Tata Group Profile

The Tata Group of Companies has always believed strongly in the concept of collaborative
growth, and this vision has seen it emerge as one of India's and the world's most respected
and successful business conglomerates. The Tata Group has traced a route of growth that
spans through six continents and embraces diverse cultures. The combined market
capitalization of 27 listed companies, being around $40.84 billion, the Group‘s present
shareholder base is 3.2 million. In the face of trying economic challenges in recent times, the
Tata Group has steered India‘s ascent in the global map through its unwavering focus on
sustainable development. Over 350,000 people worldwide are currently employed in the
seven business sectors in which the Tata Group Companies operate. It is the largest employer
in India in the Private Sector and continues to lead with the same commitment towards social
and community responsibilities that it has shown in the past.

The Tata Group of Companies has business operations (114 companies and subsidiaries) in
seven defined sectors – Materials, Engineering, Information Technology and
Communications, Energy, Services, Consumer Products and Chemicals. Tata Steel with its
acquisition of Corus has secured a place among the top ten steel manufacturers in the world
and it is the Tata Group‘s flagship Company. Other Group Companies in the different sectors
are – Tata Motors, Tata Consultancy Services (TCS), Tata Communications, Tata Power,
Indian Hotels, Tata Tea and Tata Chemicals.

Tata Motors is India‘s largest automobile company by revenue and is among the top five
commercial vehicle manufacturers in the world. Jaguar and Landrover are now part of Tata
Motor‘s portfolio.

Tata Consultancy Services (TCS) is an integrated software solutions provider with delivery
centres in more than 18 countries. It is currently ranked at no. 11 in the global market in
terms of revenue and aspires to be in the top 10 by 2010.

Tata Power has pioneered hydro-power generation in India and is the largest power
generator (production capacity of 2300 MW) in India in the private sector.
Indian Hotels Company (Taj Hotels, resorts and palaces) happens to be the leading chain of
hotels in India and one of the largest hospitality groups in Asia. It has a presence in 12
countries in 5 continents.

Tata Tea, with its major acquisitions like Tetley and Good Earth is at present the second
largest global branded tea operation.

When Jamsetji Tata gave shape to his vision of nation building by forming what was to
become the Tata Group in 1868, he had envisaged India as an independent strength –
politically, economically and socially. In order to become a force that the world has to reckon
with, the Tata Group has always ventured into path breaking territory and pioneered
developments in industries of national importance.

As a policy, the Tata Group Companies promote and encourage economic, social and
educational development in the community, returning wealth to the society they serve. Two-
thirds of the equity of Tata Sons is held in philanthropic trusts that take care of endowments
towards improvement programmes in these spheres.

Through the years, the Tata Group has been amongst the most prestigious corporate
presences in the world governed by its principles of business ethics. Its foray into
international business has been recognised by various bodies and institutions. Brand Finance,
a UK based consultancy firm after a recent valuation of the Tata brand at $9.92 billion has
ranked it 51st among the world‘s top 100 brands. In Business Week magazine‘s list of the 25
most innovative companies the Tata name appears 13th and The Reputation Institute, USA
has evaluated the Tata Group as the 11th in a global study of the most reputed companies.

In the road ahead, the Tata Group is focusing on integration of new technologies in its
operations and breaking new grounds in product development. The Eka supercomputer had
been ranked the world‘s fourth fastest in 2008 and the launch of the Nano has been a
benchmark for the auto industry specifically and the economy in general.
 Company Profile

The Tata Steel Group has always believed that mutual benefit of countries, corporations and
communities is the most effective route to growth. Tata Steel has not limited its operations
and businesses within India but has built an imposing presence around the globe as well.
With the acquisition of Corus in 2007 leading to commencement of Tata Steel's European
operations, the Company today, is among the top ten steel producers in the world with an
existing annual crude steel production capacity of around 30 million tonnes per annum and
employee strength of above 80,000 across five continents. The Group recorded a turnover of
Rs.147,329 Crores (US$ 28,962 million) in 2008 - 2009. The Company has always had
significant impact on the economic development in India and now seeks to strengthen its
position of pre-eminence in international domain by continuing to lead by example of
responsibility and trust.

