Documente Academic
Documente Profesional
Documente Cultură
COMPANY PROFILE
Tata Shaktee is Tata Steel’s flagship brand in the field of galvanized corrugated sheets. Tata Steel
has been a pioneer in the field of manufacturing superior quality TATA Shaktee Galvanised
Corrugated (GC) sheets. TATA Shaktee GC Sheets are not only made of virgin steel processed at
TATA Steel’s state-of-the-art Cold Rolling Mill but also have uniform Zinc coating on them, which
gives them the required strength in fighting the weather and to last longest. In addition to this,
TATA Shaktee GC sheets are ISI certified under Bureau of Indian Standards (IS 277). All in all,
TATA Shaktee GC sheets give more value for money and are the best choice for anyone looking
for a product that will perform year after year.
High tensile strength of Tata Shaktee GC sheets (approx. 700 mpa) ensures greater resistance to
natural forces like hailstorms and other external forces.
Tata Shaktee presents 910 mm GC sheets in the Indian market. With 13 corrugations and a width
of 910 mm, Tata Shaktee GC sheets give you the added benefit of superior quality at super
savings while building your house. The advantages of using the superior 910 mm (13
corrugations) over standard 800 mm (11 corrugations) GC sheets are many.
Consistent with the vision and values of the founder Jamsetji Tata, Tata Steel strives to
strengthen India’s industrial base through effective utilization of staff and materials. The means
envisaged to achieve this are cutting edge technology and high productivity, consistent with
modern management practices.
Tata Steel recognizes that while honesty and integrity are 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 it does in an atmosphere
free from fear, and thereby reaffirms its faith in democratic values.
OBJECTIVES
Create buzz and excitement amongst consumers during peak buying season.
Drive positive word-of-mouth amongst consumers.
Generating greater footfall at dealer outlets.
SYMBOL
SLOGAN
ORGANIZATIONAL STRUCTURE
a) Retail Offerings:
Galvanised Corrugated Sheet was launched as the 'Tata Shaktee' brand in the year 2000.
Currently, the distributor network for Tata Shaktee extends across the country, with 2,800
dealers capable of building ~1,80,000 roofs per month across 6,000 talukas throughout India.
It has also been acknowledged as a 'Superbrand' in the last edition of the consumer validated
Superbrands survey. Among Tata Shaktee's recent initiatives is 'Roofjunction' – a roofing
solution service. This includes service and roof installation by expert fabrications, who use
modern techniques. Tata Shaktee is also a component in 'Nest-In', the affordable housing
initiative promoted by Tata Steel. As a complete building solution, it provides a simple and
quick alternative to the traditional process of building houses. Being extremely versatile, it is
ideal for many applications.
Tata Tiscon, the premium quality rebar brand in Indian market, was also launched in the year
2000. Acknowledged as a 'Consumer Superbrand' for the 'Construction Rebar' category in two
consecutive surveys, it is also the only brand from the Indian Steel Industry to be rated as Asia's
most promising Brand 2012-13. A customer-focussed initiative under the Tata Tiscon stable is
the readymade stirrup solution branded 'Tiscon Superlinks'.
b) SME Offerings:
Since its launch in 2003, Tata Steelium (CR sheet), the world's first branded Cold Rolled steel
has found a wide range of applications in the SME segment as a result of the support of
distributors and service centres across the country, who are certified by Tata Steel.
The zero spangle Galvanised Plain Steel brand 'Galvano', launched in May 2009 is produced
through 'Lead-Free' costing chemistry making it an eco-friendly steel product. This product
also serves many SME customers.
The 'Tata Astrum', launched in November 2012, provides HR Sheet and Coils to the SME
customers in the processed form, eliminating the need for on-site processing by end users.
The Company's extensive network of committed channel partners enables it to deliver assured
value to priority segments in B2C and B2SME. Apart from providing reach across fragmented
consumer bases, this network of partners helps the Company create differentiated value
propositions.
Awards and Recognition:
"Special Support Award" received from Maruti Suzuki India Limited
"Material Localisation Award" from Nissan India Limited
"Award for Performance" from Brakes India Limited
"Best Supplier Award 2013" from Tata Motors Limited
"Best Business Partner" (Category of product – TMT Bars) from Tata Housing
TATA Shaktee won the Organisational Award in the category of "Long Term Campaign of
the Year" in Rural Marketing Forum & Awards function
TATA Tiscon received the award "Brand Excellence" in Construction & Real Estate Sector,
Best In-House Magazine, Building Bonds, and Effective use of Marketing Communications
in 4th CMO Asia Awards for Excellence in Singapore
c) Ferro Alloys and Minerals Division (FAMD):
The trend of production and sales volumes of the Ferro Alloys and Minerals Division is shown
below:
The Division achieved a total sales volume of 1,004k tonnes in Financial Year 2013-14 against
1,152k tonnes in the previous year.
The success of 'TATA SILCOMAG', the world's first ever branded Ferro Alloy launched in the
Financial Year 2012-13, prompted FAMD to launch two more branded Ferro alloys – TATA
TISCROME (branded Ferro Chrome) and TATA FERROMAG (branded Ferro Manganese) in
the Financial Year 2013-14. FAMD won various awards in the year including the "Gold" and
"Silver" category being conferred on Sukinda Chromite Mines & Manganese Mines,
respectively, in the Mines and Metals sector at the 14th Annual Greentech Award, 2013.
d) Tubes Division
The trend of production and sales volume of the Tubes Division over the last five years is
shown below:
Despite a slowdown in the market, the Company's focus on new growth areas resulted in steady
growth of 8% in production and sales volumes during Financial Year 2013-14.
