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Directors Report of Tata Steel Ltd.

Mar 31, 2015

To the Members,

The Directors take pleasure in presenting the 108th Annual Report on the business and operations of your Company along with the standalone and consolidated summary financial statements for the year ended 31 March, 2015.

A. FINANCIAL RESULTS

Rs crores Tata Steel Standalone 2014-15 2013-14

Net revenue from operations 41,785.00 41,711.03

Total expenditure before finance cost, depreciation (net of expenditure 31,776.20 28,894.13 transferred to capital)

Operating Profit 10,008.80 12,816.90

Add: Other income 582.78 787.64

Profit before finance cost, depreciation, exceptional items and taxes 10,591.58 13,604.54

Less: Finance costs 1,975.95 1,820.58

Profit before depreciation, exceptional items and taxes 8,615.63 11,783.96

Less: Depreciation 1,997.59 1,928.70

Profit before exceptional items and taxes 6,618.04 9,855.26

Add/(Less): Profit on sale of non-current investments 806.10 -

Add/(Less): Profit on sale of non-current assets 1,146.86 -

Add/(Less): Provision for diminution in the value of investment/doubtful (62.11) (141.76) advances/impairment of non-current assets

Profit before taxes 8,508.89 9,713.50

Less: Provision for current taxation 1,908.60 3,098.02

Less: Provision for MAT credit (117.21) -

Less: Provision for deferred taxation 278.38 203.29

Profit/(Loss) after taxes 6,439.12 6,412.19

Add: Share of profit of associates - -

Add/(Less): Minority interest - -

Profit/(Loss) after tax, minority interest and share of profit of associates - -

Distribution on hybrid perpetual securities 266.11 266.04

Tax effect on distribution of hybrid perpetual securities (90.45) (90.43)

6,263.46 6,236.58

Add: Balance brought forward from the previous year 29,430.58 24,616.17

Add: Profit and Loss account balance relating to acquisitions - 256.45

Add: Adjustments on account of transitional adjustments (127.80) -

Balance 35,566.24 31,109.20

Which the Directors have apportioned as under to:-

(i) Dividend on Preference Shares - -

(ii) Proposed dividend on Ordinary Shares 776.97 971.21

(iii) Tax on dividends 153.02 66.19

(iv) General Reserve 643.91 641.22

(v) Statutory Reserve - -

(vi) Special Reserve - -

(vii) Capital Redemption Reserve - -

Total 1573.90 1678.62

Balance to be carried forward 33,992.34 29,430.58

Tata Steel Group 2014-15 2013-14

Net revenue from operations 1,39,503.73 1,48,613.55

Total expenditure before finance cost, 1,26,967.98 1,32,202.54 depreciation (net of expenditure transferred to capital)

Operating Profit 12,535.75 16,411.01

Add: Other income 796.18 516.81

Profit before finance cost, depreciation, 13,331.93 16,927.82 exceptional items and taxes

Less: Finance costs 4.847.75 4,336.83

Profit before depreciation, exceptional 8,484.18 12,590.99 items and taxes

Less: Depreciation 5,943.60 5,841.22

Profit before exceptional items and taxes 2,540.58 6,749.77

Add/(Less): Profit on sale of non-current 1,315.34 18.20 investments

Add/(Less): Profit on sale of non-current 1,146.86 - assets

Add/(Less): Provision for diminution in the (6,390.87) (45.84) value of investment/doubtful advances/ impairment of non-current assets

Profit before taxes (1,388.09) 6,722.13

Less: Provision for current taxation 2,214.71 3,482.64

Less: Provision for MAT credit (117.32) (0.21)

Less: Provision for deferred taxation 470.02 (424.27)

Profit/(Loss) after taxes (3,955.50) 3,663.97

Add: Share of profit of associates 16.69 0.84

Add/(Less): Minority interest 13.29 (69.92)

Profit/(Loss) after tax, minority interest (3,925.52) 3,594.89 and share of profit of associates

Distribution on hybrid perpetual securities 266.11 266.04

Tax effect on distribution of hybrid perpetual (90.45) (90.43) securities (4,101.18) 3,419.28

Add: Balance brought forward from the 8,848.24 7,039.38 previous year

Add: Profit and Loss account balance relating to - 222.48 acquisitions

Add: Adjustments on account of transitional (136.24) - adjustments

Balance 4,610.83 10,681.14

Which the Directors have apportioned as under to:-

(i) Dividend on Preference Shares - 0.10

(ii) Proposed dividend on Ordinary Shares 776.97 971.21

(iii)Tax on dividends 164.20 80.22

(iv) General Reserve 729.77 730.16

(v) Statutory Reserve 66.63 -

(vi) Special Reserve 1.20 1.60

(vii)Capital Redemption Reserve 46.31 49.62

Total 1785.08 1832.02

Balance to be carried forward 2.825.75 8,848.23

Note:

The Company recognised a non-cash write-down of goodwill and assets in the consolidated financial results in Q4 FY ''15 of Rs. 4,951 crores, mainly related to the Long Products UK business in Tata Steel Europe, which is now fully impaired.

The impairment also included a write-down of investments in overseas raw materials projects in Mozambique and Ivory Coast and the Taconite iron ore project in Canada primarily because the economic viability of these projects remains uncertain at the current level of commodity prices. Additionally, the Company undertook a non-cash impairment charge of Rs. 1,577 crores in the first quarter of the Financial Year 2014-15 related to its investment in the Mozambique Coal Project. The total impairment charge for Financial Year2014-15 is Rs. 6,391 crores in the consolidated financial results after offsetting it with the reversal of impairments taken on account of Gopalpur land in the earlier years. The Company''s liquidity position and financial covenants are unaffected by the above non-cash write-down.

Transfer to Reserves

We propose to transfer Rs. 643.91 crores to the general reserve. An amount of Rs. 33,992.34 crores is proposed to be retained in the profit and loss account.

Dividend

The Board recommended a dividend of Rs. 8 per Ordinary Share on 97,12,15,439 Ordinary Shares of Rs. 10 each for the year ended 31 March, 2015. (Financial Year 2013-14: Rs. 10 per Ordinary Share on 97,12,15,405 Ordinary Shares of Rs. 10 each).

The dividend on Ordinary Shares is subject to the approval of the shareholders at the Annual General Meeting (AGM) scheduled on 12 August, 2015. The total dividend pay-out works out to 14% (Financial Year 2013-14: 16%) of the net profit for the standalone results.

The Register of Members and Share Transfer Books will remain closed from 25 July, 2015 to 12 August, 2015 (both days inclusive) for the purpose of payment of the dividend for the Financial Year ended 31 March, 2015 and the AGM.

Capex and Liquidity

During the year, the Company spent Rs. 13,492 crores on capex, deploying a large proportion towards the phase 1 of 3 million tonnes Greenfield Kalinganagar Project, Odisha. Despite this significant spend, the Company was able to keep the gross debt level stable during the year. The Company''s liquidity remains strong at Rs. 22,000 crores including undrawn lines. The Company also continues to pursue its strategy of exiting non-core assets.

B. EXTERNAL ENVIRONMENT

Global Economic Outlook

Financial Year 2014-15 witnessed volatile markets as economies around the world, found themselves at various points in the economic cycle, with monetary easing being the predominant theme across many geograp -hies. However, growth remained subdued globally, as adverse factors more than offset oil price decline, the quantitative easing in Europe and the growth in South-East Asia.

According to the International Monetary Fund, the global economy is expected to grow at ~3.4% in Financial Year 2015-16. This is due to the fact that slowdown in production in China and Russia is expected to be more than offset by recovery of the developed economies and growth in South-East Asia. However, currency movements and interest rates continue to be risks for growth in many regions.

Developed economies are expected to grow moderately. After posting stronger and broader growth at the end of 2014, the USA is carrying the momentum into 2015 with increased consumer spending and trade activity, falling unemployment rate and improved investor sentiment. Similarly, the Eurozone is improving amidst monetary uncertainty driven by a depreciating Euro and geo-political tensions with Greece, Russia and Ukraine in an environment of relatively loose monetary policy. While, the lower energy prices have helped improving consumer sentiment, the Euro continued to depreciate against the US$ sharply especially after the Swiss national bank removed Swiss Franc''s peg to the Euro. The European Commercial Bank (ECB) has exceeded market expectations with announced expanded quantitative easing programme which has boosted equity and bond markets.

Economic growth in South Asia is expected to be driven by strong consumption and increasing investment in the region. India is expected to be a major contributor to this growth as it is set to double its economic size by 2019 and see significant improvement in intensity of steel use per capita. China witnessed its slowest growth during 2014 in the last 25 years. The lower growth trend in China has adversely impacted commodity markets, including putting pressure on iron ore and steel prices.

Steel prices are now increasingly aligning to global export prices as markets strike a balance between imports and domestic demand. China''s waning demand and resultant rise in exports poses a risk to leveraging improving domestic demand in South Asia and Europe. Further, movement of currencies against US$ would also have a significant impact on the movement of global steel and raw material prices.

Outlook for India

Financial Year 2014-15 saw India emerge as a bright spark even as advanced and emerging economies grappled with uncertainty and slower growth. Economic growth in India peaked in the second quarter of the fiscal at 8.2% (under new series) but remained moderate in the third and fourth quarter at around 7.5%. Cyclical macro parameters like inflation, current account deficit have improved during the year due to domestic as well as external factors. Indian rupee was one of the best performers in the world, registering a 4% decline in value as against the US$ compared to the rest of the world grappling with devaluation of their currencies. However, domestic steel producers witnessed subdued sales as increased imports from China and Russia resulted in sharp cut to steel prices in India over the past six months.

The Indian economy is in the midst of significant structural change and is expected to embark on a sustained economic growth cycle. According to World Bank, India is set to be the world''s fastest growing major economy in the Financial Year 2015-16 at 7.5% and gradually move up to 8% in the next two financial years. However, this economic growth will depend on steady implementation of reforms aimed to improve productivity and competitiveness. Government initiatives like ''Make in India'' will stimulate manufacturing growth while its focus on infrastructure should revive the investment cycle. This should help India grow while being fiscally prudent. States are also expected to play a key part in GDP growth due to their increased finances via greater share of government taxes, coal auctions etc.

Indian steel demand is expected to reflect improving macro-economic environment. Steel end use sectors are expected to perform better compared to previous financial year. Infrastructure projects like dedicated freight corridor etc., are gaining momentum and the steady decline in stalled projects coupled with hike in import duty in both flat and long products should stimulate steel demand. Recent weakness in Indian rupee has also helped competitiveness of domestic steel players. However, steel prices are expected to remain under pressure from Chinese exports and increased domestic competitiveness.

Outlook for Europe

European economy is displaying increasing signs of recovery although it is regional and is still constrained by weak investment activity and high unemployment. Geo-political instability, capital flow volatility and deflation risk continue to exist but the impact of these risks has come down. On account of this, European steel demand is expected to be modest in 2015 following the decline experienced in the second half of the Financial Year 2014-15. Forecast suggest demand to grow in the region of 2% in 2015 considering the positive effects of the weaker Euro. At 150 million tonnes, however, European demand in 2015 would still be around 25% down on the pre-crisis peak and 10% below the pre-crisis norm of around 165 million tonnes.

Market spreads for steel in Europe improved marginally in 2014 on the back of the sharp drop in raw materials prices. However, overcapacity in China and slowdown in domestic demand, led to a 50% increase in Chinese exports to the rest of the world and put pressure on global steel prices. In 2015, steel margins are expected to remain under pressure and steelmakers to focus on operational efficiencies and value addition to customers.

C. OPERATIONS AND PERFORMANCE

Tata Steel Group

The Tata Steel Group recorded total deliveries of 26.3 million tonnes in Financial Year 2014-15 as compared to 26.6 million tonnes during the previous financial year. While deliveries at Indian operations were higher by 3% as compared to the previous year, Tata Steel Europe, NatSteel Holdings (NSH) and Tata Steel Thailand (TSTH) reported lower deliveries. Tata Steel India reported higher deliveries due to better demand in the retail segment and higher levels of production. However, deliveries at Tata Steel Europe were lower, in line with lower production due to operational challenges at its Long Product Division. The closure of key billet suppliers in China coupled with low priced Chinese imports in Singapore, have resulted in lower deliveries at NSH. TSTH reported lower deliveries primarily on account of low demand resulting in continued pressure on spreads.

During the year, the consolidated profit before interest, depreciation, exceptional items and taxes of the Tata Steel Group was Rs. 13,332 crores, lower by 21% over the previous year. Consequently, the consolidated profit before exceptional items and taxes was Rs. 2,541 crores in Financial Year 2014-15 compared to Rs. 6,750 crores in the previous year. During the year, the Company reported an exceptional loss of Rs. 3,929 crores in its consolidated accounts which primarily represents the non-cash write down of goodwill and other assets of Rs. 1,273 crores and Rs. 5,118 crores respectively. This write down in certain non-performing business units within the Tata Steel Group, primarily relating to European operations and investments in coal assets has been partly offset by profit on sale of land at Borivali, India, and profit on sale of Company''s stake in The Dhamra Port Company Limited.

India

The Company''s Indian operations are fully dependent on captive iron ore from Noamundi, Joda and Khondbond and partly on captive coal from West Bokaro and Jharia region. For the first time in the history of the Company, the operation of the captive iron ore mines were restricted. Iron ore mines at all locations remained closed for a period of 30 days. The total impact of this was a reduction in supply of 5.2 million tonnes of iron ore. Further, significant drop in demand for steel in China and devaluation of Russian rouble aggravated the conditions putting substantial pressure on margins due to influx of imports into the country.

The Company was quick in responding to the challenges through a series of risk mitigation measures and also through improvements in operations and implementing the following strategic initiatives to mitigate the impact of mining crisis in India:

- Setting up of cross functional task force for procurement of iron ore from domestic and international sources;

- Initiating appropriate steps on the logistics front to ensure delivery of raw materials from different locations. All the major east coast ports were utilised to receive the imported iron ore;

- Appropriately modifying the sinter and pellet plants to accommodate ore from different sources. Utilising the opportunity to fine tune processes for Blast Furnaces and achieving benchmark fuel rate despite raw material constraints; and

- Working on product mix enrichment and value added products to ensure better realisation and delivery compliance in chosen segments.

The Jamshedpur plant operated at an optimum capacity with the full ramping up of 2.9 mtpa expansion project. This, along with better demand in retail segment, led to a 3% increase in deliveries over the previous year. This was another year of record production and deliveries, as the Company achieved 10.16 million tonnes of hot metal production and 9.07 million tonnes of saleable steel production. Likewise, the Company also reported best ever deliveries of 8.75 million tonnes. The Company was able to report these achievements despite challenging market conditions.

For the Financial Year 2014-15, the profit before interest, depreciation, exceptional items and taxes for the standalone entity was Rs. 10,592 crores which is lower by 22% compared to the previous financial year.

In addition to the exemplary best ever production performance, there were several other best performances recorded by the Company during the Financial Year 2014-15, some of which are as follows:

- Annual sales in the Automotive segment at a record 1.37 million tonnes, as against 1.17 million tonnes in the previous year.

- Annual Tata Tiscon sales at a record 1.23 million tonnes, as against 1.09 million tonnes in the previous year.

- Annual Tata Shaktee sales at a record 0.23 million tonnes, as against 0.21 million tonnes in the previous year.

- Annual Durashine sales at a record 100k tonnes (20% more than the previous best).

- Annual sales in the LPG segment at a record 85k tonnes and a market share of 36% (23% in the previous year).

Total Quality Management

The Company has a strong culture of Total Quality Management (TQM) that is embedded in the organisation''s DNA. The continuous improvement programmes commence at the shop floor and spans across multiple organisational levels, with senior management personnel addressing more complex problems. TQM aligns the long and complex value chain spanning activities from mining to operations to marketing of steel products and services.

The Company motivates innovative thinking through ''aspirational target setting'' In this approach, stretch targets are positioned as desired intentions as a driver for teams to collaborate and come up with innovative ideas to reach as close as possible to the aspirational target. Formal initiatives such as ''Kar Vijay Har Shikhar'' and ''Innovent'' facilitate the generation of innovative ideas through this approach and also support implementation. In addition, the leadership encourages learning from other industries, which has helped the Company to innovate distribution channels in a unique way in the steel industry.

The focus on innovation has helped the Company improve its products, services and solutions to satisfy customer needs. For example, the ''Innovent'' programme has enabled the Company to enter the steel doors segment. Steel doors have been introduced under the brand name ''Pravesh'' and have received a positive response from customers, thereby creating a new market for the Company.

Marketing and Sales

The Company is operating in the domestic steel industry with a growth-oriented strategy and will continue to focus on the same in the coming years. Approximately 98% of the steel value chain products are sold in the domestic market. While the Company has customers and customer groups all across India, the concentration of the overall sales is mostly in the eastern and northern parts of the country. In the raw material value chain, Ferro Alloys and Minerals Division (FAMD) exports ~49% of its chrome and 27% of manganese products to countries including Japan, Korea and China.

