDs') of face
value `10,00,000 each, for cash, aggregating to `670 crore,
to identified investors on private placement basis. The NCDs
172
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
7.
8.
The Company, through its indirect subsidiary - Tata Steel BSL
Limited (formerly Bhushan Steel Limited), completed the
acquisition of controlling stake in Bhushan Energy Limited
(now Angul Energy Limited) pursuant to the National Company
Law Tribunal (Principal Bench, New Delhi) (‘NCLT’) order dated
May 30, 2019, approving the resolution plan submitted by the
Company under the Corporate Insolvency Resolution Process of
the Insolvency and Bankruptcy Code, 2016. The acquisition was
completed on June 1, 2019.
On April 25, 2019, the Board of Directors of the Company
have considered and approved a merger of Bamnipal Steel
Limited and Tata Steel BSL Limited (formerly Bhushan Steel
Limited) into the Company by way of a composite scheme of
amalgamation and have recommended a merger ratio of 1
equity share of `10/- each fully paid-up of the Company for
every 15 equity shares of `2/- each fully paid-up held by the
public shareholders of Tata Steel BSL Limited. As part of the
scheme, the equity shares held by Bamnipal Steel Limited and
the preference shares held by the Company in Tata Steel BSL
Limited shall stand cancelled. The equity shares held by the
Company in Bamnipal Steel Limited shall also stand cancelled.
The Company received a ‘no objection’ to the scheme from the
National Stock Exchange of India Limited and BSE Limited on
August 26, 2019 and has filed an application before the National
Company Law Tribunal, Mumbai Bench for necessary directions.
The amalgamation is subject to approval from shareholders
and other regulatory authorities.
For Parikh & Associates
Company Secretaries
sd/-
P. N. Parikh
Partner
FCS No.: 327 CP No.: 1228
UDIN: F000327B000393478
Place: Mumbai
Date: June 29, 2020
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.
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.
Where ever 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.
Place: Mumbai
Date: June 29, 2020
For Parikh & Associates
Company Secretaries
sd/-
P. N. Parikh
Partner
FCS No.: 327 CP No.: 1228
UDIN: F000327B000393478
173
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 ANNEXURE 9
Form No. MGT-9
Extract of Annual Return as on March 31, 2020
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
CIN
Registration Date
Name
Category/Sub-category of the Company
Registered office address
Contact details
Whether listed company – Yes/No
Registrars 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
E-mail: cosec@tatasteel.com Website: www.tatasteel.com
Yes
TSR Darashaw Consultants Private Limited (formerly 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
E-mail: csg-unit@tsrdarashaw.com Website: www.tsrdarashaw.com
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
Manufacture of basic iron and steel
1
NIC Code of the Products
241
% to total turnover of the Company
89.44%
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
ABJA Investment Co. Pte Ltd.
22 Tanjong Kling Road, Singapore 628048
Adityapur Toll Bridge Company Limited
Aiada Vikash Bhawan, Adityapur Industrial Area, Seraikela, Jamshedpur – 831 013
CIN: U45201JH1996PLC007124
Tata Steel Special Economic Zone Limited
5th Floor, Zone C/2, Fortune Towers, Chandrasekharpur, Khordha, Bhubaneshwar – 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
Tata Steel Utilities and Infrastructure Services Limited
(formerly Jamshedpur Utilities & Services Company Limited)
Sakchi Boulevard Road, Northerntown, 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
1
2
3
4
5
6
174
Holding (%)
100.00
88.50
100.00
95.01
100.00
60.00
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
Sl. No. Name and address of the Company
Holding (%)
Kalimati Global Shared Services Limited
1st Floor, Tata Centre, 43 Jawaharlal Nehru Road, Kolkata – 700 071
CIN: U74999WB2018PLC224208
Mohar Export Services Pvt. Ltd.
Army & Navy Building, 2nd Floor, 148, M G Road Opposite Kala Ghoda, Fort Mumbai – 400 001, Maharashtra
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
6th Floor, One Forbes No. 1, Dr. V.B. Gandhi Marg, Fort, 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, Beltola, Kolkata – 700 019
CIN: U74210WB1985PLC039675
Tata Metaliks Ltd.
Tata Centre, 10th Floor, 43, J L Nehru Road, Kolkata – 700 071
CIN: L27310WB1990PLC050000
Tata Steel Long Products Limited (formerly 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, Joda, 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 Recycling Pte Ltd.
22 Tanjong Kling Road, Singapore 628048
NatSteel Trade International Pte. Ltd.
22, Tanjong Kling Road, Singapore 628048
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
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
100.00
66.46
100.00
100.00
100.00
100.00
100.00
55.06
75.91
100.00
90.00
100.00
100.00
100.00
100.00
100.00
67.00
100.00
100.00
100.00
60.00
175
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 33
30
29
28
36
32
31
34
35
Sl. No. Name and address of the Company
Tata Steel Europe Limited
30 Millbank, London, SW1P 4WY
Apollo Metals Limited
1001, 14th Avenue, Bethlehem, PA 18018-0045, USA
Bell & Harwood Limited
30 Millbank, London, SW1P 4WY
Blastmega Limited
30 Millbank, London, SW1P 4WY
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, 1951 JZ Velsen-Noord, Netherlands
British Steel Service Centres Limited
30 Millbank, London, SW1P 4WY
British Steel Trading Limited
30 Millbank, London, SW1P 4WY
C V Benine
Wenckebachstraat 1, 1951 JZ Velsen-Noord, 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 02301, France
Tata Steel Mexico International SA de CV
Central Park – Corporativa 1 Armando Birlain Shaffler No 2001 – Int 16 C, Colonio Centro Sur, Queretaro, QRO
Mexico
38
37
44
42
46
39
45
41
40
43
47
48
49
50
51
52
Cogent Power Inc.
59 Elm Street, Suite 400, New Haven, CT CT06510 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
Cordor (C& B) Limited
30 Millbank, London, SW1P 4WY
176
Holding (%)
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
67.30
100.00
100.00
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR 57
54
53
58
55
56
Sl. No. Name and address of the Company
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
17th Floor, 125, Old Broad Street, London EC2N 1AR
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.
Calea Floreasca, 169A, A Building, Fourth Floor, Campus 10, Office 2039-2044, 1st District, Bucharest 014472
Romania
63
59
64
60
62
61
65
66
67
68
69
70
71
72
73
74
75
76
77
Corus Investments Limited
15 Atholl Crescent, Edinburgh, EH3 8HA
Corus Ireland Limited
70 Sir John Rogerson’s Quay, 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 Property
30 Millbank, London, SW1P 4WY
Corus Service Centre Limited
Hull’s Hill, Lisburn, Antrim. BT28 2SR
Corus Tubes Poland Spolka Z.O.O
Ul. Grabiszynska, Wroclaw 43-234, Poland
Corus UK Healthcare Trustee Limited
30 Millbank, London, SW1P 4WY
Crucible Insurance Company Limited
Level 2, Samuel Harris House, 5-11 St Georges Street, Douglas. IM1 1AJ
Degels GmbH
Königsberger Strasse 25, 41460 Neuss, Germany
Demka B.V.
Wenckebachstraat 1, 1951 J2 Velsen-Noord, Netherlands
DSRM Group Limited
30 Millbank, London, SW1P 4WY
Holding (%)
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
177
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 Sl. No. Name and address of the Company
Holding (%)
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
Europressings Limited
Hill House, 1 Little Street, London. EC4A 3TR
00026466 Limited (formerly Firsteel Group Limited)
30 Millbank, London, SW1P 4WY
02727547 Limited (formerly 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
Turbingatan 1, Halmstad, Sweden
Hammermega 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, 1951 J2 Velsen-Noord, Netherlands
Inter Metal Distribution SAS
3 Allee des Barbanniers, 92632 Gennevilliers Cedex, France
Layde Steel S.L.
Eguzkitza, 11, E-48200 Durango, Bizkaia, 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
Montana Bausysteme AG
Durisolstrasse 11, Villmergen 5612, Switzerland
Naantali Steel Service Centre OY
Rautakatu 5, Naantali 21110, Finland
Nationwide Steelstock Limited
30 Millbank, London, SW1P 4WY
Norsk Stal Tynnplater AS
Habornveien 60, 1630 Gamle Fredrikstad, 0106 Fredrikstad, Norway
Norsk Stal Tynnplater AB
Östra Rönneholmsvägan 11, 211 47 Malmö, 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
178
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
100.00
100.00
100.00
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Sl. No. Name and address of the Company
Holding (%)
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
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 Centre Gelsenkirchen GmbH
Am Trippelsberg 48, Duesseldorf 40589, Germany
Service Centre Maastricht B.V.
Fregatweg 42, 6222NZ Maastricht Netherlands
Societe Europeenne De Galvanisation (Segal) Sa
Chassee de Ramioul 50, Ivoz Ramet, 4400 Belgium
Staalverwerking en Handel B.V.
Wenckebachstraat 1, 1951 JZ Velsen-Noord, Netherlands
Steel StockHoldings Limited
30 Millbank, London, SW1P 4WY
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
15 Atholl Crescent, Edinburgh EH3 8HA
Surahammar Bruks AB
Box 201, 735 00, 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 Byggesystemer A/S
Kaarsbergsvej Postbox 136, 8400 Ebeltoft, Denmark
Tata Steel Europe Distribution BV
Wenckebachstraat 1, 1951 JZ Velsen-Noord, Netherlands
Tata Steel Europe Metals Trading BV
Wenckebachstraat 1, 1951 52 Velsen-Noord, Netherlands
Tata Steel France Batiment et Systemes SAS
Rue Geo Lufbery, Chauny 02300, France
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
179
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 132
131
134
130
133
Sl. No. Name and address of the Company
Tata Steel France Holdings SAS
3, Allee des Barbanniers, 92632 Gennevilliers Cedex, France
Tata Steel Germany GmbH
Am Trippelsberg 48, Duesseldorf 40589, Germany
Tata Steel IJmuiden BV
Wenckebachstraat 1, Velsen-Noord 1951, JZ 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 (Czech Republic) S.R.O
Mala Stepanska 9, 120 Praha 2, Czech Republic
Tata Steel International (Denmark) A/S
Frederiksborgvej 23, 3520 Farum, Denmark
Tata Steel International (France) SAS
3, Allee des Barbanniers, 92632 Gennevilliers Cedex, France
Tata Steel International (Germany) GmbH
Am Trippelsberg 48, 40589 Duesseldorf , 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
138
135
137
139
136
Tata Steel International (Italia) SRL
Via G.G. Winckelman 2, Milano 20146, Italy
Tata Steel International (Middle East) FZE
Plot Number B035R02, PO Box 18294, Jebel Ali, Dubai, UAE
Tata Steel International (Nigeria) Limited
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
Tata Steel International (Schweiz) AG
Basilea Treuhand AG, Henric-Petri Strasse 6, 4051 Basel , Switzerland
Tata Steel International (Sweden) AB
Barlastgatan 2, 41463 Goteborg, Sweden
Tata Steel International (India) Limited
3rd Floor, One Forbes, Dr, V B Gandhi Marg, Fort, Mumbai – 400 001
CIN: U74900MH2005PLC151710
Tata Steel International Iberica SA
CL Rosario Pino 14-16 Torre Rioja 28020 Madrid, Spain
Tata Steel Istanbul Metal Sanayi ve Ticaret AS
El Madag Harbiye Mahallesi Cumhuriyet Caddesi, 48 Pegasus Evi kat: 7 Sisli, Istanbul, Turkey 34367
Tata Steel Maubeuge SAS
22, Avenue Abbe Jean de Beco, Louvroil 5970, France
Tata Steel Nederland BV
Wenckebachstraat 1, 1951 JZ Velsen-Noord, Netherlands
Tata Steel Nederland Consulting & Technical Services BV
Wenckebachstraat 1, 1951 JZ Velsen-Noord, Netherlands
Tata Steel Nederland Services BV
Wenckebachstraat 1, 1951 JZ Velsen-Noord, Netherlands
Tata Steel Nederland Technology BV
Wenckebachstraat 1, 1951 JZ Velsen-Noord, Netherlands
140
141
142
143
144
145
146
147
148
149
150
151
152
153
180
Holding (%)
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
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR 160
164
165
166
162
159
155
161
157
154
158
156
163
Sl. No. Name and address of the Company
Tata Steel Nederland Tubes BV
Souvereinstraat 35, 4903 RH Oosterhout, Netherlands
Tata Steel Netherlands Holdings B.V.
Wenckebachstraat 1, 1951 JZ Velsen-Noord, IJmuiden Netherlands
Tata Steel Norway Byggsystemer A/S
Roraskogen 2, 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 IL 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, 44485-2699 Ohio, USA
Thomas Steel Strip Corp.
Delaware Avenue N.W., Warren, 44485 2699 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
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
179
178
175
167
174
168
173
176
170
171
169
172
177
Holding (%)
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
181
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 Sl. No. Name and address of the Company
Holding (%)
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
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
Tata Steel International (Shanghai) Ltd.
Room 506, No. 568, Hengfeng Road, Jing’an District, Shanghai
Tata Steel International (Asia) Limited
Unit 15-055, Level 15, Langham Place, 8 Argyle Street, Mongkok, Kowloon, Hong Kong
Tata Steel (Thailand) Public Company Limited
555 Rasa Tower 2, 20th Floor, Phaholyothin Road, Chatuchak, Bangkok 10900, Thailand
N.T.S Steel Group Public Company Limited
No. 351, Moo 6, 331 Highway, Hemaraj Chonburi Industrial Estate, Bowin, Sriracha, Chonburi 20230, Thailand
The Siam Construction Steel Company Limited
Plot I-23, Map Ta Phut Industrial Estate, Amphur Muang, Rayong 21150, Thailand
The Siam Iron and Steel (2001) Company Limited
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
6th Floor, One Forbes, No. 1, Dr. V. B. Gandhi Marg, Fort, Mumbai – 400 001
CIN: U27310MH2012PLC232512
Tata Steel Downstream Products Limited (formerly 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-831002
CIN: U24100JH1983PLC001836
The Tinplate Company of India Ltd.
4, Bankshall Street, Kolkata-700001
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
180
181
182
183
184
185
186
187
188
189
190
191
192
193
194
195
196
197
198
199
200
201
182
100.00
70.00
100.00
77.68
100.00
100.00
100.00
100.00
67.90
99.76
99.99
99.99
100.00
100.00
100.00
100.00
54.91
100.00
74.96
100.00
100.00
100.00
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Sl. No. Name and address of the Company
Holding (%)
202
203
204
205
206
207
208
209
210
211
212
213
214
215
216
217
218
219
220
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 – 401 506
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
Tata Steel BSL Limited
Ground Floor, Mira Corporate Suites, Plot No. 1 & 2, Ishwar Nagar, Mathura Road, New Delhi – 110 065
CIN: L74899DL1983PLC014942
Bhushan Steel (Orissa) Limited
Ground Floor, Mira Corporate Suites, Plot No. 1 & 2, Ishwar Nagar, Mathura Road, New Delhi – 110 065
CIN: U27100DL2010PLC202028
Bhushan Steel (South) Limited
Ground Floor, Mira Corporate Suites, Plot No. 1 & 2, Ishwar Nagar, Mathura Road, New Delhi – 110 065
CIN: U27100DL2010PLC202027
Bhushan Steel (Madhya Bharat) Limited
Ground Floor, Mira Corporate Suites, Plot No. 1 & 2, Ishwar Nagar, Mathura Road, New Delhi – 110 065
CIN: U27100DL2010PLC202026
Bhushan Steel (Australia) PTY Ltd.
Mitchell & Partners , Suite 3 Level 2, 66 Clarence Street, Sydney NSW 2000
Bowen Energy PTY Ltd.
Mitchell & Partners , Suite 3 Level 2, 66 Clarence Street, Sydney NSW 2000
Bowen Coal PTY Ltd.
Mitchell & Partners , Suite 3 Level 2, 66 Clarence Street, Sydney NSW 2000
Bowen Consolidated PTY Ltd.
Mitchell & Partners , Suite 3 Level 2, 66 Clarence Street, Sydney NSW 2000
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
Creative Port Development Private Limited
Tarapur Complex, Plot No. F8, MIDC, Tarapur Industrial Area, Palghar, Thane – 401 506, Maharashtra
CIN: U63032MH2006PTC234335
Subarnarekha Port Private Limited
DCB-917, 9th Floor, DLF Cybercity, Chandaka Industrial Estates, Chandrasekharpur, Patia, Bhubaneswar, Khordha,
Odisha – 751 024
CIN: U45203OR2008PTC010351
Angul Energy Limited (formerly Bhushan Energy Limited)
Ground Floor, Mira Corporate Suites, Plot No. 1 & 2, Ishwar Nagar, Mathura Road, New Delhi – 110 065
CIN: U40105DL2005PLC140748
100.00
100.00
100.00
100.00
72.65
100.00
100.00
100.00
90.97
100.00
100.00
100.00
100.00
100.00
100.00
100.00
51.00
50.41
99.99
183
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 Sl. No. Name and address of the Company
Associate Companies (Pursuant to Section 2(6) of Companies Act, 2013)
Holding (%)
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 & 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
TRF Limited
11, Station Road, Burmamines, Janshedpur – 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
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
Malusha Travels Pvt Ltd.
Army & Navy Building, 2nd Floor, 148, M G Road, Opposite Kala Ghoda, Fort Mumbai – 400 001, Maharashtra
CIN: U63040MH1988PTC049514
European Profiles (M) Sdn. Bhd.
Lot 51, Rawang Industrial Park, Selangor Darul Ehsan, Kualalumpur, Malaysia
Albi Profils SRL
Zone Industrielle D’albi-Jarlard, Rue Lebon, 81000 Albi, France
GietWalsOnderhoudCombinatie B.V.
Staalstraat 150, 1951 JP Velsen-Noord
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
Fabsec Limited
Cellbeam Ltd., Unit 516, Avenue East, Thorp Arch Estate, Wetherby, West Yorkshire, England, LS237DB
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
30.00
27.78
49.31
25.00
27.19
34.11
100.00
100.00
100.00
100.00
33.23
20.00
30.00
50.00
50.00
50.00
30.00
25.00
26.18
33.33
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
184
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Sl. No. Name and address of the Company
Holding (%)
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
Bhushan Capital & Credit Services Private Limited
Cabin No. 1, 1205, 89 Hemkunth Chamber, Nehru Place, New Delhi – 110 019
CIN: U74899DL1993PTC054636
Jawahar Credit & Holdings Private Limited
Cabin No. 1, 1205, 89 Hemkunth Chamber, Nehru Place, New Delhi – 110 019
CIN: U74899DL1993PTC054635
Himalaya Steel Mills Services Private Limited
Ground Floor, Rings & Agrico Building, Armoury Road, Northern Town, Jamshedpur, Jharkhand – 831 001
CIN: U74900JH2009PTC000689
mjunction services limited
Godrej Waterside, 3rd floor, Tower 1, Plot V, Block DP, Sector V, Salt Lake, Kolkata – 700 091
CIN: U00000WB2001PLC115841
S & T Mining Company Private Limited
Tata Centre, 1st Floor, 43, J. L. Nehru Road, Kolkata – 700 071
CIN: U13100WB2008PTC129436
Tata BlueScope Steel Private Limited
Metropolitan, Survey No. 21, Final Plot No. 27, Wakdewadi, Shivaji Nagar, Pune – 411 005
CIN: U45209PN2005PTC020270
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, Salt Lake, Kolkata – 700 091
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, 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 Hamburg, Germany
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 Centre A, Block 34 Sant Tukaram Road, Carnac Bunder,
Mumbai – 400 009
CIN: U74999MH2007PLC167623
Jamipol Limited
Namdih Road, Burmamines, Janshedpur – 831 007
CIN: U24111JH1995PLC009020
Nicco Jubilee Park Limited
Jheel Meel, Sector-IV, Salt Lake City, Kolkata, West Bengal – 700 091
CIN: U45201WB2001PLC092842
42.58
39.65
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
100.00
26.00
39.78
25.31
185
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 Sl. No. Name and address of the Company
Holding (%)
40
41
42
43
44
45
46
47
48
49
50
Medica TS Hospital Private Limited
Kalinganagar Industrial Complex, Gobarghati Kalinganagar, Sukinda, Jajpur – 755 026
CIN: U85110OR2014PTC018162
SEZ Adityapur Limited.
Sakchi Boulevard Road, Northern Town, Purba Singhbhum, Jamshedpur – 831 001
CIN: U45200JH2006PLC012633
Naba Diganta Water Management Limited
Gn 11-19, Sector-V, Salt Lake, Kolkata – 700 091
CIN: U93010WB2008PLC121573
Air Products Llanwern Limited
Hersham Place Technology Park, Molesey Road, Walton on Thames Surrey,
KT12 4RZ
Laura Metaal Holding B.V.
Rimurgerweg 40, 6471 XX Eygelshoven, Netherlands
Ravenscraig Limited
15 Atholl Crescent, Edinburgh, EH3 8HK, Scotland
Tata Steel Ticaret AS
Cumhuriyet Caddesi No. 48 Pegasus Evi Kat:7 Harbiye 34367 Istanbul, Turkey
Texturing Technology Limited
PO Box 22, 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
C/o Ocorian Corporate Services Ltd., 6th Floor, Tower A, 1 Cybercity, Ebene, Mauritius
Andal East Coal Company Private Limited
37, Shakespeare Sarani, 4th Floor, Kolkata – 700 017
CIN: U10300WB2009PTC138558
Note: Companies listed from Sl. No. 23 to 50 under associate companies are joint venture companies
26.00
51.00
74.00
50.00
49.00
33.33
50.00
50.00
50.00
35.00
33.89
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
Number of shares held (April 1, 2019)
Total
Physical
Electronic
Number of shares held (March 31, 2020)
%
Electronic
Physical
Total
%
% Change
Sl.
No.
(A)
Promoters
(including Promoter Group)
Indian
Individuals/Hindu Undivided Family
(1)
(a)
(b) Central Government
State Government(s)
(c)
(d) Bodies Corporate
(e)
(f) Any Other (Trust)
Sub-Total (A) (1)
Foreign
(2)
Financial Institutions/Banks
(a)
Individuals
Non-Resident Individuals
(b) Other Individuals
(c) Bodies Corporate
186
-
-
-
35,98,80,601
-
-
35,98,80,601
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
35,98,80,601
-
-
35,98,80,601
-
-
-
31.95
-
-
-
-
-
37,54,15,658
-
-
31.95 37,54,15,658
-
-
-
-
-
-
37,54,15,658
-
-
-
-
-
- 37,54,15,658
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
33.33
-
-
33.33
-
-
-
-
-
-
1.38
-
-
1.38
-
-
-
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
Category of Shareholders
Sl.
No.
(d) Banks/FI
(e) Qualified Foreign Investor
(f) Any Other (specify)
Sub-Total (A) (2)
Total Shareholding of Promoter and
Promoter Group (A) = (A)(1)+(A)(2)
(B) Public Shareholding
Institutions
(1)
(a) Mutual Funds
(b) Financial Institutions/Banks
(c) Central Government
(d) State Governments(s)
(e) Venture Capital Funds
Insurance Companies
(f)
(g) Foreign Institutional Investors
(h) Foreign Venture Capital Investors
Any Other (specify)
(i)
(i - 1) Qualified Foreign Investor
(i - 2) Foreign Institutional Investors – DR
(i - 3) Foreign Bodies – DR
(i - 4)
Foreign Portfolio Investments –
Individual
(i - 5) Foreign National – DR
(i - 6) Alternate Investment Funds
(i - 7) Foreign National
(i - 8) UTI
Sub-Total (B) (1)
(2) Non-Institutions
(a) Bodies Corporate
i
ii
(b)
Indian
Overseas
Individuals -
i
Individual shareholders holding
nominal share capital up to `1 lakh
ii
Individual shareholders holding
nominal share capital in excess of
`1 lakh
(c) Any Other
Trusts
i
IEPF Account
ii
HUF
iii
Clearing Member
iv
LLP/LLP-DR
v
(d) Qualified Foreign Investor
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*
GRAND TOTAL (A)+(B)+(C)
Number of shares held (April 1, 2019)
Total
-
-
-
-
Physical
-
-
-
-
Electronic
-
-
-
-
Number of shares held (March 31, 2020)
%
-
-
-
-
Electronic
-
-
-
-
Physical
-
-
-
-
Total
-
-
-
-
%
-
-
-
-
% Change
-
-
-
-
35,98,80,601
-
35,98,80,601
31.95 37,54,15,658
- 37,54,15,658
33.33
1.38
16,46,08,291
43,13,216
12,17,242
500
-
16,98,31,669
17,18,86,794
-
-
-
3,23,635
892
26,357
1,59,322
-
1,11,277
-
1,230
15,070
-
16,46,34,648
44,72,538
12,17,242
1,11,777
-
16,98,32,899
17,19,01,864
-
-
-
-
-
-
-
3,23,635
892
14.61
0.40
0.11
0.01
-
15.08
15.26
-
-
-
0.03
-
16,43,58,191
33,06,582
25,78,713
500
-
17,98,01,925
14,72,92,620
-
-
-
4,76,749
892
14,716
1,56,818
-
1,01,407
-
1,000
15,070
-
16,43,72,907
34,63,400
25,78,713
1,01,907
-
17,98,02,925
14,73,07,690
-
-
-
-
-
-
-
4,76,749
892
164
34,095
2,105
260
51,22,18,863
-
-
-
16,197
3,29,453
164
34,095
2,105
16,457
51,25,48,316
-
-
-
-
218
80,967
2,105
160
45.50 49,78,99,622
-
-
-
9,217
218
80,967
2,105
9,377
2,98,228 49,81,97,850
14.59
0.31
0.23
0.01
-
15.96
13.08
-
-
-
0.04
-
-
0.01
-
-
44.23
(0.02)
(0.09)
0.12
-
-
0.89
(2.18)
-
-
-
0.01
-
-
0.01
-
-
(1.27)
1,50,18,429
4,500
2,26,070
-
1,52,44,499
4,500
1.35
-
64,59,516
4,500
2,05,347
-
66,64,863
4,500
0.59
-
(0.76)
-
14,38,58,160
1,54,73,274
15,93,31,434
14.14
15,54,81,373
136,36,247
16,91,17,620
15.00
0.86
2,85,38,493
15,23,841
3,00,62,334
2.67
2,70,78,034
12,47,795
2,83,25,829
2.52
(0.15)
1,09,08,766
34,02,549
32,58,266
-
54,84,862
1,973
99,38,585
-
29,49,037
-
-
-
21,99,59,098 2,06,27,707
1,43,11,315
32,58,266
54,86,835
99,38,585
29,49,037
-
24,05,86,805
1.27
0.29
0.49
0.88
0.26
-
1,57,51,614
39,13,434
57,58,734
1,05,94,866
1,67,420
-
1,57,67,631
39,13,434
57,59,139
1,05,94,866
1,67,420
-
21.35 22,52,09,491 1,51,05,811 24,03,15,302
16,017
-
405
-
-
-
1.40
0.35
0.51
0.94
0.01
-
21.32
0.13
0.06
0.02
0.06
(0.25)
-
(0.03)
73,21,77,961 2,09,57,160
75,31,35,121
66.85 72,31,09,113 1,54,04,039 73,85,13,152
65.55
(1.30)
1,34,73,958
-
1,34,73,958
1.20
1,25,61,401
-
1,25,61,401
1.12
(0.08)
1,10,55,32,520 2,09,57,160 1,12,64,89,680 100.00 1,11,10,86,172 1,54,04,039 1,12,64,90,211 100.00
Note:
*This represents public non-institutional shareholding.
187
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
ii)
Shareholding of Promoter (including Promoter Group)
Sl.
No.
Shareholder’s Name
Shareholding (April 1, 2019)
Shareholding (March 31, 2020)
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 Private Limited – Promoter
1
Tata Motors Limited
2
Tata Investment Corporation Limited
3
Tata Chemicals Limited
4
Ewart Investments Limited
5
Rujuvalika Investments Limited
6
Tata Industries Limited
7
Tata Motors Finance Limited
8
9
Tata Capital Limited
10 Titan Company Limited
Total
34,31,42,275
51,41,696
39,27,625
28,90,693
20,82,364
11,68,393
9,39,358
5,70,188
15,660
2,349
35,98,80,601
30.46
0.46
0.35
0.26
0.18
0.10
0.08
0.05
-
-
31.95
1.24 35,86,77,332
51,41,696
39,27,625
28,90,693
20,82,364
11,68,393
9,39,358
5,70,188
15,660
2,349
1.24 37,54,15,658
-
-
-
-
-
-
-
-
-
31.84
0.46
0.35
0.26
0.18
0.10
0.08
0.05
-
-
33.33
1.24
-
-
-
-
-
-
-
-
-
1.24
1.38
-
-
-
-
-
-
-
-
-
1.38
Notes:
(1)
(2)
Entities listed from Sl. No. 2 to 10 above form part of the Promoter Group.
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
Tata Sons Private Limited
At the beginning of the year
Increase during the year
(due to purchase of shares)
Increase during the year
(due to purchase of shares)
At the end of the year
Shareholding
Cumulative Shareholding
during the year
Date
No. of Shares
% of total Shares
of the Company
No. of Shares
% of total Shares
of the Company
April 1, 2019
34,31,42,275
30.46
34,31,42,275
March 12, 2020
77,40,371
0.69
35,08,82,646
March 13, 2020
77,94,686
0.69
35,86,77,332
March 31, 2020
35,86,77,332
31.84
35,86,77,332
30.46
0.69
0.69
31.84
iv) Shareholding Pattern of Top Ten Shareholders (Other than Directors, Promoters and Holders of GDRs and ADRs):
Sl.
No.
1
2
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
188
Shareholding
Cumulative Shareholding
during the year
No. of shares
% of total shares
of the Company
No. of shares
% of total shares
of the Company
10,83,88,660
83,94,159
(70,86,643)
10,96,96,176
4,33,93,097
1,83,56,212
(37,89,203)
5,79,60,106
9.62
0.75
(0.63)
9.74
3.85
1.63
(0.34)
5.15
10,83,88,660
11,67,82,819
10,96,96,176
10,96,96,176
4,33,93,097
6,17,49,309
5,79,60,106
5,79,60,106
9.62
10.37
9.74
9.74
3.85
5.48
5.15
5.15
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH 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
3
5
6
4
ICICI Prudential Mutual Fund
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
SBI – Various 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
ICICI Prudential Life Insurance Company 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
NPS Trust – Various Funds
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
Abu Dhabi Investment Authority
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
10 UTI – Various Funds
9
8
7
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
11 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
12 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
1,69,68,694
1,97,51,157
(1,12,34,518)
2,54,85,333
1,30,12,682
63,77,125
(6,16,466)
1,87,73,341
3,74,47,280
1,07,65,122
(3,01,15,754)
1,80,96,648
1,53,69,695
1,72,25,320
(1,46,00,953)
1,79,94,062
81,99,446
48,39,116
(20,70,813)
1,09,67,749
89,37,667
15,71,590
(68,749)
1,04,40,508
66,40,965
87,53,953
(63,52,956)
90,41,962
41,10,592
81,44,858
(37,17,514)
85,37,936
81,95,304
-
(3,00,000)
78,95,304
1,97,31,272
76,42,753
(2,14,63,973)
59,10,052
1.51
1.75
(1.00)
2.26
1.16
0.57
(0.05)
1.67
3.32
0.96
(2.67)
1.61
1.36
1.53
(1.30)
1.60
0.73
0.43
(0.18)
0.97
0.79
0.14
(0.01)
0.93
0.59
0.78
(0.56)
0.80
0.36
0.72
(0.33)
0.76
0.73
-
(0.03)
0.70
1.75
0.68
(1.91)
0.52
1,69,68,694
3,67,19,851
2,54,85,333
2,54,85,333
1,30,12,682
1,93,89,807
1,87,73,341
1,87,73,341
3,74,47,280
4,82,12,402
1,80,96,648
1,80,96,648
1,53,69,695
3,25,95,015
1,79,94,062
1,79,94,062
81,99,446
1,30,38,562
1,09,67,749
1,09,67,749
89,37,667
1,05,09,257
1,04,40,508
1,04,40,508
66,40,965
1,53,94,918
90,41,962
90,41,962
41,10,592
1,22,55,450
85,37,936
85,37,936
81,95,304
81,95,304
78,95,304
78,95,304
1,97,31,272
2,73,74,025
59,10,052
59,10,052
1.51
3.26
2.26
2.26
1.16
1.72
1.67
1.67
3.32
4.28
1.61
1.61
1.36
2.89
1.60
1.60
0.73
1.16
0.97
0.97
0.79
0.93
0.93
0.93
0.59
1.37
0.80
0.80
0.36
1.09
0.76
0.76
0.73
0.73
0.70
0.70
1.75
2.43
0.52
0.52
189
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
Sl.
No.
Name of shareholders
13 Mirae Asset – Various Mutual Funds
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
96,89,632
47,53,411
(1,04,50,241)
39,92,802
0.86
0.42
(0.93)
0.35
96,89,632
1,44,43,043
39,92,802
39,92,802
0.86
1.28
0.35
0.35
Notes:
(1)
(2)
(3)
The above information is based on the weekly beneficiary position received from Depositories.
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
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, 2020.
v)
Shareholding of Directors and Key Managerial Personnel
Sl.
No.
Name of the Shareholder
Directors
1 Mr. N. Chandrasekaran
2 Mr. T. V. Narendran
3 Mr. Koushik Chatterjee
Key Managerial Personnel
4 Mr. Parvatheesam Kanchinadham
Shareholding (April 1, 2019)
Shareholding (March 31, 2020)
No. of Shares
% of Total Shares
of the Company
No. of Shares
% of Total Shares
of the Company
-
2,032
1,531
100
-
-
-
-
2,00,000
2,032
1,531
100
0.02
-
-
-
Note:
Ms. Mallika Srinivasan, Mr. O. P. Bhatt, Dr. Peter Blauwhoff, Mr. Aman Mehta, Mr. Deepak Kapoor, V. K. Sharma, and Mr. Saurabh Agrawal held no fully
paid-up Ordinary Shares in the Company during the Financial Year ended March 31, 2020.
B. Partly Paid-Up Equity Shares
i)
Category-wise Share Holding
Sl.
No.
Category of Shareholders
(A) Promoters
(Including Promoter Group)
Indian
Individuals/Hindu Undivided Family
Central Government
State Government(s)
Bodies Corporate
Financial Institutions/Banks
Any Other (Trust)
(1)
(a)
(b)
(c)
(d)
(e)
(f)
Sub-Total (A) (1)
Foreign
(2)
Individuals Non-Resident Individuals
(a)
(b) Other Individuals
Bodies Corporate
(c)
190
Number of shares held (April 1, 2019)
Number of shares held (March 31, 2020)
Electronic
Physical
Total
% of Total
Shares
Electronic
Physical
Total
% of Total
Shares
% Change
-
-
-
3,89,42,999
-
-
3,89,42,999
-
-
-
-
-
-
- 3,89,42,999
-
-
-
-
- 3,89,42,999
-
-
-
-
-
-
-
-
-
-
-
-
50.16
-
-
50.16
-
-
-
-
-
-
3,89,42,999
-
-
3,89,42,999
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,89,42,999
-
-
3,89,42,999
-
-
-
-
-
-
50.16
-
-
50.16
-
-
-
-
-
-
-
-
-
-
-
-
-
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
Number of shares held (April 1, 2019)
Number of shares held (March 31, 2020)
Electronic
Physical
Total
% of Total
Shares
Electronic
Physical
Total
% of Total
Shares
% Change
Sl.
No.
Category of Shareholders
Banks/FI
(d)
(e) Qualified Foreign Investor
(f)
Any Other (specify)
Sub-Total (A) (2)
Total Shareholding of Promoter and
Promoter Group (A) = (A)(1)+(A)(2)
Public Shareholding
Institutions
(B)
(1)
(a) Mutual Funds
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
Financial Institutions/Banks
Central Government
State Government(s)
Venture Capital Funds
Insurance Companies
Foreign Institutional Investors
Foreign Venture Capital Investors
Any Other (specify)
(i - 1) Qualified Foreign Investor
(i - 2) Foreign Institutional Investors – DR
(i - 3) Foreign Bodies – DR
(i - 4)
Foreign Portfolio 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)
Non-Institutions
Bodies Corporate
Indian
Overseas
Individuals -
i
ii
(c)
i
ii
iii
iv
v
Individual shareholders holding nominal
share capital up to `1 lakh
Individual shareholders holding nominal
share capital in excess of `1 lakh
Any Other
Trusts
IEPF Account
HUF
Clearing Member
LLP/LLP-DR
(d) Qualified Foreign Investor
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,89,42,999
- 3,89,42,999
50.16
3,89,42,999
92,43,395
245
-
-
-
15,98,437
35,79,665
-
-
-
17,133
-
-
-
161
-
1,44,39,036
-
-
-
-
-
-
-
-
-
-
-
-
92,43,395
245
-
-
-
15,98,437
35,79,665
-
-
-
17,133
-
-
-
-
-
161
-
-
-
- 1,44,39,036
11.91
-
-
-
-
2.06
4.61
-
-
-
0.02
-
-
-
-
-
18.60
78,98,175
642
-
-
-
14,67,347
18,91,032
-
-
-
17,133
-
-
-
161
-
1,12,74,490
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,89,42,999
50.16
78,98,175
642
-
-
-
14,67,347
18,91,032
-
-
-
17,133
-
-
-
161
-
1,12,74,490
10.17
-
-
-
-
1.89
2.44
-
-
-
0.02
-
-
-
-
-
14.52
12,12,265
-
1,662
-
12,13,927
-
1.56
-
12,80,281
-
1,662
-
12,81,943
-
1.65
-
1,48,23,765
2,05,279 1,50,29,044
19.36
1,82,42,370
1,80,683
1,84,23,053
23.73
20,49,177
2,23,908
-
12,24,366
40,71,561
4,42,340
-
-
-
-
2,23,908
-
347
12,24,713
-
-
-
40,71,561
4,42,340
-
20,49,177
2.64
40,69,168
40,69,168
5.24
2,23,453
-
18,88,096
9,96,615
5,36,649
-
0.29
-
1.58
5.24
0.57
-
31.24
49.84
-
-
-
2,23,453
-
322
18,88,418
-
-
-
9,96,615
5,36,649
-
0.29
-
2.43
1.29
0.69
-
35.32
49.84
-
-
-
-
-
-
-
-
Sub-total (B) (2)
2,40,47,382
2,07,288 2,42,54,670
2,07,288 3,86,93,706
2,72,36,632
1,82,667
2,74,19,299
3,85,11,122
1,82,667
3,86,93,789
Total Public Shareholding (B) = (B)(1)+(B)(2) 3,84,86,418
(C)
Shares held by Custodians and
against which Depository Receipts
have been Issued
GRAND TOTAL (A)+(B)+(C)
7,74,29,417
2,07,288 7,76,36,705
100.00
7,74,54,121
1,82,667
7,76,36,788
100.00
-
-
-
-
-
(1.73)
-
-
-
-
(0.17)
(2.18)
-
-
-
-
-
-
-
-
(4.08)
0.09
-
4.37
2.60
-
-
0.85
(3.96)
0.12
-
4.08
-
-
191
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
ii)
Shareholding of Promoter (including Promoter Group)
Sl.
No.
Shareholder’s Name
Shareholding (April 1, 2019)
Shareholding (March 31, 2020)
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 Private Limited – Promoter
Tata Motors Limited
Tata Chemicals Limited
Tata Investment Corporation Limited
Ewart Investments Limited
Tata Motors Finance Limited
Tata Industries Limited
Titan Company Limited
Tata Capital Limited
1
2
3
4
5
6
7
8
9
10 Rujuvalika Investments Limited
3,78,30,810
3,54,599
1,99,358
2,70,869
1,43,611
39,323
1,03,187
162
1,080
-
3,89,42,999
48.73
0.46
0.26
0.35
0.18
0.05
0.13
-
-
-
50.16
Note:
Entities listed from Sl. No. 2 to 10 above form part of the Promoter Group.
iii) Change in Promoter’s (including Promoter Group) Shareholding
- 3,78,30,810
3,54,599
-
1,99,358
-
2,70,869
-
1,43,611
-
39,323
-
1,03,187
-
162
-
1,080
-
-
-
- 3,89,42,999
48.73
0.46
0.26
0.35
0.18
0.05
0.13
-
-
-
50.16
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Particulars
At the beginning of the year
(April 1, 2019)
Changes during the year
At the end of the year
(March 31, 2020)
Shareholding
Cumulative Shareholding
during the year
No. of Shares
% of total Shares of
the Company
No. of Shares
% of total Shares
of the Company
3,89,42,999
50.16
3,89,42,999
-
-
-
3,89,42,999
50.16
3,89,42,999
50.16
-
50.16
Note: There is no change in Shareholding of the partly paid-up equity shares of the Promoter including Promoter Group.
iv) Shareholding Pattern of Top Ten Shareholders (Other than Directors, Promoters and Holders of GDRs and ADRs):
Sl.
No.
Name of shareholders
1
2
3
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
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
Shareholding
Cumulative Shareholding
during the year
No. of shares
% of total shares
of the Company
No. of shares
% of total shares
of the Company
55,69,609
-
(9,31,809)
46,37,800
24,47,488
-
(1,94,111)
22,53,377
7,76,084
-
-
7,76,084
7.17
-
(1.20)
5.97
3.15
-
(0.25)
2.90
1.00
-
-
1.00
55,69,609
55,69,609
46,37,800
46,37,800
24,47,488
24,47,488
22,53,377
22,53,377
7,76,084
7,76,084
7,76,084
7,76,084
7.17
7.17
5.97
5.97
3.15
3.15
2.90
2.90
1.00
1.00
1.00
1.00
192
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
Sl.
No.
Name of shareholders
4
5
6
7
8
9
Government Pension Fund Global
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
SBI Arbitrage Opportunities Fund
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
HDFC Life Insurance Company Limited
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
Shaileshkumar Rasiklal Shah
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
Kamlesh N. Shah
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
Kamlesh Navin Shah HUF.
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
10 NPS Trust – A/C UTI Retirement Solutions Pension
Fund Scheme
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
11 Government of Singapore
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
12 Franklin Templeton Investment Funds
At the beginning of the year
Bought during the year
Sold during the year
At the end of the year
13 Edelcap Securities Limited
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
5,13,408
-
-
5,13,408
4,91,626
-
-
4,91,626
4,84,893
-
-
4,84,893
88,900
2,78,564
-
3,67,464
2,60,911
-
(171)
2,60,740
24,780
2,12,500
-
2,37,280
2,19,541
-
-
2,19,541
4,90,949
-
(3,37,417)
1,53,532
3,32,388
-
(2,05,610)
1,26,778
5,89,254
2,74,892
(8,64,146)
-
0.66
-
-
0.66
0.63
-
-
0.63
0.62
-
-
0.62
0.11
0.36
-
0.47
0.34
-
-
0.34
0.03
0.28
-
0.31
0.28
-
-
0.28
0.63
-
(0.43)
0.20
0.43
-
(0.26)
0.17
0.76
0.35
(1.11)
-
5,13,408
5,13,408
5,13,408
5,13,408
4,91,626
4,91,626
4,91,626
4,91,626
4,84,893
4,84,893
4,84,893
4,84,893
88,900
3,67,464
3,67,464
3,67,464
2,60,911
2,60,911
2,60,740
2,60,740
24,780
2,37,280
2,37,280
2,37,280
2,19,541
2,19,541
2,19,541
2,19,541
4,90,949
4,90,949
1,53,532
1,53,532
3,32,388
3,32,388
1,26,778
1,26,778
5,89,254
8,64,146
-
-
0.66
0.66
0.66
0.66
0.63
0.63
0.63
0.63
0.62
0.62
0.62
0.62
0.11
0.47
0.47
0.47
0.34
0.34
0.34
0.34
0.03
0.31
0.31
0.31
0.28
0.28
0.28
0.28
0.63
0.63
0.20
0.20
0.43
0.43
0.17
0.17
0.76
1.11
-
-
193
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
Sl.
No.
Name of shareholders
14 Jhunjhunwala Rekha Rakesh
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
5,40,000
-
(5,40,000)
-
0.70
-
(0.70)
-
5,40,000
5,40,000
-
-
0.70
0.70
-
-
Notes:
(1)
(2)
(3)
The above information is based on the weekly beneficiary position received from Depositories.
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
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, 2020.
v)
Shareholding of Directors and Key Managerial Personnel
Sl.
No.
Name of the Shareholder
Directors
1 Mr. T. V. Narendran
2 Mr. Koushik Chatterjee
Shareholding (April 1, 2019)
Shareholding (March 31, 2020)
No. of Shares
% of Total Shares
of the Company
No. of Shares
% of Total Shares
of the Company
139
105
-
-
139
105
-
-
Note:
Mr. N. Chandrasekaran, Ms. Mallika Srinivasan, Mr. O. P. Bhatt, Dr. Peter Blauwhoff, Mr. Aman Mehta, Mr. Deepak Kapoor, Mr. Saurabh Agrawal,
Mr. V. K. Sharma, and Mr. Parvatheesam Kanchinadham held no partly paid-up ordinary shares of the Company during the Financial Year ended
March 31, 2020.
V.
INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment.
Principal Amount
Interest due but not paid
Interest accrued but not due
Indebtedness at the beginning of the Financial Year
(i)
(ii)
(iii)
Total (i+ii+iii)
Change in Indebtedness during the Financial Year
Reduction
• Addition
• Other movements
•
Net Change
Indebtedness at the end of the Financial Year
(i)
(ii)
(iii)
Total (i+ii+iii)
Principal Amount
Interest due but not paid
Interest accrued but not due
Secured Loans
excluding deposits
Unsecured
Loans
Deposits
*2,572.19
-
-
2,572.19
1,583.07
2,129.86
(260.66)
3,452.27
*5,987.43
-
37.03
6,024.46
27,129.28
-
569.36
27,698.64
#13,302.20
(2,129.86)
(3,087.33)
8,085.01
35,435.44
-
348.21
35,783.65
-
-
-
-
-
-
-
-
-
-
-
-
(` crore)
Total
Indebtedness
29,701.47
-
569.36
30,270.83
14,885.27
-
(3,347.99)
11,537.28
41,422.87
-
385.24
41,808.11
* Includes funded interest on SDF loan of `994.63 crore (31.03.2019: `924.77 crore).
# Includes revaluation loss (net) of `268.69 crore on foreign loans and amortisation of loan issue and premium and discount expenses aggregating
`219.82 crore under effective interest rate method.
194
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration of Managing Director, Whole-time Directors and/or Manager
Sl.
No.
Particulars of Remuneration
1
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
Profits in lieu of salary under Section 17(3) of the Income
Tax Act, 1961
(c)
2
3
4
5
Stock Option
Sweat Equity
Commission
Others (retirement benefits)
Total
Ceiling as per the Companies Act, 2013
B. Remuneration to other Directors
Name
Sl.
No.
I Non-Executive Directors
1 Mr. Natarajan Chandrasekaran-Chairman(1)
2 Mr. Saurabh Agrawal(2)
3 Mr. V. K. Sharma(3)
Total (I)
Independent Directors
II
1 Ms. Mallika Srinivasan
2 Mr. O. P. Bhatt
3 Dr. Peter Blauwhoff
4 Mr. Aman Mehta
5 Mr. Deepak Kapoor
Total (II)
Grand Total (I + II)
Overall Ceiling as per the Companies Act, 2013
Name of MD/WTD/Manager
Mr. T. V. Narendran Mr. Koushik Chatterjee
CEO & MD
ED & CFO
214.01
123.50
-
-
-
750.00
34.50
1,122.01
310.32
46.93
-
-
-
650.00
17.70
1,024.95
Commission
Sitting Fees
-
-
75
75
120
170
100
90
100
580
655
2.80
5.60
2.90
11.30
3.20
7.20
6.80
5.60
5.70
28.50
39.80
(` lakh)
Total Amount
524.33
170.43
-
-
-
1,400.00
52.20
2,146.96
73,191
(` lakh)
Total
Compensation
2.80
5.60
77.90
86.30
123.20
177.20
106.80
95.60
105.70
608.50
694.80
7,319
Notes:
(1)
(2)
(3)
As a Policy, Mr. N. Chandrasekaran, Chairman, has abstained from receiving commission from the Company.
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 sitting fees is paid to Mr. Vijay Kumar Sharma and the commission is paid to Life Insurance Corporation of India.
195
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
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 Kanchinadham
Company Secretary &
Chief Legal Officer
(Corporate & Compliance)
217.35
34.15
-
-
-
-
5.12
256.62
VII. PENALTIES/PUNISHMENTS/COMPOUNDING OF OFFENCES
During the year, there were no penalties/punishments/compounding offences under the Companies Act, 2013.
Mumbai
June 29, 2020
sd/-
T. V. Narendran
Chief Executive Officer &
Managing Director
DIN: 03083605
sd/-
Parvatheesam Kanchinadham
Company Secretary &
Chief Legal Officer (Corporate & Compliance)
ACS: 15921
196
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
ANNEXURE 10
Particulars of Loans, Guarantees or Investments
[Pursuant to Section 186 of the Companies Act, 2013]
Amount outstanding as on March 31, 2020
Particulars
Loans given
Guarantees given
Investments made
Loans, Guarantees given or Investments made during the Financial Year 2019-20
(` crore)
Amount
1,600.40
9,329.87
46,860.91
(` crore)
Name of the Entity
Relation
Amount
Subarnarekha Port Private Limited
T Steel Holdings Pte. Ltd.
Tata Steel Special Economic Zone 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
T Steel Holdings Pte. Ltd.
Tata Steel Long Products Limited
(formerly Tata Sponge Iron Limited)
Tata Steel Special Economic Zone Limited
Jamshedpur Continuous Annealing & Processing
Company Private Limited
S & T Mining Company Private Limited
Subsidiary
Joint Venture
3.00
1,499.02
25.00
0.03
0.03
0.03
8.80
0.03
0.03
0.03
0.03
7,643.94
1,292.20
214.22*
61.20
5.20#
Particulars of Loan,
Guarantees given or
Investments made
Purpose for which the loans,
guarantees and investments
are proposed to be utilised
Loan
Investments in Equity
Shares
Business purpose
* Advance against equity has subsequently been converted into investment in equity shares during the Financial Year 2019-20.
# Represents amount receivable converted into investment in equity shares during the Financial Year 2019-20.
During the year ended March 31, 2020, the Company has recognised a total impairment loss of `1,150.87 crore and a net fair value gain of
`106.26 crore, with respect to investments held in its subsidiaries and an associate. The impairment loss primarily relates to equity shares
investments held in T Steel Holdings Pte. Ltd. (`860.00 crore), Tata Steel Special Economic Zone Limited (`150.00 crore), NatSteel Asia Pte. Ltd.
(`126.00 crore), Jamshedpur Football and Sporting Private Limited (`8.80 crore) and TRF Limited (`5.79 crore). Net fair value gain relates to a gain
of `356.26 crore and a loss of `250.00 crore for preference shares investments held in T Steel Holdings Pte. Ltd. and TRF Limited respectively.
Mumbai
June 29, 2020
On behalf of the Board of Directors
sd/-
N. CHANDRASEKARAN
Chairman
DIN: 00121863
197
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
ANNEXURE 11
Particulars of Energy Conservation, Technology Absorption and
Foreign Exchange Earnings and Outgo
[Pursuant to Companies (Accounts) Rules, 2014]
(A) Conservation of Energy
(i)
Steps taken or impact on conservation of energy
Jamshedpur
• Achieved lowest ever plant Specific Energy Consumption of
5.635 GCal/tcs
• Converted the existing sodium vapour lamps across conveyors
and the High Mast Lighting Tower into LED
• Developed and implemented Group Stopping Command to
reduce the ideal conveyor running time
• Reduced the raw material feeding time to customers by
increasing the Tonnes Per Hour (Conveyor Capacity) from stacker
• Commissioned a new LD Gas holder and recovery system and
achieved highest ever LD Gas recovery of 59,890 Nm3/hr
Utilities
• Fulfilled electrical power demand from by-product gases
utilisation - 63.06%
• By-product gas utilisation - 92.21%
• LD Gas recovery - 64.05% of total number of heats
• Top
Pressure
generation - 91,055 MWH
Recovery
Turbine
average
energy
• Green power initiative - Achieved 23,692 MWH power generation
from Coke Dry Quenching ('CDQ') Back Pressure Turbine
Generator ('BPTG')
• Supplied 90% of total process steam from CDQ Waste Heat
Recovery Boiler
• Reduced fresh water intake by 6.63% by recovering and recycling
of drain water
• Enhance ~2.5 MW power generation from CDQ Turbine
Generator since August 2020, by innovatively using RH (Ruhrstahl
Heraeus) Degasser at Steel Melting Shop ('SMS') as idle Steam
consumption point to increase power generation
• Energy Performance Improvement Team organised ideation and
knowledge sharing sessions across Indian operations on Water
Conservation theme
Sinter Plant
• Reduced Solid Fuel requirement in Sinter Making by 1.8 kg/ton in
FY 2019-20 to 75.89 kg/ton, by optimising charge density
• Achieved best by-product gas utilisation of 98.44%
• Achieved highest ever in-house power generation of 245MW by
utilising by-product gases and through waste heat recovery
• Achieved lowest ever power rate of 378 kwhr/tss
• Four new Variable Frequency Drives installed for high power
consumption equipments
• Recorded lowest ever specific water consumption of 2.82 m3/tcs
and reduced fresh water intake by 14% over FY 2018-19
• Stabilised the Sludge De-Watering Plant, thereby enabling 100%
use of sludge from the Gas Cleaning Plant in Pellet Plant in place
of anthracite coal
• Completed life extension and capacity enhancement of 25MW
Turbo-Generator set to 30MW level
• Energy Performance Improvement Team organised ideation and
knowledge sharing sessions across Indian operations to exploit
cross learning and synergy
• Conducted mandatory energy audit, and monitoring and
verification audit complying the Perform Achieve and Trade
Cycle-II regulation
Kalinganagar
Raw Material Holding System and Logistics
•
Installed solar panels at various locations to reduce power cost
and external dependency at the Tata Steel Kalinganagar ('TSK')
traffic system and the premises outside the plant
198
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Coke Plant
Hot Strip Mill
• Reduced specific water consumption to 0.90 m3/ton of gross coke
produced during FY 2019-20 (FY 2018-19: 1.02 m3/ton)
• Reduced coke moisture to 1.74% in FY 2019-20 (FY 2018-19: 2.94%).
1% reduction in coke moisture leads to reduction of about 3 Kg of
fuel rate at the Blast Furnace resulting in a saving of 9,150 Tonnes
of fuel at Blast Furnace
• Generated cleanest Coke Oven Gas during FY 2019-20 by
achieving the lowest ever ammonia, naphthalene and tar fog at
54 mg/Nm3, 31.7 mg/Nm3 and 5.68 mg/Nm3 respectively
• Conserved Foreign Exchange by using lowest cost imported
coking coals among all the coke making facilities of the Company
and use of coke dust in coke making, thereby replacing valuable
coking coals in the coal blend
Blast Furnace
• Reduced Hot Metal Silica
to 0.65%
in FY 2019-20
(FY 2018-19: 0.74%)
• Reduced mill specific power consumption from 122 KWH/T to
118 KWH/T through several initiatives undertaken in SHIKHAR
project such as:
− planned stoppages for longer duration in place of multiple
shorter durations; and
− power optimisation during idle period by switching off
equipment, descaling pumps, motors amongst others
(ii)
Steps taken by the Company for utilising alternate
sources of Energy:
Jamshedpur
• Commissioned pilot project on ‘Energy Recovery Micro Turbine’
to recover throttling loss in pressure reducing station for
de-aeration application of Boiler feed water
• Commissioned pilot project on ‘Vapor Absorption Machine’ to
utilise the waste heat of Boiler blow-down water and condensate/
steam from steam traps
• Reduced Total Fuel rate to 541 kg/tHm through process
optimisation (FY 2018-19: 549 kg/tHm)
Kalinganagar
Steel Melting Shop (‘SMS’)
• Reduced specific water consumption from 0.46 m3/tcs to
0.43 m3/tcs by changing of Gas cleaning circuit logic
•
Increase in solid waste consumption in sinter making to 76.8 kg/
ton of Net Sinter in FY 2019-20. (FY 2018-19: 73.4 kg/ton)
(iii) Capital investment on energy conservation equipments:
Particulars
Jamshedpur
Installation and commissioning of Energy Recovery Micro Turbine at Power House#4
Installation and commissioning of Vapor Absorption Machine at Power House#4
Installation of Variable Frequency Drive in High Tension ('HT') motors with variable load
Provision for LDO firing facility in Boilers of Power House#4
Capacity enhancement and life extension of 25MW Turbo-Generator set at Power House#4
New LD Gas Holder
` crore
1
1
2
4
11
116
199
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 (B) Technology Absorption
1.
(i)
Efforts made towards technology absorption
Projects under Research and Development
Project title
Jamshedpur
Benefits
Implementation of second stage hydro
cyclone trials at Ores, Mines, & Quarries
('OMQ') to recover the iron values from online
slime
Wollastonite flux trials at iron ore Pellet
plant, to improve the pellet strength and
productivity
Process for rapid heating of non-coking coal to
coke through microwave energy
CO2 Capture from BF gas
Cyanide Removal from steel industry effluents
Value from Waste
Online Laser Profile Measurement at H Blast
Furnace
Kalinganagar
Coilability Prediction Model
Power Prediction at HSM
Width Extra to Order ('ETO') Reduction
In the absence of adequate beneficiation facility at Noamundi, ~15% of wet Run of Mine is
discarded as slime having ~8% Aluminium Oxide (Al2O3) and ~55% Iron. Based on modelling
and simulation results, continuous trial of 25 tons/hour capacity was carried out using modular
second stage hydro cyclone plant at Noamundi for a period of 30 days. The trials have indicated
a potential to recover approximately 50% iron value from slime having ~4.5% Aluminium Oxide
and ~62% Iron.
Wollastonite based calcium silicate has been established as flux in iron ore pelletisation to
improve the pellet strength and productivity. Trails at 6 MnTPA pelletising plant at 1.3% dosage
successfully improved the pellet Cold Compressive Strength ('CCS') by 30 points.
The process has demonstrated the technology at bench scale with 40% non-coking coal in
the coal blend and the Company is planning to upscale the technology to a continuous coke
making at a scale of 1 ton/hour.
5 tons/day CO2 capture pilot plant from Blast Furnace ('BF') gas has been installed at LD#1 of
the Jamshedpur Plant.
5 m3/hour Pilot study of new advance oxidation process for Tertiary treatment for cyanide
removal below 0.2 PPM (parts per million) of total cyanide has been established. The Detailed
Project Report of full scale plant @100 m3/hour has also been completed. The fabrication and
installation of the commercial plant is under processing.
Established a process for using water-cooled and air-cooled Ferro Chrome slag material
in applications such as bitumen road, concrete and fly ash slag bricks. The Company also
constructed the first bitumen road of India without using any other natural aggregate (except
Ferro Chrome slag) at Ferro Alloys Plant, Bamnipal premises and it is performing well under
heavy traffic conditions.
A laser profile meter system installed at H Blast Furnace images real time top burden profile.
An algorithm is developed which further processes the image data to generate critical insights
for blast furnace operators such as check for non-uniformity in distribution, burden descent
rate, layer profile, coke ratio distribution across the diameter of furnace across all radial points
amongst others. This system does not require any safety interlocks as compared to conventional
mechanical probe based profilometer because of its non-invasive nature which gives flexibility
to the operator to operate it for 24 hours through 7 days for multiple times, without any down
time for burden charging.
The model developed by Hot Strip Mill ('HSM') Operations team and Research & Development
team predicts coiling feasibility through first principles and has been useful in development of
API X-70.
The predictive model for HSM power consumption developed based on the past power
consumption data and rolling schedule, with an accuracy of 86%, helps in final power
scheduling.
Advance analytic techniques such as Gradient Boost, Random Forest, Partial dependency and
Density plot are being used to determine the most influencing parameters and their boundary
limits, which has helped in optimising the performance of width control model. This has
resulted in reduction in ETO on account of width by 88%.
200
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR (ii) Process Improvement
Jamshedpur
Mining:
• An insight development on application of blast free mining
technology (Surface Miner) in hard rock (Underground Coal
Study: ~80 Mpa) such as overburden material (sandstone,
shale etc.) near West Bokaro has been conducted. This would
be a first of its kind in the world for removing materials which
creates overburden.
• The identification of Strata monitoring parameters and suitable
instruments to understand strata behaviour and design suitable
support system for Jharia group coal mines has been conducted.
The procurement for the instruments used in this process is
currently underway.
Ore Beneficiation Technology
• Assessing and improving screw classifier performance at wet
plant, Noamundi Iron Ore Mines.
• Finalising 0.6 MnTPA slime beneficiation using High Gradient
improvement on raw coal basis established by replacement
of conventional rotor-stator in 3 flotation cells (out of 12) with
new generation mixing mechanism (Float Force) developed
by Outotec. Mixing mechanism is the heart of a flotation
cell which provides turbulent energy, allows suspension of
coal particles in the slurry and collision of coal particles with
air bubbles. Parallel deployment in 3 other flotation cells at
Washery#3 is in progress
Coal Coke
• Leaner blend practice at Hoogly Met Coke ('HMC') without
affecting the coke quality: Usage of prime hard coking coal
reduced from 34% to 20%. This accrued benefits of `60 crore.
• Developing coal blend optimiser to have optimum distribution
of coals across all sites with minimum blend cost for Tata
Steel India.
Agglomeration
• Developing Iron ore distribution model with the aim to optimise
overall cost (Logistics and Value in Use) across the sites.
Magnetic Separator (‘HGMS’) plant at Noamundi
Blast Furnaces
• Finalising paste thickener technology for slime disposal at OMQ
•
Improving efficiency of Gomardih dolomite for production
of Magnesium by TechMag process through thermodynamic
feasibility study. This can yield a magnesium with grade
of 99.6% purity.
Coal Beneficiation Technology
• Enhancing process visibility at West Bokaro washery#3 by
installing of 6 flow meters and 6 density meters in critical
locations of Washery#3 fines circuit – flotation, vacuum belt filter,
reflux classifier.
• Enablers to improve flotation performance:
A.
New Technology: Lab studies in Hydrophobic Hydrophilic
Separation (an advanced version of oil agglomeration) at
Virginia Tech. (USA) indicate possibility to achieve higher
yields at a significantly
lower ash (>9%) and moisture
(<2%) simultaneously
B.
