Integrated Report & Annual Accounts 2015-16

109th Year

WORKING TOGETHER TO CREATE SUSTAINABLE VALUE Forward-looking statements

Certain statements in this report regarding our business operations may constitute About the report forward-looking statements. These include all statements other than statements of historical fact, including those regarding The business environment is increasingly being influenced by the financial position, business strategy, Governments, Regulators, Civil Society and Investors who are management plans and objectives for future operations. steadily moving towards Focusing Capital on Long-Term. The providers of Financial Capital are now increasingly expecting Forward-looking statements can be companies to proactively engage with wider set of stakeholders identified by words such as 'believes', on matters relating to sustainability. The strategic focus across 'estimates', 'anticipates', 'expects', 'intends', 'may', 'will', 'plans', 'outlook' and other words businesses is steadily moving towards long-term capital of similar meaning in connection with a creation. To proactively engage with a wider set of stakeholders discussion of future operating or financial on matters relating to sustainability and in keeping with our performance. very own core principle, commencing this year, we endeavour to Forward-looking statements are necessarily transition towards a system of governance-based reporting for dependent on assumptions, data or methods long-term value creation. that may be incorrect or imprecise and that may be incapable of being realised, and as such, are not intended to be a guarantee Reporting Principle of future results, but constitute our We present our first Integrated Report prepared in line with the framework current expectations based on reasonable adopted by the International Integrated Reporting Council (IIRC). The financial assumptions. Actual results could differ and statutory data is based on the requirements of the Companies Act, 2013 materially from those projected in any (including the Rules made thereunder and Accounting Standards), the Securities forward-looking statements due to various events, risks, uncertainties and other factors. and Exchange Board of India (Listing Obligations and Disclosure Requirements) We neither intend to nor assume any Regulations, 2015 and the Secretarial Standards. The non-financial data is based obligation to update or revise any forward- on various principles laid down by Global Reporting Initiative, IIRC, UN Global looking statements, whether as a result of Compact and SEBI. Material issues have been identified based on a Materiality new information, future events or otherwise. Mapping conducted by the Company.

In order to optimise governance oversight, risk management and controls, the contents of this report have been reviewed by the Management. Reporting Period This report covers all material issues (financial and non-financial) relating to Tata Steel India for the period April 1, 2015 to March 31, 2016. Independent Assurance Assurance on financial statements has been provided by our independent auditors viz., Deloitte Haskins & Sells LLP. DNV GL, providers of accredited management systems certification have provided an independent assurance on the Integrated Report. The assurance statement is available on www.tatasteel.com

Highlights

th Tata Steel Group 11 25.9 MnT `1,172 bn Largest steel Deliveries Global revenues player globally

1.1 mn 9.5 MnT `382 bn Tata Steel India Lives touched Deliveries Revenues through CSR activities Characteristics of the Report We are a global corporation with operations in 26 countries and commercial presence in over 50 countries. Commencing this year we are presenting our first Integrated Report (covering our India operations) prepared in line with the framework adopted by the International Integrated Reporting Council (IIRC) This report reflects our integrated thinking and approach in judiciously utilising the six capitals (Financial, Manufactured, Intellectual, Human, Social and Relationship and Natural) in our operations to create long-term sustainable value to stakeholders.

Financial Manufactured Intellectual Capital Capital Capital

Financial Capital refers to a Manufactured Capital Intellectual Capital pool of funds used to create represents physical objects represents organisational CONTENTS value through conversion that are available to an knowledge-based into other forms of capital. organisation for use in the intangibles. INTEGRATED REPORT This capital is raised through production of goods or Company Overview 2 financing (equity, debt), provision of services. operations and investments. – Principal Activities and 3 Revenue Streams Pg 22 Pg 24 Pg 32 – Footprint 4 – Operating Environment 5 Human Social and Natural Chairman’s Message 6 Capital Relationship Capital Board of Directors 8 Capital Risks and Opportunities 10 Business Model 14 Human Capital represents Social and Relationship Capital Natural Capital represents all Strategy and Resource 16 people’s competencies, represents co-operative ties renewable and non-renewable capabilities, experiences and between a company and environmental resources such Allocation their motivation to innovate. different communities and as water, land, minerals, forests, Materiality 19 stakeholder groups that biodiversity and ecosystem Overview of Capitals 20 engage with each other for health. societal welfare. Financial Capital 22 Manufactured Capital 24 Pg 36 Pg 42 Pg 52 Intellectual Capital 32 Human Capital 36 Through this report, we aspire to provide our stakeholders, a comprehensive and strategic Social and Relationship 42 story of value creation that encompasses various aspects of our sustenance such as Capital strategy, operations, financial performance, governance, society and environment. Natural Capital 52

Management Speak 56

STATUTORY REPORTS Directors’ Report 58 ~ ~ 77,000 70 11% Annexures 72 Global workforce New products Y-o-Y decline in launched LTIFR FINANCIAL STATEMENTS Financial Highlights 140 Standalone 146 7% 4% 25% Consolidated 215 Y-o-Y decrease in Y-o-Y decrease in Y-o-Y decline in GHG emissions energy intensity LTIFR Notice 285

LTIFR - Loss Time Injury Frequency Rate GHG - Green House Gas MnT - Million Tonnes Y-o-Y - Year on Year COMPANY OVERVIEW We commenced our operations in 1907 and today we are the world’s second most diversified steel producer with operations in 26 countries and commercial presence in over 50 countries. We are the 11th largest steel player globally, producing 25.9 MnT finished steel and employing ~77,000 people.