Tata Steel‘s overseas ventures and investments in global companies have helped the
Company create a manufacturing and marketing network in Europe, South East Asia and the
Pacific-rim countries. The Group‘s South East Asian operations comprise Tata Steel
Thailand, in which it has 67.1% equity and Nat Steel Holdings, which is one of the largest
steel producers in the Asia Pacific with presence across seven countries.

Given below is an outline of Tata Steel's operations in Europe and South East Asia.

Corus is Europe‘s second largest steel producer. With main steelmaking

operations in the UK and the Netherlands, Corus supplies steel and related services to the
construction, automotive, packaging, mechanical engineering and other markets worldwide.
Corus comprises three operating Divisions, Strip Products, Long Products and Distribution &
Building Systems and has a global network of sales offices and service centres, employing
around 37,000 people worldwide.
 Headquartered in Bangkok, Tata Steel Thailand is a major steel producer in
Thailand and is the largest producer of long steel products with a manufacturing capacity of
1.7 mtpa.

NatSteel Holdings is headquartered in Singapore and is a leading supplier of

premium steel products for the construction industry. It became a 100% subsidiary of Tata
Steel in February 2004. NSH produces about 2 MT of steel products annually across its
regional operations.

Heritage

The story of Tata Steel is a century old. And so is the story of steel in India. Etched with the
visions and hardships of a single man, the story has flowed through ages to re-define steel in
every way. The saga, which started in 1907, completed a century of trust in 2007 and carries
on. Over the years this one company has discovered different avenues of effective steel
utilisation and its story defines and re-defines conventional wisdom in more ways than one.

As India was left slightly dazzled and overwhelmed in the wake of the Industrial Revolution
in England the leading Indian intellectuals of the 19th century believed that if India were to
keep pace with the world it would have to master the modern scientific methods of the West.
It was this vision of constructive change that led Jamsetji Nusserwanji Tata to embark on a
journey of growth that paved the path for industrialisation in India. Within his lifetime,
Jamsetji was to witness the birth of a revolutionary Indian nationalism that would assist in the
emergence of independent India, the spirit of which could already be felt when he died in
1904.
 The long Journey

In his lifetime J.N.Tata was captivated and led by the three guiding stars - building an iron
and steel company, generating hydro-electric power and creating an institution that offer the
best education in science.

Jamsetji Tata had started his quest for steel way back in 1882 but it was twenty-five years
later, in December 1907 that the explorers found their way to Sakchi - at the confluence of
the rivers Subarnarekha and Kharkai. On 27th February 1908 when the first stake was driven
into the soil of Sakchi the dream had come alive.

When Tatas issued shares on 26th August 1907, for the first time in the financial history of
the country, the Indian people - the masses, the affluent and the common people -joined
hands to put up the first truly Indian enterprise. The Tata family contributed the remaining
11% shares of the Tata Iron and Steel Company Limited.

It did not take long for work to begin thereafter. In 1908 the plant became functional and the
next year, in 1909 the blast furnaces, steel furnaces, coke ovens, powerhouse and machine
shops were laid down. Land for the site, mines and quarries were acquired in 1910. The
Government contributed their bit by connecting railway to Gorumahisani. The first steel ingot
was rolled on 16th February 1912 - a momentous day in the history of industrial India.

Towars Self Sufficiency

The Steel Company obtained its first colliery in 1910, adding six more in course of time.
Several mines were spread over the states of Bihar, Orissa and Karnataka. The Tatas soon
became the first to own a fully mechanised iron ore mine in India at Noamundi. The Coal
Beneficiation Plant at West Bokaro undertook beneficiation of low-grade coal, thus helping
in the conservation of the fast dwindling resources of high quality coal. The collieries, the
mines and the quarries together furnish the bulk of the raw material requirements of the plant.
When the entire world was reeling in the Great Depression, the Tatas survived and supplied
nearly three-fourth of the country‘s steel requirements. By the Second World War, Tatas‘
production capacities had expanded enough to make their prices lower than those of steel
produced in England, raising them to an authoritarian position. Post-Independence the Tatas
decided to set on the Herculean task of nation building. The much-required steel for the
newly devised Five-year Plans came from the Tata factories. The Company undertook the
Howrah Bridge in Calcutta, the Bhakra-Nangal Project and the Damodar Valley Corporation,
the port at Kandla, the city of Chandigarh and many more important projects.

