Corporate Governance Report for the year 2013-14

(as required under Clause 49 of the Listing Agreements entered into with the Stock Exchanges)

1. The Company's Corporate Governance Philosophy

The Company has set itself the objective of expanding its capacities and becoming globally competitive in its business. As a part of its growth strategy, the Company believes in adopting the 'best practices' that are followed in the area of Corporate Governance across various geographies. The Company emphasises the need for full transparency and accountability in all its transactions, in order to protect the interests of its stakeholders. The Board considers itself as a Trustee of its Shareholders and acknowledges its responsibilities towards them for creation and safeguarding their wealth.

In accordance with the Tata Steel Group Vision, Tata Steel Group('the Group') aspires to be the global steel industry benchmark for value creation and corporate citizenship. The Group expects to realise its Vision by taking such actions as may be necessary in order to achieve its goals of value creation, safety, environment and people.

2. Board of Directors

Profile –

Mr. Cyrus P. Mistry joined the Company as a Director on 21st May, 2012 and was appointed as Chairman w.e.f. 28th December, 2012. In addition to being Chairman of the Company, Mr. Mistry is also the Chairman of all major Tata Group companies, viz., Tata Sons Limited, Tata Industries Limited, Tata Motors Limited, Tata Consultancy Services Limited, The Tata Power Company Limited, Tata Teleservices Limited, The Indian Hotels Company Limited, Tata Global Beverages Limited and Tata Chemicals Limited.

Mr. Mistry is a graduate of Civil Engineering from Imperial College, UK and has a M.Sc. in Management from London Business School. He was also bestowed with the Alumni Achievement Award by the London Business School. Mr. Mistry is a fellow of the Institution of Civil Engineers, London. Mr. Mistry was earlier Managing Director of the Shapoorji Pallonji Group. Under his leadership, Shapoorji Pallonji's construction business grew into a billion dollar enterprise, evolving from pure-play construction to execution of complex projects in the marine, oil and gas and rail sectors, across a number of international geographies.

Mr. B. Muthuraman holds degrees in Bachelor of Technology in Metallurgical Engineering from IIT, Madras and a Masters of Business Administration from XLRI, Jamshedpur. He has also completed the Advanced Management Programme at European Centre for Executive Development (CEDEP), France and has undergone the "Challenge of Leadership" Programme at INSEAD, France. Mr. Muthuraman was bestowed an Honorary Degree of Doctor of Humane Letters, Honoris Causa from Loyola University, Chicago. Mr. Muthuraman joined Tata Steel in 1966 and has held various positions at the Company. He was appointed as Executive Director in 2000, Managing Director of the Company in 2001 and non-executive Vice Chairman in 2009.

He is the Chairman of Tata International Ltd., Tata Africa Holdings Ltd. and on the Boards of Tata Industries and Strategic Energy Technology Systems Private Ltd. Under his visionary leadership, Tata Steel became a truly global company. The acquisition of Corus, UK and Netherlands in 2007, a landmark event, not only in the history of Indian Steel industry but also in the history of India which demonstrated the "coming of age" of Indian companies on Global Map.

Mr. Muthuraman was the President of the Confederation of Indian Industry (CII) during the year 2011-12 and has been conferred with the prestigious "Padma Bhushan" award in 2012, from Government of India for his significant contribution to Indian Trade & Industry. He received the Distinguished Alumnus Award from IIT Madras in 1997 and from Madras Christian College in 2014 and the Tata Gold Medal from the Indian Institute of Metals in 2002. He also received the "CEO of the Year Award" from Business Standard in 2005, "CEO with HR Orientation Award" from World HRD Congress in 2005, Economic Times Award for Corporate Excellence in 2008 and IIM JRD Tata Award conferred by Indian Institute of Metals. He has been bestowed an Honorary Degree of Doctor of Science (Honoris Causa) from Indian Institute of Technology, Kharagpur. XLRI, Jamshedpur has conferred him with the Lifetime Achievement Award.