Products & Brands

The Company''s branded products in India have a country wide reach to serve more than 3 million consumers annually through a pan India distribution network, focussed on delivering a distinctive consumer experience. Currently we have a network of 65 distributors and over 9,000 dealers retailing our brands. During the year, we launched Steelium Neo - CR steel and Pravesh - wood finished steel doors.

Tata Tiscon and Tata Shaktee are now the most awarded and biggest steel brands in India. In the current year, more than 85% of Tiscon products have been sold in Tier 3 cities and over 90% have been sold by clubbing them together with Tiscon Superlinks and Wiron. During the year, the Company increased Roof Junction solution (2,600 installations) to more centres for fixing Tata Shaktee/Durashine sheets.

Europe

During the year, European production and deliveries were stable, despite being constrained by some demand and operational issues. In the Financial Year 2014-15, liquid steel production in Europe, at 15.16 million tonnes, was slightly (2.5%) lower than Financial Year 2013-14. Deliveries in Financial Year 2014-15 nearly matched the improved volumes of the previous year (1.4% lower).

Whilst this is a relatively stable performance, the Company sees scope for improved sales in future as it continues to work on the precision of its production and delivery performance.

Lower raw material prices led to decline in market prices which resulted in an 8% reduction in European turnover from the previous year - turnover in Financial Year 2014-15 was £8.11 billion.

Despite lower turnover, the business made a significant improvement in its financial performance, with EBIT turning positive at £102 million. The market spread did improve from the previous year and the Company''s enhanced product mix also gave its spread a boost.

EBITDA in Financial Year 2014-15 was £435 million, up by 39% over the previous year. The European operations EBITDA improvement is built on a foundation of lower costs, better supply chain management, supported by increasing sales of higher-value steels which improves its average market spread.

Despite deteriorating market conditions in the second half of Financial Year 2014-15, the year as a whole demonstrated further significant progress on its journey towards sustainable operating and financial performance.

Best Steel For Tomorrow

The programme ''Best Steel For Tomorrow'' in IJmuiden Works in Netherlands was launched by Tata Steel Europe and has been delivering significant improvements. The steel production on the IJmuiden site was 7 million tonnes steel in Financial Year 2014-15. As a result of this program, IJmuiden''s manufacturing stability improved significantly and several plants set new production records. The Direct Sheet Plant realised an annual record of 1.307k tonnes, Hot Strip Mill 2 an annual record of 5.220k tonnes, Pickle Line 22 an annual record of 1.207k tonnes. Cold Mill 22 achieved a new record of 818k tonnes. Production volumes in tinplate mills were higher than last year. Significant improvement in the product mix and precision were achieved too, which increased the earnings. As a consequence of these significant improvements, the IJmuiden Works is considered to be a benchmark site in Europe for sustainable profit generation.

Research & Technology programme at IJmuiden covers process development and product market sector developments, both of which made significant contribution towards robust and stable manufacturing processes and better use of raw materials. Product market sector developments helped development of new steel products with particular emphasis on the automotive, lifting & excavation, construction, energy & power and rail sectors.

South-East Asia

The profitability of the operations in South-East Asia was adversely affected by influx of low priced material from China, poor market conditions and shrinking margins.

During the year, NatSteel Holdings Pte. Ltd. (NSH) recorded a sales volume of 2.46 million tonnes as against the sales volume of 2.68 million tonnes in the previous year. The operations in China experienced lower than planned sales due to the closure of key billet suppliers and poor market conditions.

During the year, NSH posted a turnover of Rs. 9,028 crores, about 26% lower than the previous year. It posted negative EBITDA of Rs. 571 crores as against a profit of Rs. 246 crores in the previous year. Profitability was adversely affected by the significant contraction in scrap-rebar spread by over S$60/tonne from last year.

Similarly, during the year, TSTH recorded total sales of 1128k tonnes, which was lower by 13% as against the previous year. The EBITDA in the Financial Year 2014-15 was at Rs. 71 crores as against Rs. 193 crores in the previous year.

D. KEY DEVELOPMENTS

Mining

During the year, the Company faced significant challenges in its mining operations.

Historically, the Company has been operating its mining activities in Odisha and Jharkhand with all statutory clearances. In Odisha, on the basis of the direction issued by Honourable Odisha High Court, mining operations recommenced in Joda East, Katamati, Bamebari and Joda West Mines from mid December, 2014.

Mining operations in Sukinda Chromite Mine commenced based on the favourable express order issued by the Government of Odisha beginning December, 2014. Likewise, operations resumed in the Noamundi mines based on the express orders issued by the Government of Jharkhand in January 2015. During the year, the Company also commenced mining of chrome ore and production of ferro alloys.

The Mines and Minerals Development and Regulation (MMDR) Amendment Act 2015 was passed by the Indian Parliament and notified in the Gazette on 27 March, 2015. The amended Act addresses regulatory requirements on new allocations, transition provisions, etc.

In accordance with the amended provisions of law, supplementary Lease Deeds have been executed for the Joda East (Iron ore), Khondbond (Iron and Manganese), Joda West (Manganese), Manmora (Manganese), Bamebari (Manganese), Tiringhpahar (Manganese) and Gomardih (Dolomite) mines. All the leases have been extended up to 31 March, 2030 except Gomardih, a non-captive mine, which has been extended till 2020. The lease execution process is underway for Katamati (Iron) mines. A decision on Sukinda (Chrome) and Malda (Manganese) is awaited. The Company is engaged in discussions with the Government of Jharkhand on the extension of the mining lease for the Noamundi Iron Ore Mine.

Greenfield Project in Odisha

The first phase of the Greenfield expansion project at Odisha is at an advanced stage of execution. The construction of the Kalinganagar Project has progressed well and the heating of the coke ovens commenced in the second week of May, 2015 after all the clearances were received. The project will follow a commissioning sequence over the next six months as each facility gets commissioned. Commercial production is expected to commence in the second half of the financial year. The Kalinganagar Steel Plant is a state-of-the-art 3 million tonne plant that will increase the Company''s production capacity, widen its product portfolio and diversify the customer base. It is also aligned to ''Make in India'', an initiative of the Government of India. Thus far, the Company has spent close to Rs. 21,000 crores. The Company is also making significant investment towards social infrastructure and building greater community in the region.

Divestment of Long Products Unit in the UK

During the year, following a detailed review of its product portfolio, Tata Steel Europe signed a Memorandum of Understanding (MoU) with Klesch Group to undertake detailed due diligence and negotiations for the potential sale of the Long Products Europe business and associated distribution activities. About 6,500 people are employed at Long Products Europe and its distribution facilities. The carrying value of the investment has been fully impaired during the year as part of annual impairment analysis.

Developments in the British Steel Pension Scheme

The British Steel Pension Scheme is burdened with long-term challenges such as a high number of pensioners as compared to active employees and low bond yields especially in comparison to the relatively high inflation rates. The Company has been pursuing de-risking options to ensure a sustainable arrangement.

Tata Steel UK Limited, the Company''s subsidiary has been in discussions with the UK trade unions with the aim of creating more sustainable pension arrangements for UK employees by reducing benefits and liabilities. The negotiations with the UK unions concluded without support from the trade unions on proposed modifications to the Scheme. UK Unions carried out a ballot for industrial action.

The UK business has been a challenge for Tata Steel Europe and Tata Steel Group, and has caused significant financial stress in the past. The Group has made significant investments and supported the business over the years. We hope the employees and stakeholders appreciate the support of the Tata Steel Group in sustaining the UK business.

The Company remains open to unconditional talks with the unions to find resolutions to the challenges facing the pension scheme.

Continuous Annealing and Processing Line Joint Venture

During the year, Jamshedpur Continuous Annealing and Processing Company Private Limited (JCAPCPL), a 51:49 joint venture of Tata Steel Limited and Nippon Steel & Sumitomo Metal Corporation, set up India''s first continuous annealing and processing line that will produce 6,00,000 tonnes per annum of high-quality cold rolled sheets exclusively for the automotive industry, including outer panels and high tensile sheets.

Divestment of The Dhamra Port Company Limited (DPCL)

During the year, the Company divested its 50% stake in DPCL for an Enterprise Value of around Rs. 5,500 crores. DPCL was a 50:50 joint venture between L&T Infrastructure Development Projects Limited (L&T IDPL) and the Company. The transaction was successfully completed on 23 June, 2014.

Bond offering

On 25 July, 2014, the Company successfully issued dual tranche Reg S Unsecured Bonds of US$ 1.5 billion in the international markets. The issue comprised of US$ 500 million 4.85% Unsecured Bonds due on 31 January, 2020 and US$ 1 billion 5.95% Unsecured Bonds due on 31 July, 2024 by ABJA Investment Co. Pte. Ltd., a wholly owned subsidiary of the Company incorporated in Singapore. The issue is guaranteed by the Company and the bonds are listed on the Frankfurt Stock Exchange. This was Company''s debut US$ bond issuance and forms part of the Company''s long-term financing strategy to raise capital internationally. The success of bond issue enabled the Company to diversify the investor base, increase maturity profile and optimise the financing and capital structure.

Refinancing

Tata Steel UK Holdings Limited, 100% indirect subsidiary of the Company executed agreements for the refinancing of its debt through term loans and revolving credit facilities of €3.05 billion. The debt was originally incurred in relation to the acquisition of the Corus Group plc in 2007. The new financing structure consists of a 5-year loan of €370 million, a 6 year revolving credit facility for working capital purposes of £700 million and a 7-year loan of €1.8 billion, with more favourable terms and pricing relative to the earlier debt.

Further, Tata Steel Global Holdings Pte Ltd., another 100% indirect subsidiary of the Company, incorporated in Singapore had also executed agreements for loan facilities of US$ 1.5 billion comprising of a 5-year loan of US$ 700 million and a 7-year loan of US$ 800 million. The proceeds of this loan will be used to repay term debts, term out working capital and fund investment needs of the Tata Steel Group outside India.

E. TATA STEEL GROUP INITIATIVES

Health and Safety

Health and safety is the top most priority across the Tata Steel Group and we aspire to set the benchmark on this front within our industry. We have already made some significant achievements in Europe and are working on similar initiatives in India and South-East Asia by launching the ''Committed to Zero'' programme.

All efforts are being made to enhance safety standards and processes in order to minimise safety risks in all our operations. The Company continues to broaden the impact of its programmes, including those from DuPont (the global benchmark), to establish a strong safety culture based on inculcating safe behaviour among its employees, contractors and their employees. The Lost Time Injury Frequency Rate for Financial Year 2014-15 improved to 0.3, an improvement of 40% over the previous year. Extensive work is in progress to ensure risk control in many hazardous processes including underground mining. The Company has made specific improvements in construction activities, road traffic management and contractor management.

In order to build a sustainable work place environment, a common health and safety management system across Tata Steel Group is being implemented. This includes a cross auditing activity to enhance sharing experiences and best practices across regions. During the year, Tata Steel was again recognised by its peers in the World Steel Association, with a Health and Safety recognition award for Tata Steel Europe.

The key themes for the next three years include a safety strategy for the organisation that has been co-created with the senior leadership team and includes six strategic priorities. These are:

- Safety Leadership Development

- Organisational Safety Competency and Capability Improvement

- Contractor Safety Risk Management

- Road and Rail Safety Risk Management

- Process Safety Management, Integrated Emergency Response, Infrastructure Integrity Management

- Occupational Health/Industrial Hygiene

Environment

Tata Steel Group is committed to minimising the environmental impact of its operations through adoption of sustainable practices and continuous improvement in environmental performance. Care for environment under Corporate Citizenship is embedded in the Company''s vision. The Company acknowledges the fact that carrying capacity of nature is finite and that industry has to play an important role in protecting the environment and has to avoid disturbing the ecosystem as a result of its operations.

We continue to focus on operational excellence aimed at resource and energy efficiency, along with recovery, reuse and recycling of waste to minimise the ecological footprint of the organisation. For example, 100% of our manufacturing operations are certified by the independently verified international environmental management standard, ISO 14001.

The Company is also engaging with International Union for Conservation of Nature (IUCN) the largest global NGO network for environment, for base lining biodiversity in our mining locations and developing processes for addressing biodiversity including a Biodiversity Management Policy. Besides, the Company has also started engaging with Natural Capital Coalition for valuation of natural capital usage by companies.

Sustainability

The sustainability initiatives at Tata Steel are driven by the Tata Group core values and ethics. Our sustainability practices rest on the triple bottom-line (economic, social and environment). In 2014 we published our sustainability report using the Global Reporting Initiative (GRI) G3.1 guidelines.

The Company continues to advocate and influence positive and affirmative sustainability actions. Our senior leaders work with industry bodies such as the Confederation of Indian Industry on implementing sustainability practices. Our leaders also participated in the World Economic Forum in Davos in January 2015 and engaged in discussions with global leaders on the year''s theme, "The new global context".

During the year, the Company took several initiatives in various aspects of sustainability. At the strategic level, the Company embarked on a Scenario Planning exercise to envision the future, looking at economic, regulatory and stakeholder scenarios in order to develop our next vision and action plans. The annual business planning process has been strengthened with the inclusion of Social, Environmental and Regulatory aspects in the Objectives and Strategies of the Company. In order to drive the various aspects of sustainability in a more focussed way, the Company put together consolidated governance mechanisms with clear demarcation of roles between the Board, its Committees and the Management.

During the year, the capital projects for environment have progressed significantly. As a result, air pollution levels of the Jamshedpur plant have been significantly reduced as also the specific water consumption and effluent discharge. The Company has initiated steps to replace all office and street lights in the plant and in the mines with LED lights to improve energy efficiency. An environment research team has been formed in R&D for working on projects to reduce the environmental impact of our operations while improving resource efficiency.

We are happy to report that the Company has been duly recognised for its efforts. During the year, the Company won the ''CII ITC Sustainability Awards - Business of the Year'' trophy and the ''IIM Sustainability Award''. The Company was also included in the DJSI Sustainability Index for Emerging Markets.

F. HUMAN RESOURCES MANAGEMENT

In keeping with the tradition of pioneering Human Resource practices across geographies, the Human Resources Management (HRM) function has driven myriad changes in the way Human Resources are managed and developed, striking a balance between business needs and individual aspirations. HRM has now become a business partner and is taking key decisions not just with respect to Human Resource but businesses as a whole. It focusses on improving the way of life, work culture, employee engagement, productivity, effectiveness and efficiency.

During the year, several employee centric policies were launched to cater to the needs of the work force and also to keep the Company up to date with external realities. Policies like adoption leave, extension of maternity leave (12 weeks to 18 weeks), programmes like Stepathlon and Umang (Employee assistance programme) for physical and emotional well-being, and professional counselling services were launched in the interest of the employees'' changing needs.

The Company initiated multiple actions to keep the workforce engaged. Actions are being taken to increase gender diversity, providing greater amenities for contractor workforce, improving employee skills and enhancing employee productivity. In addition, policies are being implemented to support affirmative action through training and enabling employment. The Company has also adopted the SA8000 framework to ensure Human Rights for the workforce.

In the area of industrial relations, wage revision was successfully concluded with a win-win proposition for all stakeholders. To sensitise the workforce with Tata Values and Joint Consultations, ''Nav-Chetna'' and the Tata Story programme were launched and are being conducted across locations.

In the area of Talent Management, focussed campus branding and relationship building initiatives were successfully launched. Among these are Steel-a-thon in B-Schools and Mind over Matter in technical schools.

An outbound leadership programme, Tata Outbound Leadership Convention at Uttarkashi, was launched in partnership with TSAF and National Outdoor Leadership School (NOLS) of USA for the leadership team. A programme on ''Transformational Leadership'' was launched in February 2015 for the leadership team.

The ''Understudy'' policy for timely succession planning and ''Retainership'' policy for Superannuated Expert as well as External Experts were rolled out for building technical expertise and to strengthen the leadership development process.

An academy approach was initiated for capability development, to systematically drive the design and delivery of functional and managerial programmes for respective functions such as Finance, Supply Chain, Procurement, HR etc.

Virtual classroom training using centralised training infrastructure and resources was launched for mines in remote locations such as mines in West Bokaro, Bamnipal, KPO and Jharia.

Particulars of Employees

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this report [Annexure 1].

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits set out in the said Rules forms part of the Report.

However, having regard to the provisions of the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. The said information is available for inspection at Registered Office of the Company during working hours. Any member interested in obtaining such information may write to the Company Secretary, at the registered office and the same will be furnished on request. Further the details are also available on the Company''s website: www.tatasteel.com.

G. CORPORATE SOCIAL RESPONSIBILITY

The Company''s vision is to be a global benchmark in value creation and corporate citizenship and the Company''s long-term Corporate Social Responsibility (CSR) objective, is to improve the quality of life of the communities through long-term value creation for all stakeholders. This objective is in alignment with the Tata Group Core Purpose. Towards achieving this, the Company has been a pioneer in various CSR initiatives.

