To the Members,
Your Directors take pleasure in presenting the 7th
Integrated Report (prepared as per the framework set forth by the International Integrated
Reporting Council) and the 115th Annual Accounts on the business and operations
of Tata Steel Limited ('Tata Steel' or 'Company'), along with the summary of standalone
and consolidated financial statements for the financial year ended March 31, 2022.
A. Financial Results
(Rs. crore)
| Particulars |
Tata Steel (Standalone) |
Tata Steel (Consolidated) |
|
2021-22 |
2020-21 |
2021-22 |
2020-21 |
| Revenue from operations |
1,29,021.35 |
84,132.92 |
2,43,959.17 |
1,56,477.40 |
| Total expenditure before finance cost, depreciation (net of
expenditure transferred to capital) |
77,891.50 |
57,009.21 |
1,80,469.22 |
1,25,973.14 |
| Operating Profit |
51,129.85 |
27,123.71 |
63,489.95 |
30,504.26 |
| Add: Other income |
1,452.02 |
755.11 |
784.89 |
895.60 |
| Profit before finance cost, depreciation, exceptional items
and tax |
52,581.87 |
27,878.82 |
64,274.84 |
31,399.86 |
| Less: Finance costs |
2,792.08 |
4,541.02 |
5,462.20 |
7,606.71 |
| Profit before depreciation, exceptional items and tax |
49,789.79 |
23,337.80 |
58,812.64 |
23,793.15 |
| Less: Depreciation and amortisation expenses |
5,463.69 |
5,469.26 |
9,100.87 |
9,233.64 |
| Profit / (Loss) before share of profit/(loss) of joint
ventures & associates, exceptional items & tax |
44,326.10 |
17,868.54 |
49,711.77 |
14,559.51 |
| Share of profit / (loss) of Joint Ventures & Associates |
- |
- |
649.16 |
327.34 |
| Profit / (Loss) before exceptional items & tax |
44,326.10 |
17,868.54 |
50,360.93 |
14,886.85 |
| Add/(Less): Exceptional Items |
(235.45) |
741.30 |
(134.06) |
(1,043.16) |
| Profit before tax |
44,090.65 |
18,609.84 |
50,226.87 |
13,843.69 |
| Less: Tax Expense |
11,079.47 |
1,531.87 |
8,477.55 |
5,653.90 |
| (A) Profit/(Loss) after tax |
33,011.18 |
17,077.97 |
41,749.32 |
8,189.79 |
| Total Profit / (Loss) for the period attributable to: |
|
|
|
|
| Owners of the Company |
- |
- |
40,153.93 |
7,490.22 |
| Non controlling interests |
- |
- |
1,595.39 |
699.57 |
| (B) Total other comprehensive income |
694.90 |
411.41 |
1,305.42 |
(7,211.01) |
| (C) Total comprehensive income for the period [ A + B ] |
33,706.08 |
17,489.38 |
43,054.74 |
978.78 |
| Retained Earnings: Balance brought forward from the previous
year |
46,480.00 |
30,803.97 |
16,476.70 |
18,127.82 |
| Add: Profit for the period |
33,011.18 |
17,077.97 |
40,153.93 |
7,490.22 |
| Less: Distribution on Hybrid perpetual securities |
1.46 |
242.34 |
1.46 |
242.34 |
| Add: Tax effect on distribution of Hybrid perpetual
securities |
0.37 |
60.99 |
0.37 |
60.99 |
| Add: Other Comprehensive Income recognised in Retained
Earnings |
5.67 |
64.01 |
366.39 |
(7,627.26) |
| Add/(Less): Change in Capital Structure and other movements
within equity |
9.99 |
(138.68) |
1656.02 |
(187.98) |
| Balance |
79,505.75 |
47,625.92 |
58,651.95 |
17,621.45 |
| Which the Directors have apportioned as under to:- |
|
|
|
|
| (i) Dividend on Ordinary Shares |
3,007.08 |
1,145.92 |
3,004.16 |
1,144.75 |
| Total Appropriations |
3,007.08 |
1,145.92 |
3,004.16 |
1,144.75 |
| Retained Earnings: Balance to be carried forward |
76,498.67 |
46,480.00 |
55,647.79 |
16,476.70 |
Notes:
i. The Board of Directors of the Company, at its meeting held on April
25, 2019, had approved the Composite Scheme of Amalgamation of Bamnipal Steel Limited and
Tata Steel BSL Limited (formerly known as Bhushan Steel Limited) into and with the Company
('Scheme of Amalgamation'). The Hon'ble National Company Law Tribunal, Mumbai Bench had
pronounced the Order on October 29, 2021, approving the aforesaid Scheme of Amalgamation.
The Company, in its standalone financial statements, had accounted for
the amalgamation using the pooling of interest method retrospectively for all periods
presented as prescribed in Ind AS 103 - "Business Combinations". The figures for
the previous periods in the standalone financial statements have been accordingly restated
from April 1, 2020. The consolidated financial results include the impact of the Scheme of
Amalgamation on accounting adjustments in accordance with the applicable Ind AS
provisions. Consequent to the amalgamation, Bamnipal Steel (including Tata Steel BSL) is
no longer presented as a separate segment and its steel business is included in Tata Steel
India segment with previous periods restated accordingly.
ii. Consequent to the re-classification of South East Asian Operations
from "Held for Sale" during the quarter ended March 31, 2021, results from
"Continuing Operations" for the previous periods wherever applicable have been
re-stated to include these businesses which were earlier presented as "Discontinued
Operations". During the year under review, the Company sold its stake in its
Singapore operations of NatSteel Holdings Pte. Ltd. ('NSH'). The wires business of
NatSteel in Thailand (Siam Industrial Wires) has been retained by Tata Steel as part of
the downstream wires portfolio.
iii. Figures for the previous periods have been regrouped and
reclassified to conform to the classification of the current period, where necessary.
iv. The exceptional items (Consolidated Accounts) in Financial Year
2021-22 primarily represents:
a. Restructuring and other provisions which includes charge on
Employees Family Protection Scheme for COVID-19 amounting to Rs.215 crore at Tata Steel
Limited (Standalone), Tata Steel Downstream Products Limited and at Tata Steel Utilities
and Infrastructure Services Limited.
b. Impairment charges (net of reversal) Rs.172 crore in respect of
property, plant and equipment (including capital work-in- progress), right-of-use assets
and other assets primarily at Tata Steel Europe ('TSE') and Tata Steel Thailand.
c. Provision for Employee Separation Scheme ('ESS') amounting to Rs.331
crore includes provisions made primarily under Sunehere Bhavishya Ki Yojana ('SBKY')
scheme amounting to Rs.208 crore and Second Innings Scheme amounting to Rs.123 crore, at
Tata Steel Limited (Standalone).
d. Impairment of Inter Corporate Deposits given to an Associate of the
Company amounting to Rs.100 crore at Tata Steel Limited (Standalone).
e. Expenses incurred on stamp duty and registration fees for a portion
of land parcels and mines acquired as part of business combination amounting to Rs.27
crore at Tata Steel Long Products Limited.
f. Redundancy provisions at TSE amounting to Rs.14 crore.
g. Impairment on outstanding deferred consideration at TSE Rs.81 crore.
Partly offset by,
a. Profit on sale of subsidiaries and non-current investments in
NatSteel Holdings Pte. Ltd. amounting to Rs.725 crore.
b. Reversal of fair valuation loss previously taken on investment in
debentures of a joint venture of the Company amounting to Rs.50 crore at Tata Steel
Limited (Standalone).
c. Gain on sale of land amounting to Rs.31 crore at Tata Metaliks
Limited.
The exceptional items (Consolidated Accounts) in Financial Year 2020-21
primarily include:
a. Impairment charges (net of reversal) of Rs.1,954 crore in respect of
property, plant and equipment (including capital work-in- progress), right-of-use assets
and other assets primarily at Tata Steel Europe ('TSE'), mining operations carried out in
Canada, South-East Asian Operations, offset by reversal at Tata Steel Special Economic
Zone Limited.
b. Loss from liquidation of subsidiaries amounting to Rs.10 crore at
TSE.
c. Net Provision for Employee Separation Scheme ('ESS') amounting to
Rs.444 crore includes provisions primarily made under Special Scheme at Company's Jharia
Collieries amounting to Rs.467 crore, offset by credit for ESS under Sunehere Bhavishya Ki
Yojana ('SBKY') scheme amounting to Rs.23 crore at Tata Steel Limited (Standalone).
d. Fair valuation loss on investment in debentures of a joint venture
company amounting to Rs.50 crore at Tata Steel Limited (Standalone).
Partly offset by,
a. Restructuring and write-back of provisions which primarily includes
write-back of provisions at TSE Rs.88 crore.
b. Reversal of fair value loss amounting to Rs.1,230 crore on
reclassification of South-East Asian businesses, earlier recognised as "held for
sale".
c. Reversal of impairment of investments provided earlier in one of the
Associate company of Tata Steel amounting to Rs.70 crore.
d. Profit on sale of subsidiaries includes profit of Rs.26 crore on
realisation of deferred consideration 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').
The Policy is available on our website at https://www.tatasteel.
com/media/6086/dividend-policy-final.pdf
2. Dividend
For the Financial Year 2021-22, the Board has recommended a dividend of
Rs.51/- per fully paid-up Ordinary (equity) Share (previous year: Rs.25/- per fully
paid-up Ordinary (equity) Share) and in respect of the outstanding partly paid-up Ordinary
(equity) Shares of the Company on which call money remains unpaid as on the date of book
closure for the dividend payment, the dividend will be paid in proportion to the amount
paid-up on such shares i.e. Rs.12.75 per partly paid-up Ordinary (equity) Share of Rs.10/-
each (paid-up Rs.2.504 per share) [previous year: Rs.6.25 per partly paid-up Ordinary
(equity) Share].
The Board has recommended dividend based on the parameters laid down in
the Dividend Distribution Policy and dividend will be paid out of the 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 Tuesday, June 28, 2022 and will be paid on and from
Saturday, July 2, 2022.