Mr. Nusli N. Wadia joined the Company on August 29, 1979 as a Director. Mr. Wadia is a well-known Indian Industrialist. He is the Chairman of Wadia Group companies and also Director on the Board of several Indian companies. Mr. Wadia has contributed actively in the deliberations of various organisations such as the Cotton Textiles Export Promotion Council (TEXPROCIL), Mill Owners' Association (MOA), Associated Chambers of Commerce & Industry, etc. He is the former Chairman of TEXPROCIL and also of MOA. Mr. Wadia was appointed on the Prime Minister's Council on Trade & Industry during 1998 to 2004. He was the Convenor of the Special Group Task Force on Food and Agro Industries Management Policy in September, 1998. He was a Member of the Special Subject Group to review regulations and procedures to unshackle Indian Industry and on the Special Subject Group on Disinvestment. He was a member of ICMF from 1984-85 to 1990-91. He is on the Managing Committee of the Nehru Centre, Mumbai. Mr. Wadia has a distinct presence in public affairs and has been actively associated with leading charitable and educational institutions.

Mr. Ishaat Hussain is a Non-Executive Director of Tata Sons Limited and was the Finance Director of Tata Sons Limited for over a decade. Mr. Hussain has been with the Tata Group for 30 years. Prior to joining the Tata Sons Board in 1999, he held various positions in the Company and was the Finance Director of the Company for ten years from 1989. Mr. Hussain is a graduate in Economics from the Delhi University and a Member of the ICAEW. He has also attended the Advanced Management Programme at the Harvard Business School. Besides being on the Board of Tata Sons Limited, he represents Tata Sons on the Boards of various Tata Companies and is the Chairman of Voltas Limited and Tata Sky Limited. Mr. Hussain has been a member of the Board of Trade of India and is currently the Chairman of the SEBI Committee On Disclosure & Accounting (SCODA). He is a member of The Committee for Reforming the Regulatory Environment for doing business in India (Damodaran Committee) and the Bihar State Industrial & Investment Advisory Committee. He is also a Trustee of the India Foundation of the Arts and The Marg Foundation & Pratham Education Foundation.

Mr. Subodh Bhargava is a Mechanical Engineer from the University of Roorkee. He was the Group Chairman and Chief Executive Officer of Eicher Group of companies. He was the President of the Confederation of Indian Industries, the President of the Association of Indian Automobile Manufacturers and the Vice President of the Tractor Manufacturers Association. He has been associated with various Central and State Government bodies and committees including as a member of the Technology Development Board, Insurance Tariff Advisory Committee and the Economic Development Board of the State of Rajasthan, Himachal Pradesh and Madhya Pradesh. He has been closely associated with various IIMs, IITs and other Management and Technical Institutions as also with a number of NGOs. He is currently Chairman of Tata Communications Limited, TRF Limited, GlaxoSmithKline Consumer Heathcare Limited, Tata Communications International Pte Limited and Director on the Boards of a number of companies including Tata Motors Limited, Larsen & Toubro Limited, etc. He is also the recipient of the first Distinguished Alumnus Award in 2005 by Indian Institute of Technology, Roorkee and in 2011, the "Gaurav Shri Award" from Agra University. He has also been recognised as the "Best Independent Director 2011" by Asian Centre for Corporate Governance & Sustainability and "Global India Business Leader" of the year 2013 by Horasis (The Global Visions Community) for Excellence in Entrepreneurship, Innovation and Leadership.

Mr. Jacobus Schraven was appointed as Director of the Company in May 2007. Mr. Schraven was appointed a Non-Executive Director and Deputy Chairman of Corus Group plc. in December 2004. Additionally, in 2005 he was appointed a Member and Chairman of the Supervisory Board of Corus Nederland BV (now renamed Tata Steel Nederland BV).