We continue to remain focussed on improving the quality of life and engaging communities through health, education, sports and infrastructure development. During the last three years, the Company has spent over Rs. 550 crores on CSR activities (Rs. 171 crores in Financial Year 2014-15).

The Economic Times awarded Tata Steel with the ''Corporate Citizen of the Year'' Award in 2014. The award acknowledges the work done by the Company''s CSR arms to promote development in areas including healthcare, education, sports and culture. The jury took special note of the Maternal and Newborn Survival Initiative (MANSI) and recognised it as one of the best healthcare practices globally.

Details about the CSR policy and initiatives taken by the Company on CSR during the year are available on our website www.tatasteel.com. The Annual Report on our CSR activities is annexed to this report [Annexure 2].

H. CORPORATE GOVERNANCE

At Tata Steel, we ensure that we evolve and follow the corporate governance guidelines and best practices sincerely to not just boost long-term shareholder value, but to also respect minority rights. We consider it our inherent responsibility to disclose timely and accurate information regarding our financials and performance, as well as the leadership and governance of the Company.

In accordance with the Tata Steel Group Vision, Tata Steel Group aspires to be the global steel industry benchmark for value creation and corporate citizenship. The Tata Steel 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.

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

Board Meetings

A calendar of Meetings is prepared and circulated in advance to the Directors. The Board met nine times during the year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the Listing Agreement.

Selection of New Directors and Board Membership Criteria

The Nomination and Remuneration Committee works with the Board to determine the appropriate characteristics, skills and experience for the Board as a whole and its individual members with the objective of having a Board with diverse backgrounds and experience in business, government, education and public service. Characteristics expected of all Directors include independence, integrity, high personal and professional ethics, sound business judgment, ability to participate constructively in deliberations and willingness to exercise authority in a collective manner. The policy on appointment and removal of Directors and determining Directors'' independence is annexed to this report [Annexure 3].

Familiarisation Programme for Independent Directors

All new Independent Directors (IDs) inducted into the Board are given an orientation. Presentations are made by Executive Directors (EDs) and Senior Management giving an overview of our operations, to familiarise the new IDs with the Company''s business operations. The new IDs are given an orientation on our products, group structure and subsidiaries, Board constitution and procedures, matters reserved for the Board, and our major risks and risk management strategy.

The Policy on the Company''s Familiarisation Programme for IDs can be accessed at http://www.tatasteel.com/investors/pdf/ familiarisation-programme-for-id-tata-steel.pdf

Evaluation

The Board evaluated the effectiveness of its functioning and that of the Committees and of individual directors by seeking their inputs on various aspects of Board/Committee Governance.

The aspects covered in the evaluation included the contribution to and monitoring of corporate governance practices, participation in the long-term strategic planning and the fulfilment of Directors'' obligations and fiduciary responsibilities, including but not limited to, active participation at the Board and Committee meetings.

The Chairman of the Board had one-on-one meetings with the Independent Directors and the Chairman of the Nomination and Remuneration Committee had one-on-one meetings with the Executive and Non-Executive Directors. These meetings were intended to obtain Directors'' inputs on effectiveness of Board/Committee processes.

The Board considered and discussed the inputs received from the Directors.

Further, the Independent Directors at their meeting, reviewed the performance of Board, Chairman of the Board and of Non- Executive Directors.

Compensation Policy for Board and Senior Management

Based on the recommendations of the Nomination and Remuneration Committee, the Board has approved the Remuneration Policy for Directors, KMP and all other employees of the Company. As part of the policy, the Company strives to ensure that:

a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

b) relationship between remuneration and performance is clear and meets appropriate performance benchmarks; and

c) remuneration to Directors, KMP and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

The Remuneration Policy for Directors, KMP and other employees is annexed to this report [Annexure 4].

Independent Directors Declaration

The Company has received the necessary declaration from each ID in accordance with Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Directors and Key Managerial Personnel Induction

On the recommendations of the Nomination and Remuneration Committee, the Board appointed Mr. Andrew Robb, as an ID of the Company with effect from 12 November, 2014. Mr. Robb was a Member of the Board for seven years and retired by rotation at the AGM held on 14 August, 2014 and did not seek re-appointment. However, in the interest of maintain -ing continuity and providing guidance during challenging times in Tata Steel Europe, the Nomination and Remuneration Committee and the Board of Directors of the Company requested Mr. Robb to accept the Board position once again. Mr. Robb accepted the request. We seek your support in confirming the appointment of Mr. Robb in the ensuing AGM.

Retirement

In accordance with the Tata Group retirement policy for Board of Directors (attainment of 70 years of age for NEDs) Mr. B Muthuraman, Vice Chairman of the Company retired effective 26 September, 2014.

The Board of Directors place on record their deep appreciation for the enormous contributions made by Mr. Muthuraman as the Managing Director of the Company from 2001 to 2009 and thereafter, as Vice Chairman of the Company. The Company and the Board benefitted immensely from Mr. Muthuraman''s vast experience, knowledge and insights of the industry and operations of the Company.

Re-appointments

As per the provisions of the Companies Act, 2013, Dr. Karl- Ulrich Koehler and Mr. D. K. Mehrotra will retire at the ensuing AGM and being eligible, seek re-appointment. The Board recommends their re-appointment.

The Companies Act, 2013, provides for the appointment of IDs. Sub-section (1 0) of Section 1 49 of the Companies Act, 2013 provides that IDs shall hold office for a term of up to five consecutive years on the board of a company and shall be eligible for re-appointment on passing of a special resolution by the shareholders of the Company. Accordingly, all the IDs except for Mr. Andrew Robb, who was appointed as additional Director on 12 November, 2014, were appointed by the shareholders at the general meeting held on 14 August, 2014. Further, sub-section (13) of Section 149, provides that the provisions of retirement by rotation as defined in sub-sections (6) and (7) of Section 152 of the Companies Act, 2013 shall not apply to such IDs.

Hence, none of the IDs retire at the ensuing AGM.

Company Secretary and Compliance Officer

During the year, Mr. A. Anjeneyan, Company Secretary, KMP and Compliance Officer of the Company resigned from the services of the Company. The resignation was effective 10 October, 2014.

Consequent to Mr. A. Anjeneyan''s resignation, the Board appointed Mr. Parvatheesam K as the Company Secretary, KMP and Compliance Officer of the Company. The appointment was effective 12 January, 2015.

Directors'' Responsibility Statement

Based on the framework of internal financial controls established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external agencies, the reviews performed by Management and the relevant Board Committees, the Board, with the concurrence of the Audit Committee, is of the opinion that the Company''s internal financial controls were adequate and effective as on 31 March, 2015.

Accordingly, pursuant to Section 134(5) of the Companies Act, 2013 the Board of Directors to the best of their knowledge and ability confirm:

a) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) that we have selected such accounting policies and applied them consistently and made judgments 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 and loss of the Company for that period;

c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) that the annual accounts have been prepared on a going concern basis;

e) that proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively; and

f) that proper internal financial controls were laid down and that such internal financial controls are adequate and were operating effectively.

Audit Committee

Our Audit Committee was constituted in the year 1986. The Committee has adopted a Charter for its functioning. The primary objective of the Committee is to monitor and provide effective supervision of the Management''s financial reporting process, to ensure accurate and timely disclosures, with the highest levels of transparency, integrity and quality of financial reporting.

The Committee met five times during the year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. As of the date of this report, the Committee is comprised of Mr. Subodh Bhargava (Chairman), Mr. Ishaat Hussain, Mr. Andrew Robb and Mr. O. P. Bhatt.

Internal Control System

The Company has an internal control system, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined in the Internal Audit Charter. To maintain its objectivity and

independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

Related Party Transactions

There have been no materially significant related party transactions between the Company and the Directors, the management, the subsidiaries or the relatives except for those disclosed in the financial statements.

Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such contract or arrangement in Form AOC-2 does not form part of the report.

Vigil Mechanism

The Board, at its meeting held on 17 December, 2014, approved the revised Vigil Mechanism that provides a formal mechanism for all Directors, employees and vendors of the Company to approach the Ethics Counsellor/Chairman of the Audit Committee of the Board and make protective disclosures about the unethical behaviour, actual or suspected fraud or violation of the Tata Code of Conduct (TCoC).

The Vigil Mechanism comprises three policies viz., the Whistle Blower Policy for Directors & Employees, Whistle Blower Policy for Vendors and Whistle Blower Reward & Recognition Policy for Employees.

The Whistle Blower Policy for Directors and Employees is an extension of the TCoC, that requires every Director or employee to promptly report to the Management any actual or possible violation of the Code or any event wherein he or she becomes aware of that which could affect the business or reputation of the Company.

The Whistle Blower Policy for Vendors provides protection to vendors from any victimisation or unfair trade practice by the Company.

The Whistle Blower Reward & Recognition Policy for Employees has been implemented in order to encourage employees to genuinely blow the whistle on any misconduct or unethical activity taking place in the Company. The disclosures reported are addressed in the manner and within the time frames prescribed in the Whistle Blower Policy. Under the Policy, every Director, employee or vendor of the Company has an assured access to the Ethics Counsellor/Chairman of the Audit Committee.

Disclosure as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder.

During the Financial Year 2014-15, the Company has received 24 complaints of sexual harassment, out of which 15 complaints have been disposed off by taking appropriate actions. The remaining 9 complaints are under investigation.

Risk Management

The Company is exposed to inherent uncertainties owing to the sectors in which it operates. A key factor in determining a company''s capacity to create sustainable value is the risks that the company is willing to take (at strategic and operational levels) and its ability to manage them effectively. Many risks exist in a company''s operating environment and they emerge on a regular basis. The Company''s Risk Management processes focusses on ensuring that these risks are identified on a timely basis and addressed.

The Board of Directors has constituted a Risk Management Committee. The Committee has adopted a Charter that outlines the role, responsibilities and power of the Committee and the procedure for organising the meeting of the Committee.

The purpose of the Committee is to assist the Board of Directors in fulfilling its oversight responsibilities with regard to enterprise risk management. The Committee reviews the risk management practices and actions deployed by the Management with respect to identification, impact assessment, monitoring, mitigation and reporting of key risks while trying to achieve its business objectives.

Further, the Committee endeavours to assist the Board in framing, implementing and monitoring the risk management plan for the Company and reviewing and guiding the risk policy. The Committee also guides Management in developing the risk management policy and in implementing an appropriate risk management system/framework for the Company.

To have better focus on governance, the Company constituted a Management Committee viz., the Group Risk Review Committee to identify, assess, review and mitigate risks. The Committee comprises the Managing Director, Group Executive Director (Finance & Corporate), Managing Director & Chief Executive Officer of Tata Steel Europe and other senior management personnel as its members. This Committee has the primary responsibility of implementing the Risk Management Policy of the Company and achieving the stated objective of developing a risk intelligent culture that supports decision making and helps improve Company performance.

Subsidiaries, Joint Ventures and Associates

We have 287 subsidiaries, 23 joint ventures and 24 associate companies as on 31 March, 2015. During the year, the Board of Directors (the Board) reviewed the affairs of material subsidiaries. We have, in accordance with Section 129(3) of the Companies Act, 2013 prepared consolidated financial statements of the Company and all its subsidiaries, which form part of the Annual Report. Further, the report on the performance and financial position of each of the subsidiary, associate and joint venture and salient features of the financial statements in the prescribed Form AOC-1 is annexed to this report [Annexure 5].

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited financial statements of each of the subsidiary will be available on our website www.tatasteel.com. These documents will also be available for inspection during business hours at the registered office of the Company.

The names of companies that have become or ceased to be subsidiaries, joint ventures and associates are disclosed in the annexure to this report [Annexure 6].

Auditors

Statutory Auditors

Deloitte Haskins & Sells LLP (DHS LLP), Chartered Accountants, who are the statutory auditors of the Company, hold office until the conclusion of the ensuing AGM and are eligible for re-appointment. Members of the Company at the AGM held on 14 August, 2014 had approved the appointment of DHS LLP as the Statutory Auditors for a period of three financial years i.e., up to 31 March, 2017. As required by the provisions of the Companies Act, 2013, their appointment should be ratified by members each year at the AGM. Accordingly, requisite resolution forms part of the notice convening the AGM.

Cost Auditors

As per Section 148 of the Companies Act, 2013, the Company is required to have the audit of its cost records conducted by a Cost Accountant in practice. In this connection, the Board of Directors of the Company has on the recommendation of the Audit Committee, approved the appointment of Shome & Banerjee as the cost auditors of the Company for the year ending 31 March, 2016, at a remuneration of Rs. 12 lakhs plus out of pocket expenses.

Shome & Banerjee have vast experience in the field of cost audit and have conducted the audit of the cost records of the Company for the past several years under the provisions of the erstwhile Companies Act, 1956.

The due date for filing the Cost Audit Report of the Company for the Financial Year ended 31 March, 2014 was 30 September, 2014 and the Cost Audit Report was filed in XBRL mode by the Cost Auditor on 27 August, 2014.

Secretarial Auditors

Section 204 of the Companies Act, 2013 inter-alia requires every listed company to annex with its Board''s report, a Secretarial Audit Report given by a Company Secretary in practice, in the prescribed form.

The Board of Directors appointed Parikh & Associates, Practicing Company Secretaries as Secretarial Auditor to conduct Secretarial Audit of the Company for Financial Year 2014-15 and their report is annexed to this Board report [Annexure 7]. In connection, with the auditors observation in the report, it is clarified that the non-filing of Form MGT-14 in respect of one board resolution and delay in transfer of unclaimed rights issue application money to Investor Education Protection Fund are technical lapses that occurred inadvertently.

The Board has also appointed Parikh & Associates, as Secretarial Auditor to conduct Secretarial Audit of the Company for Financial Year 2015-16.

Extract of the Annual Return

The details forming part of the extract of the Annual Return in Form MGT 9 as per provisions of Companies Act, 2013 and rules thereto is annexed to this report [Annexure 8].

Significant and Material Orders Passed by the Regulators or Courts

There have been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations. However, members'' attention is drawn to the statement on contingent liabilities, commitments in the notes forming part of the Financial Statements.

Particulars of Loans, Guarantees or Investments

Particulars of loans, guarantees given and investments made during the year in accordance with Section 186 of the Companies Act, 2013 is annexed to this report [Annexure 9].

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

Details of the energy conservation, technology absorption and foreign exchange earnings and outgo are annexed to this report [Annexure 10].

Business Responsibility Report

A Business Responsibility Report is included in this Annual Report.

Deposits

During the year, the Company has not accepted any deposits under the Companies Act, 2013.

Acknowledgements

We thank our customers, vendors, dealers, investors, business associates and bankers for their continued support during the year. We place on record our appreciation of the contribution made by employees at all levels. Our resilience to meet challenges was made possible by their hard work, solidarity, co-operation and support.

We thank the Government of India, the State Governments where we have operations and other government agencies for their support and look forward to their continued support in the future.

On behalf of the Board of Directors

CYRUS P. MISTRY Chairman Mumbai 20 May, 2015


Mar 31, 2014

The Directors take pleasure in presenting the 107th annual report on the business and operations of your Company along with the standalone and consolidated summary financial statements for the year ended 31st March, 2014.