Levers in the existing flotation process:
− Clean Coal Yield Improvement at Bhelatand Coal Preparation
Plant ('BCPP'): Trial and regularisation of additional Coagulant
and flocculant in effluent of Bird Centrifuge at BCPP, resulting
in 0.58% yield gain on Raw Coal basis.
− Installation of Float Force - a new mixing mechanism
in, 'Flotation cell' at Washery #3: 0.4% clean coal yield
• Utilising of 3.15 mm to 5 mm size sinter at ‘I’ blast furnace for
the first time in India, which has led to a greater proportion of
agglomerates in the blast furnace burden with a consequent
improvement in gas utilisation and reduction in the fuel rate.
• Deploying of the raw flux prediction system in Level 2 across
F, G, H and I blast furnaces which streamlined the indiscriminate
raw material
raw fluxes under varying
addition of
chemistries thereby leading to realisation of a consistent slag
chemistry regime.
• Developing an operating philosophy of a large blast furnace
using two stoves. The same has enabled sustenance of stable
blast furnace operations in the event of a stove outage
Ferro Alloys
• Established new way of electrical power reduction in Ferro
Chrome production at Bamnipal by addition of Ferro Silicon as
reducing agent through a series of lab trials.
• Developed practice for re-using Ferro Chrome fines as value
added product. The plant trial will take place in FY 2020-21.
Process Visualisation & Diagnostics (‘PV & DT’)
• Developed Virtual pile making model using real time data
for Noamundi iron ore pile facilitating visibility of chemical
composition and material mix of every location of 100 kilo tonne
pile, to identify and take corrective action in order to reduce
standard deviation of iron ore fines quality.
201
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 • Successful trial of image processing based foreign particle
detection system in raw material conveyer belt to eliminate any
breakdown due to high density material (e.g. concrete boulders
mixed with coal) entering the grinding circuit of mills.
other major integrated steel plants in India were also covered.
The final report with our recommendation will be submitted
in
to Bureau of
the due course.
Indian Standards for necessary approval
Kalinganagar
Raw Material Holding System
• Reduction in rail idle freight in Outbound logistics from `338/ton
ideas.
in FY 2018-19 to `261/ton in FY 2019-20
• Re-routing of Freight Operation Information System connectivity
without hampering commercial activities has been achieved to
save time in documentation
•
•
•
Installation of mechanised auto-wagon decoupling mechanism
Inhouse modification of Single Wagon Tippler ('SWT') to handle
‘BOST’ (Bogie Open Wagon with transitional coupling) rake that
has been reduced the dependency of ‘BOXN’ (Bogie open wagon
pneumatic break block) wagons for material handling
Improved throughput of Value Added Products to 391 KT in
FY 2019-20 from 200 KT in FY 2018-19
• Reduction in Man Machine interface by administrative control
by use of designated pathways, drop gate installations, and
Reinforced Cement Concrete Toe wall at Rail siding
• Use of fall protection platform for rail and road dispatch
Sinter Plant
•
Improvement in Sinter Reducibility Index ('RI') from 73.9 to 76,
sustaining the Reduction Degradation Index ('RDI') average as
per Memorandum of Understanding with blast furnace.
Coke Plant
• Development of In-House integrated Level II system for the
operation of Coke Drying Quenching ('CDQ') using Advanced
Analytics. This is the first of its kind application in the world
where the CDQ operation is regulated by the Coke Oven Battery
Pushing schedule.
• Development of common pushing and charging schedule for
both the Coke Oven Batteries using Advanced Analytics. This
is a first of its kind application custom made for the unique
configuration of the TSK Coke Oven Batteries and the CDQ.
•
Improvement in defects in coke strength after reaction through
Coal Yard management.
• Developing real time alert system for coke ovens to improve
operational efficiency and oven health.
Process Energy & Emission
• Formed CO2
impact centre to drive CO2 reduction
12 MnT of CO2 ideas were identified during FY 2019-20
• Reusing disposed Electro Static Precipitator dust
in
agglomeration process, washing of dust trial done in I Blast
Furnace Gas Cleaning Plant. Implementation of the system in
centralised sludge dewatering plant is underway which has
helped sinter plants to reduce stack emission by 10-15 mg/Nm3.
• Developed CO2
intensity model
for
ironmaking
to
diagnose the deviation.
Characterisation and Specialty support
• Higher value added downstream product from Coal Tar: For better
realisation from coal tar, a by-product of coke making process,
the technology team and R&D team are exploring the possibility
to manufacture General Purpose Carbon Fiber ('GPCF') and
it and to
High-Performance Carbon Fiber
characterise the carbon fiber for suitable standard applications.
Preparation of concept note along with development of
technology road map and identification of suitable service
provider for manufacturing of Carbon fiber from our by-product
coal tar has been completed.
('HPCF') from
• Manufacturing of sustainable and green construction materials
from LD slag: Tata Aggreto & Tata Nirman are two brands created
to upcycle Steel Slag into sustainable building materials, such
as different grades of Paver Blocks, Fly Ash bricks, etc. These
value-added products are characterised by higher durability,
lower water absorption capacity and better compressive strength
as compared to traditional building materials. These ideas are
being deployed horizontally at plants in Tata Steel Kalinganagar
and Tata Steel BSL Limited.
• Comprehensive collaborative study on utilisation of LD slag
in Portland Slag Cement ('PSC')
is completed. Successful
implementation of this project will lead to 100% green and
sustainable evacuation of 0-6 mm fraction of LD slag. In this
collaborative project with National Council of Cement and
Building Materials, Faridabad, ('NCCBM'), LD slag samples from
202
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Blast Furnace
•
Improvement in Pulverised Coal Injection ('PCI') rate at Blast
Furnace at TSK from 151 Kg/Thm to 177 Kg/Thm in FY 2019-20 by
improving the injection capacity
Steel Melting Shop (‘SMS’)
•
Improvement in usage of clean scrap from 3.1% in FY 2018-19 to
4.1% in FY 2019-20, resulting into CO2 reduction of 0.084 t/tcs
• Reduction of HM+Scrap in SMS from 1,111.8 Kg/Tcs in FY 2018-19
to 1,102.04 Kg/Tcs in FY 2019-20
• Optimisation of Metal Recovery Plant Scrap Consumption in
SMS, increased usage up to 51% in FY 2019-20 as against the
annual plan of 35%
• Development of cold rolled dual phase steel with 780 MPa
minimum tensile strength and obtaining first phase approval
from a leading automotive manufacturer
• Development of
steel with
490 MPa minimum tensile strength, which is an enabler for
de-gauging. This is over the existing BH220 grade
rolled dual phase
cold
• St52.3 grade developed to meet customer demand for Industrial
rack application. This is a first-time development of ‘thin’ HR coil
which is < 2 mm
• Fe 600 HD rebars to meet customer demand
• Developed high carbon wire rods for high hardness “steel shots”
an import substitute
• Reduction of lime consumption in SMS from 70.7 Kg/Tcs in
FY 2018-19 to 67.76 Kg/Tcs in FY 2019-20
• Developed new sizes of wire rods (6.5 mm, 8.5 mm) for increased
productivity at customer end
•
Improvement in casting speed of SMS Caster from 1.24 Mtr/Min in
FY 2018-19 to 1.28 Mtr/Min in FY 2019-20
• Reduction in caster throughput by 16.7% by reduction in planned
downtime and unplanned outages due to mould failures,
segment failure, breakout and slab stuck by 50 hours, in SMS
• Developed Gr-7 wire rods
for high strength Steel Fibre
Reinforced Concrete.
• Developed HC78B, 5.5 mm wire rods for high tensile tyre bead
wire as per IS4824.
• Developed HC82B[SS], 8 mm wire rods for Gr-III springs.
Hot Strip Mill (‘HSM’)
Kalinganagar
•
•
Improvement in gross yield from 97.98% to 98.14% through
optimisation of crop loss and sampling loss
Improvement in tensile and toughness properties of Hot Rolled
coils through intensive cooling, especially in thicker i.e. >12 mm
thickness, reducing the cost of micro alloying elements
• Development of DP600 with low Silicon addition to improve
surface quality by controlling Silicon scales
(iii) Product Development
Jamshedpur
• Development of BS-VI compliant Fuel Tank Coating for two-
wheeler segment
• Developed 5 hot rolled grades, 1 cold rolled grade and 3 coated
product grades for a specific project
• Developed API X-70 for non-sour applications
in section
16 mm x 1,580 mm.
• Developed FB590/FB540 for wheels disc applications using
Ferrite and Bainite.
• Developed Automotive grades such as S460MC & S420MC,
to meet demands of
JSH440
DP590,
JSH590R &
automotive customers.
• Development of UT guaranteed grades, e.g. E350 Gr.C/S355J2 for
thickness >16 mm for Lifting & Excavation Equipment and wind
tower applications.
203
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 2. Benefits derived from key projects
Project title
Jamshedpur
Increase in cold rolling mill [PLTCM] productivity by increasing
pickling speeds
Use of low cost ferro-alloy and thin slab caster productivity increase
in LD3 TSCR
Micro alloy redesign of Niobium based steels in LD3 Thin Slab Caster
leading to cost saving in E46 and YST38 grades
Elimination of ‘coil break mark’ defect in formable grade HR coils
Yield improvement in New Bar Mill ('NBM')
Reduction of cobble in TSCR mill using advanced analytics
Strike rate improvement in WR3M grade
Use of synthetic slag in ladle furnace of LD2 and Slab caster shop
Pass life improvement in finishing stand of Indian Steel and Wire
Products mill
Optimisation of rolling parameters for easy descaling and
minimisation of scale loss in low carbon wire rods grades
Value creation by reducing % Silicon from Fe500SD grade rolled
in New Bar Mill
Value Creation by rolling of 15/30 C grade transition billet into high
margin product (TMT Fe500)
Kalinganagar
Improvement in Sinter Reducibility Index by keeping Reduction
Degradation Index within permissible limit (<30)
Improvement in casting speed of SMS Caster
Improvement in Pulverised Coal Injection ('PCI') rate at BF TSK from
150kg/THM to 179 Kg/THM in FY 2019-20
Improvement in CDQ utilisation
BF reliability improvement
Reduction in HM+Scrap from 1,111.8 kg/tcs to 1,102.5 kg/tcs in
FY 2019-20
Optimisation of Metal Recovery Plant ('MRP') Scrap Consumption in
Steel Melting Shop
Benefits derived
Savings of more than `3 crore/annum
Savings of more than `5 crore/annum
Savings of more than `7 crore/annum
Coil break mark defect eliminated
The yield of NBM has increased by 1% leading to savings of `12.7 crore/
annum.
Reduced mill downtime due to cobbles. Savings: `4.9 crore/annum.
Strike rate improved by ~5%. Savings: `1 crore/annum
Synthetic slag has been an environment friendly replacement of
fluorspar
Pass life increased from 250-350 tons to 500-700 tons. This resulted in
reduction in downtime and increase in mill throughput
Scale loss reduced by ~40% which is an increase in wire drawing speed
and die life.
Desired properties achieved with leaner chemistry. Savings: `3.15 crore
Produce prime grade finished product using transition billets.
Savings: `1.14 crore
Reduction in Coke Rate at Blast Furnace
Increase in maximum casting speed of Low C grades with development
of high speed casting powder and use of advance analytical model to
control superheat has led to increase in throughput of SMS
PCI improvement owing to improvement in injection rate from
85 tons/hour to 92 tons/hour
Increase in CDQ utilszation by arrangement of Tripple flue plates in
sloping flue area and CDQ level-2 system
Improvement in electrical and mechanical downtime in blast furnace
achieved
Decrease in metal losses attributed to implementation of Smart Raking
System in DS station and change in Tundish Bottom Design along with
fine tuning of Amepa Signal Settings
Optimised use of MRP Scrap by lower use of clean scrap and ferro-shot
204
BOARD’S REPORT (CONTD.)INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR 3.
Information regarding imported technology (last three years)
Torch cutting at IBMD
Induration Burner
CDQ#10 hot coke charging and Power Plant
HSM Furnace skid revamping
EMBR (Phase -1)
E BF Re-lining
New LD Gas Holder
LD#2 AMLC
Sl. No. Technology imported
Jamshedpur
1
2
3
4
5
6
7
8
Kalinganagar
1.
2.
Installation of Slab tilter facility at Steel Melt Shop
Installation of RH Degasser facility at Steel Melt Shop
2nd Barrel Reclaimer (Bulk Material Handling technology)
in Raw Material Bedding and Blending ('RMBB') Sinter Plant
3.
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
June 29, 2020
Financial Year of import
Status
2017-18
2018-19
Commissioned
2019-20
Yet to be commissioned
2018-19
2019-20
Commissioned
Commissioning in progress
(` Crore)
3.72
255.64
259.36
0.43%
(` Crore)
FY 2018-19
6,497.94
14,519.26
450.04
FY 2019-20
6,314.97
12,381.28
509.47
On behalf of the Board of Directors
sd/-
N. Chandrasekaran
Chairman
DIN: 00121863
205
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
Financial
Statements
Highlights
Financial Highlights
Financial Ratios
Production Statistics
Financial Statistics
Dividend Statistics
Standalone
Independent Auditor’s Report
Balance Sheet
Statement of Profit and Loss
Statement of Changes in Equity
Statement of Cash Flows
Notes forming part of the Standalone Financial Statements
208
209
210
210
211
212
222
223
224
226
228
FINANCIAL HIGHLIGHTS
Revenue from operations
Profit/(loss) before tax
Profit/(loss) after tax (including discontinued operations)
Dividends
Retained earnings
Capital employed
Net worth
Borrowings
Net debt to Equity
Net worth per share as at year end
Earnings per share - continuing and discounted operations:
Basic
Diluted
Dividend declared per Ordinary Share
Employees (Numbers)
Shareholders (Numbers)
Tata Steel Standalone
Tata Steel Group
(` crore)
2019-20
60,435.97
6,610.98
6,743.80
1,489.67
32,106.96
1,24,123.27
76,838.12
41,422.87
Ratio
0.49
`
670.53
57.11
57.11
10.00
32,364
8,96,919
2018-19
70,610.92
16,227.25
10,533.19
1,145.92
27,694.90
1,10,238.18
72,729.71
29,701.47
0.42
634.68
90.41
90.40
13.00
32,984
8,09,578
2019-20
1,39,816.65
(231.72)
1,172.46
1,488.13
18,127.82
2,01,752.48
76,162.90
1,16,328.20
Ratio
1.42
`
665.32
11.86
11.86
10.00
70,212
2018-19
1,57,668.99
15,905.72
9,098.33
1,144.76
14,056.43
1,84,565.65
71,289.54
1,00,816.22
1.43
622.75
87.75
87.74
13.00
70,137
208
INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH 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
Tata Steel Standalone
Tata Steel Group
2019-20
24.98%
13.76%
9.54%
9.02%
60.26%
70
7
1.26
0.49
0.81
4.37
670.53
57.11
57.11
17%
4.72
2018-19
29.38%
23.14%
16.26%
15.43%
72.19%
60
8
1.22
0.42
0.73
9.57
634.68
90.41
90.41
17%
5.76
2019-20
12.68%
2.52%
4.94%
1.59%
57.27%
85
26
1.46
1.42
1.40
1.68
665.32
22.02
11.86
98%
12.25
8.
Gross Block to Net Block: Gross Block/Net Block
2018-19
18.88%
10.16%
12.95%
13.67%
69.20%
72
28
1.40
1.43
1.39
4.38
622.75
88.32
87.75
20%
5.90
(EBITDA: PBT +/(-) Exceptional Items + Net Finance Charges
+ Depreciation and amortisation - Share of results of equity
accounted investments)
(Gross Block: Cost of property, plant and equipment + Cost
of right-of-use assets + Capital work-in-progress + Cost of
intangible assets + Intangible assets under development)
(Net Finance Charges: Finance costs - Interest income - Dividend
income from current investments - Net gain/(loss) on sale of
current investments)
(Net Block: Gross Block - Accumulated depreciation and
amortisation - Accumulated impairment)
9.
Net Debt to Equity: Net Debt/Average Net Worth
(Turnover: Revenue from Operations)
2.
PBET/Turnover
Profit before exceptional items and tax/Turnover
3.
Return on Average Capital Employed: EBIT/Average
Capital Employed
(Capital
Borrowings
current
Current Borrowings + Deferred tax liabilities)
Employed:
+
borrowings
Equity
+
maturities
Lease
Total
Current
and
Non-current
Non-
of
+
Obligations
(EBIT: PBT (including discontinued operations) +/(-) Exceptional
Items + Net Finance Charges)
Return on Average Net worth: PAT (including discontinued
operations)/Average Net worth
(Net worth: Total equity)
Asset Turnover: Turnover/(Total Assets - Investments - Advance
Against Equity)
Inventory Turnover: Average Inventory/Sale of Products in days
Debtors Turnover: Average Debtors/Turnover in days
4.
5.
6.
7.
(Net debt: Non-current borrowings + Current borrowings
+ Current maturities of long-term borrowings and lease
obligations - Current investments - Cash and cash equivalents
- Other balances with banks
(including non-current
earmarked balances))
10.
Current Ratio: Current Assets including assets held for sale
(excluding current investments)/Current Liabilities including
liabilities held for sale
(Current liabilities: Trade Payables + Short-term provisions +
Other current liabilities - Current maturities of Non-current
borrowings and 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.
14.
15.
Basic Earnings per share: Profit attributable to Ordinary
Shareholders/Weighted average number of Ordinary Shares
Dividend Payout: Proposed dividend for the year (includes tax
on dividend)/Profit after tax
P/E Ratio: Market Price per share/Basic Earnings per share-
continuing operations
209
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
PRODUCTION STATISTICS
Year
Iron
Ore
Coal
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
2018-19
2019-20
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
23,374
26,512
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
6,546
6,210
Iron
(Hot
metal)
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
14,237
14,094
Crude
steel
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
13,228
13,152
Rolled/
Forged Bars
and
Structurals
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
1,959
1,984
Plates
Sheets
88
92
78
-
-
-
-
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
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
0
0
Hot
Rolled
Coils/
Strips
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
7,801
7,793
Cold
Rolled
Coils
-
-
-
-
-
-
-
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
1,858
1,713
Railway
Materials
’000 Tonnes
Semi-
Finished
for Sale
Total
Saleable
Steel
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
0
0
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
1,386
1,499
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
12,980
12,878
FINANCIAL STATISTICS
Year
Capital^
Reserves
and
Surplus
Borrow-
ings
Gross
Block
Net
Block
Invest-
ments
Total
Income
Total
Expen-
diture*
Depre-
ciation
Profit
before
Tax
Tax
Profit
after
Tax
(` crore)
Dividend#
2017-18
2018-19
2019-20
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
3,421.12
3,421.13
69,308.59
73,416.99
29,701.47
41,422.87 1,00,072.72 79,480.43 50,096.07 60,840.09 50,308.99 3,920.12
3,802.96 16,227.25
6,610.98
77,018.31 39,406.72
93,762.15
73,016.00
52,985.79
5,694.06 10,533.19
(132.82) 6,743.80
1,370.78
1,787.38
^
c
#
Capital includes Equity share capital, Hybrid perpetual securities and Share application money pending allotment.
Expenditure includes excise duty recovered on sales, exceptional items and excludes depreciation.
paid during the year and includes tax on dividend.
210
StandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
DIVIDEND STATISTICS
Year
First Preference
(`150)
Second Preference
(`100)
Ordinary
(`10)
Total
` lakh
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
2018-19
2019-20
Rate
`
Dividend
` lakh
Rate
`
Dividend @
` lakh
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
9.25
–
8.42
–
–
–
–
–
0.4g
2.00
2.00
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
860.80
1,496.58 e,f
228.33
–
–
–
–
–
2,596.11
12,805.48
5,367.78
–
–
–
–
–
–
–
–
–
–
Tax on
dividend
` lakh
–
–
–
–
–
–
–
–
–
85.30
275.88
21.13
–
–
–
–
377.12
1,860.16
779.74
–
–
–
–
–
–
–
–
–
–
Rate*
`
Dividend @
` lakh
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
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
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
10,092.00
82,042.66
16,041.72 1,10,432.51
19,866.05 1,39,355.65
19,549.31 1,49,249.20
87,844.93
11,500.02
15,671.62 1,30,777.35
18,157.49 1,34,703.22
90,569.91
12,872.69
6,618.86 1,03,740.40
92,627.74
14,930.51
3.10
3.50
2.50a
3.00b
3.50c
4.50d
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
10.00h
13.00
10.00
92,471.69
1,16,893.21
1,38,147.27
1,79,587.42
1,14,593.05
14,774.46
92,471.69
19,771.66 1,16,893.21
23,554.82 1,38,147.27
30,620.57 1,79,587.42
– 1,14,593.05
a On the Capital as increased by Rights Issue of Ordinary Shares during the financial year 1992-93.
b On the Capital as increased by Ordinary Shares issued during the financial year 1993-94 against Detachable Warrants.
c On the Capital as increased by Ordinary Shares issued during the financial year 1994-95 against Detachable Warrants and Foreign Currency Convertible Bonds.
On the Capital as increased by Ordinary Shares issued during the financial year 1995-96 against Detachable Warrants, Foreign Currency Convertible Bonds and
d
Naked Warrants.
Includes Dividend of `22.30 lakhs on 9.25% Cumulative Redeemable Preference Shares for the period April 1, 2000 to June 27, 2000.
Includes Dividend of `1,198.40 lakhs on 8.42% Cumulative Redeemable Preference Shares for the period June 1, 2000 to March 31, 2001.
e
f
g Dividend paid for 74 days.
h On the Capital as increased by Rights Issue of Ordinary Shares during the financial year 2017-18.
*
@
Dividend proposed for the year
Includes tax on dividend.
211
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 INDEPENDENT AUDITOR’S REPORT
To the Members of Tata Steel Limited
Report on the audit of the Standalone financial statements
Emphasis of Matter
4. We draw your attention to the following matters:
(a)
Note 7 (iv) to the standalone financial statements which
states that the ability of the Tata Steel Europe (TSE), the
step-down subsidiary of T Steel Holdings Pte Ltd (TSH),
a subsidiary of the Company, to continue as a going
concern is dependent on the outcome of measures taken
as stated therein and the availability of future funding
requirements, which could have a consequential
impact on the carrying amount of
investment of
`20,854.89 crores (net of provision for impairment
amounting to `860.00 crores) in TSH as at March 31, 2020.
Further, the auditors of TSE have, without modifying
the opinion, reported a Material Uncertainty Related
to Going Concern vide their report dated June 24, 2020
on the financial information of TSE for the year ended
March 31, 2020.
(b)
Note 2(c) to the standalone financial statements which
explains the uncertainties and management’s assessment
of the financial impact due to lockdown / restrictions
related to the COVID-19 pandemic imposed by the
Governments, for which a definitive assessment of the
impact is dependent upon future economic conditions.
Our opinion is not modified in respect of these matters.
Opinion
1.
2.
We have audited the accompanying standalone financial
statements of Tata Steel Limited (“the Company”), which
comprise the balance sheet as at March 31, 2020, and the
statement of Profit and Loss (including Other Comprehensive
Income), statement of changes in equity and statement
of cash flows for the year then ended, and notes to the
including a summary
standalone financial statements,
of significant accounting policies and other explanatory
information (hereinafter referred to as “the Standalone
Financial Statements”).
In our opinion and to the best of our information and according
to the explanations given to us, the aforesaid standalone
financial statements give the information required by the
Companies Act, 2013 (“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, 2020, and total comprehensive
income (comprising profit and other comprehensive income),
changes in equity and its cash flows for the year then ended.
Basis for Opinion
3.
We conducted our audit in accordance with the Standards
on Auditing (SAs) specified under section 143(10) of the
Act. Our responsibilities under those Standards are further
described in the Auditor’s Responsibilities for the Audit of the
Standalone Financial Statements section of our report. We are
independent of the Company in accordance with the Code
of Ethics issued by the Institute of Chartered Accountants of
India together with the ethical requirements that are relevant
to our audit of the standalone financial statements under the
provisions of the Act and the Rules thereunder, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements and the Code of Ethics. We believe that the
audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
212
StandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
Key audit matters
5.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial
statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
Assessment of
contingent liabilities
litigations and
related disclosure of
How our audit addressed the key audit matter
Our audit procedures included the following:
[Refer to Note 2 (c) to the Standalone financial statements– “Use
of estimates and critical accounting judgements – Provisions and
contingent liabilities”, Note 37 (A) to the Standalone Financial
Statements – “Contingencies” and Note 38 to the Standalone
financial statements – “Other significant litigations”].
As at March 31, 2020, the Company has exposures towards litigations
relating to various matters as set out in the aforesaid Notes.
Significant management judgement is required to assess such
matters to determine the probability of occurrence of material
outflow of economic resources and whether a provision should
be recognised, or a disclosure should be made. The management
judgement is also supported with legal advice in certain cases as
considered appropriate.
As the ultimate outcome of the matters are uncertain and the
positions taken by the management are based on the application
of their best judgement, related legal advice including those
relating to interpretation of laws/regulations, it is considered to be
a Key Audit Matter.
• We understood, assessed and tested the design and operating
effectiveness of key controls surrounding assessment of
litigations relating to the relevant laws and regulations;
• We discussed with management the recent developments and
the status of the material litigations which were reviewed and
noted by the audit committee;
• We performed our assessment on a test basis on the
underlying calculations supporting the contingent liabilities/
other
the Standalone
Financial Statements;
litigations made
significant
in
• We used auditor’s experts to gain an understanding and to
evaluate the disputed tax matters;
• We considered external
obtained by management;
legal opinions, where relevant,
• We met with the Company’s external
legal counsel to
understand the interpretation of laws/regulations considered
by the management
in their assessment relating to a
material litigation;
• We evaluated management’s assessments by understanding
precedents set in similar cases and assessed the reliability of
the management’s past estimates/judgements;
• We evaluated management’s assessment around those
matters that are not disclosed or not considered as contingent
liability, as the probability of material outflow is considered to
be remote by the management; and
• We assessed the adequacy of the Company’s disclosures.
Based on the above work performed, assessment in respect of
litigations and related disclosures relating to contingent liabilities/
other significant litigations in the Standalone Financial Statements
are considered to be reasonable.
213
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 Key audit matter
Assessment of carrying value of equity investments in
subsidiaries, associates and joint ventures and fair value
of other investments
[Refer to Note 2 (c) to the Standalone Financial Statements – “Use
of estimates and critical accounting judgements – Impairment and
fair value measurements of financial instruments”, Note 2 (m) to the
Standalone Financial Statements – “Investments in subsidiaries,
associates and joint ventures”, Note 2(n)(I) to the Standalone
Financial Statements – “Financial assets”, Note 7 to the Standalone
Financial Statements – Investments in subsidiaries, associates and
joint ventures”, Note 8 to the Standalone Financial Statements
– “Investments” and Note 40 (b) to the Standalone Financial
Statements – “Fair value hierarchy”]
The Company has equity investments in various subsidiaries,
associates, joint ventures and other companies. It also has made
investments in preference shares in certain subsidiaries /associates
and debentures in a joint venture.
The Company accounts for equity investments in subsidiaries,
associates and joint ventures at cost (subject to impairment
assessment) and other investments at fair value.
For investments carried at cost amounting to `27,798.56 crores
where an indication of impairment exists, the carrying value of
investment is assessed for impairment and where applicable an
impairment provision is recognised amounting to ` 1,220.15 crores,
in case the recoverable amount is lower than the carrying value.
For investments carried at fair values, a fair valuation is done at the
year-end as required by Ind AS 109. In case of certain investments,
cost is considered as an appropriate estimate of fair value since
there is a wide range of possible fair value measurements and
cost represents the best estimate of fair value within that range as
permitted under Ind AS 109.
The accounting for investments is a Key Audit Matter as the
determination of recoverable value for impairment assessment/
fair valuation involves significant management judgement.
The impairment assessment and fair valuation for such investments
have been done by the management in accordance with Ind AS
36 and Ind AS 113 respectively. The key inputs and judgements
involved in the impairment/fair valuation assessment of unquoted
investments include:
• Forecast cash flows including assumptions on growth rates
• Discount rates
• Terminal growth rate
Economic and entity specific factors are incorporated in valuation
used in the impairment assessment.
How our audit addressed the key audit matter
Our audit procedures included the following:
• We obtained an understanding from the management,
assessed and tested the design and operating effectiveness of
the Company’s key controls over the impairment assessment
and fair valuation of material investments.
• We evaluated the Company’s process regarding impairment
assessment and fair valuation by involving auditor’s valuation
experts to assist in assessing the appropriateness of the
valuation model
independent assessment
of the underlying assumptions relating to discount rate,
terminal value etc.
including the
• We assessed the carrying value/fair value calculations of
all individually material investments, where applicable, to
determine whether the valuations performed by the Company
were within an acceptable range determined by us and the
auditor’s valuation experts.
• We evaluated the cash flow forecasts (with underlying economic
growth rate) by comparing them to the approved budgets and
our understanding of the internal and external factors.
• We checked the mathematical accuracy of the impairment
model and agreed relevant data back to the latest budgets,
actual past results and other supporting documents.
• We assessed the Company’s sensitivity analysis and evaluated
whether any reasonably foreseeable change in assumptions
could lead to impairment or material change in fair valuation.
• We discussed with the component auditors of certain entities
to develop an understanding of the operating performance
and outlook used in their own valuation model and to assess
consistency with the assumptions used in the model.
• We had discussions with management
to obtain an
understanding of the relevant factors in respect of certain
investments carried at fair value where a wide range of fair
values were possible due to various factors such as absence
of recent observable transactions, restrictions on transfer of
shares, existence of multiple valuation techniques, investee’s
varied nature of portfolio of investments for which significant
estimates/judgements are required to arrive at fair value.
• We evaluated the adequacy of the disclosures made in the
Standalone Financial Statements.
Based on the above procedures performed, we did not identify
any significant exceptions in the management’s assessment in
relation to the carrying value of equity investments in subsidiaries,
associates and joint ventures and fair value of other investments.
214
StandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Other Information
6.
The Company’s Board of Directors is responsible for the other
information. The other information comprises the information
included in the Integrated Report, Board’s Report along with its
Annexures and Financial Highlights included in the Company’s
Annual Report (titled as ‘Tata Steel Integrated Report &
Annual Accounts 2019-20’) but does not include the financial
statements and our auditor’s report thereon.
Our opinion on the standalone financial statements does not
cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the standalone financial
statements, our responsibility is to read the other information
and, in doing so, consider whether the other information
inconsistent with the standalone financial
is materially
statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated. If, based on the
work we have performed, we conclude that there is a material
misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
Responsibilities of management and those charged with
governance for the standalone financial statements
7.
The Company’s Board of Directors is responsible for the
matters stated in section 134(5) of the Act with respect to the
preparation of these standalone financial statements that
give a true and fair view of the financial position, financial
performance, changes in equity and cash flows of the Company
in accordance with the accounting principles generally
accepted in India, including the Accounting Standards specified
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 financial
statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
8.
In preparing the standalone financial statements, management
is responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting
unless management either intends to liquidate the Company
or to cease operations, or has no realistic alternative but to do
so. The Board of Directors are also responsible for overseeing
the Company’s financial reporting process.
Auditor’s responsibilities for the audit of the standalone
financial statements
9.
Our objectives are to obtain reasonable assurance about
whether the standalone financial statements as a whole
are free from material misstatement, whether due to fraud
or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance
with SAs will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these standalone
financial statements.
10.
As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional scepticism
throughout the audit. We also:
•
•
Identify and assess the risks of material misstatement of
the standalone financial statements, whether due to fraud
or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances. Under Section 143(3) (i) of
the Act, we are also responsible for expressing our opinion
on whether the company has adequate internal financial
controls with reference to standalone financial statements
in place and the operating effectiveness of such controls.
•
Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related
disclosures made by management.
• Conclude on the appropriateness of management’s use of
the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast
significant doubt on the Company’s ability to continue as
a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s
report to the related disclosures in the standalone financial
statements or,
inadequate, to
if such disclosures are
modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s
215
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
11.
12.
13.
report. However, future events or conditions may cause the
Company to cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content
of the standalone financial statements, including the
disclosures, and whether
standalone financial
statements represent the underlying transactions and
events in a manner that achieves fair presentation.
the
We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we identify
during our audit.
We also provide those charged with governance with a
statement that we have complied with relevant ethical
requirements regarding independence, and to communicate
with them all relationships and other matters that may
reasonably be thought to bear on our independence, and
where applicable, related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the standalone financial statements
of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law
or regulation precludes public disclosure about the matter
or when, in extremely rare circumstances, we determine that
a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of
such communication.
Report on other legal and regulatory requirements
14.
As required by the Companies (Auditor’s Report) Order, 2016
(“the Order”), issued by the Central Government of India in
terms of sub-section (11) of section 143 of the Act, we give in the
Annexure B a statement on the matters specified in paragraphs
3 and 4 of the Order, to the extent applicable.
15. As required by Section 143(3) of the Act, we report that:
(a)
(b)
(c)
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 Statement
of Changes in Equity and Cash Flow Statement dealt with
by this Report are in agreement with the books of account.
(d)
(e)
(f)
(g)
i.
ii.
iii.
In our opinion, the aforesaid standalone financial
statements comply with the Accounting Standards
specified under Section 133 of the Act.
On the basis of the written representations received from
the directors as on March 31, 2020 taken on record by the
Board of Directors, none of the directors is disqualified as
on March 31, 2020 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 standalone financial statements
of the Company and the operating effectiveness of such
controls, refer to our separate Report in “Annexure A”.
With respect to the other matters to be included in
the Auditor’s 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:
The Company has disclosed the impact of pending
litigations as on March 31, 2020, on its financial position
in its standalone financial statements – Refer Notes 37(A)
and 38 to the standalone financial statements;
The Company has
including
derivative contracts as at March 31, 2020 for which there
were no material foreseeable losses.
long-term contracts
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, 2020 except for amounts aggregating
to `5.71 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, 2020.
16.
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.
For Price Waterhouse & Co Chartered Accountants LLP
Firm Registration Number: 304026E/ E-300009
Chartered Accountants
Place: Mumbai
Membership Number 042190
Date: June 29, 2020
UDIN: 20042190AAAABW3347
Russell I Parera
Partner
216
StandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
ANNEXURE A TO THE INDEPENDENT AUDITOR’S REPORT
Referred to in paragraph 15(f) of the Independent Auditors’
Report of even date to the members of Tata Steel Limited on
the standalone financial statements as on and for the year
ended March 31, 2020
4.
Report on the Internal Financial Controls with reference
to standalone financial statements under Clause (i) of
Sub-section 3 of Section 143 of the Act
1.
We have audited the internal financial controls with reference
to standalone financial statements of Tata Steel Limited (“the
Company”) as of March 31, 2020 in conjunction with our audit
of the standalone financial statements of the Company for the
year ended on that date.
Management’s Responsibility for Internal Financial Controls
5.
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 with reference to standalone
financial statements 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 with reference to financial statements 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 with reference to financial statements and their
operating effectiveness. Our audit of internal financial controls
with reference to standalone financial statements included
obtaining an understanding of internal financial controls
with reference to financial statements, 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 financial statements,
whether due to fraud or error.
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
with reference to standalone financial statements.
Meaning of Internal Financial Controls with reference to
financial statements
6.
internal financial controls with reference
A company’s
to financial statements 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 controls
with reference to financial statements 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 financial statements in
accordance with generally accepted accounting principles, and
that receipts and expenditures of the company are being made
only in accordance with authorisation 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 financial statements.
Inherent Limitations of
reference to financial statements
Internal Financial Controls with
7.
Because of the inherent limitations of internal financial controls
with reference to financial statements, including the possibility
of collusion or improper management override of controls,
material misstatements due to error or fraud may occur and not
be detected. Also, projections of any evaluation of the internal
217
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls with
reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Opinion
8.
In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to standalone
financial statements and such internal financial controls with reference to standalone financial statements were operating effectively as
at March 31,2020, 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. Also refer paragraph 4(b) of our report.
For Price Waterhouse & Co Chartered Accountants LLP
Firm Registration Number: 304026E/ E-300009
Chartered Accountants
Russell I Parera
Partner
Membership Number 042190
UDIN: 20042190AAAABW3347
Place: Mumbai
Date: June 29, 2020
218
StandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR ANNEXURE B TO THE INDEPENDENT AUDITOR’S REPORT
Referred to in paragraph 14 of the Independent Auditors’
Report of even date to the members of Tata Steel Limited on
the standalone financial statements as of and for the year
ended March 31, 2020
i.
(a)
The Company is maintaining proper records showing full
particulars, including quantitative details and situation,
of fixed assets.
(b)
the
The fixed assets are physically verified by
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, as disclosed in Note 3 on
property, plant and equipment to the Standalone
Financial Statements, are held in the name of the
Company, except for:
(i)
title deeds of freehold land with gross and net
carrying amount of `60.44 crore and title deeds
of buildings with gross carrying amount and
net carrying amount of `83.48 crore and `72.24
crore respectively, which are held in the name of
erstwhile companies which have subsequently
been amalgamated with the Company;
(ii)
title deeds of freehold land with gross and net
carrying amount of `202.67 crore and title deeds
of buildings with gross carrying amount and net
carrying amount of `95.62 crore and `72.40 crore
respectively, which are not readily available.
ii.
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
the items over a period of three years. The discrepancies
noticed on physical verification of inventory as compared to
book records were not material.
iii.
iv.
v.
vi.
The Company has not granted any loans, secured or unsecured,
to companies, firms, Limited Liability Partnerships or other
parties covered in the register maintained under Section 189
of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b)
and (iii)(c) of the said Order are not applicable to the Company.
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 provided by it, as applicable.
The Company has not accepted any deposits from the public
within the meaning of section 73, 74, 75 and 76. 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 the deposits accepted from the public. 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.
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 generally regular in depositing
undisputed statutory dues in respect of income tax, though
there has been a slight delay in a few cases, and is regular in
depositing undisputed statutory dues, including provident
fund, employees’s state insurance, sales tax, service tax, duty
of customs, duty of excise , value added tax, cess, goods and
services tax and other material statutory dues, as applicable,
with the appropriate authorities. We are informed that the
Company has applied for exemption from operations of
Employee’s 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
contribution demanded.
219
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
(b)
According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of
income tax, sales tax, service tax, duty of customs, duty of excise, value added tax or goods and service tax as at March 31, 2020, which
have not been deposited on account of a dispute, are as follows:
Amount paid
(` crore)
Period to which the
amount relates
Forum where the
dispute is pending
Name of the Statute
Nature of dues
Income-tax Act, 1961
Income Tax
Customs Act,1962
Customs duty
Central Excise Act,1944
Excise Duty
Amount
(net of payments)
(` crore)
426.92*
235.82
3.20
322.50
33.12
909.49
5.51
1065.00*
100.00
0.82
59.53
0.10
46.32
3.85
Sales Tax Laws
Sales Tax
27.85
11.05
60.92
7.18
212.91
5.06
124.17
2.11
8.05
1.00
Value Added Tax Laws
Value Added Tax
Finance Act, 1994
Service tax
Goods and Service tax Act, 2017 Goods and
Service tax
27.14
7.87
252.84
22.10
67.40
142.68
133.51
2.53
0.33
0.30
713.12
2.76
0.05
0.75
2.36
2.30
1.07
2.68
0.13
6.67
3.86
0.46
0.01
-
20.67
0.10
-
1998-1999, 2006-2008,
2009-2012, 2013-2014
2010-2011, 2014-2015
2002-2003
2005-2010
1988-1990, 2003-2009
2002-2017
1988-1990, 1996-1997,
1998-1999, 2013-2017
1977-1979, 1983-1984,
1991-1994, 1995-1997,
2000-2004, 2008-2009
1977-1978, 1980-1981,
1983-1985, 1987-1988,
1989-1999, 2000-2002,
2003-2011, 2013-2015,
2016-2017
1988-1990, 1991-1992,
1993-1995, 2001-2004,
2013-2015, 2016-2017
1993-1994, 2002-2004,
2006-2007, 2011-2013,
2014-2018
1975-1976, 1983-1988,
1994-1995, 1997-2003,
2004-2005, 2006-2009,
2011-2012, 2013-2014,
2016-2019
1983-1984, 2002-2003,
2012-2014
1973-1974, 1980-1997,
2004-2005, 2008-2009,
2015-2016
2001-2002, 2003-2004,
2007-2008, 2012-2016
2005-2010, 2012-2015,
2016-2017
2006-2011, 2012-2015
2011-2014, 2015-2018
2005-2017
2005-2006, 2012-2015
1997-1998, 2014-2015,
2016-2018
2010-2011
2006-2018
2005-2009, 2012-2013,
2015-2017
2017-2018
Tribunal
Commissioner (Appeal)
High Court
Tribunal
High Court
Tribunal
Commissioner
High Court
Tribunal
Commissioner
Joint Commissioner
Deputy Commissioner
Additional
Commissioner
Assistant
Commissioner
High Court
Tribunal
Commissioner
Joint Commissioner
Deputy Commissioner
Additional
Commissioner
Assistant
Commissioner
High Court
Tribunal
Commissioner
Commissioner
*excluding net excess payments/adjustments for the years 2008-2009 aggregating `123.21 crores.
220
0.04
2018-2020
Assistant Commissioner
StandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR The following matter has been decided in favour of the Company although the department has preferred appeal at higher levels:
Name of the Statute
Nature of dues
Central Excise Act,1944
Excise Duty
Amount
(net of payments)
(` crore)
235.48
16.98
Period to which the
amount relates
Forum where the dispute is
pending
2004-2005
2009-2010,
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 at the balance sheet date.
xii.
xiii.
ix.
x.
The Company has not raised any moneys by way of initial public
offer. In our opinion, and according to the information and
explanations given to us, the moneys raised by way of further
public offer (including debt instruments) and term loans have
been applied for the purposes for which they were obtained.
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.
xiv.
xv.
xvi.
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.
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 financial statements as
required under Indian Accounting Standard (Ind AS) 24, Related
Party Disclosures specified under Section 133 of the Act.
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.
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.
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.
Place: Mumbai
Date: June 29, 2020
For Price Waterhouse & Co Chartered Accountants LLP
Firm Registration Number: 304026E/ E-300009
Chartered Accountants
Russell I Parera
Partner
Membership Number 042190
UDIN: 20042190AAAABW3347
221
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 Intangible assets
Intangible assets under development
Investments in subsidiaries, associates and joint ventures
BALANCE SHEET
as at March 31, 2020
Assets
I
II
Non-current assets
(a) Property, plant and equipment
(b) Capital work-in-progress
(c) Right-of-use assets
(d)
(e)
(f )
(g) Financial assets
Investments
(i)
(ii) Loans
(iii) Derivative assets
(iv) Other financial assets
(h) Non-current tax assets (net)
(i) Other assets
Total non-current assets
Current assets
(a)
Inventories
(b) Financial assets
(i)
Investments
(ii) Trade receivables
(iii) Cash and cash equivalents
(iv) Other balances with banks
(v) Loans
(vi) Derivative assets
(vii) Other financial assets
(c) Other assets
Total current assets
III Assets held for sale
Total assets
Equity and liabilities
IV Equity
(a) Equity share capital
(b) Hybrid perpetual securities
(c) Other equity
Total equity
V Non-current liabilities
(a) Financial liabilities
Borrowings
(i)
(ii) Derivative liabilities
(iii) Other financial liabilities
(b) Provisions
(c) Retirement benefit obligations
(d) Deferred income
(e) Deferred tax liabilities (net)
(f ) Other liabilities
Total non-current liabilities
VI Current liabilities
(a) Financial liabilities
(i)
Borrowings
(ii) Trade payables
Note Page
As at
March 31, 2020
As at
March 31, 2019
(` crore)
240
244
245
246
250
255
257
261
263
250
263
265
265
255
257
261
266
269
269
273
276
276
277
278
258
278
273
279
276
276
277
278
278
3
5
6
7
8
9
10
12
13
8
14
15
16
9
10
12
17
18
19
20
21
22
23
24
11
25
20
26
21
22
23
24
25
1 - 46
66,392.35
8,070.41
4,113.31
727.72
176.64
26,578.41
20,282.50
199.26
162.46
60.42
1,557.82
2,062.07
1,30,383.37
70,416.82
5,686.02
-
805.20
110.27
4,437.76
34,491.49
231.16
9.05
310.65
1,428.38
2,535.98
1,20,462.78
10,716.66
11,255.34
3,235.16
1,016.73
993.64
233.23
1,607.32
209.96
230.41
1,715.92
19,959.03
50.16
1,50,392.56
1,146.13
2,275.00
73,416.99
76,838.12
31,381.96
122.55
293.59
2,113.56
2,224.44
-
5,862.28
684.76
42,683.14
7,857.27
118.62
10,482.34
81.69
5,401.55
663.86
106.61
6.15
277.26
5,875.95
30,871.30
1,50,392.56
477.47
1,363.04
544.85
173.26
55.92
14.96
940.76
2,209.98
17,035.58
-
1,37,498.36
1,146.12
2,275.00
69,308.59
72,729.71
26,651.19
59.82
125.07
1,918.18
1,430.35
747.23
7,807.00
436.16
39,175.00
8.09
149.49
10,820.07
139.57
6,872.35
778.23
102.12
-
358.14
6,365.59
25,593.65
1,37,498.36
(a) Total outstanding dues of micro and small enterprises
(b) Total outstanding dues of creditors other than micro and small enterprises
(iii) Derivative liabilities
(iv) Other financial liabilities
(b) Provisions
(c) Retirement benefit obligations
(d) Deferred income
(e) Current tax liabilities (net)
(f ) Other liabilities
Total current liabilities
Total equity and liabilities
Notes forming part of the financial statements
In terms of our report attached
For and on behalf of the Board of Directors
For Price Waterhouse & Co Chartered Accountants LLP N. Chandrasekaran Mallika Srinivasan O. P. Bhatt
Firm Registration Number: 304026E/E-300009
Chartered Accountants
Chairman
DIN: 00121863
Director
DIN: 00037022
Director
DIN: 00548091
sd/-
sd/-
sd/-
sd/-
Peter Blauwhoff
Director
DIN: 07728872
sd/-
Deepak Kapoor
Director
DIN: 00162957
sd/-
Aman Mehta
Director
DIN: 00009364
sd/-
Russell I Parera
Partner
Membership Number 042190
Mumbai, June 29, 2020
222
sd/-
V. K. Sharma
Director
DIN: 02449088
sd/-
Saurabh Agrawal
Director
DIN: 02144558
sd/-
T. V. Narendran
Chief Executive Officer
& Managing Director
DIN: 03083605
sd/-
sd/-
Koushik Chatterjee Parvatheesam Kanchinadham
Executive Director &
Chief Financial Officer
DIN: 00004989
Company Secretary &
Chief Legal Officer (Corporate &
Compliance)
ACS: 15921
StandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
STATEMENT OF PROFIT AND LOSS
for the year ended March 31, 2020
Revenue from operations
I
II Other income
III Total income
IV Expenses:
Changes in inventories of finished and semi-finished goods, stock-in-trade and work-in-progress
(a) Cost of materials consumed
(b) Purchases of stock-in-trade
(c)
(d) Employee benefits expense
(e) Finance costs
(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:
(a) Profit/(loss) on sale of non-current investments
(b) Provision for impairment of investments/doubtful advances
(c) Provision for demands and claims
(d) Employee separation compensation
(e) Fair value gain/(loss) on preference share investments (net)
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)
A
(i)
B
(ii)
(i)
(ii)
Remeasurement gain/(loss) on post-employment defined benefit plans
Fair value changes of investments in equity shares
Items that will not be reclassified subsequently to profit and loss
(a)
(b)
Income tax on items that will not be reclassified subsequently to profit and loss
Items that will be reclassified subsequently to profit and loss
(a) Fair value changes of cash flow hedges
Income tax on items that will be reclassified subsequently to profit and loss
Total other comprehensive income/(loss) for the year
XI Total comprehensive income/(loss) for the year (IX+X)
XII Earnings per share
Basic (`)
Diluted (`)
XIII Notes forming part of the financial statements
Note Page
27
28
279
280
29
30
31
32
33
281
281
282
282
282
34
283
35
284
1 - 46
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
60,435.97
404.12
60,840.09
17,407.03
1,563.10
(564.40)
5,036.62
3,031.01
3,920.12
23,803.18
54,196.66
1,671.13
52,525.53
8,314.56
-
(1,149.80)
(196.41)
(107.37)
(250.00)
(1,703.58)
6,610.98
1,787.95
(1,920.77)
(132.82)
6,743.80
(461.27)
(244.30)
116.65
(79.76)
19.81
(648.87)
6,094.93
57.11
57.11
70,610.92
2,405.08
73,016.00
19,840.29
1,807.85
(554.33)
5,131.06
2,823.58
3,802.96
24,622.81
57,474.22
799.70
56,674.52
16,341.48
262.28
(12.53)
(328.64)
(35.34)
-
(114.23)
16,227.25
6,297.11
(603.05)
5,694.06
10,533.19
5.95
(46.63)
(2.63)
(10.62)
3.71
(50.22)
10,482.97
90.41
90.40
In terms of our report attached
For and on behalf of the Board of Directors
For Price Waterhouse & Co Chartered Accountants LLP N. Chandrasekaran Mallika Srinivasan O. P. Bhatt
Firm Registration Number: 304026E/E-300009
Chartered Accountants
Chairman
DIN: 00121863
Director
DIN: 00037022
Director
DIN: 00548091
sd/-
sd/-
sd/-
sd/-
Peter Blauwhoff
Director
DIN: 07728872
sd/-
Deepak Kapoor
Director
DIN: 00162957
sd/-
Aman Mehta
Director
DIN: 00009364
sd/-
Russell I Parera
Partner
Membership Number 042190
Mumbai, June 29, 2020
sd/-
V. K. Sharma
Director
DIN: 02449088
sd/-
Saurabh Agrawal
Director
DIN: 02144558
sd/-
T. V. Narendran
Chief Executive Officer
& Managing Director
DIN: 03083605
sd/-
sd/-
Koushik Chatterjee Parvatheesam Kanchinadham
Executive Director &
Chief Financial Officer
DIN: 00004989
Company Secretary &
Chief Legal Officer (Corporate &
Compliance)
ACS: 15921
223
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
STATEMENT OF CHANGES IN EQUITY
for the year ended March 31, 2020
A. Equity share capital
Balance as at
April 1, 2019
1,146.12
Balance as at
April 1, 2018
1,146.12
* represents value less than `0.01 crore.
B. Hybrid perpetual securities
Balance as at
April 1, 2019
2,275.00
Balance as at
April 1, 2018
2,275.00
C. Other equity
Changes
during the year
0.01
Changes
during the year
0.00*
Changes
during the year
-
Changes
during the year
-
Retained
earnings
(refer note 19A,
page 269)
Items of other
comprehensive
income
(refer note 19B,
page 269)
Other reserves
(refer note 19C,
page 271)
Share application
money pending
allotment
(refer not 19D,
page 272)
Balance as at April 1, 2019
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Issue of Ordinary Shares
Dividend(i)
Tax on dividend
Distribution on hybrid perpetual securities
Tax on distribution on hybrid perpetual securities
Application money received
Balance as at March 31, 2020
27,694.90
6,743.80
(345.18)
6,398.62
-
(1,489.67)
(297.71)
(266.15)
66.97
-
32,106.96
53.27
-
(303.69)
(303.69)
-
-
-
-
-
-
(250.42)
41,560.42
-
-
-
0.03
-
-
-
-
-
41,560.45
-
-
-
-
(0.04)
-
-
-
-
0.04
-
224
(` crore)
Balance as at
March 31, 2020
1,146.13
(` crore)
Balance as at
March 31, 2019
1,146.12
(` crore)
Balance as at
March 31, 2020
2,275.00
(` crore)
Balance as at
March 31, 2019
2,275.00
(` crore)
Total
69,308.59
6,743.80
(648.87)
6,094.93
(0.01)
(1,489.67)
(297.71)
(266.15)
66.97
0.04
73,416.99
StandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR STATEMENT OF CHANGES IN EQUITY (CONTD.)
for the year ended March 31, 2020
Balance as at April 1, 2018
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Issue of Ordinary Shares
Equity issue expenses written (off )/back
Dividend(i)
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, 2019
Retained
earnings
(refer note
19A,
page 269)
18,700.25
10,533.19
3.88
10,537.07
-
-
(1,145.92)
(224.86)
(266.12)
92.99
1.49
-
27,694.90
Items of other
comprehensive
income
(refer note 19B,
page 269)
Other reserves
(refer note 19C,
page 271
Share application
money pending
allotment
(refer note 19D,
page 272)
108.86
-
(54.10)
(54.10)
-
-
-
-
-
-
(1.49)
-
53.27
41,559.59
-
-
-
0.26
0.57
-
-
-
-
-
-
41,560.42
0.02
-
-
-
(0.26)
-
-
-
-
-
-
0.24
-
(` crore)
Total
60,368.72
10,533.19
(50.22)
10,482.97
-
0.57
(1,145.92)
(224.86)
(266.12)
92.99
-
0.24
69,308.59
(i)
Dividend paid during the year ended March 31, 2020 is ₹13.00 per Ordinary Share (face value ₹10 each, fully paid up) and
₹3.25 per Ordinary Share (face value ₹10 each, partly paid up ₹2.504 per share) (March 31, 2019 ₹10.00 per Ordinary Share of face
value ₹10 each, fully paid up and ₹2.504 per Ordinary Share of face value ₹10 each, partly paid up ₹2.504 per share).
D. Notes forming part of the financial statements
Note 1-46
In terms of our report attached
For and on behalf of the Board of Directors
For Price Waterhouse & Co Chartered Accountants LLP N. Chandrasekaran Mallika Srinivasan O. P. Bhatt
Firm Registration Number: 304026E/E-300009
Chartered Accountants
Chairman
DIN: 00121863
Director
DIN: 00037022
Director
DIN: 00548091
sd/-
sd/-
sd/-
sd/-
Peter Blauwhoff
Director
DIN: 07728872
sd/-
Deepak Kapoor
Director
DIN: 00162957
sd/-
Aman Mehta
Director
DIN: 00009364
sd/-
Russell I Parera
Partner
Membership Number 042190
Mumbai, June 29, 2020
sd/-
V. K. Sharma
Director
DIN: 02449088
sd/-
Saurabh Agrawal
Director
DIN: 02144558
sd/-
T. V. Narendran
Chief Executive Officer
& Managing Director
DIN: 03083605
sd/-
sd/-
Koushik Chatterjee Parvatheesam Kanchinadham
Executive Director &
Chief Financial Officer
DIN: 00004989
Company Secretary &
Chief Legal Officer (Corporate &
Compliance)
ACS: 15921
225
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
STATEMENT OF CASH FLOWS
for the year ended March 31, 2020
A. Cash flows from operating activities:
Profit before tax
Adjustments for:
Depreciation and amortisation expense
Dividend income
(Gain)/loss on sale of property, plant and equipment including intangible assets
(net of loss on assets scrapped/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
Foreign exchange (gain)/loss
Other non-cash items
Operating profit before changes in non-current/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
Principal receipts under sub-lease
Fixed/restricted 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, 2020
(` crore)
Year ended
March 31, 2019
6,610.98
16,227.25
3,920.12
(89.73)
1.20
1,703.58
1.26
(171.58)
3,031.01
(85.86)
(1,152.70)
1,441.64
533.21
(470.69)
(4,749.28)
173.07
(8,945.16)
(61.20)
-
(2,661.50)
(1,527.02)
7.76
1.83
(80.23)
117.34
35.38
34.20
20.15
3,802.96
(96.25)
1.42
114.23
(36.95)
(2,273.30)
2,823.58
(1.27)
(612.79)
7,157.30
13,768.28
3,721.63
19,948.88
(611.22)
(214.60)
602.59
1,504.16
15,272.44
(1,818.78)
13,453.66
(223.23)
19,725.65
(4,532.54)
15,193.11
(3,676.86)
18.94
(29,076.49)
(403.02)
306.63
14,759.69
(18,908.41)
18,914.72
-
(78.29)
1,696.86
39.38
38.62
18.25
Net cash from/(used in) investing activities
(17,634.66)
(16,349.98)
226
StandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
STATEMENT OF CASH FLOWS (CONTD.)
for the year ended March 31, 2020
C. Cash flows from financing activities:
Proceeds from issue of equity shares (net of issue expenses (ii))
Proceeds from long-term borrowings (net of issue expenses)
Repayment of long-term borrowings
Proceeds/(repayments) of short-term borrowings (net)
Payment of 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
Closing cash and cash equivalents (refer note 15, page 265)
Year ended
March 31, 2020
(` crore)
Year ended
March 31, 2019
0.04
5,052.88
(2,866.18)
7,846.07
(260.66)
(5.19)
(265.76)
(3,084.03)
(1,489.67)
(297.71)
(6.03)
5,911.02
(4,448.06)
(26.35)
(89.25)
15.55
(265.39)
(2,607.88)
(1,145.92)
(224.86)
4,629.79
448.79
544.85
993.64
(2,887.17)
(4,044.04)
4,588.89
544.85
(i) During the year ended March 31, 2019, includes investments in preference shares `28,686.09 crore.
(ii)
During the year ended March 31, 2019, expenses incurred in connection with Rights Issue, 2018 pending adjustment against actual
utilisation from the issue proceeds and was fully utilised.
(iii) Significant non-cash movements in borrowings during the year include:
(a)
amortisation/effective interest rate adjustments of upfront fees ₹219.82 crore (2018-19: ₹204.23 crore).
(b) exchange loss ₹268.69 crore (2018-19: loss ₹59.12 crore).
(c) adjustments to lease obligations, increase ₹1,440.60 crore (2018-19: decrease ₹34.35 crore).
D. Notes forming part of the financial statements
Note 1-46
In terms of our report attached
For and on behalf of the Board of Directors
For Price Waterhouse & Co Chartered Accountants LLP N. Chandrasekaran Mallika Srinivasan O. P. Bhatt
Firm Registration Number: 304026E/E-300009
Chartered Accountants
Chairman
DIN: 00121863
Director
DIN: 00037022
Director
DIN: 00548091
sd/-
sd/-
sd/-
sd/-
Peter Blauwhoff
Director
DIN: 07728872
sd/-
Deepak Kapoor
Director
DIN: 00162957
sd/-
Aman Mehta
Director
DIN: 00009364
sd/-
Russell I Parera
Partner
Membership Number 042190
Mumbai, June 29, 2020
sd/-
V. K. Sharma
Director
DIN: 02449088
sd/-
Saurabh Agrawal
Director
DIN: 02144558
sd/-
T. V. Narendran
Chief Executive Officer
& Managing Director
DIN: 03083605
sd/-
sd/-
Koushik Chatterjee Parvatheesam Kanchinadham
Executive Director &
Chief Financial Officer
DIN: 00004989
Company Secretary &
Chief Legal Officer (Corporate &
Compliance)
ACS: 15921
227
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
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 BSE Limited
(BSE) and the National Stock Exchange of India Limited (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, 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, 2020, Tata Sons Private Limited owns 32.93 %
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, 2020
were approved by the Board of Directors and authorised for
issue on June 29, 2020.
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 and other relevant
provisions of the Act.
(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
value 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.
228
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 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, fair
value measurements of financial instruments and retirement
benefit obligations as discussed below:
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 rates 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. Further details of the Company’s impairment review
and key assumptions are set out in note 3, page 240, note 5,
page 244 , note 6, page 245, and note 7, page 246.
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. The policy has
been detailed in note 2(i), page 231.
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), page 237 and its further information are
set out in note 11, page 258.
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH 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. Further details are set out in
note 22, page 276 and note 37A, page 291.
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 value. 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.
Further details are set out in note 40, page 297.
Retirement benefit obligations
The Company’s retirement benefit obligations are subject
to number of judgements including discount rates, inflation
and salary growth. Significant judgements are 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 judgements based on previous
experience and third party actuarial advice. Further details on
the Company’s retirement benefit obligations, including key
judgements are set out in note 36, page 284.
Estimation of uncertainties relating to COVID-19
Post declaration of COVID-19 as a pandemic by the World
Health Organization, the Government in India have taken
significant measures to curtail the wide spread of virus,
including country wide lockdown and restriction in economic
activities. In view of such lockdowns, operations at the
Company’s steel making facilities have been scaled down from
the end week of March 2020.
In view of the impact of COVID-19, the Company has assessed
the carrying amounts of property, plant and equipment, right-
of-use assets, intangible assets, inventories, trade receivables,
investments and other financial assets. In assessing the
recoverable value of such assets, the Company has considered
various internal and external information such as existing
long-term arrangements with customer and vendor partners,
long-term business plan, cash flow forecasts and possible
future uncertainties in economic conditions because of the
pandemic including lockdowns and supply chain disruptions.
As per the Company’s current assessment of recoverability of
these assets, other than the impairment recorded, no significant
impact on carrying amounts of these assets is expected.
The eventual outcome of the impact of the global health
pandemic may be different from those estimated as on
the date of approval of these financial statements and the
Company continues to closely monitor the situation including
any material changes to future economic conditions and
consequential impact on its financial statements.
(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 or deemed cost
applied on transition to Ind AS, 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
229
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
2. Significant accounting policies (Contd.)
•
sinking shafts and underground drifts (often called
mine development)
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
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
is the establishment of access to mineral
Development
reserves
commercial
production. Development activities often continue during
production and include:
preparations
other
and
for
• 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.
(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 mining sites.
liabilities are estimated case-by-case based on
Such
available information, taking into account applicable local
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
included
Patents, trademarks and software costs are
in
the balance sheet as intangible assets when it is probable
that 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
230
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
2. Significant accounting policies (Contd.)
The estimated useful lives for main categories of property,
plant and equipment and intangible assets are:
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) ability to use or sell the intangible asset.
(iv)
it is clear that the intangible asset will generate probable
future economic benefits.
(v)
(vi)
adequate technical, financial and other
resources
to complete the development and to use or sell the
intangible asset are available.
is possible to reliably measure the expenditure
during
intangible
asset
the
it
attributable
to
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.
initial recognition,
Subsequent to
intangible assets with
definite useful lives are reported at cost or deemed cost
applied on transition to Ind AS, less accumulated amortisation
and accumulated impairment losses.
(i)
Depreciation and amortisation of property, plant and
equipment, right-of-use assets and intangible assets
Depreciation or amortisation is provided so as to write off, on
a staright-line basis, the cost/deemed cost of property, plant
and equipment and intangible assets, including right-of-use
assets 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 right-of-use assets, over the lease period, if
shorter. The estimated useful lives of assets, residual values
and depreciation method are reviewed regularly and, when
necessary, revised.
Depreciation on assets under construction commences only
when the assets are ready for their intended use.