Based on the Ordinary Shares (fully paid-up as well as partly paid-up)
as on the date of this report, the dividend, if approved would result in a cash outflow of
~Rs.6,233.11 crore. The dividend on Ordinary Shares (fully paid-up as well as partly
paid-up) is 510% of the paid-up value of each share. The total dividend pay-out works out
to 19% (previous year: 18%) of the net profit (on Standalone basis).
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 will
remain closed from Friday, June 17, 2022 to Tuesday, June 28, 2022 (both days inclusive)
for the purpose of payment of the dividend and AGM for the financial year ended March 31,
2022.
3. Transfer to Reserves
The Board of Directors has decided to retain the entire amount of
profit for FY 2021-22 appearing in the statement of profit and loss.
4. Capex and Liquidity
During the year under review, the Company, on a consolidated basis
spent Rs.10,522 crore on capital projects across India and Europe largely towards ongoing
growth projects in India, essential sustenance and replacement schemes.
The Company's liquidity position, on a consolidated basis, is Rs.37,470
crore as on March 31, 2022, comprising Rs.24,513 crore in cash and cash equivalent and
balance in undrawn credit lines.
5. Management Discussion and Analysis
The Management Discussion and Analysis as required in terms of the SEBI
Listing Regulations is annexed to this Report (Annexure 1).
B. Integrated Report
In keeping with the Company's valued tradition of "thinking about
society and not just the business", in 2016, we transitioned from compliance based
reporting to governance based reporting by adopting the <IR> framework developed by
the International Integrated Reporting Council (now known as Value Reporting Foundation).
Our 7th Integrated Report highlights the measures taken by
the Company that contributes 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. Impact of COVID-19 on the economy and Company's initiatives in
addressing the challenges of the pandemic
The COVID-19 pandemic has led to the unprecedented health crisis and
has disrupted economic activities and global trade while weighing on consumer sentiments.
During the year under review, the nation experienced high severity and mortality of
citizens brought by the second wave of the ongoing COVID-19 pandemic. With intermittent
nationwide lockdowns and disruption in regular economic activities, there was price
volatility of raw materials and sluggish market demand during first half of the year under
review. However, the Company dealt with the pandemic by continuing to focus on operational
excellence, marketing strategies, and keeping its employees and community at the core of
it.
The health and safety of employees and the communities in which the
Company operates continue to be the foremost priority of the Company. To mitigate the
risks and challenges faced by the Company during the pandemic, the Company enhanced safety
and hygiene norms at offices, implemented work from home, staggered shift timings for
safety of employees and leveraged digital platforms for its day-to-day operations. The
Company, in collaboration with state governments and hospitals, contributed immensely
towards maintaining dedicated covid-care units, providing of liquid oxygen &
maintaining oxygen processing plants and undertaking vaccination drives. Further, the
Company's three pronged communication strategy - awareness, engagement and reinforcement
helped spreading awareness amongst various communities.
During the challenging times, the Company maintained its liquidity
position by minimizing cash outflows and maintaining a judicious mix of funding
instruments to fulfil its operational requirements.
Further details on various initiatives taken by Tata Steel in
addressing the challenges posed by COVID-19 pandemic forms part of the Management
Discussion and Analysis forming part of this Report.
2. Tata Steel (Consolidated)
During the year under review, the Tata Steel Group ('TSG') recorded
total consolidated crude steel production of 31.03 MnT (previous year: 28.54 MnT), an
increase by 9% primarily due to better steel demand. TSG recorded total consolidated
deliveries of 29.52 MnT (previous year: 28.50 MnT), an increase by 4%, due to higher
exports and higher domestic demand primarily during second half of the year under review.
The turnover of TSG was Rs.2,43,959 crore during the financial year
2021-22 (previous year: Rs.1,56,477 crore), an increase by 56% primarily contributed by
higher steel realisations across geographies along with increase in deliveries. Further,
the EBITDA of TSG was Rs.63,830 crore [(>2x) of previous year] during the financial
year 2021-22, significantly higher as compared to Rs.30,892 crore in the previous year,
owing to higher revenues, partly offset by increase in input cost.
During the year under review, TSG reported a consolidated profit after
tax of Rs.41,749 crore which is almost five times higher than the profit after tax of
Rs.8,190 crore in the previous year. The increase was mainly due to improvement in EBITDA,
lower net finance charges due to pre-payments and lower exceptional charge, partly offset
by higher tax charge in India due to higher profits.
3. Tata Steel (India Operations)
During the year under review, total deliveries at Tata Steel Limited
(Standalone) were at 17.62 MnT (previous year: 16.66 MnT). Turnover was Rs.1,29,021 crore
(previous year: Rs.84,133 crore), an increase of ~53% than that of the previous year.
EBITDA from Tata Steel Limited (Standalone) was Rs.51,456 crore (previous year: Rs.27,340
crore), 88% higher than that of the previous year. During the year under review, the crude
steel production in Tata Steel Limited increased by 13% to 18.38 MnT as the previous year
was impacted due to COVID-19 pandemic.
Total deliveries of Tata Steel from its Indian operations (including
Tata Steel Long Products Limited) stood at 18.27 MnT which is higher than the previous
year by 6%. The turnover was Rs.1,35,823 crore, an increase by ~53% than previous year and
EBITDA (excluding inter-company eliminations and adjustments) was Rs.52,745 crore, 85%
increase than previous year, both owing to sharp increase in steel realisations and higher
steel deliveries which was partly offset by higher operating cost due to increase in
imported coal prices and higher iron ore prices.
4. Tata Steel (Europe Operations)
During the year under review, liquid steel production from Europe
operations was 10.11 MnT (previous year: 9.55 MnT), an increase of 6%. Deliveries from
Europe operations increased by ~2% to 9.02 MnT primarily due to increased demand. Turnover
from operations was Rs.90,023 crore (previous year: Rs.56,051 crore), significantly higher
due to increase in average revenue per tonne due to continued increase in selling price
and higher deliveries in view of market demand.
Despite the headwinds from COVID-19, there was significant improvement
in EBITDA which stood at Rs.12,164 crore primarily on account of higher prices, which was
partly offset by the increase in raw material prices, increase in maintenance spend,
energy prices and employee cost.
D. Key Developments
1. Amalgamation
Amalgamation of Bamnipal Steel Limited and Tata Steel BSL Limited into
and with Tata Steel Limited
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
('TSBSL'), into and with the Company by way of a composite scheme of amalgamation
('Scheme'). The Scheme was approved by the shareholders of the Company by requisite
majority at their meeting held on March 26, 2021. On receipt of the approval of the
shareholders, the Company filed the 'Company Scheme Petition' with the Hon'ble National
Company Law Tribunal ('NCLT'), Mumbai Bench with the prayer to sanction the Scheme. After
several hearings, on October 29, 2021, the NCLT pronounced the Order sanctioning the
above-mentioned Scheme (the Appointed Date being April 1, 2019). On November 11, 2021, the
parties to the Scheme made necessary filings with the statutory authorities and
accordingly, the Scheme became effective from November 11, 2021.
As per the terms of the Scheme, the Board of Directors of the Company
at its meeting held on November 11, 2021, approved the issuance of one fully paid-up
Equity Share of Tata Steel Limited of face value Rs.10/- each for every fifteen Equity
Shares of TSBSL of face value Rs.2/- each upto 1,99,34,052 equity shares, to eligible
shareholders of TSBSL as on the Record Date i.e. November 16, 2021. Further, cross-holding
of equity shares and/or preference shares amongst the parties to the Scheme, inter-se,
stood cancelled. On November 23, 2021, the Board of Directors of the Company approved the
allotment of 1,82,23,805 fully paid-up Equity Shares to the eligible shareholders of
TSBSL. As on date, Bamnipal Steel Limited and TSBSL stands amalgamated into and with Tata
Steel Limited.
2. Acquisitions, Investments and Portfolio Restructuring Acquisition of
Neelachal Ispat Nigam Limited
On January 31,2022, Tata Steel Long Products Limited ('TSLP'), a listed
subsidiary of the Company, was announced as the winner of the bidding process to acquire
93.71% stake in the 1 MnTPA Neelachal Ispat Nigam Limited ('NINL') in accordance with the
process run by Department of Investment and Public Asset Management, Government of India.
NINL is a strategic acquisition for Tata Steel due to its close proximity to Kalinganagar
Steel Plant, its steel making capacity, its 2,500 acres of land for future growth and iron
ore reserves of around 100 MnT. This will help Tata Steel to boost its long products
business.
On March 10, 2022, the Company and TSLP executed a Share Sale and
Purchase Agreement with NINL and its principle shareholders for acquisition of the said
stake for an aggregate consideration of Rs.12,100 crore, which reflects the enterprise
value (including all recorded liabilities) as part of the said acquisition.
Investment in Tata Steel Long Products Limited
On March 17, 2022, Tata Steel acquired 10,00,00,000 - 0.01%
Non-Convertible Redeemable Preference Shares of face value Rs.100/- each ('NCRPS') of Tata
Steel Long Products Limited ('TSLP'), aggregating to Rs.1,000 crore. On March 30, 2022,
Tata Steel further acquired 117,00,00,000 NCRPS of TSLP, aggregating to Rs.11,700 crore.
Through these fundings, Tata Steel assisted TSLP in funding growth plans including
acquisition of NINL.
The Company's equity shareholding in TSLP remains at 74.91%.
Acquisition of Rohit Ferro-Tech Limited
The Company was exploring opportunities to meet its production target
for ferro alloys and considering the strategic attractiveness, competitive intensity and
expected synergy benefits, identified Rohit Ferro-Tech Limited ('RFT') as a target company
to be acquired through Tata Steel Mining Limited ('TSML'), wholly-owned subsidiary of Tata
Steel, under the Corporate Insolvency Resolution Process ('CIRP') of the Insolvency and
Bankruptcy Code, 2016 ('Code').
On June 5, 2021, the Committee of Creditors, in terms of the CIRP of
the Code, declared TSML as the successful resolution applicant for the acquisition of RFT,
subject to necessary regulatory approvals including approval from the NCLT, Kolkata Bench.