Rs. crores

Tata Steel Standalone

2013-14 2012-13

Net revenue from Operations 41,711.03 38,199.43

Total expenditure before Financial cost, depreciation 28,894.13 27,073.19

(net of expenditure transferred to capital)

Operating Profit 12,816.90 11,126.24

Add: Other income 787.64 902.04

Profit before finance cost, depreciation, exceptional items and taxes 13,604.54 12,028.28

Less: Finance costs 1,820.58 1,876.77

Profit before depreciation, exceptional items and taxes 11,783.96 10,151.51

Less: Depreciation 1,928.70 1,640.38

Profit before exceptional items and taxes 9,855.26 8,511.13

Add/(Less): Profit on sale of non-current Investments 12.33

Add/(Less): Provision for diminution in the value of investment/doubtful advances/impairment of non-current assets (141.76) (686.86)

Profit before taxes 9,713.50 7,836.60

Less: Provision for current taxation 3,098.02 1,770.54

Less: Provision for MAT credit (399.84)

Less: Provision for deferred taxation 203.29 1,402.93

Profit/(Loss) after taxes 6,412.19 5,062.97 Add: Share of Profit of Associates

Less: Minority Interest

Profit/(Loss) after tax, minority interest and share of Profit of associates

Distribution on hybrid perpetual securities 266.04 266.21

Tax effect on distribution of hybrid perpetual securities (90.43) (86.37)

6,236.58 4,883.13

Add: Balance brought forward from the previous year 24,616.17 21,145.04

Add: Profit and Loss account balance relating to acquisitions 33.97

Balance 30,886.72 26,028.17

Which the Directors have apportioned as under to: -

(i) Dividend on Preference Shares

(ii) Proposed dividend on Ordinary Shares 971.21 776.97 7 (iii) Tax on Dividends 66.19 128.73

(iv) General Reserve 641.22 506.30

(v) Statutory Reserve

(vi) Special Reserve

(vii) Capital Redemption Reserve

Total 1,678.62 1,412.00

Balance to be carried forward 29,208.10 24,616.17

Tata Steel Group

2013-14 2012-13

Net revenue from Operations 148,613.55 134,711.54

Total expenditure before Financial cost, depreciation 132,202.54 122,390.33

(net of expenditure transferred to capital)

Operating Profit 16,411.01 12,321.21

Add: Other income 516.81 479.15

Profit before finance cost, depreciation, exceptional items and taxes 16,927.82 12,800.36

Less: Finance costs 4,336.83 3,968.11

Profit before depreciation, exceptional items and taxes 12,590.99 8,832.25

Less: Depreciation 5,841.22 5,575.32

Profit before exceptional items and taxes 6,749.77 3,256.93

Add/(Less): Profit on sale of non-current Investments 18.20 966.03

Add/(Less): Provision for diminution in the value of investment/doubtful advances/impairment of non-current assets (45.84) (8,355.91)

Profit before taxes 6,722.13 (4,132.95)

Less: Provision for current taxation 3,482.64 2,325.40

Less: Provision for MAT credit (0.21) (410.12)

Less: Provision for deferred taxation (424.27) 1,314.16

Profit/(Loss) after taxes 3,663.97 (7,362.39)

Less: Minority Interest 0.84 90.31

Profit/(Loss) after tax, minority interest and share of Profit of associates (69.92) (214.46)

Distribution on hybrid perpetual securities 3,594.89 (7,057.62)

Tax effect on distribution of hybrid perpetual securities 266.04 266.21

Add: Balance brought forward from the previous year (90.43) (86.37)

Add: Profit and Loss account balance relating to acquisitions 3,419.28 (7,237.46)

Balance 7,039.38 16,125.42 Balance to be carried forward 8,625.75 7,039.38

DIVIDEND

The Board recommended a dividend of Rs. 10 per Ordinary Share on 97,12,15,405 Ordinary Shares for the year ended 31st March 2014. (Financial Year 2012-13: Rs. 8 per Ordinary Share on 97,12,15,229 Ordinary Shares of Rs. 10 each).

The dividend on Ordinary Shares is subject to the approval of the shareholders at the Annual General Meeting. The total dividend payout works out to 16% (Financial Year 2012-13: 18%) of the net Profit for the standalone results.

GLOBAL ECONOMIC CONDITIONS

The world Gross Domestic Product (GDP), as reported by the International Monetary Fund (IMF), witnessed a growth of 3% in 2013 as compared to a growth of 3.2% in 2012. Both advanced economies and emerging and developing economies witnessed the slowdown in growth at 1.3% and 4.7% respectively.

in certain developed regions including Europe but the growth remains anemic. Similarly, the GDP growth in India at 4.7% in Financial Year 2013-14, marks a second straight year of sub-5% growth – the worst slowdown in more than a quarter of a century. This is largely attributed to sluggish growth in investments and tight monetary policy by the Reserve Bank of India leading to demand contraction.

Global Steel Outlook

Tata Steel is the world''s second most geographically diversified steel company with significant exposure in India and Europe.

As per the World Steel Association, the global apparent steel use is likely to grow by 3.1% in 2014 to 1,527 million tonnes and by 3.3% to 1,576 million tonnes in 2015 as opposed 3.6% growth in 2013. In India, steel demand is expected to grow by 3.3% to 76.2 million tonnes in 2014 and by 4.5% to 79.6 million tonnes in 2015, following a marginal 1.8% growth in 2013.

Similarly, the apparent steel use for EU (28) is expected to grow by 3.1% in 2014 to 143.3 million tonnes and 3% to 147.6 million tonnes in 2015 as compared to a de-growth of -0.2% in 2013. This will help to recoup the demand in construction and automotive segments, which have almost bottomed out.

Growth of the Chinese economy, which in recent years has been one of the main demand drivers in the global mining and steel industries, has continued to slow down in the last 12-18 months, along with other emerging economies. A slow economic recovery in North America, continued stagnation in Europe and a continued slowdown in emerging economies including India and China would impact the global manufacturing and metals industry like Steel.

A recent release (April 2014) of quantitative risk assessment in the World Economic and Financial Survey by the International Monetary Fund (IMF) suggests that recession risks have decreased slightly for the major economies and have remained broadly unchanged for other economies. However, the risk of Eurozone crisis and a hard landing for China cannot be ruled out.

TATA STEEL GROUP PERFORMANCE

The momentum provided by the ramp up of all the production units under the 2.9 mtpa expansion plan at Jamshedpur, stabilisation of rebuild Blast Furnace#4 at Port Talbot, UK, significant growth in sales volume of operating entities of Nat Steel Holdings (Singapore) at Vietnam and China and an increase in deliveries in Tata Steel Thailand, contributed to record gross deliveries of 26.6 million tonnes by the Tata Steel Group during the Financial Year 2013-14. This was higher by 10% compared to the previous year deliveries of 24.1 million tonnes.

The consolidated profit before interest, depreciation, exceptional items and taxes (EBITDA) of the Group was Rs. 16,928 crores in the Financial Year 2013-14, higher by 32% over the previous year. Consequently, the consolidated profit before exceptional items and taxes (PBT) was Rs. 6,750 crores in the Financial Year 2013-14 compared to Rs. 3,257 crores in the previous year.

Indian operations:

During the Financial Year 2013-14 the Company fully ramped up to its installed capacity of 9.7 million tonnes at Jamshedpur and continued with the full-fledged construction and installation of facilities for 3 million tonnes crude steel Greenfield capacity expansion at Odisha. There has been an overall increase of ~ 12% to 14% in the production and sales volumes of the Indian operations over last year. The Company had a record production of 9.89 million tonnes of Hot Metal and 8.93 million tons of Saleable Steel during the year. Similarly, the Company reported the best ever deliveries of 8.52 million tonnes during the financial year. This has led to significant efficiency gains and a richer product mix. The Company has also invested in widening its customer base in India. The increase in sales has been achieved without sacrificing the product premium. The profit before interest, depreciation, exceptional items and taxes (EBITDA) for standalone Tata Steel was Rs. 13,605 crores for the Financial Year 2013-14, higher by 13% compared to the previous Financial Year.

There were several best performances recorded by many units of the Company during the Financial Year 2013-14 some of which are as follows:

Production

Best ever total agglomerate production of 12.14 million tonnes (Previous best - 10.22 million tonnes in the Financial Year 2012-13).

Steel Melting Shop LD#3 achieved its best ever production of 2.23 million tonnes (Previous best - 1.02 million tonnes in the Financial Year 2012-13).

Cold Rolling Mill achieved its highest ever production of 1.64 million tonnes (Previous best - 1.56 million tonnes in Financial Year 2009-10).

TSCR achieved its highest ever production of 2.18 million tonnes (Previous best - 0.99 million tonnes in the Financial Year 2012-13).

Sales

Best ever annual sales to the Automotive segment at 1.17 million tonnes (Previous best - 1.05 million tonnes in Financial Year 2012-13).

Best ever annual sales in Industrial Products segment at 1.7 million tonnes (63% more than the previous best in Financial Year 2012-13 at 1.07 million tonnes).

Best ever annual sales in LPG segment at 110 kt and a market share of 23%.

Kar Vijay Har Shikhar (KVHS), an initiative launched during Financial Year 2010-11, focussed on the Company''s aspiration to improve its EBITDA. It is a multi-unit, multi-location, cross functional improvement programme spanning the entire value chain from mining to marketing and sales of finished steel. The Company achieved an improvement in savings of Rs. 1,614 crores in the Financial Year 2013-14, which included a KVHS contribution ofRs. 1,170 crores.

Customer centricity has been the key focus area for Tata Steel and to align the actions even more closely, the Company has taken a step change in reorganising its Marketing & Sales organisation in line with the market segments i.e. Auto & Special Products, Branded and Retail, Industrial Products and downstream units.

European operations:

Tata Steel Europe (TSE) completed two major upgrades of the key production facilities (the rebuild of Blast Furnace 4 at Port Talbot during an eight month period ending February 2013 and the repair of the hearth in Blast Furnace 7 at I muiden in the March 2013) at the end of Financial Year 2012-13, which has strengthened its operating platform. This resulted in higher liquid steel production volumes of 2.2 million tonnes during the year under review.

Tata Steel Europe''s (TSE) turnover for the Financial Year 2013-14 was 3% lower than the previous year. This is due to the decrease in the average revenue per tonne caused primarily by the deterioration in the market conditions in the first half of Financial Year 2013-14, even though it was partly offset by a 6% increase in steel deliveries, attributable largely to a full year of operations by the two blast furnaces at Port Talbot.

Record performances in TSE''s operations during the Financial Year 2013-14 included the following:

At I Jmuiden, the best ever total Hot Strip Mill output of 5.21 million tonnes (previous best of 5.05 million tonnes in Financial Year 2011-12); the best ever total Direct Sheet Plant output of 1.26 million tonnes (previous best was 1.19 million tonnes in Financial Year 2006-07); and the best ever total hot dipped galvanising line output at DVL3 of 552 thousand tonnes (previous best was 465 thousand tonnes in Financial Year 2012-13).

At Port Talbot, the best ever total hot metal make at Blast Furnace 4 (2.05 million tonnes - previous best of 1.91 million tonnes in Financial Year 2002); the best ever total hot metal make for the site (4.16 million tonnes - previous best of 3.86 million tonnes in Financial Year 2007); the best ever total liquid steel make (4.55 million tonnes - previous best of 4.41 million tonnes in Financial Year 2007); and the best ever total slab make (4.45 million tonnes - previous best of 4.29 million tonnes in Financial Year 2006-07).

Tata Steel Europe has launched a multi- year transformation journey under the banner OGSM ("Objectives, Goals, Strategies & Measures") in the Financial Year 2010-11. The above programme is expected to structurally change the organisational health covering productivity improvement through operating performance, supply chain management, product differentiation and customer management, cost management including right sizing manpower and optimising the asset network. The systematic deployment of the OGSM tool has yielded significant EBITDA benefits since the time of the launch. The continued focus on operating costs achieved savings of around £ 200 million, which contributed towards improved year on year EBITDA performance at Rs. 3, 008 crores during the Financial Year 2013-14. This almost quadrupled as compared to previous year.

TSE continued to implement its strategy of market differentiation and launched 30 new products as planned during the year. The volume of new products sold increased by about 75% and sales of differentiated products also grew by 16% in comparison to the previous year.

Moreover, to generate a more sustainable performance, TSE continues to focus on customers and innovation driven strategy. As a result, the Company achieved following customer successes during the year:

Network Rail, the owner and operator of rail infrastructure in the UK, has chosen to source more than 95% of its rail from Tata Steel Europe until 2019.

Schneider Electric selected TSE for its Preferred Supplier 2013 award.

Royal Mint recognised TSE as the Most Innovative Supplier for the third year running.

GOLD in the Caterpillar Supplier Quality Excellence Process for its global supply of track shoe profiles was awarded to TSE.

Toyota awarded a Certificate of Recognition to TSE''s important contribution in the area of quality.

South-East Asian operations:

The South East Asian operations continued to improve its performance especially in Thailand despite various challenges in the market environment.

NatSteel Holdings Pte. Ltd. (NSH) enhanced its capabilities across all geographies and invested capital in technology building, strengthening information technology and capability building during the Financial Year 2013-14 despite uncertainties posed by a volatile, uncertain and highly competitive business environment especially due to Chinese exports to the ASEAN region. Its Singapore operations completed major plant modernisation projects, including the New Scrap Shear, New Shaft Furnace and various downstream automation projects.

NSH has posted a turnover of Rs. 12,128 crores during the Financial Year 2013-14, an increase of about 30% over the previous year. However, the profit before interest, depreciation, exceptional items and taxes (EBITDA) was at Rs. 246 crores that was lower by 31% compared to the previous year. Profitability was adversely affected as the operating costs were higher during the stabilisation period post the completion of the plant revamp in Singapore and influx of low-priced materials from China putting pressure on the margins.

The Chinese imports into ASEAN region jumped more than 50% in 2013, which created significant pressure in those domestic markets. In addition, political turmoil in Thailand continues to affect the underlying performance of Tata Steel Thailand (TSTH). Despite this, TSTH recorded a 10% increase in finished goods deliveries at 1.30 million tonnes in Financial Year 2013-14 over the previous Financial Year. This is primarily led by ongoing projects in the construction sector, continued exports to neighbouring countries and a stronger presence in the upcountry market translating into higher rebar sales. On the downside, the wire rods product line was adversely affected by the cheaper imports from China. The profit before interest, depreciation, exceptional items and taxes (EBITDA) at Rs. 193 crores, which is about 50% higher compared to the previous year.

Review of Impairment Risks

Under the Indian Accounting Standards, a company is required to undertake an impairment review of its assets and investments at each reporting date based on certain triggers relating to the business or the operating environment. Changes in assumptions underlying the carrying value of certain assets, including as a result of adverse market conditions could result in impairments of such assets and the Company is obliged to recognise the same. The Company has recognised an impairment charge of Rs. 141.76 crores in standalone books and Rs. 45.84 crores in consolidated books primarily on account of continuous losses and substantial erosion of net worth in Tayo Rolls Limited (a subsidiary of Tata Steel Limited) and de-allocation of the Coal mine in view of pending milestones in Strategic Energy Technology System Private Limited (a joint venture between Tata Group and South Africa''s Sasol Synfuel to convert coal to liquid fuel from a coal block in Odisha).

While an impairment loss is recognised as an expense in the income statement, it is a non-cash charge and does not affect any of the financial covenants and the funding position of Tata Steel Group.

Review of Regulatory Risks

The Central Government constituted a one member Commission comprising Hon''ble Justice M B Shah, former Judge of Supreme Court of India, to look into the nature and extent of illegal mining of iron and manganese ores and recommend suitable measures for regulation. Pursuant to the study carried out by the Commission in the states of Goa, followed by Odisha, reports have been submitted to the Central Government. In the report there are observations regarding mining activity in the State of Odisha covering (i) various aspects of non-compliance to the statute viz: absence or delay in taking approvals under environment statutes, forest statutes, mining plans, etc. (ii) extraction of ore beyond the limits permitted by such approvals, (iii) non-disposal of mining lease renewal applications for several years by the State and mining continuing under deeming provisions.

The Company is of the opinion that its mining operations are within the norms of the required regulations including Environment Clearance, Forest Clearances and Consent to Operate. The Company has since inception demonstrated the principle of mineral conservation and mineral development by undertaking scientific and sustainable mining practices including caring for the environment and the communities around the mining operations.

MAJOR DEVELOPMENTS DURING THE FINANCIAL yEAR 2013-14

A. Amalgamation

a. Kalimati Investment Company Limited

Pursuant to the sanction of the Hon''ble High Court of Bombay to the Scheme of Amalgamation, the assets and liabilities of the erstwhile Kalimati Investment Company Limited, a wholly-owned subsidiary of the Company (whose principal business was to carry on the business of investment and finance, and was registered as a non-banking financial company with the Reserve Bank of India) has been amalgamated with the Company with effect from January 1, 2013 in accordance with the scheme so sanctioned by the Court. The effect of the merger has been given in the accounts.

b. Tata Metaliks Limited

Tata Metaliks Limited (TML), a subsidiary of the Company is one of the largest producers of Foundry Grade Pig Iron in India. On 10th April, 2013, Tata Steel Limited announced the merger of TML and its subsidiary TMKPL with your Company 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.

B. Capital Projects

a. 2.9 milion tonnes expansion project in Jamshedpur

Major facilities such as Pellet Plant, Coke Oven Battery 10, "I" Blast Furnance, LD3 and TSCR under the 2.9 mtpa expansion project in Jamshedpur were commissioned in the Financial Year 2012-13. These facilities have been stabilised during the year which has enabled the Company to ramp up its production to 9.16 million tonnes of crude steel.

b. Greenfield Project in Odisha

Kalinganagar Project in Odisha is the Company''s second integrated Greenfield steel plant with 6 million tonnes crude steel capacity, after Jamshedpur. It is being executed in two phases of 3 million tonne each, with the entire capacity principally devoted to flat products. The Company''s Phase 1 of the 3 million tonne per annum of green field project at Kalinganagar Complex in Odisha has progressed significantly during the Financial Year. The stage wise commissioning of various units, namely power generation units, coke ovens, sinter plant, blast furnace, steel melting shop and hot strip mill of the first phase is expected to be initiated towards the end of Financial Year 2014-15. Subsequent to the commissioning and ramp up of the first phase of operations in Kalinganagar, the Company will also progress towards the implementation of second phase of the project in future.

c. Direct Shipping Ore Project in Canada

The Company through its Joint Venture Company (Tata Steel Minerals Canada Limited) is developing a Direct Shipping Ore (DSO) Project in the provinces of Quebec and Newfoundland & Labrador. The Company indirectly holds 80% in Tata Steel Minerals Canada (TSMC). New Millennium Corporation (NML), a Toronto listed company, holds 20% stake in the joint venture company. In addition, the Company holds 26.33% stake in NML.