Picking up pace

The last decade of the twentieth century happened to be a very hectic period of self-renewal
and growth for Tata Steel. An extensive technological overhaul, several improvement
projects, cost control measures, optimizing IT support and a strong customer-centric
approach were all instrumental in finding the right direction for changing outlooks. At the
turn of the millennium, Tata Steel had earned the complete trust of the whole wide world and
emerged as a strong entity in the global steel industry.

The last decade has been marked by Tata Steel‘s prominent role in the overall development
of the country, even during phases of economic turbulence and its decisive foray into more
and more global territory. Intense strategic thinking about future expansions, plans for
organic growth and initiation of new projects are a few highlights in Tata Steel‘s expanding
and more penetrative roles in the larger perspective. The acquisition of NatSteel in 2004 was
Tata Steel‘s first overseas acquisition and the series of joint ventures and mergers that
followed found a peak when the acquisition of Corus, happened in April 2007. But in every
positive step that the Company has taken towards growth and expansion, involving diverse
cultures and geographies, Tata Steel has never lost sight of its great heritage of social and
community responsibility.
 PROFILE OF PRODUCTS

Tata Steel's products include hot and cold rolled coils and sheets, galvanized sheets, tubes,
wire rods, construction bars, rings and bearings. In an attempt to 'decommoditise' steel, the
company has introduced brands like Tata Steelium (the world's first branded Cold Rolled
Steel), Tata Shaktee (Galvanized Corrugated Sheets), Tata Tiscon (re-bars), Tata Bearings,
Tata Agrico (hand tools and implements), Tata Wiron (galvanized wire products), Tata Pipes
(pipes for construction) and Tata Structura (contemporary construction material). The
company has launched the Customer Value Management initiative with the objective of
creating complete understanding of customer problems and finding solutions jointly. The
company's Retail Value Management addresses the needs of distributors, retailers and end
consumers.

Vision

“We aspire to be the global steel industry benchmark for Value Creation
and Corporate Citizenship”

We make the difference through:

Our people, by fostering team work, nurturing talent, enhancing leadership capability and
acting with pace, pride and passion.

Our offer, by becoming the supplier of choice, delivering premium products and services,
and creating value for our customers.

Our innovative approach, by developing leading edge solutions in technology, processes

and products.

Our conduct, by providing a safe working place, respecting the environment, caring for our
communities and demonstrating high ethical standards.
 Mission

Consistent with the vision and values of the founder Jamshedji Tata, Tata Steel strives to
strengthen India‘s industrial base through the effective utilization of staff and materials. The
means envisaged to achieve this are high technology and productivity, consistent with
modern management practices.

Tata Steel recognizes that while honesty and integrity are the essential ingredients of a strong
and stable enterprise, profitability provides the main spark for economic activity. Overall, the
Company seeks to scale the heights of excellence in all that it does in an atmosphere free
from fear, and thereby reaffirms its faith in democratic values.

Business Ethics

The Tata Steel Group is proudly represented by people who act with integrity and passion.
The strong focus on Value Creation and Corporate Citizenship has helped the group build an
enviable corporate reputation founded in honest and transparent approaches. The values and
principles, which have Governed Tata Steel‘s business for a century, have been deployed
through the implementation of the Tata Code of Conduct (TCOC), which was first formally
articulated in 1998. This Code was intended to serve as a guide to each employee on the
values, ethics and business principles expected of him or her in personal and professional
conduct. The Management of Business Ethics is effectively instituted today in Tata Steel
through its four pillars concept.

 Leadership
 System and Processes
 Training and awareness
 Measurement

A number of initiatives are continuously taken to reinforce the Code of Conduct among
employees and other stakeholders. The systems and processes are revisited and modified
constantly to ensure that they are not subjected to unethical practices.
 Corporate Social Responsibility Policy

 Tata Steel believes that the primary purpose of a business is to improve the quality of
life of people
 Tata Steel shall volunteer its resources, to the extent it can reasonably afford, to
sustain and improve healthy and prosperous environment and to improve the quality
of life of the employees and the communities it serves.
 Tata Steel shall conduct its business ever mindful of its social accountability,
respecting applicable laws and with regard for human dignity.
 Tata Steel shall positively impact and influence its partners in fostering a sense of
social commitment for their stakeholders.