On April 7, 2022, the NCLT pronounced the Order approving the Resolution Plan submitted by
TSML for acquisition of RFT. As per the Resolution Plan, TSML acquired 90% equity stake in
RFT for ~Rs.617 crore.
On April 11, 2022, in terms of the Resolution Plan, the Company
(through TSML) completed the acquisition of 90% stake in RFT and the remaining 10% stake
was acquired by the assenting financial creditors of RFT towards conversion of a portion
of their loans. For the purpose of this acquisition, the Company, as one of the funding
modes, infused Rs.625 crore into TSML by acquiring 32,63,70,757 equity shares of TSML of
face value Rs.10/- each for a premium of Rs.9.15 per share.
Acquisition of Preference Shares of Angul Sukinda Railway Limited
On December 15, 2021, the Company executed a long-term agreement with
Angul Sukinda Railway Limited ('ASRL'), for the construction, operation and maintenance of
an alternate railway line ('Additional Rail Line'). The agreement has been entered into
for a period of 20 years to meet the logistic requirements of the Company's Kalinganagar
Steel Plant. The entire expenditure for construction of the Additional Rail Line of Rs.400
crore will be funded by the Company in a phased manner by subscribing to 40,00,00,000
Non-Convertible, Non-Cumulative, Redeemable Preference Shares of face value Rs.10/- each
of ASRL.
Increase in stake in Medica TS Hospital Private Limited
On January 7, 2022, the Company's equity stake in Medica TS Hospital
Private Limited ('MTSHPL'), a joint venture of Tata Steel, increased from 26% to 51% due
to conversion of 5,102 Optionally Convertible Debentures ('OCDs') of Rs.1,000 each into
5,10,200 Equity Shares of Rs.10/- each of MTSHPL. Further, 4,92,298 OCDs of Rs.1,000 each
were also converted into 0.1% of Optionally Convertible Redeemable Preference Shares of
Rs.10/- each of MTSHPL. Accordingly, during the year under review, MTSHPL became a
subsidiary of the Company from being a joint venture of the Company.
Acquisition of stake in Ceramat Private Limited
The Company has identified Advanced Ceramics as one of the new
materials for strategic growth. The Company was exploring opportunities to set up a
world-class facility to produce medical materials and identified Ceramat Private Limited
as a special purpose vehicle for this purpose.
On February 28, 2022, Tata Steel Limited through Tata Steel Advanced
Materials Limited, wholly owned subsidiary of the Company, executed a Share Purchase cum
Shareholders' Agreement for acquisition of 90% equity stake in Ceramat Private Limited.
The said acquisition was completed on March 16, 2022 for a cash consideration of
Rs.90,000.
Acquisition of itemized assets from Stork Ferro and Mineral Industries
Private Limited
On March 30, 2022, the Company executed an Asset Transfer Agreement
with Stork Ferro and Mineral Industries Private Limited for acquisition of itemized assets
to produce ferro alloys for a cash consideration of Rs.155 crore (excluding applicable
taxes).
Acquisition of entire stake held by Steel Authority of India Limited in
S & T Mining Company Limited
On April 5, 2022, the Company had executed a Share Purchase Agreement
with the Steel Authority of India Limited ('SAIL') for acquisition of the entire equity
stake of SAIL (50%) held in S&T Mining Company Limited ('S&T Mining'). On April
11, 2022, the said acquisition was completed and S&T Mining ceased to be joint venture
of the Company and became its wholly-owned subsidiary.
Portfolio restructuring of Tata Steel Group Companies
The Company had previously announced that it is embarking on a
comprehensive strategic organization level restructuring and consolidation of its
diversified business portfolio of its group companies ('Tata Steel Group Companies or
TSGCs').
The strategic objective is to group the TSGCs under 4 distinct clusters
viz. (a) Long Products (b) Downstream (c) Mining and (d) Utilities and Infrastructure
Services, each controlled through a subsidiary company of the Company, which will be
responsible for nurturing and scaling the business of its respective cluster to become a
leading strategic player in the industry.
In line with the above objective, the Company during the year under
review, transferred its entire shareholdings in (a) Tata Steel Special Economic Zone
Limited, (b) Adityapur Toll Bridge Company Limited (c) Himalaya Steel Mill Services
Private Limited (d) Tata Pigments Ltd. (e) Jamipol Limited (f) Nicco Jubilee Park Limited
to Tata Steel Utilities and Infrastructure Services Limited (Company's wholly-owned
subsidiary), and entire shareholding in Tata Steel Advanced Materials Limited (formerly
Tata Steel Odisha Limited) to Tata Steel Downstream Products Limited (Company's
wholly-owned subsidiary).
3. Divestments
Sale of shares in NatSteel Holdings Pte. Ltd.
On September 30, 2021, T S Global Holdings Pte. Ltd. ('TSGH'), an
indirect wholly owned subsidiary of Tata Steel Limited, set up in South-East Asia,
executed definitive agreements with Toptip Holding Pte Ltd. to divest its entire stake
held in NatSteel Holdings Pte. Ltd., for an equity value of US$ 172 million (Rs.1,275
crore). However, the wires business of NatSteel in Thailand (Siam Industrial Wires) will
continue to be in operations under TSGH as part of downstream wires portfolio.
4. Financing and Debt Redemption
First and Final Call on Partly Paid-up Equity Shares
On February 9, 2021, the Board of Directors of the Company approved the
making of the first and final call of Rs.461/- (comprising Rs.7.496 towards face value and
Rs.453.504 towards securities premium) per partly paid-up equity share ('First and Final
Call') on 7,76,36,788 outstanding partly paid-up equity shares of face value Rs.10/- each,
issued by the Company, on a Rights basis, pursuant to the Letter of Offer dated January
22, 2018.
Pursuant to the First and Final Call, the Stakeholders' Relationship
Committee ('SRC'), duly authorised by the Board, on March 24, 2021 approved the conversion
of 7,02,49,241 partly paid-up equity shares of face value Rs.10/- each into fully paid-up
equity shares of face value Rs.10/- each, against which the first and final call money of
Rs.461/- (comprising Rs.7.496 towards face value and Rs.453.504 towards securities
premium) per share was received.
During the year under review, the SRC, approved the conversion of
71,64,259 partly paid-up equity shares of face value Rs.10/- each into fully paid-up
equity shares of face value Rs.10/- each, against which the First and Final Call money of
Rs.461/- per share was received. The converted shares rank pari passu with the
existing fully paid-up equity shares of the Company.
As on March 31, 2022, the Company has 2,23,288 partly paid-up equity
shares on which the first and final call money remains unpaid.
Debenture Redemptions
On May 11, 2021 the Company exercised its Call Option to redeem 11.50%
Perpetual Hybrid Securities of the Company aggregating to Rs.775 crore, as per their terms
of issue. On April 22, 2022, the Company redeemed its 2% Non-Convertible Debentures
aggregating to Rs.1,500 crore as on the due date.
Credit rating
During the year under review, international rating agency S&P
Global Ratings upgraded Tata Steel's Corporate Family Rating by four notches to 'BBB-'
Outlook: Stable from 'B+' Outlook: Stable. With the upgrade, Tata Steel has become an
investment- grade rated entity in the international markets. Further, Moody's also
upgraded the rating by one notch to 'Ba1' Outlook: Stable from 'Ba2' Outlook: Stable due
to its better-than-anticipated operational performance and reduction in gross debt during
FY 2021-22.
Domestic rating agencies upgraded Tata Steel's Ratings by one notch:
India Ratings upgraded Tata Steel's long-term credit rating by one notch to 'AA+' Outlook:
Stable from 'AA' Outlook: Stable. CARE Ratings upgraded Tata Steel's long-term credit
rating by one notch to 'AA+' Outlook: Stable from 'AA' Outlook: Negative'. Brickwork
Ratings also upgraded Tata Steel's long-term credit rating to 'AA+' Outlook: Stable from
'AA' Outlook: Stable.
Sub-division of Ordinary Shares of the Company
On May 3, 2022, the Board of Directors of the Company, in order to
enhance the liquidity in the capital market, to widen shareholder base and to make the
shares more affordable to small investors, considered and approved the proposal for
sub-division of 1 (one) equity share of the Company having face value of Rs.10/- each into
10 (Ten) equity shares of the Company having face value of Rs.1/- each, subject to the
approval of the Shareholders of the Company and other necessary approvals.
Further, there will be consequential amendments in the Capital Clause
of the Memorandum of Association of the Company and Articles of Association of the
Company, subject to approval of the Shareholders of the Company at the ensuing AGM
scheduled to be held on June 28, 2022.
Details on the proposal forms part of the AGM Notice forming part of
this Integrated Report & Annual Accounts 2021-22.
5. Operations
Commissioning of first Steel Recyclying Plant in Rohtak, Haryana
On August 18, 2021, the Company commissioned its new 0.5 MnTPA Steel
Recycling Plant at Rohtak, Haryana in collaboration with Aarti Green Tech Limited on
'Build-Own-Operate' basis. It is the first such facility in the country and is equipped
with modern and mechanized equipment such as Shredder, Baler, Material Handler amongst
others. The scrap would be procured from various market segments such as end-of-life
vehicles, obsolete households, construction & demolition, industrial etc., and
processed through mechanised equipment and the high-quality processed scrap would be
supplied for downstream steel making. Steel produced through this recycled route will lead
to lower carbon emissions, resource consumption and energy utilisation.
E. Sustainability
Tata Steel's philosophy of steel production is deep rooted on the
principles of zero harm, resource efficiency, circular economy, minimising ecological
footprint and care for community & workforce. The Company has adopted the United
Nations Sustainable Development Goals ('UN SDGs') and linked it with its long-term
strategy and has revised its sustainability targets. Aspirations of taking the Company's
carbon emissions to <1.8 tCO2/tcs, mitigating dependence on fresh water by
lowering specific freshwater consumption to <1.5 m3/tcs, no harm to
biodiversity and inclusion of critical supply chain partners for Company's ESG risk
assessment and mitigation are significant facets of this strategy. In Europe, the Company
has embraced a target to achieve carbon neutrality of its steel making operations by 2050.