The project primarily comprises of mining, crushing, washing, screening and drying the run- of-mine ore with a state-of-the-art facility near Schefferville, Québec to produce 4.2 million tonnes per annum of sinter fines and pellet feed. The processing facilities will be housed under a large steel supported fabric structure to enable year round operations. The construction of the processing plant is on-going and is expected to be commissioned by end of Financial Year 2014-15. Besides a dry crushing and screening facilities have also been installed which will produce about 1.8 million tonnes per annum of iron ore product. The above facilities will enable TSMC to produce and despatch around 6 million tonnes per annum of iron ore in a phased manner.

TSMC had already commenced mining activity in September 2012 and the mine has produced around 1 million tonnes till Financial Year 2013-14 through dry crushing and screening. TSMC shipped about 0.25 million tonnes in Financial Year 2013-14 and the shipment for Financial Year 2014-15 is expected to commence shortly.

Key developments during the year were as follows:

i. The Company increased its resource base from 64 million tonnes to 93 million tonnes through exploration activities in DSO properties. An additional potential of 8 million tonnes has been identified.

ii. TSMC entered into an un-incorporated joint venture with Labrador Iron Ore Mines (LIM) to acquire a 51% stake in the House deposit based on the outcome of the feasibility study. This is expected to add an additional 24 million tonnes of reserves to the resources of the Company. The feasibility study is in progress. Considerable savings in operating costs are expected to be achieved due to access to the Howe deposit. With House deposits, the combined resource base stands at 125 million tonnes.

iii. The construction of the Deep Sea Port at Sept-IIes, Canada through which TSMC intends to export its products is likely to be completed by end of 2014. The access to the Deep Sea port is not available at present but the Federal and Provincial Governments are supporting the Port Authority''s efforts to obtain the required access to the Deep Sea Port. It is expected that this issue will get resolved shortly. In the meanwhile, TSMC has entered into agreement with the Iron Ore Company of Canada to export its product for year 2014.

SAFETY AND HEALTH

The health and safety of the employees across its operations remains the highest priority for the Group. All endeavours are being taken to enhance safety standards and processes towards minimising safety risks in all operations in the company. The Company continues to broaden the impact of its programmes, including those from DuPont the world benchmark, to establish a strong safety culture based on inculcating safe behaviour among its employees, contractors and their employees. The Lost Time Injury Frequency Rate for Financial Year 2013-14 dipped to 0.56, an improvement of 7% over last year. Extensive work has been on-going over more than a decade to ensure risk control in many high hazard processes including underground mining has resulted in performance improvements. However, the journey will continue to ensure risks of fatalities are minimised in future. The Company''s specific improvement areas are in construction activities, road traffic management and contractor management.

In order to build a sustainable work place environment, a common health and safety management system across Tata Steel Group is being implemented. This includes cross- auditing activity to enhance sharing experiences and best practices across regions. During the year, Tata Steel was again recognised by its peers in World Steel Association with a health and safety recognition award for Tata Steel Europe.

ENVIRONMENT

Member companies of World Steel Association, including Tata Steel, are committed to a vision in which steel is recognised as

a key element of a sustainable future. Environment protection forms a focus area with member companies expected to optimise the eco-efficiency of their products through the product lifecycle, including increased resource and energy efficiency in the production of steel and during the use of steel products. It also enjoins members to promote the recovery, reuse and recycling of steel.

In line with the above commitment, Tata Steel continues to focus on operational excellence aimed at resource efficiency, energy efficiency, along with recovery, reuse and recycling of waste to minimise the ecological footprint of the Company. Tata Steel''s 2.9 mtpa expansion project in India and the upgrade of the blast furnaces by the European operations were aimed at aligning its environmental performance with best in class. The previously installed "I" Blast Furnace and the "H" Blast Furnace as part of 1.8 mtpa and 2.9 mtpa expansion projects in Jamshedpur are among the most resource efficient in India. CO2 emissions from the Jamshedpur Steel Works showed a significant change decreasing to 2.42 tCO2/tcs in Financial Year 2013-14 from 2.52 tCO2/tcs in Financial Year 2012-13.

Similarly, the Company is currently participating in a voluntary agreement with the Dutch government on energy efficiency improvements over the period 2013 to 2016 (with the previous agreement extending from 2009 to 2012 inclusive). The primary requirement of the agreement is an improvement in energy efficiency at the rate of 2% per annum, covering both energy used within the manufacturing process and energy saved across the product life cycle. The total energy efficiency improvement in 2013 was 4.9%. CO2 emissions in TSE during the Financial Year 2013-14 were 1.88 tCO2/tcs, against 1.95 tCO2/tcs in Financial Year 2012-13.

Moreover, in the United Kingdom, TSE''s engagement in a Climate Change Agreement (''CCA'') continued to benefit the Company from reduced rates in relation to the Climate Change Levy (''CCL''). The UK Government also introduced an exemption from CCL for certain metallurgical & mineralogical processes from April 2014.

Specific environment protection measures and resultant Benefits are provided in Annexure ''A'' to the 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:

a. 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.

b. 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.

c. Nearly 49,000 students in 383 Government schools in Jamshedpur were served the mid-day meal from a Central Kitchen established by Tata Steel.

d. 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.

e. 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.

f. Nearly 10,000 youth learned tribal scripts for Ho, Santhali and Oraon languages.

g. 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:

a. 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.

b. Employees of Tata Steel are increasingly acting as STEM ambassadors to attract more youngsters to the disciplines of Science, Technology, Engineering and Mathematics.

c. 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.

d. 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).

e. 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.

f. 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

a. 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.

b. 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.

c. 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.

d. 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.

e. Mr. T. V. Narendran has succeeded Mr. H. M. Nerurkar as Managing Director, India and South East Asia with effect from 1st November, 2013.

f. 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.

g. 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 there under, 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


Mar 31, 2013

To the Members,

The Board of Directors hereby presents the 106th annual report on the business and operations of your Company along with the standalone and consolidated summary financial statements for the year ended 31st March, 2013.

Rs. Crores

Tata Steel Standalone Tata Steel Group

2012-13 2011-12 2012-13 2011-12

Income from Operations 38,199.43 33,933.46 134,711.54 132,899.70

Total expenditure before finance cost, depreciation 27,073.19 22,396.69 122,390.33 120,482.91 (net of expenditure transferred to capital)

Operating Profit 11,126.24 11,536.77 12,321.21 12,416.79

Add: Other income 902.04 886.43 479.15 1,573.03

Profit before finance cost, depreciation, exceptional items and taxes 12,028.28 12,423.20 12,800.36 13,989.82

Less: Finance costs 1,876.77 1,925.42 3,968.11 4,250.11

Profit before depreciation, exceptional items and taxes 10,151.51 10,497.78 8,832.25 9,739.71

Less: Depreciation 1,640.38 1,151.44 5,575.32 4,516.65

Profit before exceptional items and taxes 8,511.13 9,346.34 3,256.93 5,223.06

Add/(Less): Profit on sale of non-current Investments 12.33 511.01 966.03 3,361.92

Add/(Less): Provision for diminution in the value of investment /doubtful advances (686.86) - - -

Add/(Less): Provision for impairment of non-current assets - - (8,355.91) -

Profit/(Loss) before taxes 7,836.60 9,857.35 (4,132.95) 8,584.98

Less: Provision for current taxation 1,770.54 3,115.11 2,325.40 3,517.65

Less: MAT credit (399.84) - (410.12) (5.41)

Less: Provision for deferred taxation 1,402.93 45.82 1,314.16 124.22

Profit/(Loss) after taxes 5,062.97 6,696.42 (7,362.39) 4,948.52

Add: Share of profit of Associates - - 90.31 268.11

Less: Minority Interest - - (214.46) (173.14)

Profit/(Loss) after minority interest and share of profit of associates - - (7,057.62) 5,389.77

Distribution on hybrid perpetual securities 266.21 256.54 266.21 256.54

Tax effect on distribution of hybrid perpetual securities (86.37) (83.24) (86.37) (83.24)

4,883.13 6,523.12 (7,237.46) 5,216.47

Add: Balance brought forward from the previous year 21,145.04 16,639.46 16,125.42 12,959.16

Add: Profit and Loss account balance relating to acquisitions - (0.87) - -

Balance 26,028.17 23,161.71 8,887.96 18,175.63

Which the Directors have apportioned as under to: -

(i) Dividend on Preference Shares - - 0.21 0.21

(ii) Proposed dividend on Ordinary Shares 776.97 1,165.46 776.97 1,165.46

(iii) Tax on Dividends 128.73 181.57 226.41 185.71

(iv) General Reserve 506.30 669.64 665.56 680.51

(v) Statutory Reserve - - 8.29 -

(vi) Special Reserve - - 161.28 11.77

(vii) Capital Redemption Reserve - - 9.86 6.55

Total 1,412.00 2,016.67 1,848.58 2,050.21

Balance to be carried forward 24,616.17 21,145.04 7,039.38 16,125.42

DIVIDEND:

The Board recommended dividend of Rs. 8 per Ordinary Share on 97,12,15,229 Ordinary Shares (Financial Year 2011-12: Rs. 12 per Ordinary Share on 97,12,14,450 Ordinary Shares of Rs. 10 each) for the year ended 31st March, 2013.

The dividend on Ordinary Share is subject to the approval of the shareholders at the Annual General Meeting. The total dividend payout works out to 18% (Financial Year 2011-12: 20%) of the net profit for the standalone results.

GLOBAL ECONOMIC CONDITIONS

The world Gross Domestic Product (GDP), as reported by the International Monetary Fund, witnessed a moderate growth of 3.2% in 2012 as compared to a growth of 4.0% in 2011. While the growth in the advanced economies was 1.2% in 2012 in contrast to 1.6% in 2011, growth in the emerging and developing economies fell to 5.1% in 2012 compared to 6.4% in 2011. There was a noticeable slowdown in the emerging market and developing economies during 2012, a reflection of the sharp deceleration in demand from key advanced economies. Global prospects have improved but the road to recovery in the advanced economies is still uncertain and volatile.

The US GDP increased by 2.2% in 2012 reflecting significant legacy effects from the financial crisis, continued fiscal consolidation, a weak external environment and disruptions in the northeast following Superstorm Sandy. The recovery is beginning to show some bright spots as credit growth has picked up and bank lending conditions have been easing slowly from tight levels. However, the impact of recent recovery is yet to show material impact on the economy. In comparison to the US, the euro zone economy contracted by 0.6% in 2012 over 2011. Amongst the euro zone countries, Germany posted a marginal growth of 0.9% while Italy and Spain posted a decrease of 2.4% and 1.4% respectively. Decisive policy actions at the European level-including Outright Monetary Transactions, the completion of the European Stability Mechanism, the Greek debt relief programme and the agreement on the Single Supervisory Mechanism-have increased confidence in the viability of the Economic and Monetary Union. However, lower sovereign spreads and improved bank liquidity are yet to translate into either improved private sector borrowing conditions or stronger economic activity. Emerging economies of eastern Europe experienced a sharp growth slowdown in 2012 reflecting spillover effect from the euro area crisis and domestic policy tightening in the larger economies. For 2012 as a whole, EU apparent steel consumption is estimated to have decreased by -9.7% to 140 million tonnes, with lower demand due to poor economic situation in the euro zone and reduced global trade. Output in the main EU27 steel using sectors declined in 2012 (Construction -5%, Automotive -4%, Mechanical Engineering -1%).

The GDP of Association of South East Asian Nation (ASEAN) (Indonesia, Malaysia, the Philippines, Thailand and Vietnam) grew at 6.1% reflecting resilient domestic demand. Thailand economy grew at 6.4% while that of Indonesia grew by 6.2% in 2012. It is estimated that the public spending by the Government especially in infrastructure and public reconstruction will sustain the growth in Thailand in the future. It is expected that continued remittance flows and low interest rates should continue to support the private consumption and investments in the region.

Steel consumption in the ASEAN region (Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Burma, Cambodia, Laos and Vietnam) have surged by 7.6% year on year to 56.4 million tonnes in 2012. Thailand registered the highest growth rate of 13.9% year on year followed by Vietnam at 9.9%, and Indonesia at 8.8%. Malaysia and Philippines both registered marginal increases in steel demand of 1.7% and 2.2%, respectively, while steel demand in Singapore declined marginally during the year.

The domestic economy in India witnessed a significant slowdown during the year with certain sectors like automotive, capital goods showing a marked slowdown in demand. The moderation in the industrial growth particularly in the manufacturing sector is largely attributed to sluggish growth in investments and tighter monetary policy. Growth in services was 6.6% as compared to a growth of 8.2% in 2011-12. Amongst the key macro-economic indicators, the current account deficit is currently at a very high level which would put significant pressure on the economy especially on the currency.

In India the flat steel consumption grew by 4.3% in the fiscal, while long steel consumption grew by 4.7%. Amongst the main steel consuming sectors,the construction sector grew at around 5.9% and the consumer durables sector grew by 4.5% while the capital goods is expected to have declined significantly by around 10.1% and the automotive sector grew by 1.2%.

TATA STEEL GROUP PERFORMANCE:

In the backdrop of a weak global economy and a challenging market situation, the gross deliveries of the Tata Steel Group at 24.1 million tonnes in 2012-13 were almost at the similar levels as the previous year of 24.2 million tonnes. The turnover of the Tata Steel India operations increased by 13% primarily due to enhanced volume from the newly commissioned facilities of the 2.9 million tonnes per annum capacity expansion in Jamshedpur and enhanced product mix in the Long Products segment. However, there was a decrease in the turnover in Tata Steel Europe by 15% (in its reporting currency) primarily due to weaker market conditions and lower operating volume in Europe.

The consolidated profit before finance costs, depreciation, exceptional items and taxes of the Group was Rs. 12,800 crores in the Financial Year 2012-13 lower by 9% over the previous year primarily due to lower operating performance in Europe, relatively weaker steel prices across all geographies. Consequently, the consolidated Profit before exceptional items and taxes were Rs. 3,257 crores in the Financial Year 2012-13 compared to Rs. 5,223 crores in the previous year.

Indian operations:

The Financial Year 2012-13 marked a major milestone in operating history of Tata Steel as the capacity expansion at Jamshedpur was completed with most of the facilities of 2.9 mtpa brownfield expansion being commissioned for production. The expansion project includes the commissioning of the 6 mtpa Pellet Plant, a 3.05 mtpa Blast Furnace (I Furnace), a new LD Shop (LD#3) and the 2.54 mtpa Thin Slab Caster and Rolling (TSCR), and two new Lime Kilns (Nos. 8 & 9) (600 tpd each). The other capital projects commissioned during the Financial Year 2012-13 were the augmentation of Noamundi and Joda Iron Ore Mines and setting up of one 0.7 mtpa Coke Ovens Battery (No.10) along with the By-Product Plant.

In order to prepare for marketing the additional volume of production from the new expansion, the Company has been working on significant initiatives on the marketing front which included (a) the launch of the Astrum brand (HR coils) to serve the large SME market, (b) acquisition and expansion of large commercial accounts in tubing, cold rolling, packaging and LPG segments, (c) developing international markets for the products and (d) initiating new product development process for securing customer approvals in the automotive segment.

The Company completed the Financial Year 2012-13 with an overall increase of approximately 14% in production and sales volumes. The production of Hot Metal (8.86 million tonnes), Crude Steel (8.13 million tonnes) and Saleable Steel (7.94 million tonnes) reached their respective highest levels till date. Correspondingly, the deliveries recorded new highs at 7.48 million tonnes for the year.

There were also several best performances recorded by many of the other operating units of the Company during the Financial Year 2012-13 some of which are as follows:

a. The Ferro Alloys and Mineral Division (FAMD) achieved the highest ever Ferrochrome production (218k tonnes) and sales (223k tonnes). FAMD launched "Tata Silcomag" India''s first branded Ferro Alloy for the SME segment.

b. Global Wires achieved its highest ever total wires production of 315,000 tonnes.

c. The Tubes Division production at 391,000 tonnes and sales at 387,000 tonnes in the Financial Year 2012-13 was the highest ever. The Division developed new products like Red Oxide Pipes, Thin Organic Coated galvanised tubes and GP tubes for retail segment. Tata Pipes also won the Zee Business ''Good Home Award'' 2012 in pipes category.

d. The Bearings Division commissioned a new line of Bearings - ''HUB Bearings'', specifically used in passenger vehicles. The Division also inaugurated a state of art ''testing and validation centre'' based on latest technology to meet the increasing expectations of the automotive customers. The Bearings Division production was 33.73 million numbers and sales was 32.03 million numbers in the Financial Year 2012-13. The Bearings Division won the ''Economic Times - Frost and Sullivan - IMEA'' Gold Award excellence in manufacturing & supply chain, and the Bajaj Gold Consistency Award for QCD, second year in a row in the Financial Year 2012-13.

e. The Agrico Division has launched two new products ''Seed Drill'' and ''Cultivator'' under the Grasshopper sub brand, and has achieved its best ever sales of Rs. 162 crores (a growth of ~5%) in the Financial Year 2012-13.