Quality Policy

 Consistent with the group purpose, Tata Steel constantly strives to improve the quality
of life of the communities it serves through excellence in all facets of its activities.
 We are committed to create value for all our customers and key stakeholders by
continually standardizing, improving and innovating our offerings, systems and
processes involving all our employees.
 This policy shall form the basis of establishing and reviewing the Business Objectives
and Strategies and shall be communicated across the organization. The policy will be
reviewed to align with business direction and to comply with all the requirements of
TQM Principles.

Human Resource Policy

 Tata Steel is an equal opportunity employer.

 Tata Steel recognizes that its people are the primary source of its competitiveness.
 It will pursue management practices designed to enrich the quality of life of its
employees, develop their potential and maximize their productivity.
 It will aim at ensuring transparency, fairness and equality in all its dealings with its
employees.
 Tata Steel shall strive continuously to foster a climate of openness, mutual trust and
teamwork.
 In the process Tata Steel shall strive to be the employer of choice by attracting the
best available talent and ensuring a cosmopolitan workforce.

Strategic Business Unit

Apart from the main Steel Division, Tata Steel's operations are grouped under the
following Strategic Business Units:
 Bearings Division: Manufactures ball bearings, double row self-aligning
bearings, magneto bearings, clutch release bearings and tapered roller bearings for
two wheelers, fans, water pumps, etc.
 Ferro Alloys and Minerals Division: Operates chrome mines and has units for
making ferro chrome and ferro manganese. It is one of the largest players in the
global ferro chrome market.
 Agrico Division: Tata Agrico is the first organised manufacturer in India of hand
tools and implements for application in agriculture.
 Tata Growth Shop (TGS) : Has designed, developed, manufactured, erected and
commissioned thousands of tonnes of equipment ranging from overhead cranes to
high precision components, including a rocket launch pad for the Indian Space
and Research Organisation.
 Tubes Division: The biggest steel tube manufacturer with the largest market share
in India, it aspires to strengthen its market presence by expanding and
modernising its commercial and precision tube manufacturing capacity.
  Wire Division: A pioneer in the manufacture of steel wires in India, it produces
coated and uncoated wires, branded as Tata Wiron. The division also operates a
wholly owned subsidiary in Sri Lanka.

Mc Kinsey’s 7’s of Tata Steel

Strategy

To spread its manufacturing units all over the world to reduce its cost of production and
become a market leader internationally.

Structure

Tata Steel has basically a flat structure but it decentralizes in some countries.

System

Tata Steel shall constantly strive to improve the quality of life of the communities it serves
through excellence in all facets of its activities. The Internal Audit Department reports, on a
quarterly basis, any significant findings to the Audit committee, which comprises of three
non-executive Director: Mr. P.K Kaul - Chairman, Mr. S. M. Palia and Mr. Ishaat Hussain -
Members. The committee met three times during the year to review the audit observation,
adequacy of actions taken and followed up implementation of corrective actions.

Shared values

The company believes that good corporate practices enable the board to direct and control the
affairs of a company in an efficient manner and to achieve its ultimate goal of maximising
shareholders value.
Style

The top management as well as the lower levels are equally participative. Continuous
feedback and coaching is encouraged. Regular meetings between managers and employees,
which include an annual performance review, provide the opportunity to discuss work
objectives and progress towards them, to plan further personal development that may be
required to achieve current expectations, and longer-term career goals. Tata Steel provides
attractive compensation opportunities.

Staff

Tata Steel recognizes that its people are the primary source of its competitiveness. It is
committed to equal employment opportunities for attracting the best available talent and
ensuring a cosmopolitan workforce. It will pursue management practices designed to enrich
the quality of life of its employees, develop their potential and maximise their productivity. It
will aim at ensuring transparency, fairness and equity in all its dealings with its employees.
Tata Steel will strive continuously to foster a climate of openness, mutual trust and
teamwork.

Skills

Tata Steel as per the industry requirements , requires all types of skills right from labour
working in mines to skilled labour working in its manufacturing units and highly educated
and experienced people at top management to handle its worldwide manufacturing units.
 Corporate Governance

The company believes that good corporate practices enable the board to direct and control the
affairs of a company in an efficient manner and to achieve its ultimate goal of maximizing
shareholders value. Realizing this, the company has adopted many practices over the last few
years, even when there were no mandatory requirements in this regard. As a result, a number
of provisions regarding Corporate Governance prescribed by the Listing Agreement have
already been complied with and steps are being taken to comply with the balance provision
within the current financial year.