The key performance highlights of the Division are as under:
In Financial Year 2013-14, the Division
crossed the production milestone of 0.4
million tonnes.
Sales of 'Tata Structura' registered 12%
volume growth, surpassing the 1,50,000
tonnes mark through a concerted focus on the
Solar and Telecom Tower segment.
Hi-end product Telescopic Front Fork (TFF)
registered its best ever Production & Sales of
3,600 MT with a growth of 66% YoY.
The Tubes Division received the best supplier award for "Innovation & Technology" from M/s.
Tata Motors Ltd.
e) Bearings Division:
The performance of the Bearings Division in terms of production and sales volume is shown
below:
Through focus on after-sales market, the Division registered its best ever sales volumes and
retail sales increased by 28% during the Financial Year 2013-14. Bearings Division has also
re-designed production processes to achieve the best ever process yield of 99.6% (Previous
Best 98.7%).
It continued to maintain the trust of its customers, earning a number of awards and accolades
including the Platinum Award from Bajaj Auto for quality, cost and delivery besides consistent
'Zero PPM' awards from Bosch, Toyota and Rane NSK.
2. Tata Steel Europe
in Rs.crores
FY 14 FY 13
Turnover 84,666 78,012
Profit/(loss) before tax (PBT) (3,684) (12,789)
Profit/(loss) after tax (PAT)* (3,011) (12,649)
* PAT represents PAT after minority interest and share of profit of associates.
Tata Steel Europe's (TSE) revenue of Rs.84,666 crores for the Financial Year 2013-14 was
8.5% higher than the previous year in rupee terms (3% lower in GBP terms, being entity's
reporting currency). The average revenue per tonne declined by 7% due to weaker market
conditions caused by continued lower steel capacity utilisation rates in Europe. The TSE's
profit before tax for the Financial Year 2013-14 registered an improvement over last year.
There was no impairment charge considered in the Financial Year 2013-14 as compared to the
impairment charge of Rs.7,534 crores considered in Financial Year 2012-13.
Operational and Sales Performance:
Stabilisation of Blast Furnace# 4 at Port Talbot, UK, rebuilt during the year and lighted in
February 2013, along with an increase in deliveries by the Long Products Division in Europe
were reflected in the 16.5% increase in crude steel production to 15.5 million tonnes in
Financial Year 2013-14 from 13.3 million tonnes in the Financial Year 2012-13. Deliveries
also grew by 6.1% to 13.9 million tonnes from 13.1 million tonnes.
The production and sales performance of TSE are shown below:
in million tonnes
Change
FY 14 FY 13
%
Liquid steel production 15.5 13.4 16.3
Deliveries 13.9 13.1 6.1
Reliability was a key theme for operational excellence during Financial Year 2013-14 with a
number of performance records being broken:
At Port Talbot – (a) the best ever total hot metal make was achieved at Blast Furnace# 4
(2.05 million tonnes - previous best of 1.91 million tonnes in Financial Year 2002); (b) the
best ever total hot metal make for the site was achieved (4.16 million tonnes - previous best
of 3.86 million tonnes in Financial Year 2007); (c) the best ever total liquid steel make (4.55
million tonnes - previous best of 4.41 million tonnes in Financial Year 2007); and (d) the best
ever total slab make (4.45 million tonnes - previous best of 4.29 million tonnes in Financial
Year 2007).
At Llanwern – the best ever total hot dipped galvanising line output on the Zodiac line was
registered with 479 thousand tonnes (previous best of 417 thousand tonnes in Financial Year
2006).
At IJmuiden – (a) the best ever total Hot Strip Mill output was achieved at 5.21 million
tonnes (previous best of 5.05 million tonnes in the Financial Year 2011-12); (b) the best ever
total Direct Sheet Plant output of 1.26 million tonnes (previous best was 1.19 million tonnes
in Financial Year 2007); and (c) the best ever total hot dipped galvanising line output at DVL3
of 552 thousand tonnes (previous best was 465 thousand tonnes in the Financial Year 2012-
13).
Production at different facilities in TSE along with their capacities is shown below:
in million tonnes
Production Actual
capacity production
Port Talbot steelworks, West Glamorgan, Wales 4.9 4.5
Scunthorpe steelworks, South Humberside, England 4.5 3.2
Rotherham steelworks, South Yorkshire, England 0.8 0.7
IJmuiden steelworks, the Netherlands 7.2 7.1
FY 14 FY 13
Turnover 12,128 9,393
Profit/(loss) before tax (PBT) 42 155
Profit/(loss) after tax (PAT)* 43 113
* PAT represents PAT after minority interest and share of profit of associates.
During Financial Year 2013-14, NatSteel Holdings (NSH) enhanced its capabilities across all
geographies as the Company invested for the future in IT, Technology and Internal Capability
Building. This was done in the backdrop of a volatile, uncertain and highly competitive
business environment.