The Company takes it as its inherent responsibility to protect the
rights of its stakeholders. During the year under review, the Company has adopted the
Business and Human Rights Policy and institutionalised a governance structure towards its
deployment. The Policy is in consonance with the Universal Declaration of Human Rights,
the UN Principles on Business and Human Rights, and the International Labour Organization
Convention and Indian laws.
Tata Steel had identified supply chain sustainability as a key material
issue and in order to take this forward, the Company had in February 2020, adopted the
Tata Steel Responsible Supply Chain Policy. During the year under review, the Company took
initiatives in deployment of the Policy through various communication channels, including
a framework for shared growth between its suppliers and distributors for sustainable
supply chain.
The Company continues to be committed to serve its customers through a
portfolio of eco-friendly products and disclosure of the environmental impact of its
products by using Life Cycle Assessment ('LCA') methodology. To accelerate its efforts in
becoming a leader in product sustainability, Tata Steel strives to use LCA tool
effectively in its products. During the year under review, the Company has undertaken LCA
studies based on worldsteel LCA methodology guided by ISO 14040 and ISO 14044. The Company
has completed the LCA study for products manufactured at its plants at Meramandali
(Odisha), CRM Bara in Jamshedpur (Jharkhand) and the plant site of its subsidiary, Tata
Steel Long Products Limited situated at Gamharia (Jharkhand). The Company has also carried
out LCA study for structural tubes and hollow section products manufactured at Tata Steel
Tubes division, Jamshedpur (Jharkhand) and other production units across India. The
Company has also carried out LCA study for its Fibre Reinforced Polymer ('FRP') product to
understand its environmental impact. During the year under review, Tata Tiscon became
India's first GreenPro certified TMT rebar brand. In alignment to the Company's
sustainability strategy, it aspires to obtain eco-labels (GreenPro and Environment Product
Declaration) for its key products and proactively react to its customers who seek product
related sustainability information. In Europe, the Company has published Environmental
Product Declarations with entire product range of the European operations certified with
BES 6001 sustainable sourcing standard.
Further, towards sustainability, Tata Steel is supporting Task Force on
Nature Related Disclosures in developing a risk management and disclosure framework to
factor nature- related risks and opportunities while making financial and business
decisions.
The Company continues to integrate Biodiversity within its business
ecosystem. Towards this, the Company has aligned its actions with the National and
International Biodiversity Targets and the Sustainable Development Goals. To augment
Company's efforts in Biodiversity conservation, Tata Steel has constituted Centre of
Excellence for Biodiversity Management to strategically formulate and implement
Biodiversity Management Plans ('BMPs') across locations. As on March 31, 2022, the Company
has implemented BMPs across 13 locations in India.
1. Environment
Being a responsible corporate citizen, Tata Steel continues to strive
for environmental sustainability across operations. Towards this, the Company has taken
necessary initiatives for environmental protection and addressing environmental concerns
associated with its operations and supply chain. The Safety, Health & Environment
Committee of the Board provides oversight and necessary guidance on safety, health and
environmental matters. The Company has dedicated Environment Management teams at all its
operating locations, globally. The Company endeavours to practice responsible advocacy on
regulatory issues and actively participates in various national and international
organisations on diverse issues.
Guided by our Code of Conduct and internal corporate policies, Tata
Steel endeavours to set steel industry benchmark in environmental performance. With the
Strategic objective of "Leadership in Sustainability", Tata Steel has achieved
significant reduction in its environment footprint over the years through its commitment
of being a responsible stakeholder in the community. Towards this, the Company has taken
several initiatives in areas of resource conservation, pollution control and sustainable
practices for waste management, amongst others. Tata Steel has adopted environment
friendly processes, best available technologies, real-time monitoring systems and IT
enabled dashboards to facilitate environmental responsiveness. Tata Steel maintains
transparency in its environmental performance through various disclosures and reporting
made to stakeholders from time to time. The Company has digitized the systems of real-time
monitoring of environmental parameters to faster identify probable environmental impacts
of its operations in order to undertake mitigating actions to control environmental
pollution. During the year under review, these digital monitoring practices have been
recognised as "synergized" in the DATOM assessment forming part of the
established digital ecosystem across enterprise and its value chain. During the year under
review, Tata Steel has taken initiatives to retain its Indian benchmark position in CO2
intensity, specific stack dust emissions and specific water consumption. The Company's
newly commissioned UV based Cyanide treatment plant at Coke Oven#2 at Angul Works, got
recognition by Tata Innovista Awards 2021.
2. Climate Change
Climate change is one of the most pressing issue the world faces today
and the Company recognises its obligation to work towards mitigation of climate change
related risks and strives to reduce its carbon footprint across all geographies. The
Company is committed to being aligned with India's Nationally Determined Contribution
('NDC') and the European Union's commitment on climate change. In India, the Company has
successfully reduced its carbon footprint in past sixteen years by improving resource
efficiency and technology and strives to attain carbon emission intensity of <1.8 tCO2/tcs
by 2030. To be aligned to its carbon emission target, Tata Steel is taking a range of
efforts across the organisation for Greenhouse Gas Emission reduction activities that
include increasing efficiency of operations, use of recycled clean scraps, Carbon Capture
and Utilization ('CCU'), and hydrogen-based steelmaking.
The Company is signatory to the Task Force on Climate-related Financial
Disclosures ('TCFD') for climate change and has identified transition risks and
opportunities. Specific mitigation and contingency plans for each of the identified risks
have been integrated within the Company's long-term strategy. To move closer towards lower
carbon pathway, the Company is working towards installing natural gas based DRI kiln and
be future-ready in use of hydrogen by replacing natural gas. The Company continues to work
towards integrating hydrogen gas in iron making processes as a non-fossil fuel and
reductant. During the year under review, the Company has successfully tried injection of
Coal Bed Methane (type of natural gas) in one of its Blast Furnaces to reduce carbon
intensity by replacing metallurgical coke.
In India, the Company, in collaboration with various startups, academia
and other organizations of repute, is working towards developing various projects with
primary focus on decarbonization. During the year under review, the Company commissioned
the CCU pilot plant at Jamshedpur Works, the first of its kind in India that extracts CO2
directly from the Blast Furnace gas. The Company aspires to emerge as a business leader
across the hydrogen and CCU value chain.
Tata Steel is also working towards minimising emission standards. With
the advent of electrification of vehicles and renewable energy system, the Company is
taking efforts to increase the use of renewable energy along with inclusion of high range
electric mobility system. During the year under review, Tata Steel became the first steel
producer in India in transporting steel products in Electronic Vehicles with a minimum
carrying capacity of 35 tonnes of steel.
Tata Steel is collaborating with wide range of organisations in
developing the ecosystem to mitigate climate change transition risk. The Company is also
working on the assessment of the physical risks present at plant sites of operation and
developing adaption strategies for the same.
3. Health and Safety
Health and Safety Management remains the Company's foremost priority
and we are committed to achieve 'Zero Harm'. In pursuit of this objective, the Company
continues to work on six strategies viz. build safety leadership capability at all levels
to achieve zero harm, achieve zero harm to contract employees by strengthening deployment
of contractor safety management standard, improve competency and capability for hazard
identification & risk management, improve road & rail safety across the Company,
excellence in process safety management, and establish industrial hygiene and improve
occupational health.
During the year under review, the Company undertook proactive measures
to minimize the impact of the COVID-19 pandemic on the Company's workforce through agile
decision making and timely and effective deployment of several policies and measures for
the benefit of the employees. A novel initiative, the 'POD concept', which involves
self-sufficient groups of people having self-contained set of skills to do an intended
job, was formed. It was deployed at manufacturing and raw material locations as well as at
profit centres to tackle the spread of COVID-19 within the Company premises. During the
year under review, the Company's efforts for ensuring safety and business continuity
during the pandemic period was recognized by the World Steel Association.
The Company took several initiatives to improve the health and safety
standards of its employees, including rolling out a Reward and Recognition Policy for
Indian operations to encourage positive safety behavior among employees. Further, to boost
employee morale during the pandemic situation, the Company organized the 'SHE Excellence
Award', recognizing and rewarding employees/departments for their remarkable contribution
towards maintaining 'safety, health and sustainability' within the Company.
The Company took initiative to enhance the competency of the workforce
and provided safety training at the Safety Leadership Development Centre formed by the
Company. The Company took several efforts in training the majority workforce in simplified
safety standards through e-modules which helped the Company to strengthen safety
competency.
Contractor's safety has always been a priority for the Company. During
the year under review, the Company introduced 'Ghar Se Ghar Tak' programme for the
contractor workers along with their families, to improve discipline and behavior amongst
themselves. Contractor Safety Management System ('CSMS') has been deployed in all
stockyards and Steel Processing Centres of Tata Steel as well as across Tata Steel Group
Companies.
Further, the initiative to roll out Process Safety through 'Centre of
Excellence' ('CoE') methodology gained momentum, enhancing the process safety competency
for employees. Currently, the process safety through CoE, has been rolled out to 43
departments across locations as well as amongst Tata Steel Group Companies. The Company
has rolled out an integrated Asset Management Framework across India operations after
considering a similar framework existing in Europe.
The Company has set up 'Tactical Centre', for business continuity
management during emergencies at Tata Steel Jamshedpur. This centre will be responsible
for triggering control measures through digital information feed from various stakeholders
and similar facilities are being established at Tata Steel Kalinganagar and Tata Steel
Meramandali. To provide a holistic approach towards the adoption of digital and technology
in maintaining safety within the organization, the Company has formed an internal Apex
Digital & Technology Safety Sub-Committee to focus on maximizing the leverage of
current digital initiatives and designing new initiatives to bolster our key strategies.
Towards Occupational Health, the Company has implemented a
comprehensive Industrial Hygiene program which includes identification of occupational
health hazards, risk analysis, and assessment of actual exposure through hazard
quantification. It also focusses on implementation of hazard control measures to maintain
minimum exposure level and to reduce occupational health related risks. During the year
under review, more than 500 awareness sessions on 'Health & Well-being' have been
organized across Tata Steel India for the employees and contract employees. These sessions
have helped in reduction of high-risk cases of lifestyle diseases by 57%.