The Company achieved a savings of approximately Rs. 1,625 crores by improving operational excellence through focused initiatives in the Financial Year 2012-13. The special improvement initiative ''KVHS'' (Kar Vijay Har Shikhar - Conquer Every Peak) launched during the Financial Year 2011-12, contributed approximately Rs. 1,057 crores in the Financial Year 2012-13. This initiative is focused on Tata Steel''s aspiration to improve its earnings through generation of new ideas and deploying the same through a structured framework. It is a multi-unit, multi-location and a cross functional improvement programme that aims to excel across the entire value chain - from the raw materials mining to the operating units across all divisions.

Inspite of very challenging market conditions and weak steel prices in India, the Company sold an additional 850,000 tonnes during the Financial Year 2012-13. During the fourth quarter of the financial year, the Company sold around 2.2 million tonnes of steel that is the highest quarterly volume in the history of the Company. This was possible due to the successful ramp up of the new facilities in Jamshedpur and the marketing initiatives taken by the Company to gear up to sell the additional volume of the expanded capacity. The profit before finance costs, depreciation, exceptional items and taxes for the stand alone Tata Steel was Rs. 12,028 crores for the Financial Year 2012-13 which was marginally lower by about 3% compared to the previous financial year.

European operations:

Tata Steel Europe''s (TSE) turnover for the Financial Year 2012-13 was 15% lower than the previous year. This was due to lower deliveries by about 7% compared to the previous year and a 8% lower average revenue per tonne caused by the deterioration in the market conditions and volatile currency exchange rates in the Financial Year 2012-13. The deliveries in Financial Year 2012-13 were impacted by the lower volume of production due to the rebuilding of Blast Furnace 4 (Port Talbot, United Kingdom), and hearth issues at Blast Furnace 7 in IJmuiden (Netherlands). The blast furnace #4 rebuild, was completed and the furnace was relighted in February 2013. The company continued to press forward with its structured improvement programme OGSM (Objectives Goals Strategies and Measurement) and posted significant gains from the success of this programme. The above improvement programme along with the other short-term management interventions could offset some of the adverse impact of the external market deterioration.

In order to enhance customer service levels, TSE is implementing a major ''supply chain transformation'' project aimed at allocating customer demand in the most efficient and timely manner (thereby reducing inventory levels, reducing costs to serve, and improving delivery and availability standards), whilst at the same time improving customer service levels. The company has also been accelerating its new product development programme as 17 new products were introduced in the market.

South-East Asian operations:

NatSteel achieved its best ever performances in Singapore and China driven by capacity expansion in China. NatSteel''s Singapore downstream domestic sales achieved a new high of 500,000 tonnes, a 19% increase over the Financial Year 2011-12.This makes it one of the largest reinforcement solutions business in the world with an enhanced product mix of 66% value added products. Other operating entities like NatSteel Vina in Vietnam and China also showed improved performance compared to the previous year. NatSteel''s operations in Australia have also undergone a major transformation, with the restructuring of its Queensland operations in Australia.

Tata Steel Thailand (TSTH) production in the Financial Year 2012-13 at 1.167 million tonnes was at par with the previous financial year though it recorded an increase in the finished goods sales by 3% during the year. The enhanced growth in construction sector in Thailand helped in the increase of rebars sales though the wire rods product line was adversely affected by the cheaper imports from China. TSTH further strengthened its leadership position in rebars by increasing its market share from 25% to 29% and also established a stronger foothold of its brand Tata Tiscon in the regional markets of Thailand. The year also saw the launch of Seismic rebars, an earthquake resistant rebar for the first time in Thailand.

Review of Impairment risks:

Under the Indian Accounting Standards a company is required to undertake an impairment review of its assets and investments based on certain triggers relating to the business or the operating environment.

Based on the above review, the Company has made a provision in the stand alone financial statements of Rs. 687 crores towards impairment in respect of equity investment in and loans granted to Tata Steel KZN Pty. Limited, South Africa. Further, the Company has recognised a non-cash write down of goodwill and other assets of Rs. 8,356 crores in the consolidated financial statements. The above impairment provision relates partly towards the write down of the assets in some parts of the business in Tata Steel Europe and also part write down of goodwill created on the acquisition of Corus Group plc (now Tata Steel Europe) in 2007. The balance provision relates to the investments made by the Company in Tata Steel KZN Pty. Limited, South Africa, Kalimati Coal Company Limited, Australia, Tata Steel Thailand and Tata Metaliks Limited (Redi Plant). The recoverable value of these companies have been adversely affected by various reasons including severe contraction in demand,especially in construction sector,declining output prices and very high raw material prices that has impacted competitive strength of the above businesses. The above provisions are non- cash charges and do not affect any of the financial covenants and the funding position of Tata Steel Group.

EXPANSION PROJECTS:

Brownfield Projects:

Jamshedpur expansion project (2.9 million tonnes)

Tata Steel India has completed implementation of the 2.9 mtpa expansion project at Jamshedpur Works to increase its crude steel capacity from 6.8 mtpa to 9.7 mtpa. The expansion project also entailed augmentation of Noamundi and Joda Iron Ore Mines and related facilities along with a By-Product Plant. Besides the main production units, the expansion project also included setting up the required support systems such as power, water, utilities, raw material handling and plant logistics. All the production facilities have been commissioned in phases. The facilities are currently in various stages of ramp up. Continuous Annealing and Processing Line Jamshedpur Continuous Annealing & Processing Company Private Limited (JCAPCPL), a joint venture company between Nippon Steel & Sumitomo Metal Corporation (NSSMC) and Tata Steel was formed in early 2012 for producing high end cold rolled coils and sheets for the Indian automotive market. It is currently undertaking the construction of a 0.6 mtpa Continuous Annealing & Processing Line (CAPL). The construction of the CAPL and all other related facilities is progressing as per schedule.

Greenfield Project

The greenfield project execution in Odisha to produce flat steel products with an ultimate capacity of 6 mtpa in two phases has made significant progress on all fronts during the year. Major orders for all zones of the phase 1 of the project have been placed and construction work is in full swing.

The new facility coming up at Kalinganagar will augment Tata Steel''s product range to meet the changing customer needs in segments that the Company serves currently. These include Automotive, Packaging, Tubing, Construction, Appliances and Railways.

The Kalinganagar facility will also enable Tata Steel to enter and have a significant presence in segments such as Oil & Gas, Lifting & Excavation, Infrastructure, Defence, Shipbuilding, Energy, Power, etc. This will help Tata Steel to improve its market share in the domestic market in the future. The first phase is expected to be completed by 2015.

RAW MATERIAL PROJECTS:

Tata Steel continued to implement its long-term strategy to secure ownership of assets that will increase its raw materials security and share of value-added products. During the Financial Year 2012-13 the Company''s primary focus remained on expediting implementation of its existing ventures and stabilising the operation of operating ventures.

Benga Coal Project, Mozambique:

In November 2007, the Company entered into Definitive Agreement with Riversdale Mining Company, an Australian listed company for purchasing 35% stake in its Mozambique Coal Project. In April 2011, British Australian Mining Company, Rio Tinto took over Riversdale Mining Company.

The Company holds 35% in RioTinto Benga (Mauritius) Ltd. (RTBML) with the balance 65% held by Rio Tinto. In Financial Year 2012-13 RTBML produced 1.41 Million tonnes of Coal (0.67 million tonne of coking coal and 0.74 million tonne of thermal coal).

Iron Ore Projects in Canada:

The Company holds 26.31% in New Millennium Iron Corp., Canada (NML). NML owns Direct Shipping Ore (DSO Project) and Taconite Iron Ore Projects. A joint venture Company Tata Steel Minerals Canada Limited (TSMC) was formed in October 2010 for development of DSO Project. Tata Steel holds 80% equity stake in TSMC and the balance 20% equity stake is held by NML.

TSMC has commenced production in September 2012 and achieved the production of 0.30 million tonnes in the Financial Year 2012-13 against the plan of 0.25 million tonnes.A production of 2 million tonnes is planned for the Financial Year 2013-14.

In recognition of the progress made by the Company, TSMC has been conferred with the ''Miner of the Year Award'' by the Canadian Institute of Mining, Minerals and Petroleum (CIM), New Foundland and Labrador.

In March 2013, the Company through its subsidiary TSMC, entered into a framework arrangement with Labrador Iron Mines (LIM) for acquisition of 51% stake in LIM''s Howse deposit which is near the Company''s DSO Project. This arrangement is expected to enhance resource and production and will also improve operational flexibility relating to DSO Project.

HEALTH AND SAFETY:

Tata Steel has identified excellence in health and safety in all its operations as a key business imperative. The Company has adopted and applied a range of programmes, including those from DuPont the world benchmark in safety, to establish a strong safety culture by inculcating safe behaviour among its employees and contractors. In Tata Steel the Lost Time Injury Frequency Rate for the Financial Year 2012-13 is 0.60 which is an improvement of 12% over last year.

The health initiatives, driven through Wellness@Workplace programme in India has a special focus on the health of women employees. These are designed to provide an injury- free working environment for a healthy and happy workforce. Tata Steel India has taken a special drive on Fatality Risk Control Programme and elimination of commonly accepted unsafe practices. This initiative has enabled correction of more than 10,000 unsafe conditions and 969 unsafe practices.

In Tata Steel India, a series of safety initiatives helped in enhancing of production capacity from 5 mtpa to 10 mtpa in the last eight years while maintaining complete harmony with the community. Further expansion of 6mtpa at Kalinganagar, Odisha is being carried out by promoting safety culture among the employees including contractors as also involving community through a special project ''AAKAR'' to promote the local acceptance. In its endeavour to address the issue of community safety, Tata Steel India is working with external consultants to drive systematic domestic safety management and safety education initiatives for school and college students in Jamshedpur and at the different mines and collieries.

In Tata Steel Europe health and safety improvements are embedded in the business strategic plan (OGSM) and these were delivered well in the Financial Year 2012-13 enabling a 18% reduction in Lost Time Injuries and recordables (4.55 in 2012-13 compared to 5.56 in 2011-12).''Recordables''are defined as all work related incidents resulting in harm to a person or persons, excluding those that require no more than first aid treatment. Highlights during the period was the full project re-build of Blast Furnace 4 at Port Talbot with no lost time injuries. TSE launched two enabling strategies that were Health & Safety Excellence for senior leaders and positive safety conversation training and implementation for all employees to move to a mature safety culture.

Operations in South East Asia at Tata Steel Thailand and NatSteel are strengthening their safety practices particularly in the areas of positive isolation, stock yard management and employees involvement through train the trainers programme. These are carried out through theme based onsite visits, reviews, recommendations and trainings.

In 2012-13 Tata Steel was again recognised by its peers in the World Steel Association with a health and safety recognition award for Tata Steel and NatSteel.

ENVIRONMENT:

The Company believes that respect for the environment is critical to the success of its business and strives for continuous improvement in environmental performance. The Group approach towards environmental protection is guided by the Founder''s Vision, Environmental Policy, Tata Group Climate Change Policy, commitment towards a sustainable planet and a clean environment as well as a healthy workplace for employees. All key sites involved in mining and manufacturing are certified under EMS ISO 14001, the international environmental management standard.

The Company focuses on environmental management not only to comply with the applicable regulatory regime but also strives to contribute positively to the communities around its operations through varied community initiatives, encouraging biodiversity and nature conservation. The Company''s products are part of the solution to climate change as steel has inherent environmental advantages by being durable, adaptable, reusable and recyclable. CO2 and other emissions in steel production are therefore offset by reductions in emissions through the life cycle of steel products achieved through effective product development & design and through recycling at end of life.

The Group continues to invest substantially in short to medium term CO2 emissions, reduction and energy efficiency improvement programme.

The Company continues to participate in the World Steel Association Climate Action programme and has further endorsed the United Nations global compact''s CEO water mandate.

Indian Operations :

The regulatory framework in India is transforming. In March 2012, new set of emissions and effluent standards applicable to Iron and Steel facilities were notified by the Government of India. Tata Steel India has started gearing up to meet this challenge to the new set of norms.

A new facility for waste storage and processing started during the year enabled enhanced solid waste utilisation at Jamshedpur Steel Works to 84% from 75% achieved in 2011-12. The projects under ''Zero Effluent Discharge'' are being commissioned in phases to reduce discharges from operations of water substantially.

The CO2 emission level for Jamshedpur Steel Works in the Financial Year 2012-13 was 2.52 tCO2/tcs that was in the similar level as in the previous year. The Company is examining means to reduce energy consumption and CO2 emissions to retain its position as the Indian benchmark in CO2 emissions in the Iron and Steel sector (BF-BOF route) by increasing process efficiency, scrap utilisation and reduction of alumina of iron ore and ash in coal through beneficiation.

Overseas Operations

European Operations (Tata Steel Europe - TSE):

CO2 emissions in TSE during the Financial Year 2012-13 were 1.90 tCO2/tcs (compared with 1.93 tCO2/tcs in 2011-12) and the compliance with the environmental permit conditions across TSE continued to be at a very high level during the financial year.

TSE met its environmental obligations in Phase 1 (2005 to 2007) and Phase 2 (2008 to 2012) of the EU ETS and expects to do the same in Phase 3 (2013 to 2020).

TSE currently participates in a voluntary agreement with the Dutch government regarding energy efficiency improvements over the period 2013 to 2016 (with the previous agreement extending from 2009 to 2012 inclusive). The primary requirement of the agreement is an energy efficiency improvement of 2% per annum, covering both energy used within the manufacturing process and energy saved across the product life cycle.

In the United Kingdom (UK), as a result of achieving the 2010 (the most recent milestone year) target within the Tata Steel Climate Change Levy (''CCL'') agreement, TSE has continued to benefit from the reduced rates in relation to the CCL. The UK government has reviewed the CCL agreement system and a revised system, which is smaller in scope that eliminates any overlap with EU ETS, is being applied from 2013 onwards. In this regard, a specific energy reduction target of -7% by 2020 (compared to 2008) has been agreed with the UK Government. Achievement of this target and the various intermediate milestone year targets will allow TSE to continue to benefit from reduced rates of CCL.

Tata Steel Europe is also working with other steelmakers in Europe on major research and development project, ULCOS (ultra low CO2 steelmaking), which aims to develop breakthrough technologies which can reduce CO2 emissions per tonne of steel produced by at least 50%. In this regard, HIsarna TM, a smelting reduction technology which offers the potential to eliminate the sinter, pellet and coke production steps from the primary iron making process and which in principle offers a 20% energy (and CO2) reduction opportunity without carbon capture and storage, is being piloted in IJmuiden, the Netherlands, jointly with other partners with a successful second campaign undertaken during 2012. A third campaign will be carried out in 2013.

South East Asia Operations:

NatSteel Holdings and Tata Steel Thailand have continued to operate with a high level of compliance with the environmental regulations. During the Financial Year 2012-13 there was a focus on energy efficiency improvements. At NatSteel a system to recover waste heat from the reheating furnace was installed during the Financial Year 2012-13. This system will generate approximately 1MW of electrical power, thereby reducing reliance on external electricity supplies and reducing CO2 emissions by over 3000t/year. Furthermore, the site was certified to the international energy management standard, ISO 50001, during the year.

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, 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

Mr. Ratan N. Tata joined the Board as a Non Executive Director in 1977 and was appointed as the Chairman in 1993. He stepped down as the Chairman and Director of the Company on 28th December, 2012 on reaching the age of 75 years and was appointed as ''Chairman Emeritus'' by the Board on the same date. The Directors would like to place on record their sincere appreciation of Mr. Tata''s relationship of nearly five decades with the Company during which his visionary leadership, strategic direction and stewardship contributed immensely in the growth of the Company and the Tata Steel Group.

Mr. Cyrus P. Mistry was appointed as Chairman of the Board with effect from 28th December, 2012.

Mr. S. M. Palia stepped down as a Director of the Company on 25th April, 2013 on reaching the age of 75 years. The Directors would like to place on record their sincere appreciation of the contributions made by Mr. S. M. Palia during his tenure on the Board since 1989.

In accordance with the provisions of the Companies Act, 1956, and the Company''s Articles of Association, Mr. Nusli N. Wadia, Mr. Subodh Bhargava, Mr. Jacobus Schraven and Dr. Karl-Ulrich Koehler retire by rotation and are eligible for re-appointment.

Mr. D. K. Mehrotra, Chairman of Life Insurance Corporation of India was appointed as Additional Director by the Board with effect from 22nd October, 2012.

Mr. Koushik Chatterjee, was appointed as Additional Director designated as Executive Director and Group Chief Financial Officer of the Company with effect from 9th November, 2012. Mr. O. P. Bhatt, former Chairman of State Bank of India was appointed as Additional Director by the Board with effect from 10th June, 2013.