The Company's Singapore operations completed its major plant modernisation projects,
including the New Scrap Shear, New Shaft Furnace and various downstream automation
projects. NSH once again achieved its highest-ever downstream deliveries of 512k tonnes and
maintained its leadership position in downstream volumes, emerging as the largest supplier of
mesh in Singapore. Overall Sales grew by 29% across the Group. A partnership with two
private steel companies for the supply of billets along with a conversion and marketing
agreement in the Fujian province, doubled sales to 1.4 million tonnes during the Financial Year
2013-14 from 653k tonnes in the Financial Year 2012-13. Consequently NSH's market share
in the Fujian province rose to 15%. Vietnam achieved record sales volume of 134k tonnes,
19% higher than last year. However, profitability was adversely affected due to a downward
pressure on price caused by the influx of low-priced materials from China. Rationalisation and
productivity efforts in Australia have resulted in a turnaround in the business to a positive
EBITDA in the Financial Year 2013-14.
4. Tata Steel Thailand
in Rs.crores
FY 14 FY 13
Turnover 4,860 4,436
Profit/(loss) before tax (PBT) 18 (626)
Profit/(loss) after tax (PAT)* 8 (635)
* PAT represents PAT after minority interest and share of profit of associates.
Sales of Tata Steel Thailand increased by 10% during the Financial Year 2013-14 despite the
adverse effects of political turmoil on the Thai GDP which has grown below 3% in 2013 and
the estimate for 2014 is pegged in the range of 2-2.4%.
The challenge of GDP contraction notwithstanding Tata Steel Thailand (TSTH) further
strengthened its leadership position in Rebars, increasing its market share from 32% to 35% in
Financial Year 2013-14 by leveraging the strong presence of its brand TATA TISCON in the
regional markets of Thailand. Finished goods production for the year stood at 1.29 million
tonnes, 10.5% higher than in the previous year. TSTH reported a profit after tax of Rs.8 crores
during Financial Year 2013-14 compared to a loss in the previous year riding on continuous
improvements in the fields of customer intimacy and operational excellence.
5. Tata Metaliks Limited
in Rs.crores
FY 14 FY 13
Turnover 1,425 995
Profit/(loss) before tax (PBT) 3 (114)
Profit/(loss) after tax (PAT)* 9 (87)
* PAT represents PAT after minority interest and share of profit of associates.
There was a significant improvement in the operating margin of Tata Metaliks Limited (TML)
during the Financial Year 2013-14 with both production and sales escalating by 38% and 51%
respectively, compared to the previous year. Production and sales of ductile iron pipes also
increased by 54% and 61% respectively, compared to the previous year. TML recorded
significant improvements in its operating margin as a consequence of improvements in
operating parameters like yield, rejection rate, plant availability, etc., as well as sales
performance in terms of net realisation.
A consolidated profit after tax of Rs.9 crores was reported during the Financial Year 2013-14
after accounting for an exceptional loss of Rs.21 crores on sale of its entire plant and machinery
at the Redi unit. TML intends to improve its operating margin further in 2014 by setting up a
coke oven plant along with a 10 MW power plant at Kharagpur on a BOOT (Built Operate
Own & Transfer) basis.
On 10th April 2013, Tata Steel Limited announced the merger of TML and TMKPL with itself
under a Scheme of Amalgamation to be sanctioned through a court approval process. Tata Steel
will issue 4 (four) equity shares of Rs.10 each for every 29 (twenty nine) equity shares of Rs.10
each held by the public shareholders of TML upon approval of the scheme by the courts. Tata
Steel holds 50.09% of the equity share capital of TML. The shareholders' approval for the
Scheme is being sought at the Court Convened Meeting of the shareholders to be held on 16th
May, 2014.
HEADQUARTERS
TATA Centre
15th Floor, 43, Jawahrlal Nehru Road
Kolkata - 700071
India
Fax : 22885923 / 2563
Toll Free No : 1800-108-8282
E-mail : tatashaktee2016@gmail.com
FINANCIAL ASPECTS
A. Financial Results
(Rs. crore))
TATA
TATA STEEL
PARTICULARS STEEL
STANDALONE
GROUP
TOTAL EXPENDITURE
BEFORE FINANCE COST
DEPRECIATION (NET OF 44740.41 41385.01 111125.84 100412.12
EXPENDITURE
TRANSFERRED TO CAPITAL)
PROFIT BEFORE
DEPRECIATION
13732.00 9601.86 17298.19 12463.09
EXCEPTIONAL ITEMS AND
TAXES
PROFIT/(LOSS) BEFORE
SHARE OF PROFIT/(LOSS) OF
JOINT VENTURES & 10004.54 6060.31 11336.53 6790.21
ASSOCIATES EXCEPTIONAL
ITEMS & TAX
SHARE OF PROFIT/(LOSS) OF
JOINT VENTURES & - - 174.10 7.65
ASSOCIATES
PROFIT/(LOSS) BEFORE
10004.54 6060.31 11510.63 6797.86
EXCEPTIONAL ITEMS & TAX
ADD/(LESS): EXCEPTIONAL
(3366.29) (703.38) 9599.12 (4324.23)
ITEMS
PROFIT/(LOSS) ON DISPOSAL
OF DISCONTINUED - - 5.15 (3085.32)
OPERATIONS
NON-CONTROLLING
- - 4328.48 72.23
INTERESTS
RETAINED EARNINGS:
BALANCE BROUGHT
12280.91 10075.75 (11447.01) (2415.49)
FORWARD FROM THE
PREVIOUS YEAR
ADD: PROFIT FOR THE