Fatality of people working at Tata Steel premises has been the topmost
safety concern for the Company. It is with deep regret that the Company reports 3
fatalities during the year under review. The Company launched hazard specific Safety
campaigns viz. 'Slip/Trip/Fall', 'Hands are not Tools', 'Zero Toppling', amongst others,
across locations to address gaps and improve safety awareness. Deployment of various
safety initiatives helped the Company in achieving 14% reduction in first-aid cases where
as increase in Slip/Trip/Fall related Lost Time Injuries still remain a major concern.
At Tata Steel Europe, health and safety continues to be of utmost
priority. In another year dominated by the COVID-19 pandemic, the Company responded with
pace and with a coordinated agile approach to protect the health and well-being of all
employees and stakeholders. Effective communication and engagement was key to maintain
safe and healthy working environment and to recognize the challenges to employee's health
and well-being. With this backdrop, the overall safety performance of the Company
improved, and the Company reported no fatalities in Europe during the year under review.
4. Research and Development
Conservation of the environment and sustainability has always been an
important area for the Company. During the year under review, the Research and Development
('R&D') team of the Company has focused in areas such as reduction in Green House Gas
emissions, achieving water neutrality and use of low-grade raw materials. The Company
strives towards reducing its carbon footprint and in alignment to this, the Company has
significantly progressed towards setting up and operating high-end technology driven plant
such as 5 TPD (tonne per day) CO2 capture plant and Cyanide removal plant based
upon patented UV oxidation process.
The Company has also demonstrated continuous injection of Coal Bed
Methane in Blast Furnace at Jamshedpur operations in order to reduce use of coal/coke in
Blast Furnace which in turn would further reduce CO2 emissions. Hydrogen is
seen as another potential solution to decarbonize steel industry and towards this, the
Company has initiated several research programs in collaboration with research institutes
towards production of hydrogen through sustainable process. Working in line with the theme
of efficient usage of raw materials, a novel slag modifier has been developed which allows
smooth Blast Furnace operations even with high alumina iron ore material. This process is
patented and has potential to substantially contribute towards the cost saving of the
Company.
Amongst the notable new product development, the R&D team of the
Company has developed a novel process of manufacturing a new variant of pearlitic (C80)
steel used to modify the microstructure to spheroidised carbides in hot rolled condition.
Crash is one of the most important design considerations for automotive engineers. Tata
Steel has established a facility for studying deformation behaviour of steels at high
strain rates which are usually seen during crash.
Tata Steel R&D team is a pioneer in adding this facility which is
so far available only at a few Government Research Centres in India.
Our thrust on innovation is visible as the Company has filed 125 new
patent applications during the year under review, which is highest ever number achieved by
Tata Steel.
In Europe, R&D has contributed to the development of various new
products and has been involved in the development and implementation of new process
control models and other process improvements. In the Netherlands, the Company has
progressed in its product developments which includes 27 & 38MnB5 steels (high
strength heat treatable BMn steels used in agricultural applications by the
engineering-sector), Serica- FLO (a new Gl-based, zinc coating for exposed panels used by
automotive sector) and HR-S355MC with guaranteed toughness at thick gauge (a HSLA grade
with high impact toughness at low temperatures). The Company has also introduced various
process improvements which includes implementation of coating weight control on
Galvanising Line to visualise the hearth wear in Blast Furnaces, and setting up of new
design of oxygen blow profiles to prevent slopping at convertor processes. Further,
R&D has also been vital in getting many potential new products to reach higher level
of Technology Readiness throughout the year and support the customer interactions on a
technical level. Research & Development continues to help the Company and its
customers in its drive to become more sustainable and more environment friendly. Within
R&D, work continues on Hlsarna project as a novel and more flexible reduction
technology for iron production.
In the United Kingdom, the R&D department supports the business
needs of new product development, process and product improvements and providing customer
support. The Company has identified automotive VAVE/EVI, Engineering Performance Analyses,
Construction and Conveyance Solutions as specific competency areas. Amongst new process
development, the Company has developed a software for automated release of Hot Rolled
products, the use of Through Process Record set tool and Advanced Analytics Toolbox to
investigate the long-standing caster laminations problem. The Company has made significant
achievement in product differentiation by innovating eco-friendly Microwave curing
coatings on steel. During the year under review, the Company has strengthened its
collaboration with various global Universties so as to contribute to research and
development and deliver the much needed technology support to meet business requirements.
The Company has also worked with Steel and Metals Institute SaMI at Swansea University on
better utilisation metrics.
5. New Product Development
During the year under review, the Company developed 62 new products in
India. For superior customer experience, the Company has adopted best in class
manufacturing practices, invested in product branding and developed its products to best
serve its customers. During the year under review, the Company has taken initiatives to
develop high end, niche products in Automotive and Industrial Products, Projects and
Exports segment through continuous engagement with customer. On the automotive segment,
some of the significant developments bolstering growth in high end automotive grades in
India includes development of 22MnB5 used for heat treated long member application, S700MC
[thin] used for automotive structural application, E450 used for axle housing applications
and JSH 590B having >75% hole expansion ratio. In the API (American Petroleum
Institute) segment, noteworthy developement includes successful commercialization of J55
for OCTG (Oil Country Tubular Goods) application in export segment. During the year under
review, the Company has moved to advance stages of development of X42 and X60 with
stringent sour performance guarantee. The Company made significant advancement towards
niche Lifting & Excavation ('L&E') products by developing S700MC, first of its
kind in India, with guaranteed toughness at -40?C, primarily used in telescopic boom
application. This product advancement had led to import substitution and customer delight.
Further, to maintain leadership position in rebar segment, the Company
developed Fe550SD with higher strength and ductility and commercialized it in size range
of 6mm to 25mm. Also, higher sizes of high strength rebars of Fe600HD and Fe550D were
developed to cater to niche requirements in various projects in areas of construction and
infrastructure. In order to cater to the new requirements of high strength wire rods for
LRPC and spring application, new grades such as HC82Cr[LR HT], HC82BCr[SH HT], PC300K were
developed. These grades have been developed as first of their kind in India and they
provide increased drawing speed, increase in die life and better mechanical properties in
the final product.
In Europe, 13 new products were launched during the year. These
launches include major developments for automotive, engineering, and construction markets
in the Netherlands and construction and energy markets in the United Kingdom. In the
Netherlands, in the automotive segment, the Company improved the product performance of
Serica? range thereby offering premium surface finish for market-leading paint appearance
for automotive outer body applications. Additionally, to cater to premium customers, the
Company has introduced new offerings of nickle-plated steel for application in
rechargeable batteries used in Electric Vehicles. In the construction sector, the Company
launched products which extended the capability of linepipe offerings for offshore Oil
& Gas application in the X65/X70 grade range and improved the sustainability of the
Contiflo? range of precision tubes with an odour free and low environmental impact
internal coating aligned to latest environmental standards. The Company also introduced
Sinusoidal Roof Panel which is the future-proof solution for asbestos replacement market.
In the engineering sector, the Company has launched two additional hot-rolled grades -
27MnB5 and 38MnB5, to strengthen its heat treatable, manganese boron portfolio. In the
United Kingdom, the
Company commercialized the Colorcoat? High Reflect Liner A+ organic
coated steel product, thereby catering to customer requirement towards a sustainable
internal coating with A+ VOC which will reduce energy consumption and CO2
emission in construction sector. Additionally, the API X65/X70 energy tube range produced
at Tata Steel's Hartlepool facility was extended to target the large diameter, thin wall
segment to cater to the requirements of a niche market.
6. Customer Relationship
The year under review continued to be a challenging year for the global
economy with two major waves of COVID-19 pandemic. During such challenging times, the
Company stood steadfast with its customers, partners, and other stakeholders and continued
to work on its effort to strengthen this relationship. The Company's digital initiatives
served as a big game changer during the pandemic and helped the Company to revitalize its
engagement with existing customers and reach new customers in unserved territories and
markets.
The Company continued its efforts to enhance its relationship with
automotive manufacturers and their large value chain partners. Considering the changing
business requirements and to serve the customers better, the Company focused towards fast
growth Light Commercial Vehicle segment, technical services offerings such as Vehicle
Teardown and Benchmarking Services, Early Vendor Involvements on upcoming models amongst
others and broadening supply chain capabilities through new processing partners. Further,
the Company's digital initiatives such as digital VAVE (Value Analysis and Value
Engineering) workshops through e-DRIVE platform, supply chain visibility through COMPASS
platform and complaint handling through TSLCares app, has enhanced value driven
engagements with customers.
In B2B segment, the Company has formed cross functional Customer
Service Teams ('CST') with key customer accounts for building and nurturing relationships.
VAVE initiatives for L&E segment also helped in customer value creation. Further, to
enhance service levels to Oil & Gas customers during the pandemic, the Company
extended virtual third-party inspection facility through close co-ordination amongst
multiple internal and external stakeholders. The Company has also collaborated with the
World Steel Association (through ConstructSteel forum) to support them in their effort to
improve steel intensity in construction in India.
The Company continued to nurture the relationship with MSME customers
through 'Ecafez', an online platform where training workshops, events, quality focused
webinars and Micro-segment specific Engagement Programs were conducted. During the year
under review, 180 Ecafez Qualithon engagements were conducted and the 'Ecafez 360' app saw
8,000+ new influencers. The Company also conducted eight new ECA connects for insightful
discussions with over 800 MSMEs / ECAs (Emerging Corporate Accounts) spread across 20
microsegments. DigEca, a digital solution for ECA business, has created real-time, segment
visibility of sales for channel partners and end customers.
Our flagship galvanized retail brands, Tata Shaktee and Tata Kosh,
undertook various marketing initiatives to engage with stakeholders and increase brand
loyalty among consumers. Tata Sampoorna, the channel management platform for Tata Shaktee
was launched for improving consumer (R2C) level leads visibility. Tata Shaktee reached out
to over 10,000 farmers across India via Kisan meets conducted on Kisan Diwas. The
Company's e-selling platform "Aashiyana" through which we sell multiple B2C
brands crossed a turnover of Rs.1,468 crore as against Rs.726 crore in previous year.