He had an international career with the Royal Dutch Shell Group and became Chairman of the Board of Shell Nederland BV. He was also President of the Confederation of The Netherlands Industry and Employers Federation and Vice-Chairman of Business Europe. Currently, he is Chairman of the Supervisory Board of Stork B.V. and Fokker Technologies Holding BV. He is also Chairman of the Board of the Trust Foundation Unilever N.V. and the Trust Foundation Pref Shares B KPN. Additionally, he is a member of the Supervisory Board of BNP OBAM NV. He is also Treasurer of the Carnegie Foundation (Peace Palace in The Hague). Mr. Schraven is 'Commander of the Order of Orange Nassau' (Netherlands) and 'Officer of the L'égion d'Honneur' (France).

Mr. Andrew Robb is a Fellow Member of the Chartered Institute of Management Accountants and holds a Joint Diploma in Management Accounting. Mr. Robb has been a Non-Executive Independent Director of the Company since November 22, 2007. He joined the Board of Corus Group plc and became Chairman of the audit committee in August 2003.

Following the takeover of Corus by Tata Steel in March 2007, Mr. Robb remained on the Board and in November 2007, he became a Non-Executive Independent Director of the Company. He is currently also the Chairman of the Board and the Audit Committee of Tata Steel Europe Limited. Mr. Robb was Finance Director of the Peninsular and Oriental Steam Navigation Co., between 1983 and 1989 and then became Finance Director of Pilkington Group PLC from 1989 to 2001. Mr. Robb remained a Director of Pilkington until January 28, 2003. He has been Chairman of the Board of Tata Steel Europe Limited since March 2009 and its Independent Director since August 1, 2003. He is also a Non-Executive Director of Jaguar Land Rover Automotive Plc. and Paypoint Plc.

Mrs. Mallika Srinivasan joined the Company as a Director in May 2012. She is the Chairman and Chief Executive Officer of Tractors and Farm Equipment Limited and TAFE Motors and Tractors Limited. A thorough leader and strategist, recognised for her commitment to excellence and contribution to Indian Industry, she has been at the helm of affairs of leading industry bodies and trade associations. She is also a Director on the Board of Tata Global Beverages Limited. Ms. Srinivasan is the recipient of the Padma Shri Award in 2014 and several business leadership awards and has an avid interest in academia, particularly management education.

Mr. D. K. Mehrotra joined the Company as a Director in October 2012. He is an honours Graduate in Science from the University of Patna. Mr.Mehrotra has attended several important knowledge forums in India and abroad and is associated with the apex training institutes of insurance in India like the National Insurance Academy and the Insurance Institute of India. He is former Chairman of LIC of India.

Mr. O P Bhatt is a graduate in Science and a post graduate in English Literature (Gold Medalist). In his last assignment, from July 1, 2006 to March 31, 2011, he was the Chairman, State Bank Group, which includes State Bank of India, India's largest commercial bank; five associate banks in India; five overseas banks; SBI Life, the country's largest private life insurer; SBI Capital Markets, India's leading investment bank; SBI Fund Management and other subsidiaries spanning diverse activities.

Mr. Bhatt has served as Chairman of Indian Banks' Association, the apex body of Indian banks. He also served as India's economic diplomacy as government's nominee on the India-US CEO Forum, Indo-French CEO Forum and Indo-Russia CEO Forum, forging links with a cross section of the world's business leaders.

Dr. Karl-Ulrich Koehler was appointed a Director of the Company in November 2010. He has been Chief Executive Officer and Managing Director of Tata Steel Europe Limited since October 1, 2010. He was appointed as Chief Operating Officer of Tata Steel Europe Limited in February 2010.

Dr. Koehler studied metallurgy at Clausthal University of Technology, where he gained his doctorate in 1988. In 2005, he was awarded an honorary professorship in flat steel product technology by Freiberg University. Dr. Koehler is a member of the board of the World Steel Association and Vice-president of Eurofer, the European Steel Association. For most of his more than 34 years in the steel industry, he has worked at the companies that today comprise ThyssenKrupp Steel, where he was ultimately Chairman of the Executive Board and a member of the Board of the parent company, ThyssenKrupp AG. Dr. Koehler is based at IJmuiden in the Netherlands.