Jamshedpur Steel Plant In India, we are one of the largest private sector integrated steel producers with a Vision Values turnover of `38,000 crore. Our value chain We aspire to be the global steel Integrity, Understanding, extends from mining to the steel finished industry benchmark for Value Excellence, Unity, Responsibility goods in the metal industry. Creation and Corporate Citizenship.

Over the years we have enriched the glorious legacy handed over by our Mission Founder J.N. Tata, by placing equal Consistent with the vision and values of the Founder Jamsetji Tata, Tata Steel strives emphasis on value creation and corporate to strengthen India’s industrial base through the effective utilisation of staff and citizenship. Underpinning this vision is materials. The means envisaged to achieve this are high technology and productivity, a performance culture committed to consistent with modern management practices. aspirational targets, safety and social responsibility, continuous improvement, Tata Steel recognises that while honesty and integrity are the essential ingredients openness and transparency. What binds of a strong and stable enterprise, profitability provides the main spark for economic together every member of our global activity. family today is a shared corporate culture, shaped by value-based guiding principles Overall, the Company seeks to scale the heights of excellence in all that it does in an and the lineage of one of the world’s most atmosphere free from fear and thereby reaffirms its faith in democratic values. pioneering and respected entities – the Tata Group itself.

Ownership Structure Operating Structure We are headquartered in Mumbai. We have a well-defined operating The executive team responsible for Our ownership (as of March 31, 2016) is structure to ensure that the Company is operations such as Raw Materials, Steel diversely held as depicted below. on track to achieve its vision and strategic Making, Sales and Marketing etc. reports objectives. to the Managing Director. Corporate functions such as Finance and Accounts, Our executive management rests with Legal, Secretarial, Communications and Mr. T. V. Narendran, Managing Director Regulatory Affairs, among others, report for our Indian and South-East Asian to the Group Executive Director (Finance operations and Mr. Koushik Chatterjee, and Corporate). Group Executive Director (Finance and Corporate) and Executive Director for We have a strong, diverse, highly qualified our European operations. Mr. Narendran and richly experienced leadership team Category % and Mr. Chatterjee, operationally and with a track record of excellence and Promoters 31.35 administratively report to our Chairman, passion for performance. Mr. Cyrus P. Mistry and functionally report to Institutions 45.20 the Board of Directors. Retail Shareholders 23.45

2 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR

OUR PRINCIPAL ACTIVITIES INTEGRATED REPORT AND REVENUE STREAMS

From a revenue driver perspective, our Business Value Chain comprises (a) Steel Value Chain – from captive mining to downstream steel businesses, (b) Raw Materials Value Chain – mining of chrome and manganese ore to production and sale of ferro-alloys & minerals and (c) Other Businesses – e.g. equipment manufacturing, bearings and agricultural equipment manufacturing. In FY16, these revenue drivers accounted for 92%, 7% and 1% of our total revenues, respectively. COMPANY OVERVIEW Turnover (%) Business Key Product Categories, 92% Value Chain Offerings & Solutions Steel Value Chain Hot Roll Coil/Sheet Cold Roll Coil/Sheet Mining & Beneficiation Galvanized Coil /Sheet Iron making Steel making Rebar Rolling Wire Rods By-products Steel by-products Tubes Tubes Wires Wires

Ferro-alloys and minerals Raw Materials • Ferro Chrome (Tata Tiscrome) Value Chain • Ferro Manganese (Tata Ferromag) • Silico Manganese (Tata Silicomag)

Cranes & Structural • Electric Overhead Travelling (EOT) Cranes, Structural Agriculture Products Other • Agri & garden tools, mechanised implements, Businesses general purpose hand tools Bearings 7% • Ball Bearings, Taper Roller, Hub 1%

Market Segments

Construction Automotive General Industrial Agricultural Engineering Individual House Builders Auto OEMs Panel & Appliances LPG Agri Equipment Rural Roofing Auto Ancillaries Fabricating & Capital Welding Fencing, Farming & Infrastructure Goods Process industries like Irrigation Housing & Commercial Furniture Cement, Power, Steel

