INNOVATE. GROW. EXCEL. 111Th Year Worldreginfo - Fbe2b811-0Cb1-4550-95Ff-76125A26934d Our Approach to Reporting
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Integrated Report & Annual Accounts 2017-18 INNOVATE. GROW. EXCEL. 111th Year WorldReginfo - fbe2b811-0cb1-4550-95ff-76125a26934d Our Approach to Reporting This is the third Integrated Report (IR) Reporting Principle Reporting Period of Tata Steel Limited (TSL). Through The financial and statutory data this Report, we aspire to provide The financial information is presented in this Report is in line with the to our stakeholders an all-inclusive reported for the period April 1, 2017 to requirements of the Companies Act, 2013 depiction of the organisation’s March 31, 2018. Some parts of the non- (including the rules made thereunder), value creation using both financial financial information, including Directors’ Indian Accounting Standards, the Securities and non-financial resources. The Report, are provided as on May 16, 2018. and Exchange Board of India (Listing Report provides insights into our key Comparative figures for last three to five Obligations and Disclosure Requirements) strategies, operating environment, years have been incorporated in the Regulations, 2015 and the Secretarial material issues emanating from Report to provide a holistic view to the Standards. The Report is prepared in key stakeholder concerns and the stakeholders. accordance with the framework of the respective mitigation strategies, the International Integrated Reporting Council operating risks and opportunities, (IIRC) and discloses performance against governance structure and the Scope and Boundary the Key Performance Indicators (KPIs) Company’s approach towards relevant to Tata Steel, as per the Global This Report covers information on Tata Steel long-term sustainability. Reporting Initiative (GRI) G4 Guidelines, the India, including the Tata Steel plants (at United Nations Global Compact (UNGC) Jamshedpur, Jharkhand and Kalinganagar, principles, the Securities and Exchange Odisha), Raw Material Divisions and Profit Board of India (SEBI) and World Steel Centres. Association (WSA). To optimise governance oversight, risk Our Approach to Materiality management and controls, the content of this Report have been reviewed by The Report presents an overview of our the senior executives of the Company, business and associated activities that help including the Chief Executive Officer and in long-term value creation. The Report also Managing Director, Executive Director presents the issues that could substantively and Chief Financial Officer, Vice President affect the organisation’s ability to create (VP) Safety, Health and Sustainability and value in the short, medium or long-term Company Secretary (CS). and the process by which we address them. Independent Assurance Forward-looking Statements Assurance on financial statements Certain statements in this Report regarding our business operations may constitute forward-looking has been provided by independent statements. These include all statements other than statements of historical fact, including those regarding the auditors Price Waterhouse & Co. financial position, business strategy, management plans and objectives for future operations. Chartered Accountants LLP and Forward-looking statements can be identified by words such as 'believes', 'estimates', 'anticipates', 'expects', non-financial statements by KPMG. 'intends', 'may', 'will', 'plans', 'outlook' and other words of similar meaning in connection with a discussion of future operational or financial performance. The certificate issued by KPMG is Forward-looking statements are necessarily dependent on assumptions, data or methods that may be available on our website at incorrect or imprecise and that may be incapable of being realised, and as such, are not intended to be a www.tatasteel.com or can be guarantee of future results, but constitute our current expectations based on reasonable assumptions. Actual accessed at https://bit.ly/2HOMSaN results could differ materially from those projected in any forward-looking statements due to various events, risks, uncertainties and other factors. We neither assume any obligation nor intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. WorldReginfo - fbe2b811-0cb1-4550-95ff-76125a26934d Contents Integrated Report 2-72 Statutory Reports 74-180 Performance Highlights 2 Directors’ Report 74 About Tata Steel 4 Annexures 93 Our Principal Activities and Revenue Streams 6 Key Products and Market Segments 7 Financial Performance 8 Our Footprint 9 Board of Directors 10 Financial Statements 182-386 Chairman’s Message 12 A Dialogue with the CEO & CFO 14 Financial Highlights 182 Our Approach to Value Creation 18 Standalone 186 Business Model 20 Consolidated 275 Stakeholder Engagement 