Mr. Koushik Chatterjee is an honours Graduate in Commerce from Calcutta University and is a Fellow Member of the Institute of Chartered Accountants of India. He is currently Group Executive Director (Finance & Corporate) of the Company.

Mr. Chatterjee joined Tata Steel in 1995. During his stint in the Company, he worked in the areas of Corporate Finance and Planning. In 1998, he was transferred to the Tata Steel Head Office in Mumbai and subsequently to Tata Sons Limited in the Group Executive Office (GEO). During his tenure in Tata Sons Limited, he was involved in Mergers & Acquisitions activities including privatisations and joint ventures and was also the lead facilitator in the Groupwide rollout of the Economic Value Added (EVA).

Mr. Chatterjee re-joined Tata Steel on August 1, 2003 and was appointed the Vice President (Finance) w.e.f. August 1, 2004. During his tenure, he has led the first overseas acquisition of the Company – NatSteel Asia followed by Millennium Steel (now Tata Steel Thailand) in Thailand and acquisition of Corus Group plc (now Tata Steel Europe).

Mr. Chatterjee was appointed as Group Chief Financial Officer w.e.f. January 1, 2008. He has been responsible for Group Financial Reporting, Investor Relations, Financing Strategy including debt and equity raising, Corporate M&A, Risk Management and Compliance, Taxation Strategy and planning and co-ordination of statutory and management reporting.

In November 2012, he was elevated to the Board of Tata Steel and appointed as Executive Director & Group CFO. In September 2013, he has been appointed as the Group Executive Director (Finance and Corporate). In addition to leading the Company's finance function, Mr. Chatterjee is also responsible for the Tata Steel Group Corporate functions including Legal and Regulatory Affairs, Corporate Communications, Strategic Procurement, Information Systems, Group Investments, Global Mining Projects and Assurance.

He is on the Board of several Tata Steel Group companies, in India and abroad, including Tata Steel Europe, NatSteel Asia Pte. Limited, Tata Steel (Thailand) Public Company Limited and others. He is also on the Board of the listed iron ore company in Canada, New Millennium Iron Corp.

Mr. Chatterjee was declared one of India's best CFOs by Business Today Magazine in 2005 and 2006 and by CNBC in 2007. In March 2012, he has been awarded the Best Performing CFO in the Metals Sector by CNBC TV18. He was declared India's "Best Executive" for 2009 by Asia Money Magazine. He is a member of the Primary Market Advisory Committee on Capital Markets of SEBI and was a member of the Takeover Regulations Advisory Committee of SEBI, which drafted the new Takeover Code. He has recently been appointed as the first Indian on the Global Preparers Forum which is advisory body of the International Accounting Standards Board, London. He is also a member of the International Integrated Reporting Council and on the various committees of Confederation of Indian Industry (CII).

Mr. T. V. Narendran is a Mechanical Engineer from REC (NIT), Trichy. He joined Tata Steel after completing his MBA from IIM Calcutta in 1988. He is a Chevening Scholar and has also attended the Advanced Management Programme in CEDEP- INSEAD, Fontainebleau, France. He became Managing Director of Tata Steel India and South East Asia w.e.f. November 1, 2013. Mr. Narendran worked in the International Trading Division of Tata Steel from 1988 to 1997 wherein he spent five years in Dubai looking after Tata Steel's exports to the Middle East.

From 1997 to 2001, he spent time in Tata Steel's marketing and sales division and was involved in market development work for the Cold Rolling Mill Project, Supply Chain Management, Sales Planning, etc. From 2001 to 2003, he was the Chief of Marketing & Sales (Long Products) and played a key role in building the 'Tata Tiscon' brand and the distribution network for the same. From 2003 to 2005, he worked with Mr. B. Muthuraman, the then Managing Director of Tata Steel, as his Principal Executive Officer.