Some of our leading Products & Brands

3 OUR FOOTPRINT

We are primarily present in the Steel Business business of steel making, including raw material and finishing operations. Steel Manufacturing and Finishing Mills Additionally, we are also present in Location Nature of Operations Capacity various value adding downstream 1 Flat Product Manufacturing 7 MnTPA Jamshedpur businesses. Our operational footprint Long Product Manufacturing 3 MnTPA has been indicated on the map. 2 Kalinganagar Flat Product Manufacturing 3 MnTPA

S

9 8 12 7 S 1 1 11 10 4 13 5 S 3 6 S 2 S 10

S

Steel Business Raw Material locations Location Nature of Operations 14 S 3 Noamundi 4 Joda Iron Ore Mines & Quarries Raw Materials Revenue 5 Katamati Stream (Ferro Alloys & 6 Khondbond Minerals) 7 West Bokaro Colliery (West Bokaro Division) 8 Jamadoba Group Location Nature of Operations Colliery (Jharia Division) 9 Sijua Group Sukinda & Bamnipal Ferro Alloys Plant Sukinda Chromite Mine Joda West, Bambebari, Steel Business Malda, Manmora & Manganese Mines Trinpahar Downstream Operations Gomardih Dolomite Mine Location Nature of Operations Tubes Manufacturing

1 Jamshedpur Industrial By-products Management Division Nature of Operations Nos. Tata Growth Shop 6 [Delhi, Faridabad, Chennai, Zonal Hubs Vijayawada, Nagpur, Kolkata] 10 Tarapur Wire Manufacturing Stockyards 17 [not on map] 11-12 Pithampur & Killa, Indore Distributors 77 [not on map] 13 Kharagpur Bearings Manufacturing Cut & Bend (Rebar – tailor-made Dealers 10,991 [not on map] 14 Bengaluru shapes and size) Steel Processing 12 Key SPCs across S Centres 7 Locations - Across the country through Agricultural tools & equipment Agrico Processing Partners manufacturing Sales Offices 26 (APP)

4 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR

OUR OPERATING ENVIRONMENT INTEGRATED REPORT

We operate in a volatile and ambiguous upon rain-fed, single crop agriculture Clean Energy Cess from `200 to `400 per business landscape. Our operating for livelihood. Rapid socio-economic tonne would raise input costs for domestic environment is influenced by global development in these states is a challenge. producers. macroeconomic conditions, developments With our operations largely confined to in steel and allied industries and the areas with a sizeable SC and ST population, Biodiversity and Ecosystem evolving technological landscape. we believe that promoting Affirmative Services Together with this, the social context in the Action based on positive discrimination In recent years, the Government of India areas we operate in, legislative, regulatory is the right thing to do, besides fostering and NGOs have shown concern over the COMPANY OVERVIEW and political environment and the desirable diversity at the workplace. continuous degradation of biodiversity overall ecosystem affect our operations. and erosion of ecosystem service. As a The discussion on the macroeconomic Safety and Health party to the Convention on Biological environment and industry is captured Steel manufacturing is hazardous by Diversity (CBD), India has developed in our Directors’ Report. The remaining nature. The commitment of global 12 National Biodiversity Targets (NBD) factors have been discussed below. steel manufacturers towards building a using the Strategic Plan 2011-2020 and its sustainable world is manifested in the goal 'Aichi' (named after venue for convention Technological Changes of achieving an injury-free, illness-free on biodiversity) targets as a framework. We face significant challenges to keep up and healthy workplace. This is the primary National Biodiversity Targets relevant with the pace of technological changes focus in all our operations. to the steel industry include NBD 1, and to ensure that our manufacturing requiring a significant proportion of India’s facilities are modern to be efficient Employment, Productivity and population, especially the youth, to be with minimal impact on environment. Skilling aware of the values of biodiversity and Technological solutions for the steel Despite the rise in labour productivity the steps they can take to conserve and industry are increasingly being developed in India, sustainable growth requires use it sustainably and NBD 9 on national with focus on reducing carbon footprint, investments in intellectual capital and initiatives to protect, use and strengthen using inferior raw materials, yield structural reforms. The Indian Industry the traditional knowledge of communities improvement, solid waste utilisation and has proposed a review of labour laws relating to biodiversity. moving towards a regime of zero water in the country to help boost industrial discharge. productivity. It has voluntarily committed Legislative, Regulatory and to address the mismatch between Political Environment In India, the use of inferior quality the representations of socially and India jumped 12 places up in the “Ease of of indigenous raw materials and the economically challenged communities in Doing Business” ranking of the World Bank variability in ore, compared to imported their workforce as a proportion of their in 2016, to which the Economic Survey raw materials, pose an enormous representation in the total population 2016 attributes a dramatic spurt in Foreign challenge in terms of achieving high through Affirmative Action. This includes Direct Investment flows by 40% during quality products, generation of wastes and employment and employability initiatives. the year. energy utilisation. Also domestic needs of global manufacturers for high quality Climate Change With the Union Government having products as well as the continuously In view of the outcome of climate a clear majority and thereby ensuring evolving demand for newer, high strength negotiations at COP21 and India’s political stability, corporates have eagerly grades of steel, makes it necessary for steel commitment to address Climate anticipated quicker reforms, such as makers to expand the capability of their Change through its Intended Nationally the Goods and Services Tax (GST) and finishing mills to include high-end, high Determined Contribution (INDC), a implementation of the Insolvency strength products. reduction in emission intensity of its and Bankruptcy Code. However, there GDP by 33 to 35% by 2030 compared to are significant grey areas in the law, Social Context 2005 levels is expected. For this, Indian particularly insufficient clarity on taxation In India, we operate primarily in the Steel industry will have to aggressively rates and its likely applicability to the traditionally backward states of Jharkhand cut down CO2 emissions. While the steel sector. Additionally, the delay in and Odisha, with higher than national Government has not set any sector specific the Land Acquisition, Rehabilitation & average illiteracy and Scheduled Caste targets, the Ministry of Steel has prepared Resettlement (LARR) Act and reforms in (SC) and Scheduled Tribe (ST) community a road map. The emission target set for labour legislations are also likely to throw population. These states are also impacted steel production via the BF/ BOF route up challenges on the economy and the by extremist activities in their rural areas. for 2020 is 2.4-2.6/tcs and the target for steel sector. Most people in these states depend 2030 is 2.2-2.4 /tcs. The doubling of the