Mr. D. K. Mehrotra, Mr. Koushik Chatterjee and Mr. O. P. Bhatt will hold office till the date of the forthcoming Annual General Meeting and notices have been received from a Member proposing the candidatures of Mr. D. K. Mehrotra, Mr. Koushik Chatterjee and Mr. O. P. Bhatt for being appointed as Directors of the Company.

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.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, a Management Discussion and Analysis, Corporate Governance Report, Managing Director''s and Auditors'' Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report. A Business Responsibility Report on the Company''s corporate sustainability initiatives is also included.

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, 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.

On behalf of the Board of Directors

CYRUS P. MISTRY

Chairman

Mumbai, 11th June, 2013


Mar 31, 2011

The Board of Directors hereby presents the 104th annual report on the business and operations of your Company along with the standalone and consolidated summary financial statements for the year ended 31st March, 2011.

Figures in Rs. crores

Tata Steel Standalone Tata Steel Group

2010-11 2009-10 2010-11 2009-10

Net Sales/Income from Operations 29,396.35 25,021.98 1,18,753.12 1,02,393.12

Total expenditure before depreciation 17,963.49 16,069.89 1,02,757.50 94,350.46 (net of expenditure transferred to capital)

Operating Profit 11,432.86 8,952.09 15,995.62 8,042.66

Add: Dividend and other income 790.67 853.79 980.98 1,185.85

Profit before interest, depreciation, exceptional items and taxes 12,223.53 9,805.88 16,976.60 9,228.51

Less: Net finance charges 1,300.49 1,508.40 2,770.04 3,022.06

Profit before depreciation, exceptional items and taxes10,923.04 8,297.48 14,206.56 6,206.45

Less: Depreciation 1,146.19 1,083.18 4,414.82 4,491.73

Profit before exceptional items and taxes 9,776.85 7,214.30 9,791.74 1,714.72

Add/(Less): Restructuring costs - - 2,310.21 (1,683.72)

Profit before taxes 9,776.85 7,214.30 12,101.95 31.00

Less: Provision for current taxation 2,857.00 1,998.00 2,910.34 2,162.53

Less: Provision for deferred taxation 54.16 169.50 335.56 (10.69)

Profit after taxes 6,865.69 5,046.80 8,856.05 (2,120.84)

Less: Minority Interest - - (60.28) 15.24

Add: Share of Profit of Associates - - 66.36 126.86

Profit after minority interest and share of Profit of associates - - 8,982.69 (2,009.22)

Distribution on hybrid perpetual securities 6.79 - 6.79 -

Tax effect on distribution of hybrid perpetual securities (2.25) - (2.25) -

Profit after taxes and distri -bution on hybrid perpetual securities 6,861.15 5,046.80 8,978.15 (2,009.22)

Add: Balance brought forward from the previous year 12,772.65 9,496.70 7,010.48 10,961.96

Add: Balance brought forward - HMPCL on Amalgamation - 12.28 - -

Balance 19,633.80 14,555.78 15,988.63 8,952.74

Which the Directors have apportioned as under to:

(i) Dividend on Preference Shares - 45.88 - 45.88

(ii) Proposed dividend on Ordinary Shares 1,151.06 709.77 1,150.25 709.23

(iii) Tax on dividends 156.71 122.80 163.22 154.33

(iv) Special Reserve - - 5.32 48.55

(v) General Reserve 686.57 504.68 703.42 552.58

(vi) Debenture Redemption Reserve 1,000.00 400.00 1,007.26 400.00

(vii) Statutory Reserve - - - 31.69

Total 2,994.34 1,783.13 3,029.47 1,942.26

Balance to be carried forward 16,639.46 12,772.65 12,959.16 7,010.48

DIVIDEND

The Board recommended dividend of Rs. 12 per Ordinary Share on 95,92,14,450 Ordinary Shares (2009-10: Rs. 8 per Ordinary Share on 88,72,14,196 Ordinary Shares of Rs. 10/- each) for the year ended 31st March, 2011.

The dividend on Ordinary Shares is subject to the approval of the shareholders at the Annual General Meeting. The total dividend payout works out to 19% (2009-10: 17%) for the standalone company.

INCREASE IN AUTHORISED SHARE CAPITAL

In order to facilitate the issue of Ordinary Shares with differential voting rights as to voting and/or dividend (hereinafter referred to as A Ordinary Shares) in the future, the authorised share capital of the Company was increased from Rs. 8,000 crores to Rs. 8,350 crores by creation of a new class of Capital viz. 35,00,00,000 A Ordinary Shares of Rs. 10 each aggregating to Rs. 350 crores.

PREFERENTIAL ISSUE OF SHARES AND WARRANTS TO TATA SONS LIMITED

Pursuant to the shareholders approval obtained through Postal Ballot, the following securities were allotted to Tata Sons Limited on 23rd July, 2010:

i. 1,50,00,000 Ordinary Shares of Rs. 10/- each at a premium of Rs. 584/- per share aggregating to Rs. 891 crores and

ii. 1,20,00,000 Warrants, where each Warrant would entitle Tata Sons Limited to subscribe to one Ordinary Share of the Company at a price of Rs. 594/- per share. As per the SEBI (ICDR Regulations 2009), an amount equivalent to 25% of the price i.e. Rs. 148.50 per Warrant aggregating to Rs. 178.20 crores was received from Tata Sons Limited. The option to convert the Warrants into Ordinary Shares is exercisable by Tata Sons Limited before 23rd January, 2012.

FOLLOW-ON PUBLIC ISSUE OF ORDINARY SHARES

The Company completed a follow-on public issue of 5,70,00,000 Ordinary Shares of Rs. 10/- each at a price of Rs. 610 per share (including premium of Rs. 600 per share) aggregating to Rs. 3,477 crores. The Ordinary Shares were allotted on 29th January, 2011 in accordance with the terms contained in the Prospectus dated 25th January, 2011.

GLOBAL ECONOMY

The world GDP, as reported by International Monetary Fund, was on an upturn, growing by 5% in 2010 as compared to a negative growth of 0.5% in 2009. While the growth in the advanced economies was 3.0% in 2010, in contrast to -3.4% in 2009, the emerging and developing economies grew by 7.3% in 2010 when compared to the growth of 2.7% in 2009. The growth in the developing and emerging economies slowed down during the end of 2010 as stimulus measures were slowly removed and policies were tightened in response to rising inflation and overheating concerns. A trend of GDP growth (%) for the last five years in the world, split up into advanced economies and emerging and developing economies, is shown below:

The US: The US GDP increased by 2.8% in 2010 as compared to a negative growth of 2.6% in 2009, but the country still faces large fiscal deficit. In late 2009 and early 2010 there was a deceleration in growth in the US economy as the effect of one time stimulus factors faded. However, in the second half of the year, growth picked up with a decline in the rate of unemployment and consumer spending picking up at its fastest pace in the last five years with further major stimulus measures being introduced along with tax cuts and investment incentives. The housing market, non-residential construction and overall credit growth still remained weak with tight bank lending conditions starting to ease for not only large firms but also for small and medium-sized firms.

India: As reported in the Economic Survey of 2010-11, GDP is expected to grow by 8.6% in 2010-11 as compared to the growth of 8.0% in 2009-10. The agricultural output grew by 5.4% as compared to a nominal 0.4% growth in 2009-10 when the country was hit by a dEfficient monsoon. Manufacturing grew by 8.8% during the year being at par with the growth noticed in the last f scal. Overall growth in industry was 8.1% during 2010-11 compared to 8.0% in the last year. Services witnessed a decelerated growth of 9.6% as compared to a growth of 10.1% in 2009-10. Amongst the key macro-economic indicators, f scal def cit was limited to 4.8% of GDP in 2010-11 as compared to 6.3% in 2009-10. Export and import grew positively by 29.5% and 19.0% in contrast to the negative growths experienced in the previous year. Clouds of high inflation and a temporary slowdown in the industrial growth are looming in the country as steps are being taken to mitigate such adversities.

Europe: GDP in the Eurozone increased by 1.9% in 2010-11 over 2009-10 with a high unemployment rate of around 10% and divergent performances by member countries. While Germany posted a growth of 4% driven by strong export demand and lower unemployment, the Spanish economy was adversely affected by fiscal tightening and a weak housing market with a rise in unemployment. Ireland, Portugal and Greece are seeking financial assistance from the EU and IMF after facing sharp increases in their borrowing costs and potential shortfall in funding. The UK GDP grew by 1.9% in 2010-11, continuing to recover but uneven growth, high unemployment and rising inflation has resulted in the UK household disposable income coming under pressure. There was a strong quarterly growth at the beginning of the year followed by a slowdown and winter-inflicted contraction in the December quarter. The fiscal austerity announced by the UK Government will see a 24% cut in public investment and 7% cut in real government consumption in the next five years.

TATA STEEL GROUP PERFORMANCE

Tata Steel Group steel deliveries at 23.5 million tonnes in the financial year under review were at par with the financial year 2009-10 (23.6 million tonnes). The gross steel deliveries (including the inter-group transfers) for the steel-producing entities were higher than the previous years with Tata Steel India, Tata Steel Europe, NatSteel Holdings and Tata Steel Thailand posting growth of 4%, 3%, 1% and 8% respectively. Your companys Indian operations recorded a growth of 4% in steel deliveries from 6.17 million tonnes in the financial year 2009-10 to 6.42 million tonnes in 2010-11.

Along with the increase in gross steel deliveries, the steel- producing entities witnessed increases in the average realisations in line with the steep increase in the raw material prices. The turnover for the Group in 2010-11 at Rs. 118,753 crores, was 16% higher than 2009-10 (Rs. 102,393 crores). While the turnover in Tata Steel India witnessed a growth of 17% from Rs. 25,022 crores in the financial year 2009-10 to Rs. 29,396 crores in the financial year 2010-11, Tata Steel Europes turnover increased by 15% from Rs. 65,843 crores in the financial year 2009-10 to Rs. 75,991 crores in the financial year 2010-11.

The Earnings before Interest, Taxes, Depreciation and Amortisation (EBITDA) of the Group increased signif cantly from Rs. 9,340 crores in the f scal year 2009-10 to Rs. 17,103 crores in the financial year 2010-11 primarily driven by the increase in prices partly of set by the steep increase in input costs. Tata Steel India recorded an EBITDA of Rs. 12,224 crores in the financial year 2010-11 growing by 25% as compared to Rs. 9,806 crores in 2009-10.

Restructuring, impairment and disposals in the current year include Rs. 2,503 crores Profit on disposal of Teesside Cast Products at Tata Steel Europe.

Consequently, the Group turned around with a Profit after Tax (after minority interest and share of profits of associates) for 2010-11 at Rs. 8,983 crores as compared to a loss of Rs. 2,009 crores in 2009-10.

Indian Operations: Crude steel production at 6.86 million tonnes in financial year 2010-11 was higher than the previous year (6.56 million tonnes) by 4%, thus exceeding the nameplate production capacity in the second year on enhanced capacity. There was an increase in the vessel life and heat size of the two steel melting shops enhancing their productivity to achieve the higher crude steel production of your company. Saleable steel also increased by 4% from 6.44 million tonnes recorded in financial year 2009-10 to 6.69 million tonnes in the financial year under review with higher hot metal being available from the bigger blast furnaces with higher productivity. The sales volume during the financial year 2010-11 at 6.42 million tonnes was 4% higher as compared to the previous year (6.17 million tonnes) indicating the robust growth in steel demand. Apart from the two steel melting shops, there were many units (including mines and collieries) which surpassed their respective best ever performances.

Ferro Alloys and Minerals divisions saleable production at 1,405k tonnes in the financial year 2010-11 was higher than financial year 2009-10 (1,350k tonnes) by 4%. The sales (including transfers to other divisions of the Company), however, at 1,464k tonnes were lower than the previous year (1,508k tonnes) by 3%. Chrome alloys exports and manganese alloys sales of the division touched new heights during the financial year under review.

Improved demand in auto and infrastructure segments led to the increase in sales and production in the Tubes division. The division recorded production of 371k tonnes in FY 2010-11, higher by 6% over FY 2009-10 (351k tonnes), while the sales improved from 349k tonnes in FY2009-10 to 366k tonnes in 2010-11, an increase of 5%. Boosted by various improvement initiatives under Kar Vijay Har Shikhar programme, the division continued to improve on its performance in various segments like Tata Pipes (plumbing and irrigation), Tata Structural (infrastructure) and Precision Tubes (Automotive, Process and Power sector).

Sales in the Bearings division in the financial year 2010-11 at 32.95 million numbers grew by 4% against the financial year 2009-10 (31.69 million numbers), while the production at 33.14 million numbers in FY 2010-11 increased by 12% over FY 2009-10 (29.61 million numbers). The increases were primarily driven by higher demand in the domestic auto segment.

European operations: Sales volumes of Tata Steel Europe (TSE), excluding seasonal effects, were reasonably flat for the first three quarters of the financial year 2010-11, before showing an improvement in the last quarter to the highest level of quarterly sales since financial year 2008-09. Deliveries in Tata Steel Europe during FY 2010-11 (14.9 million tonnes) increased by 3% over FY 2009-10 (14.4 million tonnes). Selling prices increased steadily through the year with the revenue per tonne increasing by around 17% over the previous year. The revenue per tonne increased relatively sharply in the first quarter of the financial year under review in anticipation of the equally sharp increase in price of raw materials, but became more modest in the second and third quarters before losing its upward momentum in the fourth quarter. Raw material prices, in contrast, peaked during the third quarter.

TSE has adopted the Tata Steel identity for trading purposes with ef ect from September 2010 and a progressive rebranding process is under way. The Company has also adopted a new operating model to replace the previous model of three main operating divisions (Strip Products, Long Products and Distribution & Building Systems). It is now organised into a number of business activities comprising steelmaking hubs (Strip Products Mainland Europe, Strip Products UK and Long Products Europe), speciality businesses (Colours, Building Systems, Packaging, Tubes, Kalzip, Plating, Cogent Power and Speciality Steel), and a distribution and sales network (Distribution UK & Ireland, Distribution Europe and International). TSE has adopted a single sales and marketing function with eight industry-focused marketing sectors, namely automotive, construction, packaging, rail, lifting and excavating, energy and power, industry strip and industry long products. Europe, principally the EU, continues to be the most important market of the Company.

On 24th February, 2011, Tata Steel UK Limited (TSUK), a subsidiary of TSE, signed a def nitive sale agreement to sell certain assets of TCP to Sahaviriya Steel Industries Public Company Limited in a deal valuing the business at £434 million. The assets covered by the sale include the Redcar blast furnace, the Redcar and South Bank coke ovens, TCPs power generation facilities and sinter plant, and the Lackenby steelmaking and casting facilities. The deal also includes TSUK and SSI entering into a joint venture to operate Redcar wharf, TCPs bulk terminal. The sale was completed on 24th March, 2011.

The Fit for the Future programme initiated in response to the financial crisis continued to give results with notable reduction in the average number of employees. The deal with SSI resulted in 850 employees getting transferred to SSI and it is expected that further jobs will be created.

South-East Asian operations: NatSteel recorded an increase in steel sales by 1% in FY 2010-11 (1.80 million tonnes) over FY 2009-10 (1.78 million tonnes). The increases were most noticeable in NatSteel Singapore, the Australian units, Thailand and in trading business, while other business units in China and Vietnam witnessed decline in their respective volumes. NatSteel Singapore increased its sales volume by 106k tonnes from 738k tonnes in FY 2009-10 to 844k tonnes in FY 2010-11. Average revenue per tonne improved across all units (other than Australian units) thereby increasing the turnover of the Company. The Company sold its share in an associate company Southern Steel Berhard (SSB) during the financial year. The EBITDA of the Company, excluding the Profit on sale of share of SSB in the financial year under review, reduced from the previous financial year primarily due to rise in the cost of input materials which more than of set the increase in prices and impact of higher sales volumes.

Sales volume of Tata Steel Thailand during FY 2010-11 at 1.29 million tonnes was higher than FY 2009-10 (1.20 million tonnes) by 8%, while production increased by 6% from 1.21 million tonnes in FY 2009-10 to 1.28 million tonnes in FY 2010-11. During the financial year under review, the Company had to mothball the Mini Blast Furnace in the third quarter due to high costs of operations and low capacity utilisation, before recommencing its operations in the fourth quarter. The company incurred losses during the year primarily due to high costs of operations, low capacity utilisation and losses due to mothballing of the Mini Blast furnace partly compensated by increase in average revenue per tonne and higher sales volume.