He was actively involved in Tata Steel's first overseas acquisition, NatSteel and was seconded there as an Executive Vice President in 2005. He ran operations in NatSteel thereafter as the Deputy President (Operations) and took over as the President & CEO on January 1, 2008. He played a key role in the integration of NatSteel and Tata Steel. Before being appointed as MD – Tata Steel India and South East Asia, Mr. Narendran was the Vice President – Safety, Flat Products & Long Products Divisions of Tata Steel. He is currently on the Boards of Tata Steel Europe Limited, CEDEP, XLRI and World Steel Association. He is currently the Chairman of CII, Jharkhand.

CORPORATE GOVERNANCE

The Company has a Non-Executive Chairman and the number of Independent Directors is more than 50 percent of the total number of Directors in compliance with the Clause 49 of the listing Agreement. As on 31st March, 2014, the Company has 13 Directors on its Board, of which 7 Directors are independent. The number of Non-Executive Directors (NEDs) is more than 50 percent of the total number of Directors. The Company is in compliance with the Clause 49 of the Listing Agreements pertaining to compositions of Directors.

None of the Directors on the Board is a Member on more than 10 Committees and Chairman of more than 5 Committees (as specified in Clause 49), across all the companies in which he is a Director. The necessary disclosures regarding Committee positions have been made by the Directors.

The names and categories of the Directors on the Board, their attendance at Board Meetings during the year and at the last Annual General Meeting, as also the number of Directorships and Committee Memberships held by them in other companies and Shareholdings are given below:

Name of the Director Director Identification Number Category No. of Board Meetings attended during 2013-14 Attendance at the last AGM No. of Directorships in other public companies* as on 31.03.2014 No. of Committee positions held in other public companies** as on 31.03.2014 Share holdings#
          Chairman Member Chairman Member Ordinary Shares of Rs. 10/- each
Mr. Cyrus P. Mistry
(Chairman)
00010178 Not Independent
Non-Executive
9 Yes 9 1
Mr. B. Muthuraman
(Vice-Chairman)
00004757 Not Independent
Non-Executive
8 Yes 1 1 6,230
Mr. Nusli N. Wadia 00015731 Independent
Non-Executive
9 No 4 3
Mr. S. M. Palia
(Stepped down w.e.f.25th April, 2013)
00031145 Independent
Non-Executive
1 NA NA NA NA NA NA
Mr. Ishaat Hussain 00027891 Not Independent
Non-Executive
8 Yes 2 11 3 5 2,216
Mr. Subodh Bhargava 00035672 Independent
Non-Executive
6 Yes 3 3 2 1,012
Mr.Jacobus Schraven 01462126 Independentx
Non-Executive
7 Yes
Mr. Andrew Robb 01911023 Independent
Non-Executive
9 Yes
Mrs. Mallika Srinivasan 00037022 Independent
Non-Executive
6 Yes 3 3 1
Mr. D. K. Mehrotra 00142711 Independent
Non-Executive
6 Yes 1 1
Mr. O P Bhatt
(Appointed w.e.f 10th June 2013)
00548091 Independent
Non-Executive
6 Yes 3 1 5
Mr. H. M. Nerurkar
(Managing Director)@
00265887 Not Independent
Executive
5 Yes NA NA NA NA NA
Dr. Karl-Ulrich Koehler 03319129 Not Independent
Non-Executive
9 Yes
Mr. Koushik Chatterjee
(Executive Director)
00004989 Not Independent
Executive
9 Yes 2 1 1,320
Mr. T. V. Narendran
(Managing Director)@@
03083605 Not Independent
Executive
4 NA 1,753
* Excludes Directorships in associations, private, foreign and Section 25 companies.
** Represents Chairmanships/Memberships of Audit Committee and Shareholders'/Investors' Grievance Committee.
@ Retired as Managing Director, India and South East Asia on 31st October, 2013
@@ Appointed as Managing Director - Designate India and South East Asia w.e.f 19th September, 2013 and succeeded
Mr. H. M. Nerurkar as Managing Director, India and South East Asia w.e.f. 1st November, 2013
# Shareholdings represent holdings in Director's personal capacity and either as sole or first or joint holder. Total
Shareholding of the Directors as on 31st March, 2014 – 12,531 Ordinary Shares.