5 CHAIRMAN’S MESSAGE

competitive federalism that will certainly industry in India will depend on the cost make India an attractive destination of doing business including regulatory for new business and investments not costs, infrastructure efficiency for inbound only from within India but from across and outbound transportation of raw the globe. As a foundation industry for material and finished goods, as also the any nation, the Indian Steel industry availability of energy at competitive costs. will be encouragingly watching these We have seen significant increase in levies, developments and would be future- duties and regulatory costs in the mining ready to serve the nation with globally sector in India in the recent years and competitive products and services. also infrastructural challenges especially in logistics. If this trend continues in the In recent years, the global steel industry future, it will seriously impact the long- has been impacted by significant term attractiveness for investments in oversupply in certain geographies, the steel manufacturing sector and the declining demand, falling spreads country’s ambition to be a 300 MnTPA between steel prices and raw material steel producing nation in the next decade prices and volatile currency movements. will be at risk. Some of these issues are structural as the world is readjusting to lower The Indian operations of Tata Steel commodity prices and slow growth. continue to be the foundation of the Tata Under these circumstances, it would be Steel Group. During the year under review, vital for the industry to look at supply the Jamshedpur operations achieved side restructuring to rebalance the highest-ever crude steel production Dear Shareholders, demand-supply equation especially and sales for the year along with several in countries and regions where the best-ever operating and commercial Almost seven years after the world oversupply situation is structurally acute. milestones. The Company is also economy emerged from the most severe The supply side discipline is critical for undertaking a programme to structurally and impactful post-war recession, a return the future sustenance and viability of the enhance the business performance to healthy and stable global economy still steel industry. As the world adjusts to through operating improvement remains elusive. The downside risks to the structurally lower commodity prices for a initiatives, right sizing of manpower to global growth remains at all-time high. longer period of time, consolidation of the enhance employee productivity and new During FY16, the global economy had steel industry would remain a key theme, product development. The year under an uneven growth with a few developed especially in geographies where the review was also very critical for Tata Steel economies demonstrating resilience demand is unlikely to grow structurally as it completed the project execution of while the Euro Area and Japan has in the near future. Consolidation of the state-of-the-art 3 MnTPA greenfield been tentative. Amongst the emerging businesses would provide an opportunity project in Kalinganagar, Odisha. This economies, while India has relatively to the steel industry to remain relevant is the first phase of the greenfield site outperformed its peers, China continues and competitive in terms of costs and and has the potential to grow further in to show moderation in its economic value to the customers and enable the future. The Board has approved the performance. The sharp decline in oil and investments in product innovation, commercial production of the facilities commodity prices have also impacted the technology and supply chain efficiencies. this month and over the next financial economy of many commodity producing It is important for national governments year, the operations will be ramped up countries. The medium to long-term to ensure a level playing field for fair to reach its capacity over the next 18 economic outlook in India continues to competition against unfairly priced months. The combination of Jamshedpur look promising and it is heartening to imports and I would like to compliment and Kalinganagar operations will enable see the Government’s drive to continue the Government of India for responding Tata Steel to enhance its product portfolio to liberalise the economy and focus on effectively to put in place an appropriate with enriched products and solutions social sector spending in building both deterrent mechanism against such and also expand its customer footprint hard and soft infrastructure. These are imports during the second half of the to new segments of the market. While critical initiatives to make the nation’s previous financial year. Having said that, investing to build physical assets, the economy more productive and resilient I would like to highlight that while the Company continues to make meaningful in the future. The recent initiative to above measures are short-term support contributions towards developing social assess and rank the States on ease of against unfairly priced imports, the capital especially in communities in and doing business has ignited the spirit of long-term competitiveness of the steel around the place of its business. Building