Buildings
Roads
Plant and machinery
Railway sidings
Vehicles and aircraft
Furniture, fixtures and office equipments
Computer software
Assets covered under Electricity Act (life as
prescribed under the Electricity Act)
Estimated useful
life (years)
upto 60 years*
5 years
upto 40 years*
upto 35 years*
5 to 20 years
4 to 6 years
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
value 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
231
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
2. Significant accounting policies (Contd.)
The Company as lessee
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
Ind AS 116 “Leases” replaces Ind AS 17 “Leases” with effect
from April 1, 2019.
The adoption of this new Standard has resulted in the Company
recognising a right-of-use asset and related lease liability in
connection with all former operating leases except for those
identified as low-value or having a remaining lease term of less
than 12 months from the date of initial application.
approach, with
The new Standard has been applied using the modified
asset
retrospective
recognised at an amount equal to the present value of lease
liability, adjusted by the amount of any prepaid or accrued
lease payments relating to those leases. Prior periods have
not been restated.
right-of-use
the
For contracts in place at the date of initial application, the
Company has elected not to carry forward the definition of
leases as per Ind AS 17 and has therefore, applied the definition
of a lease as per Ind AS 116 to all such arrangements.
On transition, for leases previously accounted for as operating
leases with a remaining lease term of less than 12 months and
for leases of low-value assets the Company has applied the
optional exemptions to not recognise right-of-use assets but
to account for the lease expense on a straight-line basis over
the remaining lease term.
For those leases previously classified as finance leases, the
right-of-use asset and lease liability are measured at the date
of initial application at the same amounts as under Ind AS 17
‘Leases’ immediately before the date of initial application.
Refer note 2(k) - Significant accounting policies – Leases in the
Annual report of the Company for the year ended March 31,
2019, page 219 for the policy as per Ind AS 17 “Leases”.
232
The Company accounts for each lease component within the
contract as a lease separately from non-lease components of
the contract and allocates the consideration in the contract to
each lease component on the basis of the relative stand-alone
price of the lease component and the aggregate stand-alone
price of the non-lease components. The Company recognises
right-of-use asset representing its right to use the underlying
asset for the lease term at the lease commencement date.
The cost of the right-of-use asset measured at inception
comprises of the amount of initial measurement of the lease
liability adjusted for any lease payments made at or before the
commencement date.
Certain lease arrangements include options to extend or
terminate the lease before the end of the lease term. The right-
of-use assets and lease liabilities include these options when it
is reasonably certain that such options would be exercised.
The right-of-use assets is subsequently measured at cost less
any accumulated depreciation, accumulated
impairment
losses, if any and adjusted for any remeasurement of the
lease liability. The right-of-use assets is depreciated using the
straight-line method from the commencement date over the
shorter of lease term or useful life of right-of-use asset.
impairment whenever
Right-of-use assets are tested for
there is any indication that their carrying amounts may not
be recoverable. Impairment loss, if any, is recognised in the
statement of profit and loss.
Lease liability is measured at the present value of the lease
payments that are not paid at the commencement date of the
lease. The lease payments are discounted using the interest
rate implicit in the lease, if that rate can be readily determined.
If that rate cannot be readily determined, the Company uses
incremental borrowing rate. The lease liability is subsequently
remeasured by increasing the carrying amount to reflect
interest on the lease liability, reducing the carrying amount to
reflect the lease payments made and remeasuring the carrying
amount to reflect any reassessment or lease modifications. The
Company recognises the amount of the remeasurement of
lease liability as an adjustment to the right-of-use asset. Where
the carrying amount of the right-of-use asset is reduced to zero
and there is a further reduction in the measurement of the
lease liability, the Company recognises any remaining amount
of the remeasurement in statement of profit and loss.
Variable lease payments not included in the measurement
of the lease liabilities are expensed to the statement of profit
and loss in the period in which the events or conditions which
trigger those payments occur.
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
2. Significant accounting policies (Contd.)
The Company accounts for sale and lease back transaction,
recognising right-of-use assets and lease liability, measured
in the same way as other right-of-use assets and lease liability.
Gain or loss on the sale transaction is recognised in statement
of profit and loss.
The Company as lessor
(i)
(ii)
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.
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
rather
that of
the first pit,
consecutively with
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 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 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 Company can identify the component of the ore body
for which access has been improved and
the costs relating to the
component can be measured reliably.
improved access to that
Such costs are presented within mining assets. After initial
recognition, stripping activity assets are carried at cost/
deemed cost less 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.
233
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2. Significant accounting policies (Contd.)
(m)
Investments in subsidiaries, associates and joint
ventures
Investments in subsidiaries, associates and joint ventures are
carried at cost/deemed cost applied on transition to Ind AS,
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.
(I)
Financial assets
Cash and bank balances
Cash and bank balances consist of:
(i)
Cash and cash equivalents - which includes cash
on 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 original
maturities of less than one year. These balances with
banks are unrestricted for withdrawal and usage.
234
(ii)
Other bank balances - which
and deposits with banks that are restricted
withdrawal and usage.
includes balances
for
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 believes 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 and loss.
Financial assets not measured at amortised cost or at fair value
through other comprehensive income are carried at fair value
through profit and loss.
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.
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
2. Significant accounting policies (Contd.)
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.
For financial assets (apart from trade receivables that do not
constitute of financing transaction) 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.
(II) 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 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
remeasured 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.
235
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 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
Contributions under defined contribution plans are recognised
as expense for the period in which the employee has rendered
the service. 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. Remeasurement 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) are recognised as an
expense within employee 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 obligations recognised in the balance
sheet represents the present value of the defined benefit
obligations 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.
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:
(i)
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;
236
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
2. Significant accounting policies (Contd.)
(ii)
as a result, the entity has created a valid expectation on
the part of those other parties that it will discharge such
responsibilities.
(r) Onerous contracts
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 are recognised at its fair value, where
there is a reasonable assurance that such grants will be
received and compliance with the conditions attached
therewith have been met.
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. Grants
received less amounts credited to the statement of profit and
loss at the reporting 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.
Where a disposal group represents a separate major line of
business or geographical area of operations, or is part of a
single co-ordinated 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.
(u)
Income taxes
Tax expense for the year comprises 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
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 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.
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.
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
237
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
2. Significant accounting policies (Contd.)
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
The Company manufactures and sells a range of steel and
other products.
Sale of products
Revenue from sale of products is recognised when control of
the products has transferred, being when the products are
delivered to the customer. Delivery occurs when the products
have been shipped or delivered to the specific location as the
case may be, the risks of loss has been transferred, and either
the customer has accepted the products in accordance with
the sales contract, or the Company has objective evidence that
all criteria for acceptance have been satisfied. Sale of products
include related ancillary services, if any.
Goods are often sold with volume discounts based on
aggregate sales over a 12 months period. Revenue from
these sales is recognised based on the price specified in the
contract, net of the estimated volume discounts. Accumulated
experience is used to estimate and provide for the discounts,
using the most likely method, and revenue is only recognised
to the extent that it is highly probable that a significant reversal
will not occur. A liability is recognised for expected volume
discounts payable to customers in relation to sales made until
the end of the reporting period. No element of financing is
deemed present as the sales are generally made with a credit
term of 30-90 days, which is consistent with market practice.
Any obligation to provide a refund is recognised as a provision.
A receivable is recognised when the goods are delivered as
this is the point in time that the consideration is unconditional
because only the passage of time is required before the
payment is due.
The Company does not have any contracts where the period
between the transfer of the promised goods or services to the
customer and payment by the customer exceeds one year.
As a consequence, the Company does not adjust any of the
transaction prices for the time value of money.
Sale of power
Revenue from sale of power is recognised when the services
are provided to the customer based on approved tariff rates
established by the respective regulatory authorities. The
Company doesn’t recognise revenue and an asset for cost
incurred in the past that will be recovered.
(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.
transactions
In preparing
in
the financial statements,
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 Standards” 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.
238
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
The Company has applied the amendments prospectively
for annual reporting periods beginning on or after April 1,
2019. There is no material impact on the Company due to the
application of the above amendment.
Amendment to Ind AS 23 “Borrowing Costs”
The amendment clarifies that if any specific borrowing remains
outstanding after the related asset is ready for its intended
use or sale, that borrowing becomes part of the funds that an
entity borrows generally when calculating the capitalisation
rate on general borrowings.
The Company has applied the amendments prospectively
for annual reporting periods beginning on or after April 1,
2019 There is no material impact on the Company due to the
application of the above amendment.
There is no new standard or amendment to the existing
standards which would have been applicable from April 1, 2020.
2. Significant accounting policies (Contd.)
income earned on temporary
investment of
Investment
specific borrowings pending their expenditure on qualifying
assets is recognised in the statement of profit and 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 recognised as borrowing costs.
All other borrowing costs are recognised as expenses in the
period in which it is incurred.
(y) Earnings per share
Basic earnings per share is computed by dividing 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 is computed using the weighted
average number of shares and dilutive potential shares except
where the result would be anti-dilutive.
(z) Recent accounting pronouncements
Amendment to Ind AS 12 “Income Tax” - Insertion of
Appendix C, “Uncertainty over Income tax treatments”
The amendment intends to bring clarity to the accounting for
uncertainties on income tax treatments that have yet to be
accepted by tax authorities, and to reflect it in the measurement
of current and deferred taxes.
239
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
3. Property, plant and equipment
[Item No. I(a), Page 222]
Cost/deemed cost as at April 1, 2019
Additions
Disposals
Classified as held for sale
Other re-classifications
Cost/deemed cost as at March 31, 2020
Impairment as at April 1, 2019
Accumulated impairment as at March 31, 2020
Accumulated depreciation as at April 1, 2019
Charge for the year
Disposals
Classified as held for sale
Other re-classifications
Accumulated depreciation as at March 31, 2020
Total accumulated depreciation and
impairment as at March 31, 2020
Net carrying value as at April 1, 2019
Net carrying value as at March 31, 2020
Land
including
roads
Buildings
Plant and
machinery
Furniture,
fixtures
and office
equipments
Vehicles
Railway
sidings
(` crore)
Total
14,192.96
60.44
-
-
-
14,253.40
0.15
0.15
609.16
119.49
-
-
-
728.65
728.80
6,109.34
277.26
(16.70)
(37.09)
40.25
63,468.68
1,425.81
(204.17)
(73.81)
(3,892.60)
6,373.06 60,723.91
0.09
0.09
13,148.02
3,035.35
(32.81)
(31.34)
(1,702.51)
1,118.56 14,416.71
1,119.88 14,416.80
1.32
1.32
921.82
233.37
(5.80)
(32.41)
1.58
548.90
44.77
(21.15)
(5.32)
0.11
567.31
-
-
363.37
77.19
(20.04)
(4.02)
0.01
416.51
416.51
369.92
73.85
(9.86)
(3.45)
-
430.46
-
-
177.79
31.41
(7.97)
(1.74)
-
199.49
199.49
1,080.39
15.37
-
-
-
85,770.19
1,897.50
(251.88)
(119.67)
(3,852.24)
1,095.76 83,443.90
1.56
1.56
15,351.81
3,535.23
(66.62)
(69.51)
(1,700.92)
170.07 17,049.99
170.07 17,051.55
-
-
131.65
38.42
-
-
-
13,583.65
13,524.60
50,320.57
5,186.20
5,253.18 46,307.11
185.53
150.80
192.13
230.97
70,416.82
948.74
925.69 66,392.35
Land
including
roads
Buildings
Plant and
machinery
Furniture,
fixtures
and office
equipments
Vehicles
Railway
sidings
(` crore)
Total
Cost/deemed cost as at April 1, 2018
Additions
Disposals
Other re-classifications
Cost/deemed cost as at March 31, 2019
Impairment as at April 1, 2018
Accumulated impairment as at March 31, 2019
Accumulated depreciation as at April 1, 2018
Charge for the year
Disposals
Other re-classifications
Accumulated depreciation as at March 31, 2019
Total accumulated depreciation and
impairment as at March 31, 2019
Net carrying value as at April 1, 2018
Net carrying value as at March 31, 2019
14,117.17
75.79
-
-
14,192.96
0.15
0.15
493.55
115.61
-
-
609.16
609.31
5,902.00
221.14
(13.80)
-
6,109.34
1.32
1.32
690.56
233.32
(2.06)
-
921.82
923.14
60,846.29
2,613.71
(0.37)
9.05
63,468.68
0.09
0.09
9,980.12
3,162.19
(0.29)
6.00
13,148.02
13,148.11
431.26
118.90
(1.26)
-
548.90
-
-
291.37
73.19
(1.19)
-
363.37
363.37
304.62
86.83
(12.48)
(9.05)
369.92
-
-
164.42
30.51
(11.14)
(6.00)
177.79
177.79
1,056.94
23.45
-
-
1,080.39
-
-
93.80
37.85
-
-
131.65
131.65
82,658.28
3,139.82
(27.91)
-
85,770.19
1.56
1.56
11,713.82
3,652.67
(14.68)
-
15,351.81
15,353.37
13,623.47
13,583.65
5,210.12
5,186.20
50,866.08
50,320.57
139.89
185.53
140.20
192.13
963.14
948.74
70,942.90
70,416.82
240
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
3. Property, plant and equipment (Contd.)
[Item No. I(a), Page 222]
(i)
During the year ended March 31, 2020, other re-classifications primarily include assets under finance leases of ₹2,151.32 crore (net of
accumulated depreciation and impairment), reclassified to right-of-use assets on adoption of Ind AS 116 “Leases”.
(ii)
Buildings include ₹2.32 crore (March 31, 2019: ₹2.32 crore) being cost of shares in co-operative housing societies and limited companies.
(iii)
During the year ended March 31, 2020, the Company has classified certain items of property, plant and equipment in respect of one of its
mining locations as assets held for sale. As at March 31, 2020, the net carrying value of these assets ₹50.16 crore is expected to be recovered
principally through a sale transaction, rather than through continuing use.
(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, 2020
As at
March 31, 2019
123.65
104.97
18.68
443.66
311.54
132.12
150.80
118.24
94.67
23.57
430.66
268.70
161.96
185.53
(v)
`103.58 crore (2018-19: ₹88.68 crore) of borrowing costs has been capitalised during the year against qualifying assets under
construction using a capitalisation rate of 6.84% (2018-19: 9.00%).
(vi)
Rupee liability has increased by ₹128.72 crore (March 31, 2019: ₹106.56 crore) arising out of re-translation of the value of long-term
foreign currency loans and liabilities for procurement of property, plant and equipment, generally plant and machinery. This increase
is adjusted against the carrying cost of assets and depreciated over their remaining useful life. The depreciation for the current year is
higher by ₹4.31 crore (2018-19: ₹3.50 crore) on account of this adjustment.
(vii) 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, 2020, the Company has recognised an impairment reversal of ₹45.97 crore (net of
charge) (2018-19: ₹8.54 crore, impairment charge) in respect of expenditure incurred (included within capital work-in-progress) at one of
its mining sites. The impairment recognised/reversed is included within other expenses in the statement of profit and loss.
241
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
3. Property, plant and equipment (Contd.)
[Item No. I(a), Page 222]
(viii) Property, plant and equipment includes capital cost of in-house research facilities as below:
Cost/deemed cost as at April 1, 2019
Additions
Other re-classifications*
Deductions
Cost/deemed cost as at March 31, 2020
Capital work-in-progress
Land
including
roads
Buildings
Plant and
machinery
Furniture,
fixtures and office
equipments
Vehicles
(` crore)
Total
-
-
-
-
1.88
-
-
-
1.88
-
6.35
6.35
-
-
-
-
-
-
6.35
6.35
92.93
72.72
0.03
20.21
-
-
-
-
92.96
92.93
8.24
7.01
1.03
1.23
(1.61)
-
(0.43)
-
7.23
8.24
0.09
0.09
-
-
-
-
-
-
0.09
0.09
107.61
86.17
1.06
21.44
0.27
-
(0.43)
-
108.51
107.61
3.50
1.12
Figures in italics represent comparative figures for previous year.
* Other re-classifications represents ₹0.27 crore relating to in-house research facilities, regrouped from intangible assets to land including roads.
(ix) Details of property, plant and equipment pledged against borrowings is presented in note 20, page 273.
4. Leases
The Company’s significant leasing arrangements include assets dedicated for use under long-term arrangements, lease of land, office space,
equipment, vehicles and some IT equipment.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. Each lease generally imposes a
restriction that, unless there is a contractual right for the Company to sublet the asset to another party, the right-of-use asset can only be used
by the Company. Extension and termination options are included in a number of property and equipment leases. These are used to maximise
operational flexibility in terms of managing the assets used in the Company’s operations. Majority of the extension and termination options
held are exercisable based on mutual agreement of the Company and the respective lessor.
With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the balance sheet as a rightof- use
asset and a lease liability. Payments made under such leases are expensed on a straight-line basis over the lease term.
Variable lease payments which do not depend on an index or a rate (such as lease payments based on a percentage of sales) are excluded from
the initial measurement of the lease liability and asset.
For leases recognised under long-term arrangements involving use of a dedicated asset, non-lease components are excluded based on the
underlying contractual terms and conditions. A change in the allocation assumptions may have an impact on the measurement of lease
liabilities and the related right-of-use assets.
242
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
4. Leases (Contd.)
On adoption of Ind AS 116 “Leases” with effect from April 1, 2019, the Company elected to apply the modified retrospective transition method.
Accordingly, on transition, right-of-use assets of ₹1,200.13 crore were measured at an amount equal to lease liabilities. In addition, an amount
of ₹832.92 (net of accumulated amortisation) crore in respect of right-of-use of land was re-classified from other assets to right-of-use assets.
The right-of-use assets was reduced by ₹8.95 crore on account of sub-leases recognised on transition.
The weighted average incremental borrowing rate applied to lease liabilities recognised on transition to Ind AS 116 “Leases” was 8.98%
The reconciliation of total operating lease commitments as at March 31, 2019 to the lease liabilities recognised on transition is as below:
Particulars
Operating lease commitments as at March 31, 2019
Short-term leases
Extension and termination options
Changes in the index or rate affecting variable payments
Contracts recognised as leases on transition to Ind AS 116 “Leases”
Undiscounted operating lease commitments as at April 1, 2019
Effect of discounting
Lease liabilities for operating leases as at April 1, 2019
Finance lease obligation as at March 31, 2019
Lease liabilities as at April 1, 2019
During the year ended March 31, 2020, the Company recognised the following in the statement of profit and loss:
(a)
expense in respect of short-term leases and leases of low-value assets ₹32.18 crore and ₹1.21 crore respectively.
(b) expense in respect of variable lease payments not included in the measurement of lease liabilities ₹81.99 crore.
(c)
(d)
income in respect of sub-leases of right-of-use assets ₹0.71 crore.
loss on sale and leaseback transaction entered during the year ₹0.45 crore.
During the year ended March 31, 2020, total cash outflow in respect of leases amounted to ₹729.29 crore.
As at March 31, 2020, commitments for leases not yet commenced was ₹335.44 crore.
(` crore)
Amount
1,511.23
(3.08)
131.15
143.79
185.12
1,968.21
(768.08)
1,200.13
2,129.86
3,329.99
243
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 5. Right-of-use assets
[Item No. I(c), Page 222]
Right-of-use
land
Right-of-use
buildings
Right-of-use
plant and
machinery
Right-of-use
vehicles
Right-of-use
railway
sidings
Cost as at April 1, 2019
Addition on account of transition to Ind AS 116 “Leases”
Additions
Disposals
Other re-classifications
Cost as at March 31, 2020
Accumulated impairment as at March 31, 2020
Accumulated depreciation as at April 1, 2019
Charge for the year
Disposals
Other re-classifications
Accumulated depreciation as at March 31, 2020
Total accumulated depreciation and impairment as
at March 31, 2020
Net carrying value as at April 1, 2019
Net carrying value as at March 31, 2020
-
27.29
20.17
-
897.62
945.08
-
-
16.97
-
64.70
81.67
81.67
-
863.41
-
77.27
16.74
(0.87)
0.59
93.73
-
-
23.29
(0.24)
0.59
23.64
23.64
-
1,074.49
191.20
-
3,851.65
5,117.34
-
-
255.48
-
1,700.33
1,955.81
1,955.81
-
70.09
-
3,161.53
-
-
7.97
-
-
7.97
-
-
0.53
-
-
0.53
0.53
-
7.44
-
12.13
5.26
-
-
17.39
-
-
6.55
-
-
6.55
6.55
-
10.84
(` crore)
Total
-
1,191.18
241.34
(0.87)
4,749.86
6,181.51
-
-
302.82
(0.24)
1,765.62
2,068.20
2,068.20
-
4,113.31
(a)
Other re-classifications represent assets under finance leases of ₹2,151.32 crore (net of accumulated depreciation and impairment) and
prepaid payment with respect to land leases of ₹832.92 crore (net of accumulated amortisation), reclassified under right-of-use assets
on adoption of Ind AS 116 “Leases”.
(b) Vehicle cost used for in-house research and development included within right-of-use vehicles is ₹0.28 crore.
244
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
6.
Intangible assets
[Item No. I(d), Page 222]
Cost/deemed cost as at April 1, 2019
Additions
Cost/deemed cost as at March 31, 2020
Accumulated impairment as at April 1, 2019
Accumulated impairment as at March 31, 2020
Accumulated amortisation as at April 1, 2019
Charge for the year
Accumulated amortisation as at March 31, 2020
Total accumulated amortisation and impairment as at March 31, 2020
Net carrying value as at April 1, 2019
Net carrying value as at March 31, 2020
Cost/deemed cost as at April 1, 2018
Additions
Cost/deemed cost as at March 31, 2019
Accumulated impairment as at April 1, 2018
Charge for the year
Accumulated impairment as at March 31, 2019
Accumulated amortisation as at April 1, 2018
Charge for the year
Accumulated amortisation as at March 31, 2019
Total accumulated amortisation and impairment as at March 31, 2019
Net carrying value as at April 1, 2018
Net carrying value as at March 31, 2019
Software
costs
266.66
4.57
271.23
-
-
195.75
24.74
220.49
220.49
70.91
50.74
Software
costs
240.89
25.77
266.66
-
-
-
167.74
28.01
195.75
195.75
73.15
70.91
Mining
assets
1,929.01
0.02
1,929.03
40.11
40.11
1,154.61
57.33
1,211.94
1,252.05
734.29
676.98
Mining
assets
1,782.41
146.60
1,929.01
37.05
3.06
40.11
1,032.33
122.28
1,154.61
1,194.72
713.03
734.29
(` crore)
Total
2,195.67
4.59
2,200.26
40.11
40.11
1,350.36
82.07
1,432.43
1,472.54
805.20
727.72
(` crore)
Total
2,023.30
172.37
2,195.67
37.05
3.06
40.11
1,200.07
150.29
1,350.36
1,390.47
786.18
805.20
(i)
(ii)
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.
During the year ended March 31, 2019, the Company has recognised an impairment charge of ₹5.17 crore (including intangible assets
under development) 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 ₹0.01 crore (2018-19: ₹0.28 crore). During
the year ended March 31, 2020, ₹0.27 crore relating to in-house research facilities has been regrouped to land including roads.
245
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
7.
Investments in subsidiaries, associates and joint ventures
[Item No. I(f), Page 222]
No. of shares as at March
31, 2020 (face value of `10
each fully paid up unless
otherwise specified)
(` crore)
As at
March 31, 2020
As at
March 31, 2019
1,54,64,590
3,42,37,521
205.87
1,378.74
205.87
86.54
55,87,372
7,84,57,640
2,00,000
4,14,00,000
25,88,95,798
23,69,86,703
40,000
1,27,500
40,000
40,000
4,08,00,000
40,000
3,352
28,14,37,128
40,000
13,28,800
40,000
40,000
4,24,183
-
395.02
1,979.63
1.08
26.40
258.89
321.73
0.04
91.88
0.04
0.04
40.80
0.04
-
773.86
0.04
60.40
0.04
0.04
17.01
-
395.02
687.43
1.08
26.40
258.89
321.73
0.01
91.88
0.01
0.01
32.00
0.01
-
773.86
0.01
60.40
0.01
0.01
17.01
A.
Investments carried at cost/deemed cost
(a) Equity investment in subsidiary companies
(i) Quoted
(1) Tata Metaliks Ltd.
(2) Tata Steel Long Products Limited (formerly Tata
Sponge Iron Limited)
(pursuant to rights issue, 2,58,43,967 right equity
shares at an issue price of ₹500 each has been
subscribed during the year)
(3) Tayo Rolls 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
(4) Bhubaneshwar Power Private Limited
(5) Bistupur Steel Limited^
(30,000 shares purchased during the year)
(6) Creative Port Development Private Limited
(7) Dimna Steel Limited^
(8)
(9)
(30,000 shares purchased during the year)
Jamadoba Steel Limited^
(30,000 shares purchased during the year)
Jamshedpur Football and Sporting Private Limited
(88,00,000 shares purchased during the year)
(10) Jugsalai Steel Limited^
(30,000 shares purchased during the year)
(11) Mohar Exports Services Pvt Ltd*
(12) NatSteel Asia Pte. Ltd. (Face value of SGD 1 each)
(13) Noamundi Steel Limited^
(30,000 shares purchased during the year)
(14) Rujuvalika Investments Limited
(15) Sakchi Steel Limited^
(30,000 shares purchased during the year)
(16) Straight Mile Steel Limited^
(30,000 shares purchased during the year)
(17) Subarnarekha Port Private Limited
246
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
7.
Investments in subsidiaries, associates and joint ventures (Contd.)
[Item No. I(f), Page 222]
(18) T Steel Holdings Pte. Ltd. (Face value of GBP 1 each)
(55,41,31,297 shares received on conversion of
preference shares and 82,62,22,307 shares are
purchased during the year)
(19) T Steel Holdings Pte. Ltd. (Face value of GBP 0.78 each)
(1,25,80,00,000 shares received on conversion of
preference shares during the year)
(20) Tata Korf Engineering Services Ltd * #
(21) Tata Steel (KZN) (Pty) Ltd. * # (Face value of ZAR 1 each)
(22) Tata Steel Downstream Products Limited (formerly
Tata Steel Processing and Distribution Limited)
(23) Tata Steel Foundation
(24) Tata Steel Mining Limited (formerly T S Alloys Limited)
(25) Tata Steel Odisha Limited
(26) Tata Steel Special Economic Zone Limited
(21,42,17,870 shares purchased during the year)
(27) Tata Steel Utilities and Infrastructure Services
Limited (formerly Jamshedpur Utilities & Services
Company Limited)
(28) The Indian Steel & Wire Products Ltd
(29) The Tata Pigments Limited (Face value of ₹100 each)
Aggregate provision for impairment in value of investments
(b)
Investment in equity share warrants of subsidiary companies
(i) Unquoted
(1) Tata Metaliks Ltd.
(c) Equity investment in associate companies
(i) Quoted
(1)
TRF Limited
Aggregate provision for impairment in value of investments
No. of shares as at March
31, 2020 (face value of `10
each fully paid up unless
otherwise specified)
(` crore)
As at
March 31, 2020
As at
March 31, 2019
7,31,21,21,292
12,724.26
-
1,25,80,00,000
8,990.63
3,99,986
12,96,00,000
6,82,50,000
10,00,000
6,57,07,544
25,67,000
39,94,60,501
-
-
274.45
1.00
78.64
2.57
374.54
-
-
-
274.45
1.00
78.64
2.57
160.32
2,43,50,000
24.35
24.35
56,92,651
75,000
34,92,500
37,53,275
3.08
0.70
24,066.55
(1,195.08)
22,871.47
24,851.10
56.05
56.05
5.79
5.79
(5.79)
-
3.08
0.70
2,128.43
(50.00)
2,078.43
2,765.86
56.05
56.05
5.79
5.79
-
5.79
247
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
7.
Investments in subsidiaries, associates and joint ventures (Contd.)
[Item No. I(f), Page 222]
No. of shares as at March
31, 2020 (face value of `10
each fully paid up unless
otherwise specified)
(` crore)
As at
March 31, 2020
As at
March 31, 2019
(ii) Unquoted
(1) Kalinga Aquatic Ltd*
(2) Malusha Travels Pvt Ltd. ₹33,520 (March 31, 2019 : ₹33,520)
(3) Nicco Jubilee Park Limited*
(4) Strategic Energy Technology Systems Private Limited
10,49,920
3,352
3,40,000
2,56,14,500
Aggregate provision for impairment in value of investments
(d) Equity investment in joint ventures
(i) Unquoted
Industrial Energy Limited
(1) Himalaya Steel Mill Services Private Limited
(2)
(3) Jamipol Limited
(4) Jamshedpur Continuous Annealing & Processing Company
Private Limited
(6,12,00,000 shares purchased during the year)
(5) Medica TS Hospital Private Limited
(6) mjunction services limited
(7) S & T Mining Company Private Limited
(Amount receivable converted into 52,00,000 shares
during the year)
(8) T M Mining Company Limited #
(9) Tata BlueScope Steel Private Limited
(10) Tata NYK Shipping Pte Ltd. (Face value of USD 1 each)
(11) TM International Logistics Limited
Aggregate provision for impairment in value of investments
Total investments in subsidiaries, associates and joint ventures
*These investments are carried at a book value of ₹1.00
36,19,945
17,31,60,000
36,75,000
68,95,20,000
2,60,000
40,00,000
1,81,41,400
2,29,116
43,30,00,000
6,51,67,500
91,80,000
-
-
-
-
0.91
0.91
(0.91)
-
-
3.62
173.16
8.38
689.52
0.26
4.00
18.14
-
-
-
0.91
0.91
(0.91)
-
5.79
3.62
173.16
8.38
628.32
0.26
4.00
12.94
0.23
433.00
350.14
9.18
1,689.63
(18.37)
1,671.26
26,578.41
0.23
433.00
350.14
9.18
1,623.23
(13.17)
1,610.06
4,437.76
#As on March 31, 2020, Tata Steel (KZN) (Pty) Ltd. is under liquidation, Tata Korf Engineering Services Ltd is non-operative and T M Mining
Company Limited is under strike off.
^ These companies have applied to Registrar of Companies (ROC), Mumbai for striking off their names from the ROC and the same is pending
ROC’s approval.
(i)
The Company holds more than 50% of the equity share capital in TM International Logistics Limited, Jamshedpur Continuous Annealing
& 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.
248
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
7.
Investments in subsidiaries, associates and joint ventures (Contd.)
[Item No. I(f), Page 222]
(ii) Carrying value and market value of quoted and unquoted investments are as below:
(a)
(b)
Investment in subsidiary companies:
Aggregate carrying value of quoted investments
Aggregate market value of quoted investments
Aggregate carrying value of unquoted investments
Investment in associate companies:
Aggregate carrying value of quoted investments
Aggregate market value of quoted investments
Aggregate carrying value of unquoted investments
(c)
Investment in joint ventures:
Aggregate carrying value of unquoted investments
(` crore)
As at
March 31, 2020
As at
March 31, 2019
1,979.63
1,761.42
22,927.52
-
19.25
-
687.43
2,876.68
2,134.48
5.79
44.87
-
1,671.26
1,610.06
(iii)
The Hon’ble National Company Law Tribunal (NCLT), Kolkata vide order dated April 5, 2019 has admitted the initiation of Corporate
Insolvency Resolution Process (CIRP) in respect of Tayo Rolls Limited, a subsidiary of the Company.
(iv)
During the year ended March 31, 2020, the Company considered indicators of impairment for investments in steel, mining and other
business operations held either directly or indirectly, such as declines in operational performance or changes in the outlook of future
profitability or weaker market conditions, among other potential indicators.
In respect of the overseas investments in T Steel Holdings Pte. Ltd. and NatSteel Asia Pte. Ltd. where indicators of impairment were
identified, the Company estimated the recoverable amount based on the value in use of the underlying businesses. The computation 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 into perpetuity. Key assumptions for the value in use computations are those regarding
the discount rates, growth rates, exchange rates, market demand, expected changes to selling prices, raw material and other direct
costs. Changes in selling prices, raw material costs, exchange rates and demand are based on historical experience and expectations
of future changes in the market. Beyond the specifically forecasted period, a growth rate of 1.25% is used to extrapolate the cash flow
projections. This rate does not exceed the average long-term growth rate for the relevant markets.
The Company estimates discount rates using pre-tax rates that reflect the current market rates for investments of similar risk. The rate for
these investments were estimated from the weighted average cost of capital of participants, which operate a portfolio of assets similar to
those of the Company’s assets. The weighted average pre-tax discount rates used for discounting the cash flows projections was 8.00%.
The outcome of the test as on March 31, 2020 resulted in the Company recognizing an impairment loss of ₹860.00 crore with respect to
investment in T Steel Holdings Pte. Ltd. and ₹126.00 crore with respect to investment in NatSteel Asia Pte. Ltd.
The operational and financial performance of Tata Steel Europe Limited (TSE), a wholly owned subsidiary of T Steel Holdings Pte. Ltd.
is forecasted to be adversely impacted due to the downturn in steel demand on account of the COVID-19 pandemic, consequently,
impacting the ability to meet its liquidity requirements. TSE as a whole, including its operations in the United Kingdom, continues
to implement various measures aimed at conserving cash including but not limited to deferral of capital expenditures, reduction in
administrative expenses, use of non-recourse securitisation programmes, seeking Government backed funding etc. The severity and
length of the downturn in steel demand on account of the pandemic remains unpredictable and the ability of TSE to continue as a going
concern is dependent on the outcome of the above measures taken.
249
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
7.
Investments in subsidiaries, associates and joint ventures (Contd.)
[Item No. I(f), Page 222]
The balance impairment charge recognised during the year ended March 31, 2020 amounting to ₹164.87 crore primarily relates to
investments held Tata Steel Special Economic Zone Limited (₹150.00 crore), Jamshedpur Football and Sporting Private Limited
(₹8.80 crore) and TRF Limited (₹5.79 crore).
During the year ended March 31, 2019, an impairment charge of ₹12.07 crore was recognised with respect to investment in Jamshedpur
Football and Sporting Private Limited (₹12.00 crore) and T M Mining Company Limited (₹0.07 crore).
8.
Investments
[Item No. I(g)(i) and II(b)(i), Page 222]
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) Steel Strips Wheels Limited
(4) Tata Consultancy Services Limited
(Face Value of ₹1 each)
(5) Tata Investment Corporation Limited
(6) Tata Motors Ltd. (Face value of ₹2 each)
(7) The Tata Power Company Ltd. (Face value of ₹1 each)
(8) Timken India Ltd. ₹767.20 (March 31, 2019 : ₹587.25)
No. of shares as at March
31,2020 (face value of `10
each fully paid up unless
otherwise specified)
As at
March 31, 2020
(` crore)
As at
March 31, 2019
3,54,000
7,900
10,86,972
46,798
2,28,015
1,00,000
3,91,22,725
1
11.59
1.29
38.53
8.55
15.12
0.71
128.52
-
204.31
35.03
1.55
93.19
9.37
19.00
1.74
288.73
-
448.61
250
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
8.
Investments (Contd.)
[Item No. I(g)(i) and II(b)(i), Page 222]
(ii) Unquoted#
IFCI Venture Capital Funds Ltd.
(1)
(2) Panatone Finvest Ltd.
(3) Steelscape Consultancy Pvt. Ltd.
(4) Taj Air Limited
(5) Tarapur Environment Protection Society
(6) Tata Industries Ltd. (Face value of `100 each)
(7) Tata International Ltd. (Face value of `1,000 each)
(8) Tata Services Ltd. (Face value of `1,000 each)
(9) Tata Sons Private Limited (Face value of `1,000 each)
(10) Tata Teleservices Ltd.
(11) Others(iii)
(II)
Investments carried at fair value through profit and loss:
Investment in preference shares
(a) Subsidiary companies
(i) Unquoted
No. of shares as at March
31,2020 (face value of `10
each fully paid up unless
otherwise specified)
As at
March 31, 2020
(` crore)
As at
March 31, 2019
1,00,000
45,000
50,000
42,00,000
82,776
99,80,436
28,616
1,621
12,375
8,74,27,533
0.10
0.05
-
-
0.89
202.19
31.19
0.16
68.75
-
0.01
303.34
507.65
0.10
0.05
-
-
0.89
202.19
31.19
0.16
68.75
-
0.01
303.34
751.95
(1) Creative Port Development Private Limited
25,10,830
25.11
25.11
(2)
(3)
(4)
0.01% non-cumulative optionally convertible redeemable
preference shares (Face value of ₹100 each)
T Steel Holdings Pte. Ltd.
5.00% non-cumulative convertible preference shares *
(Face value of GBP 1 each)
(55,41,31,297 shares were converted into same number of
equity shares of face value GBP 1 each during the year)
T Steel Holdings Pte. Ltd.
5.60% non-cumulative convertible preference shares *
(Face value of USD 1 each)
(1,25,80,00,000 shares were converted into same number
of equity shares of face value GBP 0.78 each during the
year)
Tata Steel BSL Limited
10,70,00,00,000 11.09 % non-cumulative redeemable
preference shares and 9,00,00,00,000 8.89 %
non-cumulative optionally convertible redeemable
preference shares
-
-
-
-
5,016.25
8,698.44
19,70,00,00,000
19,700.00
19,700.00
251
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
8.
Investments (Contd.)
[Item No. I(g)(i) and II(b)(i), Page 222]
(5)
(6)
(7)
(8)
Tayo Rolls Limited
7.00% non-cumulative redeemable preference shares
(Face value of ₹100 each)
Tayo Rolls Limited
7.17% non-cumulative redeemable preference shares
(Face value of ₹100 each)
Tayo Rolls Limited
8% non-cumulative redeemable preference shares
(Face value of ₹100 each)
Tayo Rolls Limited
8.50% non-cumulative redeemable preference shares
(Face value of `100 each)
No. of shares as at March
31,2020 (face value of `10
each fully paid up unless
otherwise specified)
As at
March 31, 2020
(` crore)
As at
March 31, 2019
43,30,000
64,00,000
3,00,000
2,31,00,000
-
-
-
-
-
-
-
-
19,725.11
33,439.80
(b) Associate companies
(i) Unquoted
(1)
TRF Limited
12.50 % non-cumulative redeemable preference shares
25,00,00,000
-
250.00
-
19,725.11
250.00
33,689.80
Investments in debentures and bonds
Investment in joint ventures
(a)
(i) Unquoted
(1) Medica TS Hospital Private Limited
4,97,400
49.74
49.74
Secured optionally convertible redeemable debentures
(Face value of `1,000 each)
(b)
Investments in others
(i) Unquoted
(1)
Bharti Airtel Limited - ₹700.00 (March 31, 2019 : Nil)
10.00 % non-cumulative redeemable preference shares
(Face value of ₹100 each)
(7 debentures were acquired during the year)
49.74
49.74
7
-
-
-
49.74
20,282.50
-
49.74
34,491.49
* During the year ended March 31, 2020, terms of the non-cumulative redeemable preference shares of T Steel Holdings Pte. Ltd. were
modified to non-cumulative convertible preference shares and these preference shares were converted to equity shares. The fair value of the
preference shares on the date of conversion was considered as the cost of the equity shares.
252
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
8.
Investments (Contd.)
[Item No. I(g)(i) and II(b)(i), Page 222]
B. Current
Investments carried at fair value through profit and loss:
Investment in mutual funds – Unquoted
(1) Nippon MF ETF Liquid Fund
(2)
(3)
Tata Liquid Fund - Growth
Tata Overnight Fund - Reg - Growth
(i)
Carrying value and market value of quoted and unquoted investments are as below:
(a) Investments in quoted instruments:
Aggregate carrying value
Aggregate market value
(b) Investments in unquoted instruments:
Aggregate carrying value
(` crore)
As at
March 31, 2020
As at
March 31, 2019
0.09
-
3,235.07
3,235.16
0.09
477.38
-
477.47
(` crore)
As at
March 31, 2020
As at
March 31, 2019
204.31
204.31
448.61
448.61
23,313.35
34,520.35
(ii)
During the year ended March 31, 2019, cumulative gain on de-recognition of investments which were carried at fair value through other
comprehensive income amounted to ₹1.49 crore. Fair value of such investments as on the date of de-recognition was ₹1.97 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.
253
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
8.
Investments (Contd.)
[Item No. I(g)(i) and II(b)(i), Page 222]
(iii) 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.
(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
No. of shares as at March
31, 2020 (face value of
`10 each fully
paid up unless
otherwise specified)
200
As at
March 31, 2020
(`)
As at
March 31, 2019
(`)
5,000.00
5,000.00
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
254
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
9. Loans
[Item No. I(g)(ii) and II(b)(v), Page 222]
A. Non-current
(a) Security deposits
Considered good - Unsecured
Credit impaired
Less: Allowance for credit losses
(b) Loans to related parties
Considered good - Unsecured
Credit impaired
Less: Allowance for credit losses
(c) Other loans
Considered good - Unsecured
Credit impaired
Less: Allowance for credit losses
B. Current
(a) Security deposits
Considered good - Unsecured
(b) Loans to related parties
Considered good - Unsecured
Credit impaired
Less: Allowance for credit losses
(c) Other loans
Considered good - Unsecured
Credit impaired
Less: Allowance for credit losses
(` crore)
As at
March 31, 2020
As at
March 31, 2019
184.04
1.96
1.96
184.04
-
558.95
558.95
-
15.22
0.53
0.53
15.22
199.26
200.13
2.02
2.02
200.13
13.00
558.95
558.95
13.00
18.03
0.53
0.53
18.03
231.16
(` crore)
As at
March 31, 2020
As at
March 31, 2019
2.47
-
1,600.40
67.66
67.66
1,600.40
4.45
2.00
2.00
4.45
1,607.32
52.01
68.72
68.72
52.01
3.91
2.00
2.00
3.91
55.92
(i)
(ii)
Security deposits are primarily in relation to public utility services and rental agreements. It includes deposit with a subsidiary
₹14.00 crore (March 31, 2019: ₹14.00 crore) and deposits with Tata Sons Private Limited ₹1.25 crore (March 31, 2019: ₹1.25 crore).
Non-current loans to related parties represent loans given to subsidiaries ₹558.95 crore (March 31, 2019: ₹571.95 crore), out of which
₹558.95 crore (March 31, 2019: ₹558.95 crore) is impaired.
255
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
9. Loans (Contd.)
[Item No. I(g)(ii) and II(b)(v), Page 222]
(iii)
Current loans to related parties represent loans/advances given to subsidiaries ₹1,640.46 crore (March 31, 2019: ₹92.06 crore) and joint
ventures ₹27.60 crore (March 31, 2019: ₹28.67 crore) out of which ₹67.66 crore (March 31, 2019: ₹67.65 crore) and Nil (March 31, 2019:
₹1.07 crore) is impaired respectively.
(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)
Loans/advances in the nature of loan outstanding from subsidiaries, associates and joint ventures for the year ended March 31, 2020:
Name of the Company
Subsidiaries
(1) Bamnipal Steel Limited
(interest rate 10.00 %)
(2) Jamshedpur Football and Sporting Private Limited
(interest rate 12.25%)
(3) Subarnarekha Port Private Limited
(interest rate 10.51%)
(4) T Steel Holdings Pte. Ltd.
(interest rate LIBOR+2%)
(5) Tata Steel (KZN) (Pty) Ltd.(ii)
(6) Tata Steel Special Economic Zone Limited
(interest rate 10.00% to 10.50%)
(7) Tata Steel Utilities and Infrastructure Services Limited (formerly Jamshedpur
Utilities & Services Company Limited)
(interest rate 10.50% to 12.50%)
(8) Tayo Rolls Limited(ii)
(interest rate 7.00% to 13.07%)
(` crore)
Debts
outstanding as at
March 31, 2020
Maximum balance
outstanding during
the year
-
-
-
-
23.00
20.00
1,511.80
-
558.95
558.95
38.00
13.00
-
-
67.00
67.00
-
18,631.65
-
15.00
23.00
20.00
1,511.80
-
558.95
558.95
38.00
13.00
-
7.50
67.00
67.00
256
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
9. Loans (Contd.)
[Item No. I(g)(ii) and II(b)(v), Page 222]
Name of the Company
Associate
(1) TRF Limited
(interest rate 10.00% to 10.51%)
Joint ventures
(1) Industrial Energy Limited
(interest rate 10.00%)
(2) S & T Mining Company Private Limited
(interest rate 12.00% to 14.00%)
(3) T M Mining Company Limited
(interest rate 12.40%)
(` crore)
Debts
outstanding as at
March 31, 2020
Maximum balance
outstanding during
the year
-
-
27.60
27.60
-
1.07
-
-
-
242.00
27.60
46.22
1.07
1.07
-
0.05
Figures in italics represents comparative figures of previous year.
(i) The above loans have been given for business purpose.
(ii) As at March 31, 2020, loans given to Tayo Rolls Limited and Tata Steel (KZN) (Pty) Ltd. were fully impaired.
(b) Details of investments made and guarantees provided are given in note 7, page 246, note 8, page 250 and note 37B, page 293.
(vi) There are no outstanding debts from directors or other officers of the Company.
10. Other financial assets
[Item No. I(g)(iv) and II(b)(vii), Page 222]
A. Non-current
(a) Interest accrued on deposits and loans
Considered good - Unsecured
(b) Earmarked balances with banks
(c) Others
Considered good - Unsecured
(` crore)
As at
March 31, 2020
As at
March 31, 2019
1.68
54.31
4.43
60.42
0.50
34.96
275.19
310.65
257
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
10. Other financial assets (Contd.)
[Item No. I(g)(iv) and II(b)(vii), Page 222]
B. Current
(a) Interest accrued on deposits and loans
Considered good - Unsecured
Credit impaired
Less: Allowance for credit losses
(b) Others
Considered good - Unsecured
(` crore)
As at
March 31, 2020
As at
March 31, 2019
10.42
14.30
14.30
10.42
6.30
14.32
14.32
6.30
219.99
230.41
934.46
940.76
(i)
(ii)
(iii)
Non-current earmarked balances with banks 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.
During the year ended March 31, 2019, non-current other financial assets included advance against purchase of equity shares in a
subsidiary ₹275.19 crore out of which ₹258.69 crore was contributed by way of transfer of assets.
Current other financial assets include amount receivable from post-employment benefit funds ₹56.71 crore (March 31, 2019: ₹755.95
crore) on account of retirement benefit obligations paid by the Company directly.
11. Income tax
[Item No. V(e), Page 222]
A.
Income tax expense/(benefit)
The Company is subject to income tax in India on the basis of its standalone financial statements. 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. 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.
Section 115BAA has newly been inserted in the Income Tax Act, 1961 vide Taxation Laws (Amendment) Ordinance, 2019 (subsequently enacted
on December 11, 2019 as The Taxation Laws (Amendment) Act, 2019) which provides a domestic company with an irrevocable option to pay
tax at a lower rate of 22% (effective rate of 25.168%) for any previous year relevant to the assessment year beginning on or after April 1, 2020.
The lower rate shall be applicable subject to certain conditions, including that the total income should be computed without claiming specific
deduction or exemptions. MAT would be inapplicable to companies opting to apply the lower tax rate.
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.
258
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
11. Income tax (Contd.)
[Item No. V(e), Page 222]
The reconciliation of estimated income tax to income tax expense is as below:
Profit before tax
Expected income tax expense at statutory income tax rate of 25.168 % (2018-19 : 34.944 %)
(a) Income exempt from tax/Items not deductible
(b) Additional tax benefit for capital investment including research and development expenditures
(c) Impact of change in tax rate(i)
Tax expense as reported
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
6,610.98
1,663.85
388.72
-
(2,185.39)
(132.82)
16,227.25
5,670.45
48.98
(25.37)
-
5,694.06
(i)
The Company has elected to exercise the option permitted under new tax rate regime during the financial year ended March 31, 2020 and
accordingly remeasured deferred tax balances expected to reverse in future periods based on the revised applicable tax rate.
B. Deferred tax assets/(liabilities)
(i)
Components of deferred tax assets and liabilities as at March 31, 2020 are as below:
Deferred tax assets:
Investments
Retirement benefit obligations
Expenses allowable for tax purposes when
paid/written off
Deferred tax liabilities:
Property, plant and equipment and intangible assets
Others
Net deferred tax assets/(liabilities)
Disclosed as:
Deferred tax liabilities (net)
Balance
as at
April 1, 2019
Recognised/
(reversed)
in profit and
loss during the
year
Recognised
in other
comprehensive
income during
the year
3,040.80
186.00
3,011.80
(54.30)
(52.04)
(911.56)
6,238.60
(1,017.90)
-
-
-
-
(3,009.53)
70.86
(2,938.67)
1,920.77
-
(20.37)
(20.37)
20.37
13,700.23
345.37
14,045.60
(7,807.00)
(7,807.00)
(` crore)
Recognised
in equity during
the year
Balance
as at
March 31, 2020
-
-
-
-
(3.58)
-
(3.58)
3.58
2,986.50
133.96
2,100.24
5,220.70
10,687.12
395.86
11,082.98
(5,862.28)
(5,862.28)
259
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
11. Income tax (Contd.)
[Item No. V(e), Page 222]
Components of deferred tax assets and liabilities as at March 31, 2019 are as below:
Deferred tax assets:
Investments
Retirement benefit obligations
Expenses allowable for tax purposes when
paid/written off
MAT credit entitlement/(utilisation)
Deferred tax liabilities:
Property, plant and equipment and
intangible assets
Others
Net deferred tax assets/(liabilities)
Disclosed as:
Deferred tax liabilities (net)
Balance
as at
April 1, 2018
Recognised/
(reversed)
in profit and
loss during the
year
Recognised
in other
comprehensive
income during
the year
3,040.80
186.00
1,838.05
-
-
1,173.75
2,158.92
7,223.77
-
1,173.75
13,391.83
313.21
-
-
-
-
-
-
91.03
13,482.86
(6,259.09)
(6,259.09)
257.49
570.70
603.05
(3.15)
(3.15)
3.15
Recognised
in equity during
the year
Other
movements
during the year
Balance
as at
March 31, 2019
(` crore)
-
-
-
-
-
(4.81)
-
(4.81)
4.81
-
-
-
3,040.80
186.00
3,011.80
(2,158.92)
(2,158.92)
-
6,238.60
-
13,700.23
-
-
(2,158.92)
345.37
14,045.60
(7,807.00)
(7,807.00)
(ii)
As at March 31, 2020, deferred tax assets amounting to `7,967.37 crore (March 31, 2019: `8,112.23 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.
260
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
12. Other assets
[Item No. I(i) and II(c), Page 222]
A. Non-current
(a) Capital advances
Considered good - Unsecured
Considered doubtful - Unsecured
Less: Provision for doubtful advances
(b) Advances with public bodies
Considered good - Unsecured
Considered doubtful - Unsecured
Less: Provision for doubtful advances
(c) Prepaid lease payments for operating leases
(d) Capital advances to related parties
Considered good - Unsecured
(e) Others
Considered good - Unsecured
(` crore)
As at
March 31, 2020
As at
March 31, 2019
969.40
83.98
83.98
969.40
1,016.92
12.23
12.23
1,016.92
-
706.50
83.86
83.86
706.50
919.44
12.21
12.21
919.44
821.25
33.99
40.89
41.76
47.90
2,062.07
2,535.98
261
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
12. Other assets (Contd.)
[Item No. I(i) and II(c), Page 222]
B. Current
(a) Advances with public bodies
Considered good - Unsecured
Considered doubtful - Unsecured
Less: Provision for doubtful advances
(b) Advances to related parties
Considered good - Unsecured
(c) Prepaid lease payments for operating leases
(d) Others
Considered good - Unsecured
Considered doubtful - Unsecured
Less: Provision for doubtful advances
(` crore)
As at
March 31, 2020
As at
March 31, 2019
1,179.77
2.43
2.43
1,179.77
1,575.77
2.43
2.43
1,575.77
102.27
140.03
-
11.67
433.88
64.52
64.52
433.88
1,715.92
482.51
66.10
66.10
482.51
2,209.98
(i)
Advance with public bodies primarily relate to input credit entitlements and amounts paid under protest in respect of demands and
claims from regulatory authorities.
(ii)
Prepaid lease payments in respect of land leases has been reclassified to right-of-use assets on adoption of Ind AS 116 “Leases”.
(iii) Others include advances against supply of goods/services and advances paid to employees.
262
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
13. Inventories
[Item No. II(a), Page 222]
(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
(` crore)
As at
March 31, 2020
As at
March 31, 2019
3,586.21
6.90
4,663.71
113.15
2,346.69
10,716.66
645.00
7.07
39.99
112.91
804.97
4,496.38
14.54
4,129.28
75.54
2,539.60
11,255.34
671.23
0.71
66.22
163.35
901.51
Value of inventories above is stated after provisions (net of reversal) `110.35 crore (March 31, 2019: `93.07 crore) for write-downs to net
realisable value and provision for slow-moving and obsolete items.
14. Trade receivables
[Item No. II(b)(ii), Page 222]
(a)
(b)
Considered good - Unsecured
Credit impaired
Less: Allowance for credit losses
(` crore)
As at
March 31, 2020
As at
March 31, 2019
1,016.73
33.16
1,049.89
33.16
1,016.73
1,363.04
34.74
1,397.78
34.74
1,363.04
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 and rates used in the provision matrix.
(i) Movements in allowance for credit losses of receivables is as below:
Balance at the beginning of the year
Charge/(release) during the year
Balance at the end of the year
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
34.74
(1.58)
33.16
30.97
3.77
34.74
263
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
14. Trade receivables (Contd.)
[Item No. II(b)(ii), Page 222]
(ii) Ageing of trade receivables and credit risk arising therefrom 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
Gross
credit risk
801.91
146.79
16.84
10.86
28.04
45.45
1,049.89
Gross
credit risk
1,243.54
65.51
17.34
9.65
16.69
45.05
1,397.78
As at March 31, 2020
Allowance for
credit losses
1.46
3.65
1.70
2.03
5.68
18.64
33.16
As at March 31, 2019
Allowance for
credit losses
2.34
1.66
1.19
2.69
2.63
24.23
34.74
(` crore)
Net
credit risk
800.45
143.14
15.14
8.83
22.36
26.81
1,016.73
(` crore)
Net
credit risk
1,241.20
63.85
16.15
6.96
14.06
20.82
1,363.04
(iii)
The Company considers its maximum exposure to credit risk with respect to customers as at March 31, 2020 to be `1,016.73 crore (March
31, 2019: `1,363.04 crore), which is the carrying value of trade receivables after allowance for credit losses.
The Company’s exposure to customers is diversified and no single customer, other than a subsidiary, contributes more than 10% of the
outstanding receivables as at March 31, 2020 and March 31, 2019.
(iv) There are no outstanding receivables due from directors or other officers of the Company.
264
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
15. Cash and cash equivalents
[Item No. II(b)(iii), Page 222]
(a) Cash on 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.
16. Other balances with banks
[Item No. II(b)(iv), Page 222]
Earmarked balances with banks
(` crore)
As at
March 31, 2020
As at
March 31, 2019
0.50
0.34
-
992.80
993.64
1.35
7.74
8.97
526.79
544.85
As at
March 31, 2020
(` crore)
As at
March 31, 2019
233.23
173.26
(i)
Earmarked balances with banks primarily includes balances held for unpaid dividends `64.20 crore (March 31, 2019: `64.88 crore), bank
guarantees and margin money `38.90 crore (March 31, 2019: `66.11 crore).
(ii)
Earmarked balances with banks are denominated and held in Indian Rupees.
265
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
17. Equity share capital
[Item No. IV(a), Page 222]
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, 2019: 1,75,00,00,000 Ordinary Shares of `10 each)
‘A’ Ordinary Shares of `10 each*
(March 31, 2019: 35,00,00,000 ‘A’ Ordinary Shares of `10 each)
Cumulative Redeemable Preference Shares of `100 each*
(March 31, 2019: 2,50,00,000 Shares of `100 each)
Cumulative Convertible Preference Shares of `100 each*
(March 31, 2019: 60,00,00,000 Shares of `100 each)
Ordinary Shares of `10 each
(March 31, 2019: 1,12,75,20,570 Ordinary Shares of `10 each)
Ordinary Shares of `10 each (partly paid up, `2.504 each paid up)
(March 31, 2019 : 7,76,97,280 Ordinary Shares of ₹10 each,
₹2.504 each paid up)
Subscribed and paid up:
1,12,64,90,211
7,76,36,788
Ordinary Shares of `10 each fully paid up
(March 31, 2019 : 1,12,64,89,680 Ordinary Shares of ₹10 each)
Ordinary Shares of ₹10 each (partly paid up, ₹2.504 each paid up)
(March 31, 2019 : 7,76,36,705 Ordinary Shares of ₹10 each,
₹2.504 each paid up)
Amount paid up on 3,89,516 Ordinary Shares of ₹10 each forfeited
(March 31, 2019 : 3,89,516 Ordinary Shares of ₹10 each)
(` crore)
As at
March 31, 2020
As at
March 31, 2019
1,750.00
1,750.00
350.00
250.00
350.00
250.00
6,000.00
6,000.00
8,350.00
8,350.00
1,127.52
1,127.52
77.70
77.70
1,205.22
1,205.22
1,126.49
1,126.48
19.44
19.44
0.20
1,146.13
0.20
1,146.12
* ‘A’ class Ordinary Shares and Preference Shares included within the authorised share capital are for disclosure purposes and have not
yet been issued.
(i)
Subscribed and paid up share capital includes 11,81,893 (March 31, 2019: 11,81,893) Ordinary Shares of face value `10 each fully paid up,
held by subsidiaries of the Company.
(ii) Details of movement in subscribed and paid up share capital other than forfeited shares is as below:
Ordinary Shares of `10 each
Balance at the beginning of the year
Fully paid shares allotted during the year(a),(b),(c)
Partly paid shares allotted during the year(d)
Balance at the end of the year
* represents value less than `0.01 crore.
266
Year ended
March 31, 2020
Year ended
March 31, 2019
No. of shares
` crore
No. of shares
` crore
1,20,41,26,385
531
83
1,20,41,26,999
1,145.92
0.01
0.00*
1,145.93
1,20,41,19,440
4,865
2,080
1,20,41,26,385
1,145.92
0.00*
0.00*
1,145.92
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
17. Equity share capital (Contd.)
[Item No. IV(a), Page 222]
(a)
(b)
(c)
(d)
210 Ordinary Shares of face value ₹10 each were allotted at a premium of ₹290 per share to the shareholders whose shares were
kept in abeyance in the Rights Issue of 2007.
154 Ordinary Shares of face value ₹10 each were allotted at a premium of ₹590 per share in lieu of Cumulative Convertible
Preference Shares of ₹100 each to the shareholders whose shares were kept in abeyance in the Rights Issue of 2007.
167 fully paid Ordinary Shares of face value ₹10 were allotted at a premium of ₹500 per share to the shareholders whose shares
were kept in abeyance in the Rights Issue of 2018.
83 partly paid Ordinary Shares of face value ₹10 each (₹2.504 paid up) were allotted at a premium of ₹605 (₹151.496 paid up) per
share to the shareholders whose shares were kept in abeyance in the Rights Issue of 2018.
(iii)
As at March 31, 2020, 2,98,822 Ordinary Shares of face value ₹10 each (March 31, 2019: 2,99,188 Ordinary Shares) are kept in abeyance in
respect of Rights Issue of 2007.
As at March 31, 2020, 1,21,293 fully paid Ordinary Shares of face value ₹10 each (March 31, 2019: 1,21,460 fully paid Ordinary Shares) and
60,492 partly paid Ordinary Shares of face value ₹10 each, ₹2.504 paid up (March 31, 2019: 60,575 partly paid Ordinary Shares, ₹2.504
paid up) are kept in abeyance in respect of Rights Issue of 2018.
(iv) Details of shareholders holding more than 5 percent shares in the Company is as below:
Name of shareholders
(a) Tata Sons Private Limited
(b) Life Insurance Corporation of India
(c) HDFC Trustee Company Limited
As at
March 31, 2020
As at
March 31, 2019
No. of Ordinary
Shares
% held
No. of Ordinary
Shares
% held
39,65,08,142
10,96,96,176
6,02,13,483
32.93
9.11
5.00
38,09,73,085
10,83,88,660
NA*
31.64
9.00
NA*
* As on March 31, 2019, HDFC Trustee Company Limited held less than 5% shares in the Company.
(v)
1,25,61,401 shares (March 31, 2019: 1,34,73,958 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.
(vi)
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)
In respect of every Ordinary Share (whether fully paid or partly paid), voting right and dividend 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.
(iii)
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.
267
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
17. Equity share capital (Contd.)
[Item No. IV(a), Page 222]
B.
(i)
‘A’ Ordinary Shares of `10 each
C. Preference Shares
(a)
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:
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.
-
-
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.
(i)
(ii)
(b)
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.
(ii)
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.
268
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
18. Hybrid perpetual securities
[Item No. IV(b), Page 222]
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)
Year ended
March 31, 2020
Year ended
March 31, 2019
2,275.00
2,275.00
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.
19. Other equity
[Item No. IV(c), Page 222]
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 post-employment defined benefit plans
Tax on remeasurement of post-employment defined 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
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
27,694.90
6,743.80
(461.27)
116.09
(1,489.67)
(297.71)
(266.15)
66.97
-
32,106.96
18,700.25
10,533.19
5.95
(2.07)
(1,145.92)
(224.86)
(266.12)
92.99
1.49
27,694.90
(i)
Represents profit on sale of investments carried at fair value through other comprehensive income reclassified from investment
revaluation reserve.
B.
Items of other comprehensive income
(a) Cash flow hedge reserve
The cumulative effective portion of gains or losses arising from changes in 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, interest rate swaps and interest rate caps and collars as cash flow
hedges in respect of foreign exchange and interest rate risks.
269
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
19. Other equity (Contd.)
[Item No. IV(c), Page 222]
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 re-classified to profit and loss/cost of hedged items
Tax impact on above
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
(1.77)
(59.95)
(61.72)
5.14
(6.91)
(1.77)
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
(74.28)
(5.48)
19.81
(59.95)
(27.94)
17.32
3.71
(6.91)
During the year, ineffective portion of cash flow hedges recognised in the statement of profit and loss amounted to Nil (2018-19: 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: loss `4.24 crore (2018-19: loss `2.17 crore)
later than one year: loss `57.48 crore (2018-19: gain `0.40 crore)
(b)
Investment revaluation reserve
The cumulative gains and losses arising from 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
Tax impact on above
Transfers within equity
Balance at the end of the year
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
55.04
(244.30)
0.56
-
(188.70)
103.72
(46.63)
(0.56)
(1.49)
55.04
270
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
19. Other equity (Contd.)
[Item No. IV(c), Page 222]
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 details of movement in securities premium is as below:
Balance at the beginning of the year
Received/transfer on issue of Ordinary Shares during the year
Equity issue expenses written (off )/back during the year
Balance at the end of the year
(b) Debenture redemption reserve
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
27,780.25
0.03
-
27,780.28
27,779.42
0.26
0.57
27,780.25
Earlier, the provisions of the Companies Act, 2013 read with the related rules required a company issuing debentures to create a Debenture
redemption reserve (DRR) of 25% of the value of debentures issued, either through a public issue or on a private placement basis, out of
the profits of the company available for payment of dividend. The amounts credited to the DRR can be utilised by the company only to
redeem debentures.