The Internal Audit Department reports, on a quarterly basis, any significant findings to the
Audit committee, which comprises of three non-executive Director: Mr. P.K Kaul -
Chairman, Mr. S. M. Palia and Mr. Ishaat Hussain - Members. The committee also met the
company's statutory Auditors to ascertain their views on the adequacy of internal control
systems in the company. The committee submits an annual report of its observation to the
Board of Directors. The company has adopted the Tata Code of Conduct which entitles it to
use the Tata Brand name.
 SWOT ANALYSIS
Strengths
 6th Largest Steel Manufacturer in world
 Brown field expansion in Jamshedpur and
Greenfield project at Kalingangar to meet
increasing demand in future.
 TSL has formed a Global Minerals Group,
in-order to explore various opportunities
to secure access to
 Iron ore and coal in various geographies.
Opportunities
 The International Iron and Steel Institute
forecast global steel consumption to grow
at 6.1% in FY 08 driven by strong demand
from Asia, Africa and South America.
 The amount allocated for development of
infrastructure for 11th Five year plans
amounts to USD 320 bn. As a result, the
domestic steel consumption is expected to
increase to 65 mn. Tonnes by FY 10 and
over 125 mn. tonnes by FY 15.
Weakness
 TSL‘s bottom line will be affected to
increase in Interest cost, due to long term
debt raised by the company for Corus
acquisition.
Threats
 Increase in imported raw material prices
may affect the operating margins of the
companies.
 Change in economic environment
 Threat of increased production in China
and its ability to export.
 Assuming interest rate goes up by 50 bps
 (Corus funding), such increase will impact
the PAT margins by 23 bps.
 BOARD OF DIRECTORS
(As on 14th April, 2009)

Mr R N Tata (Chairman)

Mr James Leng (Non - Executive Deputy Chairman)

Mr Nusli N Wadia (Company Director)

Mr S M Palia (Company Director)

Mr Suresh Krishna (Financial Institutions' Nominee)

Mr Ishaat Hussain (Board Member)

Dr Jamshed J Irani (Board Member)

Mr Subodh Bhargava (Board Member)

Mr Jacques Schraven (Non - Executive Independent Director)

Dr Anthony Hayward (Non - Executive Independent Director)

Mr Philippe Varin (Non - Executive Non independent Director)

Mr B Muthuraman (Managing Director)

Dr T Mukherjee (Non Executive Director)

Mr Andrew Robb (Non Executive Independent Director)

 KRAs

Summary
―Key Result Areas‖ or KRAs refer to general areas of outcomes or outputs for which a role is
responsible. A typical role targets three to five KRA. KRAs are also known as key work
outputs (KWOs).

Value
Identifying KRAs helps managers to:
Clarify their roles
Align their roles to the organization‘s business or strategic plan
Focus on results rather than activities
Communicate their role‘s purposes to others
Set goals and objectives
Prioritize their activities, and therefore improve their time/work management
 Make value added decisions

Description
Key result areas (KRAs) capture about 80% of a work role. The remainder of the role is
usually devoted to areas of shared responsibility (e.g., helping team members, participating in
activities for the good of the organization). For example, ―image of the organization‖ is
usually a very senior official‘s key result area, but hopefully all employees contribute to this
outcome. Most roles include 3 to 5 key result areas. If individuals are accountable for more
than this, they may be overloaded, or they may not be delegating effectively. Key result areas
are worded using as few terms as possible with no verbs (i.e., these are about results, not
action) and no direction/measurement (e.g., words such as "good," "increased" or
"decreased"). They simply describe the areas for which one is responsible for results.
Process
Managers undertake the following steps to determine the KRAs for their roles:
1. They list their main day-to-day responsibilities/activities.
2. For each activity, they ask ―Why do I do this?‖
3. They review the answers to their ―why‖ questions, looking for common themes or areas.
4. They identify their KRAs from these themes.
5. They share their KRAs, preferably with those they report to, those they work along with,
and those who report to them.

Implementation
Managers who identify their KRAs typically:
Work with those they report to, those they work along with, and those who report to them
to identify their KRAs so all on a team have clarity regarding outputs.
Develop specific goals and objectives, and plans to reach them.
Take control of their time/work management strategies.