6 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR INTEGRATED REPORT

Our Indian operations continue to be the Our Netherlands business generated bulk of the operating earnings in the previous foundation of the Tata Steel Group. During year for Tata Steel Europe. However, it has FY16, the Jamshedpur operations achieved the potential to improve its performance to a much higher level and with new highest-ever crude steel production and sales investments in its steel making and rolling for the year along with several best-ever facilities as well as other restructuring and improvement measures that have operating and commercial milestones. currently been initiated, I am certain the CHAIRMAN'S MESSAGE employees and management of Tata Steel a sustainable society remains the core going forward. Consequently, based Netherlands will work towards delivering purpose of our business and the focus on the periodic performance review enhanced value for the shareholders of during the year continued to be on health, of the business during the year and an Tata Steel in the future. livelihood, education, sports, ethnicity and assessment of the business conditions and disaster relief. the challenges faced by Tata Steel UK, the In February 2016, Dr. Karl Koehler stepped Board of Tata Steel advised its European down as the CEO and Managing Director I would also like to take this opportunity subsidiary to undertake several structural of Tata Steel Europe and also from the to mention that the business performance decisions, most notably, the restructuring Board of Tata Steel. On behalf of the Board, of the subsidiaries of Tata Steel in India and divestment of the Long Products I would like to place on record the Board’s and South East Asia has significantly business in Europe and restructuring the appreciation of Karl’s contribution to the improved. Following the exit of the operating sites of the Bar business and the Company during his tenure. Mr. Koushik business from China and several other downstream operations in Llanwern in the Chatterjee, Group Executive Director restructuring initiatives, NatSteel and Tata UK. These actions were absolutely critical (Finance and Corporate) was appointed Steel Thailand have significantly improved for the future of the UK business, but more by the Board as the Executive Director their underlying performance during the needs to be done to provide a sustainable for the European business of Tata Steel in year. Similarly, the performances of other business going forward. addition to his current responsibilities and subsidiaries and joint venture companies Mr. Hans Fischer was appointed CEO of like Tata Metaliks, Tata Bluescope, Tinplate In the wider interest and financial Tata Steel Europe. Company of India and Tata Steel Processing sustenance of the Tata Steel Group, the and Distribution improved significantly Board also reviewed the UK business Finally, I would like to take this compared to the previous year. in its entirety and advised its European opportunity to thank you as the subsidiary - Tata Steel Europe, to look shareholders of the Company for your During FY16, the European steel industry at all options of restructuring including support and motivation to the Company continued to face several challenges a potential divestment of the whole or during the year. I would also like to thank including significant third country imports parts of the business. The above process the lenders, suppliers, customers, various especially to the UK, a sharp drop in is currently on-going and the alternate national and provincial governments the market spread between steel prices options are being closely reviewed with whom we have been working, the and raw material price basket and very even as the business is being currently employees, the Unions and associates volatile currency movements. The adverse supported by the parent for investments across all Tata Steel Group companies who operating environment in Europe deeply and funding requirements. I would also have stood by the Company and I look impacted the consolidated financial like to mention here that under the forward to their continued support in the performance of Tata Steel for the year current fragile business conditions for future. under review. While our Management steel industry in Europe, especially in the team and employees took significant UK, exposure to defined benefit schemes Yours Sincerely, initiatives to improve the operating significantly impacts the future viability performance, market challenges offset the of the underlying business. The Company Cyrus P. Mistry benefits of internal improvement efforts has been in close and intense discussions Chairman leading to significant profit erosion and with several stakeholders including the impairment of assets. You would recall, Pension Trustees, the Unions and the Mumbai I had mentioned in my message in the relevant bodies in the Government of May 25, 2016 previous year that should the underlying UK and the Welsh Government to find a business and operating environment sustainable solution to the pensions that not improve in the UK, the business does not impact the continuing business has to undergo further restructuring of Tata Steel UK.

7 BOARD OF DIRECTORS (As on May 25, 2016)

1 2 3 4

5 6 7 8

9 10 11

1 Mr. Cyrus P. Mistry 2 Mr. Nusli N. Wadia 3 Mr. Ishaat Hussain Non-Executive Chairman Independent Director Non-Executive Director 6 2 2 6 3 1 4 5 6 Mr. Mistry (47) is the Chairman of the Mr. Wadia (72) is foremost amongst Mr. Hussain (68) serves on the Board of Board. He is also the Chairman of Tata famous Indian industrialists. He is the several Tata Group Companies including Sons and several Tata Group Companies. Chairman of The Wadia Group and Tata Sons, Tata Consultancy Services, In the past, he served as the Managing Bombay Dyeing, companies that are Voltas and Tata Sky. In the past, he was the Director of the Shapoorji Pallonji Group. amongst the most respected and widely Executive Director (Finance) at Tata Steel. He is a graduate of Civil Engineering from diversified business houses in the Mr. Hussain graduated in Economics from Imperial College London, UK, and has a corporate world. He serves on the St. Stephen's College, New Delhi. M.Sc. in Management from London Board of several companies including He is a Fellow of the Institute of Chartered Business School. Tata Motors, Tata Chemicals and Accountants in England and Wales. Britannia Industries.