Nine Board Meetings were held during the Financial Year 2013-14 and the gap between two meetings did not exceed four months.

The details of meetings attended by the Directors are given below:

Date of Meeting Mr. Cyrus P. Mistry Mr. B. Muthuraman Mr. Nusli N. Wadia Mr. S. M. Palia Mr. Ishaat Hussain Mr.Subodh Bhargava Mr. Jacobus Schraven
4th April, 2013 Yes Yes Yes Yes Yes No Yes
23rd May, 2013 Yes Yes Yes NA Yes Yes No
11th July, 2013 Yes Yes Yes NA Yes Yes Yes
13th August, 2013 Yes Yes Yes NA No Yes Yes
19th September, 2013 Yes Yes Yes NA Yes Yes Yes
13th November, 2013 Yes No Yes NA Yes Yes Yes
13th December, 2013 Yes Yes Yes NA Yes No No
11th February, 2014 Yes Yes Yes NA Yes Yes Yes
10th March, 2014 Yes Yes Yes NA Yes No Yes
Date of Meeting Mr. Andrew Robb Mrs. Mallika Srinivasan Mr. D. K. Mehrotra Mr. O. P.Bhatt Mr. H. M. Nerurkar Dr. Karl-Ulrich Koehler Mr. Koushik Chatterjee Mr. T. V. Narendran
4th April, 2013 Yes Yes No NA Yes Yes Yes NA
23rd May, 2013 Yes No Yes NA Yes Yes Yes NA
11th July, 2013 Yes Yes Yes Yes Yes Yes Yes NA
13th August, 2013 Yes Yes Yes Yes Yes Yes Yes NA
19th September, 2013 Yes Yes Yes No Yes Yes Yes NA
13th November, 2013 Yes No Yes Yes NA Yes Yes Yes
13th December, 2013 Yes Yes Yes Yes NA Yes Yes Yes
11th February, 2014 Yes Yes No Yes NA Yes Yes Yes
10th March, 2014 Yes No No Yes NA Yes Yes Yes

Dates for the Board Meetings in the ensuing year are decided well in advance and communicated to the Directors. Board Meetings are held at the Registered Office of the Company. The Agenda along with the explanatory notes are sent in advance to the Directors. Additional meetings of the Board are held when deemed necessary by the Board.

The information as required under Annexure IA to Clause 49 is being made available to the Board.

The Board periodically reviews compliance reports of all laws applicable to the Company. Steps are taken by the Company to rectify instances of non-compliance, if any.

Four Meetings of the Committee of Directors constituted by the Board for specific purposes from time to time were held during the Financial Year 2013-14.

The dates on which the Committee meetings were held are as follows:

10th April, 2013, 6th May, 2013, 19th February, 2014 and 14th March, 2014.

During the Financial Year 2013-14, the Company did not have any material pecuniary relationship or transactions with Non-Executive Directors, other than Mr. B. Muthuraman to whom the Company paid retiring benefits aggregating to Rs.78.39 lakhs. The Company has adopted the Tata Code of Conduct for Executive Directors, Senior Management Personnel and other Executives of the Company. The Company has received confirmations from the Executive Directors as well as Senior Management Personnel regarding compliance of the Code during the year under review. It has also adopted the Tata Code of Conduct for Non-Executive Directors of the Company. The Company has received confirmations from the Non-Executive Directors regarding compliance of the Code for the year under review. Both the Codes are posted on the website of the Company.