Human Resource Policy

 Tata Steel recognizes that its people are the primary source of its competitiveness.
 It is committed to equal employment opportunities for attracting the best available talent
and ensuring a cosmopolitan workforce.
 It will pursue management practices designed to enrich the quality of life of its
employees, develop their potential and maximise their productivity.
 It will aim at ensuring transparency, fairness and equity in all its dealings with its
employees.
 Tata Steel will strive continuously to foster a climate of openness, mutual trust and
teamwork.
 Manpower Planning

Manpower planning enables HR department to project its short to long term needs on the
basis of its departmental plans so that it can adjust its manpower requirements to meet
changing priorities. The more changing the environment the department is in, the more the
department needs manpower planning to show:

• The number of recruits required in a specified timeframe and the availability of talent
• Early indications of potential recruitment or retention difficulties
• Surpluses or deficiencies in certain ranks or grades
• Availability of suitable qualified and experienced successors

Recruitment and Selection

There is no recruitment from last few years in the plant due to heavy computerization,
mechanisms, and modern technologies. In last decade no. of employees is reduced to 40000
from 70000. Yet, Preference is given to son(s) of workman.
They require much lesser manpower as there is centralized management.
They recruit freshers only from colleges and specially post graduate students having degree
of C.A., MBA, etc to become competitive in nature.

Performance Appraisal System

Performance appraisal assesses an individual's performance against previously agreed work

objectives. Performance appraisal is normally carried out once a year. They assess key result
areas of their employees, workers and supervisors. Since it is a joint responsibility of the
individual and the supervisor; every individual in TISCO are co prime to each other.
It also enables management to compare performance and potential between employees and
subordinates of the same rank. Rating of employees is done by their performances. It is given
as per ranks very good, average, and average to medium and below average. On the basis of
these rankings highest reward of the year is given to best suitable worker. The better
performing employee gets the majority of available merit pay increases, bonuses, and
promotions.

Training Measures

 Safety is a high priority area. Several movements to inculcate a culture of safety have
been practiced, but the company needs to do more to prevent accidents and improve
its safety record.
 The Technical Education Advisory Committee guides employee development and
training in line with strategic goals of the company and long term objectives. The in-
house training centres impart majority of the training programmes. (Technical
Institute & management Development Centre).
 Employees are also deputed to other organizations and training centres in the country
such as ITI and abroad for specialized training.
 Officers are trained into business managers through special general management
programmes such as at CEDEP, France.
 They are trained to know the changes in the environment, market, and in steel prices.
 They also get training of problem solving techniques, conflict management, etc.
 Future Plans

Steel Plant Projects:

India:
The Company has embarked upon setting up three green field steel plants in eastern India:
• 12 MTPA* plant in Jharkhand
• 6 MTPA plant in Orissa
• 5 MTPA plant in Chhattisgarh
• Jamshedpur Steel Works will become a 7 MTPA unit by 2008.
*MTPA = million tonnes per annum

Overseas:
• Iran
• Bangladesh

Other Projects:

India
• 1.2 MTPA Metcoke project in West Bengal
• Deep sea port in Dhamra, Orissa
• Titanium Dioxide project in Tamil Nadu
• Joint Venture with BlueScope Steel for metallic coating and painting steel unit

Overseas:
• Development of a source of low ash coal from Queensland, Australia
• Ferro Chrome production in Richards Bay, South Africa.
 Functions of managers at various levels

Maintaining communication with employees- Communication is maintained through

various communication channels such as:
• Notices
• Emails
• Circulars
• Calling forums
• Correspondents
• Functional departmental meetings, etc.

Employee counseling- Certain areas where they counsels are:

• Chronic absenteeism and bunking
• Alcohol and drugs
• HIV (+) & AIDS Control
• Career planning and resolving conflicts
• Health problems
Annual Production and Sales Figures - 2009-10

Tata Steel completed the fiscal year, 2009-10 on a thumping note. The performance of the
Jamshedpur Works was outstanding. The major Production and Sales figure are tabulated
below:

Production & Sales Performance

Items April-March

FY’09 FY’10 % Change

Hot 6254 723 16

Metal 1

Crude 5646 656 16

Steel 4

Saleable 5375 643 20

Steel 9

Sales 5232 617 18

0

Major Highlights - FY’10

Production

 Best ever Hot metal (7.231 million tonnes), Crude steel (6.564 million tonnes) and
saleable steel (6.439 million tonnes) production.
 H blast furnace achieved best ever annual production of 3.07 MT (22% higher than
designed capacity of 2.5 MT).
 G blast furnace achieved best ever annual production of 2.08 MT (Previous best 2.04
million tonnes in FY‘09).
 In line with Tata Steel‘s expansion plans, the capacity enhancement of ‗C‘ Blast
furnace from 0.4 mtpa to 0.7 mtpa was commissioned in Sept‘09.It is the first
 operating blast furnace in the world to incorporate Gimbal Top technology for raw
material charging system.
 One of the Steel Melting Shop (LD#2 & Slab Caster) achieved best ever slab
production of 3.70 million tonnes (Previous best 3.51 million tonnes in FY‘09).
 LD#1, another Steel Melting Shop also achieved best ever annual billet production of
2.85 million tonnes (Previous best 2.105 million tonnes in FY‘09).
 Sinter Plant produced 7.66 million tonnes sinter which is the best ever (Previous best
6.53 million tonnes in FY‘09). Highest ever solid waste utilization at 90% (Previous
best 89.61% in FY‘09).
 Hot Strip Mill achieved highest ever production of 3.65 million tonnes (Previous best
3.27 million tonnes in FY‘08).
 Cold Rolling Mill achieved highest ever production of 1.563 million tonnes (Previous
best 1.534 million tonnes in FY‘08).
 New Bar Mill achieved highest ever production of 0.672 million tonnes (Previous best
0.612 million tonnes in FY‘09).
 Wire Rod Mill achieved highest ever production of 0.419 million tonnes (Previous
best 0.416 million tonnes in FY‘06).
 Merchant Mill achieved highest ever production of 0.341 million tonnes (Previous
best 0.328 million tonnes in FY‘09).
 West Bokaro Division achieved highest ever clean coal production of 2.14 million
tonnes (Previous best 1.98 million tonnes in FY‘09).
 OMQ division produced highest ever iron ore of 11.08 million tonnes (Previous best
9.42 million tonnes in FY‘09).

Sales

 Overall sales at 6.170 million tonnes, grew by 18 % over last year (5.232 million
tonnes in FY‘09).
 34 % increase in Long products sales at 2.697 million tonnes (2.006 million tonnes in
FY‘09).
 8 % increase in Flat products sales at 3.473 million tonnes (3.226 million tonnes in
FY‘09)
 System of accounting followed:

(a) Basis for Accounting

The financial statements are prepared under the historical cost convention on an accrual basis
of accounting in accordance with the generally accepted accounting principles, Accounting
Standards notified under Section 211(3C) of the Companies Act, 1956 and the relevant
provisions thereof.

(b) Revenue Recognition

(i) Sales comprises sale of goods and services, net of trade discounts.

(ii) Export incentive under the Duty Entitlement Pass Book Scheme has been recognised on
the basis of credits afforded in the pass book.

(c) Employee Benefits

(i) Short-term employee benefits are recognised as an expense at the undiscounted amount in
the Profit and Loss Account of the year in which the related service is rendered.

(ii) Post employment benefits are recognised as an expense in the Profit and Loss Account
for the year in which the employee has rendered services. The expense is recognised at the
present value of the amount payable towards contributions. The present value is determined
using the market yields of government bonds, at the balance sheet date, as the discounting
rate.

(iii) Other long-term employee benefits are recognised as an expense in the Profit and Loss
Account for the period in which the employee has rendered services. Estimated liability on
account of long-term benefits is discounted to the current value, using the market yield on
government bonds, as on the date of balance sheet, as the discounting rate.
(iv) Actuarial gains and losses in respect of post employment and other long-term benefits
are charged to the Profit and Loss Account.
(v) Miscellaneous Expenditure In respect of the Employee Separation Scheme (ESS), net
present value of the future liability for pension payable is amortized equally over five years
or upto financial year ending 31st March, 2010, whichever is earlier. The increase in the net
present value of the future liability for pension payable to employees who have opted for
retirement under the Employee Separation Scheme of the Company is charged to the Profit
and Loss Account.

(d) Fixed Assets

All fixed assets are valued at cost less depreciation. Pre-operation expenses including trial
run expenses (net of revenue) are capitalised. Borrowing costs during the period of
construction is added to the cost of fixed assets. Blast Furnace relining is capitalised. The
written down value of the asset consisting of lining/relining expenditure embedded in the cost
of the furnace is written off in the year of fresh relining.