However, as per the recent amendment in the Companies (Share Capital and Debentures) Rules, 2014, a listed company issuing privately
placed debentures on or after August 16, 2019, is not required to maintain additional amount in the DRR. Accordingly, the existing balance
in the DRR shall be maintained to be utilised only for the redemption of existing debentures issued by the Company before August 16, 2019.
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)
Year ended
March 31, 2020
Year ended
March 31, 2019
2,046.00
2,046.00
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)
Year ended
March 31, 2020
Year ended
March 31, 2019
11,596.35
11,596.35
11,596.35
11,596.35
271
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
19. Other equity (Contd.)
[Item No. IV(c), Page 222]
(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)
Year ended
March 31, 2020
Year ended
March 31, 2019
20.78
20.78
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)
Year ended
March 31, 2020
Year ended
March 31, 2019
117.04
117.04
117.04
117.04
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
-
0.04
(0.04)
-
0.02
0.24
(0.26)
-
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 Ordinary Shares during the year
Balance at the end of the year
272
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
20. Borrowings
[Item No. V(a)(i) and VI(a)(i), Page 222]
A. Non-current
(a) Secured
(i)
(ii)
Loans from Joint Plant Committee - Steel Development Fund
Lease obligations
(b) Unsecured
(i) Non-convertible debentures
(ii) Term loans from banks/financial institutions
(iii) Lease obligations
B. Current
(a) Secured
(i)
Repayable on demand from banks/financial institutions
(b) Unsecured
Loans from banks/financial institutions
(i)
(ii) Commercial papers
(i)
(ii)
(a)
As at March 31, 2020, `5,618.78 crore (March 31, 2019: `2,572.19
crore) of the total outstanding borrowings were secured by a
charge on property, plant and equipment, right-of-use assets,
inventories and receivables.
The security details of major borrowings as at March 31,
2020 is as below:
Loans 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
(` crore)
As at
March 31, 2020
As at
March 31, 2019
2,633.96
2,941.15
5,575.11
12,567.07
13,239.78
-
25,806.85
31,381.96
2,564.10
-
2,564.10
12,195.74
9,956.98
1,934.37
24,087.09
26,651.19
(` crore)
As at
March 31, 2020
As at
March 31, 2019
43.67
4,800.00
3,013.60
7,813.60
7,857.27
8.09
-
-
-
8.09
movable assets of the Tube Division, Bearings 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 rediscounting
schemes/asset credit schemes.
The loan was 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.
273
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
20. Borrowings (Contd.)
[Item No. V(a)(i) and VI(a)(i), Page 222]
The loan includes funded interest `994.63 crore (March 31,
2019: `924.77 crore).
It includes `1,639.33 crore (March 31, 2019: `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) Lease obligations
The Company has taken certain assets on lease for business
purpose. In addition, the Company has entered into long-term
arrangements which conveys right to control the use of the
identified assets resulting in recognition of right-of-use assets
and lease obligations.
Lease obligations represent the present value of minimum
lease payments payable over the lease term.
(v)
(iii)
The details of major unsecured borrowings as at March 31,
2020 is as below:
(a) Commercial Paper
Commercial papers raised by the Company are short-term in
nature ranging between one to three months.
(b) Non-convertible debentures
(i)
(ii)
(iii)
(iv)
9.84% p.a. interest bearing 43,150 debentures of face
value ₹10,00,000 each are redeemable at par in 4 equal
annual instalments commencing from February 28, 2031.
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.
interest bearing 10,000 debentures of
8.15% p.a.
face value ₹10,00,000 each are redeemable at par on
October 1, 2026.
(v)
7.70% p.a. interest bearing 6,700 debentures of face value
₹10,00,000 each are redeemable at par on March 13, 2025.
(vii)
9.15% p.a. interest bearing 5,000 debentures of face
value ₹10,00,000 each are redeemable at par on
January 25, 2021.
(c) Term loans from banks/financial institutions
(i)
(ii)
(iii)
(iv)
USD 330.00 million equivalent to ₹2,494.80 crore (March
31, 2019: Nil) loan is repayable in 3 equal annual instalments
commencing from September 09, 2023.
Rupee loan amounting ₹2,500.00 crore (March 31, 2019:
₹2,500.00 crore)
instalments
commencing from March 31, 2023.
in 9 quarterly
is repayable
Rupee loan amounting ₹1,047.50 crore (March 31, 2019:
₹1,047.50 crore) is repayable in 10 semi-annual instalments, the
next instalment is due on November 29, 2022.
Rupee loan amounting ₹1,000.00 crore (March 31, 2019: Nil) is
repayable in 16 semi-annual instalments, the next instalment is
due on March 24, 2022.
Rupee
loan amounting ₹584.58 crore (March 31, 2019:
₹584.58 crore) is repayable in 8 semi-annual instalments, the
next instalment is due on June 15, 2021.
(vi)
Rupee loan amounting ₹750.00 crore (March 31, 2019: ₹750.00
crore) is repayable in 3 equal annual instalments commencing
from May 29, 2021.
(vii) USD 7.86 million equivalent to ₹59.43 crore (March 31, 2019:
USD 7.86 million equivalent to ₹54.38 crore) is repayable
on March 1, 2021.
(viii) USD 133.33 million equivalent to ₹1,008.00 crore (March 31,
2019: USD 200.00 million equivalent to ₹1,383.55 crore) loan is
repayable in 2 equal annual instalments, the next instalment is
due on February 16, 2021.
(ix)
(x)
loan amounting ₹632.72 crore (March 31, 2019:
Rupee
₹640.42 crore) is repayable in 14 semi-annual instalments, the
next instalment is due on August 14, 2020.
Euro 10.81 million equivalent to ₹89.56 crore (March 31, 2019:
Euro 16.21 million equivalent to ₹125.96 crore) loan is repayable
in 4 equal semi-annual instalments, the next instalment is due
on July 6, 2020.
(xi)
Rupee loan amounting ₹1,000.00 crore (March 31, 2019: Nil) is
repayable in 15 semi-annual instalments, the next instalment is
due on June 30, 2020.
(vi)
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.
(xii) Rupee loan amounting ₹1,600.00 crore (March 31, 2019:
₹1,600.00 crore) is repayable in 8 semi-annual instalments, the
next instalment is due on April 30, 2020.
274
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
20. Borrowings (Contd.)
[Item No. V(a)(i) and VI(a)(i), Page 222]
(xiii) Euro 47.76 million equivalent to ₹395.80 crore (March 31, 2019:
Euro 66.87 million equivalent to ₹519.58 crore) loan is repayable
in 5 equal semi-annual instalments, the next instalment is due
on April 30, 2020.
(xiv) Rupee loan amounting ₹1,447.50 crore (March 31, 2019:
₹1,485.00 crore) is repayable in 17 semi-annual instalments, the
next instalment is due on April 16, 2020.
(iv)
Currency and interest exposure of borrowings including current maturities at the end of the reporting period is as below:
As at March 31, 2020
As at March 31, 2019
Fixed
rate
24,190.31
325.31
-
24,515.62
Floating
rate
13,225.20
156.25
3,525.80
16,907.25
Total
37,415.51
481.56
3,525.80
41,422.87
Fixed
rate
16,476.27
425.00
-
16,901.27
Floating
rate
11,162.42
212.29
1,425.49
12,800.20
(` crore)
Total
27,638.69
637.29
1,425.49
29,701.47
INR
EURO
USD
Total
INR-Indian Rupees, USD-United States Dollars.
(v)
Majority of floating rate borrowings are bank borrowings bearing interest rates based on MCLR, LIBOR and EURIBOR. Of the total floating
rate borrowings as at March 31, 2020, `2,778.30 crore (March 31, 2019: `1,037.66 crore) has been hedged using interest rate swaps and
interest rate caps and collars, with contracts covering period of more than one year.
(vi) 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 leases
Less: Capitalisation of transaction costs
As at March 31, 2020
Lease
obligations
Total
borrowings
(` crore)
As at March 31, 2019
Total borrowings
753.36
611.87
528.24
451.01
417.32
3,716.20
6,478.00
3,168.20
-
3,309.80
10,428.89
2,284.53
4,542.85
3,742.61
3,881.43
19,979.54
44,859.85
3,168.20
268.78
41,422.87
3,325.08
2,033.20
1,912.66
4,206.95
2,611.95
18,625.16
32,715.00
2,560.34
453.19
29,701.47
Borrowings
other than lease
obligations
9,675.53
1,672.66
4,014.61
3,291.60
3,464.11
16,263.34
38,381.85
-
268.78
38,113.07
(vii)
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.
275
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
21. Other financial liabilities
[Item No. V(a)(iii) and VI(a)(iv), Page 222]
A. Non-current
Creditors for other liabilities
B. Current
(a) Current maturities of long-term borrowings
(b) Current maturities of lease obligations
(c)
(d) Unclaimed dividends
(e) Creditors for other liabilities
Interest accrued but not due
(i)
Non-current and current creditors for other liabilities include:
(a)
(b)
creditors for capital supplies and services `1,303.22 crore (March 31, 2019: `1,582.88 crore).
liability for employee family benefit scheme `195.21 crore (March 31, 2019: `189.87 crore).
22. Provisions
[Item No. V(b) and VI(b), Page 222]
A. Non-current
(a) Employee benefits
(b) Others
B. Current
(a) Employee benefits
(b) Others
276
(` crore)
As at
March 31, 2020
As at
March 31, 2019
293.59
125.07
(` crore)
As at
March 31, 2020
As at
March 31, 2019
1,814.99
368.65
385.24
64.20
2,768.47
5,401.55
2,846.70
195.49
569.36
64.88
3,195.92
6,872.35
(` crore)
As at
March 31, 2020
As at
March 31, 2019
1,756.69
356.87
2,113.56
1,556.66
361.52
1,918.18
(` crore)
As at
March 31, 2020
As at
March 31, 2019
219.52
444.34
663.86
300.80
477.43
778.23
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
22. Provisions (Contd.)
[Item No. V(b) and VI(b), Page 222]
(i)
(ii)
(iii)
Non-current and current provision for employee benefits include provision for leave salaries `1,158.62 crore (March 31, 2019: `999.39
crore) and provision for early separation scheme `801.46 crore (March 31, 2019: `843.14 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.
Non-current and current other provisions include:
(a)
provision for compensatory afforestation, mine closure and rehabilitation obligations `753.88 crore (March 31, 2019: `791.62
crore). These amounts become payable upon closure of the mines and are expected to be incurred over a period of 1 to 32 years.
(b)
provision for legal and constructive commitments provided by the Company in respect of a loss-making subsidiary `47.33 crore
(March 31, 2019: `47.33 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
Recognised/(released) during the year(a)
Utilised during the year
Balance at the end of the year
(a) include provisions capitalised during the year in respect of restoration obligations.
23. Retirement benefit obligations
[Item No. V(c) and VI(c), Page 222]
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
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
838.95
8.03
(45.77)
801.21
676.34
190.91
(28.30)
838.95
(` crore)
As at
March 31, 2020
As at
March 31, 2019
528.76
1,446.44
249.24
2,224.44
80.21
1,182.12
168.02
1,430.35
(` crore)
As at
March 31, 2020
As at
March 31, 2019
92.66
13.95
106.61
88.89
13.23
102.12
(i) Detailed disclosure in respect post-retirement defined benefit schemes is provided in note 36, page 284.
(ii) Other defined benefits include post-retirement lumpsum benefits, long service awards, packing and transportation, farewell gifts, etc.
277
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
24. Deferred income
[Item No. V(d) and VI(d), Page 222]
A. Non-current
Grants relating to property, plant and equipment
B. Current
Other deferred income
(` crore)
As at
March 31, 2020
As at
March 31, 2019
-
747.23
(` crore)
As at
March 31, 2020
As at
March 31, 2019
6.15
-
(i)
Grants relating to property, plant and equipment as at March 31, 2019 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, an amount of `747.23 crore (2018-19: `618.38 crore) was released from deferred income to the statement of profit and
loss on fulfilment of export obligations.
25. Other liabilities
[Item No. V(f) and VI(f), Page 222]
A. Non-current
(a) Statutory dues
(b) Other credit balances
B. Current
(a) Advances received from customers
(b) Employee recoveries and employer contributions
(c) Statutory dues
(` crore)
As at
March 31, 2020
As at
March 31, 2019
-
684.76
684.76
19.77
416.39
436.16
(` crore)
As at
March 31, 2020
As at
March 31, 2019
560.15
27.91
5,287.89
5,875.95
484.99
70.22
5,810.38
6,365.59
(i)
Statutory dues primarily relate to payables in respect of royalties, GST, excise duty, service tax, sales tax, VAT and tax deducted at source.
278
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
26. Trade payables
[Item No. VI(a)(ii), Page 222]
A. Total outstanding dues of micro and small enterprises
Dues of micro and small enterprises
B.
Total outstanding dues of creditors other than micro and small enterprises
(a) Creditors for supplies and services
(b) Creditors for accrued wages and salaries
(` crore)
As at
March 31, 2020
As at
March 31, 2019
118.62
149.49
(` crore)
As at
March 31, 2020
As at
March 31, 2019
9,340.32
1,142.02
10,482.34
8,995.84
1,824.23
10,820.07
(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:
(i) Principal amount remaining unpaid to supplier at the end of the year
(ii) Interest due thereon remaining unpaid to supplier at the end of the year
(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
(` crore)
As at
March 31, 2020
As at
March 31, 2019
118.62
3.10
8.67
149.49
3.55
8.09
(iv) Amount of interest accrued and remaining unpaid at the end of the year
11.77
11.64
27. Revenue from operations
[Item No. I, Page 223]
(a)
(b)
(c)
Sale of products
Sale of power and water
Other operating revenues (ii)
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
57,167.71
1,647.86
1,620.40
60,435.97
67,213.85
1,709.51
1,687.56
70,610.92
279
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
27. Revenue from operations (Contd.)
[Item No. I, Page 223]
(i)
Revenue from contracts with customers disaggregated on the basis of geographical region and major businesses is as below:
(a)
(b)
(c)
Steel
Power and water
Others
(a)
(b)
(c)
Steel
Power and water
Others
Year ended March 31, 2020
India
48,764.20
1,647.86
1,837.84
52,249.90
Outside India
5,135.81
-
1,429.86
6,565.67
Year ended March 31, 2019
India
58,777.12
1,709.51
1,801.94
62,288.57
Outside India
4,342.26
-
2,292.53
6,634.79
(` crore)
Total
53,900.01
1,647.86
3,267.70
58,815.57
(` crore)
Total
63,119.38
1,709.51
4,094.47
68,923.36
(ii)
Other operating revenues include export incentives and deferred income released to the statement of profit and loss on fulfilment of
export obligations under the EPCG scheme.
28. Other income
[Item No. II, Page 223]
Interest income
(a) Dividend income
(b)
(c) Net gain/(loss) on sale/fair value changes of mutual funds
(d) Gain/(loss) on sale of property, plant and equipment including intangible assets (net of loss on
assets scrapped/written off )
(e) Gain/(loss) on cancellation of forwards, swaps and options
(f ) Other miscellaneous income
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
89.73
73.57
96.19
(1.20)
(1.26)
147.09
404.12
96.25
1,627.24
596.79
(1.42)
36.95
49.27
2,405.08
(i)
Dividend income includes income from investments carried at fair value through other comprehensive income `20.15 crore
(2018-19: `18.25 crore).
(ii)
Interest income includes:
(a)
income on financial assets carried at amortised cost `73.57 crore (2018-19: `874.36 crore).
(b)
income on financial assets carried at fair value through profit and loss Nil (2018-19: `752.88 crore).
280
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
29. Changes in inventories of finished and semi-finished goods, stock-in-trade and work-in-progress
[Item No. IV(c), Page 223]
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
Increase/(decrease)
30. Employee benefits expense
[Item No. IV(d), Page 223]
(a) Salaries and wages
(b) Contribution to provident and other funds
(c) Staff welfare expenses
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
6.90
4,663.71
113.15
4,783.76
14.54
4,129.28
75.54
4,219.36
564.40
14.54
4,129.28
75.54
4,219.36
6.77
3,602.13
56.13
3,665.03
554.33
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
4,231.14
477.48
328.00
5,036.62
4,306.68
473.94
350.44
5,131.06
(i)
During the year ended March 31, 2020, the Company has recognised an amount of `32.96 crore (2018-19: `27.06 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, 2020
Year ended
March 31, 2019
21.47
11.21
0.28
32.96
22.05
4.88
0.13
27.06
281
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
31. Finance costs
[Item No. IV(e), Page 223]
Interest expense on:
(a) Bonds, debentures, bank borrowings and others
(b) Lease obligation
Less: Interest capitalised
(i)
Interest on income tax was Nil for the year ended March 31, 2020 and March 31, 2019.
32. Depreciation and amortisation expense
[Item No. IV(f), Page 223]
(a) Depreciation on property, plant and equipment
(b) Depreciation on right-of-use assets
(c) Amortisation of intangible assets
33. Other expenses
[Item No. IV(g), Page 223]
(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) Others
Insurance charges
Rent
Royalty
282
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
2,767.82
366.77
3,134.59
103.58
3,031.01
2,644.94
267.32
2,912.26
88.68
2,823.58
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
3,535.23
302.82
82.07
3,920.12
3,652.67
-
150.29
3,802.96
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
4,616.04
64.64
3,181.23
93.90
198.39
2,906.01
2,795.20
4,046.92
58.68
1,751.32
832.18
147.17
180.22
2.13
2,929.15
23,803.18
4,040.28
61.34
2,950.18
87.58
210.87
2,822.47
2,722.06
4,319.64
72.09
2,002.89
1,201.05
133.10
188.63
1.42
3,809.21
24,622.81
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
33. Other expenses (Contd.)
[Item No. IV(g), Page 223]
(i) Others include:
(a) net foreign exchange gain ₹53.04 crore (2018-19: foreign exchange loss ₹134.41 crore),
(b)
(c) donations to electoral trusts Nil (2018-19: ₹175.00 crore).
gain on fair value changes of financial assets carried at fair value through profit and loss ₹356.26 crore (2018-19: loss of ₹111.31 crore),
(ii)
During the year ended March 31, 2020, the Company has recognised an amount of ₹6.95 crore (2018-19: ₹7.35 crore) towards payment
to non-executive directors. The details are as below:
(a)
(b)
Short-term benefits
Sitting fees
(iii) Details of auditors’ remuneration and out-of-pocket expenses is as below:
(a)
(b)
Auditors remuneration and out-of-pocket expenses
(i) Statutory audit fees
(ii) Tax audit fees
(iii) For other services
(iv) Out-of-pocket expenses
Cost audit fees [including out of pocket expenses ₹58,035 (2018-19 : ₹6,936)]
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
6.55
0.40
6.95
6.87
0.48
7.35
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
6.00
0.40
0.69
0.23
0.21
6.18
0.40
0.74
0.12
0.18
(iv)
As per the Companies Act, 2013, amount required to be spent by the Company on Corporate Social Responsibility (CSR) activities during
the year was ₹173.53 crore (2018-19: ₹82.40 crore).
During the year ended March 31, 2020, in respect of CSR activities the Company incurred revenue expenditure which was recognised
in the statement of profit and loss amounting to ₹192.99 crore [₹192.83 crore has been paid in cash and ₹0.16 crore is yet to be paid],
which includes ₹0.93 crore on construction of assets [paid in cash]. During the year ended March 31, 2019, similar expense incurred was
₹314.94 crore [₹301.04 crore was paid in cash and ₹13.90 crore was unpaid], which included ₹43.32 crore on construction of assets [₹30.92
crore was paid in cash and ₹12.40 crore was unpaid].
During the year ended March 31, 2020 amount spent on CSR activities through related parties was ₹80.16 crore (2018-19: ₹45.45 crore).
(v)
During the year ended March 31, 2020, revenue expenditure charged to the statement of profit and loss in respect of research and
development activities undertaken was ₹255.64 crore (2018-19: ₹212.97 crore) including depreciation of ₹9.62 crore (2018-19:
₹7.80 crore). Capital expenditure incurred in respect of research and development activities during the year was ₹3.72 crore (2018-
19: ₹2.82 crore).
34. Exceptional items
[Item No. VI, Page 223]
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)
During the year ended March 31, 2019, profit/(loss) on sale of non-current investments ₹262.28 crore relates to profit recognised on
sale of investments in TRL Krosaki Refractories Limited, an associate of the Company.
283
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
34. Exceptional items (Contd.)
[Item No. VI, Page 223]
(b)
(c)
(d)
(e)
Provision for impairment of investments/doubtful advances ₹1,149.80 crore (2018-19: ₹12.53 crore) relates to provision recognised
for impairment of investments in subsidiaries, joint ventures and associates, net of reversals of ₹1.07 crore on account of recovery
of advances made to a joint venture.
Provision for demands and claims ₹196.41 crore (2018-19: ₹328.64 crore) relates to provision recognised in respect of certain
statutory demands and claims.
Employee separation compensation `107.37 crore (2018-19: `35.34 crore) relates to provisions recognised in respect of employee
separation scheme of employees.
Fair value gain/(loss) on preference share investments (net) ₹250.00 crore (2018-19: Nil) represents notional fair value loss on
preference share investments held by the Company in some of its affiliates.
35. Earnings per share
[Item No. XII, Page 223]
The following table reflects the profit and shares data used in the computation of basic and diluted earnings per share (EPS):
(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 Share (`)
(d) Basic earnings per Ordinary Share (`)
(e) Diluted earnings per Ordinary Share (`)
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
6,743.80
199.18
6,544.62
Nos.
1,14,59,30,120
89,536
1,14,60,19,656
10.00
10,533.19
173.13
10,360.06
Nos.
1,14,59,26,020
1,37,496
1,14,60,63,516
10.00
57.11
57.11
90.41
90.40
(i)
As at March 31, 2020, 5,81,96,450 (March 31, 2019: 5,81,95,359) options in respect of partly paid shares and 1,21,523 (March 31, 2019: Nil)
options in respect of fully paid shares were excluded from weighted average number of Ordinary Shares for the computation of diluted
earnings per share as these were anti-dilutive.
36. Employee benefits
A. Defined contribution plans
The major defined contribution plans operated by
Company are as below:
the
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.
(a) Provident fund and pension
The Company provides provident fund benefits for eligible
employees as per applicable regulations wherein both
employees 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
284
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
36. Employee benefits (Contd.)
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 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
its employees. Employees who are members of the
of
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 ₹1,50,000, 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.
The contributions recognised as an expense in the statement
of profit and loss during the year on account of the above
defined contribution plans amounted to ₹178.78 crore (2018-
19: ₹191.18 crore).
B. Defined benefit plans
The defined benefit plans operated by the Company 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 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 and 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:
As at
March 31, 2020
As at
March 31, 2019
6.50%
8.50%
8.40%
7.50%
8.65%
8.60%
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 a 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 a year-end actuarial valuation.
(d) Other defined benefits
Other benefits provided under unfunded schemes include
post-retirement
lumpsum benefits, 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:
(i)
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.
285
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
36. Employee benefits (Contd.)
(ii)
(iii)
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 value of plan’s
debt investments
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.
C.
Details of defined benefit obligations and plan assets:
(a) Retiring gratuity:
(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.
(i)
The following table sets out the amounts recognised in the financial statements in respect of retiring gratuity plan:
Change in defined benefit obligations:
Obligation at the beginning of the year
Current service cost
Interest cost
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 benefits 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 obligations
Recognised as:
Retirement benefit obligations - Non-current
286
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
2,839.66
128.99
180.11
231.65
192.01
(569.52)
3,002.90
2,767.69
124.76
186.50
(3.93)
-
(235.36)
2,839.66
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
2,759.45
188.61
15.38
80.22
(569.52)
2,474.14
2,706.72
196.53
28.94
62.63
(235.37)
2,759.45
(` crore)
As at
March 31, 2020
As at
March 31, 2019
2,474.14
(3,002.90)
(528.76)
2,759.45
(2,839.66)
(80.21)
(528.76)
(80.21)
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
36. Employee benefits (Contd.)
Expense/(gain) 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 financial assumption
Actuarial (gain)/loss arising from changes in experience adjustments
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
128.99
(8.50)
120.49
(15.38)
222.89
8.76
216.27
124.76
(10.03)
114.73
(28.94)
-
(3.93)
(32.87)
Expense/(gain) recognised in the statement of profit and loss
336.76
81.86
(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, 2020
As at
March 31, 2019
(%)
0.19
22.48
77.33
100.00
0.05
18.93
81.02
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 prescribed investment criteria 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
Rate of escalation in salary
(iv) Weighted average duration of the retiring gratuity obligation is 8.1 years (March 31, 2019: 9 years).
(v)
The Company expects to contribute ₹528.76 crore to the plan during the financial year 2020-21.
As at
March 31, 2020
As at
March 31, 2019
7.50%
7.50% to 10.00% 7.50% to 10.00%
6.50%
287
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
36. Employee benefits (Contd.)
(vi) The table below outlines the effect on retiring gratuity obligation in the event of a decrease/increase of 1% in the assumptions used:
As at March 31, 2020
Assumption
Discount rate
Rate of escalation in salary
As at March 31, 2019
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 `222.21crore, increase by `258.25 crore
Increase by `252.24 crore, decrease by `222.21crore
Change in assumption
Increase by 1%, decrease by 1%
Increase by 1%, decrease by 1%
Impact on obligation
Decrease by `178.90 crore, increase by `204.46 crore
Increase by `201.62 crore, decrease by `178.90 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:
Year ended March 31, 2020
Year ended March 31, 2019
Medical
Others
Medical
Others
(` crore)
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 financial
assumptions
(ii) Actuarial (gains)/losses arising from changes in experience
assumptions
Benefits paid
Obligation at the end of the year
Amounts recognised in the balance sheet consist of:
1,271.01
18.58
92.73
210.83
15.26
181.25
66.61
12.97
14.92
3.99
1,204.70
17.46
87.96
-
24.74
(69.31)
1,539.10
(16.55)
263.19
(63.85)
1,271.01
72.56
108.99
5.16
-
2.18
(7.64)
181.25
(` crore)
Present value of obligations
Recognised as:
Retirement benefit obligations - Current
Retirement benefit obligations - Non-current
288
As at March 31, 2020
As at March 31, 2019
Medical
(1,539.10)
Others
(263.19)
Medical
(1,271.01)
Others
(181.25)
(92.66)
(1,446.44)
(13.95)
(249.24)
(88.89)
(1,182.12)
(13.23)
(168.02)
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR 36. Employee benefits (Contd.)
Expense/(gain) recognised in the statement of profit and loss consists of:
Employee benefits expense:
Current service cost
Net interest expense
Other comprehensive income:
Actuarial (gains)/losses arising from changes in financial assumption
Actuarial (gains)/losses arising from changes in experience adjustments
Year ended
March 31, 2020
Year ended
March 31, 2019
Medical
Others
Medical
Others
(` crore)
18.58
92.73
111.31
210.83
15.26
226.09
66.61
12.97
79.58
14.92
3.99
18.91
17.46
87.96
105.42
108.99
5.16
114.15
-
24.74
24.74
-
2.18
2.18
Expense recognised in the statement of profit and loss
337.40
98.49
130.16
116.33
(ii)
Key assumptions used in the measurement of post-retirement medical benefits and other defined benefit plans is as below:
As at March 31, 2020
As at March 31, 2019
Discount rate
Rate of escalation in salary
Inflation rate
Medical
6.50%
N.A
8.00%
Others
6.50%
10.00%-15.00%
4.00%
Medical
7.50%
Others
7.50%
N.A 10.00% - 15.00%
4.00%
8.00%
(iii)
(iv)
Weighted average duration of post-retirement medical benefit obligation is 8 years (March 31, 2019: 8 years). Weighted average duration
of other defined benefit obligation ranges from 3.3 to 13 years (March 31, 2019: 3.6 to 12 years)
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, 2020
Assumption
Discount rate
Medical cost inflation rate
As at March 31, 2019
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 `210.86 crore, increase by `272.42 crore
Increase by `252.41 crore, decrease by `200.08 crore
Change in assumption
Increase by 1%, decrease by 1%
Increase by 1%, decrease by 1%
Impact on obligation
Decrease by `160.15 crore, increase by `203.36 crore
Increase by `189.38 crore, decrease by `152.52 crore
289
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 36. Employee benefits (Contd.)
(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, 2020
Assumption
Discount rate
Rate of escalation in salary
Inflation rate
As at March 31, 2019
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 ₹14.90 crore, increase by ₹17.47 crore
Increase by ₹3.29 crore, decrease by ₹2.99 crore
Increase by ₹6.82 crore, decrease by ₹5.97 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 `10.83 crore, increase by `12.47 crore
Increase by `2.37 crore, decrease by `2.12 crore
Increase by `5.03 crore, decrease by `4.49 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.
290
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR 37. Contingencies and commitments
A. Contingencies
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.
It is not practicable for the Company to estimate the timings
of the cash outflows, if any, pending resolution of the
respective proceedings. The Company does not expect any
reimbursements in respect of the same.
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 a 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.
(a)
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.
(b)
As at March 31, 2020, there are matters and/or disputes
pending in appeal amounting to ₹2,260.36 crore (March 31,
2019: ₹3,160.64 crore).
The details of demands for more than `100 crore is as below:
(a)
Interest expenditure on loans taken by the Company
for acquisition of a subsidiary has been disallowed in
assessments with tax demand raised for ₹1,551.10 crore
(inclusive of interest) (March 31, 2019: ₹1,791.29 crore).
(b)
Interest expenditure on “Hybrid Perpetual Securities”
has been disallowed in assessments with tax demand
raised for ₹170.54 crore (inclusive of interest) (March 31,
2019: ₹459.13 crore)
In respect of above demands, the Company has deposited an
amount of ₹1,165.00 crore (March 31, 2019: ₹1,065.00 crore)
as a precondition for obtaining stay. The Company expects to
sustain its position on ultimate resolution of the said appeals.
Customs, excise duty and service tax
As at March 31, 2020, there were pending litigations for
various matters relating to customs, excise duty and service
taxes involving demands of ₹365.43 crore (March 31, 2019:
₹682.53 crore).
Sales tax/VAT
The total sales tax demands that are being contested by
the Company amounted to ₹563.30 crore (March 31, 2019:
₹717.02 crore).
The details of demands for more than `100 crore are as below:
The Company stock transfers its goods manufactured at
its various depots/branches
Jamshedpur works plant to
located outside the state of Jharkhand across the country
and these goods are then sold to various customers outside
the states from depots/branches. As per the Central Sales Tax
Act, 1956, these transfers of goods to depots/branches were
made without payment of Central sales tax and F-Form was
submitted in lieu of the stock-transfers made during the period
of assessment. The value of these sales was also disclosed in
the periodical returns filed as per the Jharkhand Vat Act, 2005.
The Commercial Tax Department has raised 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. The amount involved for various assessment
years beginning 2011-2012 to 2015-2016 is amounting to
₹127.00 crore (March 31, 2019: ₹127.00 crore).
The Commercial Tax Department of Jharkhand has rejected
certain Input tax credit claimed by the Company on goods
purchased from the suppliers within the State of Jharkhand.
The Department has alleged that the goods have not been
used in accordance with the provisions of Jharkhand VAT Act,
2005. The potential exposure on account of disputed tax and
interest for the period beginning 2012-2013 to 2015-2016 as on
March 31, 2020 is ₹74.00 crore (March 31, 2019: ₹104.00 crore).
291
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
37. Contingencies and commitments (Contd.)
(a)
(b)
Other taxes, dues and claims
Other amounts for which the Company may contingently
be liable aggregate to ₹12,450.66 crore (March 31, 2019:
₹11,639.19 crore).
The details of demands for more than `100 crore are as below:
Claim by a party arising out of conversion arrangement
₹195.79 crore (March 31, 2019: ₹195.79 crore). The Company
has not acknowledged this claim and has instead filed a claim
of ₹141.23 crore (March 31, 2019: ₹141.23 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 Odisha High Court challenging the validity of
the Act. The High Court held in December 2005 that the 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 the High Court and the case is pending in Supreme Court.
The potential liability, as at March 31, 2020 is ₹8,732.29 crore
(March 31, 2019: ₹7,573.53 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
issued by the Ministry of Mines, Government of India and
the price published by Indian Bureau of Mines (IBM) on
a monthly basis.
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 and to grant refund of royalty
paid in excess by the Company. Mines Tribunal has granted
stay on the total demand with directive to Government of
Odisha not to take any coercive action for realisation of this
demanded amount.
The Hon’ble High Court of Odisha in a similar matter held the
circulars based on which demands were raised to be valid.
The Company has challenged the judgment of the High
Court by a separate petition in the Hon’ble Supreme Court on
April 29, 2016.
(d)
On July 16, 2019, the Company has filed rejoinders to the reply
filed by State of Odisha against the revision petition. The
State pressed for rejection of revision applications citing the
judgment of the High Court. The Company represented before
the authorities and explained that the judgment was passed
under a particular set of ‘facts & circumstances’ which cannot
have blanket application on the Company considering the
case of the Company is factually different. On August 7, 2019,
the Mines Tribunal decided to await the outcome of Special
leave petition pending before the Hon’ble Supreme Court and
adjourned the matter.
Likely demand of royalty on fines at sized ore rates as on March
31, 2020 is ₹1,965.52 crore (March 31, 2019: ₹1,630.16 crore).
Demand notices were originally issued by the Deputy Director
of Mines, Odisha amounting to ₹3,827.29 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, 1957 (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 pronounced its judgement 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 Judgement of Hon’ble Supreme Court,
demand/show cause notices amounting to ₹3,873.35 crore
have been issued during 2017-18 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 during 2017-18 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 during 2017-18 for production in
excess of environment clearance to the District Mining
Office, Jharkhand.
292
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
37. Contingencies and commitments (Contd.)
•
•
the Company has challenged the demands amounting to
₹132.91 crore in 2017-18 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. Mines Tribunal, Delhi
vide order dated November 26, 2018 disposed of all the
revision applications with a direction to remand it to the
State Government to hear all such cases afresh and pass
detailed order. Demand amount of ₹132.91 crore (March
31, 2019: ₹132.91 crore) is considered 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 received
during 2017-18 for production in violation of mining plan,
Environment Protection Act, 1986 and Water (Prevention
& Control of Pollution) Act, 1981. A demand amounting
to ₹234.74 crore has been received in April 2018 from
the Deputy Director of Mines, Odisha for production in
excess of the Environmental Clearance. The Company has
challenged the demand and obtained a stay on the matter
from the Revisionary Authority, Mines Tribunal, New Delhi.
Demand of ₹234.74 crore has been provided and show
cause notice of ₹694.02 crore had been considered as
contingent as at March 31, 2019.
During the year ended March 31, 2020, based on the
evaluation of current
the
Company has assessed and concluded that the said show
cause notice of ₹694.02 crore no longer qualifies to be a
contingent liability.
facts and circumstances,
• 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 producing more
than environment clearance and the balance amount of
₹727.41 crore (March 31, 2019: ₹727.41 crore) has been
considered contingent. The Company has however been
granted a stay by the Revisional Authority, Ministry of Coal,
Government of India against such demand notices.
(e)
An agreement was executed between the Government of
Odisha (GoO) and the Company in December, 1992 for drawal
of water from Kundra Nalla for industrial consumption. In
December 1993, the Tahsildar, Barbil issued a show-cause
notice alleging that the Company has lifted more quantity of
water than the sanctioned limit under the agreement and has
also not installed the water meter.
While the proceedings in this regard were in progress, the
Company had applied for allocation of fresh limits. Over the
years, there has also been a steep increase in the water charges
against which the Company filed writ petitions before Hon’ble
High Court of Odisha.
In this regard, the Company has received demand of ₹156.62
crore considering the demand for period beginning from
January, 1996 upto February, 2020. The potential exposure
as on March 31, 2020, ₹162.96 crore (March 31, 2019: ₹125.98
crore) is considered as contingent.
The writ petition filed in August, 1997 was listed for hearing
before the Full Bench of the Odisha High Court on May 17,
2019. SAIL, one of the petitioners, sought permission to
withdraw its writ petition because the settlement arrived with
the State Government in the matter. The High court allowed
withdrawal of writ petition of SAIL and directed other parties
to negotiate with the State Government. The Company has
submitted its detailed representation to Principal Secretary,
Water Resource Department, GoO on June 21, 2019, which is
under consideration.
B. Commitments
(a)
into various contracts with
The Company has entered
suppliers and contractors for the acquisition of plant and
machinery, equipment and various civil contracts of capital
nature amounting to ₹8,682.73 crore (March 31, 2019:
₹7,265.82 crore).
Other commitments as at March 31, 2020 amount to ₹0.01
crore (March 31, 2019 : ₹0.01 crore).
(b) The Company has given undertakings to:
(i)
(ii)
IDBI not to dispose of
Incandescent India Ltd.
its
investment
in Wellman
IDBI and ICICI Bank Ltd. (formerly ICICI) not to dispose of
its investment in Standard Chrome Ltd
(c)
Tata Steel Limited and Bluescope Steel Limited have given
undertaking to State Bank of India not to reduce collective
shareholding in Tata Bluescope Steel Private Limited (TBSPL),
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
TBSPL below 50%.
293
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
37. Contingencies and commitments (Contd.)
(d)
(e)
The Company, as a promoter, has pledged 4,41,55,800 (March
31, 2019 : 4,41,55,800) equity shares of Industrial Energy Limited
with Infrastructure Development Finance Corporation Limited.
Company
The
aggregating
₹9,329.87 crore (March 31, 2019 : ₹12,096.24 crore) details of
which are as below:
guarantees
given
has
(i)
(ii)
(iii)
(iv)
in favour of Commissioner Customs for ₹1.07 crore
(March 31, 2019: ₹1.07 crore) given on behalf of Timken
India Limited in respect of goods imported.
in favour of Mizuho Corporate Bank Ltd., Japan Nil (March
31, 2019: ₹9.60 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, 2019: ₹177.18 crore) against performance of
export obligation under the various bonds executed
by a joint venture Jamshedpur Continuous Annealing &
Processing Company Private Limited.
of
the
100%
repayment
favour of the note holders against due and
in
amounts
punctual
outstanding as on March 31, 2020 towards
issued
Guaranteed Notes by a subsidiary, ABJA Investment
Co. Pte Ltd. for ₹7,560.00 crore (March 31, 2019 :
₹10,376.63 crore) and ₹1,591.47 crore (March 31, 2019 :
₹1,531.61 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,
2019 : ₹0.15 crore) against advance license.
38. Other significant litigations
(a)
Odisha Legislative Assembly issued an amendment to Indian
Stamp Act, 1889, 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. Because of
the stay, as on date, the Act is not enforceable and any demand
294
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 ₹5,579.00 crore (March 31,
2019: ₹5,579.00 crore). The Company has concluded that it is
remote that the claim will sustain on ultimate resolution of the
legal case by the court.
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, 2020 as per the existing provisions of the Stamp Act, 1899
and the Company had paid the stamp duty and registration
charges totalling ₹413.72 crore for supplementary deed
execution in respect of eight mines out of the above mines.
(b)
Noamundi Iron Ore Mine of the Company 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 judgement 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 interpretation of Goa judgement
that the mining carried out after expiry of the period of second
renewal was ‘illegal’ and hence, issued a demand notice of
₹3,568.31 crore being the price of iron ore extracted. The said
demand has been challenged by the Company before the
Jharkhand High Court.
The mining operations were suspended from August 01, 2014.
Upon issuance of an express order, Company paid ₹152.00
crore under protest, so that mining could 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 the following
terms and conditions:
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
38. 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 instalments.
• 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 issued a demand
notice for payment of ₹421.83 crore, in three monthly instalments.
The Company on March 20, 2015 replied that 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.
The Company filed another writ petition before the Hon’ble High
Court of Jharkhand which was heard on September 9, 2015. An
interim order was given by the Hon’ble High Court of Jharkhand on
September 17, 2015 wherein the Court has directed the Company
to pay the amount of ₹371.83 crore in 3 equal instalments, first
instalment by October 15, 2015, second instalment by November 15,
2015 and third instalment by December 15, 2015.
In view of the interim order of the Hon’ble High Court of Jharkhand
₹124.00 crore was paid on September 28, 2015, ₹124.00 crore
on November 12, 2015 and ₹123.83 crore on December 14,
2015 under protest.
The case is pending before the 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. Based on the Company’s
assessment of the Goa mines judgement read with the Ordinance
issued in the year 2015, the Company believes that it is remote that
the demand of the State would sustain.
295
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 39. 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 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
Current borrowings
Current maturities of long-term borrowings and 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 banks (including non-current earmarked balances)
Net debt (C)
(` crore)
As at
March 31, 2020
As at
March 31, 2019
1,146.13
2,275.00
73,416.99
76,838.12
31,381.96
7,857.27
2,183.64
41,422.87
1,18,260.99
41,422.87
3,235.16
993.64
287.54
36,906.53
1,146.12
2,275.00
69,308.59
72,729.71
26,651.19
8.09
3,042.19
29,701.47
1,02,431.18
29,701.47
477.47
544.85
208.22
28,470.93
Net debt to equity ratio(i)
0.49
0.42
(i)
Net debt to equity ratio as at March 31, 2020 and March 31, 2019 has been computed based on average of opening and closing equity.
296
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR 40. 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 234
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, 2020 and
March 31, 2019:
As at March 31, 2020
Amortised
cost
Fair value
through other
comprehensive
income
Derivative
instruments
in hedging
relationship
Derivative
instruments
not in hedging
relationship
Fair value
through 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 payables
Borrowings other than lease
obligations
Lease obligations
Derivatives
Other financial liabilities
1,281.18
1,016.73
-
-
1,806.58
236.52
4,341.01
10,600.96
38,113.07
3,309.80
-
3,511.50
55,535.33
-
-
507.65
-
-
-
507.65
-
-
-
-
-
-
-
-
-
15.59
-
-
15.59
-
-
-
98.07
-
98.07
-
-
-
356.83
-
-
356.83
-
-
-
106.17
-
106.17
-
-
23,010.01
-
-
-
23,010.01
1,281.18
1,016.73
23,517.66
372.42
1,806.58
236.52
1,281.18
1,016.73
23,517.66
372.42
1,806.58
236.52
28,231.09 28,231.09
-
-
-
-
-
-
10,600.96
38,113.07
10,600.96
38,713.37
3,309.80
204.24
3,511.50
3,309.80
204.24
3,511.50
55,739.57 56,339.87
297
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
40. Disclosures on financial instruments (Contd.)
As at March 31, 2019
Amortised
cost
Fair value
through other
comprehensive
income
Derivative
instruments
in hedging
relationship
Derivative
instruments
not in hedging
relationship
Fair value
through 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 payables
Borrowings
Derivatives
Other financial liabilities
753.07
1,363.04
-
-
287.08
1,216.45
3,619.64
10,969.56
29,701.47
-
3,955.23
44,626.26
-
-
751.95
-
-
-
751.95
-
-
-
-
-
-
-
-
1.27
-
-
1.27
-
-
3.83
-
3.83
-
-
-
22.74
-
-
22.74
-
-
195.56
-
195.56
-
-
34,217.01
-
-
-
753.07
753.07
1,363.04
1,363.04
34,968.96
34,968.96
24.01
24.01
287.08
287.08
1,216.45
1,216.45
34,217.01 38,612.61 38,612.61
10,969.56
29,701.47
199.39
3,955.23
10,969.56
-
29,543.97
-
199.39
-
-
3,955.23
- 44,825.65 44,668.15
(i)
Investments in mutual funds and derivative instruments (other than those designated in a hedging relationship) are mandatorily
classified as fair value through 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 Level 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 value is 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.
298
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
40. 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, 2020
Level 1
Level 2
Level 3
Total
(` crore)
3,235.16
204.31
-
-
-
3,439.47
-
-
Level 1
477.47
448.61
-
-
-
926.08
-
-
49.74
-
372.42
422.16
204.24
204.24
-
303.34
-
19,725.11
-
20,028.45
-
-
3,235.16
507.65
49.74
19,725.11
372.42
23,890.08
204.24
204.24
(` crore)
As at March 31, 2019
Level 2
-
-
49.74
-
24.01
73.75
Level 3
Total
-
303.34
-
33,689.80
-
33,993.14
477.47
751.95
49.74
33,689.80
24.01
34,992.97
-
-
199.39
199.39
-
-
199.39
199.39
(i)
Current financial assets and liabilities are stated at carrying value which is approximately equal to their fair value.
(ii)
(iii)
Derivatives are fair valued using market observable rates and published prices together with forecasted cash flow information
where applicable.
Investments carried at fair value are generally based on market price quotations. Investments in equity shares included in 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 investment in preference shares is estimated through a valuation model incorporating assumptions which includes
unobservable market data and by discounting the expected future cash flows using a discount rate equivalent to the expected rate of
return for a similar instrument and maturity as on the reporting date. Key inputs to the valuation model are expected cash flows and
discount rate expected for an instrument with similar terms and maturity as on the reporting date.
(iv)
Fair value of investments in preference share of Tata Steel BSL Limited is dependent on its profitability and cash flows available for
distribution. The expected cash flows have been discounted considering a pre-tax discount rate of 11.90%. The fair value is sensitive
to changes in discount rate and profitability. An increase in cash flow by 1% would lead to an increase in fair value of preference shares
by ₹169.30 crore and increase in discount rate by 1% would lead to decrease in fair value by ₹1,444.90 crore.
299
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
40. Disclosures on financial instruments (Contd.)
(v)
(iv)
Fair value of borrowings which have a quoted market price in an active market is based on its market price which is categorised as Level1.
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.
(vii) There have been no transfers between Level 1 and Level 2 for the years ended March 31, 2020 and March 31, 2019.
(viii) Reconciliation of Level 3 fair value measurement is as below:
Balance at the beginning of the year
Additions during the year
Fair value changes through profit or loss
Reclassification within investments*
Balance at the end of the year
Year ended
March 31, 2020
33,993.14
-
106.26
(14,070.95)
20,028.45
(` crore)
Year ended
March 31, 2019
5,423.37
28,698.08
(111.31)
(17.00)
33,993.14
* represents investment held in preference shares of a subsidiary converted into equity shares during the year. During the year ended March 31,
2019, reclassification represents investments in Subarnarekha Port Private Limited which had become a subsidiary.
(c) Derivative financial instruments
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” wherever possible. The Company 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 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, 2020
As at March 31, 2019
Assets
372.42
-
372.42
162.46
209.96
Liabilities
105.29
98.95
204.24
122.55
81.69
Assets
19.93
4.08
24.01
9.05
14.96
(` crore)
Liabilities
199.32
0.07
199.39
59.82
139.57
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) Foreign currency forwards, swaps and options
(ii) Interest rate swaps and collars
300
As at
March 31, 2020
1,345.71
367.50
1,713.21
(US$ million)
As at
March 31, 2019
1,148.92
150.00
1,298.92
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR 40. Disclosures on financial instruments (Contd.)
(d) Transfer of financial assets
The Company transfers certain trade receivables under
discounting arrangements with banks/financial institutions.
Some of such arrangements do not qualify for de-recognition
due to recourse arrangements being in place. Consequently,
the proceeds received from transfer are recorded as short-term
borrowings from banks and financial institutions. As at March
31, 2020 and March 31, 2019, there has been no such transfer of
trade receivables.
(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. Such
movements may also impact the fair value of preference shares
investments held by the Company in its foreign subsidiaries.
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 ₹158.75
crore for the year ended March 31, 2020 (2018-19: ₹1,491.07
crore) and an increase/decrease in carrying value of property,
plant and equipment
(before considering depreciation)
by approximately ₹109.94 crore as at March 31, 2020
(March 31, 2019: ₹145.38 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, 2020 and March 31, 2019 excluding trade payables, trade
receivables, other derivative and non-derivative financial
instruments (except investment in preference shares and
loans receivable) 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.
(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, 2020
and March 31, 2019, 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 ₹149.37 crore for the year ended
March 31, 2020 (2018-19: ₹128.33 crore).
301
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
40. Disclosures on financial instruments (Contd.)
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, 2020 and March 31, 2019 was ₹204.31 crore and ₹448.61
crore, respectively.
A 10% change in equity prices of such securities held as at
March 31, 2020 and March 31, 2019, would result in an impact
of ₹20.43 crore and ₹44.86 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 credit worthiness
as well as concentration risks.
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 in debt securities and mutual
funds, balances with bank, bank deposits, derivatives and
financial guarantees provided by the Company. None of
the financial instruments of the Company result in material
risk except preference shares
concentration of credit
investments, the Company made in its subsidiary companies.
The carrying value of financial assets represents the maximum
credit risk. The maximum exposure to credit risk was
₹27,722.94 crore and ₹37,584.12 crore, as at March 31, 2020
and March 31, 2019 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
note 14, page 263.
is presented
in
The Company’s exposure to customers is diversified and no
single customer, other than a subsidiary, contributes to more
than 10% of outstanding trade receivables as at March 31, 2020
and March 31, 2019.
In respect of financial guarantees provided by the Company
to banks/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
have access to undrawn lines of committed and uncommitted
borrowing/ facilities, 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 low
market risk. The Company has also invested 15% of the non-
convertible debentures (issued by the Company) falling due for
repayment in the next 12 months in bank deposits, to meet the
regulatory norms of liquidity requirements. The Company also
constantly monitors funding options available in the debt and
capital markets with a view to maintaining financial flexibility.
The Company’s liquidity position remains strong at ₹8,315.34
crore as at March 31, 2020, comprising ₹4,516.34 crore in
the form of current investments, cash and cash equivalents
and other balances with banks
(including non-current
earmarked balances) and ₹3,799.00 crore in committed
undrawn bank lines.
302
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
40. 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 other than lease obligation
including interest obligations
Lease obligations including interest
obligations
Trade payables
Other financial liabilities
Carrying
value
Contractual
cash flows
Less than
one year
Between one to
five years
More than
five years
As at March 31, 2020
(` crore)
38,461.28
53,465.41
11,715.26
19,407.02
22,343.13
3,346.83
6,478.00
753.36
2,008.44
3,716.20
10,600.96
3,126.26
55,535.33
10,600.96
3,126.26
73,670.63
10,600.96
2,832.67
25,902.25
-
191.49
21,606.95
-
102.10
26,161.43
Derivative financial liabilities
204.24
204.24
81.69
115.42
7.13
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
More than
five years
As at March 31, 2019
(` crore)
30,270.83
10,969.56
3,385.88
44,626.27
47,984.98
10,969.56
3,385.88
62,340.42
5,366.27
10,969.56
3,260.81
19,596.64
18,284.95
-
15.47
18,300.42
24,333.76
-
109.60
24,443.36
Derivative financial liabilities
199.39
199.39
139.57
59.82
-
41. Segment reporting
The Company is primarily engaged in the business of manufacture and distribution of steel products and is 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.
303
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 42. Related party transactions
The Company’s related parties primarily consist of its subsidiaries, associates, joint ventures and Tata Sons Private 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, 2020 and March 31, 2019:
Subsidiaries
Associates
Joint
ventures
Tata Sons Private
Limited, its subsidiaries
and joint ventures
(` crore)
Total
10,409.01
11,805.15
24.33
268.35
222.91
133.63
1.00
13.71
2,338.13
2,500.24
86.32
39.66
746.71
909.62
6,878.15
8,958.58
1,963.43
1,867.90
434.53
478.74
4.33
1,576.03
-
-
1.54
1.18
35.38
39.38
5.76
15.33
4.62
5.82
-
7.81
-
-
-
-
-
3.67
0.03
(0.01)
80.77
135.94
2.91
4.13
-
-
-
-
34.20
34.95
(6.62)
(1.03)
1.60
2.50
-
-
108.63
53.34
27.91
16.61
-
-
-
-
75.55 10,731.80
12,360.50
153.37
208.93
138.36
9,426.21
11,610.89
217.80
237.69
3,014.26
3,054.87
1.01
1.13
520.93
621.63
-
-
7.24
1,587.97
17.54
19.23
17.54
19.23
470.41
361.45
471.95
362.63
13.59
10.88
0.01
0.02
83.17
88.88
(0.82)
14.31
100.00
100.00
238.14
172.45
-
1.97
-
1.97
Purchase of goods
Sale of goods
Services received
Services rendered
Interest income recognised
Interest expenses recognised
Dividend paid
Dividend received
Provision/(reversal) recognised for receivables during
the year
Management contracts
Sale of investments
304
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR 42. Related party transactions (Contd.)
Subsidiaries
Associates
Joint
ventures
Tata Sons Private
Limited, its subsidiaries
and joint ventures
(` crore)
Total
Finance provided during the year (net of repayments)
Outstanding loans and receivables
Provision for outstanding loans and receivables
Outstanding payables
Guarantees provided outstanding
Sale of fixed assets
10,471.64
29,349.55
2,702.13
1,489.08
656.76
651.00
4,841.64
4,764.18
9,151.47
11,908.24
-
-
250.00
12.45
10.06
0.06
0.03
41.78
16.54
-
-
-
-
60.13
134.91
119.96
57.09
0.84
7.46
183.48
213.13
177.18
186.78
267.71
-
- 10,531.77
29,734.46
-
6.19
9.22
2,840.73
1,565.45
0.03
0.02
657.69
658.51
116.83
132.86
5,183.73
5,126.71
-
-
-
-
9,328.65
12,095.02
267.71
-
Figures in italics represent comparative figures of previous year.
(i)
The details of remuneration paid to key managerial personnel and payment to non-executive directors are provided in note 30,
page 281 and note 33, page 282 respectively.
The Company has paid dividend of ₹42,048.50 (2018-19: ₹32,345.87) to key managerial personnel and ₹8,313.50 (2018-19: ₹3,895.10) to
relatives of key managerial personnel during the year ended March 31, 2020.
(ii)
During the year ended March 31, 2020, the Company has contributed ₹346.76 crore
post-employment benefit plans.
(2018-19: ₹281.57 crore) to
As at March 31, 2020, amount receivable from post-employment benefit fund is ₹56.71 crore (March 31, 2019: ₹755.95 crore) on account
of retirement benefit obligations paid by the Company directly.
As at March 31, 2020, amount payable to post-employment benefit fund is ₹13.29 crore (March 31, 2019: ₹0.06 crore) on account of
retirement benefit obligations.
(iii) Details of investments made by the Company in preference shares of its subsidiaries and associates is disclosed in note 8, page 250.
(iv) Commitments with respect to subsidiaries, associates and joint ventures is disclosed in note 37B page 293.
(v) Transactions with joint ventures have been disclosed at full value and not at their proportionate share.
305
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
43. The Board of Directors of the Company have approved a merger of Bamnipal Steel Limited and Tata Steel BSL Limited (formerly Bhushan
Steel Limited) into the Company by way of a composite scheme of amalgamation and have recommended a merger ratio of 1 equity
share of 10/-each fully paid up of the Company for every 15 equity shares of 2/- each fully paid up held by the public shareholders of
Tata Steel BSL Limited. As part of the scheme, the equity shares held by Bamnipal Steel Limited and the preference shares held by the
Company in Tata Steel BSL Limited shall stand cancelled. The equity shares held by the Company in Bamnipal Steel Limited shall also
stand cancelled. The merger is subject to shareholders and other regulatory approvals.
44. Details of significant investments in subsidiaries, associates and joint ventures
Country of
incorporation
As at
March 31, 2020
As at
March 31, 2019
(% direct holding)
Jamadoba Steel Limited
Jamshedpur Football and Sporting Private Limited
(a) Subsidiary companies
(1) ABJA Investment Co. Pte Ltd.
(2) Adityapur Toll Bridge Company Limited
(3) Bamnipal Steel Limited
(4) Bhubaneshwar Power Private Limited
(5) Bistupur Steel Limited
(6) Creative Port Development Private Limited
(7) Dimna Steel Limited
(8)
(9)
(10) Jugsalai Steel Limited
(11) Mohar Exports Services Pvt Ltd
(12) NatSteel Asia Pte. Ltd.
(13) Noamundi Steel Limited
(14) Rujuvalika Investments Limited
(15) Sakchi Steel Limited
(16) Straight Mile Steel Limited
(17) Subarnarekha Port Private Limited
(18) T Steel Holdings Pte. Ltd.
(19) Tata Korf Engineering Services Ltd
(20) Tata Metaliks Ltd.
(21) Tata Steel (KZN) (Pty) Ltd.
(22) Tata Steel Downstream Products Limited (formerly
Tata Steel Processing and Distribution Limited)
(23) Tata Steel Foundation
(24) Tata Steel Long Products Limited (formerly Tata
Sponge Iron Limited)
(25) Tata Steel Mining Limited
(formerly T S Alloys Limited)
(26) Tata Steel Odisha Limited
(27) Tata Steel Special Economic Zone Limited
(28) Tata Steel Utilities and Infrastructure Services
Limited (formerly Jamshedpur Utilities & Services
Company Limited)
(29) Tayo Rolls Limited
(30) The Indian Steel & Wire Products Ltd.
306
Singapore
India
India
India
India
India
India
India
India
India
India
Singapore
India
India
India
India
India
Singapore
India
India
South Africa
India
India
India
India
India
India
India
India
India
100.00
88.50
100.00
93.58
100.00
51.00
100.00
100.00
100.00
100.00
33.23
100.00
100.00
100.00
100.00
100.00
7.07
100.00
100.00
55.06
90.00
100.00
100.00
75.91
100.00
100.00
100.00
100.00
54.91
95.01
100.00
88.50
100.00
93.58
100.00
51.00
100.00
100.00
100.00
100.00
33.23
100.00
100.00
100.00
100.00
100.00
7.07
100.00
100.00
55.06
90.00
100.00
100.00
54.50
100.00
100.00
100.00
100.00
54.91
95.01
NOTESforming part of the financial statementsStandaloneINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR 44. Details of significant investments in subsidiaries, associates and joint ventures (Contd.)
Country of
incorporation
As at
March 31, 2020
As at
March 31, 2019
(% direct holding)
(31) The Tata Pigments Limited
(32) The Tinplate Company of India Limited
(b) Associate companies
(1) Kalinga Aquatics Ltd.
(2) Malusha Travels Pvt Ltd
(3) Nicco Jubilee Park Limited
(4) Strategic Energy Technology Systems Private Limited
(5) TRF Limited
Industrial Energy Limited
Jamipol Limited
Jamshedpur Continuous Annealing & Processing Company Private Limited
(c) Joint ventures
(1) Himalaya Steel Mill Services Private Limited
(2)
(3)
(4)
(5) Medica TS Hospital Private Limited
(6) mjunction services limited
(7) S & T Mining Company Private Limited
(8) T M Mining Company Limited
(9) Tata BlueScope Steel Private Limited
(10) Tata NYK Shipping Pte Ltd.
(11) TM International Logistics Limited
45. Dividend
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
India
Singapore
India
100.00
74.96
100.00
74.96
30.00
33.23
20.99
25.00
34.11
26.00
26.00
32.67
51.00
26.00
50.00
50.00
74.00
50.00
50.00
51.00
30.00
33.23
20.99
25.00
34.11
26.00
26.00
32.67
51.00
26.00
50.00
50.00
74.00
50.00
50.00
51.00
The dividend declared by the Company is based on profits available for distribution as reported in the standalone financial statements
of the Company. On June 29, 2020 the Board of Directors of the Company have proposed a dividend of ₹10.00 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, 2020
subject to the approval of shareholders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of
₹1,145.93 crore.
46. 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 N. Chandrasekaran Mallika Srinivasan O. P. Bhatt
Firm Registration Number: 304026E/E-300009
Chartered Accountants
Chairman
DIN: 00121863
Director
DIN: 00037022
Director
DIN: 00548091
sd/-
sd/-
sd/-
sd/-
Peter Blauwhoff
Director
DIN: 07728872
sd/-
Deepak Kapoor
Director
DIN: 00162957
sd/-
Aman Mehta
Director
DIN: 00009364
sd/-
Russell I Parera
Partner
Membership Number 042190
Mumbai, June 29, 2020
sd/-
V. K. Sharma
Director
DIN: 02449088
sd/-
Saurabh Agrawal
Director
DIN: 02144558
sd/-
T. V. Narendran
Chief Executive Officer
& Managing Director
DIN: 03083605
sd/-
sd/-
Koushik Chatterjee Parvatheesam Kanchinadham
Executive Director &
Chief Financial Officer
DIN: 00004989
Company Secretary &
Chief Legal Officer (Corporate &
Compliance)
ACS: 15921
307
NOTESforming part of the financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
Independent Auditor’s Report
Consolidated Balance Sheet
Consolidated Statement of Profit and Loss
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes forming part of the Consolidated Financial Statements
310
322
324
326
328
330
INDEPENDENT AUDITOR’S REPORT
To the Members of Tata Steel Limited
Report on the Audit of the Consolidated Financial Statements
Opinion
1.
2.
We have audited the accompanying Consolidated Financial
Statements of Tata Steel Limited (hereinafter referred to as the
‘Holding Company”) and its subsidiaries (Holding Company
and its subsidiaries together referred to as “the Group”), its
associates and jointly controlled entities [refer note 1 to the
attached Consolidated Financial Statements], which comprise
the Consolidated Balance Sheet as at March 31, 2020, the
Consolidated Statement of Profit and Loss (including Other
Comprehensive
Income), the Consolidated Statement of
Changes in Equity and the Consolidated Cash Flows Statement
for the year then ended, and Notes to the Consolidated
Financial Statements, including a summary of significant
accounting policies and other explanatory
information
prepared based on the relevant records. (hereinafter referred
to as “the Consolidated Financial Statements”).
In our opinion and to the best of our information and
according to the explanations given to us, the aforesaid
Consolidated Financial Statements give the
information
required by the Companies Act, 2013 (“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 entities as at March 31, 2020, its consolidated
total comprehensive income (comprising profit and other
comprehensive income), its consolidated changes in equity
and its consolidated cash flows for the year then ended.
Basis for Opinion
3.
We conducted our audit in accordance with the Standards
on Auditing (SAs) specified under section 143(10) of the
Act. Our responsibilities under those Standards are further
described in the Auditor’s Responsibilities for the Audit of
the Consolidated Financial Statements section of our report.