4169.55 3444.55 13434.33 (4240.80)
PERIOD
LESS: DISTRIBUTION ON
HYBRID PERPETUAL 266.13 266.10 266.13 266.10
SECURITIES
ADD: OTHER
COMPREHENSIVE INCOME
155.39 (142.42) (2780.05) (3549.43)
RECOGNISED IN RETAINED
EARNINGS
RETAINED EARNINGS:
BALANCE TO BE CARRIED 18700.25 12280.91 7801.99 (11447.01)
FORWARD
MARKETING ASPECTS
During the year the exceptional items primarily include: a) Provision of ( Rs. 3214)crore in
respect of certain statutory demands and claims net of liability towardsdistrict mining fund no
longer required written back and provision for advances paid forrepurchase of equity shares in
Tata Teleservices Ltd. from NTT DoCoMo Inc. (Rs. 27 crore)at Tata Steel India. b) Charge on
account of Employee Separation Scheme (‘ESS‘)under Sunhere
Bhavishya Ki Yojana (‘SBKY‘) scheme (Rs. 108 crore) mainly at TataSteel India and at
Jamshedpur Utilities & Services Company Limited. c) Restructuringand other provisions of
13851 crore represents gains arising out of modification inbenefit structure for members of the
new pension scheme (‘NBSPS‘) versustheir benefits under Tata Steel Europe's British Steel
Pension Scheme (‘BSPS') offset by settlement charges for those members whodid not join
the NBSPS and one-o costs at Tata Steel Europe. d) Impairment charges(Rs. 903 crore) in
respect of property plant and equipment (including CapitalWork-in-Progress) and intangible
assets relating to global mineral entities.
The exceptional items in Financial Year 2016-17 primarily include: a) Provision fordemands
and claims (Rs. 218 crore) charge on account of Employee Separation Scheme(‘ESS') under
Sunhere Bhavishya Ki Yojana (‘SBKY‘) scheme
(Rs. 207 crore) provision for advances given for repurchase of Equity shares in
TataTeleservices Ltd. from NTT DoCoMo Inc. (Rs. 125 crore) at Tata Steel India b)
Impairmentcharges (Rs. 268 crore) in respect of property plant and equipment (including
CWIP) andintangible assets mainly relating to European & South-East Asian operations.
c)Restructuring and other provisions (Rs. 3614 crore) primarily include curtailment
chargerelating to closure of Tata Steel Europe's British Steel Pension Scheme (‘BSPS')to future
accrual. d) Profit on sale of investments in subsidiaries associates and jointventures 23 crore
and profit on sale of assets of a subsidiary in South-East Asia onliquidation 86 crore.
1. Dividend Distribution Policy
In terms of Regulation 43A of the Securities and Exchange Board of India (ListingObligations
and Disclosure Requirements) Regulations 2015 (‘Listing Regulations')the Board of Directors
of the Company has formulated and adopted the Dividend DistributionPolicy (‘the Policy').
As per the Policy the Company endeavours to paydividend up to 50% of profit after tax of the
Company subject to the applicable rules andregulations. The Policy is annexed to this report
(Annexure 1) and is alsoavailable on our website www.tatasteel.com
2. Dividend
TheBoardofDirectorsoftheCompany(‘theBoard')hasrecommended a dividend of 10per Fully
Paid Ordinary Share on 1126484815 Ordinary Shares of Face Value 10 each forthe year
endedMarch 31 2018. (Dividend for Financial Year 2016-17: 10 perOrdinary Share on
971215889 Ordinary Shares of 10 each). The Board has recommended adividend of 2.504 per
Partly Paid Ordinary Share on 77634625 Ordinary Shares of FaceValue 10 (paid-up 2.504 per
share) each for the year ended March 31 2018.
The Board has recommended dividend based on the parameters laid down in the
DividendDistribution Policy.
The dividend on Ordinary (fully paid as well as partly paid) Shares is subject to theapproval of
the Shareholders at the ensuing Annual General Meeting (‘AGM‘)scheduled to be held on
Friday July 20 2018. The dividend once approved byShareholders will be paid on and from
Monday July 23 2018. The total dividend pay-outworks out to 33% (Previous Year: 34%) of
the net profit for the standalone results.
The Register of Members and Share Transfer Books of the Company (for fully paid as wellas
partly paid shares) will remain closed from Saturday July 7 2018 to Friday July 202018 (both
days inclusive) for the purpose of payment of dividend for the Financial Yearended March 31
2018 and the AGM.
3. Transfer to Reserves
The Board of Directors has decided to retain the entire amount of profits in the profitand loss
account.
4. Capex and Liquidity
During the year the Company on a consolidated basis spent 7479 crore oncapital projects across
India Europe South-East Asia and Canada. The spend was largelytowards essential sustenance
replacement and on-growth projects in India and Netherlands.Despite this significant spend the
Company was able to keep the gross debt level stableduring the year.
The Company's liquidity position remains strong at 36320 crore as on March 31 2018which
includes undrawn lines.
5. Management Discussion and Analysis
The Management Discussion and Analysis as required in terms of the Listing Regulationsis
annexed to the report (Annexure 2) and is incorporated herein by reference andforms an
integral part of this report.