EXPANSION PROJECTS

Brownf eld Projects:

Tata Steel India is implementing an expansion project at Jamshedpur Works to increase its crude steel capacity from 6.8 million tonnes per annum to 9.7 million tonnes per annum. The facilities under this project are scheduled to be completed in FY 2011-12. Simultaneously, the Company is implementing a few other major capital schemes at Jamshedpur which include Coke Plant Battery No. 11, Coke Dry Quenching at Coke Ovens Batteries 5, 6 & 7 and a new mill for producing Full Hard Cold Rolled (FHCR) coils. Tata Steel India is also setting up a Continuous Annealing and Processing Line at Jamshedpur with a capacity of 0.6 mtpa under a joint venture company with Nippon Steel Corporation (NSC), Japan. The line will produce automotive cold rolled flat products and address the needs of Indian automotive customers for high- grade cold rolled steel sheets. NSC will transfer its technology for producing high-grade cold rolled steel sheets for automotive application including skin panel and high tensile steel. These projects, along with other sustenance and improvement projects, are being implemented with a view to support your Companys current operations and its growth aspirations.

Greenf eld Projects:

Odisha Project:

Preliminary work on the 6 mtpa greenfield steel plant at Kalinganagar, Odisha is in progress. The boundary wall on 3 sides (8.5 km) along with trench cutting and barbed wire fencing has been completed, warehouse has been made operational and construction of Sinter plant has started. As of March 2011, a total of 910 families have moved from the plant site to the new rehabilitation colony area where plot allocation has been started. The rehabilitation colonies have been provided with good infrastructural facilities which include clean drinking water, street lighting, and a community centre set up by the Company. Key challenges for FY 2011-12 are to develop infrastructure and mobilise resources to accelerate the project work.

Other projects:

Chhattisgarh Project:

The Company has signed an MoU with the Government of Chhattisgarh for setting up of a 5 mtpa Greenfield integrated steel plant in Bastar. Land has been acquired by the

Government and the rights vest with Chhattisgarh State Industrial Development Corporation (CSIDC) for allotment to Tata Steel Limited for 99 years. The letter of intent from CSIDC has been issued. Your Company requested for demarcation free from all encumbrances, as per terms of MoU, before taking possession of the said land.

Further, Chhattisgarh Government has accorded approval for drawing water from the river Sabri and the Ministry of Railways, Government of India has granted an in-principle approval for the railway corridor. Public hearing for the Environment Clearance has been successfully conducted.

Prospecting License for iron ore has been granted in Bailadila-I deposits after obtaining necessary approvals from the Ministry of Environment and Forest and Ministry of Mines, Government of India. Prospecting License for Pyroxenite in the close proximity of iron ore area is in an advanced stage of grant by the State Government. In line with the Companys initiatives in the field of Corporate Social Responsibility, several activities in the field of health, youth and women empowerment, sports and skill development are being carried out for local residents as well as those from displaced families.

Ha Tinh Project at Vietnam:

Tata Steel signed an MoU with Vietnam Steel Corporation (VSC) on 29th May, 2008 to develop a steel complex with an estimated capacity of 4.5 million tonnes per year in Ha Tinh province at Vietnam. Another MoU was signed to set up a cold rolling mill in Ha Tinh province. On successful completion of study and financial closure, Tata Steel will have a stake of minimum 65% and VSC will have a stake of 35% in the steel complex.

Karnataka Project:

Tata Metaliks Limited (TML) and Tata Steel have entered into a MoU with the Government of Karnataka in June 2010 for setting up an integrated steel plant of 3 mtpa in Agadi and Boodagatti villages of Haveri District, Karnataka. State High Level Clearance Committee of the Government of Karnataka has approved 2,500 acres of land at Agadi, Boodagatti, Devagiri and Yellapura villages, and is in process of acquiring land.

RAW MATERIAL PROJECTS

Your Company continues to implement its long-term strategy to secure ownership of assets that will increase its raw materials security and share of value-added products. During the financial year 2010-11, the Companys primary focus was on expediting implementation of its existing ventures.

Coal Projects:

Benga Coal Project, Mozambique: The Tata-Riversdale Joint Venture in Mozambique conducted a formal Ground Breaking Ceremony at the Benga Coal Project in the presence of the President of the Republic of Mozambique, His Excellency Armando Emilio Guebuza on 14th April, 2010. This official ceremony follows a series of milestones already achieved by the Company such as the signing of the Mining Contract, approval of Environmental Licences for the Benga Coal Project and the Benga Power Project, and the approval of Stage 1 of the Benga Coal Project following the completion of the Feasibility Study for production of 10.6 million ROM tonnes in two phases. Other key contracts and agreements include the CHP Plant Supply Contract, a Resettlement Action Plan and the Project Labour Agreement (PLA) which was signed with SINTICIM (the Mozambican National Construction and Mine workers Union).

Stage 1 entails initial production of 5.3 million ROM tonnes per year to produce approximately 1.7 mtpa of high quality hard coking coal and 0.3 mtpa of thermal coal by the second half of 2011. Tata Steel has 35% stake in the joint venture with 40% of -take right to the coking coal produced from these mines. The joint venture owns the Benga and Tete tenements which cover an area of 24,960 hectares. Benga has an inferred resource of approximately 4 billion tonnes. Your Company plans to supply the hard coking coal from this project to its facilities in Europe in the initial phase of the project development and also for the requirements of the Indian operations in the future. Tata Steel currently holds about a 27.1% equity stake in the parent company, Riversdale Mining Limited.

Coal Mining Project in Australia (CDJV): Tata Steel has a strategic interest of 5% in the coal mining project in Australia in partnership with Vale, Nippon Steel, JFE and POSCO with up to 20% of -take rights. The Joint Venture was formed for the development of a greenf eld underground coal project in Bowen Basin, Queensland. The first raw coal production started in August 2006 and the mine is currently producing around 1.5 mtpa. The mine is being operated by Long Wall method and expected to produce around 3.0 million tonnes of Coking and PCI coal during FY 2011-12.

Iron Ore Projects:

Direct Shipping Ore Project in Canada (New Millennium Capital Corporation):

In September 2008, Tata Steel had entered into a Heads of Agreement with New Millennium Capital Corporation, Canada

(NML), a Canadian listed mining company, to develop iron ore projects in northern Quebec and Newfoundland and Labrador and had acquired a 19.9% stake in NML. As per the agreement, Tata Steel had an exclusive option to acquire an 80% equity interest in NMLs Direct Shipping Ore project (DSO Project) and an exclusive right to negotiate and settle a proposed transaction in respect of NMLs LabMag and KéMag (Taconite) Projects. In September 2010, Tata Steel has made a positive investment decision by exercising its option to acquire 80% interest in the NMLs Direct Shipping Ore (DSO) Project.

As part of the Joint Venture agreement, Tata Steel will reimburse NML for 80% of NMLs cost to date on the DSO Project; arrange funding for up to CAD$ 300 million of capital costs for the Project to earn its 80% share of the JV and commit to take 100% of the DSO projects iron ore products of specif ed quality, at world market prices, for the life of the mining operation. The Feasibility Study estimates proven and probable mineral reserves of 64.1 million tonnes and the project is expected to produce 4 million dry tonnes per year of iron ore products commencing in the second half of 2012. The iron ore from this project will be supplied to Tata Steel Groups facilities located in Europe.

On 26th February, 2011, Tata Steel purchased 67,39,956 common shares of NML under its existing pre-emptive right at CAD$ 3.50 per share for gross proceeds to NML of CAD$ 23,589,846. This will maintain Tata Steels interest in NML at approximately 27.2% of the total shares outstanding.

On 6th March, 2011 Tata Steel signed a binding heads of agreement with New Millennium Capital Corporation to develop the LabMag and KéMag iron ore deposits, known collectively as the Taconite Project. The Taconite Project consists of two world- class magnetite iron ore deposits on the emerging Millennium Iron Range, which stretches 210 kilometres from western Labrador through eastern Quebec. The LabMag deposit is located in the Labrador portion of the range and the KéMag deposit is located in the Quebec portion. Together, the two deposits hold over 9 billion tonnes of reserves and resources and are expected to produce more than 20 million tonnes per year of concentrate, with a potential mine life of over 100 years.

Ivory Coast Project: In view of the environmental issues encountered in the case of Mt. Nimba deposit, Tata Steel approached the Government of Ivory Coast to grant a Prospecting License for Mt. Gao for an early start of the project. The Government of Ivory Coast has granted an Exploration

License to Sodemi on 30th July, 2009 and an Addendum to the Joint Venture Agreement was signed on 29th September, 2009 to include Mt. Gao in the Joint Venture Agreement. Upon transferring the Exploration License for Mt. Gao to the JV company, a helicopter-borne geophysical survey covering 811 sq km has been completed. The team on the site has also done a detailed geological mapping over a 100 sq km area at 1:10000 scale. Currently exploration work on the ground has been put on hold due to rising security concern in Ivory Coast.

Limestone Project:

Limestone Project in Oman: The Environmental Impact Assessment has been completed and the mining license is awaited.

OTHER PROJECTS

Dhamra Port Company Limited (DPCL):

The Dhamra Port Company Limited, a 50:50 joint venture between Tata Steel Limited and Larsen & Toubro, is developing a deep-draught port under a concession agreement awarded by the Government of Odisha on Build, Own, Operate, Share and Transfer (BOOST) basis. The project will be located on the eastern coast of India approximately 225 km southwest of Kolkata and 205 km from Bhubaneshwar.

Situated between Haldia and Paradip, Dhamra Port will be one of the deepest ports in India with a draft of 18 metres, capable of accommodating super capesize vessels up to 1,80,000 DWT.

Phase-I of the project is complete and the port has started commercial operations on 6th May, 2011. In Phase-I, two fully mechanised berths; one for handling import cargo and the other for export cargo with back-up facilities have been built, along with a rail corridor for hinterland connectivity. The construction of railway line on a route length 62 km from Bhadrak to Dhamra is completed except commissioning of the automated signaling system. The capacity is estimated to be 27 mtpa in Phase-I. Dhamra Port will be of strategic importance to Tata Steel in terms of its integrated logistics cost of raw materials and will also consolidate Tata Steels supply chain network, contributing to its expansion aspirations.

S&T Mining Limited:

S&T Mining Limited is a joint venture between Tata Steel Limited and Steel Authority of India Limited to develop the raw material security. The company was shortlisted by CIL to participate in the tender for reviving and developing abandoned mines. It has made progress on its proposal to set up a 2 mtpa coal washery in Jharkhand for which it is in an advanced stage of environmental clearance. It is also gearing up for participating in the Coal auction process of Ministry of Coal, Government of India.

HEALTH AND SAFETY

Health and Safety continues to be a key performance indicator and one of the prime drivers of the Corporate Vision of your Company. The Group Vision is to achieve a target of 0.4 LTIFR with zero fatalities by 2012. Tata Steels safety and health responsibilities are driven by the belief within our policy which was launched for Tata Steel group from January 2011: "The safety and health of all the people who work in and with the Tata Steel Group is our number one priority." In pursuance of this belief, we are committed to continual efforts to improve health and safety in Tata Steel as we strive for excellence.

Health and Safety is reviewed at all Board meetings of your Company with a Health, Safety and Environment committee incorporating senior executives and non-executives from the Board also established to carry out more detailed reviews. The integrated and systemic Health and Safety Management System introduced in Tata Steel Europe in 2008 with a governance process for improvement actions and regular safety tours by the Board and executive members is being evaluated for Tata Steel Group-wide application.

During the financial year 2010-11, the Group recorded a LTIFR of 0.78 improving by 18% against 0.95 in FY2009-10. Tragically, during the financial year under review there were 10 fatalities across the Group which included 5 contractor employees. The Board expresses its sincere regret at these fatalities and is committed to learning from each of these incidents to prevent any recurrence and also in its implementation of measures to ensure that any fatality potential is identified and controlled in our operations.

The safeguarding and promotion of the physical, mental and social well-being of employees of the Group has been enhanced from a number of programmes across the Group. In India, the programme Wellness at Workplace targets the major health risks such as heart disease, diabetes and includes proactive reviewing of individual medical condition and identifying improvements. In Europe, health promotion is also done on major risks such as cancer, heart disease with an additional focus on minimising exposure to potential health hazards like noise, vibration and the need to use personal protective equipment.

ENVIRONMENT

Tata Steel Group puts emphasis on minimising the environmental impact of its operations and its products by adopting sustainable practices and continuous improvements in environmental performance. Manufacturing steel unavoidably produces carbon dioxide (CO2). However, Tata Steel products are part of the solution to climate change as steel has inherent environmental advantages of being durable, adaptable, reusable and recyclable. CO2 emissions in steel production are of set by reductions in emissions through the life cycle of steel products, achieved through effective product design and through recycling at end of life. Furthermore, your Company aims to contribute positively to the communities around or near its operations, actively participating in community initiatives, encouraging biodiversity and nature conservation.

One of the key corporate goals which your Company seeks to achieve is to reduce carbon dioxide (CO2) emissions per tonne of crude steel produced. The current targets, which are provisional and are under review pending regulatory developments in both India and Europe, are to reduce emissions on a group-wide basis to less than 1.9 tonnes of CO2 per tonne of crude steel by 2015 and to less than 1.7 tonnes of CO2 per tonne of crude steel by 2020 (using the World Steel Association reporting scope and methodology). CO2 emissions for the Tata Steel Group during FY 2010-11 were 2.15 tonnes per tonne of crude steel for Blast Furnace route steel (2.01 tonnes per tonne of crude steel including Electric Arc Furnace route steel).

CO2 emission (direct + electricity) in the Indian operations during FY 2010-11 at 2.44 tonnes per tonne of crude steel was almost at the same level as the last year (2.41 tonne per tonne of crude steel), while the water pollutant discharge was 65 gallons per tonne of crude steel in FY 2010-11 improving 26% as compared to 88 gallons per tonne of crude steel in 2009-10. Solid waste utilisation also improved from 91.1% in 2009-10 to 94.4% in 2010-11. Environmental clearances for 2.9 million tonne expansion programme for Jamshedpur Steel Works and Chhattisgarh project were obtained along with the consent to establish the Cold Rolling Mill complex at Bara, Jamshedpur.

In the European operations, the CO2 emissions were 2.0 tonnes per tonne of crude steel. More generally, compliance with

environmental permit conditions was at a very high level across the European operations during the financial year and there were no prosecutions or regulatory enforcement actions in relation to environmental matters. Furthermore, TSE met all of its environmental obligations as specified under Phase 1 (2005 till 2007) of the EU Emissions Trading Scheme (EU ETS) and expects to meet its obligations for Phase 2 (2008 till 2012). In the UK, the revised target within the Climate Change Levy (CCL) Agreement to reduce absolute energy consumption by 15.8% compared to 1997 levels was achieved in 2010. This ensures that Tata Steel Europe will continue to benefit from reduced rates in relation to the CCL for 2011 and 2012. The UK government announced in the 2011 budget their intention to introduce a carbon price floor with effect from FY 2013-14. This is an additional tax on electricity generation related to the carbon intensity of the generation fuel used, which would come into effect if the price of carbon in the EU ETS does not reach certain thresholds. TSE also currently participates in a voluntary agreement with the Dutch government to benchmark and maintain its energy efficiency in line with worlds best standards. The primary requirement of the agreement is an energy efficiency improvement of 2% per annum. The total energy efficiency improvement in 2010 was 2.8%.

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, 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

Dr. Karl-Ulrich Koehler has been Chief Executive Officer and Managing Director of Tata Steel Europe Limited since 1st October, 2010. He was appointed Chief Operating Officer of Tata Steel Europe Limited in February 2010. Considering his vast experience of 30 years in the steel industry, the Board thought it prudent to appoint Dr. Koehler as an Additional Non-Executive Non-Independent Director of the Company with effect from12th November, 2010.

Dr. Koehler will hold office till the date of the forthcoming Annual General Meeting and a notice has been received from a Member proposing the candidature of Dr. Koehler for being appointed as a Director of the Company.

Mr. Kirby Adams ceased to be a Director of the Company on 30th September, 2010. The Directors would like to place on record their appreciation of the contributions made by Mr. Kirby Adams during his tenure as Director of the Company.

Dr. J. J. Irani will step down as a Director of the Company on 2nd June, 2011 on reaching the age of 75 years, and hence will not be seeking re-appointment. The Directors would like to place on record their appreciation of the leadership and contributions made by Dr. Irani as the Managing Director of the Company from 1992 to 2001 and thereafter, as a non-executive Director of the Company. Therefore in accordance with the provisions of the Companies Act, 1956, and the Companys Articles of Association, Mr. Ratan N. Tata, Mr. Nusli N. Wadia, Mr. Subodh Bhargava and Mr. Jacobus Schraven retire by rotation and are eligible for re-appointment.

ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

Details of energy conservation and research and development activities undertaken by the Company 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 given in Annexure A to the Directors Report.

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 upto 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.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, a Management Discussion and Analysis, Corporate Governance Report, Managing Directors and Auditors Certificate regarding compliance of conditions of Corporate Governance are made a part of the Annual Report. A note on the Companys corporate sustainability initiatives is also included.

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, 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.

On behalf of the Board of Directors

RATAN N. TATA

Chairman

Mumbai, 25th May, 2011



 
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