We are independent of the Group, its associates and jointly
controlled entities in accordance with the ethical requirements
that are relevant to our audit of the Consolidated Financial
Statements in India in terms of the Code of Ethics issued
by ICAI and the relevant provisions of the Act, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements. 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 paragraph 19 of
the Other Matters paragraph below, other than the unaudited
financial statements/ financial information as certified by the
310
management and referred to in paragraph 20 and financial
information not available as referred to in paragraph 21 of the
Other Matters paragraph below, is sufficient and appropriate to
provide a basis for our opinion.
Material Uncertainty Related to Going Concern
4.
The following Material Uncertainty Relating to Going Concern
(as reproduced) has been communicated to us by the auditors
of Tata Steel Europe Limited, a subsidiary of the Holding
Company, vide their audit report dated June 24, 2020:
“Without qualifying our opinion on the special purpose
financial information, we have considered the adequacy of the
disclosure made in the special purpose financial information
concerning Tata Steel Europe Limited’s ability to continue as a
going concern. The impact of the COVID-19 global pandemic
will require Tata Steel Europe Limited to access group company
support in order to meet its obligations as they fall due. Tata
Steel Europe Limited has received a letter from TS Global
Procurement Company Pte Ltd undertaking to provide
working capital and/or other cash support up to a specified
amount which exceeds the amount forecast as being required
by Tata Steel Europe Limited over the next twelve months.
The letter states that it represents present policy, is given by
way of comfort only and is not to be construed as constituting
a promise as to the future conduct of TS Global Procurement
Company Pte Ltd or Tata Steel Limited. Accordingly, there can
be no certainty that the funds required by Tata Steel Europe
Limited will in fact be made available. These conditions,
along with the other matters explained in the special purpose
financial information, indicate the existence of a material
uncertainty which may cast significant doubt about Tata Steel
Europe Limited’s ability to continue as a going concern. The
special purpose financial information does not include the
adjustments that would result if Tata Steel Europe Limited were
unable to continue as a going concern.”
Also, refer note 49 to the consolidated financial statements
in this regard.
Emphasis of Matter
5.
We draw your attention to Note 2(c) to the consolidated
financial statements which explains the uncertainties and
management’s assessment of the financial impact due to
lockdown / restrictions related to the COVID-19 pandemic
imposed by the Government, for which a definitive assessment
of the impact is dependent upon future economic conditions.
Our opinion is not modified in respect of this matter.
ConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
Key audit matters
6.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial
statements of the current year. These matters were addressed in the context of our audit of the consolidated financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
Assessment of
contingent liabilities
litigations and
related disclosure of
How our audit addressed the key audit matter
Our audit procedures included the following:
[Refer to Note 2 (c) to the Consolidated financial statements– “Use
of estimates and critical accounting judgements – Provisions and
contingent liabilities”, Note 40 (A) to the Consolidated financial
statements – “Contingencies” and Note 41 to the Consolidated
financial statements – “Other significant litigations”].
As at March 31, 2020, the Holding Company has exposures
towards litigations relating to various matters as set out in the
aforesaid Notes.
Significant management judgement is required to assess such
matters to determine the probability of occurrence of material
outflow of economic resources and whether a provision should
be recognised, or a disclosure should be made. The management
judgement is also supported with legal advice in certain cases as
considered appropriate. As the ultimate outcome of the matters are
uncertain and the positions taken by the management are based
on the application of their best judgement, related legal advice
including those relating to interpretation of laws/regulations, it is
considered to be a Key Audit Matter.
• We understood, assessed and tested the design and operating
effectiveness of
the Holding Company’s key controls
surrounding assessment of litigations relating to the relevant
laws and regulations;
• We discussed with management the recent developments and
the status of the material litigations which were reviewed and
noted by the Holding Company’s audit committee;
• We performed our assessment on a test basis on the
underlying calculations supporting the contingent liabilities/
other significant litigations made in relation to the Holding
Company’s Standalone Financial Statements;
• We used auditor’s experts to gain an understanding and to
evaluate the disputed tax matters;
• We considered external
obtained by management;
legal opinions, where relevant,
• We discussed with the Holding Company’s external legal
counsel to understand the interpretation of laws/regulations
considered by the management in their assessment relating to
a material litigation;
• We evaluated management’s assessments by understanding
precedents set in similar cases and assessed the reliability of
the management’s past estimates/judgements;
• We evaluated management’s assessment around those
matters that are not disclosed or not considered as contingent
liability, as the probability of material outflow is considered to
be remote by the management; and
• We assessed the adequacy of the disclosures.
Based on the above work performed, management’s assessment
in respect of Holding Company’s litigations and related disclosures
relating to contingent
litigations
in
the Consolidated Financial Statements are considered
to be reasonable.
liabilities/other significant
311
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 How our audit addressed the key audit matter
Our procedures included the following:
• We understood from the management of the subsidiary
company, assessed the design and tested the operating
effectiveness of the subsidiary company's key controls
over the accounting of business combination and the
impairment assessment.
• We have evaluated the competence, capabilities and objectivity
of the management’s expert engaged for the PPA, obtained an
understanding of the work of the expert, and evaluated the
appropriateness of the expert’s work as audit evidence.
• We have traced the value of the consideration transferred with
reference to the BTA.
• We have carried out our evaluation, by involving our experts
(“auditor’s expert”) to:
i) review the PPA and assess the reasonableness of the
underlying key assumptions used in determining the fair
value of assets and liabilities as at the acquisition date.
ii) review the subsidiary company’s management's assessment
/ method including the key assumptions related to the
projections, the discount rate used in the assessment of the
carrying values as at the year end.
• We have verified the subsidiary company’s management’s
computation of goodwill.
• We have also assessed the adequacy and appropriateness of
the disclosures made.
Based on our procedures performed above, we noted that the
PPA of the consideration is in accordance with Ind-AS 103 Business
Combination and that the carrying value of the acquired Property,
plant and equipment, Right-of-use assets, Other intangible assets
and Goodwill as at the year end was appropriate.
Key audit matter
Assessment of Purchase Price Allocation on acquisition
of business in accordance with Ind AS 103, Business
Combination and the appropriateness of the carrying
value of the acquired Property, plant and equipment,
Right-of-use assets, Other intangible assets and Goodwill
as at the year end
• [Refer to Note 2 (e) to the Consolidated financial statements–
“Business Combination” and Note 42. A to the Consolidated
financial statements – “Acquisition of Subsidiaries”]
• On April 9, 2019, Tata Steel Long Products Limited, a subsidiary
company acquired the steel division of Usha Martin Limited,
pursuant to the Business Transfer Agreement (“BTA”). The
subsidiary company determined the acquisition to be a
business combination in accordance with Ind AS 103 ‘Business
Combinations’. Ind AS 103 requires the identified assets and
liabilities be recognised at fair value at the date of acquisition
with the excess of the acquisition cost over the identified fair
value of recognised assets and liabilities as goodwill.
• The subsidiary company appointed independent professional
valuers to perform valuation of assets for the purpose of
allocation of the consolidated purchase price to the respective
assets and liabilities acquired (hereinafter referred to as ‘the
purchase price allocation’ or ‘the PPA’). The Management of
the subsidiary company determined that the fair values of the
net identifiable assets acquired was `4,042.98 crores as part
of the PPA and accordingly, the consideration paid in excess
of the net assets acquired resulted in recognition of Goodwill
of `5.66 crores.
• Significant assumptions and estimates are used as of the
date of acquisition in the determination of the fair values
of the identified assets acquired and liabilities assumed in
the transaction.
• Further, as at the year end, significant judgements were made
by the management of the subsidiary company in respect of
the future projections and the discount rate used in applying
the value in use method in assessing the carrying value of the
acquired Property, plant and equipment, Right-of-use assets,
Other intangible assets and the Goodwill.
• Accordingly, these are considered to be a key audit matter. The
Management of the subsidiary company concluded that the
recoverable amount is higher than their carrying values and
that no impairment provision is warranted.
312
ConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR 7.
The following Key Audit Matters were included in the audit report dated May 25, 2020, containing an unmodified audit opinion on
the consolidated special purpose financial information of Tata Steel BSL Limited, a subsidiary of the Holding Company, issued by other
auditors and reproduced by us as under:
Key audit matter
“Recoverability of amounts paid against on-going litigation
Refer Note 3 to the Consolidated Special Purpose Financial
Information. Prior to the approval of the resolution plan (‘the
BSL Resolution Plan’) under the Corporate Insolvency Resolution
Process of the Insolvency and Bankruptcy Code, 2016 on 15 May
2018, the Holding Company was a party to certain litigations.
Pursuant to the approval of the BSL Resolution Plan, it was
determined that no amounts are payable in respect of those
litigations as they stand extinguished.
The Holding Company had also made certain payments to the
relevant authorities in respect of those litigations which were
presented as recoverable under “Other non-current assets” in the
Consolidated Special Purpose Financial Information.
The estimates related to expected outcome of litigations and
recoverability of payments made in respect thereof have high
degree of
judicial
precedents in India in respect of disposal of litigations involving
companies admitted to Corporate Insolvency Resolution Process.
inherent uncertainty due to
insufficient
The application of significant judgement in the aforementioned
matter required substantial involvement of senior personnel on
the audit engagement including individuals with expertise in tax
related matters.
How our audit addressed the key audit matter
We have performed the following procedures, among others, to
test the recoverability of payments made by the Holding Company
in relation to litigations instituted against it prior to the approval of
the BSL Resolution Plan:
• Verified the underlying documents related to litigation and
other correspondences with statutory authorities;
•
Involved direct and indirect tax specialists to review the
process used by the management to determine estimates and
to test the judgements applied by management in developing
the accounting estimates;
• Assessed management’s estimate of recoverability, supported
by an opinion obtained by the management from a legal
expert, by determining whether;
- The method of measurement used is appropriate in the
circumstances; and
- The assumptions used by management are reasonable in light
of the measurement principles of Ind AS.
• Determined whether the methods for making estimates have
been applied consistently;
• Evaluated whether
the management
from
the accounting principles applied
amounts
by
in Consolidated
relevant authorities
recoverable
Special Purpose Financial Information in accordance with the
principles of Ind AS.
fairly present
the
313
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 How our audit addressed the key audit matter
We have performed the following procedures, among others,
to examine whether the acquisition of Angul Energy Limited
(formerly known as Bhushan Energy Limited) was appropriately
accounted for and presented in the Consolidated Special Purpose
Financial Information;
• Assessed and tested the design and operating effectiveness
of Holding Company’s key controls over the accounting of
business combination.
• Reviewed and obtained understanding of the terms of the BEL
Resolution Plans to determine the assets and liabilities acquired
by the Holding Company and the value of the consideration
paid by the Holding Company.
• Assessed
the competence, capabilities, objectivity and
interdependence of management’s expert;
•
Involved auditor’s valuation specialists to evaluate the
reasonableness of the methodology and key assumptions used
by management and its expert for determination of fair value
of the identifiable assets acquired and liabilities assumed;
• Performed enquiries with the management’s experts and
the
relevant supporting documents
inspected
to
underlying data used in valuation of tangible assets;
test
• Evaluate the appropriateness of the accounting in accordance
including computation of the capital
with
Ind AS 103,
reserve and disclosures
in the financial statements and
assessed the completeness and mathematical accuracy of
relevant disclosures.”
Key audit matter
Acquisition of Angul Energy Limited (formerly known as
Bhushan Energy Limited)
Refer Note
to
Financial Information.
4
the Consolidated
Special Purpose
On 1 June 2019, the Holding Company acquired Angul Energy
Limited (formerly known as Bhushan Energy Limited) for a
purchase consideration of `10 crores and provided additional funds
aggregating to `755 crores by way of Inter Corporate Deposits
(‘ICD’), in accordance with the resolution plan (‘the BEL Resolution
Plan’) under the Corporate Insolvency Resolution Process of the
Insolvency and Bankruptcy Code, 2016.
The acquisition has been accounted for as a business combination
under Ind AS 103, Business Combination and includes a number of
significant and complex judgements in determination of the fair
value of the identifiable assets acquired and liabilities assumed.
The acquisition resulted in recognition of capital reserve amounting
to INR 804 Crores, as disclosed in the aforesaid note.
Considering the materiality of the impact on the accompanying
Consolidated Special Purpose Financial
Information and
judgements and assumptions
aforementioned
involved, which required substantial
involvement of senior
personnel including experts in valuation, this has been considered
as a Key Audit Matter.
significant
314
ConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Other Information
8.
9.
10.
The Holding Company’s Board of Directors is responsible
for the other information. The other information comprises
the information in the Integrated Report, Board’s Report
along with its Annexures and Financial Highlights included
in the Holding Company’s Annual Report (titled as ‘Tata Steel
Integrated Report & Annual Accounts 2019-20’), but does
not include the Consolidated Financial Statements and our
auditor’s report thereon.
Our opinion on the Consolidated Financial Statements does
not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the Consolidated Financial
Statements, our responsibility is to read the other information
and, in doing so, consider whether the other information
is materially inconsistent with the Consolidated Financial
Statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated. If, based on the
work we have performed and the reports of the other auditors
as furnished to us (Refer paragraph 19 below), we conclude
that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report
in this regard.
Responsibilities of Management and Those Charged with
Governance for the Consolidated Financial Statements
11.
The Holding Company’s Board of Directors is responsible
for the preparation and presentation of these Consolidated
Financial Statements in term of the requirements of the Act
that give a true and fair view of the consolidated financial
position, consolidated financial performance consolidated
changes in equity and consolidated cash flows of the Group
including
jointly controlled entities
in accordance with the accounting principles generally
accepted
including the Accounting Standards
specified under section 133 of the Act. The respective Board
of Directors of the companies included in the Group and of its
associates and jointly controlled entities are responsible for
maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets
its associates and
India,
in
of the Group 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 the design, implementation and
maintenance of adequate internal financial controls, that were
operating effectively for ensuring 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 have been used for the purpose
of preparation of the Consolidated Financial Statements by the
Directors of the Holding Company, as aforesaid.
12.
In preparing the Consolidated Financial Statements, the
respective Board of Directors of the companies included in
the Group and of its associates and jointly controlled entities
are responsible for assessing the ability of the Group and of its
associates and jointly controlled entities to continue as a going
concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting
unless management either intends to liquidate the Group or to
cease operations, or has no realistic alternative but to do so.
13.
The respective Board of Directors of the companies included
in the Group and of its associates and jointly controlled entities
are responsible for overseeing the financial reporting process
of the Group and of its associates and jointly controlled entities.
Auditor’s Responsibilities for the Audit of the Consolidated
Financial Statements
14.
Our objectives are to obtain reasonable assurance about
whether the Consolidated Financial Statements as a whole
are free from material misstatement, whether due to fraud
or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance
but is not a guarantee that an audit conducted in accordance
with SAs will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these Consolidated
Financial Statements.
315
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 15.
As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional skepticism
throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the
Consolidated Financial Statements, whether due to fraud
or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)(i) of
the Act, we are also responsible for expressing our opinion
on whether the Holding company has adequate internal
financial controls with reference to financial statements in
place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and
related disclosures made by management.
• Conclude on the appropriateness of management’s use
of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may
cast significant doubt on the ability of the Group and its
associates and jointly controlled entities to continue as a
going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s
report to the related disclosures in the Consolidated
Financial Statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the
Group and its associates and jointly controlled entities to
cease to continue as a going concern.
• Evaluate the overall presentation, structure and content
of the Consolidated Financial Statements, including the
disclosures, and whether the Consolidated Financial
Statements represent the underlying transactions and
events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities
within the Group and its associates and jointly controlled
entities to express an opinion on the Consolidated
Financial Statements. We are responsible for the direction,
supervision and performance of the audit of the financial
statements of such entities included in the Consolidated
Financial Statements of which we are the independent
auditors. For the other entities included in the Consolidated
Financial Statements, which have been audited by other
auditors, such other auditors remain responsible for the
direction, supervision and performance of the audits
carried out by them. We remain solely responsible for
our audit opinion.
We communicate with those charged with governance of
the Holding Company and such other entities included in
the Consolidated Financial Statements of which we are the
independent auditors regarding, among other matters, the
planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with a
statement that we have complied with relevant ethical
requirements regarding independence, and to communicate
with them all relationships and other matters that may
reasonably be thought to bear on our independence, and
where applicable, related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of
most significance in the audit of the Consolidated Financial
Statements of the current year and are therefore the key
audit matters. We describe these matters in our auditor’s
report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated in
our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest
benefits of such communication.
16.
17.
18.
316
ConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Other Matters
19.
20.
We did not audit the financial statements/special purpose
financial information of twenty subsidiaries whose financial
statements/special purpose financial information reflect total
assets of `1,43,590.38 crores and net assets of `60,337.76 crores
as at March 31, 2020, total revenue of `77,682.83 crores, total
net profit after tax of `9,498.02 crores and total comprehensive
income of `16,241.78 crores and net cash flows amounting to
`415.69 crores for the year ended on that date, as considered
in the Consolidated Financial Statements. The Consolidated
Financial Statement of these subsidiaries also
include
their step down associates and jointly controlled entities
constituting `16.27 crores and `14.99 crores of the Group’s
share total comprehensive income for the year ended March
31, 2020 respectively. The consolidated financial statements
also include the Group’s share of total comprehensive income
(comprising profit and other comprehensive income) of `32.91
crores in respect of four jointly controlled entities whose
financial statements/special purpose financial information
have not been audited by us. These financial statements/special
purpose financial information have been audited by other
auditors/independent firm of accountants whose reports have
been furnished to us by the other auditors/Management, and
our opinion on the Consolidated Financial Statements insofar
as it relates to the amounts and disclosures included in respect
of these subsidiaries, associates and jointly controlled entities
and our report in terms of sub-section (3) of Section 143 of the
Act including report on Other Information insofar as it relates
to the aforesaid subsidiaries, joint ventures and associates, is
based solely on the reports of the other auditors/independent
firm of accountants (as the case may be).
We did not audit the financial statements / special purpose
financial information of five subsidiaries, whose financial
statements/special purpose financial information reflect total
assets of `8,882.39 crores and net assets of `4,149.16 crores as at
March 31, 2020, total revenue of `327.81 crores, total net profit
after tax of `27.08 crores and total comprehensive income of
`25.96 crores and net cash flows amounting to `23.65 crores for
the year ended on that date, as considered in the Consolidated
Financial Statements. The Consolidated Financial Statements
also include the Group’s share of net profit/(loss) after tax and
total comprehensive income of `Nil and `Nil for the year ended
21.
March 31, 2020 as considered in the Consolidated Financial
Statements, in respect of three associates and two jointly
controlled entities respectively, whose financial statements/
special purpose financial information have not been audited
by us. These financial statements/special purpose financial
information are unaudited and have been furnished to us
by the Management, and our opinion on the Consolidated
Financial Statements insofar as it relates to the amounts and
disclosures included in respect of these subsidiaries, associates
and jointly controlled entities and our report in terms of sub-
section (3) of Section 143 of the Act including report on Other
Information insofar as it relates to the aforesaid subsidiaries,
associates and jointly controlled entities, is based solely on
such unaudited financial statements/special purpose financial
information. In our opinion and according to the information
and explanations given to us by the Management, these
financial statements/special purpose financial information are
not material to the Group.
In the case of three subsidiaries, four associates and two
jointly controlled entities, the financial statements/special
purpose financial information for the year ended March 31,
2020 are not available. The investments in these companies are
carried at Re 1 as at March 31, 2020. In absence of the aforesaid
financial statements/special purpose financial information,
the financial statements/special purpose financial information
in respect of aforesaid subsidiaries and the Group’s share of
total comprehensive income of these associates and jointly
controlled entities for the year ended March 31, 2020 have
not been included in the Consolidated Financial Statement.
The investments in these companies are carried at Re 1 as at
March 31, 2020. Accordingly, we do not report in terms of sub-
section (3) of Section 143 of the Act including report on Other
Information insofar to the extent these relate to the aforesaid
subsidiaries, associates and jointly controlled entities.
Our opinion on the Consolidated 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, the financial statements / financial information
certified by the Management and the non-availability of
financial information.
317
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
its
subsidiary
the Holding Company and the reports of the statutory
auditors of
companies, associate
companies and jointly controlled entities incorporated
in India, none of the directors of the Group companies,
its associate companies and jointly controlled entities
incorporated in India is disqualified as on March 31, 2020
from being appointed as a director in terms of Section
164(2) of the Act.
(f)
(g)
i.
ii.
With respect to the adequacy of internal financial controls
with reference to consolidated financial statements of the
Group and the operating effectiveness of such controls,
refer to our separate report in Annexure A.
With respect to the other matters to be included in
the Auditor’s Report in accordance with Rule 11 of the
Companies (Audit and Auditor’s) Rules, 2014, in our
opinion and to the best of our information and according
to the explanations given to us:
The Consolidated Financial Statements disclose the
impact of pending litigations as on March 31, 2020 on the
consolidated financial position of the Group, its associates
and jointly controlled entities – Refer Notes 40(A) and 41
to the Consolidated Financial Statements.
The Group, its associates and jointly controlled entities
had long-term contracts including derivative contracts
as at March 31, 2020 for which there were no material
foreseeable losses.
Report on Other Legal and Regulatory Requirements
22.
As required by Section 143(3) of the Act, we report, to the
extent applicable, that:
(a)
(b)
(c)
(d)
(e)
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 Financial Statements.
In our opinion, proper books of account as required by
law relating to preparation of the aforesaid Consolidated
Financial Statements have been kept so far as it appears
from our examination of those books and the reports of
the other auditors.
The Consolidated Balance Sheet, the Consolidated
Statement of Profit and Loss
(including other
income), Consolidated Statement of
comprehensive
Changes in Equity and the Consolidated Cash Flow
Statement dealt with by this Report are in agreement with
the relevant books of account and records maintained
for the purpose of preparation of the consolidated
financial statements.
In our opinion, the aforesaid Consolidated Financial
Statements comply with the 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, 2020 taken on record by the Board of Directors of
318
ConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
23.
iii.
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 entities incorporated in India during the year
ended March 31, 2020 except for amount aggregating
to `5.71 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 disclosures relating to Specified Bank
Notes is not applicable to the Group for the year ended
March 31, 2020.
The Group, its associates and jointly controlled entities
incorporated as public companies in India, have 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, except in case of one subsidiary and
one associate where managerial remuneration amounting to
`2.12 crore and `1.36 crore respectively, is subject to approval
of the shareholders of the subsidiary and the associate
respectively by way of special resolution in the ensuing Annual
General Meeting.
Additionally, the following paragraph has been included
in the audit report on the consolidated special purpose
financial information of Tata Steel BSL Limited, a subsidiary
of the Holding Company, issued by other auditor vide its
report dated May 25, 2020 and reproduced by us as under:
“As required by section 197 (16) of the Act, based on our audit
and on the consideration of the report of the other auditors,
referred to in paragraph 12, on separate financial statements
of a subsidiary, we report that the Holding Company and the
subsidiary company covered under the Act paid remuneration
to their respective directors during the year in accordance with
the provisions of and limits laid down under section 197 read
with Schedule V to the Act. Further, as stated in paragraph 13,
financial information of three subsidiary companies, covered
under the Act are unaudited and have been furnished to us
by the management, and as certified by the management,
such companies have not paid or provided for any managerial
remuneration during the year.”
For Price Waterhouse & Co Chartered Accountants LLP
Firm Registration Number: 304026E/ E-300009
Chartered Accountants
Place: Mumbai
Membership Number 042190
Date: June 29, 2020
UDIN: 20042190AAAABX4407
Russell I Parera
Partner
319
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
ANNEXURE A TO THE INDEPENDENT AUDITOR’S REPORT
Referred to in paragraph 22(f) of the Independent Auditors’
Report of even date to the members of Tata Steel Limited
on the consolidated financial statements as of and for the
year ended March 31, 2020
Report on the Internal Financial Controls with reference to
consolidated financial statements under Clause (i) of Sub-
section 3 of Section 143 of the Act
1.
In conjunction with our audit of the consolidated financial
statements of the Company as of and for the year ended March
31, 2020, we have audited the internal financial controls with
reference to consolidated financial statements 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 (i) of sub section
3 of Section 143 of the Act in respect of the adequacy of the
internal financial controls with reference to financial statements
is not applicable to one subsidiary and three jointly controlled
companies incorporated in India namely Tata Steel Foundation
and, Himalaya Steel Mills Services Private Limited, S & T Mining
Company Private Limited and Tata NYK Shipping (India) Private
Limited respectively, pursuant to MCA notification GSR 583(E)
dated June 13, 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 with reference to
financial statements, which are companies incorporated in
India, are responsible for establishing and maintaining internal
financial controls based on 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 with reference to consolidated
financial statements 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 with reference to consolidated financial
statements 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 with reference to consolidated financial statements
internal
and their operating effectiveness. Our audit of
financial controls with reference to consolidated financial
statements included obtaining an understanding of internal
financial controls with reference to consolidated financial
statements, 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 consolidated 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
with reference to consolidated financial statements.
Meaning of Internal Financial Controls with reference to
financial statements
6.
A company's internal financial control with reference to
financial statements
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
320
ConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR accounting principles. A company's internal financial control
with reference to financial statements 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 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 financial statements.
Inherent Limitations of Internal Financial Controls with
reference to financial statements
7.
inherent
limitations of
Because of the
internal financial
controls with reference to financial statements, including the
possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may
occur and not be detected. Also, projections of any evaluation
of the internal financial controls with reference to financial
statements to future periods are subject to the risk that the
internal financial control with reference to financial statements
may become inadequate because of changes in conditions, or
that the degree of compliance with the policies or procedures
may deteriorate.
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 with
reference to financial statements and such internal financial
controls with reference to financial statements were operating
effectively as at March 31, 2020, 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. Also refer paragraph 5 of our report.
Other Matters
9.
Our aforesaid reports under Section 143(3)(i) of the Act on the
adequacy and operating effectiveness of the internal financial
controls with reference to financial statements insofar as it
relates to thirteen subsidiary companies, which are companies
incorporated in India, is based on the corresponding reports
of the auditors of such companies 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
Place: Mumbai
Membership Number 042190
Date: June 29, 2020
UDIN: 20042190AAAABX4407
Russell I Parera
Partner
321
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 Note Page
As at
March 31, 2020
As at
March 31, 2019
(` crore)
3
5
6
7
8
9
10
11
12
13
14
344
349
350
351
353
355
356
357
358
360
364
1,19,503.98
18,862.06
8,549.78
4,054.53
2,442.37
634.77
2,168.54
684.77
488.71
279.64
588.93
27,278.45
1,725.67
1,270.33
3,154.20
1,91,686.73
1,18,450.97
17,956.51
-
3,996.62
1,994.32
684.70
1,922.95
1,290.36
613.34
108.74
570.06
19,964.19
1,574.78
808.95
4,654.92
1,74,591.41
15
365
31,068.72
31,656.10
9
16
17
18
10
11
12
355
366
367
368
356
357
358
14
364
19
369
3,431.87
7,884.91
7,541.96
512.76
215.68
1,486.06
446.42
-
143.20
3,177.69
55,909.27
2,823.45
2,50,419.45
2,524.86
11,811.00
2,975.53
365.84
239.70
359.11
1,248.56
4.38
133.94
3,529.70
54,848.72
4,142.26
2,33,582.39
CONSOLIDATED BALANCE SHEET
as at March 31, 2020
Assets
I
Intangible assets under development
Non-current assets
Property, plant and equipment
(a)
Capital work-in-progress
(b)
Right-of-use assets
(c)
(d) Goodwill on consolidation
(e) Other intangible assets
(f )
(g) Equity accounted investments
(h) Financial assets
(i) Investments
(ii) Loans
(iii) Derivative assets
(iv) Other financial assets
Retirement benefit assets
(i)
(j) Non-current tax assets
(k) Deferred tax assets
(l) 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 banks
(v)
(vi) Derivative assets
(vii) Other financial assets
Retirement benefit assets
Current tax assets
Loans
(c)
(d)
(e) Other assets
Total current assets
III Assets held for sale
Total assets
322
ConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR CONSOLIDATED BALANCE SHEET (CONTD.)
as at March 31, 2020
Equity and liabilities
IV Equity
(a)
Equity share capital
(b) Hybrid perpetual securities
(c) Other equity
Equity attributable to owners 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)
Trade payables
(ii)
(a) Total outstanding dues of micro and small enterprises
(b) Total outstanding dues of creditors other than micro and small
enterprises
(iii) Derivative liabilities
(iv) Other financial liabilities
Provisions
Retirement benefit obligations
Current 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
Note Page
As at
March 31, 2020
As at
March 31, 2019
(` crore)
20
21
22
371
374
374
24
381
25
26
12
27
13
28
386
386
358
388
360
389
24
29
381
389
25
26
12
27
386
386
358
388
28
389
19
369
1-53
1,144.95
2,275.00
70,156.35
73,576.30
2,586.60
76,162.90
94,104.97
127.92
387.67
4,235.07
3,598.18
151.30
9,261.38
729.15
1,12,595.64
1,144.94
2,275.00
65,505.14
68,925.08
2,364.46
71,289.54
80,342.73
59.82
270.58
4,046.21
2,653.46
906.80
12,459.89
519.23
1,01,258.72
19,184.48
10,802.08
198.86
21,181.99
169.74
21,547.22
729.22
9,518.53
1,663.67
141.26
34.55
609.58
7,050.44
60,312.58
1,348.33
2,50,419.45
416.59
16,737.83
1,248.72
120.69
16.51
636.42
7,912.21
59,608.01
1,426.12
2,33,582.39
In terms of our report attached
For and on behalf of the Board of Directors
For Price Waterhouse & Co Chartered Accountants LLP N. Chandrasekaran Mallika Srinivasan O. P. Bhatt
Firm Registration Number: 304026E/E-300009
Chartered Accountants
Chairman
DIN: 00121863
Director
DIN: 00037022
Director
DIN: 00548091
sd/-
sd/-
sd/-
sd/-
Peter Blauwhoff
Director
DIN: 07728872
sd/-
Deepak Kapoor
Director
DIN: 00162957
sd/-
Aman Mehta
Director
DIN: 00009364
sd/-
Russell I Parera
Partner
Membership Number 042190
Mumbai, June 29, 2020
sd/-
V. K. Sharma
Director
DIN: 02449088
sd/-
Saurabh Agrawal
Director
DIN: 02144558
sd/-
T. V. Narendran
Chief Executive Officer
& Managing Director
DIN: 03083605
sd/-
sd/-
Koushik Chatterjee Parvatheesam Kanchinadham
Executive Director &
Chief Financial Officer
DIN: 00004989
Company Secretary &
Chief Legal Officer (Corporate &
Compliance)
ACS: 15921
323
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 CONSOLIDATED STATEMENT OF PROFIT AND LOSS
for the year ended March 31, 2020
Note Page
30
31
390
390
Year ended
March 31, 2020
1,39,816.65
1,843.49
1,41,660.14
(` crore)
Year ended
March 31, 2019
1,57,668.99
1,420.58
1,59,089.57
32
33
34
35
391
391
392
392
36
393
13
360
37
393
53,244.21
4,795.78
(565.24)
54,309.07
6,567.98
(96.71)
18,533.58
7,533.46
8,440.73
48,663.26
1,40,645.78
2,318.00
1,38,327.78
187.97
3,520.33
18,758.87
7,660.10
7,341.83
50,410.72
1,44,951.86
1,664.28
1,43,287.58
224.70
16,026.69
189.62
(40.95)
(3,197.14)
(196.41)
(107.37)
(149.80)
(250.00)
(3,752.05)
(231.72)
2,084.52
(4,652.93)
(2,568.41)
2,336.69
(1,136.25)
(27.98)
(1,164.23)
1,172.46
180.13
(172.12)
(9.57)
(328.64)
(35.33)
244.56
-
(120.97)
15,905.72
6,728.14
(9.71)
6,718.43
9,187.29
(88.96)
-
(88.96)
9,098.33
I
II
III
IV
Revenue from operations
Other income
Total income
Expenses:
(a) Cost of materials consumed
(b) Purchases of stock-in-trade
(c) Changes in inventories of finished and semi-finished goods, stock-in-trade and
work-in-progress
(d) Employee benefits expense
(e) Finance costs
(f ) Depreciation and amortisation expense
(g) Other expenses
V
VI
VII
(h) Less: Expenditure (other than interest) transferred to capital and other accounts
Total expenses
Share of profit/(loss) of joint ventures and associates
Profit/(loss) before exceptional items and tax (III-IV+V)
Exceptional items:
(a) Profit on sale of subsidiaries and non-current investments
(b) Provision for impairment of investments/doubtful advances
(c) Provision for impairment of non-current assets
(d) Provision for demands and claims
(e) Employee separation compensation
(f ) Restructuring and other provisions
(g) Fair value gain/(loss) on preference share investments
Total exceptional items
VIII Profit/(loss) before tax (VI+VII)
IX
Tax expense:
(a) Current tax
(b) Deferred tax
Total tax expense
Profit/(loss) after tax from continuing operations
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
Profit/(loss) for the year (X+XI)
X
XI
XII
324
ConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR CONSOLIDATED STATEMENT OF PROFIT AND LOSS (CONTD.)
for the year ended March 31, 2020
Note Page
Year ended
March 31, 2020
Year ended
March 31, 2019
(` crore)
XIII Other comprehensive income/(loss)
A.
(i)
Items that will not be reclassified subsequently to profit and loss:
(a) Remeasurement gain/(loss) on post-employment defined benefit plans
(b) Fair value changes of investments in equity shares
(c) Share of equity accounted investees
(ii) Income tax on items that will not be reclassified subsequently to
B.
(i)
profit and loss
Items that will be reclassified subsequently to profit and loss:
(a) Foreign currency translation differences
(b) Fair value changes of cash flow hedges
(c) Share of equity accounted investees
(ii) Income tax on items that will be reclassified subsequently to profit
and loss
Total other comprehensive income/(loss) for the year
XIV Total comprehensive income/(loss) for the year (XII+XIII)
XV
Profit/(loss) from continuing operations for the year attributable to:
Owners of the Company
Non-controlling interests
XVI Profit/(loss) from discontinued operations for the year attributable to:
Owners of the Company
Non-controlling interests
XVII Total comprehensive income for the year attributable to:
Owners of the Company
Non-controlling interests
XVIII Earnings per share (for continuing operations)
38
395
Basic (`)
Diluted (`)
XIX Earnings per share (for discontinued operations)
XX
Basic (`)
Diluted (`)
Earnings per share (for continuing and discontinued operations)
Basic (`)
Diluted (`)
38
395
38
395
XXI Notes forming part of the consolidated financial statements
1-53
In terms of our report attached
For and on behalf of the Board of Directors
5,474.69
(250.46)
(3.25)
(1,019.01)
554.96
(378.49)
25.94
78.45
(683.60)
(36.65)
(0.14)
94.83
508.47
161.80
4.53
(41.45)
4,482.83
5,655.29
7.79
9,106.12
2,719.58
(382.89)
2,336.69
(1,163.04)
(1.19)
(1,164.23)
6,026.17
(370.88)
5,655.29
22.02
22.02
(10.16)
(10.16)
11.86
11.86
10,283.45
(1,096.16)
9,187.29
(65.12)
(23.84)
(88.96)
10,362.88
(1,256.76)
9,106.12
88.32
88.31
(0.57)
(0.57)
87.75
87.74
For Price Waterhouse & Co Chartered Accountants LLP N. Chandrasekaran Mallika Srinivasan O. P. Bhatt
Firm Registration Number: 304026E/E-300009
Chartered Accountants
Chairman
DIN: 00121863
Director
DIN: 00037022
Director
DIN: 00548091
sd/-
sd/-
sd/-
sd/-
Peter Blauwhoff
Director
DIN: 07728872
sd/-
Deepak Kapoor
Director
DIN: 00162957
sd/-
Aman Mehta
Director
DIN: 00009364
sd/-
Russell I Parera
Partner
Membership Number 042190
Mumbai, June 29, 2020
sd/-
V. K. Sharma
Director
DIN: 02449088
sd/-
Saurabh Agrawal
Director
DIN: 02144558
sd/-
T. V. Narendran
Chief Executive Officer
& Managing Director
DIN: 03083605
sd/-
sd/-
Koushik Chatterjee Parvatheesam Kanchinadham
Executive Director &
Chief Financial Officer
DIN: 00004989
Company Secretary &
Chief Legal Officer (Corporate &
Compliance)
ACS: 15921
325
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended March 31, 2020
A. Equity share capital
Balance as at
April 1, 2019
1,144.94
Balance as at
April 1, 2018
1, 144.95
B. Hybrid perpetual securities
Balance as at
April 1, 2019
2,275.00
Balance as at
April 1, 2018
2,275.00
C. Other equity
Changes
during the year
0.01
Changes
during the year
(0.01)
Changes
during the year
-
Changes
during the year
-
(` crore)
Balance as at
March 31, 2020
1,144.95
(` crore)
Balance as at
March 31, 2019
1,144.94
(` crore)
Balance as at
March 31, 2020
2,275.00
(` crore)
Balance as at
March 31, 2019
2,275.00
Retained
earnings
[refer note
22A,
page 374]
Items of other
comprehensive
income
[refer note 22B,
page 374]
Other
consolidated
reserves
[refer note 22C,
page 376]
Share
application
money pending
allotment
[refer note 22D,
page 378]
Other equity
attributable to
the owners of
the Company
Non-
controlling
interests
(` crore)
Total
14,056.43
1,556.54
4,459.24
6,015.78
-
(5.31)
(1,488.13)
(297.40)
(266.15)
66.97
14.28
-
-
31.35
7,612.15
-
10.39
10.39
-
-
-
-
-
-
(6.63)
-
-
-
43,836.56
-
-
-
0.03
-
-
-
-
-
(7.65)
584.24
(0.56)
-
-
-
-
-
(0.04)
-
-
-
-
-
-
-
-
-
65,505.14
1,556.54
4,469.63
2,364.46 67,869.60
1,172.46
(384.08)
4,482.83
13.20
6,026.17
(370.88) 5,655.29
(0.01)
(5.31)
(1,488.13)
(297.40)
(266.15)
66.97
-
584.24
(0.56)
31.35
192.80
-
(18.42)
-
-
-
219.91
181.47
(31.35)
192.79
(5.31)
(1,506.55)
(297.40)
(266.15)
66.97
-
804.15
180.91
-
-
-
18,127.82
-
-
7,615.91
-
-
44,412.62
0.04
-
-
0.04
-
70,156.35
-
48.61
0.04
48.61
2,586.60 72,742.95
Balance as at April 1, 2019
Profit/(loss) for the year
Other comprehensive income
for the year
Total comprehensive income for
the year
Issue of Ordinary Shares
Equity issue expenses
written (off )/back
Dividend(i)
Tax on dividend
Distribution on
hybrid perpetual securities
Tax on distribution on
hybrid perpetual securities
Transfers within equity
Addition relating to acquisitions
Disposal of group undertakings
Adjustment for changes in
ownership interests
Application money received
Other movements
Balance as at March 31, 2020
326
ConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTD.)
for the year ended March 31, 2020
C. Other equity (Contd.)
Balance as at April 1, 2018
Profit/(loss) for the year
Other comprehensive income
for the year
Total comprehensive income for
the year
Issue of Ordinary Shares
Equity issue expenses written (off )/
back
Dividend(i)
Tax on dividend
Distribution on hybrid perpetual
securities
Tax on distribution on hybrid
perpetual securities
Transfers within equity
Addition relating to acquisitions
Disposal of group undertakings
Adjustment for changes in
ownership interests
Application money received
Adjustment for cross holdings
Other movements
Balance as at March 31, 2019
Retained
earnings
[refer note
22A,
page 374]
Items of other
comprehensive
income
[refer note 22B,
page 374]
Other
consolidated
reserves
[refer note 22C,
page 376]
Share
application
money pending
allotment
[refer note 22D,
page 378]
Other equity
attributable to
the owners of
the Company
Non-
controlling
interests
(` crore)
Total
7,801.99
10,218.33
(425.92)
7,149.50
-
570.47
42,499.16
-
-
0.02
-
-
57,450.67
10,218.33
144.55
936.52 58,387.19
9,098.33
7.79
(1,120.00)
(136.76)
9,792.41
570.47
-
-
(1,144.76)
(224.61)
(266.12)
92.99
29.95
-
-
(2,025.42)
-
-
-
14,056.43
-
0.26
0.43
-
-
-
-
-
-
-
-
-
-
(31.06)
-
-
-
-
-
(76.76)
7,612.15
1.11
1,336.41
-
-
-
(0.81)
-
43,836.56
-
10,362.88 (1,256.76) 9,106.12
(0.26)
-
-
0.43
-
-
-
0.43
-
-
-
-
-
-
-
-
(1,144.76)
(224.61)
(266.12)
(41.44)
-
-
(1,186.20)
(224.61)
(266.12)
92.99
-
92.99
-
1,336.41
-
(2,025.42)
-
729.33
(67.10)
2,025.42
-
2,065.74
(67.10)
-
0.24
-
-
-
0.24
(0.81)
(76.76)
65,505.14
-
-
38.49
0.24
(0.81)
(38.27)
2,364.46 67,869.60
(i)
Dividend paid during the year ended March 31, 2020 is ₹13.00 per Ordinary share (face value ₹10 each, fully paid up) and ₹3.25 per
Ordinary Share (face value ₹10 each, partly paid up ₹2.504 per share) (March 31, 2019: ₹10.00 per Ordinary Share of face value ₹10 each,
fully paid up and ₹2.504 per Ordinary Share of face value ₹10 each, partly paid up ₹2.504 per share).
D. Notes forming part of the consolidated financial statements Note 1-53
In terms of our report attached
For and on behalf of the Board of Directors
For Price Waterhouse & Co Chartered Accountants LLP N. Chandrasekaran Mallika Srinivasan O. P. Bhatt
Firm Registration Number: 304026E/E-300009
Chartered Accountants
Chairman
DIN: 00121863
Director
DIN: 00037022
Director
DIN: 00548091
sd/-
sd/-
sd/-
sd/-
Peter Blauwhoff
Director
DIN: 07728872
sd/-
Deepak Kapoor
Director
DIN: 00162957
sd/-
Aman Mehta
Director
DIN: 00009364
sd/-
Russell I Parera
Partner
Membership Number 042190
Mumbai, June 29, 2020
sd/-
V. K. Sharma
Director
DIN: 02449088
sd/-
Saurabh Agrawal
Director
DIN: 02144558
sd/-
T. V. Narendran
Chief Executive Officer
& Managing Director
DIN: 03083605
sd/-
sd/-
Koushik Chatterjee Parvatheesam Kanchinadham
Executive Director &
Chief Financial Officer
DIN: 00004989
Company Secretary &
Chief Legal Officer (Corporate &
Compliance)
ACS: 15921
327
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended March 31, 2020
A. Cash flows from operating activities:
Profit/(loss) before taxes
Adjustments for:
Depreciation and amortisation expense
Dividend income
(Gain)/loss on sale of non-current investments
(Gain)/loss on sale of property, plant and equipment including intangible
assets (net of loss on assets scrapped/written off )
Exceptional (income)/expenses
(Gain)/loss on cancellation of forwards, swaps and options
Interest income and income from current investments
Finance costs
Foreign exchange (gain)/loss
(Profit)/loss on disposal of discontinued operation
Share of profit or loss of joint ventures and associates
Other non-cash items
Operating profit before changes in non-current/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
Repayment of loans given
Principal receipts under sublease
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(i)
8,707.67
(35.08)
(2.01)
4.36
4,901.60
1.26
(1,547.11)
7,580.72
982.07
27.98
(187.97)
(974.62)
4,631.12
1,561.94
(1,996.86)
(10,398.00)
385.73
(61.83)
121.21
(766.15)
-
8.16
67.72
(138.18)
202.57
56.02
46.64
(4,432.74)
378.50
Year ended
March 31, 2020
(` crore)
Year ended
March 31, 2019
(1,380.44)
15,807.12
7,579.32
(26.19)
-
(266.40)
136.26
(36.95)
(1,037.89)
7,741.88
(1,150.77)
-
(222.27)
(684.45)
19,458.87
18,078.43
12,032.54
27,839.66
(114.54)
(1,068.71)
3,773.76
4,196.20
22,274.63
(2,105.91)
20,168.72
2,590.51
30,430.17
(5,094.22)
25,335.95
(9,091.00)
466.69
(489.96)
462.50
13,093.07
(242.47)
260.86
-
418.32
175.43
114.15
34.19
(34,568.87)
156.16
Net cash from/(used in) investing activities
(14,530.35)
(29,210.93)
328
ConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR CONSOLIDATED STATEMENT OF CASH FLOWS (CONTD.)
for the year ended March 31, 2020
C. Cash flows from financing activities:
Proceeds from issue of equity shares (net of issue expense(ii))
Proceeds from long-term borrowings (net of issue expenses)
Repayment of long-term borrowings
Proceeds/(repayments) of short term borrowings (net)
Payment of 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 (iii)
Effect of exchange rate on translation of foreign currency cash and cash
equivalents
Closing cash and cash equivalents (refer note 17, page 367) (iii)
Year ended
March 31, 2020
(` crore)
Year ended
March 31, 2019
187.53
8,907.35
(7,937.37)
7,666.32
(1,028.99)
10.78
(265.76)
(7,419.26)
(1,506.55)
(308.67)
(6.03)
33,343.63
(21,068.14)
(4,008.52)
(276.33)
(66.64)
(265.39)
(6,901.39)
(1,186.20)
(237.69)
(1,694.62)
3,943.75
3,270.30
518.29
7,732.34
(672.70)
(4,547.68)
7,783.50
34.48
3,270.30
(i)
(ii)
Includes ₹112.75 crore (2018-19: ₹91.62 crore) received in respect of deferred consideration on disposal of a subsidiary during the year
ended March 31, 2018.
During the year ended March 31, 2019, expenses incurred in connection with Rights Issue, 2018 pending adjustment against actual
utilisation from the issue proceeds and was fully utilised.
(iii)
Opening cash and cash equivalents includes ₹294.77 crore (2018-19: Nil) and closing cash and cash equivalents includes ₹190.38 crore
(2018-19: ₹294.77 crore) in respect of subsidiaries classified as held for sale.
(iv) Significant non-cash movements in borrowing during the year include:
(a)
addition on account of subsidiaries acquired during the year ₹121.71 crore (2018-19: ₹986.65 crore) and reduction on account of
subsidiaries disposed off, liquidated or classified as held for sale ₹182.28 crore (2018-19: ₹758.50 crore).
(b)
exchange loss (including translation) ₹4,095.03 crore (2018-19: gain ₹344.86 crore).
(c) amortisation/effective interest rate adjustments of upfront fees ₹498.76 crore (2018-19: ₹375.76 crore).
(d)
adjustment to lease obligation, increase ₹4,080.85 crore (2018-19 : decrease ₹26.35 crore).
(e) gain on refinancing treated as modification of existing borrowing ₹1,169.66 crore (2018-19: Nil).
D. Notes forming part of the consolidated financial statements
Note 1-53
In terms of our report attached
For and on behalf of the Board of Directors
For Price Waterhouse & Co Chartered Accountants LLP N. Chandrasekaran Mallika Srinivasan O. P. Bhatt
Firm Registration Number: 304026E/E-300009
Chartered Accountants
Chairman
DIN: 00121863
Director
DIN: 00037022
Director
DIN: 00548091
sd/-
sd/-
sd/-
sd/-
Peter Blauwhoff
Director
DIN: 07728872
sd/-
Deepak Kapoor
Director
DIN: 00162957
sd/-
Aman Mehta
Director
DIN: 00009364
sd/-
Russell I Parera
Partner
Membership Number 042190
Mumbai, June 29, 2020
sd/-
V. K. Sharma
Director
DIN: 02449088
sd/-
Saurabh Agrawal
Director
DIN: 02144558
sd/-
T. V. Narendran
Chief Executive Officer
& Managing Director
DIN: 03083605
sd/-
sd/-
Koushik Chatterjee Parvatheesam Kanchinadham
Executive Director &
Chief Financial Officer
DIN: 00004989
Company Secretary &
Chief Legal Officer (Corporate &
Compliance)
ACS: 15921
329
Corporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
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 BSE Limited
(BSE) and the National Stock Exchange of India Limited (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, coated steel, rebars, wire rods, tubes and wires.
The consolidated financial statements as at March 31, 2020
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 53, page 431.
The functional and presentation currency of the Company and
the presentation currency of the Group is Indian Rupee (“₹”).
As on March 31, 2020, Tata Sons Private Limited owns 32.93%
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, 2020
were approved by the Board of Directors and authorised for
issue on June 29, 2020.
2. Significant accounting policies
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 consolidated
financial statements, unless otherwise indicated.
(a) Statement of compliance
The consolidated 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 and other relevant
provisions of the Act.
(b) Basis of preparation
The consolidated 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.
330
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 the consolidated 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, fair value measurements of financial
instruments, retirement benefit obligations and non-current
assets classified as held for sale as discussed below.
Impairment
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.
Further details of the Group’s impairment review and key
assumptions are set out in notes 3, page 344, note 5, page 349,
note 6, page 350, and note 7, page 351.
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. The policy has
been detailed in note 2(n), page 335.
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
2. Significant accounting policies (Contd.)
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), page 341 and its further information are
set out in note 13, page 360.
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. Further details are set out in
notes 26, page 386 and note 40(A), page 407.
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. Further details are set out in note 45, page 417.
Retirement benefit obligations and assets
The Group’s retirement benefit obligations are subject to a
number of judgements including discount rates, inflation
and salary growth. Significant judgements are 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 judgements based on
previous experience and third party actuarial advice. Further
details on the Group’s retirement benefit obligations, including
key judgements are set out in note 39, page 396.
Non-current assets held for sale
The recognition of non-current assets (or disposal groups) as
held for sale is dependent upon whether its carrying amount
will be recovered principally through a sale transaction rather
than through continuing use. Significant judgement is required
to assess whether the sale of the assets (or disposal group) is
highly probable.
Estimation of uncertainties relating to COVID-19
Post declaration of COVID-19 as a pandemic by the World Health
Organization, the Government in India and across the world
have taken significant measures to curtail the wide spread
of virus, including country wide lockdown and restriction in
economic activities.
In view of such lockdowns, operations at the Group’s steel
making facilities in India have been scaled down from the
end week of March 2020. The Group’s overseas operations in
Europe, South East Asia and Canada have also been scaled
down over various periods and are being operated as per the
local guidelines, wherever permitted.
In view of the impact of COVID-19, the Group has assessed the
carrying amounts of property, plant and equipment, right-
of-use assets, goodwill, intangible assets, inventories, trade
receivables, investments and other financial assets. In assessing
the recoverable value of such assets, the Group has considered
various internal and external information such as existing
long-term arrangements with customer and vendor partners,
long-term business plan, cash flow forecasts and possible
future uncertainties in economic conditions because of the
pandemic including lockdowns and supply chain disruptions
across various geographies.
As per the Group’s current assessment of recoverability of these
assets, other than the impairment recorded, no significant
impact on carrying amounts of these assets is expected.
The eventual outcome of the impact of the global health
pandemic may be different from those estimated as on the
date of approval of these consolidated financial statements and
the Group continues to closely monitor the situation including
any material changes to future economic conditions and
consequential impact on its consolidated financial statements.
(d) Basis of consolidation
incorporate
the
The consolidated financial statements
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
joint arrangements and associates that are
reserves of
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
331
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
2. Significant accounting policies (Contd.)
affect those returns through its power to direct the relevant
activities of 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 acquisition 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.
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
identifiable net
from non-controlling shareholders. The
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
interest 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 shareholders’ equity.
(f) Goodwill
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 or joint 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
influence ceases. Subsequent changes in the carrying value
332
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
2. Significant accounting policies (Contd.)
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.
Where Group entity undertakes its activities under 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.
in the joint venture, unrealised
Unrealised gains on transactions between the Group and
its joint ventures are eliminated to the extent of the Group’s
interest
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 conform 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 or deemed cost
applied on transition to Ind AS, 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
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2. Significant accounting policies (Contd.)
• 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
is the establishment of access to mineral
Development
reserves
commercial
production. Development activities often continue during
production and include:
preparations
other
and
for
•
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.
334
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.
(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.
Such
liabilities are estimated case-by-case based on
available information, taking into account applicable local
legal 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) ability to use or sell the intangible asset.
(iv)
it is clear that the intangible asset will generate probable
future economic benefits.
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2. Significant accounting policies (Contd.)
(v)
resources
adequate technical, financial and other
to complete the development and to use or sell the
intangible asset are available.
(vi) 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.
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.
initial recognition,
intangible assets with
Subsequent to
definite useful lives acquired in a business combination are
reported at cost or deemed cost applied on transition to
Ind AS, less accumulated amortisation and accumulated
impairment losses.
(n)
Depreciation and amortisation of property, plant and
equipment, right-of-use assets 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 right-of-use
assets 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 right-of-use assets, over the lease period, if
shorter. The estimated useful lives of assets, residual values
and depreciation method are reviewed regularly and, when
necessary, revised.
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
Plant and machinery
Furniture, fixture and office equipments
Vehicles and aircraft
Railway sidings
Assets covered under the Electricity Act (life
as prescribed under the Electricity Act)
Patents and trademarks
Product and process development costs
Computer software
Other assets
Estimated useful
life (years)
upto 60 years*
5 years
upto 40 years*
3 to 25 years
4 to 20 years
upto 35 years*
3 to 34 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
value 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
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2. Significant accounting policies (Contd.)
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
Ind AS 116 “Leases” replaces Ind AS 17 “Leases” with effect
from April 1, 2019.
The adoption of this new Standard has resulted in the Group
recognising a right-of-use asset and related lease liability in
connection with all former operating leases except for those
identified as low-value or having a remaining lease term of less
than 12 months from the date of initial application.
approach, with
The new Standard has been applied using the modified
asset
retrospective
recognized at an amount equal to the present value of lease
liability, adjusted by the amount of any prepaid or accrued
lease payments relating to those leases. Prior periods have
not been restated.
right-of-use
the
For contracts in place at the date of initial application, the
Group has elected not to carry forward the definition of leases
as per Ind AS 17 and has therefore, applied the definition of a
lease as per Ind AS 116 to all such arrangements.
Instead of performing an impairment review on the right-of-
use assets at the date of initial application, the Group has relied
on its historic assessment as to whether leases were onerous
immediately before the date of initial application of Ind AS 116.
On transition, for leases previously accounted for as operating
leases with a remaining lease term of less than 12 months
and for leases of low-value assets the Group has applied the
optional exemptions to not recognise right-of-use assets but to
account for the lease expense on a straight-line basis over the
remaining lease term.
For those leases previously classified as finance leases, the
right-of-use asset and lease liability are measured at the date
336
of initial application at the same amounts as under Ind AS 17
“Leases” immediately before the date of initial application.
Refer note 2(p) - Significant accounting policies – Leases in the
Annual Report of the Company for the year ended March 31,
2019, Page 319 for the policy as per Ind AS 17 “Leases”.
The Group as lessee
The Group accounts for each lease component within the
contract as a lease separately from non-lease components of
the contract and allocates the consideration in the contract to
each lease component on the basis of the relative stand-alone
price of the lease component and the aggregate stand-alone
price of the non-lease components. The Group recognises
right-of-use asset representing its right to use the underlying
asset for the lease term at the lease commencement date.
The cost of the right-of-use asset measured at inception
comprises of the amount of initial measurement of the lease
liability adjusted for any lease payments made at or before the
commencement date.
Certain lease arrangements include options to extend or
terminate the lease before the end of the lease term. The right-
of-use assets and lease liabilities include these options when it
is reasonably certain that such options would be exercised.
The right-of-use assets are subsequently measured at cost
less any accumulated depreciation, accumulated impairment
losses, if any, and adjusted for any remeasurement of the lease
liability. The right-of-use assets are depreciated using the
straight-line method from the commencement date over the
shorter of lease term or useful life of right-of-use asset.
Right-of-use assets are tested for
impairment whenever
there is any indication that their carrying amounts may not
be recoverable. Impairment loss, if any, is recognised in the
consolidated statement of profit and loss.
Lease liability is measured at the present value of the lease
payments that are not paid at the commencement date of the
lease. The lease payments are discounted using the interest
rate implicit in the lease, if that rate can be readily determined.
If that rate cannot be readily determined, the Group uses
incremental borrowing rate. The lease liability is subsequently
remeasured by increasing the carrying amount to reflect
interest on the lease liability, reducing the carrying amount to
reflect the lease payments made and remeasuring the carrying
amount to reflect any reassessment or lease modifications. The
Group recognises the amount of the remeasurement of lease
liability as an adjustment to the right-of-use asset. Where the
carrying amount of the right-of-use asset is reduced to zero
and there is a further reduction in the measurement of the
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
2. Significant accounting policies (Contd.)
lease liability, the Group recognises any remaining amount
of the remeasurement in the consolidated statement of
profit and loss.
Variable lease payments not included in the measurement of
the lease liabilities are expensed to the consolidated statement
of profit and loss in the period in which the events or conditions
which trigger those payments occur.
The Group accounts for sale and lease back transaction,
recognising right-of-use assets and lease liability, measured
in the same way as other right-of-use assets and lease liability.
Gain or loss on the sale transaction is recognised in the
consolidated statement of profit and loss.
The Group as lessor
(i)
(ii)
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 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.
(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 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.
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
rather
that of
the first pit,
consecutively with
than concurrently
•
•
investment decisions are made to develop
separate
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
•
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 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
production phase if, and only if, all of the following are met:
in the
•
•
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
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2. Significant accounting policies (Contd.)
Financial assets at amortised cost
•
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, less 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 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 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
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.
(I)
Financial assets
Cash and bank balances
Cash and bank balances consist of:
Cash and cash equivalents - which include cash on
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 original maturities of less than
one year. These balances with banks are unrestricted for
withdrawal and usage.
Other bank balances
and deposits with banks that are restricted
withdrawal and usage.
include balances
for
- which
(i)
(ii)
338
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 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 believes 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 assets not measured at amortised cost or at fair value
through other comprehensive income are carried at fair value
through profit and loss.
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.
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.
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2. Significant accounting policies (Contd.)
The Group recognises life time expected credit losses for all
trade receivables that do not constitute a financing transaction.
For financial assets (apart from trade receivables that do not
constitute a financing transaction) 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 Group 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 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.
(II) 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.
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 remeasured to their fair value at the end of
each reporting period.
The Group adopts hedge accounting for forward foreign
exchange, 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 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
consolidated 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
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2. Significant accounting policies (Contd.)
Defined benefit plans
•
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
Contributions under defined contribution plans are recognised
as an expense for the period in which the employee has
rendered the service. 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.
340
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. Remeasurement 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) are recognised as an
expense within employee 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.
retirement benefit obligations
The
the
consolidated balance sheet represents the present value of
the defined benefit obligation as reduced by the fair value
of plan assets.
recognised
in
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.
(t)
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.
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
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
2. Significant accounting policies (Contd.)
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:
(i)
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
(ii)
as a result, the entity has created a valid expectation on
the part of those other parties that it will discharge such
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.
(w) Government grants
Government grants are recognised at its fair value, where
there is a reasonable assurance that such grants will be
received and compliance with the conditions attached
therewith have been met.
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. 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.
(x)
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 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.
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
341
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
2. Significant accounting policies (Contd.)
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 Group 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 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
The Group manufactures and sells a
and other products
range of steel
Sale of products
Revenue from sale of products is recognised when control of
the products has transferred, being when the products are
delivered to the customer. Delivery occurs when the products
have been shipped or delivered to the specific location as the
case may be, the risk of loss has been transferred, and either
the customer has accepted the products in accordance with
the sales contract, or the Group has objective evidence that
all criteria for acceptance have been satisfied. Sale of products
include related ancillary services, if any.
Goods are often sold with volume discounts based on
aggregate sales over a 12 months period. Revenue from
these sales is recognised based on the price specified in the
contract, net of the estimated volume discounts. Accumulated
experience is used to estimate and provide for the discounts,
using the most likely method, and revenue is only recognised
to the extent that it is highly probable that a significant reversal
will not occur. A liability is recognised for expected volume
discounts payable to customers in relation to sales made until
the end of the reporting period. No element of financing is
deemed present as the sales are generally made with a credit
term of 30-90 days, which is consistent with market practice.
Any obligation to provide a refund is recognised as a provision.
A receivable is recognised when the goods are delivered as
this is the point in time that the consideration is unconditional
because only the passage of time is required before the
payment is due.
The Group does not have any contracts where the period
between the transfer of the promised goods or services to the
customer and payment by the customer exceeds one year. As a
consequence, the Group does not adjust any of the transaction
prices for the time value of money.
Sale of power
Revenue from sale of power is recognised when the services
are provided to the customer based on approved tariff rates
established by the respective regulatory authorities. The
Group doesn’t recognise revenue and an asset for cost incurred
in the past that will be recovered.
(aa) Foreign currency transactions and translation
The consolidated financial statements of the Group are
presented in Indian Rupee (“₹”), 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
342
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
2. Significant accounting policies (Contd.)
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 Standards” 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
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.
(ab) 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 consolidated statement of profit and 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 recognised as borrowing costs.
All other borrowing costs are recognized as expenses in the
period in which it is incurred.
(ac) Earnings per share
Basic earnings per share
is 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 is computed using the weighted
average number of shares and dilutive potential shares except
where the result would be anti-dilutive.
(ad) Recent accounting pronouncements
Amendment to Ind AS 12 “Income Tax” - Insertion of
Appendix C, “Uncertainty over Income tax treatments”
The amendment intends to bring clarity to the accounting for
uncertainties on income tax treatments that have yet to be
accepted by tax authorities, and to reflect it in the measurement
of current and deferred taxes.
The Group has applied the amendments prospectively for
annual reporting periods beginning on or after April 1, 2019.
There is no material impact on the Group due to the application
of above amendment.
Amendment to Ind AS 23 “Borrowing Costs”
The amendment clarifies that if any specific borrowing remains
outstanding after the related asset is ready for its intended
use or sale, that borrowing becomes part of the funds that an
entity borrows generally when calculating the capitalization
rate on general borrowings.
The Group has applied the amendments prospectively for
annual reporting periods beginning on or after April 1, 2019.
There is no material impact on the Group due to the application
of above amendment.
There is no new standard or amendment to the existing
standards which would be effective for annual periods
beginning on or after April 1, 2020.