8 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR

4 Mr. Subodh Bhargava 5 Mr. Jacobus Schraven Chairman Emeritus INTEGRATED REPORT Independent Director Independent Director 1 2 5 7 7 Mr. Bhargava (74) is currently the Mr. Schraven (74) is the Chairman of Chairman of Tata Communications, the Supervisory Board of Tata Steel GlaxoSmithKline Healthcare and Director Netherlands BV and serves on the Board on the Boards of Tata Motors and Larsen & of Tata Steel Europe. In the past, he has Tubro. He is also the Chairman Emeritus of held a number of executive positions in Eicher Group and in the past served as its the Royal Dutch/Shell Group and served Group Chairman and CEO. Mr. Bhargava is as the President of Shell Nederland. BOARD OF DIRECTORS a Mechanical Engineer from the University Mr. Schraven holds a Master’s Degree of Roorkee. in Law.

6 Ms. Mallika Srinivasan 7 Mr. D. K. Mehrotra Independent Director Non-Executive Director Mr. Ratan N. Tata Ms. Srinivasan (56) is the Chairperson 5 3 4 Ratan N. Tata (78) was the Chairman of and CEO of Tractors and Farm Equipment Mr. Mehrotra (63) served as the Chairman Tata Sons, the holding company of the Limited. She serves on several Boards of Life Insurance Corporation of India. Tata Group, from 1991 till his retirement in including AGCO Corporation and Tata He serves on several Boards including 2012. He was also Chairman of the major Global Beverages. Ms. Srinivasan holds Tata AIA Life Insurance, Multi Commodity Tata Group Companies. During his tenure, an MBA from the Wharton School of Exchange of India and NSE Strategic the Group’s revenues grew to over Business, University of Pennsylvania and Investment Corporation. Mr. Mehrotra $100 bn. Master’s Degree in Econometrics from the holds an Honours Graduate Degree in

University of Madras. Science from the University of Patna. Mr. Tata is currently the Chairman of two of the largest private-sector-promoted 8 Mr. O. P. Bhatt 9 Mr. Andrew Robb philanthropic trusts in India. He serves on the Board of Alcoa and also on Independent Director Independent Director the International Advisory Boards of 4 1 2 3 1 6 Mitsubishi Corporation, JPMorgan Chase, Mr. Bhatt (65) served as the Chairman Mr. Robb (73) is the Chairman of Tata Rolls-Royce, Temasek Holdings and the of State Bank of India, India’s largest Steel Europe and serves as Director on Monetary Authority of Singapore. commercial bank. He serves on several the Board of Jaguar Land Rover. In the Boards including Tata Consultancy past, he served as the Director (Finance) In 2008, the Government of India Services, Hindustan Unilever and Standard of the Peninsular & Oriental Steam honoured Mr. Tata with its second-highest Chartered. Mr. Bhatt holds a Graduate Navigation Co. and Pilkington Group. civilian award, the Padma Vibhushan. Degree in Science and a Master’s in He is a Fellow Member of the Chartered English Literature. Institute of Management Accountants and holds a Joint Diploma in Management Board Committees Accounting. 1 Audit 10 Mr. Koushik Chatterjee 11 Mr. T. V. Narendran 2 Nomination and Remuneration Group Executive Director (F&C) Managing Director 3 Corporate Social Responsibility and Executive Director – Europe (India and South East Asia) 4 Risk Management 3 4 5 6 3 4 6 7 5 Stakeholders' Relationship Mr. Chatterjee (47) is in charge of Finance Mr. Narendran (50) is in charge of our 6 Executive Committee of the Board and all Corporate Functions. He is also operations in India and South East Asia. 7 Safety, Health and Environment the Executive Director for our European Since, 1988 he has served the Company Operations. Since 1995, he has served the in various roles. He holds a Degree in Chairman Member Company and Tata Sons in various roles. Mechanical Engineering from the Regional Mr. Chatterjee holds an Honours Graduate Engineering College (NIT), Trichy and Degree in Commerce from the Calcutta Post Graduate Diploma in Management University and is a Fellow Member of from the Indian Institute of Management, Mr. Parvatheesam K the Institute of Chartered Accountants Calcutta. Mr. Narendran is a Chevening Company Secretary of India. Scholar.