Further, Tata Kosh doubled its volumes to 125 KT in FY 2021-22 as against 67 KT in FY
2020-21 by reaching out to over 35 lakh consumers and over 5,000 fabricators.
'Golden Home Consumer' - Tata Tiscon's loyalty and advocacy programme
for Individual House Building segment, strengthened its digital platform and the brand
touched 19,000+ consumers.
In the Services and Solutions segment, the Company has two major
offerings - Tata Pravesh steel doors and windows and Nest-In, a smart steel based modular
construction solution. During the year under review, amidst the pandemic, Tata Pravesh
became the first brand in doors and fenestration industry to set up Authorized Service
Centre - SmartCare for its customers to provide them with superior and uniform customer
experience through professionally trained service team, supported by augmented IT
infrastructure and best in class industry practices. During the year under review, Tata
Pravesh installations grew by ~34% over previous year. Additionally, Tata Pravesh expanded
its Privileged Dealer network to 350 outlets.
Nest-In has built competency in developing and sustaining long-term
value-creating partnerships with its customers and channel partners through unique
interventions and innovative services across several stages of the customer life cycle.
The Company has taken initiatives towards strengthening customer relationships by
leveraging digital tools like SFDC for lead management, MS Project for time and cost
compliance, AR-VR (Augmented Reality - Virtual Reality) facility for providing key
solutions to customer amongst others. These initiatives have helped the Company to
transfer information seamlessly with customers starting from their order placement till
product delivery. Additionally, Nest-In has developed capability of executing more than 60
projects across locations at any given time which has helped in converting revenues into
profits and strengthening customer relations.
Further, the Company also launched two new brands - Tata FerroBaled?
and Tata FerroShred? for the baled & shredded ferrous scrap processed in the new
facility at Rohtak, Haryana, India. These are high quality processed scrap and they
promise to provide the much-needed raw material fillip to Tata Steel /Indian steel
industry by making available quality processed ferrous scrap and reducing the dependency
on imports.
In Europe, the Company partners with customers to help them excel in
their market, co-creating more responsible and sustainable value throughout the entire
value chain. As part of its Transformation Programme, the Company has improved its
integrated initiatives such as the 'Commercial Topline' for driving quality improvements,
and has undertaken initiatives to optimise the product mix, and identify and capture
additional opportunities in the market. 'Commercial Excellence' improvement has been
acknowledged in the Tata Business Excellence Model assessment. The Company also has a
value chain transformation programme previously known as 'Ops 1 & 2' which focusses on
performance throughout the value chain. 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 various 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 e-Commerce webshops
and coil sales utilising Dutch Auction methodology.
7. 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's CSR policy provides guidelines to conduct CSR
activities of the Company. The salient features of the Policy forms part of the Annual
Report on CSR activities annexed to the Board's Report. The CSR policy is available on the
website of the Company at https://www.tatasteel.com/media/11804/
tata-steel-csr-policy-latest-2019.pdf.
For decades, the Company has pioneered various CSR initiatives. The
Company continues to address societal challenges through societal development programmes
and remains focused on improving the quality of life. During the year under review, the
Company has impacted the lives of around 2.87 million people from the most vulnerable
sections of society, including initiating a large-scale national programme in response to
the COVID-19 pandemic. The Company implements its CSR programmes primarily through the
Tata Steel Foundation, which works in close collaboration with public systems and
partners.
Through its CSR, the Company envisions an enlightened, equitable
society in which every individual realises her/his potential with dignity through work
with tribal and excluded communities to co-create transformative, efficient and lasting
solutions to their development challenges.
Through large-scale, proven Signature Theme Models of change, the
Company addresses core development gaps in India, while being replicable at global
platform. These include programmes on maternal and child mortalities, access to school and
learning enrichment for rural children, pan-India focus on key aspects of tribal identity,
and comprehensive development through empowerment of panchayats between the manufacturing
locations at Jamshedpur and Kalinganagar.
The Company also fosters Regional Change Models enabling lasting
betterment in the well-being of communities, prioritizing those who are excluded and
proximate to its operating areas. The Company undertakes its CSR Programmes in areas of
health, nutrition, water, education, livelihoods, infrastructure, sports, disabilities,
grassroots governance and empowering the voice of women within communities.
During the year under review, the Company spent Rs.406 crore on CSR
activities. The Annual Report on CSR activities, in terms of Section 135 of the Companies
Act, 2013 and the Rules framed thereunder, is annexed to this Report (Annexure 2).
In Europe, the Company maintains close relationship with employees,
customers, local residents, NGOs and educational institutions in driving community
development programmes and provides guest lectures on various environmental related topics
including role of steel in our society and processing method of steel. In the Netherlands,
the Company is closely involved in the Technochallenge Foundation, which organises various
activities for primary and secondary schools. During 2021, Promotie Evenement Techniek
event in Beverwijk, Holland was attended by 67 primary schools who were introduced to
recent technologies. Further, on April 21, 2021, the Company also celebrated 'Girl's Day'
and organized an online programme to introduce girl students to the world of science and
technology.
The Company strives to contribute to the future social wellbeing of its
local communities through a Community Partnership Programme, 'Future Generations' which
makes donations and organises activities focused on education, environment as well as
health and well-being. The Company sponsors local activities and supports charities. The
Company also co-operates a programme named 'Telstar at home in the neighbourhood'. As part
of this programme, children with learning difficulties are coached towards a healthy
lifestyle.
The Company also sponsors local sports teams and children's events
which promote community spirit and brings improvement in fields of healthy eating,
teamwork and behavior. 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 rights 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, Tata Steel aspires to be the global
steel industry benchmark for value creation and corporate citizenship. Tata Steel 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
3).
1. Meetings of the Board and Committees of the Board
The Board met six times during the year under review. The intervening
gap between the meetings was within the period prescribed under the Companies Act, 2013
and the SEBI Listing Regulations. The Committees of the Board usually meet the day before
or on the day of the 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 and Directors attending the same are
given in the Corporate Governance Report forming part of this Report.
2. Selection of New Directors and Board Membership Criteria
The Nomination and Remuneration Committee ('NRC') engages with the
Board to evaluate 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.
The NRC, basis such evaluation, determines the role and capabilities required for
appointment of Independent Director. Thereafter, the NRC recommends to the Board the
selection of new Directors.
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 and Removal of
Directors.
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 were no substantive changes in the
Policy except to align the Policy with amendments made to applicable laws and the same is
available on the website of the Company at https://www.tatasteel.com/media/6816/
policy-on-appointment-and-removal-of-directors.pdf
3. Familiarization 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 Senior Management giving an overview of the operations, to familiarize 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 organized for
the new Directors to enable them to understand the business better.
Details of orientation given to the new and existing Independent
Directors in the areas of strategy/industry trends, operations & governance, and
safety, health and environment initiatives are available on the website of the Company at
https://www. tatasteel.com/media/12333/familiarization-programme-for-
independent-directors-for-website.pdf
4. Evaluation
The Board evaluated the effectiveness of its functioning, of the
Committees and of individual Directors, pursuant to the provisions of the Companies Act,
2013 ('Act') and the SEBI Listing Regulations.
The Board sought the feedback of Directors on various parameters
including:
• Degree of fulfillment of key responsibilities towards stakeholders (by way of
monitoring corporate governance practices, participation in the long-term strategic
planning, etc.);
• Structure, composition and role clarity of the Board and Committees;
• Extent of co-ordination and cohesiveness between the Board and its Committees;
• Effectiveness of the deliberations and process management;
• Board/Committee culture and dynamics; and
• Quality of relationship between Board Members and the Management.
The above criteria are broadly based on the Guidance Note on Board
Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.
The Chairman of the Board had one-on-one meeting with the Independent
Directors ('IDs') and the Chairperson of NRC had one-on-one meeting with the Executive and
Non-Executive, Non-Independent Directors. These meetings were intended to obtain
Directors' inputs on effectiveness of the Board/ Committee processes.
In a separate meeting of the IDs, the performance of the
Non-Independent Directors, the Board as a whole and Chairman of the Company were evaluated
taking into account the views of Executive Directors and other Non-Executive Directors.
The NRC reviewed the performance of the individual directors and the
Board as a whole.
In the Board meeting that followed the meeting of the IDs and the
meeting of NRC, the performance of the Board, its committees, and individual Directors
were 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 the ESG
landscape, stakeholder engagement, safety performance including digital interventions and
risk management.
5. Remuneration Policy for the Board and Senior Management
Based on the recommendations of the NRC, the Board has approved the
Remuneration Policy for Directors, Key Managerial Personnel ('KMP') 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, KMP 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
6. 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 4).
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.
7. Directors
The year under review saw the following changes to the Board of
Directors ('Board').
Inductions to the Board
i. Based on the recommendations of the NRC, the Board, on August 12,
2021, in terms of the provisions of the Companies Act, 2013, appointed Ms. Farida Khambata
(DIN: 06954123) as an Additional Director of the Company. Further, based on the
recommendations of the NRC and subject to the approval of the Members, the Board, in
accordance with the provisions of Section 149 read with Schedule IV to the Act and
applicable SEBI Listing Regulations, appointed Ms. Khambata as an Independent Director of
the Company, not liable to retire by rotation, for a period commencing from August 12,
2021 through December 10, 2024, (i.e. up to Ms. Khambata attaining the age of 75 years).
Ms. Khambata brings to the Board her extensive knowledge and experience in areas of
Governance, Risk Management and Finance. On March 25, 2022, the Shareholders of the
Company, by way of a special resolution passed through postal ballot, approved the
appointment of Ms. Khambata as an Independent Director of the Company for the
above-mentioned tenure.
ii. Based on the recommendations of the NRC, the Board of Directors of
the Company, on October 11, 2021, in terms of the provisions of the Companies Act, 2013,
appointed Mr. David W. Crane (DIN: 09354737) as an Additional Director of the Company.