B. Integrated Report
Commitment to society has always been at the forefront in the Company. In furtheranceto this
commitment in 2016 the Company transitioned from compliance based reporting togovernance
based reporting and adopted the <IR> framework developed by theInternational Integrated
Reporting Council. Our Integrated Report for Financial Year2016-17 has been recognised as
Asia's Best Integrated Report by Asia SustainabilityReporting Awards (‘ASRA') the highest
regional recognition for sustainabilityand integrated reporting. In continuation with our efforts
towards enhancing stakeholdervalue we are happy to present to you our 3rd Integrated Report
which endeavours toarticulate the measures undertaken by the Company in the journey towards
long-termsustainability and value creation.
C. External Environment
1. Macroeconomic Condition
During the Financial Year 2017-18 the global economy continued its broad-basedmomentum
and registered a growth of 3.8% its strongest level since 2011 as more thanhalf of the world's
economies registered growth. Global manufacturing activity continuedto grow on account of
favourable financing conditions globally accommodative policiesrising investor confidence
and increase in commodity prices. Global economy was aided byrebound in global trade
investment recovery in advanced economies and continued growth inemerging Asia. Growth
in advanced economies was driven by strong domestic demand andimproved labour markets
while emerging markets witnessed strong consumption and trademomentum. The United States
of America (‘US') witnessed a growth of 2.3% onthe back of strong external demand private
investment and a weaker dollar. Demand waspositively affected by the overhaul of the tax code
in 30 years - the corporateincome tax rate was slashed to 21% from 35% and taxes for
households were also lowered.Strong domestic demand is also a recurring theme in Europe and
Asia. Euro area registereda growth of 2.4% which is almost 0.6% higher than previous year.
Policy stimulus andstrengthening global demand has contributed to this increase in growth. In
Japan strongdomestic demand aided by recovery in consumer spending and investment helped
achievegrowth of 1.7%. Among the emerging and developing economies China continued to
maintainits growth rate at approximately 7% aided by policy support and recovery in trade.
Growthin India was 6.7% owing to consumption led growth influenced by Government policies
andinvestments. Growth in Middle-East and sub-Saharan Africa was impacted bygeo-
political/domestic conflicts. Overall improved growth in US Europe and other keyregions more
than offset the lower growth in other regions and helped sustain growthmomentum.
2. Economic Outlook
According to International Monetary Fund (‘IMF') global growth isprojected to rise to 3.9%
in 2018 and 2019 closer to the long-term growth trend of 4%.The IMF estimates that the growth
of more than 1.5% in 2017 in each of the world's sevenbiggest economies—the US China
Germany Japan France the UK and India— willprovide an impetus to the world economy to
achieve more robust growth in 2018. Advancedeconomies are expected to maintain their
growth momentum in 2018. The US economy isprojected by IMF to grow at a faster pace
(2.7%) in 2018 aided by fiscal stimulus andpolicies. The euro area economic recovery has
broadened across its member nations and islikely to be aided by rise in capex and consumption.
Unemployment rate has reached itslowest level since 2009 and the European Central Bank
(‘ECB') is expected tokeep interest rates unchanged and gradually scale back on asset
purchases with an eye oneconomic growth. Among other key regions China's GDP growth is
likely to moderate to 6.5%in 2018 as the policy makers continue their efforts to promote quality
growth. Supply sidereforms through capacity cuts rural revitalisation urbanisation & housing
reform andcontrolled pace of credit growth are likely to determine domestic demand and
potentialmovement in commodity prices. As per IMF India is expected to grow between 7.0%
to 7.5%in Financial Year 2018-19 aided by rural development infrastructure investment
andexpansion of manufacturing activity. Outlook for Middle-East and North Africa is
graduallyimproving on the back of higher commodity prices. Structural issues though continue
topose a significant risk to the global growth cycle. While the supportive economicenvironment
policies and commodity prices are likely to aid growth in the short termpossible financial stress
increased protectionism and rising geopolitical tensions maypose as downside risks to growth.
Further restrictions by the US government on importsand other protectionist measures in
Europe & other regions may disrupt global tradeand investment adversely affecting global
growth and sentiment. Also high leverage levelsamong nations makes them financially
vulnerable and any tighter financial conditions inUS Europe or China is likely to have adverse
spill-over effect on global growth. Outcomeof the Brexit negotiations is likely to impact the
pace of recovery in UK as well as theEurozone economy.
D. Steel Industry
1. Global Steel Industry
Global steel markets continued their recovery in Financial Year 2017-18. Steelprices were up
across the regions aided by growth in regional demand supply side reformsin China and low
inventory levels. During 2017 global steel demand grew by nearly 2% to1.58 billion tonnes
while the global crude steel production increased by 4% to 1.7billion tonnes as compared to
the previous year. Policy led capacity cuts have led toimproved utilisation levels in China. This
coupled with strong domestic demand has led tolower steel exports from China compared to
the previous year. China's steel net exportswere down 20% to 0.08 billion tonnes. Low level of
exports coupled with volatile rawmaterial prices have led to demand pull and cost push for
steel prices at various timesduring the year. Iron ore prices were positively affected by growth
in China and increaseddemand for higher quality raw material. Along with these factors
weather disruptions andproduction outages have contributed to coking coal price movements.