9 RISKS AND OPPORTUNITIES

Enterprise Risk Management the phased rollout of the ERM framework its engagement with a wide spectrum The objective of our Enterprise Risk and ensures uniform deployment across of internal stakeholders via a bottom up Management (ERM) is to prepare the the Tata Steel Group. The final ownership five step process depicted in the diagram, Company to become ‘Risk Intelligent’ for and implementation of risk response with the senior management actively i.e. to strengthen risk resilience to strategies rests with the senior executives monitoring, reviewing and guiding the significant risk exposures, provide agility of the functional units or the risk owners. process at all stages. and a competitive edge with the goal of preserving as well as enhancing long-term Our ERM framework has been developed Overview of Key Risks value for stakeholders. with inputs based on best practices of As a global organisation, we are exposed leading companies and international to risks and opportunities arising out of We have established a robust standards & references such as COSO a dynamic macroeconomic environment governance structure, headed by the (Committee of Sponsoring Organisation that could impact our business objectives, Risk Management Committee of Board of Treadway Commission) & ISO 31000. strategies and hamper our ability to create (RMC). At the Senior Management The framework has effectively been used value over the short, medium and long- level, we have the Group Risk Review to identify and analyse unforeseen risks, term. Our key risks, linkage to strategic Committee (GRRC), to identify, assess, resulting in the management taking risk priorities, impact on various capitals and mitigate and report on risks of the Tata informed decisions. The ERM team ensures the mitigation strategies are summarised Steel Group. At the organisational level, a the effectiveness of the process through in the adjacent table. centrally established ERM team facilitates

Objectives and Strategies 1 Establish Context • ABP/LTP Objectives (Objectives, Vision, Values etc.) • Vision & Values • Leadership Directions

2 3 4 Risk Library External Risk Identification Risk Evaluation, Risk Mitigation Risk Register & Environment Scan Analysis & Prioritisation Due diligence (Impact, Probability Matrix, Risk heat map)

Sign-off & feedback Risk Heat Map

Impact Scales Mitigation & Lead Contingency Indicators Likelihood Scales Planning

Status Monitoring

5 MIS Risk Review Review Dashboard Review documents & Reports Review feedback

10 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR INTEGRATED REPORT

Key Risks

Risks Potential Impact Impacted Capital Risk Response Strategies

Strategic Risks

Adverse macro environment Profitability, Financial Capital • Driving initiatives for developing value added RISKS AND OPPORTUNITIES coupled with global steel capacity Financial, products, introducing new brands, diversifying may impact our operating markets Flexibility and deepening the customer base and several and net realisations stressing our cost reduction strategies to mitigate challenging cash flows and ratings. economic conditions. • Merchant mining of chrome ore and leveraging zero duty on exports. • Refinancing of loans and renegotiation of covenants to provide adequate flexibility to the business. • Divestment of non-core assets and deferring of expenditure wherever feasible.

Long-term growth of the Growth & Financial Capital • Leveraging project management expertise for organisation may be hampered Expansions successful implementation of various projects. in case of failure of capacity • Development of structural processes for effective expansion projects, restructuring. project planning, management and enhancing in-house capability. • Leveraging experience with regulatory authorities for timely approvals & sanctions.

Operational Risks

Failure to maintain adequate Human Safety, Human Capital • Various policies, initiatives, guidelines stringently health and safety standards may Employee Morale followed across the organisation to maintain high cause us to incur significant safety standards. costs, liabilities and damage the • Initiation of “Committed to Zero” drive across the Tata Company’s reputation. Social and Steel Group, to create awareness and reduce safety Relationship Capital accidents. • Enhanced efforts to ensure workplace safety in the mines and collieries in India and construction sites.

Absence of social license to Business Financial Capital • Engagement in various community development operate may cause business Continuity programmes such as Self Help Groups (SHGs). disruptions. • Creating village committees and other initiatives that drive the socio-economic empowerment of the local Social and Relationship community. Capital

Human resource risks and/or low Employee Human Capital • Strategic initiatives for enhancing employee productivity may challenge the Productivity, productivity. This is being achieved through Company’s competitiveness. Cost redeployment of the workforce in a phased manner keeping the industrial harmony intact through focused communication channels and developing parity in amenities and treatment for all employees.

11 Risks Potential Impact Impacted Capital Risk Response Strategies

Legal & Compliance Risks

Absence of raw materials linkage Business Natural Capital • Strong supplier relationships and flexible sourcing due to adverse regulatory Continuity, through the centralised procurement of raw environment and/or its Cost, materials. price volatility may threaten Volume • Continue to closely monitor market conditions and Manufactured Company’s profitability. Capital seek to put in place contractual arrangements to ensure security of critical supplies.