(e) Depreciation

(I) Capital assets whose ownership does not vest in the Company is depreciated over their
estimated useful life or five years, whichever is less.

(II) In respect of other assets, depreciation is provided on a straight line basis applying the
rates specified in Schedule XIV to the Companies Act, 1956 or based on estimated useful life
whichever is higher. However, asset value upto Rs. 25,000 is fully depreciated in
the year of acquisition. The details of estimated life for each category of assets is as under:

(i) Buildings -30 to 62 years.

(ii) Plant and Machinery -6 to 21years.
(iii) Railway Sidings -21 years.
(iv) Vehicles and Aircraft -5to 18 years.
(v) Furniture, Fixtures and Office Equipment — 5 years.
(vi) Intangibles (Computer Software) — 5 to 10 years.
(vii)Development of property for development of mines and collieries are depreciated over
the useful life of the mine or lease period whichever is less, subject to maximum of 10 years,
(viii) Blast Furnace relining is depreciated over a period of 10 years (average expected life),
(ix) Freehold land is not depreciated,
(x) Leasehold land is amortised over the life of the lease,
(xi) Roads — 30 to 62 years.

(f) Foreign Currency Transactions

Foreign Currency Transactions (FCT) and forward exchange contracts used to hedge FCT
(including firm commitments and forecast transactions) are initially recognised at the spot
rate on the date of the transaction/contract. Monetary assets and liabilities relating to foreign
currency transactions and forward exchange contracts remaining unsettled at the end of the
year are translated at year end rates. The company has opted for accounting the exchange
differences arising on reporting of long term foreign currency monetary items in line with
Companies (Accounting Standards) Amendment Rules 2009 relating to Accounting Standard
11 (AS-11) notified by Government of India on 31st March, 2009. Accordingly the effect of
exchange differences on foreign currency loans of the company is accounted by addition or
deduction to the cost of the assets so far it relates to depreciable capital assets and in other
cases by transfer to Foreign Currency Monetary Items Translation Difference Account to be
amortised over the balance period of the long- term monetary items or 31st March, 2011
whichever is earlier. Exchange difference recognised in the Profit & Loss Account up to last
financial year ended 31st March, 2008 relating to said long term monetary items in foreign
currency has been adjusted against opening revenue reserve as provided in the rules.

The differences in translation of FCT and forward exchange contracts used to hedge FCT
(excluding the long term foreign currency monetary items accounted in line with Companies
(Accounting Standards) Amendment Rules 2009 on Accounting Standard 11 notified by
Government of India on 31st March, 2009) and realised gains and losses, other than those
relating to fixed assets are recognised in the Profit and Loss Account. The outstanding
derivative contracts at the balance sheet date other than forward exchange contracts used to
hedge FCT are valued by marking them to market and losses, if any, are recognised in the
Profit and Loss Account.
Exchange difference relating to monetary items that are in substance forming part of the
Company‘s net investment in non integral foreign operations is accumulated in Foreign
Exchange Fluctuation Reserve Account.

(g) Investments

Long term investments are carried at cost less provision for permanent diminution, if any, in
value of such investments. Current investments are carried at lower of cost and fair value.
When investment is made in partly convertible debentures with a view to retain only the
convertible portion of the debentures, the excess of the face value of the non-convertible
portion over the realization on sale of such portion is treated as a part of the cost of
acquisition of the convertible portion of the debenture.

(h) Inventories

Finished and semi-finished products produced and purchased by the Company are carried at
lower of cost and net realizable value.

Work-in-progress is carried at lower of cost and net realizable value.

Coal, iron ore and other raw materials produced and purchased by the Company are carried
at lower of cost and net realizable value.

Stores and spare parts are carried at cost. Necessary provision is made and charged to
revenue in case of identified obsolete and non-moving items.

Cost of inventories is generally ascertained on the weighted average basis. Work-in-progress

and finished and semi-finished products are valued on full absorption cost basis.

(i) Relining Expenses

Relining expenses other than expenses on Blast Furnace relining are charged as an expense
in the year in which they are incurred.
(j) Research and Development

Research and Development costs (other than cost of fixed assets acquired) are charged as an
expense in the year in which they are incurred.

(k) Deferred Tax

Deferred Tax is accounted for by computing the tax effect of timing differences which arise
during the year and reverse in subsequent periods.