Directors' Report

Corporate Social Responsibility

Tata Steel's vision and strategies focus on having right balance between Value Creation and Corporate Citizenship. The new Companies Act 2013 mandates that every company, who meet certain eligibility criteria needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility activities. However, Corporate Social Responsibility is an integral part of Tata Steel management process since inception.
Tata Steel's sustainable development and inclusive growth strategy is sustained through CSR programmes. The Company strives to enhance the livelihood of the local communities and contribute to their future economic and social well-being through a proactive community partnership programme based on three key pillars:

  • Education – Improve and inspire future technical skills
  • Environment – Acting responsibly and maintaining high standards
  • Health & Well-being – Improving the quality of life in communities around our sites

The key focus areas are promoting quality education, creating livelihoods, enabling skill development, providing state-of the-art medical facilities and building sports, and training facilities. Tata Steel is committed towards providing health care services to the communities in and around the area of operations. During Financial Year 2013-14, 1.5 million people in India and nearly 80,000 people in Europe and UK benefitted from the community programmes of Tata Steel group.

Some of the key projects undertaken during the years are as follows:

In India:

  1. Project MANSI, aimed at improving maternal and new born survival rates, is being implemented in 167 villages of Seraikela district. The positive impact achieved includes a drop in the infant mortality rate by 26.5% and neonatal mortality rate by 32.7%. This project was recognised by the Government of Jharkhand, which has asked the Company to help upscale to the state level.
  2. Jyoti Fellowship awarded to nearly 3,000 meritorious students from the Scheduled Caste and Scheduled Tribes communities in the states of Jharkhand, Chhattisgarh and Odisha.
  3. Nearly 49,000 students in 383 Government schools in Jamshedpur were served the mid-day meal from a Central Kitchen established by Tata Steel.
  4. Project RISHTA on adolescent health was scaled up from Seraikela Kharsawan to other operational areas of the Company in Jharkhand and Odisha. It is now being implemented in 700+ villages across seven districts in the two states.
  5. The Company trained 93 tribal girls as nurses from the naxalite affected Saranda region of Jharkhand. Another 1,800 youth were trained through a range of skill development programmes across the Company's locations in Financial Year 2013-14.
  6. Nearly 10,000 youth learned tribal scripts for Ho, Santhali and Oraon languages.
  7. Under the solar street light project, nearly 2,300 solar street lights were installed in villages of Jharkhand and Odisha in Financial Year 2013-14.

In Europe:

  1. Tata Steel created the Industrial Cadets Program that raises awareness on local career opportunities in the industrial and manufacturing sectors, helps students and employees develop life skills and create a talent pipeline.The programme involves industry-based activities where 11-19 year olds can develop personal skills and enhance careers awareness whilst gaining accreditation. The inspiration for Industrial Cadets came from HRH The Prince of Wales. The Department for Communities and Local Government support the initiative. Tata Steel pioneered the programme by working with the very first Industrial Cadets.
  2. Employees of Tata Steel are increasingly acting as STEM ambassadors to attract more youngsters to the disciplines of Science, Technology, Engineering and Mathematics.
  3. Girls' Day is part of a national programme across the Netherlands which focusses on introducing technical studies to girls between the ages of 8-14. In 2013, 140 girls attended Girls' Day in IJmuiden.
  4. Marquette run organised in the local area of the IJmuiden site, the run focusses on the health and well-being of kids (2,000 participants, of which 1,000 are youngsters).
  5. The first time neighbour days were held to introduce people from the community around the Company's European sites to various on-site activities. More than 2,500 people were introduced to the production processes on site.
  6. In 2006, Tata Steel became the corporate partner of the British Triathlon Federation. In 2013, almost 10,000 children participated in 12 events and in November TSE celebrated the 100th Tata – Kids of Steel with a mini-triathlon at the Houses of Parliament in London, United Kingdom.

Details of various initiatives undertaken during Financial Year 2013-14 under Corporate Social Responsibility by the Company are covered in this Annual Report.

Subsidiaries

The consolidated financial statements presented by the Company include financial information of its subsidiaries prepared in compliance with applicable Accounting Standards. The Ministry of Corporate Affairs, Government of India vide its Circular No. 5/12/2007-CL-III dated 8th February, 2011 has granted general exemption under Section 212(8) of the Companies Act, 1956, from attaching the balance sheet, profit and loss account and other documents of the subsidiary companies to the balance sheet of the Company, provided certain conditions are fulfilled. Accordingly, the annual accounts of the subsidiary companies and the related detailed information will be made available to the holding and subsidiary companies' investors seeking such information at any point of time. The annual accounts of the subsidiary companies will also be kept for inspection by any investor at its Head Office in Mumbai and that of the subsidiary companies concerned.