343
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
3. Property, plant and equipment
[Item No. I(a), Page 322]
Land
including
roads
Buildings
Plant and
machinery
Furniture,
fixtures
and office
equipments
(FFOE)
Vehicles
Railway
sidings
Leased
FFOE
and
vehicles
(` crore)
Total
Cost/deemed cost as at April 1, 2019
Addition relating to acquisitions
Additions
Disposals
Disposal of group undertakings
Other re-classifications
Exchange differences on consolidation
Cost/deemed cost as at March 31, 2020
Accumulated impairment as at April 1, 2019
Charge for the year
Disposals
Disposal of group undertakings
Other re-classifications
Exchange differences on consolidation
Accumulated impairment as at March 31, 2020
Accumulated depreciation as at April 1, 2019
Charge for the year
Disposals
Disposal of group undertakings
Other re-classifications
Exchange differences on consolidation
Accumulated depreciation as at March 31, 2020
Total accumulated depreciation and
impairment as at March 31, 2020
306.71
1,851.24
(33.14)
-
(499.63)
420.26
17,126.35
118.14
238.36
(8.84)
-
(23.62)
158.39
21,752.60 1,27,435.12
4,808.53
6,045.15
(960.53)
(143.13)
(5,434.76)
2,587.64
17,608.78 23,798.04 1,34,338.02
2,231.25
2,180.04
(158.63)
(0.14)
(101.51)
164.13
4,315.14
41,190.29
6,281.90
(472.92)
(124.93)
(2,266.86)
1,656.12
46,263.60
50,578.74
221.84
1.30
(2.78)
-
(10.97)
16.18
225.57
5,040.20
824.02
(14.19)
-
(171.75)
243.55
5,921.83
6,147.40
295.97
-
-
-
-
13.18
309.15
610.31
135.73
-
-
(0.53)
(0.03)
745.48
1,054.63
739.46
3.19
79.48
(33.32)
-
6.48
0.30
795.59
20.60
0.11
(0.90)
-
-
(0.12)
19.69
455.95
102.23
(28.86)
-
7.58
(1.84)
535.06
554.75
398.38
1.04
79.21
(12.22)
-
(0.32)
0.33
466.42
0.07
-
(0.02)
-
0.01
-
0.06
185.58
36.39
(8.33)
-
(0.31)
0.11
213.44
213.50
1,548.97
23.63
19.31
(9.84)
-
(251.44)
5.33
1,69,001.90
1.02
5,261.24
-
8,312.75
-
(1,057.89)
-
(143.13)
-
(6,204.31)
(1.02)
-
3,172.25
- 1,335.96 1,78,342.81
2,786.98
-
2,181.45
-
(162.33)
-
(0.14)
-
(112.47)
-
193.94
-
4,887.43
-
47,763.95
0.72
7,435.03
-
(524.48)
-
(124.93)
-
(2,500.16)
(0.72)
1,901.99
-
53,951.40
-
58,838.83
-
17.25
-
-
-
-
0.57
17.82
280.90
54.76
(0.18)
-
(67.57)
4.08
271.99
289.81
0.30
1,250.82
1,18,450.97
- 1,046.15 1,19,503.98
Net carrying value as at April 1, 2019
Net carrying value as at March 31, 2020
16,220.07
16,490.56
16,554.15 17,650.64
84,013.58
83,759.28
262.91
240.84
212.73
252.92
344
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
3. Property, plant and equipment (Contd.)
[Item No. I(a), Page 322]
Land
including
roads
Buildings
Plant and
machinery
Cost/deemed cost as at April 1, 2018
Addition relating to acquisitions
Additions
Disposals
Disposal of group undertakings
Classified as held for sale
Other re-classifications
Exchange differences on consolidation
Cost/deemed cost as at March 31, 2019
Accumulated impairment as at April 1, 2018
Charge for the year
Disposals
Classified as held for sale
Other re-classifications
Exchange differences on consolidation
Accumulated impairment as at March 31, 2019
Accumulated depreciation as at April 1, 2018
Charge for the year
Disposals
Disposal of group undertakings
Classified as held for sale
Other re-classifications
Exchange differences on consolidation
Accumulated depreciation as at March 31, 2019
Total accumulated depreciation and
impairment as at March 31, 2019
Net carrying value as at April 1, 2018
Net carrying value as at March 31, 2019
9,350.84
882.99
(115.15)
-
(329.39)
(29.50)
(155.01)
16,955.23
411.09
156.89
(54.42)
-
(261.75)
(9.78)
(70.91)
12,147.82 1,04,889.43
19,608.03
6,839.39
(760.65)
(124.17)
(1,322.04)
(446.10)
(1,248.77)
17,126.35 21,752.60 1,27,435.12
2,302.85
126.84
(20.92)
153.84
(291.28)
(40.08)
2,231.25
37,222.31
6,205.14
(641.19)
(28.06)
(575.92)
(177.61)
(814.38)
5,040.20 41,190.29
5,262.04 43,421.54
322.29
-
(7.56)
-
(9.64)
(9.12)
295.97
505.09
118.49
-
-
(14.95)
(1.73)
3.41
610.31
906.28
283.11
0.55
(33.58)
-
(17.81)
(10.43)
221.84
4,607.35
735.67
(53.86)
-
(139.88)
(7.55)
(101.53)
Furniture,
fixtures
and office
equipments
(FFOE)
667.95
35.70
153.45
(22.34)
(3.58)
(137.61)
31.51
14.38
739.46
4.81
19.97
(1.14)
(2.99)
(0.17)
0.12
20.60
419.27
114.50
(22.46)
(2.31)
(97.54)
31.61
12.88
455.95
476.55
Vehicles
Leased
FFOE and
vehicles
Railway
sidings
(` crore)
Total
342.70
8.84
93.50
(21.89)
(4.35)
(17.18)
(3.52)
0.28
398.38
0.48
-
0.93
(1.23)
(0.07)
(0.04)
0.07
181.42
37.35
(20.04)
(2.25)
(10.74)
(0.36)
0.20
185.58
185.65
97.44
63.62
(20.06)
-
-
-
10.74
1,397.23 1,36,401.14
0.78
29,511.94
-
8,193.31
3.47
(994.51)
-
(132.10)
-
(2,071.69)
(3.72)
(456.95)
0.44
(1,449.24)
0.05
1.02 1,548.97 1,69,001.90
2,931.12
147.36
(62.27)
149.62
(318.97)
(59.88)
2,786.98
43,147.24
7,280.08
(737.55)
(32.62)
(839.14)
(155.20)
(898.86)
47,763.95
50,550.93
17.58
-
-
-
-
(0.33)
17.25
211.44
68.91
-
-
-
-
0.55
280.90
298.15
-
-
-
-
-
-
-
0.36
0.02
-
-
(0.11)
0.44
0.01
0.72
0.72
65,364.27
7,257.36
16,127.85
16,220.07 16,490.56 84,013.58
243.87
262.91
160.80
212.73
1,168.21
90,322.78
0.42
0.30 1,250.82 1,18,450.97
(i)
For the year ended March 31, 2020, other re-classifications primarily include assets under finance leases of ₹3,521.77 crore (net of
accumulated depreciation and impairment), reclassified to right-of-use assets on adoption of Ind AS 116 “Leases”.
345
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
3. Property, plant and equipment (Contd.)
[Item No. I(a), Page 322]
(ii) 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, 2020
As at
March 31, 2019
228.64
162.57
66.07
566.95
392.18
174.77
240.84
216.84
147.62
69.22
522.62
328.93
193.69
262.91
(iii)
(iv)
(v)
₹241.00 crore (2018-19: ₹ 206.01 crore) of borrowing costs have been capitalised during the year on qualifying assets under construction.
The capitalisation rate ranges between 6.07% to 9.34% (2018-19: 7.00% to 9.80%).
Rupee liability has increased by ₹129.42 crore (2018-19: ₹ 108.32 crore) arising out of retranslation of the value of long-term foreign
currency loans and liabilities for procurement of property, plant and equipment, generally plant and machinery. 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 ₹4.32 crore (2018-19: ₹ 3.57 crore) on account of this adjustment.
During the year ended March 31, 2020, the Group considered indicators of impairment for its cash generating units ('CGUs') within the
steel, mining and other business operations, such as decline in operational performance, changes in the outlook of future profitability
or weaker market conditions, among other potential indicators. In respect of CGUs where indicators of impairment were identified, the
Group estimated the recoverable amount based on the value in use.
The outcome of the test as on March 31, 2020 resulted in the Group recognising a net impairment charge of ₹3,024.81 crore (2018-19:
₹118.08 crore) in respect of property, plant and equipment including capital work-in-progress. The impairment charge is contained
within the Indian, European and Overseas mining businesses.
Within the Indian steel business operations, the Group has recognized a net impairment reversal of ₹45.97 crore (2018-19: impairment
charge ₹8.54 crore). The impairment reversed/recognized is included within other expenses in the consolidated statement of
profit and loss.
Within the Indian other business operations, the Group has recognised an impairment charge of ₹168.54 crore (2018-19: ₹2.86 crore).
The impairment recognised during the year primarily relates to the business of developing infrastructure and related facilities in an
industrial park and leasing thereof. The value in use was computed using risk adjusted cash flow forecasts based on the most recently
approved financial budgets and strategic forecasts which cover a period of 5 years and future projections taking the analysis out to
the period over which the Group expects to use the underlying assets. Key assumptions for the value in use computation are those
regarding land area developed and subleased over the period, lease rentals/premium from subleasing and a discount rate of 12.10% p.a.
The impairment recognised is included within exceptional items in the consolidated statement of profit and loss.
346
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
3. Property, plant and equipment (Contd.)
[Item No. I(a), Page 322]
Within the European business, wherever triggers existed, the assumptions used for impairment test of property, plant and equipment
(including capital work in progress) as at March 31, 2020 were consistent with that used for the annual impairment test of goodwill as
at March 31, 2020. The outcome of the test indicated that, using a discount rate of 8.00% p.a. (2018-19: 8.20% p.a.), property, plant and
equipment (including capital work in progress) in the European business had a value in use which was lower than its carrying value.
Accordingly, an impairment charge of ₹2,224.61 crore (2018-19: ₹106.68 crore) has been recognised. The impairment primarily relates
to the Strip Products UK business. Out of the impairment recognised, ₹2,187.79 crore is included within exceptional items and ₹36.82
crore is included within other expenses in the consolidated statement of profit and loss.
Within the overseas mining business, the Group has recognised an impairment charge ₹677.63 crore in respect of mining operations
carried out in Canada. The value in use was computed using cash flow forecasts based on the most recently approved financial budgets
which cover a period of 5 years and future projections taking the analysis out to the period over which the Group has the right to use
the underlying assets discounted using a discount rate of 10.00% p.a. The impairment recognised is included within exceptional items
in the consolidated statement of profit and loss.
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, 2020 of ₹2,338.38 crore (March 31, 2019: ₹3,358.46 crore) and the overseas Canadian mining business which had a carrying value
as at March 31, 2020 of ₹6,448.75 crore (March 31, 2019: ₹6,175.14 crore). In relation to the Strip Products UK business, the value in use
is dependent on an improvement to UK steel market margins, the implementation of a business transformation plan and assumptions
regarding the level of future capital expenditure. For the mining operations in Canada, the value in use is dependent on commodity
prices and realisation of cost savings in operation. A reasonably possible change in any of these key assumptions would increase the
likelihood of impairment losses in the future.
(vi)
The details of property, plant and equipment pledged against borrowings is presented in note 24, page 381.
347
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
4. Leases
The Group’s significant leasing arrangements relate to assets specifically set up for dedicated use by the Group under long-term
arrangements and time charter of vessels. Other leases include land, office space, equipment, vehicles and some IT equipment.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. Each lease generally
imposes a restriction that, unless there is a contractual right for the Group to sublet the asset to another party, the right-of-use asset can
only be used by the Group. Extension and termination options are included in a number of property and equipment leases. These are
used to maximise operational flexibility in terms of managing the assets used in the Group’s operations. Majority of the extension and
termination options held are exercisable based on mutual agreement of the Group and the respective lessor.
With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the balance sheet as a right-
of- use asset and a lease liability. Payments made under such leases are expensed on a straight-line basis over the lease term.
Variable lease payments which do not depend on an index or a rate (such as lease payments based on a percentage of sales) are excluded
from the initial measurement of the lease liability and asset.
For leases recognized under long-term arrangements involving use of a dedicated asset, non-lease components are excluded based on
the underlying contractual terms and conditions. A change in the allocation assumptions may have an impact on the measurement of
lease liabilities and the related right-of-use assets.
On adoption of Ind AS 116 “Leases” with effect from April 1, 2019, the Group elected to apply the modified retrospective transition method.
Accordingly, on transition, right-of-use assets of ₹2,940.10 crore were measured at an amount equal to lease liabilities. In addition, an
amount of ₹1,915.66 (net of accumulated amortisation) crore in respect of right of use of land was re-classified from other assets to right-
of-use assets. The right-of-use assets was reduced by ₹76.24 crore on account of provisions held in respect of onerous lease contracts
and by ₹149.98 crore for sub leases recognised on transition.
The weighted average incremental borrowing rate applied to lease liabilities recognised under Ind AS 116 “Leases” was in the range of
4.60% to 12.63%.
The reconciliation of total operating lease commitments as at March 31, 2019 to the lease liabilities recognised on transition is as below:
Particulars
Operating lease commitments as at March 31, 2019
Short-term leases
Low-value leases
Service/non-lease components
Extension and termination options
Changes in the index or rate affecting variable payments
Contracts recognised as leases on transition to Ind AS 116 “Leases”
Undiscounted operating lease commitments as at April 1, 2019
Effect of discounting
Classified as held for sale
Lease liabilities for operating leases as at April 1, 2019
Finance lease obligation as at March 31, 2019
Lease liabilities as at April 1, 2019
(` crore)
Amount
4,310.72
(204.48)
(0.98)
(133.03)
105.90
(231.75)
496.59
4,342.97
(1,184.25)
(218.62)
2,940.10
3,853.30
6,793.40
During the year ended March 31, 2020, the Group recognised the following in the consolidated statement of profit and loss:
(i) expense in respect of short-term leases and leases of low- value assets ₹89.06 crore and ₹10.62 crore respectively.
(ii) expense in respect of variable lease payments not included in the measurement of lease liabilities ₹508.04 crore.
348
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
4. Leases (Contd.)
(iii) income in respect of sub leases of right-of-use assets ₹7.84 crore.
(iv) loss on sale and leaseback transaction entered during the year ₹0.45 crore.
During the year ended March 31, 2020, total cash outflow in respect of leases amounted to ₹2,308.40 crore.
As at March 31, 2020, commitments for leases not yet commenced was ₹396.68 crore.
5. Right-of-use assets
[Item No. I(c), Page 322]
Cost as at April 1, 2019
Addition on account of transition to Ind AS 116
"Leases"
Addition relating to acquisitions
Additions
Disposals
Disposal of group undertakings
Other re-classifications
Exchange differences on consolidation
Cost as at March 31, 2020
Accumulated impairment as at April 1, 2019
Charge for the year
Disposals
Other re-classifications
Exchange differences on consolidation
Accumulated impairment as at March 31, 2020
Accumulated depreciation as at April 1, 2019
Charge for the year
Disposals
Disposal of group undertakings
Other re-classifications
Exchange differences on consolidation
Accumulated depreciation as at March 31, 2020
Total accumulated depreciation and
impairment as at March 31, 2020
Net carrying value as at April 1, 2019
Net carrying value as at March 31, 2020
Right-of-use
land
Right-
of-use
buildings
Right-of-use
plant and
machinery
Right-of-use
furniture, fixtures
and office
equipments
(` crore)
Right-
of-use
vehicles
Right-of-
use railway
sidings
Total
right-of-use
assets
-
59.57
-
902.55
-
1,727.07
159.95
39.71
-
-
1,983.43
1.53
2,244.19
-
24.03
-
-
-
24.03
-
41.02
-
-
66.41
0.01
107.44
131.47
3.30
727.55
(74.97)
(92.22)
539.35
78.96
2,084.52
-
54.29
(59.40)
86.93
3.05
84.87
-
209.49
(13.18)
(3.94)
173.91
16.03
382.31
467.18
119.12
318.84
(100.14)
-
5,416.42
94.78
7,576.09
-
15.25
-
1.00
0.31
16.56
-
665.22
(85.02)
-
2,472.74
47.36
3,100.30
3,116.86
-
17.52
-
0.12
(0.05)
-
3.61
(1.94)
19.26
-
-
-
-
-
-
-
2.44
(0.01)
-
0.71
0.04
3.18
3.18
71.28
-
73.00
(2.60)
-
-
6.77
148.45
-
-
-
-
-
-
-
42.08
(1.67)
-
-
1.91
42.32
42.32
-
12.13
-
2,790.12
-
5.26
-
-
302.45
20.04
282.37
1,164.48
(177.76)
(92.22)
8,245.26
200.14
339.88 12,412.39
-
93.57
(59.40)
87.93
3.36
125.46
-
986.67
(99.88)
(3.94)
2,783.04
71.26
3,737.15
3,862.61
-
-
-
-
-
-
-
26.42
-
-
69.27
5.91
101.60
101.60
-
2,112.72
-
1,617.34
-
4,459.23
-
16.08
-
106.13
-
238.28
-
8,549.78
(i)
During the year ended March 31, 2020, the Group recognised an impairment charge of ₹93.57 crore against right-of-use assets contained
within the Indian and European operations. Out of the impairment recognised, ₹93.18 crore is included within exceptional items and
₹0.39 crore is included within other expenses.
349
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
6. Goodwill on consolidation
[Item No. I(d), Page 322]
Cost as at beginning of the year
Addition relating to acquisitions
Disposal of group undertakings
Exchange differences on consolidation
Cost as at end of the year
Impairment as at beginning of the year
Charge for the year
Disposal of group undertakings
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
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
5,388.13
5.66
(11.22)
169.44
5,552.01
1,391.51
70.00
(11.22)
47.19
1,497.48
3,996.62
4,054.53
5,517.55
-
(28.47)
(100.95)
5,388.13
1,418.10
-
-
(26.59)
1,391.51
4,099.45
3,996.62
(i)
The carrying value of goodwill predominantly relates to the goodwill that arose on the acquisition of erstwhile Corus Group Plc. and has
been tested in both periods against the recoverable amount of Strip Products Mainland Europe cash generating unit (CGU) by 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 or 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, which equates to the remaining economic life of the assets. Key assumptions
for the value in use calculation are those regarding expected changes to selling prices and raw material costs, steel demand in European
Union, exchange rates, business disruption caused by the COVID-19 pandemic and a discount rate of 8.00% p.a. (March 31, 2019: 8.20%
p.a.). Changes in selling prices, raw material costs, exchange rates and steel demand in European Union are based on expectations of
future changes in the steel market based on external market sources. A Nil (March 31, 2019: 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 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, 2020 for the Strip Products Mainland Europe CGU resulted in no impairment of goodwill
(2018-19: 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.
(ii)
The Group has conducted an impairment assessment to test the recoverability of the carrying value of its goodwill with respect to one
of its Indian subsidiaries, representing a single cash generating unit, engaged in the business of generation and supply of power. The
recoverable amount of the CGU related to such goodwill have been derived from value in use calculations. The calculation uses cash
flow forecasts based on the most recently approved financial budgets and future projections for 23 years. Key assumptions for the value
in use calculation are forecasted power tariff as per the power purchase agreement net of operational and maintenance charges and
a discount rate of 12.10% p.a. (March 31, 2019: 12.10% p.a.) A Nil (March 31, 2019: Nil) growth rate is used to extrapolate the cash flow
projections beyond five-year period up to 23 years. The pre-tax discount rate is derived from the Company’s weighted average cost
of capital. The outcome of the Group’s goodwill impairment test as at March 31, 2020 has resulted in an impairment of ₹70.00 crore
(2018-19: Nil), which is recognised within exceptional items in the consolidated statement of profit and loss.
350
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
6. Goodwill on consolidation (Contd.)
[Item No. I(d), Page 322]
(iii)
Addition to Goodwill during the year ended March 31, 2020 relates to the acquisition of the steel business of Usha Martin Limited by Tata
Steel Long Products Limited (formerly known as Tata Sponge Iron Limited), a subsidiary of the group. Detailed disclosure in respect of
the acquisition is provided in note 42, page 412.
Disposal of group undertakings during the year ended March 31, 2020 primarily relates to disposal of Kalimati Coal Company Pty. Ltd., a
subsidiary of the Group.
For the year ended March 31, 2019 disposal of group undertakings relates to disposal of Black Ginger 461 (Proprietary) Ltd, a subsidiary
of the Group. Detailed disclosure in respect of the disposal is provided in note 43, page 414.
7. Other intangible assets
[Item No.I(e), Page 322]
Cost/deemed cost as at April 1, 2019
Addition relating to acquisitions
Additions
Disposals
Other re-classifications
Exchange differences on consolidation
Cost/deemed cost as at March 31, 2020
Accumulated impairment as at April 1, 2019
Charge for the year
Other re-classifications
Exchange differences on consolidation
Accumulated impairment as at March 31, 2020
Accumulated amortisation as at April 1, 2019
Charge for the year
Disposals
Other re-classifications
Exchange differences on consolidation
Accumulated amortisation as at March 31, 2020
Total accumulated amortisation and impairment
as at March 31, 2020
Net carrying value as at April 1, 2019
Net carrying value as at March 31, 2020
28.44
-
0.01
-
-
0.81
29.26
11.23
-
-
0.37
11.60
9.17
0.11
-
-
0.13
9.41
21.01
8.04
8.25
Patents
and
trademarks
Development
costs
Software
costs
Mining
assets
Other
intangible
assets
268.28
-
-
-
-
18.12
286.40
-
-
-
-
-
244.18
16.81
0.06
-
17.40
278.45
278.45
569.55
-
308.85
(3.62)
0.08
29.25
904.11
21.71
3.69
(0.46)
1.14
26.08
358.45
96.06
(3.60)
(1.01)
14.66
464.56
490.64
2,473.97
315.20
0.02
-
-
50.79
2,839.98
135.44
-
-
8.88
144.32
1,154.60
74.63
-
-
-
1,229.23
1,373.55
697.81
-
0.24
(14.72)
(3.31)
-
680.02
30.65
-
-
-
30.65
78.30
39.52
(14.72)
-
-
103.10
133.75
(` crore)
Total
4,038.05
315.20
309.12
(18.34)
(3.23)
98.97
4,739.77
199.03
3.69
(0.46)
10.39
212.65
1,844.70
227.13
(18.26)
(1.01)
32.19
2,084.75
2,297.40
24.10
7.95
189.39
413.47
1,183.93
1,466.43
588.86
546.27
1,994.32
2,442.37
351
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
7. Other intangible assets (Contd.)
[Item No.I(e), Page 322]
Cost/deemed cost as at April 1, 2018
Addition relating to acquisitions
Additions
Disposals
Disposal of group undertakings
Classified as held for sale
Other re-classifications
Exchange differences on consolidation
Cost/deemed cost as at March 31, 2019
Accumulated impairment as at April 1, 2018
Charge for the year
Exchange differences on consolidation
Accumulated impairment as at March 31, 2019
Accumulated amortisation as at April 1, 2018
Charge for the year
Disposals
Disposal of group undertakings
Classified as held for sale
Other re-classifications
Exchange differences on consolidation
Accumulated amortisation as at March 31, 2019
Total accumulated amortisation and impairment
as at March 31, 2019
Net carrying value as at April 1, 2018
Net carrying value as at March 31, 2019
Patents
and
trademarks
Development
costs
Software
costs
Mining
assets
Other
intangible
assets
278.81
-
-
-
-
-
-
(10.53)
268.28
-
-
-
-
224.34
29.44
-
-
-
-
(9.60)
244.18
244.18
530.68
0.10
90.16
(24.23)
(0.45)
(24.86)
3.03
(4.88)
569.55
0.47
21.70
(0.46)
21.71
310.79
92.51
(24.23)
(0.31)
(18.75)
(1.00)
(0.56)
358.45
380.16
2,517.52
-
185.47
-
(236.09)
-
-
7.07
2,473.97
125.61
3.06
6.77
135.44
1,103.91
148.98
-
(93.08)
-
-
(5.21)
1,154.60
1,290.04
184.17
512.80
0.84
-
-
-
-
-
697.81
30.65
-
-
30.65
37.40
40.90
-
-
-
-
-
78.30
108.95
(` crore)
Total
3,525.17
512.90
292.47
(25.42)
(236.54)
(24.86)
3.03
(8.70)
4,038.05
156.73
36.12
6.18
199.03
1,685.78
312.36
(24.86)
(93.39)
(18.75)
(1.00)
(15.44)
1,844.70
2,043.73
13.99
-
16.00
(1.19)
-
-
-
(0.36)
28.44
-
11.36
(0.13)
11.23
9.34
0.53
(0.63)
-
-
-
(0.07)
9.17
20.40
4.65
8.04
54.47
24.10
219.42
189.39
1,288.00
1,183.93
116.12
588.86
1,682.66
1,994.32
(i)
(ii)
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.
During the year ended March 31, 2020, the Group recognised an impairment charge of ₹3.69 crore in respect of intangible assets in its
European operations. The impairment recognised is included within other expenses in the consolidated statement of profit and loss.
For the year ended March 31, 2019, the Group recognized an impairment charge of ₹68.39 crore with respect to intangible assets
(including intangible assets under development) included within Indian operations: ₹5.24 crore and European operations: ₹63.15 crore.
The impairment recognised was included within other expenses in the consolidated statement of profit and loss.
(iii)
For the year ended March 31, 2020, other re-classifications primarily include ₹3.31 crore (net of accumulated amortisation and
impairment), reclassified to right-of-use assets on adoption of Ind AS 116 “Leases”.
352
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
8. Equity accounted investments
[Item No.I(g), Page 322]
(a)
Investment in associates:
(i)
The Group has no material associates as at March 31, 2020. 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
As at
March 31, 2020
(` crore)
As at
March 31, 2019
161.84
155.86
Year ended
March 31, 2020
16.27
(1.46)
14.81
(` crore)
Year ended
March 31, 2019
19.40
1.63
21.03
(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, 2020 is ₹31.92 crore (March 31, 2019: ₹62.07 crore). The carrying value of such investments is Nil (March 31, 2019: 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 ₹62.20 crore for the year ended March 31, 2020 (2018-
19: ₹9.41 crore). Cumulative share of unrecognised losses in respect of equity accounted associates as at March 31, 2020 amounted to
₹140.15 crore. (March 31, 2019: ₹77.95 crore)
(b)
Investment in joint ventures:
(i)
The Group holds more than 50% of the equity share capital in TM International Logistics Limited, Jamshedpur Continuous Annealing
& Processing Company Private Limited and TM Mining Company Limited. However, decisions in respect of activities which significantly
affect the risks and rewards of these businesses, require a unanimous consent of all the shareholders. These entities have therefore been
considered as joint ventures.
(ii)
The Group has no material joint ventures as at March 31, 2020. The aggregate summarised financial information in respect of the Group’s
immaterial joint ventures accounted for using the equity method is as below.
Carrying value of Group’s interest in joint ventures*
(` crore)
As at
March 31, 2020
As at
March 31, 2019
2,006.70
1,767.09
353
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
8. Equity accounted investments (Contd.)
[Item No.I(g), Page 322]
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
Year ended
March 31, 2020
171.70
24.15
195.85
(` crore)
Year ended
March 31, 2019
205.30
2.76
208.06
(iii)
Share of unrecognised losses in respect of equity accounted joint ventures amounted to ₹78.42 crore for the year ended March 31,
2020 (2018-19: ₹58.86 crore). Cumulative share of unrecognised losses in respect of equity accounted joint ventures as at March 31, 2020
amounted to ₹1,356.19 crore. (March 31, 2019: ₹1,297.94 crore).
(iv)
During the year ended March 31, 2020, the Group has recognised an impairment of Nil (2018-19: ₹0.06 crore) in respect of its equity
accounted joint ventures.
(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, 2020
161.84
2,006.70
2,168.54
Year ended
March 31, 2020
16.27
171.70
187.97
(` crore)
As at
March 31, 2019
155.86
1,767.09
1,922.95
(` crore)
Year ended
March 31, 2019
19.40
205.30
224.70
(e) Summary of Group’s share in other comprehensive income for the year of equity accounted investees:
Share of other comprehensive income of immaterial associates
Share of other comprehensive income of immaterial joint ventures
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
(1.46)
24.15
22.69
1.63
2.76
4.39
*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.
354
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
9.
Investments
[Item No. I(h)(i) and II(b)(i), Page 322]
A. Non-current
(a)
Investments carried at amortised cost:
Investment in government or trust securities
Investment in bonds and debentures
Investment in preference shares
(b)
Investments carried at fair value through other comprehensive income:
Investment in equity shares#
(c)
Investments carried at fair value through profit and loss:
Investment in bonds and debentures
Investment in preference shares
Investment in equity shares
Investment in mutual funds
B. Current
Investments carried at fair value through profit and loss:
Investment in mutual funds
(i)
Carrying value and market value of quoted and unquoted investments is as below:
(a)
Investments in quoted instruments:
Aggregate carrying value
Aggregate market value
(b)
Investments in unquoted instruments:
Aggregate carrying value
(` crore)
As at
March 31, 2020
As at
March 31, 2019
14.58
0.11
71.15
85.84
506.87
506.87
49.74
-
42.32
-
92.06
684.77
0.02
0.20
64.99
65.21
756.39
756.39
49.74
250.00
60.75
108.27
468.76
1,290.36
As at
March 31, 2020
(` crore)
As at
March 31, 2019
3,431.87
3,431.87
2,524.86
2,524.86
(` crore)
As at
March 31, 2020
As at
March 31, 2019
205.02
205.02
454.53
454.53
3,911.62
3,360.69
(ii)
Cumulative gain on de-recognition of investments during the year which were carried at fair value through other comprehensive
income amounted to ₹6.60 crore (2018-19: ₹31.06 crore). Fair value of such investments as on the date of de-recognition was ₹7.49
crore (2018-19 : ₹40.78 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.
355
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
10. Loans
[Item No. I(h)(ii) and II(b)(v)], Page 322]
A. Non-current
(a) Security deposits
Considered good–Unsecured
Credit impaired
Less: Allowance for credit losses
(b) Loans to related parties
Considered good–Unsecured
Credit impaired
Less: Allowance for credit losses
(c) Other loans
Considered good–Unsecured
Credit impaired
Less: Allowance for credit losses
B. Current
(a) Security deposits
Considered good–Unsecured
Credit impaired
Less: Allowance for credit losses
(b) Loans to related parties
Considered good–Unsecured
Credit impaired
Less: Allowance for credit losses
(c) Other loans
Considered good–Unsecured
Credit impaired
Less: Allowance for credit losses
356
As at
March 31, 2020
(` crore)
As at
March 31, 2019
237.36
3.62
3.62
237.36
7.63
193.93
193.93
7.63
243.72
1,464.18
1,464.18
243.72
488.71
254.98
2.07
2.07
254.98
7.37
188.67
188.67
7.37
350.99
1,382.53
1,382.53
350.99
613.34
(` crore)
As at
March 31, 2020
As at
March 31, 2019
64.11
82.33
82.33
64.11
27.60
907.89
907.89
27.60
123.97
2.09
2.09
123.97
215.68
91.16
151.75
151.75
91.16
27.60
831.55
831.55
27.60
120.94
2.08
2.08
120.94
239.70
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
10. Loans (Contd.)
[Item No. I(h)(ii) and II(b)(v)], Page 322]
(i)
(ii)
Security deposits are primarily in relation to public utility services and rental agreements. It includes deposit with Tata Sons Private
Limited ₹1.25 crore (March 31, 2019: ₹1.25 crore).
Non-current loans to related parties represent loans given to joint ventures ₹193.93 crore (March 31, 2019: ₹185.37 crore) and associates
₹7.63 crore (March 31, 2019: ₹10.67 crore) out of which ₹193.93 crore (March 31, 2019: ₹185.37 crore) and Nil crore (March 31, 2019: ₹3.30
crore) respectively is impaired.
(iii)
Current loans to related parties represent loans/advances to joint ventures ₹935.49 crore (March 31, 2019: ₹859.15 crore) out of which
₹907.89 crore (March 31, 2019: ₹831.55 crore) is impaired.
11. Other financial assets
[Item No. I(h)(iv) and II(b)(vii), Page 322]
A. Non-current
(a)
Interest accrued on deposits, loans and advances
Considered good–Unsecured
Credit impaired
Less: Allowance for credit losses
(b)
Earmarked balances with banks
(c) Other balances with banks
(d) Others
Considered good–Unsecured
Credit impaired
Less: Allowance for credit losses
(` crore)
As at
March 31, 2020
As at
March 31, 2019
1.78
0.27
0.27
1.78
61.88
0.29
524.98
164.05
164.05
524.98
588.93
84.41
0.27
0.27
84.41
70.80
0.19
414.66
148.34
148.34
414.66
570.06
357
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
11. Other financial assets (Contd.)
[Item No. I(h)(iv) and II(b)(vii), Page 322]
B. Current
(a)
Interest accrued on deposits, loans and advances
Considered good–Unsecured
Credit impaired
Less: Allowance for credit losses
(b) Others
Considered good- Unsecured
Credit impaired
Less: Allowance for credit losses
(` crore)
As at
March 31, 2020
As at
March 31, 2019
33.93
20.42
20.42
33.93
412.49
1.87
1.87
412.49
446.42
42.10
216.08
216.08
42.10
1,206.46
5.17
5.17
1,206.46
1,248.56
(i)
Non-current earmarked balances with banks 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)
Current other financial assets include amount receivable from post-employment benefit funds ₹57.26 crore (March 31, 2019: ₹769.20
crore) on account of retirement benefit obligations paid by the Group directly.
12. Retirement benefit assets and obligations
[Item No. I(i), II(c), V(c) and VI(c), Pages 322 and 323]
(I) Retirement benefit assets
A. Non-current
(a)
(b)
Pension
Retiring gratuities
B.
Current
(a)
Retiring gratuities
358
As at
March 31, 2020
27,278.03
0.42
27,278.45
(` crore)
As at
March 31, 2019
19,963.75
0.44
19,964.19
As at
March 31, 2020
(` crore)
As at
March 31, 2019
-
4.38
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
12. Retirement benefit assets and obligations (Contd.)
[Item No. I(i), II(c), V(c) and VI(c), Pages 322 and 323]
(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
(` crore)
As at
March 31, 2020
As at
March 31, 2019
1,150.49
625.82
1,490.54
331.33
3,598.18
1,072.64
120.36
1,214.83
245.63
2,653.46
As at
March 31, 2020
9.25
18.62
95.85
17.54
141.26
(` crore)
As at
March 31, 2019
7.37
4.51
92.66
16.15
120.69
(i) Detailed disclosure in respect of post-retirement defined benefit schemes is provided in note 39, page 396.
(ii) Other defined benefits include post-retirement lumpsum benefits, long service awards, packing and transportation, farewell gifts etc.
359
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
13. Income taxes
[Item No. I(k) and V(e), Pages 322 and 323]
A.
Income tax expenses/(benefit)
Indian companies are subject to income tax in India on the basis of their standalone financial statements. Indian 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. 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.
Section 115BAA has been inserted in the Income Tax Act, 1961 vide Taxation Laws (Amendment) Ordinance, 2019 (subsequently enacted on
December 11, 2019 as The Taxation Laws (Amendment) Act, 2019) which provides a domestic company with an irrevocable option to pay tax
at a lower rate of 22% (effective rate of 25.168%) for any previous year relevant to the assessment year beginning on or after April 1, 2020. The
lower rate shall be applicable subject to certain conditions, including that the total income should be computed without claiming specific
deductions or exemptions. MAT would be inapplicable to companies opting to apply the lower tax rate.
Indian Companies can carry forward business losses 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.
Apart from India, major tax jurisdictions for the Group include Singapore, 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
Income tax expense at tax rates applicable to individual entities
(a) Tax on income at different rates
(b) Additional tax benefit for capital investment including research and development expenditures
(c) Income exempt from tax/items not deductible
(d) Deferred tax assets not recognised because realisation is not probable
(e) Adjustments to taxes in respect of prior periods
(f ) Utilisation/credit of unrecognised tax losses, unabsorbed depreciation and other tax benefits
(g) Impact of changes in tax rates(i)
Tax expense as reported
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
(231.72)
15,905.72
225.35
9.73
(16.76)
(548.44)
693.77
(65.70)
(593.70)
(2,272.66)
(2,568.41)
5,576.07
(24.22)
(25.37)
646.06
3,197.18
(287.69)
(2,406.93)
43.33
6,718.43
(i)
Impact of changes in tax rates during the year ended March 31, 2020 primarily represents remeasurement of deferred tax balances
expected to reverse in future periods based on the revised applicable tax rate by the Company and some of its Indian subsidiaries as per
option permitted under new tax rate regime.
During the year ended March 31, 2019, deferred tax balances were remeasured following a reduction in corporate income tax rate within
European operations.
360
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
13. Income taxes (Contd.)
[Item No. I(k) and V(e), Pages 322 and 323]
B. Deferred tax assets/(liabilities)
(i)
Components of deferred tax assets and liabilities as at March 31, 2020 are as below:
Deferred tax assets:
Tax-loss carry forwards
Expenses allowable for tax
purposes when paid/written off
Others
Deferred tax
liabilities:
Property, plant and equipment
and Intangible assets
Retirement benefit assets/
obligations
Others
Net deferred tax assets/
(liabilities):
Disclosed as:
Deferred tax assets
Deferred tax liabilities
Balance
as at
April 1, 2019
Recognised/
(reversed)
in profit and
loss during
the year
Recognised
in other
comprehensive
Income during
the year
Recognised
in equity
during the
year
Disposal
of group
undertakings
during the
year
Other
movements
during the
year
Exchange
differences on
consolidation
during the
year
(` crore)
Balance
as at
March 31,
2020
6,719.14
3,169.13
310.70
(655.09)
780.68
10,668.95
(167.46)
(511.85)
-
3.44
79.01
82.45
-
-
-
-
(1.28)
-
(946.73)
-
139.31
16.68
6,221.14
2,534.16
-
(1.28)
(0.45)
(947.18)
37.38
193.37
729.16
9,484.46
18,441.52
(4,723.51)
-
(3.58)
(2.81)
(946.65)
(36.05)
12,728.92
2,769.95
663.67
1,147.58
-
-
(0.03)
163.31
4,744.48
1,108.42
22,319.89
(11,650.94)
(1,104.94)
(5,164.78)
4,652.93
-
1,147.58
(1,065.13)
-
(3.58)
3.58
-
(2.81)
1.53
-
(946.68)
(0.50)
(1.37)
125.89
67.48
2.11
17,475.51
(7,991.05)
808.95
12,459.89
(11,650.94)
1,270.33
9,261.38
(7,991.05)
361
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
13. Income taxes (Contd.)
[Item No. I(k) and V(e), Pages 322 and 323]
Components of deferred tax assets and liabilities as at March 31, 2019 are as below:
Balance
as at
April 1,
2018
Recognised/
(reversed) in
profit and 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
Disposal
of group
undertakings
during the
year
Reclassified
as held for
sale
during the
year
Other
movements
during the
year
Exchange
differences on
consolidation
during the year
(` crore)
Balance
as at
March 31,
2019
2,991.55
1,984.22
1,573.56
(791.63)
2,160.66
-
-
-
-
321.64
7,458.07
62.48
844.41
(44.10)
(44.10)
-
-
-
-
-
2,208.20
2,009.01
-
424.08
4,641.29
-
(9.85)
(9.52)
(16.81)
15.83
(2.26)
(60.48)
(3.55)
6,719.14
3,169.13
-
-
-
(2,160.66)
-
-
13.09
8.50
(5.01)
780.68
(9.85)
(13.24)
(2,138.59)
(69.04)
10,668.95
13,454.92
247.64
-
(4.81)
4,834.29
(58.18)
(57.09)
23.93
0.82
18,441.52
2,668.18
250.65
(100.47)
869.05
16,992.15
(9,534.08)
314.58
812.87
31.54
-
(100.47)
56.37
-
-
(59.61)
(4.81)
4,774.68
4.81
(133.39)
-
-
8.28
-
(56.69)
2,769.95
0.71
(57.47)
47.62
0.16
(48.65)
(0.24)
23.69
(16.23)
(72.10)
1,108.42
22,319.89
35.41
(2,162.28)
3.06
(11,650.94)
808.95
12,459.89
(11,650.94)
Deferred tax assets:
Tax-loss carry forwards
Expenses allowable
for tax purposes when
paid/written off
MAT credit entitlement/
(utilisation)
Others
Deferred tax
liabilities:
Property, plant and
equipment and
Intangible assets
Retirement benefit
assets/obligations
Others
Net deferred tax
assets/(liabilities):
Disclosed as:
Deferred tax assets
1,035.80
Deferred tax liabilities 10,569.88
(9,534.08)
(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 ₹49,698.56 crore (March 31, 2019: ₹45,310.97 crore) as its
recovery is not considered probable in the foreseeable future. Such losses primarily relate to the Group’s European operations.
362
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
13. Income taxes (Contd.)
[Item No. I(k) and V(e), Pages 322 and 323]
(iv)
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, 2020
4,301.43
2,171.54
4.45
43,221.14
49,698.56
(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, 2020
2,311.15
797.56
3,108.71
(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 ₹7,201.13 crore (March 31, 2019: ₹6,642.93 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.
363
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
14. Other assets
[Item No. I(l) and II(e), Page 322]
A. Non-current
(a) Capital advances
Considered good - Unsecured
Considered doubtful - Unsecured
Less: Provision for doubtful advances
(b) Advances with public bodies
Considered good - Unsecured
Considered doubtful - Unsecured
Less: Provision for doubtful advances
(` crore)
As at
March 31, 2020
As at
March 31, 2019
1,241.28
132.39
132.39
1,241.28
1,624.63
397.03
397.03
1,624.63
1,068.83
93.05
93.05
1,068.83
1,473.31
345.42
345.42
1,473.31
(c) Prepaid lease payments for operating leases
-
1,888.22
(d) Capital advances to related parties
Considered good - Unsecured
(e) Others
Considered good - Unsecured
11.07
5.38
277.22
3,154.20
219.18
4,654.92
364
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
14. Other assets (Contd.)
[Item No. I(l) and II(e), Page 322]
B. Current
(a) Advances with public bodies
Considered good - Unsecured
Considered doubtful - Unsecured
Less: Provision for doubtful advances
(b) Prepaid lease payments for operating leases
(c) Advances to related parties
Considered good- Unsecured
(d) Others
Considered good - Unsecured
Considered doubtful - Unsecured
Less: Provision for doubtful advances
As at
March 31, 2020
(` crore)
As at
March 31, 2019
1,998.61
3.04
3.04
1,998.61
2,095.99
2.71
2.71
2,095.99
-
15.18
7.68
21.88
1,171.40
83.24
83.24
1,171.40
3,177.69
1,396.65
46.58
46.58
1,396.65
3,529.70
(i)
Advances with public bodies primarily relate to input credit entitlements and amounts paid under protest in respect of demands and
claims from regulatory authorities.
(ii)
Prepaid lease payments in respect of land leases has been reclassified to right-of-use assets, on adoption of Ind AS 116 “Leases”.
(iii) Others include advances against supply of goods/services and advances paid to employees.
15. Inventories
[Item No. II(a), Page 322]
(a)
Raw materials
(b) Work-in-progress
(c)
(d)
(e)
Finished and semi-finished goods
Stock-in-trade
Stores and spares
As at
March 31, 2020
9,512.47
4,273.25
12,391.38
128.72
4,762.90
31,068.72
(` crore)
As at
March 31, 2019
11,424.47
4,591.81
11,055.76
96.65
4,487.41
31,656.10
365
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
15. Inventories (Contd.)
[Item No. II(a), Page 322]
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, 2020
(` crore)
As at
March 31, 2019
1,514.77
82.92
39.99
205.09
1,842.77
1,942.16
314.93
66.22
190.74
2,514.05
Value of inventories above is stated after provisions (net of reversal) of ₹747.92 crore (March 31, 2019 : ₹482.25 crore) for write-down to net
realisable value and provision for slow-moving and obsolete items.
16. Trade receivables
[Item No. II(b)(ii), Page 322]
Considered good- Unsecured
Credit impaired
Less: Allowance for credit losses
(` crore)
As at
March 31, 2020
As at
March 31, 2019
7,884.91
308.74
8,193.65
308.74
7,884.91
11,811.00
392.92
12,203.92
392.92
11,811.00
In determining allowance for credit losses of trade receivables, the Group 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.
(i) Movement in allowance for credit losses of receivables is as below:
Balance at the beginning of the year
Charge/(release) during the year
Utilised during the year
Addition relating to acquisitions
Disposal of group undertakings
Classified as held for sale
Other reclassifications
Exchange differences on consolidation
Balance at the end of the year
366
Year ended
March 31, 2020
(` crore)
Year ended
March 31, 2019
392.92
(8.27)
(84.00)
22.79
(0.71)
-
(15.71)
1.72
308.74
250.26
33.16
(19.94)
172.36
(9.75)
(32.15)
-
(1.02)
392.92
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
16. Trade receivables (Contd.)
[Item No. II(b)(ii), Page 322]
(ii) Ageing of trade receivables and credit risk arising therefrom 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
As at March 31, 2020
Gross
credit risk
Subject to credit
insurance cover
Allowance for
credit losses
6,475.28
837.43
136.22
83.11
106.06
555.55
8,193.65
3,789.33
372.58
38.72
29.39
36.48
83.22
4,349.72
9.35
5.16
2.09
2.60
11.41
278.13
308.74
As at March 31, 2019
Gross
credit risk
Subject to credit
insurance cover
Allowance for
credit losses
10,469.72
715.71
191.42
76.60
157.49
592.98
12,203.92
7,687.00
423.61
59.70
29.41
50.18
78.19
8,328.09
41.14
9.65
8.39
4.71
10.87
318.16
392.92
(` crore)
Net
credit risk
2,676.60
459.69
95.41
51.12
58.17
194.20
3,535.19
(` crore)
Net
credit risk
2,741.58
282.45
123.33
42.48
96.44
196.63
3,482.91
(iii)
The Group considers its maximum exposure to credit risk with respect to customers as at March 31, 2020 to be ₹ 3,535.19 crore (March 31,
2019 : ₹ 3,482.91 crore), which is the carrying 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.
17. Cash and cash equivalents
[Item No. II(b)(iii), Page 322]
Cash on hand
Cheques, drafts on hand
Remittances-in-transit
(a)
(b)
(c)
(d) Unrestricted balances with banks
As at
March 31, 2020
1.32
2.44
39.79
7,498.41
7,541.96
(` crore)
As at
March 31, 2019
1.67
9.32
9.27
2,955.27
2,975.53
367
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
17. Cash and cash equivalents (Contd.)
[Item No. II(b)(iii), Page 322]
(i)
Currency profile of cash and cash equivalents is as below:
INR
GBP
EURO
USD
Others
Total
INR-Indian Rupees, GBP-Great British Pound, USD-United States Dollars.
Others primarily include SGD-Singapore Dollars and CAD-Canadian Dollars.
18. Other balances with banks
[Item No. II(b)(iv), Page 322]
Earmarked balances with banks
(i)
Currency profile of earmarked balances with banks is as below:
INR
USD
Total
INR-Indian rupees, USD-United States dollars.
(` crore)
As at
March 31, 2020
As at
March 31, 2019
2,106.53
(2,313.30)
1,449.22
6,201.16
98.35
7,541.96
1,328.22
1,565.50
(131.98)
30.35
183.44
2,975.53
(` crore)
As at
March 31, 2020
As at
March 31, 2019
512.76
365.84
(` crore)
As at
March 31, 2020
As at
March 31, 2019
512.76
-
512.76
350.21
15.63
365.84
(ii)
Earmarked balances with banks represent balances held for unpaid dividends, margin money/fixed deposits against issue of bank
guarantees and deposits made against contract performance.
368
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
19. Assets and liabilities held for sale
[Item No. III and VII, Pages 322 and 323]
(i)
On January 28, 2019, the Group entered into definitive agreements with HBIS Group Co. Ltd. ('HBIS') to divest its entire equity stake in
NatSteel Holdings Pte. Ltd. ('NSH') and Tata Steel (Thailand) Public Company Ltd. ('TSTH'). The said definitive agreements were not extended
on account of buyer’s inability to obtain requisite regulatory approval.
As on March 31, 2020, active discussions and engagement with other potential buyers demonstrate that the management of the Group is
committed to sell the disposal group and there is an active programme for completing the sale.
In accordance with Ind AS 105, “Non-current Assets Held for Sale and Discontinued Operations”, the assets and liabilities of businesses
forming part of the disposal group have been classified as held for sale.
The major classes of assets and liabilities classified as held for sale as on reporting date are set out below:
(` crore)
As at
March 31, 2020
As at
March 31, 2019
Non-current assets
Property, plant and equipment
Capital work-in-progress
Right of-use-assets
Other intangible assets
Intangible assets under development
Other investments
Other financial assets
Non-current tax assets
Deferred tax assets
Other assets
Current assets
Inventories
Trade receivables
Cash and bank balances
Other financial assets
Derivative assets
Current tax assets
Other assets
Fair value adjustments
Total assets held for sale
1,377.86
34.17
299.33
6.38
0.44
33.71
12.45
23.60
19.63
1.44
1,809.01
1,395.11
563.41
190.38
35.21
20.59
1.86
51.71
2,258.27
(1,253.16)
2,814.12
1,484.91
40.27
-
6.17
0.54
38.70
1.50
19.29
16.43
1.83
1,609.64
1,491.32
608.51
294.77
78.25
2.82
2.88
51.26
2,529.81
-
4,139.45
369
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
19. Assets and liabilities held for sale (Contd.)
[Item No. III and VII, Pages 322 and 323]
Non-current liabilities
Borrowings
Other financial liabilities
Provisions
Retirement benefit obligations
Deferred tax liabilities
Current liabilities
Borrowings
Derivative liabilities
Trade payables
Other financial liabilities
Retirement benefit obligations
Provisions
Current tax liabilities
Other liabilities
Total liabilities held for sale
(` crore)
As at
March 31, 2020
As at
March 31, 2019
270.07
0.39
0.25
102.15
40.09
412.95
248.71
77.75
458.83
103.97
0.75
3.02
21.69
20.61
935.33
1,348.28
11.14
0.37
0.23
61.89
51.68
125.31
670.97
3.62
501.19
90.92
0.61
2.76
12.75
17.91
1,300.73
1,426.04
(ii)
As at March 31, 2020, the Group classified certain assets and liabilities held within a disposal group with net carrying value of
₹0.89 crore (March 31, 2019: ₹2.73 crore) in respect of one of its Indian subsidiary as held for sale. These assets and liabilities continue to
be classified as held for sale as the Group expects to recover the carrying value principally through sale.
Property, plant and equipment
Inventories
Trade receivables
Other non-financial assets
Total assets held for sale
Trade payables
Total liabilities held for sale
As at
March 31, 2020
0.06
0.67
0.19
0.02
0.94
0.05
0.05
(` crore)
As at
March 31, 2019
0.06
1.92
0.79
0.04
2.81
0.08
0.08
iii)
On April 9, 2019, Tata Steel Long Products Limited (formerly Tata Sponge Iron Limited) ('TSLP'), a subsidiary of the Company, completed
acquisition of the steel business of Usha Martin Limited ('UML') pursuant to a Business Transfer Agreement between the Company and
UML in September, 2018. As a result of this transaction, TSLP acquired certain property, plant and equipment which was classified as held
for sale. These assets have a carrying value of ₹8.39 crore as at March 31, 2020.
370
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
20. Equity share capital
[Item No. IV(a), Page 323]
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, 2019: 1,75,00,00,000 Ordinary Shares of `10 each)
'A' Ordinary Shares of `10 each *
(March 31, 2019: 35,00,00,000 'A' Ordinary Shares of `10 each)
Cumulative Redeemable Preference Shares of `100 each *
(March 31, 2019: 2,50,00,000 Shares of `100 each)
Cumulative Convertible Preference Shares of `100 each *
(March 31, 2019: 60,00,00,000 Shares of `100 each)
Ordinary Shares of `10 each
(March 31, 2019: 1,12,75,20,570 Ordinary Shares of `10 each)
Ordinary Shares of `10 each (partly paid up, `2.504 each paid up)
(March 31, 2019: 7,76,97,280 Ordinary Shares of `10 each, `2.504 each paid
up)
Subscribed and paid up:
1,12,53,08,318
7,76,36,788
Ordinary Shares of `10 each fully paid up
(March 31, 2019: 1,12,53,07,787 Ordinary Shares of `10 each)
Ordinary Shares of `10 each (partly paid up, `2.504 each paid up)
(March 31, 2019: 7,76,36,705 Ordinary Shares of `10 each,
`2.504 each paid up)
Amount paid up on 3,89,516 Ordinary Shares of `10 each forfeited
(March 31, 2019: 3,89,516 Shares of `10 each)
(` crore)
As at
March 31, 2020
As at
March 31, 2019
1,750.00
1,750.00
350.00
250.00
350.00
250.00
6,000.00
6,000.00
8,350.00
8,350.00
1,127.52
1,127.52
77.70
77.70
1,205.22
1,205.22
1,125.31
1,125.30
19.44
19.44
0.20
0.20
1,144.95
1,144.94
* 'A' class Ordinary Shares and Preference Shares included within authorised share capital are for disclosures purposes and have not
yet been issued.
(i)
Subscribed and paid up share capital excludes 11,81,893 (March 31, 2019: 11,81,893) Ordinary Shares of face value ₹10 each fully paid
up held by subsidiaries of the Company.
371
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
20. Equity share capital (Contd.)
[Item No. IV(a), Page 323]
(ii) Details of movement in subscribed and paid up share capital other than forfeited shares is as below:
Ordinary Shares of `10 each
Balance at the beginning of the year
Fully paid shares allotted during the year (a),(b),(c)
Partly paid shares allotted during the year(d)
Adjustment for cross holdings
Balance at the end of the year
* represents value less than `0.01 crore.
As at
March 31, 2020
As at
March 31, 2019
No. of shares
` crore
No. of shares
` crore
1,20,29,44,492
531
83
-
1,20,29,45,106
1,144.74
0.01
0.00*
-
1,144.75
1,20,29,51,047
4,865
2,080
(13,500)
1,20,29,44,492
1,144.75
0.00*
0.00*
(0.01)
1,144.74
(a)
(b)
(c)
(d)
210 Ordinary Shares of face value ₹10 each were allotted at a premium of ₹290 per share to the shareholders whose shares were
kept in abeyance in the Rights Issue of 2007.
154 Ordinary Shares of face value ₹10 each were allotted at a premium of ₹590 per share in lieu of Cumulative Convertible Preference
Shares of ₹ 100 each to the shareholders whose shares were kept in abeyance in the Rights Issue of 2007.
167 fully paid Ordinary Shares of face value of ₹10 were allotted at a premium of ₹500 per share to the shareholders whose shares
were kept in abeyance in the Rights Issue of 2018.
83 partly paid Ordinary Shares of face value of ₹10 each (₹2.504 paid up) were allotted at a premium of ₹605 (₹151.496 paid up) per
share to the shareholders whose shares were kept in abeyance in the Rights Issue of 2018.
(iii)
As at March 31, 2020, 2,98,822 Ordinary Shares of face value of ₹10 each (March 31, 2019: 2,99,198 Ordinary Shares) are kept in abeyance
in respect of Rights Issue of 2007.
As at March 31, 2020, 1,21,293 fully paid Ordinary Shares of face value of ₹10 each (March 31, 2019: 1,21,460 fully paid Ordinary Shares)
and 60,492 partly paid Ordinary Shares of face value of ₹10 each, ₹2.504 paid up (March 31, 2019: 60,575 partly paid Ordinary Shares,
₹2.504 paid up) are kept in abeyance in respect of Rights Issue of 2018.
(iv) Details of shareholders holding more than 5 percent shares in the Company is as below:
Name of shareholders
(a) Tata Sons Private Limited
(b) Life Insurance Corporation of India
(c) HDFC Trustee Company Limited
As at
March 31, 2020
As at
March 31, 2019
No. of Ordinary
Shares
% held
No. of Ordinary
Shares
% held
39,65,08,142
10,96,96,176
6,02,13,483
32.93
9.11
5.00
38,09,73,085
10,83,88,660
NA*
31.64
9.00
NA*
* As on March 31, 2019, HDFC Trustee Company Limited held less than 5% shares in the Company.
372
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
20. Equity share capital (Contd.)
[Item No. IV(a), Page 323]
(v)
(vi)
1,25,61,401 shares (March 31, 2019: 1,34,73,958 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.
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)
B.
(i)
In respect of every Ordinary Share (whether fully paid or partly
paid), voting right and dividend 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.
‘A’ Ordinary Shares of `10 each
(a)
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.
(b)
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.
(ii)
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.
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.
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)
(iv)
373
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
21. Hybrid perpetual securities
[Item No. IV(b), Page 323]
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)
Year ended
March 31, 2020
Year ended
March 31, 2019
2,275.00
2,275.00
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.
22. Other equity
[Item No. IV(c), Page 323]
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 post-employment defined benefit plans
Tax on remeasurement of post-employment defined benefit plans
Equity issue expenses written off
Dividend
Tax on dividend
Distribution on hybrid perpetual securities
Tax on distribution on hybrid perpetual securities
Transfers within equity
Adjustment for change in ownership interests
Balance at the end of the year
B.
Items of other comprehensive income
(a) Cash flow hedge reserve
Year ended
March 31, 2020
(` crore)
Year ended
March 31, 2019
14,056.43
1,556.54
5,480.23
(1,020.99)
(5.31)
(1,488.13)
(297.40)
(266.15)
66.97
14.28
31.35
18,127.82
7,801.99
10,218.33
(523.40)
97.48
-
(1,144.76)
(224.61)
(266.12)
92.99
29.95
(2,025.42)
14,056.43
The cumulative effective portion of gain or losses arising from changes in 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.
The Group has designated certain foreign currency forward contracts, commodity contracts, interest rate swaps, caps and collar as cash flow
hedges in respect of foreign exchange, commodity price and interest rate risks.
374
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
22. Other equity (Contd.)
[Item No. IV(c), Page 323]
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 consolidated statement of profit and loss/cost of hedged items
Tax impact on above
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
119.63
(286.65)
(167.02)
9.99
109.64
119.63
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
(210.17)
(154.93)
78.45
(286.65)
349.67
(198.58)
(41.45)
109.64
During the year, ineffective portion of cash flow hedges recognised in the consolidated statement of profit and loss amounted to Nil
(2018-19: 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: loss of ₹109.54 crore (2018-19 : gain of ₹119.23 crore)
later than one year: loss of ₹57.48 crore (2018-19: gain of ₹0.40 crore)
(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
Tax impact on above
Transfers within equity
Other movements
Balance at the end of the year
Year ended
March 31, 2020
80.28
(248.94)
1.98
(6.63)
-
(173.31)
(` crore)
Year ended
March 31, 2019
155.23
(44.30)
(2.65)
(31.06)
3.06
80.28
375
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
22. Other equity (Contd.)
[Item No. IV(c), Page 323]
(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
Other movements
Balance at the end of the year
C. Other reserves
(a) Securities premium
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
7,412.24
544.00
-
7,956.24
6,984.28
507.78
(79.82)
7,412.24
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 details of movement in securities premium is as below:
Balance at the beginning of the year
Received/transfer on issue of Ordinary Shares during the year
Equity issue expenses written (off )/back during the year
Balance at the end of the year
(b) Debenture redemption reserve
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
27,778.09
0.03
-
27,778.12
27,777.40
0.26
0.43
27,778.09
Earlier, the provisions of the Companies Act, 2013 read with related rules required a company issuing debentures to create Debenture
Redemption Reserve (DRR) of 25% of the value of debentures issued, either in a public issue or on a private placement basis, out of profits of
the company available for payment of dividend. The amounts credited to the DRR can be utilised by the company only to redeem debentures.
However, as per the recent amendment in the Companies (Share Capital and Debentures) Rules, 2014, a listed company issuing privately
placed debentures on or after August 16, 2019, is not required to maintain additional amount in the DRR. Accordingly, the existing balance in
the DRR shall be maintained to be utilized for redemption of existing debentures issued by the Company on or before August 16, 2019.
376
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
22. Other equity (Contd.)
[Item No. IV(c), Page 323]
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
(c) General reserve
Year ended
March 31, 2020
2,046.00
2,046.00
(` crore)
Year ended
March 31, 2019
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 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
Adjustment for cross holdings
Balance at the end of the year
(d) Capital redemption reserve
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
12,181.16
-
12,181.16
12,181.97
(0.81)
12,181.16
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 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
Year ended
March 31, 2020
133.11
133.11
(` crore)
Year ended
March 31, 2019
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.
377
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
22. Other equity (Contd.)
[Item No. IV(c), Page 323]
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
(f) Capital reserve on consolidation
Year ended
March 31, 2020
8.14
1.92
10.06
(` crore)
Year ended
March 31, 2019
7.58
0.56
8.14
The excess of fair value of net assets acquired over consideration paid in a business combination is recognised as capital reserve on
consolidation. The reserve is not available for distribution.
The details of movement in capital reserve on consolidation is as below:
Balance at the beginning of the year
Addition relating to acquisitions
Disposal of group undertakings
Balance at the end of the year
(g) Others
Year ended
March 31, 2020
1,436.94
584.24
(0.56)
2,020.62
(` crore)
Year ended
March 31, 2019
100.53
1,336.41
-
1,436.94
Others primarily represent amounts appropriated out of the statement of profit and 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
Transfers within equity
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 Ordinary Shares during the year
Balance at the end of the year
378
Year ended
March 31, 2020
253.12
(9.57)
243.55
(` crore)
Year ended
March 31, 2019
252.57
0.55
253.12
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
-
0.04
(0.04)
-
0.02
0.24
(0.26)
-
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
23. Non-controlling interests
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
Following are the subsidiaries which include material non-controlling interests:
As at
March 31, 2020
2,586.60
(` crore)
As at
March 31, 2019
2,364.46
(i)
(ii)
(iii)
The Company, through its wholly owned subsidiary, T S Global Minerals Holdings Pte. Ltd via TSMUK holds 77.68% equity stake in Tata
Steel Minerals Canada Limited.
On May 18, 2018, Bamnipal Steel Limited, a wholly owned subsidiary of the Company, completed the acquisition of 72.65% stake in Tata
Steel BSL Limited pursuant to a Corporate Insolvency Resolution Process implemented under the Insolvency and Bankruptcy Code 2016.
During the year ended March 31, 2020, the Company subscribed to 2,58,43,967 equity shares pursuant to right issue made by its
subsidiary, Tata Steel Long Products Limited (formerly Tata Sponge Iron Limited). As at March 31, 2020 the Company holds 75.91% (March
31, 2019: 54.50%) equity stake.
