| During the year under review, a 100%
subsidiary, Jamshedpur Utilities and Services Co. Ltd. (JUSCO) was incorporated with the
objectives to provide services in the area of housekeeping and hospitality, town planning
and engineering, civil construction and maintenance, public health, education,
horticulture, fleet management, water and waste water management, power distribution and
many other similar activities. The Town Division of the Company hitherto, carried out much
of these activities. It is expected that JUSCO, as a separate organization, will bring a
sharper focus and improvement in the quality of these services, thus permitting the
Company to focus on its core businesses. The Company
has invested an amount of Sri Lankan Rupees 25 million in the equity capital of a new
Company, Lanka Special Steels Limited, registered in Sri Lanka, which has been formed as a
100% Subsidiary of the Company, to take over the assets of Mascons Wire Industries Limited
(Mascons). Mascons have wire drawing and galvanizing plants with annual capacities of
8,400 tonnes and 12,000 tonnes respectively. The Company believes that there is a strong
synergy between its Wire Division (acquired earlier through merger of the erstwhile Tata
SSL Limited) and the new unit, which can harness the growing market in Sri Lanka.
A new company, M/s. Tata Steel KZN (PTY) Ltd., registered
in South Africa, has been formed as a subsidiary of Tata Africa, to implement the 120,000
tonne ferro chrome project at Richards Bay, South Africa. The Company expects to become a
majority shareholder in the new company. Detailed trials on alternative technologies are
being conducted. Substantial progress has been made in the Environment Impact Assessment.
Pursuant to an Order by the Bureau for Industrial Finance
and Reconstruction (BIFR) in December 2003, the Company has become the beneficial owner of
91.36% of the equity in the Jamshedpur based company, Indian Steel & Wire Products
Ltd. (ISWP). The shares were acquired through purchase of the stake held by the erstwhile
promoters and conversion of a part of the unsecured loans outstanding. ISWP has, therefore
become a subsidiary of the Company. ISWP has a Wire Rod Mill, Wire Drawing Unit, Rolling
Mill Roll Manufacturing Plant and a Fastener Plant.
Limestone, which is an important raw material in steel
manufacturing, is sourced from the market. However, since the supply from the existing
sources has become somewhat uncertain, the Company has identified Thailand as a reliable
source having good reserves of high quality limestone. The Company has, therefore, entered
into a shareholders’ agreement with M/s. Unistrech Limited, a Thai Company, as a
long-term solution to procuring limestone. The project is being implemented through a new
company called Sila Eastern Company Limited, in which the Company has a 49% share holding,
the balance being held by M/s. Unistrech Limited. The Company will, however have
management control over M/s. Sila Eastern Company Limited.
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