During the year Indiawitnessed steel (including alloy and stainless steel) demand growth of
approximately 7.8%in apparent steel use terms aided by strong demand in steel consuming
sectors i.e. AutoConstruction and Consumer durables etc. The Indian steel industry has
witnessed improvedutilisation levels (approximately 80%) even as the resolution process under
Insolvency andBankruptcy Code 2016 paves way for further consolidation within the industry.
This islikely to ease the financial stress and further improve utilisation levels within
theindustry. The domestic crude steel production was around 102 MnT with approximately91
MnT being consumed. India continued to remain a net exporter.
In Europe anti-dumping legislation domestic demand and currency movement have led toan
increase in demand by approximately 2% to 159 MnT as compared to 2016. Steel demandgrew
broadly in line with economic growth. Domestic steel production also witnessed anincrease in
market share as compared to imports.
2. Outlook for Steel Industry
As per the World Steel Association (‘WSA') global steel demand is expectedto grow at 1.8%
in 2018 to 1.62 billion tonnes and a further 0.7% in 2019 to reach 1.63billion tonnes. Broad-
based global growth momentum is expected to aid growth in advancedas well as developing
markets. However possible escalation of trade tensions between USand China and rising
inflationary pressure due to oil prices poses a significant risk tothe outlook. China's steel
demand which accounts for 46% of global steel demand isexpected to be fiat at 737 MnT in
2018 while declining by 2% in 2019. However steeldemand in rest of the world is expected to
grow at 3.4% in 2018 and 2.9% in 2019. Advancedeconomies are expected to grow at a steady
pace while much of the growth is likely to bewitnessed in Asia Middle-East and North Africa.
India's prospects continue to remainbright considering that India's per capita consumption of
approximately 65 kg is one-thirdof the global average and government intends to increase it to
approximately 160 kg byFinancial Year 2031 (CAGR approximately 8%) under the National
Steel Policy. Publicinvestment government initiatives such as ‘Make in India' Smart cities and
focus onrural development is likely to support growth in domestic demand while headwinds
exist inthe form of increased competitiveness and possible delay in increase of investment
cycleparticularly private investments. As per WSA Indian steel demand is expected to grow
at6-7% per annum in the next two years. In Europe increase in non-residential constructionand
strong manufacturing activities are expected to aid growth in steel demand. As perWSA EU is
expected to grow at 2% to approximately 166 MnT in 2018 and a further 0.8%
toapproximately167 MnT in 2019. Growth in automotive sector is likely to moderate
whilemachinery sector is expected to benefit from rising investment. At the same time
theconstruction sector is likely to witness growth in 2018 and 2019 on back of rise inconsumer
confidence and access to low cost finance.
E. Operations and Performance
1. Tata Steel Group
During the year under review the Tata Steel Group (‘the Group') recordedtotal deliveries of
25.27 MnT (previous year - 23.88 MnT). The turnover for the Group wasat 133016 crore
(previous year - 117420 crore) an increase of 13% over theprevious year. This increase is due
to additional volumes from Tata Steel Kalinganagar(‘TSK') which were capitalised from June
2016 as well as increasedrealisations. The chrome business also saw an increase in revenue
owing to higher volumes.The turnover at Europe increased due to improvement in average
revenue per tonne.
The Group EBITDA was 22045 crore (previous year - 17025 crore) an increase of 29.5%over
the previous year. This increase in EBITDA is attributable to higher volumes andimproved
realisations partly offset by increase in operating costs mainly raw materialsin India as well as
on account of favourable foreign exchange movement at Tata SteelGlobal Holdings. This
increase was partly offset by decline in steel spread andoperational issues encountered in
Europe and higher operating costs at Tata SteelThailand.
During the year the Group reported a consolidated profit after tax (includingdiscontinued
operations) of 17763 crore as against a consolidated loss of 4169 crore inthe previous year. The
year's profit includes an exceptional gain of 9599 crore asagainst a charge of 4324 crore during
the previous year. The exceptional gain during theyear is primarily due to non-cash accounting
surplus arising from the formation of the newBritish Steel Pension Scheme. The underlying
profit during the year is driven by increasedproduction due to ramp-up at the Kalinganagar
plant and improved selling prices.
2. India
During the year total deliveries at Tata Steel India were at 12.15 MnT(previous year - 10.97
MnT) recording an increase of 10.7% over the previous year. Theturnover from the Indian
operations was 60519 crore (previous year - 53261 crore) 13.6%higher than the previous year.
The increase in turnover was primarily through highervolumes at TSK and higher realisations
and volumes at Tata Steel Jamshedpur. Higherrevenue at Ferro Alloys and Minerals Divison
from ferro chrome and ferro manganese as wellas Wires and Tubes Division has also
contributed to the increase. The EBITDA from Indianoperations was 15800 crore (previous
year - 11944 crore) 32% higher than the previousyear. The increase in EBITDA is on account
of improved steel margins attributable tohigher volumes and realisations. The profit after tax
from Indian operations was 4170crore (previous year - 3445 crore) 21% higher than previous
year. The increase isprimarily on account of improved realisations and higher deliveries partly
offset byhigher exceptional charges over previous year.
The Company's branded products portfolio has been growing strongly and the
Companycontinues to invest in this portfolio with the aim of gaining greater market share.