The table below provides information in respect of these subsidiaries as at March 31, 2020:
Name of subsidiary
Country of
incorporation and
operation
% of non-
controlling
interests as at
March 31, 2020
% of non-
controlling
interests as at
March 31, 2019
Profit/(loss)
attributable to
non-controlling
interests for
the year ended
March 31, 2020
Profit/(loss)
attributable to
non-controlling
interests for
the year ended
March 31, 2019
Non-controlling
interests as at
March 31, 2020
(` crore)
Non-
controlling
interests as at
March 31, 2019
Tata Steel Minerals
Canada Limited
Tata Steel BSL Limited
Tata Steel Long
Products Limited
Canada
22.32%
22.32%
(165.84)
(10.91)
India
India
27.35%
24.09%
27.35%
45.50%
(168.64)
(135.65)
(240.93)
56.59
506.41
334.92
485.64
624.98
286.43
493.35
The tables below provide summarised information in respect of consolidated balance sheet as at March 31, 2020, consolidated statement
of profit and loss and consolidated statement of cash flows for the year ended March 31, 2020, in respect of the above-mentioned entities:
Summarised balance sheet information
Particulars
Tata Steel Minerals Canada Limited
Tata Steel BSL Limited
Tata Steel Long Products Limited
(` crore)
Non-current assets
Current assets
Total assets (A)
Non-current liabilities
Current liabilities
Total liabilities (B)
Net assets (A-B)(i)
As at
March 31, 2020
As at
March 31, 2019
As at
March 31, 2020
As at
March 31, 2019
As at
March 31, 2020
As at
March 31, 2019
7,516.08
270.45
7,786.53
4,284.33
1,233.35
5,517.68
2,268.85
6,943.13
82.43
7,025.56
3,514.19
711.27
4,225.46
2,800.10
31,614.99
7,223.79
38,838.78
15,846.97
4,471.21
20,318.18
18,520.60
31,628.26
7,981.01
39,609.27
17,089.27
4,178.26
21,267.53
18,341.74
4,889.63
1,274.68
6,164.31
2,803.31
1,356.50
4,159.81
2,004.50
615.73
696.24
1,311.97
27.53
210.72
238.25
1,073.72
(i)
Net assets of Tata Steel BSL Limited as at March 31, 2020, includes equity portion of preference shares ₹17,295.82 crore (March 31, 2019:
₹17,295.82 crore) issued by Tata Steel BSL Limited to the Company.
379
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 23. Non-controlling interests (Contd.)
Summarised profit and loss information
Particulars
Tata Steel Minerals Canada Limited
Tata Steel BSL Limited
Tata Steel Long Products Limited
(` crore)
Total Income
Profit/(loss) for the year
Total comprehensive income/(loss)
for the year
Year ended
March 31, 2020
Year ended
March 31, 2019
Year ended
March 31, 2020
Year ended
March 31, 2019
Year ended
March 31, 2020
Year ended
March 31, 2019
405.90
(743.03)
(743.03)
1.67
(48.88)
(48.88)
18,270.89
(616.69)
(625.32)
18,493.07
(881.07)
(872.96)
3,571.31
(516.23)
(525.71)
1,049.78
124.39
124.32
Summarised cash flow information
Particulars
Tata Steel Minerals Canada Limited
Tata Steel BSL Limited
Tata Steel Long Products Limited
(` crore)
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
Year ended
March 31, 2020
Year ended
March 31, 2019
Year ended
March 31, 2020
Year ended
March 31, 2019
Year ended
March 31, 2020
Year ended
March 31, 2019
440.91
(51.27)
1,866.17
5,458.42
(335.66)
100.25
(860.71)
(394.77)
531.70
(1,315.43)
(3,574.41)
(12.43)
406.61
410.74
(1,950.69)
(4,577.49)
3,804.89
(37.13)
0.63
15.95
3.39
3.13
48.12
15.95
-
-
-
-
277.65
712.15
163.21
112.52
724.83
277.65
58.03
163.21
380
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
24. Borrowings
[Item No. V(a)(i) and VI(a)(i), Page 323]
A. Non-current
(a)
Secured
(i)
(ii)
(iii)
(iv) Other loans
Loan from Joint Plant Committee - Steel Development Fund
Term loans from banks/financial institutions
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/financial institutions
Lease obligations
B. Current
(a)
Secured
(i)
(ii)
(iii) Other Loans
Loans from banks/financial institutions
Repayable on demand from banks/financial institutions
(b) Unsecured
(i)
(ii)
(iii)
(iv)
Preference shares
Loans from banks/financial institutions
Commercial papers
Other loans
(` crore)
As at
March 31, 2020
As at
March 31, 2019
2,633.96
28,496.93
5,896.52
309.76
37,337.17
31,445.29
-
25,315.71
-
6.71
0.09
56,767.80
94,104.97
2,564.10
23,458.91
1,324.76
283.38
27,631.15
29,509.49
13.31
21,047.72
2,134.08
6.40
0.58
52,711.58
80,342.73
(` crore)
As at
March 31, 2020
As at
March 31, 2019
48.06
561.52
8.19
617.77
1.00
14,937.39
3,013.60
614.72
18,566.71
19,184.48
5,437.52
45.88
-
5,483.40
1.00
5,129.65
171.97
16.06
5,318.68
10,802.08
381
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
24. Borrowings (Contd.)
[Item No. V(a)(i) and VI(a)(i), Page 323]
(i)
As at March 31, 2020, ₹39,178.70 crore (March 31, 2019 : ₹36,218.83 crore) of the total outstanding borrowings (including current
maturities) were secured by a charge on property, plant and equipment, right-of-use assets, inventories and receivables.
(ii)
The security details of major borrowings as at March 31, 2020 is as below:
(a) Loans 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, Bearings 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 was 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 ₹994.63 crore (March 31, 2019: ₹924.77 crore).
It includes ₹1,639.33 crore (March 31, 2019: ₹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 institutions
Majority of the secured borrowings from banks and financial institutions relate to subsidiaries of the Company namely Tata Steel BSL
Limited and Tata Steel Europe
The borrowings in Tata Steel BSL Limited are secured by a charge on all its immovable and movable properties both present and future
including movable plant and machinery, spares, tools and accessories, inventories and other current assets, ranking pari passu inter-se.
The term loan is payable in 18 semi-annual instalments starting from March 2022.
The majority of the borrowings in Tata Steel Europe relate to the senior facility arrangement (SFA) which was refinanced in February
2020. The SFA is secured against the assets and shares of Tata Steel UK and the shares of Tata Steel Netherlands Holdings B.V. The
SFA has a financial covenant which sets an annual maximum capital expenditure level. The SFA comprises of the following term loans
detailed as below:
Facility A: EUR 410.00 million bullet term loan facility equivalent to ₹3,396.71 crore, repayable in February 2025
Facility B: EUR 1,340.00 million bullet term loan facility equivalent to ₹11,101.44 crore, repayable in February 2026.
(c) Lease obligations
The Group has taken certain assets on lease for business purpose. In addition, the Group has entered into long-term arrangements which
convey the right to control the use of the identified assets resulting in recognition of right-of-use assets and lease obligations.
Lease obligations represents the present value of minimum lease payments payable over the lease term.
382
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
24. Borrowings (Contd.)
[Item No. V(a)(i) and VI(a)(i), Page 323]
(iii) The details of major unsecured borrowings as at March 31, 2020 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
(I) Non-convertible debentures:
The details of debentures issued by the Company is as below:
(i)
(ii)
9.84% p.a. interest bearing 43,150 debentures of face value ₹10,00,000 each are redeemable at par in 4 equal annual instalments
commencing from February 28, 2031.
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.
(iii)
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.
(iv) 8.15% p.a. interest bearing 10,000 debentures of face value ₹10,00,000 each are redeemable at par on October 1, 2026.
(v) 7.70% p.a. interest bearing 6,700 debentures of face value ₹10,00,000 each are redeemable at par on March 13, 2025.
(vi)
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.
(vii)
9.15% p.a. interest bearing 5,000 debentures of face value ₹10,00,000 each are redeemable at par on January 25, 2021.
(II) Bonds:
ABJA Investment Company Pte Ltd. a wholly owned subsidiary of the Company has issued non-convertible 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:
Sl. No.
Issued on
Currency
Initial principal due
(in millions)
Outstanding principal (in millions)
Interest rate
Redeemable on
1
2
3
4
5
January 2018
July 2014
January 2018
May 2013
July 2014
USD
USD
USD
SGD
USD
As at
March 31, 2020
As at
March 31, 2019
1,000
1,000
300
300
500
1,000
1,000
300
300
-
1,000
1,000
300
300
500
5.45%
5.95%
4.45%
4.95%
4.85%
January 2028
July 2024
July 2023
May 2023
January 2020
(c) Loans from banks/financial institutions
(I) Details of loans from banks/financial institutions availed by the Company is as below:
(i)
(ii)
USD 330.00 million equivalent to ₹2,494.80 crore (March 31, 2019: Nil) loan is repayable in 3 equal annual instalments commencing
from September 09, 2023.
Rupee loan amounting ₹2,500.00 crore (March 31, 2019: ₹2,500.00 crore) is repayable in 9 quarterly instalments commencing from
March 31, 2023.
383
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
24. Borrowings (Contd.)
[Item No. V(a)(i) and VI(a)(i), Page 323]
(iii)
Rupee loan amounting ₹1,047.50 crore (March 31, 2019: ₹1,047.50 crore) is repayable in 10 semi-annual instalments, the next
instalment is due on November 29, 2022.
(iv)
Rupee loan amounting ₹1,000.00 crore (March 31, 2019: Nil) is repayable in 16 semi-annual instalments, the next instalment is due
on March 24, 2022.
(v)
Rupee loan amounting ₹584.58 crore (March 31, 2019: ₹584.58 crore) is repayable in 8 semi-annual instalments, the next instalment
is due on June 15, 2021.
(vi)
Rupee loan amounting ₹750.00 crore (March 31, 2019: ₹750.00 crore) is repayable in 3 equal annual instalments commencing
from May 29, 2021.
(vii)
USD 7.86 million equivalent to ₹59.43 crore (March 31, 2019: USD 7.86 million equivalent to ₹54.38 crore) is repayable on March 1, 2021.
(viii) USD 133.33 million equivalent to ₹1,008.00 crore (March 31, 2019: USD 200.00 million equivalent to ₹1,383.55 crore) loan is
repayable in 2 equal annual instalments, the next instalment is due on February 16, 2021.
(ix)
Rupee loan amounting ₹632.72 crore (March 31, 2019: ₹640.42 crore) is repayable in 14 semi-annual instalments, the next
instalment is due on August 14, 2020.
(x)
Euro 10.81 million equivalent to ₹89.56 crore (March 31, 2019: Euro 16.21 million equivalent to ₹125.96 crore) loan is repayable in 4
equal semi-annual instalments, the next instalment is due on July 6, 2020.
(xi)
Rupee loan amounting ₹1,000.00 crore (March 31, 2019: Nil) is repayable in 15 semi-annual instalments, the next instalment is due
on June 30, 2020.
(xii) Rupee loan amounting ₹1,600.00 crore (March 31, 2019: ₹1,600.00 crore) is repayable in 8 semi-annual instalments, the next
instalment is due on April 30, 2020.
(xiii) Euro 47.76 million equivalent to ₹395.80 crore (March 31, 2019: Euro 66.87 million equivalent to ₹519.58 crore) loan is repayable in
5 equal semi-annual instalments, the next instalment is due on April 30, 2020.
(xiv) Rupee loan amounting ₹1,447.50 crore (March 31, 2019: ₹1,485.00 crore) is repayable in 17 semi-annual instalments, the next
instalment is due on April 16, 2020.
(II)
Details of loans from banks/financial institutions availed by NatSteel Asia Pte Limited, a wholly owned subsidiary of the
Company is as below:
(i)
(ii)
USD 1,151.66 million equivalent to ₹8,705.40 crore (March 31, 2019: USD 1,151.66 million equivalent to ₹7,963.15 crore) loan is
repayable in 3 annual instalments, the next instalment is due on April 19, 2022.
EUR 418.27 million equivalent to ₹3,465.22 crore (March 31, 2019: EUR 418.27 million equivalent to ₹3,248.44 crore) loan is
repayable in 3 annual instalments, the next instalment is due on April 19, 2022
384
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
24. Borrowings (Contd.)
[Item No. V(a)(i) and VI(a)(i), Page 323]
(iv)
Currency and interest exposure of borrowings including current maturities at the end of the reporting period is as below:
As at March 31, 2020
As at March 31, 2019
Fixed
rate
26,388.35
1,217.99
1,238.53
22,147.07
2,221.04
53,212.98
Floating
rate
29,170.92
1,827.02
17,270.08
14,825.01
22.19
63,115.22
Total
55,559.27
3,045.01
18,508.61
36,972.08
2,243.23
116,328.20
Fixed
rate
19,350.08
147.48
972.92
23,094.51
2,005.37
45,570.36
Floating
rate
25,201.05
3,514.88
15,523.15
10,980.10
26.68
55,245.86
(` crore)
Total
44,551.13
3,662.36
16,496.07
34,074.61
2,032.05
100,816.22
INR
GBP
EURO
USD
Others
Total
INR-Indian Rupees, GBP- Great British Pound, USD-United States Dollars.
(a) Others primarily include SGD-Singapore Dollars and CAD- Canadian Dollars.
(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, 2020, ₹2,786.70 crore (March 31, 2019: ₹1,037.66 crore) has been hedged using interest rate
swaps and interest rate caps 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, 2020
(` crore)
As at March 31, 2019
Lease
obligations
Total
borrowings
Total
borrowings
1,721.35
1,397.53
1,174.58
978.90
968.75
5,160.40
11,401.51
4,379.45
-
7,022.06
22,822.44
3,233.29
8,491.08
13,763.90
22,085.06
52,571.43
122,967.20
4,379.45
2,259.55
116,328.20
20,877.47
6,756.98
8,335.28
8,093.70
12,011.55
49,261.03
1,05,336.01
3,388.73
1,131.06
1,00,816.22
Borrowings
other than lease
obligations
21,101.09
1,835.76
7,316.50
12,785.00
21,116.31
47,411.03
111,565.69
-
2,259.55
109,306.14
(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 ability of entities within the Group to borrow additional funds or to incur additional liens, and/or provide for increased costs in
case of breach.
385
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
25. Other financial liabilities
[Item No. V(a)(iii) and VI(a)(iv), Page 323]
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 lease obligations
Interest accrued but not due
(a)
(b)
(c)
(d) Unclaimed dividends
(e)
Creditors for other liabilities
(i)
Non-current and current creditors for other liabilities include:
(a)
creditors for capital supplies and services of ₹2,904.05 crore (March 31, 2019: ₹3,717.51 crore).
(b)
liability for employee family benefit scheme ₹195.21 crore (March 31, 2019: ₹189.87 crore).
26. Provisions
[Item No. V(b) and VI(b), Page 323]
A. Non-current
Employee benefits
Insurance provisions
(a)
(b)
(c) Others
B. Current
Employee benefits
(a)
(b) Others
386
(` crore)
As at
March 31, 2020
As at
March 31, 2019
-
387.67
387.67
9.57
261.01
270.58
(` crore)
As at
March 31, 2020
As at
March 31, 2019
1,913.21
1,125.54
778.93
77.31
5,623.54
9,518.53
9,276.95
394.46
848.96
99.11
6,118.35
16,737.83
As at
March 31, 2020
2,655.81
566.80
1,012.46
4,235.07
As at
March 31, 2020
472.03
1,191.64
1,663.67
(` crore)
As at
March 31, 2019
2,396.20
661.77
988.24
4,046.21
(` crore)
As at
March 31, 2019
395.97
852.75
1,248.72
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
26. Provisions (Contd.)
[Item No. V(b) and VI(b), Page 323]
(i)
(ii)
(iii)
Non-current and current provision for employee benefits include provision for leave salaries ₹1,317.48 crore (March 31, 2019:
₹1,127.69 crore) and provision for early separation, disability and other long term employee benefits ₹1,735.39 crore (March 31, 2019:
₹1,591.55 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 currently held by Tata Steel Europe, a wholly owned indirect subsidiary of the Company, cover its historical liability
risks, including those covered by its captive insurance company, Crucible Insurance Company Limited, in respect of its retrospective
hearing impairment policy and those for which it is now responsible for under its current insurance arrangements. The provisions
include a suitable amount in respect of its known outstanding claims and an appropriate amount in respect of liabilities that have
been incurred but not yet reported. The provisions are subject to regular review and are adjusted as appropriate. The value of the final
insurance settlements is uncertain and so is the timing of the expenditure.
(iv)
Non-current and current other provisions primarily include:
(a)
provision for compensatory afforestation, mine closure and rehabilitation obligations and other environmental remediation
obligations ₹1,438.86 crore (March 31, 2019: ₹1,046.50 crore). These amounts become payable upon closure of the mines/sites
and are expected to be incurred over a period of 1 to 32 years.
(b)
provision in respect of onerous contracts amounting to ₹173.79 crore (March 31, 2019: ₹249.65 crore).
(v)
The details of movement in provision balances is as below:
Year ended March 31, 2020
Balance at the beginning of the year
Recognised/(released) during the year(i)
Addition relating to acquisitions
Disposal of group undertakings
Utilised during the year
Other re-classifications(ii)
Exchange differences on consolidation
Balance at the end of the year
Insurance
Provisions
661.77
(73.53)
-
-
(39.41)
-
17.97
566.80
Others
1,840.99
591.19
27.42
(9.91)
(238.61)
(76.24)
69.26
2,204.10
(` crore)
Total
2,502.76
517.66
27.42
(9.91)
(278.02)
(76.24)
87.23
2,770.90
387
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
26. Provisions (Contd.)
[Item No. V(b) and VI(b), Page 323]
Year ended March 31, 2019
Balance at the beginning of the year
Recognised/(released) during the year(i)
Disposal of group undertakings
Utilised during the year
Classified as held for sale
Exchange differences on consolidation
Balance at the end of the year
(i)
Includes provisions capitalised during the year in respect of restoration obligations.
(ii) Represents provision for onerous leases reclassified to right-of-use assets.
27. Deferred income
[Item No. V(d) and VI(d), Page 323]
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
858.44
(131.98)
-
(50.83)
-
(13.86)
661.77
Others
1,828.10
290.48
(12.26)
(233.47)
(0.23)
(31.63)
1,840.99
(` crore)
Total
2,686.54
158.50
(12.26)
(284.30)
(0.23)
(45.49)
2,502.76
As at
March 31, 2020
45.47
18.25
87.58
151.30
As at
March 31, 2020
20.75
13.80
34.55
(` crore)
As at
March 31, 2019
804.37
32.14
70.29
906.80
(` crore)
As at
March 31, 2019
10.48
6.03
16.51
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 fulfilment of related
export obligations.
During the year, an amount of ₹764.35 crore (2018-19: ₹635.76 crore) was released from deferred income to the consolidated statement of
profit and loss on fulfilment of export obligations.
388
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
28. Other liabilities
[Item No. V(f) and VI(f), Page 323]
A. Non-current
Advances received from customers
(a)
(b)
Statutory dues
(c) Other credit balances
B. Current
Advances received from customers
(a)
Employee recoveries and employer contributions
(b)
(c)
Statutory dues
(d) Other credit balances
(` crore)
As at
March 31, 2020
As at
March 31, 2019
2.73
-
726.42
729.15
-
19.77
499.46
519.23
As at
March 31, 2020
810.06
135.04
6,046.67
58.67
7,050.44
(` crore)
As at
March 31, 2019
769.60
161.08
6,931.75
49.78
7,912.21
(i)
Statutory dues primarily relate to payables in respect of royalties, GST, excise duties, service tax, sales tax, VAT and tax deducted at source.
29. Trade payables
[Item No. VI(a)(ii), Page 323]
A. Total outstanding dues of micro and small enterprises
Dues of micro and small enterprises
B.
Total outstanding dues of creditors other than micro and small enterprises
(a)
(b)
Creditors for supplies and services
Creditors for accrued wages and salaries
As at
March 31, 2020
198.86
198.86
As at
March 31, 2020
17,618.35
3,563.64
21,181.99
(` crore)
As at
March 31, 2019
169.74
169.74
(` crore)
As at
March 31, 2019
17,100.42
4,446.80
21,547.22
389
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
30. Revenue from operations
[Item No. I, Page 324]
Sale of products
(a)
Sale of power and water
(b)
(c)
Income from services
(d) Other operating revenues(ii)
Year ended
March 31, 2020
1,35,167.06
1,659.46
150.24
2,839.89
1,39,816.65
(` crore)
Year ended
March 31, 2019
1,52,843.66
1,727.58
120.60
2,977.15
1,57,668.99
(i)
Revenue from contracts with customers disaggregated on the basis of geographical regions and major businesses is as below:
India
(a)
(b) Outside India
Steel
Power and water
(a)
(b)
(c) Others
Year ended
March 31, 2020
70,121.42
66,855.34
136,976.76
Year ended
March 31, 2020
1,25,991.59
1,659.46
9,325.71
136,976.76
(` crore)
Year ended
March 31, 2019
79,605.15
75,086.69
1,54,691.84
(` crore)
Year ended
March 31, 2019
1,40,002.34
1,727.58
12,961.92
154,691.84
Revenue outside India includes Asia excluding India ₹9,935.98 crore (2018-19: ₹8,895.30 crore), UK ₹12,606.68 crore (2018-19: ₹14,767.65
crore) and other European countries ₹35,783.63 crore (2018-19: ₹41,123.35 crore).
(ii)
Other operating revenues include export incentives and deferred income released to consolidated statement of profit and loss on
fulfilment of export obligations under the EPCG scheme.
31. Other income
[Item No. II, Page 324]
Interest income
Net gain/(loss) on sale/fair value changes of mutual funds
(a) Dividend income
(b)
(c)
(d) Net gain/(loss) on sale of non-current investments
(e) Gain/(loss) on sale of property, plant and equipment including intangible assets
(net of loss on assets scrapped/written off )
Gain/(loss) on cancellation of forwards, swaps and options
(f )
(g) Other miscellaneous income
390
Year ended
March 31, 2020
43.35
1,419.09
140.86
2.01
(4.14)
(` crore)
Year ended
March 31, 2019
34.19
316.64
708.96
-
266.50
(1.26)
243.58
1,843.49
36.95
57.34
1,420.58
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
31. Other income (Contd.)
[Item No. II, Page 324]
(i)
Dividend income includes income from investments carried at fair value through other comprehensive income of ₹20.29 crore
(2018-19: ₹19.58 crore)
(ii)
Interest income includes:
(a)
income from financial assets carried at amortised cost of ₹241.36 crore (2018-19: ₹315.24 crore).
(b)
income from financial assets carried at fair value through profit and loss ₹8.07 crore (2018-19: ₹1.40 crore).
(iii)
Interest income during the year also includes gain of ₹1,169.66 crore on senior facility arrangement refinancing in February 2020 within
Tata Steel Europe, treated as a debt modification in accordance with Ind AS 109 "Financial Instruments". The gain arises as the effective
interest rate used to discount the cashflows is higher than the actual interest rate charged on the facility.
32. Employee benefits expense
[Item No. IV(d), Page 324]
(a)
(b)
(c)
Salaries and wages
Contribution to provident and other funds
Staff welfare expenses
Year ended
March 31, 2020
15,212.59
2,687.36
633.63
18,533.58
(` crore)
Year ended
March 31, 2019
15,382.93
2,719.49
656.45
18,758.87
During the year ended March 31, 2020, the Company has recognised an amount of ₹32.96 crore (2018-19: ₹27.06 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
33. Finance costs
[Item No. IV(e), Page 324]
Interest expense on:
(a) Bonds, debentures, bank borrowings and others
(b) Lease obligations
Less: Interest capitalised
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
21.47
11.21
0.28
32.96
22.05
4.88
0.13
27.06
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
7,100.94
673.52
7,774.46
241.00
7,533.46
7,537.44
328.67
7,866.11
206.01
7,660.10
391
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
34. Depreciation and amortisation expense
[Item No. IV(f), Page 324]
Depreciation on property, plant and equipment and amortisation of intangible assets
Depreciation on right-of-use assets
Less: Transferred to capital accounts
Less: Reclassified to discontinued operations
Less: Amount released from grants received
35. Other expenses
[Item No. IV(g), Page 324]
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 losses/provision for advances
(o) Others
Year ended
March 31, 2020
(` crore)
Year ended
March 31, 2019
7,662.16
986.67
195.89
-
12.21
8,440.73
7,592.44
-
-
237.49
13.12
7,341.83
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
11,625.68
107.73
6,753.60
93.97
599.48
4,720.44
2,651.71
8,929.09
2,324.79
1,823.88
1,174.48
351.84
238.68
5.82
7,262.07
48,663.26
11,160.14
133.23
6,672.15
87.90
451.20
4,865.36
2,680.86
8,388.65
3,454.91
2,191.26
1,485.19
272.24
259.88
173.90
8,133.85
50,410.72
(i) Others include:
net foreign exchange gain `713.51 crore (2018-19: loss `785.89 crore)
(a)
(b) donations to electoral trusts Nil (2018-19: `175.00 crore)
(ii)
During the year ended March 31, 2020, the Company has recognized an amount of ₹6.95 crore (2018-19: ₹7.35 crore) as payment to non-
executive directors. The details are as below:
(a) Short-term benefits
(b) Sitting fees
Year ended
March 31, 2020
(` crore)
Year ended
March 31, 2019
6.55
0.40
6.95
6.87
0.48
7.35
(iii)
Revenue expenditure charged to the consolidated statement of profit and loss in respect of research and development activities
undertaken during the year is ₹756.31 crore (2018-19: ₹865.01 crore)
392
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
36. Exceptional items
[Item No. VII, Page 324]
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)
(b)
(c)
Profit on sale of subsidiaries and non-current investments includes profit of ₹148.99 crore on sale and ₹40.63 crore on liquidation
of subsidiaries within the European Operations (2018-19: ₹180.13 crore primarily includes profit on sale of investment in TRL Krosaki
Refractories Limited, an associate of the Company).
Provision for impairment of investments/doubtful advances ₹40.95 crore (2018-19: ₹172.12 crore) primarily relates to capital and
other advances.
Provision for impairment of non-current assets relates to impairment recognised in respect of property, plant and equipment
(including capital work-in-progress), right-of-use assets and goodwill ₹3,197.14 crore (2018-19: ₹9.57 crore). The impairment
recognized is contained within Tata Steel Europe, Rest of the world, Other Indian operations and Bamnipal Steel (including Tata
Steel BSL) segment (2018-19: Bamnipal Steel (including Tata Steel BSL) segment). The impairment recognized is shown as an
exceptional item in segment reporting and does not form part of segment result.
(d) Provision for demands and claims ₹196.41 crore (2018-19: ₹328.64 crore) is in respect of certain statutory demands and claims.
(e)
(f)
Employee separation compensation ₹107.37 crore (2018-19: ₹35.33 crore) relates to provisions recognised in respect of early
separation of employee within Indian operations.
Restructuring and other provisions ₹149.80 crore primarily includes provision relating to performance obligation towards
development of a coal block within Tata Steel Long Products Limited (formerly Tata Sponge Iron Limited), restructuring provisions
within European Operations and write-back of liabilities no longer required (2018-19: ₹244.56 crore primarily include write-back of
liabilities no longer required).
(g)
Fair value gain/(loss) on preference share investment ₹250.00 crore (2018-19: Nil) represents notional fair value loss on preference
share investments held in an associate of the Company.
37. Discontinued operations
[Item No. XI, Page 324]
On January 28, 2019, the Group entered into definitive agreements with HBIS Group Co. Ltd. ('HBIS') to divest its entire equity stake in
NatSteel Holdings Pte. Ltd. ('NSH') and Tata Steel (Thailand) Public Company Ltd. ('TSTH'). The definitive agreements were not extended
since HBIS was not able to procure the requisite regulatory approval.
As on March 31, 2020, active discussions and engagement with other potential buyers demonstrate that the management of the Group
is committed to sell the disposal group and there is an active programme for completing the sale.
In accordance with Ind AS 105, “Non-current Assets Held for Sale and Discontinued Operations”, the businesses forming part of the
disposal group have been classified as discontinued operations.
393
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
37. Discontinued operations (Contd.)
[Item No. XI, Page 324]
The results of discontinued operations are set out below:
Revenue from operations
I
II Other income
III Total income
IV Expenses:
(a) Cost of materials consumed
(b) Purchases of stock-in-trade
(c)
Changes in inventories of finished and semi-finished goods, stock-in-trade and work-in-
progress
(d) Employee benefits expense
(e) Finance costs
(f ) Depreciation and amortisation expense
(g) Other expenses
Total expenses
V Share of profit/(loss) of joint ventures and associates
VI Profit/(loss) before exceptional items and tax from discontinued operation (III-IV+V)
VII Exceptional items
VIII Profit/(loss) before tax (VI+VII)
IX Tax expense:
(a) Current tax
(b) Deferred tax
Total tax expense
X Profit/(loss) after tax
XI Profit/(loss) on disposal of discontinued operations
XII Profit/(loss) after tax from discontinued operations (X+XI)
XIII Other comprehensive income/(loss)
(A) (i) Items that will not be reclassified subsequently to profit and loss:
(a) Remeasurement gain/(loss) on post-employment defined benefit plans
(b) Fair value changes of investments in equity shares
(ii) Income tax on items that will not be reclassified subsequently to profit and loss
(B) (i)
Items that will be reclassified subsequently to profit and loss:
(a) Foreign currency translation differences
(b) Fair value changes of cash flow hedges
(ii) Income tax on items that will be reclassified subsequently to profit and loss
Total other comprehensive income/(loss)
XIV Total comprehensive income/(loss) from discontinued operations (XII + XIII)
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
9,155.06
(21.50)
9,133.56
348.62
5,708.42
75.19
618.65
47.26
266.94
2,039.67
9,104.75
-
28.81
(1,149.55)
(1,120.74)
29.11
(13.60)
15.51
(1,136.25)
(27.98)
(1,164.23)
(6.31)
(7.15)
2.18
111.66
(36.90)
-
63.48
(1,100.75)
9,632.74
2.67
9,635.41
396.07
5,935.93
329.57
597.11
81.78
237.49
2,138.34
9,716.29
(2.43)
(83.31)
(15.29)
(98.60)
12.19
(21.83)
(9.64)
(88.96)
-
(88.96)
(0.22)
10.94
(2.03)
22.48
2.72
-
33.89
(55.07)
During the year ended March 31, 2020, impairment charge of ₹1,175.30 crore was recognized to write down the carrying value of the
disposal group to fair value less costs to sell. The impairment charge is included within exceptional items in discontinued operations.
During the year ended March 31, 2020, discontinued operations resulted in an inflow of ₹474.56 crore (March 31, 2019: inflow of ₹550.43
crore) to the Group’s net operating cash flows, an outflow of ₹29.39 crore (March 31, 2019: outflow of ₹76.78 crore) in respect of investing
activities and an outflow of ₹563.11 crore (March 31, 2019: outflow of ₹422.45 crore) in respect of financing activities.
(i)
(ii)
394
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
38. Earnings per share
[Item No. XVIII, XIX and XX, Page 325]
The following table reflects the profit/(loss) and shares data used in the computation of basic and diluted earnings per share (EPS).
(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)
Profit/(loss) after tax from continuing and discontinued operations attributable to ordinary
shareholders- for basic and diluted EPS (A+B)
(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 Share (₹)
(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
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
2,719.58
199.18
2,520.40
10,283.45
173.13
10,110.32
(1,163.04)
(65.12)
1,357.36
10,045.20
Nos.
1,14,47,48,227
89,536
1,14,48,37,763
Nos.
1,14,47,45,815
1,37,496
1,14,48,83,311
10.00
22.02
22.02
(10.16)
(10.16)
11.86
11.86
10.00
88.32
88.31
(0.57)
(0.57)
87.75
87.74
(i)
As at March 31, 2020, 5,81,96,450 options (March 31, 2019: 5,81,95,359) in respect of partly paid shares and 1,21,523 options (March 31,
2019: Nil) in respect of fully paid shares were excluded from weighted average number of Ordinary Shares for the computation of diluted
earnings per share as these were anti-dilutive
395
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
39. 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
Group are as below:
the
(a) Provident fund and pension
The Company and its Indian subsidiaries provide provident
fund benefits for eligible employees as per applicable
regulations wherein both employees and the Company/
Indian subsidiaries make monthly contributions at a specified
percentage of the eligible employees’ 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 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 ₹1,50,000, 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 the
above defined contribution plans amounted to ₹1,419.38
crore (2018-19: ₹1,369.81 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 the consolidated
statement of profit and 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:
As at
March 31, 2020
As at
March 31, 2019
6.20% - 6.70%
8.00% - 8.50%
8.00% - 8.50%
7.50%
8.60% - 8.65%
8.60% - 8.75%
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.
396
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
39. 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
liability for post-retirement
subsidiaries account for the
medical scheme based on year-end actuarial valuation.
(d) Tata Steel Europe’s pension plan
Tata Steel Europe, a wholly owned indirect subsidiary of the
Company, operates a number of defined benefit pension
and post-retirement schemes. 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
legislation. The accounting and disclosure
and national
requirements of Ind AS 19 "Employee benefits" do not affect
these funding arrangements.
The British Steel Pension Scheme (BSPS) is the legacy defined
benefit pension scheme in the UK and is closed to future
accrual. The current Scheme is the successor to the old BSPS
which,
in accordance with a Regulated Apportionment
Arrangement (‘RAA’), entered a Pension Protection Fund (PPF)
assessment period in March 2018. At that time approximately
80,000 electing members of the BSPS, out of a total of more
than 120,000, were transferred to the new Scheme (which
retains the title ‘British Steel Pension Scheme’). The BSPS is
sponsored by Tata Steel UK Limited (TSUK). Although TSUK has
a legal obligation to fund any future deficit, a key condition of
the new BSPS going forward was that it was sufficiently well
funded to meet the scheme’s modified liabilities on a self-
sufficiency basis with a buffer to cover residual risks. With the
assets that it holds, the new scheme is therefore well positioned
to pay benefits securely on a low risk basis without recourse
to TSUK. This risk includes economic risks (such as interest
rate risk and inflation risk), demographic risks (for example
members living longer than expected), and legal risks (for
example changes in legislation that may increase liabilities).
TSUK has worked with the Trustee to develop and implement
an Integrated Risk Management (‘IRM’) framework to manage
these risks. The framework provides ongoing monitoring of
the key investment, funding and covenant risks facing the
scheme and tracks progress against the scheme’s journey
plan and target. Measures taken by the Trustee to manage risk
include the use of asset-liability matching techniques to reduce
interest rate risk, and investment in assets that are expected to
be correlated to future inflation in the longer term to mitigate
inflation risk. In particular, the scheme’s investment policy has
regard for the maturity and nature of the scheme’s liabilities
and seeks to match a large part of the scheme’s liabilities with
secure bonds, whilst achieving a higher long-term return on
a small proportion of equity and other investments. However,
the scheme’s interest rate risk is hedged on a long-term
funding basis linked to gilts whereas AA corporate bonds are
implicit in the Ind AS 19 “Employee Benefits” discount rate and
so there is some mismatching risk to the financial statements,
should yields on gilts and corporate bonds diverge.
The BSPS and Open Trustee Limited (‘OTL’), acting on behalf of
the members of the old Scheme, hold an anti-embarrassment
interest in TSUK agreed as part of the RAA. The anti-
embarrassment interest was initially 33.33% at the time of the
RAA but has since been diluted to less than 1% due to successive
equity issuances by TSUK to its parent company Corus Group
Limited. No value has been included in the BSPS’s assets at
March 31, 2020 (March 31, 2019: Nil) for its interest in TSUK.
At March 31, 2020 the new scheme had a surplus of
₹26,067.36 crore (March 31, 2019: ₹18,833.17 crore). The
company has recognised 100% (March 31, 2019: 100%) of
the surplus as it has an unconditional right to a refund of the
397
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
39. Employee benefits (Contd.)
surplus. The new scheme is fully funded on a low-risk technical
provisions (‘TP’) basis and TSUK is working with the Trustee
to explore options to increase security for members and to
work towards an ultimate winding up of the scheme in which
all benefits are fully secured with one or more insurance
companies. The March 31, 2018 valuation was agreed between
TSUK and the BSPS Trustee on April 11, 2019. This was a surplus
of ₹6,008.56 crore on a TP (more prudent) basis equating to a
funding ratio of 106.3%. The agreed Schedule of Contributions
recovery
that neither ordinary nor deficit
confirmed
contributions are due from Tata Steel Europe.
On October 26, 2018 the High Court ruled that UK pension
schemes would be required to equalise guaranteed minimum
pensions ('GMP'). The ruling also provided guidance on how
this equalisation should be undertaken. Following this ruling,
in the prior year an increase to the BSPS liabilities in respect
of the estimated impact of this equalisation with the related
charge in other comprehensive income was recognised. This
reserve has been retained at the same value in the March 31,
2020 Ind AS 19 position.
(e) Other defined benefits
Other benefits provided under unfunded schemes include
pension payable to directors on their retirement, farewell
gifts, post-retirement lumpsum benefit 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)
(ii)
(iii)
(iv)
(v)
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.
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 value of plan’s
debt investments.
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.
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.
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.
398
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
39. 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
Obligations of companies disposed
Obligation at the end of the year
Change in plan assets:
Fair value of plan assets at the beginning of the year
Addition relating to acquisitions
Interest income
Remeasurement gain/(loss) excluding amount included within employee benefits expense
Employers' contribution
Benefits paid
Assets of companies disposed
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 obligations - Non-current
Retirement benefit obligations - Current
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
3,096.99
24.77
150.73
200.10
(597.47)
269.36
192.01
(5.45)
3,331.04
2,966.47
56.67
143.63
205.38
(257.31)
(17.85)
-
-
3,096.99
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
2,976.94
-
204.18
16.11
86.94
(592.51)
(4.64)
2,687.02
2,898.34
22.55
211.58
29.73
72.05
(257.31)
-
2,976.94
As at
March 31, 2020
(` crore)
As at
March 31, 2019
2,687.02
3,331.04
(644.02)
0.42
-
(625.82)
(18.62)
(644.02)
2,976.94
3,096.99
(120.05)
0.44
4.38
(120.36)
(4.51)
(120.05)
399
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 39. Employee benefits (Contd.)
Expense/(gain) recognised in the consolidated statement of profit and loss consist of:
Employee benefits expense:
Current service cost
Net interest expense/(income)
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 assumptions
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, 2020
Year ended
March 31, 2019
150.73
(4.08)
146.65
(16.11)
0.26
254.40
14.70
253.25
399.90
143.63
(6.20)
137.43
(29.73)
(8.62)
(7.32)
(1.91)
(47.58)
89.85
(%)
As at
March 31, 2020
As at
March 31, 2019
0.22
21.65
21.87
1.00
73.53
3.60
78.13
100.00
0.05
18.43
18.48
0.96
77.12
3.44
81.52
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 criteria 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.
400
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR 39. Employee benefits (Contd.)
(iii) Key assumptions used in the measurement of retiring gratuity is as below:
Discount rate
Rate of escalation in salary
As at
March 31, 2020
6.20 - 6.96 %
5.00 - 10.00 %
(%)
As at
March 31, 2019
7.50 - 7.71 %
4.00 - 10.00 %
(iv) Weighted average duration of the retiring gratuity obligation ranges between 6 to 16 years (March 31, 2019: 6 to 16 years).
(v)
The Group expects to contribute ₹587.98 crore to the plan during the financial year 2020-21.
(vi) The table below outlines the effect on retiring gratuity obligation in the event of a decrease/ increase of 1% in the assumptions used.
As at March 31, 2020
Assumption
Discount rate
Rate of escalation in salary
As at March 31, 2019
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 ₹ 245.08 crore, increase by ₹ 285.02 crore
Increase by ₹ 278.14 crore, decrease by ₹ 245.13 crore
Change in assumption
Increase by 1%, decrease by 1%
Increase by 1%, decrease by 1%
Impact on obligation
Decrease by `194.58 crore, increase by `221.91 crore
Increase by `218.74 crore, decrease by `194.53 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.
Change in defined benefit obligations:
Obligation at the beginning of the year
Current service cost
Past service cost
Costs relating to scheme change
Interest cost
Remeasurement (gain)/loss
Settlements
Benefits paid
Obligations of companies disposed off
Exchange differences on consolidation
Obligation at the end of the year
Year ended
March 31, 2020
(` crore)
Year ended
March 31, 2019
77,973.85
153.33
(36.08)
-
1,731.77
(3,239.54)
(108.24)
(4,744.32)
-
2,462.14
74,192.91
84,834.48
183.24
-
18.32
2,125.59
3,085.94
-
(10,673.74)
(127.66)
(1,472.32)
77,973.85
401
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 39. Employee benefits (Contd.)
Change in plan assets:
Fair value of plan assets at the beginning of the year
Interest income
Remeasurement gain/(loss)
Employers' contribution
Settlements
Benefits paid
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 obligations - Current
Retirement benefit obligations - Non-current
Expense/(gain) recognised in the consolidated statement of profit and loss consist of:
Employee benefits expense:
Current service cost
Past service costs
Net interest expense/(income)
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 assumptions
Actuarial (gain)/loss arising from changes in experience adjustments
Expense/(gain) recognised in the consolidated statement of profit and loss
402
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
96,807.02
2,173.73
2,769.02
63.14
(108.24)
(4,726.28)
3,281.88
1,00,260.27
1,04,248.01
2,629.50
2,382.12
45.81
-
(10,655.41)
(1,843.01)
96,807.02
As at
March 31, 2020
1,00,260.27
74,192.91
26,067.36
27,278.03
(9.25)
(1,201.42)
26,067.36
(` crore)
As at
March 31, 2019
96,807.02
77,973.85
18,833.17
19,963.75
(7.90)
(1,122.68)
18,833.17
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
153.33
(36.08)
(441.96)
-
(324.71)
(2,769.02)
342.50
(3,588.86)
6.82
(6,008.56)
(6,333.27)
183.24
-
(503.91)
18.32
(302.35)
(2,382.12)
(1,179.06)
3,818.84
446.16
703.82
401.47
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR 39. Employee benefits (Contd.)
(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
Property
Unquoted
(a)
(b) Derivatives
(c) Others
As at
March 31, 2020
(%)
As at
March 31, 2019
0.44
3.92
68.36
29.25
0.34
102.31
11.18
(16.06)
2.57
(2.31)
100.00
0.59
7.41
49.86
28.05
0.04
85.95
12.75
(0.99)
2.29
14.05
100.00
(iii) Key assumptions used in the measurement of pension benefits is as below:
Discount rate
Rate of escalation in salary
Inflation rate
As at March 31, 2020
As at March 31, 2019
BSPS
2.45%
N.A
2.55%
Others
0.30-3.20%
1.00-2.00%
1.00-3.00%
BSPS
2.30%
N.A
3.20%
Others
0.80-3.95%
1.00-2.00%
1.00-3.00%
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 BSPS the liability calculations as at
March 31, 2020 use the Self-Administered Pension Schemes 2 (SAPS 2) base tables, S2NMA/S2DFA with the 2015 CMI projections with a 1.50%
p.a. (2018-19: 1.50% p.a.) long-term trend applied from 2007 to 2016 [(adjusted by a multiplier of 1.15 p.a. (2018-19: 1.15 p.a.) for males and
1.21 p.a. (2018-19: 1.21 p.a.) for females)]. In addition, future mortality improvements are allowed for in line with the 2019 CMI Projections with
a long-term improvement trend of 1% per annum, a smoothing parameter of 7.0 and an initial addition parameter of 0%. This indicates that
today's 65 year old male member is expected to live on average to approximately 86 years (2018-19: 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 (2018-19: 86 years) of age.
(iv) Weighted average duration of the pension obligations is 14.5 years (March 31, 2019: 14.5 years).
(v) The Group expects to contribute Nil to the plan during the financial year 2020-21.
(vi) The table below outlines the effect on pension obligations in the event of a decrease/increase of 10 bps in the assumptions used.
403
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 39. Employee benefits (Contd.)
As at March 31, 2020
Assumption
Discount rate
Rate of escalation in salary
Inflation rate
Mortality rate
As at March 31, 2019
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 expectancy
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 3%, decrease by 3%
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 expectancy
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 3%, decrease by 3%
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.
(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.
Actuarial (gain)/losses arising from changes in demographic assumptions
Actuarial (gain)/losses arising from changes in financial assumptions
Change in defined benefit obligations:
Obligations at the beginning of the year
Current service cost
Interest costs
Remeasurement (gain)/loss:
(i)
(ii)
(iii) Actuarial (gain)/losses arising from changes in experience adjustments
Benefits paid
Addition relating to acquistion
Obligations of companies disposed
Classified as held for sale
Exchange differences on consolidation
Obligations at the end of the year
Year ended
March 31, 2020
Year ended
March 31, 2019
Medical
Others
Medical
Others
(` crore)
1,307.49
19.38
95.27
-
215.48
23.34
(73.35)
-
(1.22)
-
-
1,586.39
211.21
66.79
15.10
1,239.92
19.12
90.26
-
18.56
4.99
(19.14)
0.43
-
-
-
297.94
-
(0.02)
24.99
(66.78)
-
-
-
-
1,307.49
158.62
115.53
8.96
1.26
(0.20)
1.33
(13.40)
-
-
(62.11)
1.22
211.21
404
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR 39. Employee benefits (Contd.)
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
As at March 31, 2020
As at March 31, 2019
(` crore)
Medical
1,586.39
Others
297.94
Medical
1,307.49
95.85
1,490.54
1,586.39
17.54
280.40
297.94
92.66
1,214.83
1,307.49
Others
211.21
15.61
195.60
211.21
(` crore)
Expense/(gain) recognised in the consolidated statement of profit and loss consist of:
Employee benefits expense:
Current service costs
Interest costs
Other comprehensive income:
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
Year ended
March 31, 2020
Year ended
March 31, 2019
Medical
Others
Medical
Others
19.38
95.27
114.65
-
215.48
23.34
238.82
353.47
66.79
15.10
81.89
19.12
90.26
109.38
115.53
8.96
124.49
-
18.56
4.99
23.55
105.44
-
(0.02)
24.99
24.97
134.35
1.26
(0.20)
1.33
2.39
126.88
(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, 2020
As at March 31, 2019
Medical
6.20-6.75%
N.A
5.00-8.00%
Others
6.20% - 6.75%
3.50 - 15.00%
4.00-6.00%
Medical
7.50%
N.A
5.00% - 8.00%
Others
7.50%
3.50% - 15.00%
4.00% - 6.00%
(iii)
(iv)
Weighted average duration of post-retirement medical benefit obligations ranges between 7 to 10 years (March 31, 2019: 7 to 9 years).
Weighted average duration of other defined benefit obligations ranges between 5 to 12 years (March 31, 2019: 6 to 12 years).
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, 2020
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 ₹ 216.09 crore, increase by ₹ 278.55 crore
Increase by ₹ 258.25 crore, decrease by ₹ 205.01 crore
405
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
39. Employee benefits (Contd.)
As at March 31, 2019
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 `163.63 crore, increase by `207.55 crore
Increase by `193.32 crore, decrease by `155.82 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, 2020
Assumption
Discount rate
Rate of escalation in salary
Inflation rate
As at March 31, 2019
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 ₹17.96 crore, increase by ₹21.07 crore
Increase by ₹5.93 crore, decrease by ₹5.26 crore
Increase by ₹7.52 crore, decrease by ₹6.58 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 ₹13.41 crore, increase by ₹15.49 crore
Increase by ₹4.36 crore, decrease by ₹3.83 crore
Increase by `6.01 crore, decrease by `5.35 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.
406
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR 40. Contingencies and commitments
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.
It is not practicable for the Group to estimate the timings of
the cash outflows, if any, pending resolution of the respective
proceedings. The Group does not expect any reimbursements in
respect of the same.
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 a 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 expenses, 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, 2020, there are matters and/or disputes pending in
appeal amounting to ₹2,364.13 crore (March 31, 2019: ₹3,218.64
crore) which includes ₹11.62 crore (March 31, 2019: ₹17.18 crore) in
respect of equity accounted investees.
(b)
The details of significant demands are as below:
(a)
Interest expenditure on loans taken by the Company for
acquisition of a subsidiary has been disallowed in assessments
with tax demand raised for ₹1,551.10 crore (inclusive of
interest) (March 31, 2019: ₹1,791.29 crore).
(b)
Interest expenditure on “Hybrid Perpetual Securities” has been
disallowed in assessments with tax demand raised for ₹170.54
crore (inclusive of interest) (March 31, 2019: ₹459.13 crore)
In respect of above demands, the Company has deposited an amount
of ₹1,165.00 crore (March 31, 2019: ₹1,065.00 crore) as a precondition
for obtaining stay. The Company expects to sustain its position on
ultimate resolution of the said appeals.
Customs, Excise duty and Service tax
As at March 31, 2020, there were pending litigation for various
matters relating to customs, excise duty and service tax involving
demands of ₹614.58 crore (March 31, 2019: ₹925.71 crore), which
includes ₹20.50 crore (March 31, 2019: ₹19.95 crore) in respect of
equity accounted investees.
Sales tax/VAT
The total sales tax demands that are being contested by the Group
amounted to ₹742.66 crore (March 31, 2019: ₹889.88 crore), which
includes ₹79.05 crore (March 31, 2019: ₹79.70 crore) in respect of
equity accounted investees.
The details of significant demands are as below:
(a)
The Company stock transfers its goods manufactured at
Jamshedpur works plant to
its various depots/branches
located outside the state of Jharkhand across the country
and these goods are then sold to various customers outside
the states from depots/branches. As per the Central Sales Tax
Act, 1956, these transfers of goods to depots/branches were
made without payment of Central sales tax and F-Form was
submitted in lieu of the stock-transfers made during the period
of assessment. The value of these sales was also disclosed in
the periodical returns filed as per the Jharkhand Vat Act, 2005.
The Commercial Tax Department has raised 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. The amount involved for various assessment
years beginning 2011-2012 to 2015-2016 is amounting to
₹127.00 crore (March 31, 2019: ₹127.00 crore).
The Commercial Tax Department of Jharkhand has rejected
certain Input tax credit claimed by the Company on goods
purchased from the suppliers within the State of Jharkhand.
The Department has alleged that the goods have not been
used in accordance with the provisions of Jharkhand VAT Act,
2005. The potential exposure on account of disputed tax and
interest for the period beginning 2012-2013 to 2015-2016 as on
March 31, 2020 is ₹74.00 crore (March 31, 2019: ₹104.00 crore).
407
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 40. Contingencies and commitments (Contd.)
Other taxes, dues and claims
Other amounts for which the Group may contingently be liable
aggregate to ₹13,044.46 crore (March 31, 2019: ₹12,578.82 crore),
which includes ₹90.53 crore (March 31, 2019: ₹75.22 crore) in respect
of equity accounted investees.
The details of significant demands are as below:
(a)
(b)
Claim by a party arising out of conversion arrangement
₹195.79 crore (March 31, 2019: ₹195.79 crore). The Company
has not acknowledged this claim and has instead filed a claim
of ₹141.23 crore (March 31, 2019: ₹141.23 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 Orissa High Court challenging the
validity of the Act. The High Court held in December 2005
that the 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 the High Court and the case is pending in
Supreme Court. The potential liability, as at March 31, 2020 is
₹8,732.29 crore (March 31, 2019: ₹7,573.53 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 issued by the Ministry of Mines, Government of
India and the price published by India Bureau of Mines (IBM) on
a monthly basis.
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 and to grant refund of royalty
paid in excess by the Company. Mines Tribunal has granted
stay on the total demand with directive to Government of
Odisha not to take any coercive action for realisation of this
demanded amount.
The Hon’ble High Court of Odisha, in a similar matter held the
circulars based on which demands were raised to be valid.
The Company has challenged the judgement of the High
Court by a separate petition in the Hon’ble Supreme Court on
April 29, 2016.
408
(d)
On July 16, 2019, the Company has filed rejoinders to the reply
filed by State of Odisha against the revision petition. The
State pressed for rejection of revision applications citing the
judgment of the High Court. The Company represented before
the authorities and explained that the judgment was passed
under a particular set of ‘facts & circumstances’ which cannot
have blanket application on the Company considering the
case of the Company is factually different. On August 7, 2019,
the Mines Tribunal decided to await the outcome of Special
leave petition pending before the Hon’ble Supreme Court and
adjourned the matter.
Likely demand of royalty on fines at sized ore rates as on March
31, 2020 is ₹1,965.52 crore (March 31, 2019: ₹1,630.16 crore).
Demand notices were originally issued by the Deputy Director
of Mines, Odisha amounting to ₹3,827.29 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, 1957 (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 pronounced its judgement 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 Judgement of Hon’ble Supreme Court,
demand/show cause notices amounting to ₹3,873.35 crore
have been issued during 2017-18 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 during 2017-18 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 during 2017-18 for production in
excess of environment clearance to the District Mining
Office, Jharkhand.
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
40. Contingencies and commitments (Contd.)
•
•
•
the Company has challenged the demands amounting
to ₹132.91 crore in 2017-18 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.
Mines Tribunal, Delhi vide order dated November 26, 2018
disposed of all the revision applications with a direction
to remand it to the State Government to hear all such
cases afresh and pass detailed order. Demand amount of
is
₹132.91 crore
considered contingent.
(March 31, 2019: ₹132.91 crore)
the Company has made a comprehensive submission
before the Deputy Director of Mines, Odisha against
show cause notices amounting to ₹ 694.02 crore received
during 2017-18 for production in violation of mining plan,
Environment Protection Act, 1986 and Water (Prevention
& Control of Pollution) Act, 1981. A demand amounting
to ₹234.74 crore has been received in April, 2018 from
the Deputy Director of Mines, Odisha for production in
excess of the Environmental Clearance. The Company has
challenged the demand and obtained a stay on the matter
from the Revisionary Authority, Mines Tribunal, New Delhi.
Demand of ₹234.74 crore has been provided and show
cause notice of ₹694.02 crore had been considered as
contingent as at March 31, 2019.
During the year ended March 31, 2020, based on the
the
evaluation of current
Company has assessed and concluded that the said show
cause notice of ₹694.02 crore no longer qualifies to be a
contingent liability.
facts and circumstances,
internal assessment has
its
the Company based on
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 producing more
than environment clearance and the balance amount of
₹727.41 crore (March 31, 2019: ₹727.41 crore) has been
considered as contingent. The Company has however been
granted a stay by the Revisional Authority, Ministry of Coal,
Government of India against such demand notices.
(e)
An agreement was executed between the Government of
Odisha (GoO) and the Company in December, 1992 for drawal
of water from Kundra Nalla for industrial consumption. In
December 1993, the Tahsildar, Barbil issued a show-cause
notice alleging that the Company has lifted more quantity of
water than the sanctioned limit under the agreement and has
also not installed the water meter.
While the proceedings in this regard were in progress, the
Company had applied for allocation of fresh limits. Over the
years, there has also been a steep increase in water charges
against which the Company filed writ petitions before the
Hon’ble High Court of Odisha.
In this regard, the Company has received demand of ₹156.62
crore for the period beginning January 1996 to February 2020.
The potential exposure as on March 31, 2020 is ₹162.96 crore
(March 31, 2019: ₹125.98 crore) is considered as contingent.
The writ petition filed in August 1997 was listed for hearing
before the Full Bench of High Court of Odisha on May 17,
2019. SAIL, one of the petitioners, sought permission to
withdraw its writ petition because a settlement arrived with
the State Government on the matter. The High Court allowed
withdrawal of writ petition of SAIL and directed other parties
to negotiate with the State Government. The Company has
submitted its detailed representation to Principal Secretary,
Water Resource Department, GoO on June 21, 2019, which is
under consideration.
B. Commitments
(a)
The Group has entered into various contracts with suppliers
and contractors for acquisition of plant and machinery,
equipment and various civil contracts of capital nature
amounting to ₹11,128.64 crore, which includes ₹91.89 crore
in respect of equity accounted investees (March 31, 2019:
₹10,205.20 crore which includes ₹30.30 crore in respect of
equity accounted investees).
Other commitment as at March 31, 2020 amounts to ₹0.01 crore
which includes Nil in respect of equity accounted investees
(March 31, 2019: ₹ 0.01 crore which includes Nil in respect of
equity accounted investees).
(b)
The Company has given undertakings to:
(i)
(ii)
IDBI not to dispose of
Incandescent India Ltd.,
its
investment
in Wellman
IDBI and ICICI Bank Ltd. (formerly ICICI) not to dispose of
its investment in Standard Chrome Ltd.
409
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
40. Contingencies and commitments (Contd.)
(c)
The Company and Bluescope Steel Limited have given
undertaking to State Bank of India not to reduce collective
shareholding in Tata Bluescope Steel Private Limited (TBSPL),
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
TBSPL below 50%.
(d)
The Company, as a promoter, has pledged 4,41,55,800 (March
31, 2019: 4,41,55,800) equity shares of Industrial Energy Limited
with Infrastructure Development Finance Corporation Limited.
(e)
The Group has given guarantees aggregating ₹178.40 crore
(March 31, 2019: ₹188.00 crore) details of which are as below:
(i)
(ii)
(iii)
in favour of Commissioner of Customs for ₹1.07 crore
(March 31, 2019: ₹1.07 crore) given on behalf of Timken
India Limited in respect of goods imported.
in favour of Mizuho Corporate Bank Ltd., Japan for Nil
(March 31, 2019: ₹9.60 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, 2019: ₹177.18 crore) against performance of
export obligations under various bonds executed by a
joint venture Jamshedpur Continuous Annealing and
Processing Company Private Limited.
(iv)
in favour of President of India for ₹0.15 crore (March 31,
2019: ₹ 0.15 crore) against advance license.
41. Other significant litigations
(a)
Odisha Legislative Assembly issued an amendment to Indian
Stamp Act, 1889, on May 9, 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. Because 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 various
mines in Odisha totalling to ₹5,579.00 crore (March 31, 2019:
₹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 court.
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, 2020 as per the existing provisions of the Stamp Act, 1899
and the Company had paid the stamp duty and registration
charges totalling ₹413.72 crore for supplementary deed
execution in respect of eight mines out of the above mines.
b)
Noamundi Iron Ore Mine of the Company 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 judgement 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 ₹3,568.31 crore being the price of iron ore extracted.
The said demand has been challenged by the Company before
the Jharkhand High Court.
The mining operations were suspended from August 1, 2014.
Upon issuance of an express order, Company paid ₹152.00
crore under protest, so that mining could 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 upto March 31, 2030 with the following
terms and conditions:
410
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
41. 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 instalments.
• value of iron ore produced from July 18, 2014 to August 31,
2014 ₹152.00 crore to be paid immediately.
District Mining Officer Chaibasa on March 16, 2015 issued a
demand notice for payment of ₹421.83 crore in three monthly
installments. The Company on March 20, 2015 replied that 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.
The Company filed another writ petition before the Hon’ble
High Court of Jharkhand which was heard on September 9,
2015. An interim order was given by the Hon’ble High Court
of Jharkhand on September 17, 2015, wherein the Court has
directed the Company to pay the amount of ₹371.83 crore in 3
equal instalments, first instalment by October 15, 2015, second
instalment by November 15, 2015 and third instalment by
December 15, 2015.
In view of the interim order of the Hon’ble High Court of
Jharkhand ₹124.00 crore was paid on September 28, 2015,
₹124.00 crore on November 12, 2015 and ₹123.83 crore on
December 14, 2015 under protest.
The case is pending before the 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. Based on the
Company’s assessment of the Goa mines judgement read with
the Ordinance issued in the year 2015, the Company believes
that it is remote that the demand of the State would sustain.
411
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
42. Acquisition of subsidiaries
A.
On April 9, 2019, Tata Steel Long Products Limited (formerly Tata Sponge Iron Limited) (‘TSLP’), a subsidiary of the Company, completed the
acquisition of the steel business of Usha Martin Limited (‘UML’).
Fair value of identifiable assets acquired and liabilities assumed as on the date of acquisition is as below:
Non-current assets
Property, plant and equipment
Capital work-in-progress
Right-of-use assets
Other intangible assets
Financial assets
Other assets
Current assets
Inventories
Trade receivables
Other financial assets
Other assets
Assets held for sale
Total assets [A]
Non-current liabilities
Borrowings
Provisions
Retirement benefit obligations
Current liabilities
Borrowings
Trade payables
Other financial liabilities
Provisions
Retirement benefit obligations
Deferred income
Other liabilities
Total liabilities [B]
Fair value of identifiable net assets [C=A-B]
Consideration paid
Deferred consideration
Total consideration paid [D]
Goodwill [D-C]
412
(` crore)
Fair value as on
acquisition date
4,106.18
19.87
255.11
315.20
7.99
15.26
4,719.61
245.75
101.18
0.18
27.02
374.13
8.39
5,102.13
100.42
20.57
13.03
134.02
21.29
619.86
16.55
14.60
10.91
31.51
210.41
925.13
1,059.15
4,042.98
(` crore)
3,906.12
142.52
4,048.64
5.66
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
42. Acquisition of subsidiaries (Contd.)
(i) On acquisition of the steel business of UML, TSLP has paid ₹476.37 crore on account of negative working capital and debt like items.
(ii)
(iii)
Acquisition-related costs amounting to ₹27.42 crore have been excluded from the consideration transferred and have been recognised
as an expense in the consolidated statement of profit and loss within exceptional items.
From the date of acquisition, UML has contributed ₹2,668.60 crore to revenue from operations and a loss of ₹694.37 crore to consolidated
profit before tax on a pre-consolidation adjustments basis.
Had the business combination been effected at April 1, 2019, the revenue of the Group from continuing operations would have been
higher by ₹59.63 crore and profit before tax from continuing operations lower by ₹11.92 crore on a pre-consolidation adjustments basis.
B.