Details of major subsidiaries of the Company are covered in this Annual Report.

Directors

  1. In accordance with the provisions of the Companies Act, 2013 and the Company's Articles of Association, Mr. Cyrus P. Mistry and Mr. Ishaat Hussain retire by rotation and are eligible for re-appointment.
  2. Mr. Koushik Chatterjee, Executive Director & Group Chief Financial Officer of the Company was appointed as Group Executive Director (Finance and Corporate) of the Company with effect from 19th September, 2013.
  3. Mr. T. V. Narendran, was appointed as an Additional Director designated as the Managing Director – Designate, India & South East Asia with effect from 19th September, 2013. Mr. T. V. Narendran will hold office till the date of the forthcoming Annual General Meeting (AGM) and notice has been received from a Member proposing the candidature of Mr. T. V. Narendran for being appointed as a Director of the Company.
  4. Mr. H. M. Nerurkar stepped down as the Managing Director of the Company on 31st October, 2013 on reaching the age of superannuation. The Directors would like to place on record their sincere appreciation for his ability, unstinting commitment and outstanding contribution to the Company during his tenure on the Board since 2009.
  5. Mr. T. V. Narendran has succeeded Mr. H. M. Nerurkar as Managing Director, India and South East Asia with effect from 1st November, 2013.
  6. Pursuant to Section 149 and other applicable provisions of the Companies Act, 2013, your Directors are seeking appointment of Mr. Nusli N. Wadia, Mr. Subodh Bhargava, Mr. Jacobus Schraven, Mrs. Mallika Srinivasan and Mr. O. P. Bhatt as Independent Directors for the terms given in the Notice of the 107th Annual General Meeting. Details of the proposal for the appointment of above Independent Directors are mentioned in the Explanatory Statement under Section 102 of the Companies Act, 2013 of the Notice of the 107th Annual General Meeting.
  7. Mr. Andrew Robb, who holds office up to the date of the forthcoming AGM has informed that he would not be seeking re-election to the Board. The Directors would like to place on record their sincere appreciation for his commitment and contribution made by him during his tenure on the Board since 2007.

Auditors

M/s Deloitte Haskins & Sells LLP (DHS LLP), Chartered Accountants, who are the statutory auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. Pursuant to provisions of Section 139 of the Companies Act, 2013 and rules framed thereunder, it is proposed to appoint DHS LLP as statutory auditors of the Company from the conclusion of the ensuing AGM till the conclusion of the 110th AGM to be held in the year 2017, subject to annual ratification by members at Annual General Meeting.

During the year, the Company had received intimation from DHS LLP stating that Deloitte Haskins & Sells had been converted into a limited liability partnership (LLP). Accordingly, the audit of the Company for Financial Year 2013-14 was conducted by DHS LLP.

Particulars of Employees

The information required under Section 217(2A) of the Companies Act, 1956 and the Rules there under, in respect of the employees of the Company, is provided in the Annexure forming part of this Report. In terms of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the Members, excluding the aforesaid Annexure. The Annexure is available for inspection by Members at the Registered Office of the Company during business hours on working days up to the date of the ensuing AGM, and if any Member is interested in obtaining a copy thereof such Member may write to the Company Secretary, whereupon a copy would be sent.

Energy Conservation, Technology Absorption, and Foreign Exchange Earnings and Outgo

Details of the energy conservation and research and development activities undertaken by Tata Steel Limited along with the information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are provided as an Annexure to the Directors' Report.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, a Management Discussion and Analysis, Corporate Governance Report and the Managing Director's and Auditors' Certificate regarding compliance of conditions of Corporate Governance are made part of the Annual Report.

Business Responsibility Report

A Business Responsibility Report is included in this Annual Report.

Directors' Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that –

  1. in the preparation of the annual accounts for the Financial Year 2013-14, the applicable Accounting Standards have been followed and that there are no material departures;
  2. they have, in the selection of the Accounting Policies, consulted the Statutory Auditors and have applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit of the Company for that period;
  3. they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
  4. they have prepared the annual accounts on a going concern basis.

Acknowledgements

The Directors wish to convey their appreciation to all Company's employees for their enormous personal efforts as well as their collective contribution to the Company's performance. The Directors would also like to thank the employee unions, shareholders, customers, dealers, suppliers, bankers, Government and all the other business associates for the continuous support given by them to the Company and their confidence in its management.

On behalf of the Board of Directors

Cyrus P. Mistry

Chairman

Mumbai, 14th May, 2014