22 Our Growth Drivers 26 Strategic Objectives and Enablers 28 Notice 388 Risk Governance and Management 30 People 32 Customer Focus 38 Operational Excellence 42 Innovation 46 Supply Chain 50 Responsible Behaviour Environment 54 Community 60 Ethics and Governance 66 Sustainability 70 Highlights FY 2017-18 (Consolidated) 25.27 MnT 65,000+ `1,33,016 Cr. Deliveries Employees Revenue 13% increase y-o-y `22,045 Cr. `17,763 Cr. 21% EBITDA Profit After Tax (PAT) Improvement in Lost-time 29.5% increase y-o-y Injury Frequency Rate (LTIFR) over FY 2016-17 About the Cover Antwerp Port House iGATE Skywalk in Louvre, Abu Dhabi Aurangabad Airport in Belgium Bengaluru Tata Steel products have played a part in making of the structures featured on the cover page. These structures embody the strength, innovation and futuristic outlook that the Company represents. WorldReginfo - fbe2b811-0cb1-4550-95ff-76125a26934d Performance Highlights (Tata Steel India) Financial Capital We generate our financial capital annually in the form of surplus arising from the current business operations as well as through financing activities, which include restructuring of debts aligned with the market conditions and other investments. `60,519 Cr. `4,170 Cr. 26% Turnover PAT EBITDA 13.6% increase over FY 2016-17 21% increase over FY 2016-17 primarily 4% increase over FY 2016-17 due to on account of higher realisation, due to higher realisations and deliveries better realisations and higher deliveries higher deliveries due to ramp up of from TSK partially offset by higher operations at TSK* and increase in exceptional charges over the previous year the Ferro Chrome business `2,527 Cr. Capex Manufactured Capital We continually invest in our integrated steel plants, consisting of our iron-making, steel-making and rolling facilities and warehouses, along with the logistics operations, while ensuring the safety and reliability of the operations. 12.48 MnT 8.9 MnT `2,594 Cr. Total Crude Steel Flat Products Sales Savings through improvement Production New products and markets due to the projects 6.8% higher due to the stable Kalinganagar plant production Across the value chain operations at Jamshedpur plant and ramp up of Kalinganagar MnT plant 3.3 MnT 6.5 Long Products Sales Enriched / value-added products sales 9.4% increase Intellectual Capital Our thrust on innovation and research is of paramount importance for our product development and it also reinforces our operational efficiency and resource optimisation drive, while adhering to the Standard Operating Procedures (SOPs). We incorporate customer requirement in our product development. We also collaborate with experts, academia and think tanks for our Research and Development (R&D) efforts. 964 `1,987 Cr. `181.64 Cr. Patents Filed Revenue from new products Spend on R&D Cumulative till FY 2017-18 2.7% higher 25% higher 418 `3,290 Cr. Patents Granted Revenue from by-products Cumulative till FY 2017-18 14% higher * TSK: Tata Steel Kalinganagar 2 INTEGRATED REPORT & ANNUAL ACCOUNTS 2017-18 | 111TH YEAR WorldReginfo - fbe2b811-0cb1-4550-95ff-76125a26934d Integrated Report 1-72 Statutory Reports 73-180 Financial Statements 181-386 Human Capital Our people form the core of our operations. We invest in employee welfare and happiness to drive performance excellence. Our work culture ensures safety, health, competency enhancement and the overall well-being of our employees. DIVERSITY 64 0.29 738 tcs / employee / year 6.11% 17.29 % Lost-time LTIFR Productivity (at TSJ) 21% reduction Injuries (LTIs) Women in the Underprivileged 2.5% increase 20% reduction workforce community in the 6% higher workforce 918 tcs / employee / year 3 2% increase Fatalities Productivity (at TSK) Relationship Capital We believe in building long-term, transparent and trust-based relationship with our partners, while adhering to applicable norms and corporate ethics. We also invest in building our partners’ capabilities and sharing knowledge with them. > 81 606 PPM > 5,000 34 Customer Customer complaints Supplier Base Collaborations with Satisfaction Index (at TSJ) technical institutes (score out of 100) 20% reduction > 12,000 Consistent Channel Partners Natural Capital We depend on the stock of natural resources such as iron ore, coal and other minerals, which constitute our key raw materials. At the same time, resources such as land and water are indispensable for our operations. We also mitigate the impacts of our operations on the natural environment. 3 2.30 tCO2e/tcs 3.68 m /tcs 5.67 Gcal/tcs CO2 emissions (at TSJ) Specific Water Consumption (at TSJ) Energy Intensity (at TSJ) Sustained performance 3.9% reduction Sustained performance 3 2.65 tCO2e/tcs 4.75 m /tcs 7.29 Gcal/tcs CO2 emissions (at TSK) Specific Water Consumption (at TSK) Energy Intensity (at TSK) 16.9% reduction 38%