On June 1, 2019, Tata Steel BSL Limited, a subsidiary of the Company has acquired 99.99% stake in Angul Energy Limited (formerly
“Bhushan Energy Limited”) (‘AEL’) pursuant to a Corporate Insolvency Resolution Process implemented under the Insolvency and
Bankruptcy Code, 2016
Fair value of identifiable assets acquired and liabilities assumed as on the date of acquisition is as below:
Non-current assets
Property, plant and equipment
Right-of-use assets
Investments
Financial assets
Non-current tax assets
Other assets
Current assets
Inventories
Trade receivables
Cash and cash equivalents
Other financial assets
Other assets
Total assets [A]
Non-current liabilities
Borrowings
Provisions
Retirement benefit obligations
Current liabilities
Trade payables
Other financial liabilities
Provisions
Retirement benefit obligations
Other liabilities
Total liabilities [B]
Fair value of identifiable net assets [C=A-B]
(` crore)
Fair value as on
acquisition date
1,155.06
27.26
1.27
0.22
3.14
0.13
1,187.08
24.62
105.58
238.38
1.33
39.43
409.34
1,596.42
10.00
0.74
1.17
11.91
13.16
6.67
0.21
0.09
5.21
25.34
37.25
1,559.17
413
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
42. Acquisition of subsidiaries (Contd.)
Consideration paid
Non-controlling interests
Consideration paid including non-controlling interest [D]
Capital reserve [C-D]
(` crore)
755.00
0.02
755.02
804.15
From the date of acquisition, AEL has contributed ₹355.54 crore to revenue from operations and a profit of ₹4.31 crore to consolidated profit
before tax on a pre-consolidation adjustments basis.
Had the business combination been effected at April 1, 2019, the revenue of the Group from continuing operations would have been higher by
₹128.24 crore and profit before tax from continuing operations higher by ₹40.87 crore on a pre-consolidation adjustments basis.
43. Disposal of subsidiaries
During the year ended March 31, 2020, the Group disposed off Firsteel business and Cogent Power Inc. units in Europe.
A profit of ₹148.99 crore being the difference between the fair value of consideration received and carrying value of net assets disposed off in
respect of these businesses was recognized in the consolidated statement of profit and loss as an exceptional item.
During the year ended March 31, 2019, the Group disposed off Corus Building Systems Bulgaria AD in Bulgaria and Kalzip Business Units. The
Group also disposed Black Ginger 461 (Proprietary) Ltd. within the overseas mining business in South Africa. A profit of ₹10.20 crore being the
difference between the fair value of consideration received and the carrying value of net assets disposed off in respect of these businesses was
recognized in the consolidated statement of profit and loss.
(i)
Details of net assets disposed off and profit/(loss) on disposal is as below:
Non-current assets
Goodwill
Property, plant and equipment
Capital work-in-progress
Right-of-use assets
Other intangible assets
Current assets
Inventories
Trade receivables
Cash and bank balances
Other financial assets
Derivative assets
Current tax assets
Other non-financial assets
Non-controlling interests
414
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
-
18.06
6.74
88.28
-
113.08
153.68
136.83
6.91
1.46
-
7.25
22.79
328.92
28.47
99.48
1.40
-
143.71
273.06
223.00
113.66
24.22
16.89
0.06
8.65
13.63
400.11
71.86
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
43. Disposal of subsidiaries (Contd.)
Non-current liabilities
Borrowings
Provisions
Retirement benefit obligations
Other financial liabilities
Deferred income
Deferred tax liabilities
Current liabilities
Borrowings
Derivative liabilities
Trade payables
Other financial liabilities
Provisions
Retirement benefit obligations
Current tax liabilities
Other non-financial liabilities
Carrying value of net assets disposed off
Less: Adjustments in respect of:
Inter-company arrangements
Adjusted carrying value of net assets disposed
Sale consideration
Transaction costs
Foreign exchange recycled to profit/(loss) on disposal
Carrying value of net assets disposed off
Profit/(loss) on disposal
(ii) Details of net cash flow arising on disposal is as below:
Consideration received in cash and cash equivalents
Cash and cash equivalents disposed off
Net cash flow arising on disposal
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
89.37
2.09
-
-
-
1.53
92.99
-
-
215.17
3.65
-
-
-
-
218.82
130.19
-
130.19
89.64
26.39
119.52
0.84
10.80
47.62
294.81
160.66
15.19
136.46
63.24
17.90
4.49
42.12
21.02
461.08
(154.58)
(191.94)
37.36
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
263.31
(0.43)
16.30
(130.19)
148.99
87.24
-
(39.68)
(37.36)
10.20
Year ended
March 31, 2020
263.31
(6.91)
256.40
(` crore)
Year ended
March 31, 2019
87.24
(22.70)
64.54
415
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
44. 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 long-term borrowings and 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 banks (including non-current earmarked balances)
Net debt (C)
As at
March 31, 2020
1,144.95
2,275.00
70,156.35
73,576.30
2,586.60
76,162.90
94,104.97
19,184.48
3,038.75
1,16,328.20
1,92,491.10
1,16,328.20
3,431.87
7,541.96
574.93
1,04,779.44
(` crore)
As at
March 31, 2019
1,144.94
2,275.00
65,505.14
68,925.08
2,364.46
71,289.54
80,342.73
10,802.08
9,671.41
1,00,816.22
1,72,105.76
1,00,816.22
2,524.86
2,975.53
436.83
94,879.00
Net debt to equity ratio(i)
1.42
1.43
(i) Net debt to equity ratio as at March 31, 2020 and March 31, 2019 has been computed based on the average of opening and closing equity.
416
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR 45. 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 338 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, 2020 and
March 31, 2019.
As at March 31, 2020
Amortised
cost
Fair value
through other
comprehensive
income
Derivative
instruments
in hedging
relationship
Derivative
instruments
not in hedging
relationship
Fair value
through 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 payables
Borrowings other than lease
obligations
Lease obligations
Derivatives
Other financial liabilities
8,116.89
7,884.91
85.84
-
704.39
973.18
17,765.21
21,380.85
1,09,306.14
7,022.06
-
6,867.45
1,44,576.50
-
-
506.87
-
-
-
506.87
-
-
-
-
-
-
-
-
-
684.23
-
-
684.23
-
-
-
513.76
-
513.76
-
-
-
1,081.47
-
-
1,081.47
-
-
-
343.38
-
343.38
-
-
3,523.93
-
-
-
3,523.93
8,116.89
7,884.91
4,116.64
1,765.70
704.39
973.18
23,561.71
8,116.89
7,884.91
4,116.64
1,765.70
704.39
973.18
23,561.71
-
-
-
-
-
-
21,380.85
1,09,306.14
21,380.85
1,08,728.40
7,022.06
857.14
6,867.45
1,45,433.64
7,022.06
857.14
6,867.45
1,44,855.90
417
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 45. Disclosures on financial instruments (Contd.)
As at March 31, 2019
Financial assets:
Cash and bank balances
Trade receivables
Investments
Derivatives
Loans
Other financial assets
Financial liabilities:
Trade payables
Borrowings
Derivatives
Other financial liabilities
Amortised
cost
Fair value
through other
comprehensive
income
Derivative
instruments
in hedging
relationship
Derivative
instruments
not in hedging
relationship
Fair value
through profit
and loss
Total
carrying
value
(` crore)
Total fair
value
3,412.36
11,811.00
65.21
-
853.04
1,747.63
17,889.24
21,716.96
1,00,816.22
-
7,337.00
1,29,870.18
-
-
756.39
-
-
-
756.39
-
-
-
-
-
-
-
-
184.44
-
-
184.44
-
-
216.35
-
216.35
-
-
-
283.41
-
-
283.41
-
-
260.06
-
260.06
-
-
2,993.62
-
-
-
2,993.62
3,412.36
11,811.00
3,815.22
467.85
853.04
1,747.63
22,107.10
3,412.36
11,811.00
3,815.22
467.85
853.04
1,747.63
22,107.10
-
-
-
-
-
21,716.96
1,00,816.22
476.41
7,337.00
1,30,346.59
21,716.96
99,893.42
476.41
7,337.00
1,29,423.79
(i)
Investments in mutual funds and derivative instruments (other than those designated in a hedging relationship) are mandatorily
classified as fair value through 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 Level 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 Level includes investment in unquoted equity shares and
preference shares.
418
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
45. 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
Investments in preference shares
Derivative financial assets
Financial liabilities:
Derivative financial liabilities
Notes:
As at March 31, 2020
Level 1
Level 2
Level 3
Total
(` crore)
3,431.87
205.02
-
-
3,636.89
-
-
-
-
49.74
1,765.70
1,815.44
857.14
857.14
-
344.17
-
-
344.17
-
-
3,431.87
549.19
49.74
1,765.70
5,796.50
857.14
857.14
(` crore)
As at March 31, 2019
Level 1
Level 2
Level 3
Total
2,633.13
454.53
-
-
-
3,087.66
-
-
-
-
49.74
-
467.85
517.59
476.41
476.41
-
362.61
-
250.00
-
612.61
-
-
2,633.13
817.14
49.74
250.00
467.85
4,217.86
476.41
476.41
(i) Current financial assets and liabilities are stated at carrying value which is approximately equal to their fair value.
(ii)
(iii)
(iv)
(v)
Derivatives are fair valued using market observable rates and published prices together with forecasted cash flow information
where applicable.
Investments carried at fair value are generally based on market price quotations. Investments in equity shares included in 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 investment in preference shares is estimated by discounting the
expected future cash flows using a discount rate equivalent to the expected rate of return for a similar instrument and maturity as on the
reporting date.
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 the 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, 2020 and March 31, 2019.
419
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
45. 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
Disposals
Fair value changes during the year
Classified as held for sale
Reclassifications within investments*
Exchange rate differences on consolidation
Balance at the end of the year
(` crore)
Year ended
March 31, 2020
Year ended
March 31, 2019
612.61
0.63
(10.90)
(242.44)
-
(17.01)
1.28
344.17
388.94
267.92
-
(0.02)
(23.60)
(17.00)
(3.63)
612.61
* represents investments reclassified from fair value through profit and loss to amortized cost. During the year ended March 31, 2019,
reclassification represents investment in Subarnarekha Port Private Limited which had become a subsidiary.
(c) Derivative financial instruments
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 utilised to hedge future transactions and cash flows and are subject
to hedge accounting under Ind AS 109 “Financial Instruments” wherever 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.
(a)
(b)
(c)
Foreign currency forwards, futures, swaps and options
Commodity futures and options
Interest rate swaps and collars
Classified as:
Non-current
Current
As at March 31, 2020
As at March 31, 2019
Assets
1,739.90
13.05
12.75
1,765.70
279.64
1,486.06
Liabilities
539.34
218.85
98.95
857.14
127.92
729.22
Assets
360.07
90.56
17.22
467.85
108.74
359.11
(` crore)
Liabilities
476.34
-
0.07
476.41
59.82
416.59
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:
(i) Foreign currency forwards, futures, swaps and options
(ii) Commodity futures and options
(iii) Interest rate swaps and collars
420
As at
March 31, 2020
7,040.34
109.30
368.63
7,518.27
(US$ million)
As at
March 31, 2019
7,722.00
115.40
150.00
7,987.40
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
45. 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 arrangements 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:
Trade receivables
(e) Financial risk management
In the course of its business, the Group is exposed primarily
to fluctuations
rates,
commodity prices, interest rates, equity prices, liquidity and
credit risk, which may adversely impact the fair value of its
financial instruments.
foreign currency exchange
in
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 such
as interest rate risks and credit risks. The risk management
policy is approved by the Board of Directors of the respective
companies. 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.
(a) Market risk - Foreign currency exchange rate risk:
The fluctuation in foreign currency exchange rates may have
potential impact on the consolidated statement of profit and
As at March 31, 2020
As at March 31, 2019
Carrying
value of
assets
transferred
8.19
Carrying value
of associated
liabilities
8.19
Carrying
value of
assets
transferred
6.60
Carrying value
of associated
liabilities
6.60
(` crore)
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 forward and other derivative instruments primarily
to hedge foreign exchange and
interest rate exposure.
Any weakening of the functional currency may impact the
respective entities’ 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 a decrease/increase in the Group’s
net profit and equity before considering tax impacts by
approximately ₹578.31 crore for the year ended March 31,
2020, (2018-19 ₹1,208.86 crore) and increase/decrease in
carrying value of property, plant and equipment (before
considering depreciation impact) by approximately ₹109.94
crore as at March 31, 2020 (March 31, 2019: ₹145.38 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
entities within the Group.
421
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
45. Disclosures on financial instruments (Contd.)
The sensitivity analysis has been based on the composition
of the Group’s financial assets and liabilities as at March 31,
2020 and March 31, 2019 excluding trade payables, trade
receivables, other derivative and non-derivative financial
instruments not forming 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, 2020 and
March 31, 2019 a 100 basis points increase in interest rates
would increase the Group’s finance costs (before considering
interest eligible for capitalization) and thereby consequently
reduce net profit and equity before considering tax impacts
by approximately ₹629.81 crore for the year ended March 31,
2020 (2018-19 : ₹555.11 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, 2020 and March 31, 2019 was ₹205.02 crore and
₹454.53 crore respectively.
A 10% change in equity prices of such securities held as at
March 31, 2020 and March 31, 2019 would result in an impact
of ₹20.50 crore and ₹45.45 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 credit worthiness
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 in debt securities and mutual
funds, balances with banks, bank deposits, 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
₹18,661.48 crore and ₹12,960.20 crore as at March 31, 2020
and March 31, 2019 respectively, being the total carrying
value of trade receivables, balances with bank, bank deposits,
investments in debt securities and mutual funds, loans,
derivative assets and other financial assets net of insurance
cover, where applicable.
The risk relating to trade receivables
note 16, page 366.
is presented
in
422
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
45. Disclosures on financial instruments (Contd.)
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, 2020 and March 31, 2019.
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.
(iv) Liquidity risk
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 entities
within the Group have access to undrawn lines of committed
and uncommitted borrowing/facilities, 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 Company and entities
within the Group, wherever applicable, have also invested 15%
of the non-convertible debentures (issued by the Company/
entities) falling due for repayment in the next 12 months
in bank deposits, to meet the regulatory norms of liquidity
requirements. The Group also constantly monitors funding
options available in the debt and capital markets with a view of
maintaining financial flexibility.
The Group’s liquidity position remains strong as at March
31, 2020, comprising of current investments, cash and cash
equivalents and other balances with banks, in addition to
committed undrawn bank lines.
423
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
45. Disclosures on financial instruments (Contd.)
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 other than lease obligations
including interest obligations
Lease obligations including interest
obligations
Trade payables
Other financial liabilities
Carrying
value
Contractual
cash flows
less than
one year
between one to
five years
More than
five years
As at March 31, 2020
(` crore)
1,10,048.97
1,47,106.89
26,888.52
61,686.58
58,531.79
7,058.16
11,401.51
1,721.35
4,519.76
5,160.40
21,380.85
6,088.52
1,44,576.50
21,380.85
6,088.52
1,85,977.77
21,380.85
5,700.85
55,691.57
-
233.61
66,439.95
-
154.06
63,846.25
Derivative financial liabilities
857.14
857.14
729.22
120.79
7.13
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
More than
five years
As at March 31, 2019
(` crore)
1,01,674.75
21,716.96
6,478.47
1,29,870.18
1,34,845.14
21,716.96
6,478.47
1,63,040.57
21,955.48
21,716.96
6,217.46
49,889.90
52,896.95
-
21.62
52,918.57
59,992.71
-
239.39
60,232.10
Derivative financial liabilities
476.41
476.41
416.59
59.82
-
424
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR 46. Segment reporting
The Group is primarily engaged in the business of manufacture 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.
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:
Reconciliation to profit/(loss) for
the year:
Add: Finance income
Less: Finance costs
Less: Depreciation and amortisation
expense
Add: Share of profit/(loss) of joint
ventures and associates
Profit before exceptional items and
tax
Add: Exceptional items (refer note 36,
page 393)
Profit before tax
Less: Tax expense
Profit after tax from continuing
operations
Profit after tax from
discontinued operations
Net profit/(loss) for the year
Segment assets
Assets held for sale
Total assets
Tata Steel
India
53,122.60
61,222.97
7,313.37
9,387.95
60,435.97
70,610.92
15,095.93
20,743.98
Bamnipal
Steel
(including
Tata Steel
BSL)
18,051.38
18,132.19
147.76
243.67
18,199.14
18,375.86
2,370.12
3,027.95
Tata Steel
Long
Products
Other
Indian
operations
Tata Steel
Europe
Other trade
related
operations
Rest of the
world
Inter-
segment
eliminations
(` crore)
Total
3,183.64
941.61
306.35
50.44
3,489.99
992.05
183.77
156.44
7,635.93
9,445.30
1,859.82
1,831.52
9,495.75
11,276.82
879.95
55,753.35
64,474.73
185.64
302.34
55,938.99
64,777.07
(664.19)
975.78
5,413.63
1,655.20
2,668.22
30,072.89
31,028.29
31,728.09
33,696.51
1,799.71
489.63
414.55
783.97
-
-
414.55
783.97
13.01
182.13
- 1,39,816.65
1,57,668.99
-
-
(39,885.83)
-
(42,844.21)
(39,885.83) 1,39,816.65
1,57,668.99
(42,844.21)
(1,943.27)
(1,219.22)
17,735.03
29,770.32
1,571.52
1,033.60
7,533.46
7,660.10
8,440.73
7,341.83
187.97
224.70
3,520.33
16,026.69
(3,752.05)
(120.97)
(231.72)
15,905.72
(2,568.41)
6,718.43
2,336.69
1,25,469.14
1,34,385.00
38,924.26
39,854.24
6,155.92
1,311.97
7,867.82
7,666.12
78,314.90
68,251.43
21,778.73
68,831.55
8,525.75
7,739.47
9,187.29
(1,164.23)
(88.96)
1,172.46
9,098.33
(39,440.52) 2,47,596.00
2,29,440.13
2,823.45
4,142.26
2,50,419.45
2,33,582.39
(98,599.65)
425
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
46. Segment reporting (Contd.)
Tata Steel
Long
Products
Other
Indian
operations
Tata Steel
Europe
Other trade
related
operations
Rest of the
world
Inter-
segment
eliminations
(` crore)
Total
Tata Steel
India
Bamnipal
Steel
(including
Tata Steel
BSL)
Segment assets include:
Equity accounted investments
Segment liabilities
Liabilities held for sale
Total liabilities
1,778.74
1,573.83
76,540.96
67,809.45
-
-
20,318.21
21,428.15
0.80
0.80
4,159.82
238.25
20.10
13.31
3,762.13
4,295.24
357.27
323.73
42,911.68
92,326.76
11.63
11.28
40,825.92
46,465.89
-
-
6,000.08
4,747.92
Addition to non-current assets
5,779.68
3,344.32
735.89
1,392.34
54.49
84.55
729.15
451.11
5,936.60
4,353.71
285.29
0.98
758.15
620.55
Figures in italics represents comparative figures of previous year.
(i) Details of revenue by nature of business is as below:
-
-
(76,444.93)
2,168.54
1,922.95
(21,610.58) 1,72,908.22
1,60,866.73
1,348.33
1,426.12
1,74,256.55
1,62,292.85
14,279.25
10,247.56
-
-
Steel
Others
Revenue from other businesses primarily relate to ferro alloys, power and water and other services.
Year ended
March 31, 2020
1,26,445.73
13,370.92
1,39,816.65
(` crore)
Year ended
March 31, 2019
1,42,591.92
15,077.07
1,57,668.99
426
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR 46. Segment reporting (Contd.)
(ii) Details of revenue based on geographical location of customers is as below:
India
Outside India
Year ended
March 31, 2020
72,885.01
66,931.64
1,39,816.65
(` crore)
Year ended
March 31, 2019
82,528.14
75,140.85
1,57,668.99
Revenue outside India includes: Asia excluding India ₹9,969.85 crore (2018-19 : ₹8,959.48 crore), UK ₹12,641.97 crore (2018-19: ₹14,810.44
crore) and other European countries ₹35,792.48 crore (2018-19: ₹41,142.74 crore).
(iii)
Details of non-current assets (property, plant and equipment, right-of-use assets, capital work-in-progress, intangibles
and goodwill on consolidation) based on geographical area is as below:
India
Outside India
As at
March 31, 2020
1,18,818.73
35,228.76
1,54,047.49
(` crore)
As at
March 31, 2019
1,10,980.41
32,102.71
1,43,083.12
Non-current assets outside India include: Asia excluding India ₹185.27 crore (March 31, 2019: ₹2.55 crore), UK ₹7,959.37 crore (March 31, 2019:
₹7,981.67 crore) and other European countries ₹19,575.18 crore (March 31, 2019: ₹17,191.20 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 expenses, share of profit/(loss) of joint ventures and associates and tax expenses. Segment results
reviewed by the CODM also exclude income or expenses which are non-recurring in nature and are classified as an 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, 2020 and March 31, 2019.
(iii) The accounting policies of the reportable segments are the same as of the Group’s accounting policies.
427
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206 47. Related party transactions
The Group’s related parties primarily consist of its joint ventures, associates and Tata Sons Private Limited including its subsidiaries
and joint ventures. The Group 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, 2020 and March 31, 2019.
Associates
303.85
488.88
950.93
1,210.03
86.32
146.39
7.19
6.89
-
-
-
7.81
-
-
-
-
20.47
46.89
0.03
(0.01)
27.91
16.61
Joint
ventures
Tata Sons Private
Limited, its subsidiaries
and joint ventures
289.89
186.86
2,915.81
3,198.08
1,720.04
1,604.64
116.58
152.61
267.71
-
2.91
4.13
-
-
-
-
35.04
68.02
(6.62)
(1.03)
1.60
3.12
664.68
710.83
649.94
505.05
712.56
819.19
23.01
1.18
-
-
-
-
17.88
19.27
470.41
361.45
13.59
10.88
0.01
0.02
107.45
285.72
(` crore)
Total
1,258.42
1,386.57
4,516.68
4,913.16
2,518.92
2,570.22
146.78
160.68
267.71
-
2.91
11.94
17.88
19.27
470.41
361.45
69.10
125.79
(6.58)
(1.02)
136.96
305.45
Purchase of goods
Sale of goods
Services received
Services rendered
Sale of fixed assets
Interest income recognised
Interest expenses recognised
Dividend paid
Dividend received
Provision/(reversal) recognised for receivables during
the year
Management contracts
428
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
47. Related party transactions (Contd.)
Sale of investments
Finance provided during the year (net of repayments)
Outstanding loans and receivables
Provision for outstanding loans and receivables
Outstanding payables
Guarantees provided outstanding
Associates
Joint
ventures
Tata Sons Private
Limited, its subsidiaries
and joint ventures
-
-
-
250.00
97.45
26.68
10.74
10.71
65.78
38.63
-
-
-
-
60.13
134.91
1,130.67
1,263.64
1,094.09
1,023.31
230.08
241.47
177.18
186.78
-
1.97
-
-
25.03
43.96
0.03
0.02
322.60
278.54
-
-
(` crore)
Total
-
1.97
60.13
384.91
1,253.15
1,334.28
1,104.86
1,034.04
618.46
558.64
177.18
186.78
Figures in italics represent comparative figures of previous year.
(i)
The details of remuneration paid to the key managerial personnel and payments to non-executive directors are provided in note 32,
page 391 and note 35 page 392, respectively.
The Group paid dividend of ₹42,048.50 (2018-19: ₹32,345.87) to key managerial personnel and ₹8,313.50 (2018-19: ₹3,895.10) to
relatives of key managerial personnel during the year ended March 31, 2020.
(ii)
the year ended March 31, 2020,
During
post-employment benefit plans.
the Group has contributed ₹370.47 crore
(2018-19: ₹337.70 crore)
to
As at March 31, 2020, amount receivable from post-employment benefit funds is ₹57.26 crore (March 31, 2019: ₹769.20 crore) on account
of retirement benefit obligations paid by the entities within the Group directly.
As at March 31, 2020, amount payable to post-employment benefit fund is ₹20.14 crore (March 31, 2019: ₹1.59 crore) on account of
retirement benefit obligations.
(iii) Details of investments made by the Company in preference shares of its joint ventures and associates is disclosed in note 9, page 355.
(iv) Commitments with respect to joint venture and associates are disclosed in note 40B, page 409.
(v) Transactions with joint ventures have been disclosed at full value and not at their proportionate share.
429
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
48. The Board of Directors of the Company have considered and approved a merger of Bamnipal Steel Limited and Tata Steel BSL Limited
into the Company by way of a composite scheme of amalgamation and have recommended a merger ratio of 1 equity share of ₹10/-
each fully paid up of the Company for every 15 equity shares of ₹2/- each fully paid up held by the public shareholders of Tata Steel BSL
Limited. The merger is subject to shareholders and other regulatory approvals.
49.
Tata Steel Europe (TSE), a wholly owned subsidiary of the Group has assessed the potential impact of the downturn in steel demand due
to the COVID-19 pandemic on its future business outlook.
Based on an initial assessment, the outlook for its UK operation is expected to be adversely impacted with respect to its ability to
continue as a going concern and meet its liquidity requirements. In response to the COVID-19 pandemic, TSE as a whole including
TSUK continues to implement various measures aimed at conserving cash including but not limited to deferral of capital expenditures,
reduction in administrative expenses, use of non-recourse securitisation programmes, seeking Government backed funding etc.
The Company through its wholly owned subsidiary TS Global Procurement Company Pte. Ltd. has also undertaken to provide working
capital funding support to TSE including TSUK.
Given that the severity and length of the downturn in steel demand on account of the pandemic remains unpredictable, the directors of
TSE observed that while there is a reasonable expectation that TSE has the adequate resources to continue operating for the foreseeable
future and that the going concern basis for the preparation of its financial statements remains appropriate, there exists a material
uncertainty surrounding the impact of the COVID-19 pandemic on its financial situation. The financial statements of TSE are prepared on
a going concern basis and do not include any adjustments regarding going concern of TSUK.
The Group has assessed its ability to meet any liquidity requirements at TSE, if required, and concluded that its cashflow and liquidity
position remains strong.
50.
The net worth of TRF Limited, an associate of the Company, has been fully eroded. The carrying value of the share of investment in
the consolidated financial statements is Nil. The financial statements of TRF Limited have been prepared on a going concern basis as
it expects to generate cash flow from improvements in its operations, increased business from the Company, increased efficiencies in
the project activities, proceeds from restructuring of its subsidiaries, facilities from banks as required and the Company is expected to
provide the necessary financial support to TRF Limited, if required, to meet its future obligations.
51. 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 June 29, 2020 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, 2020
subject to the approval of shareholders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of
₹1,144.75 crore.
52. Previous year figures have been recasted/restated wherever necessary.
430
NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
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NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
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NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
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NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
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NOTESforming part of the consolidated financial statementsConsolidatedINTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
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439
NOTESforming part of the consolidated financial statementsCorporate Overview 02Strategic Review 46Performance Review 20Statutory Reports 84Our Strategy 28Financial Statements 206
NOTICE
Notice is hereby given that the 113th Annual General Meeting
of the Members of Tata Steel Limited will be held on Thursday,
August 20, 2020, at 3.00 p.m. (IST) through Video Conferencing
(‘VC’)/Other Audio-Visual Means
the
following business:
(‘OAVM’),
transact
to
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, 2020 together with 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, 2020 together with the Report of the Auditors thereon.
Item No. 3 – Declaration of Dividend
To declare dividend of:
• ₹10/- per fully paid-up Ordinary (equity) Share of face value ₹10/-
each for the Financial Year 2019-20.
• ₹2.504 per partly paid-up Ordinary
(equity) Share of
face value ₹10/- each (paid-up ₹2.504 per share) for the
Financial Year 2019-20.
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 – Ratification of Remuneration of Cost Auditors
To consider, and if thought fit, to pass the following Resolution as an
Ordinary Resolution:
(b)
“RESOLVED THAT pursuant to the provisions of Section 148(3) and
other applicable provisions, if any, of the Companies Act, 2013 read
with the Companies (Audit and Auditors) Rules, 2014, (including any
statutory modification or re-enactment thereof for the time being
in force), the Company hereby ratifies the remuneration of ₹20 lakh
plus applicable taxes and reimbursement of 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,
440
as the Cost Auditors of the Company, to conduct the audit of the cost
records maintained by the Company, for the Financial Year ending
March 31, 2021.”
Item No. 6 – Commission to Non-Executive Directors of the
Company
To consider, and if thought fit, to pass the following Resolution as an
Ordinary Resolution:
“RESOLVED THAT pursuant to the provisions of Section 197 and
other applicable provisions, if any, of the Companies Act, 2013 (‘Act’)
and the Rules made thereunder, as amended from time to time
and Regulation 17(6) of the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015,
as amended from time to time, consent of the Members be and is
hereby accorded for payment of a sum not exceeding 1% of the net
profits of the Company per annum, calculated in accordance with the
provisions of Section 198 of the Act, as commission and the same
be paid to and distributed amongst the Directors of the Company
or some or any of them (other than the Managing Director and
Whole-time Directors) in such amounts or proportions and in such
manner and in all respects as may be decided by the Board of
Directors of the Company and such payments shall be made with
respect to the profits of the Company for each year, commencing
April 1, 2021.”
NOTES:
(a)
The Statement, pursuant to Section 102 of the Companies
Act, 2013, as amended (‘Act’) with respect to Item Nos. 5
and 6 forms part of this Notice. Additional information,
pursuant to Regulations 26(4) and 36(3) of the Securities and
Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015, (‘SEBI Listing Regulations’)
and Secretarial Standard on General Meetings issued by
the Institute of Company Secretaries of India, in respect of
Director retiring by rotation seeking re-appointment at this
Annual General Meeting (‘Meeting’ or ‘AGM’) is furnished as
an annexure to the Notice.
In view of the global outbreak of the COVID-19 pandemic,
the Ministry of Corporate Affairs (‘MCA’) has vide its General
Circular No. 20/2020 dated May 5, 2020
in relation to
‘Clarification on holding of annual general meeting (AGM)
through video conferencing (VC) or other audio visual
means (OAVM) read with General Circular No. 14/2020 dated
April 8, 2020 and the General Circular No. 17/2020 dated
April 13, 2020 in relation to ‘Clarification on passing of ordinary
and special resolutions by companies under the Companies
Act, 2013 and the rules made thereunder on account of the
threat posed by COVID-19’ (collectively referred to as ‘MCA
INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Circulars’) and the Securities and Exchange Board of India
(‘SEBI’) vide its circular dated May 12, 2020 in relation to
‘Additional relaxation in relation to compliance with certain
provisions of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 – COVID-19 pandemic’ (‘SEBI
Circular’) permitted the holding of the AGM through VC or
OAVM, without the physical presence of the Members at a
common venue. In compliance with the provisions of the Act,
SEBI Listing Regulations and MCA Circulars & SEBI Circular, the
113th AGM of the Company is being held through VC/OAVM on
Thursday, August 20, 2020 at 3.00 p.m. (IST). The deemed venue
for the 113th AGM will be Bombay House, 24 Homi Mody Street,
Fort, Mumbai – 400 001.
PURSUANT TO PROVISIONS OF THE ACT, A MEMBER
ENTITLED TO ATTEND AND VOTE AT THE AGM
IS
ENTITLED TO APPOINT A PROXY TO ATTEND AND
VOTE AT THE MEETING ON HIS/HER BEHALF AND THE
PROXY NEED NOT BE A MEMBER OF THE COMPANY.
SINCE THIS AGM IS BEING HELD PURSUANT TO THE
MCA CIRCULARS AND SEBI CIRCULAR THROUGH
VC/OAVM, THE REQUIREMENT OF PHYSICAL ATTENDANCE
OF MEMBERS HAS BEEN DISPENSED WITH. ACCORDINGLY,
IN TERMS OF THE MCA CIRCULARS AND SEBI CIRCULAR,
THE FACILITY FOR APPOINTMENT OF PROXIES BY THE
MEMBERS WILL NOT BE AVAILABLE FOR THIS AGM AND
HENCE THE PROXY FORM, ROUTE MAP AND ATTENDANCE
SLIP ARE NOT ANNEXED TO THIS NOTICE.
The Members can join the AGM in the VC/OAVM mode
30 minutes before and 15 minutes after the scheduled
time of the commencement of the Meeting by following
in the Notice. The Members
the procedure mentioned
will be able to view the proceedings on the National
Securities Depository
at
Limited’s
www.evoting.nsdl.com The facility of participation at the
AGM through VC/OAVM will be made available to at least
1,000 Members on a first come first served basis as per the
MCA Circulars.
(‘NSDL’) website
Institutional Investors, who are Members of the Company,
are encouraged to attend the 113th AGM through VC/OAVM
mode and vote electronically. Pursuant to the provisions of the
Act, the Institutional/Corporate Shareholders (i.e. other than
individuals / HUF, NRI, etc.) are required to send a scanned copy
(PDF/JPG Format) of its Board or governing body Resolution/
Authorisation etc., authorising its representative to attend
the AGM through VC/OAVM on its behalf and to vote through
remote e-voting. The said Resolution/Authorisation shall be
sent to the Scrutinizer at tsl.scrutinizer@gmail.com with a copy
marked to evoting@nsdl.co.in
(c)
(d)
(e)
(f)
The attendance of the Members attending the AGM through
VC/OAVM will be counted for the purpose of reckoning the
quorum under Section 103 of the Act.
(g)
(h)
In case of joint holders, the Member whose name appears
as the first holder in the order of the names as per the
Register of Members of the Company will be entitled to vote
at the meeting.
In line with the MCA Circular dated May 5, 2020 and
SEBI Circular dated May 12, 2020, the Notice of the AGM
along with the
Integrated Report & Annual Accounts
2019-20 is being sent only through electronic mode to those
Members whose e-mail addresses are registered with the
Company/Depositories. The Notice convening the 113th
AGM has been uploaded on the website of the Company at
from
www.tatasteel.com and may also be accessed
the Stock
the
the National Stock
Exchanges
Exchange of
and
www.nseindia.com respectively. The Notice is also available on
the website of NSDL at www.evoting.nsdl.com
India Limited at www.bseindia.com
i.e. BSE Limited and
relevant section of
the websites of
(i)
Book Closure and Dividend
The Register of Members and Share Transfer Books of the
Company (for both, fully paid-up and partly paid-up Ordinary
(equity) Shares) will be closed from Saturday, August 8, 2020
to Thursday, August 20, 2020 (both days inclusive) for the
purpose of payment of dividend for Financial Year 2019-20.
The dividend of ₹10/- per fully paid-up Ordinary (equity) Share
of ₹10/- each (100%) and ₹2.504 per partly paid-up Ordinary
(equity) Share of ₹10/- each (paid-up ₹2.504 per share) (100%),
if declared by the Members at the AGM, will be paid subject to
deduction of income-tax at source (‘TDS’) on and from Monday,
August 24, 2020 as under:
•
•
In respect of Ordinary Shares held in physical form:
To all the Members, after giving effect to valid transmission
and transposition in respect of valid requests lodged with
the Company as on close of business hours on Friday,
August 7, 2020.
In respect of Ordinary Shares held in electronic form:
To all beneficial owners of the shares, as on the close of
business hours on Friday, August 7, 2020, as per details
furnished by the Depositories for this purpose.
Pursuant to Finance Act, 2020, dividend income is taxable
in the hands of Shareholders w.e.f. April 1, 2020 and the
Company is required to deduct tax at source from dividend
paid to the Members at the prescribed rates in the Income
Tax Act, 1961 (‘IT Act’). In general, to enable compliance with
TDS requirements, Members are requested to complete and/
or update their Residential status, PAN, Category as per the IT
Act with their depository participants (‘DPs’) or in case shares
are held in physical form, with the Company/ Registrars and
Transfer Agent (‘RTA’) by sending documents through e-mail on
or before Friday, July 31, 2020. For the detailed process, please
click here: ‘Communication on Tax Deduction on Dividend’.
441
Notice
Updation of mandate for receiving dividend directly in bank
account through Electronic Clearing System or any other
means in a timely manner:
requested
form: Members are
in physical
Shares held
to send hard copies of
following details/documents
the
to the Company’s Registrars and Transfer Agent (RTA), viz. TSR
(formerly TSR
Darashaw Consultants Private Limited
Darashaw Limited) at 6-10, Haji Moosa Patrawala
Industrial
Estate (Near Famous Studio), 20, Dr. E. Moses Road, Mahalaxmi,
Mumbai – 400 011, latest by Friday, July 31, 2020:
(TSR),
(k)
a.
a signed request letter mentioning your name, folio number(s),
complete address and following details relating to bank
account in which the dividend is to be received:
(l)
i)
ii)
Name & Branch of Bank and Bank Account type;
Bank Account Number & Type allotted by your Bank after
implementation of Core Banking Solutions;
(m)
iii)
11 digit IFSC Code.
b.
c.
d.
Cancelled cheque in original, bearing the name of the Member
or first holder, in case shares are held jointly;
self-attested copy of the PAN Card; and
self-attested copy of any document (such as Aadhaar Card,
Driving License, Election Identity Card, Passport) in support of
the address of the Member as registered with the Company.
Shares held in electronic form: Members may please note that
their bank details as furnished by the respective DPs to the Company
will be considered for remittance of dividend as per the applicable
regulations of the DPs and the Company will not entertain any direct
request from such Members for change/addition/deletion in such
bank details. Accordingly, the Members holding shares in demat
form are requested to update their Electronic Bank Mandate with
their respective DPs.
Further, please note that instructions, if any, already given by
Members in respect of shares held in physical form, will not be
automatically applicable to the dividend paid on shares held in
electronic form.
The Members who are unable to receive the dividend directly in
their bank accounts through Electronic Clearing Service or any other
means, due to non-registration of the Electronic Bank Mandate, the
Company shall dispatch the dividend warrant/ Bankers’ cheque/
demand draft to such Members, upon normalisation of postal
services and other activities.
(j)
Nomination facility: As per the provisions of Section 72 of
the Act, the facility for making nomination is available to the
Members in respect of the shares held by them. Members who
have not yet registered their nomination are requested to
register the same by submitting Form No. SH-13. If a Member
desires to cancel the earlier nomination and record a fresh
nomination, may submit the same in Form SH-14. The said
forms can be downloaded from the Company’s website at
442
www.tatasteel.com Members are requested to submit the said
form to their DP in case the shares are held in electronic form
and to the RTA at csg-unit@tsrdarashaw.com in case the shares
are held in physical form, quoting their folio no(s).
Consolidation of Physical Share Certificates: Members
holding shares in physical form, in identical order of names,
in more than one folio are requested to send to the Company
or RTA, the details of such folios together with the share
certificates for consolidating their holdings in one folio. A
consolidated share certificate will be issued to such Members
after making requisite changes.
The attention of the Members is particularly drawn to the
Corporate Governance Report forming part of the Board’s
Report in respect of unclaimed dividends and transfer of
dividends/shares to the Investor Education & Protection Fund.
In compliance with the aforesaid MCA Circulars and SEBI
Circular, Notice of the AGM along with the Integrated Report
& Annual Accounts 2019-20 is being sent only through
electronic mode to those Members whose e-mail addresses are
registered with the Company/RTA/Depositories. Members may
note that the Notice and Integrated Report & Annual Accounts
2019-20 will also be available on the Company’s website
relevant
www.tatasteel.com,
the
of
i.e. BSE Limited
websites of
the Stock Exchanges
and National Stock Exchange of
India Limited at
www.bseindia.com and www.nseindia.com respectively, and
on the website of NSDL https://www.evoting.nsdl.com
section
As per Regulation 40 of the SEBI Listing Regulations,
as amended, securities of the listed companies can be
form with effect
in dematerialised
transferred only
from April 1, 2019, except in case of request received for
transmission or transposition of securities. In view of this
and to eliminate all risks associated with physical shares and
for ease of portfolio management, Members holding shares
in physical form are requested to consider converting their
holdings to dematerialised form. Members may contact the
Company’s RTA, TSR Darashaw Consultants Private Limited at
csg-unit@tsrdarashaw.com
in this regard.
Members may also refer to Frequently Asked Questions
(‘FAQs’) on the Company’s website. For details click here: FAQs
for assistance
(n)
(o)
To prevent fraudulent transactions, Members are advised to
exercise due diligence and notify the Company of any change
in address or demise of any Member as soon as possible.
Members are also advised to not leave their demat account(s)
dormant for long. Periodic statement of holdings should be
obtained from the concerned Depository Participant and
holdings should be verified from time to time.
PROCESS FOR REGISTERING E-MAIL ADDRESS:
i.
One time registration of e-mail address with RTA for
receiving the Integrated Report & Annual Accounts
2019-20 and cast votes electronically: The Company has
INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR made special arrangements with RTA for registration of e-mail
address of those Members (holding shares either in electronic
or physical form) who wish to receive this Integrated Report and
Annual Accounts for FY 2019-20 and cast votes electronically.
Eligible Members whose e-mail addresses are not registered
with the Company/DPs are required to provide the same to RTA
on or before 5.00 p.m. (IST) on Thursday, August 13, 2020.
Process to be followed for one time registration of
e-mail address is as follows:
I.
a)
For Members who hold shares in Electronic form:
Visit the link:
https://green.tsrdarashaw.com/green/events/login/ti
b)
Enter the DP ID & Client ID, PAN details and captcha code.
c)
System will verify the Client ID and PAN details.
d)
On successful verification, system will allow you to enter
your e-mail address and mobile number.
e)
Enter your e-mail address and mobile number.
f)
The system will then confirm the e-mail address for
the limited purpose of service of this AGM Notice &
Integrated Report & Annual Accounts 2019-20.
II.
For Members who hold shares in Physical form:
a)
b)
c)
d)
e)
Visit the link:
https://green.tsrdarashaw.com/green/events/login/ti
the physical Folio Number, PAN details
Enter
and captcha code.
In the event the PAN details are not available on record,
Member to enter one of the share certificate number.
System will verify the Folio Number and PAN details or
the share certificate number.
On successful verification, system will allow you to enter
your e-mail address and mobile number.
f)
Enter your e-mail address and mobile number.
g)
h)
If PAN details are not available, the system will prompt the
Member to upload a self-attested copy of the PAN card.
The system will then confirm the e-mail address for
the purpose of service of this AGM Notice & Integrated
Report and Annual Accounts for FY 2019-20.
After successful submission of the e-mail address, NSDL will
e-mail a copy of this AGM Notice and Integrated Report for
FY 2019-20 along with the e-voting user ID and password. In case of
any queries, Members may write to csg-unit@tsrdarashaw.com or
evoting@nsdl.co.in
ii.
Registration of e-mail address permanently with
Company/DP: Members are requested to register the e-mail
address with their concerned DPs, in respect of electronic
holding and with RTA, in respect of physical holding, by writing
to them at csg-unit@tsrdarashaw.com Further, those Members
who have already registered their e-mail addresses are
requested to keep their e-mail addresses validated/updated
with their DPs/RTA to enable servicing of notices/documents/
Integrated Reports and other communications electronically
to their e-mail address in future.
iii.
Alternatively, Members may also send an e-mail request to
evoting@nsdl.co.in along with the following documents for
procuring user id and password and registration of e-mail
addresses for remote e-voting for the resolutions set out
in this Notice:
•
•
In case shares are held in physical form, please provide
Folio No., Name of Shareholder, scanned copy of the share
certificate (front and back), self-attested scanned copy of
PAN card, and self-attested scanned copy of Aadhaar Card.
In case shares are held in demat form, please provide DP
ID-Client ID (8 digit DP ID + 8 digit Client ID or 16 digit
Beneficiary ID), Name, client master or copy of Consolidated
Account statement, self-attested scanned copy of PAN
card, and self-attested scanned copy of Aadhaar Card.
INSTRUCTIONS FOR E-VOTING AND JOINING THE AGM ARE
AS FOLLOWS:
A.
1.
2.
PROCESS AND MANNER FOR VOTING THROUGH
ELECTRONIC MEANS:
Pursuant to the provisions of Section 108 of the Act read with
Rule 20 of the Companies (Management and Administration)
Rules, 2014 (as amended) and Regulation 44 of the SEBI Listing
Regulations (as amended) and the MCA Circulars, the Company
is providing facility of remote e-voting to its Members in respect
of the business to be transacted at the AGM. For this purpose,
the Company has entered into an agreement with NSDL for
facilitating voting through electronic means, as the authorised
agency. The facility of casting votes by a Member using remote
e-voting system as well as remote e-voting during the AGM will
be provided by NSDL.
Members of the Company holding shares either in physical
form or in electronic form as on the cut-off date of Thursday,
August 13, 2020 may cast their vote by remote e-voting. A
person who is not a Member as on the cut-off date should
treat this Notice for information purpose 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 only shall be entitled to avail the facility of remote
e-voting before the AGM as well as remote e-voting during the
AGM. Any person who acquires shares of the Company and
becomes a Member of the Company after the dispatch of the
Notice and holding shares as on the cut-off date i.e. Thursday,
August 13, 2020, may obtain the User ID and Password by
sending a request at evoting@nsdl.co.in
443
Notice
3.
4.
The
remote e-voting period commences on Sunday,
August 16, 2020 at 9.00 a.m. (IST) and ends on Wednesday,
August 19, 2020 at 5.00 p.m. (IST). 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 it subsequently. The voting
rights of the 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. Thursday, August 13, 2020.
Members will be provided with the facility for voting through
electronic voting system during the VC/OAVM proceedings at
the AGM and Members participating at the AGM, who have
not already cast their vote on the resolution(s) by remote
e-voting, will be eligible to exercise their right to vote on such
resolution(s) upon announcement by the Chairman. Members
who have cast their vote on resolution(s) by remote e-voting
prior to the AGM will also be eligible to participate at the AGM
through VC/OAVM but shall not be entitled to cast their vote on
such resolution(s) again.
3.
4.
5.
The remote e-voting module on the day of the AGM shall be
disabled by NSDL for voting 15 minutes after the conclusion
of the Meeting.
5.
INSTRUCTIONS FOR MEMBERS FOR ATTENDING THE AGM
THROUGH VC/OAVM AND REMOTE E-VOTING (BEFORE AND
DURING THE AGM) ARE AS UNDER:
recommended to use stable Wi-Fi or LAN connection to
mitigate any glitches.
Members are encouraged to submit their questions
in
advance with respect to the Accounts or the business to be
transacted at the AGM. These queries may be submitted from
their registered e-mail address, mentioning their name, DP ID
and Client ID/folio number and mobile number, to reach the
Company’s e-mail address at cosec@tatasteel.com before 3.00
p.m. (IST) on Thursday, August 13, 2020.
their
request
Members who would like to express their views or ask
questions during the AGM may pre-register themselves
as a speaker by sending
their
from
their name, DP
registered e-mail address mentioning
ID and Client ID/folio number, PAN, mobile number at
cosec@tatasteel.com between August 14, 2020 (9:00 a.m. IST)
through August 16, 2020 (5:00 p.m. IST). Those Members
who have registered themselves as a speaker will only be
allowed to express their views/ask questions during the
AGM. The Company reserves the right to restrict the number
of speakers depending on the availability of time for the AGM.
Members who need assistance before or during the AGM, can
contact NSDL on evoting@nsdl.co.in /1800-222-990 or contact
Mr. Amit Vishal, Senior Manager – NSDL at amitv@nsdl.co.in/
022-24994360 or Mr. Sanjeev Yadav, Assistant Manager – NSDL
at sanjeevy@nsdl.co.in/022-24994553.
the
and
same
access
they may
The Members will be provided with a facility to attend
the AGM through VC/OAVM through the NSDL e-voting
system
at
https://www.evoting.nsdl.com under
the Shareholders/
Members login by using the remote e-voting credentials,
where the EVEN of the Company
i.e. 113138 (for fully
paid-up Ordinary Shares) & 113139 (for partly paid-up Ordinary
Shares) will be displayed. On clicking this link, the Members
will be able to attend and participate in the proceedings of
the AGM. Please note that the Members who do not have the
User ID and Password for e-voting or have forgotten the User
ID/Password may retrieve the same by following the remote
e-voting instructions mentioned below to avoid last minute
rush. Further, Members may also use the OTP-based login for
logging into the e-voting system of NSDL.
join
the Meeting
Members may
through Laptops,
Smartphones, Tablets and iPads for better experience. Further,
Members will be required to use Internet with a good speed
to avoid any disturbance during the Meeting. Members will
need the latest version of Chrome, Safari, Internet Explorer 11,
MS Edge or Firefox. Please note that participants connecting
from Mobile Devices or Tablets or through Laptops connecting
via mobile hotspot may experience Audio/Video loss due
to fluctuation in their respective network. It is therefore
INSTRUCTIONS FOR REMOTE E-VOTING BEFORE/
THE
DURING THE AGM
The instructions for remote e-voting before the AGM are as
under:
The way to vote electronically on NSDL e-voting system consists of
‘Two Steps’ which are mentioned below:
Step 1: Log-in to NSDL e-voting system at
https://www.evoting.nsdl.com/
How to Log-in to NSDL e-voting website?
1.
2.
3.
Visit the e-voting website of NSDL. Open web browser by
typing the following URL: https://www.evoting.nsdl.com/
either on a Personal Computer or on a mobile.
Once the home page of e-voting system is launched, click on
the icon ‘Login’ which is available under ‘Shareholder’ section.
A new screen will open. You will have to enter your User ID,
your Password and a Verification Code as shown on the screen.
Alternatively, if you are registered for NSDL eservices i.e. IDEAS,
you can log-in at https://eservices.nsdl.com/ with your existing
IDEAS login. Once you log-in to NSDL eservices after using your
log-in credentials, click on e-voting and you can proceed to
Step 2 i.e. Cast your vote electronically.
1.
2.
444
INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR
4.
Your User ID details are given below:
Manner of holding shares i.e. Demat (NSDL or CDSL) or
Physical
Your User ID is:
a) For Members who hold shares in demat account with NSDL.
b) For Members who hold shares in demat account with CDSL.
8 Character DP ID followed by 8 Digit Client ID
For example, if your DP ID is IN300*** and Client ID is 12****** then
your user ID is IN300***12******.
16 Digit Beneficiary ID
For example, if your Beneficiary ID is 12************** then your user
ID is 12**************
c) For Members holding shares in Physical Form.
5.
Your password details are given below:
(a)
(b)
If you are already registered for e-voting, then you can use
your existing password to login and cast your vote.
If you are using NSDL e-voting system for the first time, you will
need to retrieve the ‘initial password’ which was communicated
to you. Once you retrieve your ‘initial password’, you need to
enter the ‘initial password’ and the system will force you to
change your password.
(c) How to retrieve your ‘initial password’?
(i)
If your e-mail ID is registered in your demat account or with
the Company, your ‘initial password’ is communicated
to you on your e-mail ID. Open the e-mail sent to you
by NSDL and open the attachment i.e. a .pdf file. The
password to open the .pdf file is your 8 digit client ID for
NSDL account, last 8 digits of client ID for CDSL account or
folio number for shares held in physical form. The .pdf file
contains your ‘User ID’ and your ‘initial password’.
(ii)
If your e-mail ID is not registered, please follow steps
mentioned in process for those shareholders whose
e-mail ids are not registered.
If you are unable to retrieve or have not received the ‘Initial
password’ or have forgotten your password:
Click on ‘Forgot User Details/Password?’ (If you are holding
shares in your demat account with NSDL or CDSL) option
available on www.evoting.nsdl.com
Click on
holding shares
www.evoting.nsdl.com
‘Physical User Reset Password?’
(If you are
in physical mode) option available on
If you are still unable to get the password by aforesaid
two options, you can send a request at evoting@nsdl.co.in
mentioning your demat account number/folio number, your
PAN, your name and your registered address.
6.
(a)
(b)
(c)
EVEN Number followed by Folio Number registered with the Company
For example, if folio number is S1******** and EVEN is113138 fully
paid-up Ordinary Shares) then user ID is 113138S1******** and, If,
EVEN
then user
ID is 113139PV*********
(partly paid-up Ordinary Shares)
is 113139
(d)
Members can also use the OTP (One Time Password) based
login for casting the votes on the e-voting system of NSDL.
7.
8.
9.
After entering your password, tick on Agree to ‘Terms and
Conditions’ by selecting on the check box.
Now, you will have to click on ‘Login’ button.
After you click on the
e-voting will open.
‘Login’ button, Home page of
Step 2: Cast your vote electronically on NSDL e-voting system.
How to cast your vote electronically on NSDL e-voting system?
1.
2.
3.
4.
5.
6.
7.
8.
After successful login at Step 1, you will be able to see the
Home page of e-voting. Click on e-Voting. Then, click on
Active Voting Cycles.
After clicking on Active Voting Cycles, you will be able to see
all the companies ‘EVEN’ in which you are holding shares and
whose voting cycle is in active status.
Select ‘EVEN’ of the Company.
Now you are ready for e-voting as the Voting page opens.
Cast your vote by selecting appropriate options i.e. assent
or dissent, verify/modify the number of shares for which
you wish to cast your vote and click on ‘Submit’ and also
‘Confirm’ when prompted.
Upon confirmation, the message
will be displayed.
‘Vote cast successfully’
You can also take the printout of the votes cast by you by
clicking on the print option on the confirmation page.
Once you confirm your vote on the resolution, you will not be
allowed to modify your vote.
445
Notice
ii.
iii.
The Board of Directors has appointed Mr. P. N. Parikh
(Membership No. FCS 327) or failing him, Ms. Jigyasa Ved
(Membership No. FCS 6488) and failing her, Mr. Mitesh
Dhabliwala (Membership No. FCS 8331) of M/s. Parikh &
Associates, Practising Company Secretaries, as the Scrutinizer
to scrutinize the remote e-voting process before and during
the AGM in a fair and transparent manner.
The Scrutinizer shall immediately after the conclusion of
voting at the AGM, unblock and count the votes cast during the
AGM, and votes cast through remote e-voting and make, not
later than 48 hours of conclusion of the AGM, a consolidated
Scrutinizer’s Report of the total votes cast in favor or against, if
any, to the Chairman or a person authorised by him in writing
who shall countersign the same.
and on
the website of
The results declared along with the Scrutinizer’s Report
the Company
shall be placed on
www.tatasteel.com
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.
By Order of the Board of Directors
Sd/-
Parvatheesam Kanchinadham
Company Secretary &
Chief Legal Officer (Corporate & Compliance)
ACS: 15921
Mumbai
June 29, 2020
Registered Office:
Bombay House, 24, Homi Mody Street,
Fort, Mumbai – 400 001
Tel: +91 22 6665 8282
CIN: L27100MH1907PLC000260
Website: www.tatasteel.com
E-mail: cosec@tatasteel.com
The instructions for e-voting during the AGM are as under:
Other Instructions:
1.
2.
The procedure for remote e-voting during the AGM is same as
the instructions mentioned above for remote e-voting, since
the Meeting is being held through VC/OAVM.
i.
Only those Members/Shareholders, who will be present in the
AGM through VC/OAVM facility and have not cast their vote on
the Resolutions through remote e-voting and are otherwise
not barred from doing so, shall be eligible to vote on such
resolution(s) through e-voting system during the AGM.
General Guidelines for Shareholders:
It is strongly recommended not to share your password with
any other person and 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.
of
case
any queries/grievances pertaining
In
to
remote e-voting (before the AGM and during the AGM), you
may refer to the Frequently Asked Questions (‘FAQs’) for
Shareholders and e-voting user manual for Shareholders
available in the download section of www.evoting.nsdl.com
or call on the toll-free number: 1800-222-990 or send a request
at evoting@nsdl.co.in or contact Mr. Amit Vishal or
Ms. Pallavi Mhatre or Mr. Pratik Bhatt from NSDL at the
designated e-mail IDs: amitv@nsdl.co.in or pallavid@nsdl.co.in
or pratikb@nsdl.co.in or at telephone nos.: +91 22 2499 4360/
4545/4738.
1.
2.
446
INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH 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 and 6 mentioned in the accompanying Notice.
Item No. 5:
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. Based on the
documents made available and the discussions held at the meeting
of the Audit Committee, it considered and recommended the
appointment and remuneration of the Cost Auditor to the Board of
Directors (the ‘Board’). The Board has, on the recommendation of
the Audit Committee, approved the appointment and remuneration
of Messrs Shome & Banerjee, Cost Accountants (Firm Registration
Number - 000001) as the Cost Auditor of the Company for the
Financial Year 2020-21.
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. The Board of Directors has
fixed the remuneration payable to the Cost Auditors for Financial
Year 2020-21 at ₹20 lakh plus applicable taxes and reimbursement
of out of pocket expenses, to cover the cost audit of different divisions
including Tubes, Bearings, Ferro Alloys and Minerals Division, Steel
Products, Growth Shop, health services, and Kalinganagar plant.
Accordingly, the consent of the Members is sought for passing
an Ordinary Resolution as set out at Item No. 5 of the Notice for
ratification of the remuneration payable to the Cost Auditor of the
Company for the Financial Year ending March 31, 2021.
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. 5 of the Notice.
The Board recommends the Resolution set forth in Item No. 5 for
the approval of the Members.
Item No. 6:
The Members at the 108th AGM of the Company held on
August 12, 2015, approved payment of remuneration by way of
commission to Non-Executive Directors (‘NEDs’) of the Company,
of a sum not exceeding 1% of the net profits of the Company per
annum, calculated in accordance with the provisions of Section
198 of the Act, for a period of five years commencing from
April 1, 2016 till March 31, 2021. This commission will be distributed
amongst all or some of the Non-Executive Directors, taking
into consideration parameters such as overall performance of
the Company, attendance at Board and Committee meetings,
contribution at or other than at meetings etc. in accordance
with the directions given by the Board as prescribed under the
Remuneration Policy of Directors, KMPs and Other Employees
of the Company.
Further, Regulation 17(6)(a) of the SEBI Listing Regulations authorises
the Board of Directors to recommend all fees and compensation
(excluding sitting fees), if any, to NEDs, including Independent
Directors and the same would require approval of Members at
general meeting.
Considering the rich experience, expertise, and insights brought
to the Board by the NEDs, it is proposed that, remuneration by
way of commission not exceeding 1% of the net profits of the
Company per annum, calculated in accordance with provisions
of the Act, be continued to be paid and distributed amongst the
NEDs of the Company in accordance with the recommendations of
the Nomination and Remuneration Committee of the Board and
approval by the Board of Directors of the Company, for each financial
year commencing April 1, 2021 onwards. The above commission shall
be in addition to sitting fees payable to the Director(s) for attending
meetings of the Board/Committees or for any other purpose
whatsoever as may be decided by the Board.
Details of commission and sitting fees paid to NEDs during the
Financial Year 2019-20 is provided in Annexure 5 to the Board’s
Report and the Corporate Governance Report.
Since the validity of the earlier resolution passed by the Members
at the AGM held on August 12, 2015, expires in the ensuing financial
year i.e. 2020-21, approval is sought from Members for paying
commission to NEDs as mentioned above.
None of the Directors and Key Managerial Personnel of the Company
or their respective relatives, except the NEDs of the Company to
the extent of remuneration that may be received by such Directors,
is concerned or interested in the Resolution mentioned at Item
No. 6 of the Notice.
The Board recommends the Resolution set forth in Item No. 6 for the
approval of the Members.
By Order of the Board of Directors
Sd/-
Parvatheesam Kanchinadham
Company Secretary &
Chief Legal Officer (Corporate & Compliance)
ACS: 15921
Mumbai
June 29, 2020
Registered Office:
Bombay House, 24, Homi Mody Street,
Fort, Mumbai – 400 001
Tel: +91 22 6665 8282
CIN: L27100MH1907PLC000260
Website: www.tatasteel.com
E-mail: cosec@tatasteel.com
447
Notice Annexure to the Notice
Details of the Director seeking 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 Meeting]
Profile of Mr. Natarajan Chandrasekaran
Mr. Natarajan Chandrasekaran
(DIN:00121863) (aged 57 years)
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 Chairman
of the Board at Tata Sons Private
Limited, the holding company
and promoter of all Tata Group
companies. The Tata Group
companies, across 10 business
verticals, have aggregate annual
revenues over US $110 billion and a market capitalisation of over
US$ 165 billion.
Mr. Chandrasekaran joined the Board of Tata Sons in October 2016
and was appointed Chairman in January 2017. He also chairs the
Boards of several group operating companies, including Tata Motors,
Tata Power, Indian Hotels and Tata Consultancy Services (TCS) – of
which he was Chief Executive from 2009-17.
In addition to his professional career with the Tata Group, he serves
as a Director on the Board of India’s central bank, the Reserve Bank of
India, since 2016. Mr. Chandrasekaran also serves on the International
Advisory Council of Singapore’s Economic Development Board.
Doctor of Letters from the Regional Engineering College, Trichy,
Tamil Nadu. He is also the author of Bridgital Nation, a ground
breaking book on harnessing technological disruptions to bring
Indians closer to their dreams.
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.
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. He 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 and currently
serving as the Chairman of Tata Sons Private Limited, brings with
him valuable experience in managing the issues faced by large and
complex organisations. The Company and the Board will immensely
benefit by leveraging his demonstrated leadership capability,
general business acumen and knowledge of complex financial and
operational issues faced by the Company.
Mr. Chandrasekaran also brings rich experience in various areas of
business, technology, operations, societal and governance matters.
Mr. Chandrasekaran
Institute of
is the Chairman of
Management Lucknow as well as the President of the Court
at Indian Institute of Science Bengaluru. He is the member of
Bocconi’s International Advisory Council and the Co-Chair of
India US CEO Forum.
Indian
Board Meeting Attendance and Remuneration
Details regarding the attendance at the Board Meeting and
remuneration paid to Mr. Natarajan Chandrasekaran are provided in
the Board’s Report and in the Corporate Governance Report forming
part of the Board’s Report.
Mr. Chandrasekaran has been awarded several honorary doctorates
by leading Universities in India and internationally, including an
honorary Doctor of Letters from Macquarie University, Australia,
Shareholding in the Company
Mr. Natarajan Chandrasekaran holds 2,00,000 fully paid-up Ordinary
(Equity) Shares of the Company.
448
INTEGRATED REPORT & ANNUAL ACCOUNTS 2019-20 | 113TH YEAR Directorships
companies
(excluding foreign companies, private companies and
Section 8 companies)
in other public
limited
Directorships
Tata Consultancy Services Limited
Tata Motors Limited
The Indian Hotels Company Limited
The Tata Power Company Limited
Tata Consumer Products Limited
(formerly Tata Global Beverages Limited)
Chairman/Member of Committees in other public limited
companies (Committees include the statutory committees)
Corporate Social Responsibility Committee
Chairman
Tata Consultancy Services Limited
Nomination and Remuneration Committee
Member
Tata Consultancy Services Limited
Tata Motors Limited
The Indian Hotels Company Limited
The Tata Power Company Limited
Tata Consumer Products Limited
(formerly Tata Global Beverages Limited)
449
Notice NOTES
NOTES
NOTES
Shri M Venkaiah Naidu, Hon’ble Vice President of India, releasing the
commemorative postal stamp to mark 100 years of Jamshedpur at
Tata Auditorium
Branding of ‘Steel Express’ to mark the Centenary Year
celebrations of Jamshedpur
Tata Steel Limited
Bombay House, 24 Homi Mody Street, Fort, Mumbai - 400 001
www.tatasteel.com
/TataSteelLtd
/Tatasteelltd
/tatasteelltd/
/user/Thetatasteel/
/company/tatasteelltd/
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