Further, based on the recommendations of the NRC and subject to the approval of the
Members, the Board, in accordance with the provisions of Section 149 read with Schedule IV
to the Act and applicable SEBI Listing Regulations, appointed Mr. Crane as an Independent
Director of the Company, not liable to retire by rotation, for a period commencing from
October 11, 2021 through October 10, 2026. Mr. Crane brings to the Board his extensive
knowledge and experience in areas of health, safety, environment and sustainability. On
March 25, 2022, the Shareholders of the Company, by way of a special resolution passed
through postal ballot, approved the appointment of Mr. Crane as an Independent Director of
the Company for the above-mentioned tenure.
iii. The NRC after considering, (1) performance evaluation of Mr.
Deepak Kapoor (DIN: 00162957) as a Member of the Board/Commitees, (2) his contribution in
Board/ Committee deliberations during his tenure as an Independent Director and (3) his
skills, background and experience, recommended to the Board for his re-appointment as
Independent Director for a second term of five years. The Board unanimously endorsed the
view of the NRC and recommended to the Shareholders of the Company, the re-appointment of
Mr. Kapoor as an Independent Director of the Company, not liable to retire by rotation, to
hold office for a second term of five years, effective April 1,2022 through March 31,2027.
On March 25, 2022, the Shareholders of the Company, by way of a special resolution passed
through postal ballot, approved the re-appointment of Mr. Kapoor as an Independent
Director of the Company for the above-mentioned tenure.
iv. Based on the recommendations of the NRC, the Board of Directors of
the Company, on March 28, 2022, in terms of the provisions of the Companies Act, 2013,
appointed Mr. Noel Naval Tata (DIN: 09354737) as an Additional Director (Non-Executive,
Non-Independent) of the Company. Further, the Board considering his experience, designated
Mr. Noel Naval Tata as the Vice - Chairman of the Board. Mr. Noel Naval Tata brings to the
Board his extensive knowledge and experience in areas of operations, strategy, risk
management, financial, societal and governance matters.
v. Mr. V. K. Sharma has served as a Non-Executive Director on the Board
of the Company since August 24, 2018. At the time of the appointment as a Member of the
Board, Mr. Sharma was the Chairman of Life Insurance Corporation of India ('LIC'), a
shareholder of Tata Steel Limited. Mr. Sharma ceased to be the Chairman of LIC effective
December 31, 2018. On March 28, 2022, Mr. Sharma conveyed his intention to step down as
representative of LIC and resigned as the Non-Executive Director of the Company with
immediate effect. However, the NRC, after considering, (1) his performance as Member of
the Board, (2) background, qualification, skills & attributes and (3) his contribution
to Board/Committee deliberations during his tenure as a Director of the Company,
considered the proposal to appoint Mr. Sharma as an Independent Director of the Company
for a term of five years from March 28, 2022 through March 27, 2027 (both days inclusive)
and accordingly recommended the same to the Board.
Based on the recommendations of the NRC, the Board of Directors of the
Company, on March 28, 2022, in terms of the provisions of the Companies Act, 2013,
appointed Mr. V. K. Sharma (DIN: 02449088) as Additional Director of the Company. Further,
based on the recommendations of the NRC and subject to the approval of the Members, the
Board, in accordance with the provisions of Section 149 read with Schedule IV to the Act
and applicable SEBI Listing Regulations, appointed Mr. Sharma as an Independent Director
of the Company, not liable to retire by rotation, for a period commencing from March 28,
2022 through March 27, 2027. Mr. Sharma will continue to bring to the Board his extensive
knowledge and experience in the areas of strategic planning, product development and
branding, risk oversight, compliance and other governance matters.
The necessary resolutions for the appointment of Mr. Noel Naval Tata as
Non-Executive Director and Mr. V.K. Sharma as Independent Director, as mentioned above in
point (iv) and (v), form part of the Postal Ballot Notice dated May 3, 2022. The profile
and particulars of experience, attributes and skills that qualify the above-mentioned
Directors for Board membership, are disclosed in the said Notice. The Notice will be sent
to eligible shareholders as on the cut- off date of April 29, 2022. The e-voting period
for the same shall stay open from 9:00 a.m. (IST) on Thursday, May 12, 2022 through 5:00
p.m. (IST) on Friday, June 10, 2022.
Re-appointment of Directors retiring by rotation
In terms of the provisions of the Companies Act, 2013, Mr. Koushik
Chatterjee (DIN: 00004989), Director of the Company, retires at the ensuing AGM and being
eligible, seeks re-appointment. The necessary resolution for re-appointment of Mr.
Chatterjee forms part of the Notice convening the ensuing AGM scheduled to be held on
Tuesday, June 28, 2022.
The profile and particulars of experience, attributes and skills that
qualify Mr. Chatterjee for Board membership, are disclosed in the said Notice.
Cessations
Dr. Peter Blauwhoff, Independent Director, resigned as a Member of the
Board effective July 13, 2021.
In accordance with the retirement policy applicable for the Company's
Board of Directors (Independent Directors to retire on attaining 75 years of age), Mr.
Aman Mehta, Independent Director, retired from the Board on August 31, 2021.
The Board of Directors places on record its deep appreciation for the
contribution of these Directors during their tenure.
8. 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. Further, in terms of Section 150 read with Rule 6 of the Companies
(Appointment and Qualification of Directors) Rules, 2014, as amended, Independent
Directors of the Company have included their names in the data bank of Independent
Directors maintained with the Indian Institute of Corporate Affairs.
9. 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 has been no change in the Key Managerial Personnel.
10. Audit Committee
The Audit Committee was constituted in the year 1986. The Committee has
adopted a Charter for its functioning. The primary objective of the Committee is to
monitor and provide effective supervision of the Management's financial reporting process,
to ensure accurate and timely disclosures, with the highest levels of transparency,
integrity and quality of financial reporting.
The Committee comprises Mr. O. P. Bhatt (Chairman), Mr. Deepak Kapoor,
Ms. Farida Khambata, Mr. David W. Crane and Mr. Saurabh Agrawal. The Committee met six
times during the year under review, the details of which are given in the Corporate
Governance Report forming part of this Report.
During the year under review, there were no instances when the
recommendations of the Audit Committee were not accepted by the Board.
11. Internal Control Systems
The Company has internal control systems 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. Details on the Internal
Financial Controls of the Company forms part of Management Discussion and Analysis forming
part of this Report.
12. Risk Management
Tata Steel's Enterprise Risk Management ('ERM') process is based on
international standards like Committee of Sponsoring Organization of the Treadway
Commission ('COSO') and ISO 31000.
Risk Management Committee ('RMC') of the Board provides oversight and
sets the tone for implementing the ERM framework across the organization. It reviews the
status of key risks, progress of ERM implementation across locations and any exceptions as
flagged to it, on quarterly basis.
The risk appetite of the organization was approved by the RMC and the
Board during FY 2020-21. The risk appetite is aligned to the Vision of the organization
and is an important metric governing all business actions and strategic decisions. The
Risk Appetite is driven by the following:
• Health and safety of our employees and the communities in which we operate are
our prime concern and our operating strategy is focused on the above objective;
• All business decisions are aligned to the Tata Code of Conduct;
• Management actions are focused on continuous improvement;
• Environment and Climate Change impacts are assessed on a continuous basis and
business decisions support systems including capital allocation consider impact of climate
change through the internal carbon pricing framework; and
• The long-term strategy of the Company is focused on generating profitable growth
and sustainable cashflows that creates long-term stakeholder value.
Risk Owners may accept risk exposure to their annual and long-term
business plans, which after implementation of mitigation strategies, is aligned to our
risk appetite. The risk appetite has been cascaded across the organization including the
Tata Steel Group Companies through focused communication during the Annual Business Plan
cycle.
For better focus on Risk Governance and ERM implementation, the Company
has set up a Management Committee called Apex Risk Committee ('ARC'). ARC has the primary
responsibility of implementing the Risk Management Policy of Tata Steel and developing a
risk intelligent culture that fosters business resilience. ARC reviews include detailed
discussions on key risk themes, progress of mitigation plans, exceptions as flagged to it
and new initiatives related to ERM.
Central ERM is a dedicated business vertical that has been set up to
ensure deployment of the 5 Step bottom-up process across the organization. The team is led
by Vice President - Corporate Finance, Treasury & Risk Management who acts as the
Chief Risk Officer of the Company. The ERM team continuously scans the external
environment for developments which may throw up risks for the organization. The risk flags
and risk insights are shared with the Business Units ('BUs'). These form inputs to the BUs
for identification and management of bottom-up risks, which are periodically reviewed as
per defined ERM Governance mechanism. The risks are escalated and aggregated for reporting
to ARC and RMC. This is complemented by a top-down process, which helps in identification
of strategic, enterprise level risks.
The Company follows coordinated risk assurance and the ERM process is
integrated with Corporate Audit, Strategy & Business Planning, Corporate Legal, Ethics
& Compliance functions. The two-way communication with these functions brings further
rigor in driving the process across the organization and the Tata Steel Group Companies.
The ERM process being data intensive, an in-house built IT system has been developed
across the organization for real time management of risks through live dashboards. The IT
system supports risk analytics and helps in developing a uniform risk culture as the ERM
framework is used while identifying, assessing, evaluating, monitoring & reviewing
risks.
Tata Steel was conferred with the 'RIMS India ERM Award for
Distinction', the only company to receive this award in India in 2021. The Risk and
Insurance Management Society (RIMS) Global ERM Award of Distinction honors organizations
that create and retain value through their Enterprise Risk Management programs and ERM
excellence that demonstrates ERM innovation in creating and preserving organizational
value, and the program's ability to build sustaining risk management capabilities. The
Company has also been adjudged 'Masters of Risk in Metals & Mining' and 'Risk
Technology' categories, at the 8th edition of 'The India Risk Management
Awards' for the sixth time in a row.
Risk intelligent culture of Tata Steel has established ERM as an
enabler to proactively manage the uncertainties in an unprecedented and volatile business
environment and achieve business objectives. During the year under review, with the
resurgence of COVID-19 pandemic, "Scenario-based risk assessment" was revisited
across Tata Steel to understand the change in best-case and worst-case scenarios. The
focus was on identification of "Early Warning Indicators" for proactive Risk
Management. Real-time digital dashboard was developed and reviewed by the Senior
Leadership Team periodically for decision making. The Company continues its focus on
creating sustainable value for building resilience amidst dynamic and uncertain business
environment.