Thebranded products contributed to around 46% of total sales. The Company continued its
focustowards value added products and achieved highest ever annual sales in value
addedsegments over last year through the various product development initiatives.
The Company is striving to continuously increase its presence in Services &Solutions space
for better consumer connect and experience. ‘Pravesh' (Steel doorsand windows) won the ‘Best
Online Marketing Campaign of the year' award by ET now.
3. Europe
During the year our European operations continued to focus on improving
operationalefficiencies and minimising environmental impact.
Our European operations recorded total deliveries of 9.99 MnT (previous year– 9.93 MnT).
The turnover increased from 52085 crore in the previous year to59985 crore during the year
thereby recording an increase of 7900 crore (15%). Theincrease can be attributed to
improvement in average revenue per tonne driven by improvedmarket conditions which were
a result of the imposition of anti-dumping measures alongwith marginal increase in deliveries
partly offset by adverse exchange impact ontranslation. The EBITDA from European
operations was 3792 crore as against 4705 crore inthe previous year. The decrease of 913 crore
(19%) was mainly due to decline in steelspread and operational issues encountered in Strip UK
and Strip MLE partly offset byimprovement in steel prices. The profit after tax reported during
the year was 11687crore as against a loss of 4515 crore in the previous year. The significant
increase inprofits is due to an exceptional gain of Regulated Apportionment Arrangement
credit.
During the year several strategic and critical re-structuring initiatives wereundertaken
including signing of Memorandum of Understanding between Tata Steel andthyssenkrupp AG
to create a new 50:50 joint venture company restructuring the BritishSteel Pension Scheme and
sale of Tata Steel UK 42-inch and 84-inch pipe mills inHartlepool.
During the year Tata Steel Europe won a ‘Steelie' the highest award for thesteel industry
presented by the World Steel Association for taking a new approach towardsdemonstrating that
steel is a highly sustainable product. BMW announced that TSE has beenawarded the best
performing supplier with a maximum rating of 100 for quality as pertheir rating system.
HUMAN RESOURCES ASPECTS
From its very inception, Tata Steel has been a showcase for worker welfare schemes. Today,
the Human Resource Management function is a strategic partner in our business. We
firmly believe that people are our greatest asset and we adopt best practices to ensure healthy
employee relations, employee growth and development as well as work satisfaction.
We have, over the decades, implemented trendsetting policies, the most recent being the first
in the manufacturing industry to have a 5-day work-week. We were also declared as the ‘Best
Place to Work in the Core Sector’ in the Business Today, India Survey 2016.
Besides Paternity Leave, Work from Home and Extended Maternity Leave, other initiatives
include Mosaic, a Diversity and Inclusion Campaign that emphasises meritocracy, gender
diversity, a friendly infrastructure for differently-abled employees and increased participation
of women in senior leadership.
PRODUCTS
Benefits
Tata Shaktee GC sheets are manufactured to the exact parameters of thickness, length, width
and zinc coating as per the specified requirements. Tata Shaktee Wide GC sheets and Wider
GC sheets are more cost effective since fewer sheets are required.
AWARDS
It gives us immense pleasure & pride to share with you that “Tata Shaktee” the leading steel
roofing brand in India has bagged RMAI Corporate Awards in 6 categories.
Rural Marketing Association of India (RMAI) is a premier industry body devoted to furthering
the cause of rural marketing. Since its inception in the year 2005, RMAI has been helping
marketers plan and implement their rural marketing activities across the country. With the
growing importance of the Rural Markets in corporate marketing strategies, there is an
increased recognition of rural specialists in helping companies plan and implement their rural
marketing activities. Rural Marketing Association of India (RMAI) had organized the fourth
edition of RMAI Corporate Awards on 18th January 2013 at Hotel Oodles, New Delhi to
recognize the best in rural marketing and communications. The awards have been initiated for
recognizing and promoting rural initiatives taken in the field of advertising, marketing, brand
activation and promotion. Those projects that have been undertaken during April 2010 to
March 2012 have been considered for this edition of corporate awards.
The award programme has also seen 60 best case studies that were presented by
corporate/brands such as Hero Motocorp, Mahindra, Tata Steel (Tata Shaktee), Tata Motors,
Reliance Broadcast, Airtel, Vodafone, Novartis, etc. who shared their experience and
knowledge of the rural market. This year, the judging panel comprised Santosh Desai , MD
and CEO, Future Brands Limited; Sunil Alagh, Founder & Chairman, SKA Advisors;
Neelamegham, President, NIILM Centre for Management Studies and Govindraj Ethiraj,
Founder of Ping Digital Broadcast.
“Tata Shaktee” team applied RMAI Corporate Awards in 6 categories out of total 17 categories.
Entire “Tata Shaktee” team is proud to share that our brand has bagged awards in all 6
categories.
Category I: Best Long Term Rural Communication Initiative for more than two years
Category III: Using never before used media – Innovative way of Communication
Category IV: Best use of traditional rural congregation Mela/Fair/Haat
Category VIII: Best Channel Marketing / Retailer Loyalty Programme
Category VII: Best use of Sales Promotion.
Category XIII: Best Low cost / Small budget initiatives / promotions
This financial year will ever remain memorable for the brand as it has bagged WOW awards
in 2 categories in May 12, has achieved its 2million ton landmark in July 12; it was awarded
“Super Brand” status in Dec 12 & now 6 RMAI awards in January 2013 and if everything goes
well this year can also witness highest ever sales.
“Tata Shaktee” has achieved several milestones while serving millions of its consumers across
the years, the brand will continue to bring innovations to benefit its consumer & recognition
will follow to appreciate its efforts. This goes without saying that “Tata Shaktee” would not
have achieved this height without the hard work & contribution made by all of its stakeholders
including our esteemed Channel Partners, Retailers and the employees across the organization
who touched this brand from their respective functions of Planning, Operations, R&D and
Marketing & Sales. We sincerely appreciate the contribution made by all the stake holders &
will look forward to the achievements of new heights.
INDUSRTY PROFILE
WORLD CONTEXT
Steel BSL Limited, with a large amount of debt in proportion to its equity (3.5 times more), is
a highly leveraged company. The company's consolidated debt stands at ₹31,839 crore, having
risen 18 per cent from a year ago. The Company is spending Rs. 260 billion to expand its
capacity to 12 million tonnes annually,from the present installed capacity of around one million
tonnes.
INDIAN CONTEXT
Tata Steel on 18 May 2018 announced the completion of its acquisition of the then Bhushan
Steel (BSL) through its wholly owned subsidiary Bamnipal Steel Ltd (BNPL), wrapping up the
resolution of the first case under Insolvency and Bankruptcy Code, 2016. The bankrupt firm
was among the 12 stressed assets the RBI had referred for NCLT proceedings last year.On
November 27, 2018 the company was renamed as Tata Steel BSL Limited from Bhushan Steel
Limited.
RECENT TRENDS
Tata Shaktee is Tata Steel’s flagship brand in the field of galvanized corrugated sheets.
Launched in the year 2000, the brand has recently completed 10 years of its journey. Over the
years, TATA Steel has altered the landscape of the roofing industry in India. The company has
been a pioneer in the field of manufacturing superior quality TATA Shaktee Galvanised
Corrugated (GC) sheets.
Manufactured with world class technological expertise, these GC sheets are stronger and longer
lasting than any other ordinary GC sheets. TATA Shaktee GC Sheets are not only made of
virgin steel processed at TATA Steel’s state-of-the-art Cold Rolling Mill but also have uniform
Zinc coating on them, which gives them the required strength in fighting the weather and to
last longest.
Living up to the company’s assurance of good quality and trustworthy products, these sheets
are manufactured to exact parameters of thickness, length, width and Zinc coating as per the
specified requirements. In addition to this, TATA Shaktee GC sheets are ISI certified under
Bureau of Indian Standards (BIS). (IS 277) All in all, TATA Shaktee GC sheets give more
value for money and are the best choice for anyone looking for a product that will perform year
after year.
RELATED TABLES
) Finance costs and Net finance charges
in Rs.crores
Change
FY 14 FY 13
%
Tata Steel 1,821 1,877 (3)
Tata Steel Europe 3,606 3,090 17
NatSteel Holding 61 56 9
Tata Steel Thailand 76 77 (1)
Others 1,428 1,167 22
Eliminations & adjustments (2,655) (2,299) 15
in Rs.crores
Change
FY 14 FY 13
%
Tata Steel 1,472 1,546 (5)
Tata Steel Europe 3,508 2,996 17
NatSteel Holding 57 51 12
Tata Steel Thailand 72 74 (3)
Others 402 250 61
Eliminations & adjustments (1,656) (1,400) 18
Change
FY 14 FY 13
%
Tata Steel (142) (675) (79)
Tata Steel Europe – (7,340) (100)
NatSteel Holding – (24) (100)
Tata Steel Thailand – (518) (100)
Others – 673 (100)
Eliminations & adjustments 114 494 (77)
Inc./ Change
FY 14 FY 13
(Dec.) %
Tata Steel 1,718 1,473 245 17
Tata Steel Europe 1,053 887 166 19
NatSteel Holding 117 89 28 32
Tata Steel Thailand 259 280 (21) (8)
Others 254 236 18 8
Eliminations & adjustments – – – –
Change
FY 14 FY 13 Inc./(Dec.)
%
Finished Goods 10,016 8,291 1,724 21
WIP 5,768 4,946 823 17
Raw Materials 7,695 7,890 (195) (2)
Inc./ Change
FY 14 FY 13
(Dec.) %
Tata Steel 4,290 3,785 505 13
Tata Steel Europe 16,652 14,858 1,794 12
NatSteel Holding 1,311 1,118 193 17
Tata Steel Thailand 585 639 (54) –
Others 962 995 (33) (3)
Eliminations & adjustments (321) (268) (53) 20
Change
FY 14 FY 13
%
Tata Steel 771 797 (3)
Tata Steel Europe 7,510 5,824 29
NatSteel Holding 751 726 3
Tata Steel Thailand 128 166 (23)
Others 19,283 15,891 21
Eliminations & adjustments (12,437) (9,410) 32
Change
FY 14 FY 13
%
Net Cash from operating activities 13,146 14,035 (6)
Net Cash flow from investing activities (16,451) (13,297) 24
Net Cash flow from financing activities 1,014 (1,780) (157)
Change
FY 14 FY 13
%
Gross Debt 81,609 68,507 19
Less: Cash and Bank balances (including non-current balances) 8,704 9,892 (12)
Less: Current investments 2,668 760 251