During the year under review, the Company continued to be vigilant of
the evolving pandemic situation to proactively manage risks. Health and safety of
employees and the communities in the vicinity of the Company's operations remained the
top-most priority for the Company, whilst simultaneously ensuring continuity of our
business operations.
Implementation of focused risk mitigation strategies coupled with
improvement in the global and domestic macro environment has significantly improved Tata
Steel's risk profile for FY 2021-22. Despite the challenges posed by COVID-19, the Company
has been able to deleverage beyond the target set in the past two years.
13. Vigil Mechanism
Tata Steel always believes in promoting a culture of trust and
transparency. The vigil mechanism in Tata Steel resonates with the same values. The
Company has a Vigil Mechanism that provides a formal channel for all its Directors,
employees and business associates including customers to approach the Chairman of the
Audit Committee or Chief Ethics Counsellor and make protective 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.
The Vigil Mechanism includes policies viz. the Whistleblower Policy for
Directors & Employees, the Whistleblower Policy for Business Associates, the
Whistleblower Protection Policy for Business Associates (vendors/customers), the Gift and
Hospitality Policy, the Conflict of Interest Policy for Employees, the Anti-Bribery &
Anti-Corruption ('ABAC') Policy, and Anti-Money Laundering ('AML') Policy.
The Whistleblower Policies for Directors & Employees and Business
Associates and TCoC 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. The Company ensures
protection for the whistleblowers and any attempts to intimidate the whistleblower would
be treated as a violation of the TCoC. This Policy includes 'reporting of incidents of
leak or suspected leak of Unpublished Price Sensitive Information ('UPSI')' as required in
terms of the provisions of the SEBI Listing Regulations.
The Whistleblower Protection Policy for Business Associates including
vendors and customers provides protection to Business Associates from any victimization or
unfair trade practices by the Company. While the Whistleblower policy encourages
Whistleblowers to make protected disclosures in good faith, it also forbids raising
concerns with malicious intent.
The ABAC and AML policies primarily cover risk assessment, third party
due diligence, training & awareness, and audit & reporting.
The Gift and Hospitality Policy aims to provide guidance to directors,
officers and employees or persons who perform services for or on behalf of the Company on
what is appropriate and acceptable, and what is not acceptable, for offering, giving and
accepting gifts and hospitality. The Policy is in consonance with ABAC and AML policies.
The Company has also adopted a Conflict of Interest Policy that
requires employees to act in the best interest of the Company without any conflicts and
declare conflicts, if any (real, potential or perceived).
The Whistleblower Reward and Recognition Guidelines for employees has
been implemented to encourage employees to genuinely blow the whistle on any misconduct or
unethical activity taking place in the Company. The disclosures reported are addressed in
the manner and within the time frames prescribed in the Whistleblower Policy.
The Company continues to make available a Third-Party Whistleblowing
helpline service through an external service provider across the Company as well as Tata
Steel Group Companies. The Ethics helpline services includes toll free number, web access,
postal services and e-mail facilities. This helpline service acts as a platform within the
Tata Steel Group Companies, to raise concerns on unethical behavior and enhance 'zero
tolerance towards unethical activities'. Around 40% of the reportees use this medium to
raise their whistleblowing concerns. During the year under review, the Company has
conducted several training sessions for its employees, vendors and distributors, spreading
awareness towards TCoC, ABAC & AML Policy, Whistleblower Policy and other ethical
practices of the Company.
During the year under review, the Company received 845 whistleblower
complaints of which as on March 31, 2022, 601 complaints were investigated and appropriate
actions were taken and investigations were underway for the remaining 244 complaints.
14. Disclosure as per the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013
The Company has zero tolerance towards sexual harassment at the
workplace. The Company has adopted a policy on prevention, prohibition and redressal of
sexual harassment at workplace in line with the provisions of the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made
thereunder.
The Company has complied with the provisions relating to the
constitution of the Internal Complaints Committee as per the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013.
During the year under review, the Company received 22 complaints of
sexual harassment, of which 18 complaints have been resolved by taking appropriate actions
and 4 complaints are under investigation.
15. 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. During the
year under review, the Policy has been amended to incorporate the regulatory amendments in
the SEBI Listing Regulations. The updated Policy can be accessed on the Company's website
at https://www.tatasteel. com/media/5891/policv-on-related-partv-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 Companies Act, 2013. Also, there were no
material related party contracts entered into by the Company during the year under review.
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
2021-22 and hence does not form part of this report.
Details of related party transactions entered into by the Company, in
terms of Ind AS-24 have been disclosed in the notes to the standalone/consolidated
financial statements forming part of this Integrated Report & Annual Accounts 2021-22.
16. Directors' Responsibility Statement
Based on the framework of internal financial controls and compliance
system 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 FY 2021-22.
Accordingly, pursuant to Section 134(5) of the Act, the Board of
Directors, to the best of its knowledge and ability confirms that:
a) in the preparation of the annual accounts, the applicable accounting
standards have been followed and that there were no material departures;
b) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the end of the
financial year and of the profit of the Company for that period;
c) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the Companies Act, 2013
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls to be followed by
the Company and that such internal financial controls are adequate and are operating
effectively;
f) they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems are adequate and operating
effectively.
17. Business Responsibility and Sustainability Report
The Securities and Exchange Board of India ('SEBI'), in May, 2021,
introduced new sustainability related reporting requirements to be reported in the
specific format of Business Responsibility and Sustainability Report ('BRSR'). BRSR is a
notable departure from the existing Business Responsibility Report ('BRR') and a
significant step towards giving platform to the companies to report the initiatives taken
by them in areas of environment, social and governance. Further, SEBI has mandated top
1,000 listed companies, based on market capitalization, to transition to BRSR from FY
2022-23 onwards.
For FY 2021-22, the Company has followed the <IR> framework of
the International Integrated Reporting Council (now known as Value Reporting Foundation),
to report on all the six capitals that are used by the Company to create long-term
stakeholder value. The Company has done the requisite mapping of principles between the
Integrated Report, the Global Reporting Initiative ('GRI') and the BRR principles as
prescribed by SEBI and the same is available on our website at www.tatasteel.com. Our
Integrated Report has been assessed and Price Waterhouse & Co Chartered Accountants
LLP has provided the required assurance.
18. Subsidiaries, Joint Ventures and Associates
We have 172 subsidiaries and 45 associate companies (including 25 joint
ventures) as on March 31, 2022. During the year under review, the Board of Directors
reviewed the affairs of material subsidiaries. There has been no material change in the
nature of the business of the subsidiaries.
We have, in accordance with Section 129(3) of the Act prepared
Consolidated Financial Statements of the Company and all its subsidiaries, associates and
joint ventures 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 5).
In accordance with the provisions of Section 136 of the Act and the
amendments thereto, read with 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
at 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 6).
19. 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) ('PW'), 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 of the Companies Act, 2013, an audit firm
acting as the statutory auditor of a company is eligible to be appointed as statutory
auditors for two terms of five years each. The first term of PW as statutory auditors of
the Company expires at the conclusion of the 115th AGM of the Company scheduled
to be held on June 28, 2022. Considering their performance as auditors of the Company
during their present tenure, the Audit Committee of the Company, after due deliberation
and discussion, recommended the re-appointment of PW as statutory auditors of the Company
for a second term of five years to hold office from the conclusion of the 115th
AGM to be held on June 28, 2022 through the conclusion of the 120th AGM of the
Company to be held in the year 2027. Further, the remuneration to be paid to Statutory
Auditors for FY 2022-23 is Rs.10 crore plus out of pocket expenses and applicable taxes
and the remuneration for the remaining tenure of their second term as Statutory Auditors
shall be mutually agreed between the Board of Directors and PW, from time to time.
The above proposal forms part of the Notice of the AGM for your
approval.
The report of the Statutory Auditor forms part of this Integrated
Report and Annual Accounts 2021-22. 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 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, 2023. 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.
Further, Tata Steel BSL Limited has amalgamated into and with Tata
Steel Limited effective November 11, 2021, pursuant to the Composite Scheme of
Amalgamation of Tata Steel BSL Limited and Bamnipal Steel Limited into and with Tata Steel
Limited as sanctioned by the Hon'ble National Company Law Tribunal, Mumbai Bench, vide
Order dated October 29, 2021. Consequent to the amalgamation, the scope of cost audit has
enhanced. Accordingly, the Board, based on the recommendation of the Audit Committee, has
approved an increased remuneration to Rs.30 lakhs plus applicable taxes and reimbursement
of out-of-pocket expenses payable to the Cost Auditors for conducting cost audit of the
Company for FY 2022-23. The same is placed for ratification of Members and forms part of
the Notice of the AGM.
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 Auditors to conduct
Secretarial Audit of the Company for the FY 2021-22 and their Report is annexed to this
report (Annexure 7). There are no qualifications, observations, adverse remarks or
disclaimer in the said Report.
20. Annual Return
The Annual Return for FY 2021-22 as per provisions of the Act and Rules
thereto, is available on the Company's website at
https://www.tatasteel.com/media/15859/mgt7-combine.pdf.
21. 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.
22. 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 8).
23. Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo
Details of the energy conservation, technology absorption and foreign
exchange earnings and outgo are annexed to this report (Annexure 9).
24. 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.
25. Secretarial Standards
The Company has in place proper systems to ensure compliance with the
provisions of the applicable secretarial standards issued by The Institute of Company
Secretaries of India and such systems are adequate and operating effectively.
J. Acknowledgements
The Directors regret the loss of life due to COVID-19 pandemic and are
deeply grateful and have immense respect for every person who risked their life and safety
to fight this pandemic. 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.
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On behalf of the Board of Directors |
|
sd/- |
|
N. CHANDRASEKARAN |
| Mumbai |
Chairman |
| May 3, 2022 |
DIN: 00121863 |
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