Regulatory and environmental Regulatory Manufactured • Policies, systems and procedures for regular non-compliances may cause Compliance Capital monitoring of compliances through automated the Company to incur liabilities systems. and damage the Company’s • Invest in various environmental projects & schemes Financial Capital reputation. (pollution control equipment, effluent treatment plants, quality monitoring systems, waste recycling & disposal schemes, etc.) to improve energy Social and Relationship efficiency and minimise environmental footprints. Capital

Foreign exchange rate volatility Profitability Financial Capital • Foreign exchange hedging policies to protect may affect the outcome of trading and manufacturing margins against rapid commercial transactions. and significant foreign exchange movements.

Impairment of tangible and Financial Ratios Financial Capital • Reviews of the carrying amounts of tangible and intangible assets may affect the intangible assets (including investments) to determine Company’s key financial ratios. recoverable amount through continuing use.

Focus Areas

To further strengthen and improve upon the process and framework, the Company will going forward focus on: 1. Widening the reach and depth of engagement across the Company in the planned phased manner. 2. Better integration of ERM with business processes. 3. Automation of the ERM process. 4. Launch of e-learning modules and packages/ manuals / documented procedures for ready referrals. 5. Initiation of external training sessions and programmes to spread awareness.

12 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR INTEGRATED REPORT

Opportunities

The India Opportunity Urbanisation directly influences steel consumption. India is only about 31% urban presently and with higher migration, newer centres of development and Government programmes such as the Smart City Mission, the rate of urbanisation and urban

renewal is expected to rise significantly in the near-future. India’s per capita steel consumption is very low (at 61kg) compared RISKS AND OPPORTUNITIES with China (at 540kg), pointing to a significant headroom for consumption growth.

Demographic trends further support the case for the increasing steel demand in India. Each year approximately 12 mn people join the workforce in India. There is a corresponding increase in demand for housing, transportation and public infrastructure, all of which are major drivers for steel demand.

Raw material costs form a significant portion of the steel making cost. India has adequate reserves of high quality Iron ore giving steel manufacturers in India a price advantage.

Competitive labour costs in India allow steel producers a distinct advantage. Globally, labour constitutes approximately 8-10% of the total cost of making and selling steel. We seek to leverage this advantageous position and strengthen our status as a low-cost producer of steel.

Raw Growth Productivity Customer, Digital Material Market and Technologies Product segments

High quality, Stable demand Employee Potential for Leverage digital low cost iron ore growth in India productivity low as customised technologies available at close driven by a young compared to peers. products and to make the proximity to the demography and services. Company more manufacturing trend of urbanisation. agile, enhance plant. productivity and Focus of Government profitability. on infrastructure FOR TATA STEEL TATA FOR OPPORTUNITIES OPPORTUNITIES development and ‘Make In India’ initiative.

Invest in mining Enhance steel Improving Increase revenue Seeding initiatives assets for securing producing capacity work practices from services and via organisation- iron ore reserves. • Explore and increasing solutions and B2C. wide mobilisation, automation. Jamshedpur Works pilots and capacity expansion. Enter new capability building. • Commencement segments. of Kalinganagar Phase 2 – including THE OPPORTUNITIES THE downstream. STRATEGIES TO TO LEVERAGE STRATEGIES

13 BUSINESS MODEL

Our value creation process comprises INPUTS OUTPUTS converting heterogeneous raw materials (Iron ore and coal) into Financial Capital As on March 31, 2016 Manufactured Capital (MnT) FY15 FY16 customised steel products for Capex (` crore) 5,858 Crude Steel production 9.3 9.9 customers. Flat Product - Sales 5.8 6.3 Long Product - Sales 2.9 3.2 At the core of our value creation Manufactured Capital As on March 31, 2016 Total Sales 8.7 9.5 process is the business model which Jamshedpur Steel 9.7 represents a well-integrated steel Works (MnTPA) manufacturing operation from Kalinganagar (MnTPA) 3.0 mining to steel making and further downstream processing. Intellectual Capital FY12 – FY16 BUSINESS ACTIVITIES We produce outputs (Flat and Long (Cumulative) steel products and solid waste as a Spend on R&D- `448 crore RM Mining & Beneficiation by-product), while drawing inputs (Capital+Revenue) Extraction and processing of raw from the various capitals. Our business Collaborations / Multiple collaborations materials for Iron making activity endeavours to minimise memberships with 20 technical the negative environmental and (technical institutes) institutes Iron making social impacts and to enhance our FY16 Converts Iron Ore to hot metal competitive position, relationships, Patents Filed 791 for steel making Patents Granted 318 brand image and reputation. Steel making & Rolling Converts hot metal into different The outcomes of the business types grades of steel products Human Capital As on March 31, 2016 activities on the various capitals are shown in the business model. The Employee on Rolls 35,439 Finishing & Downstream Skilled Manpower (%) 93.9 Converts steel products into Company measures these outcomes finished goods as per customer at defined frequencies and takes Spend on training over 578 requirement suitable actions to improve them, last 5 years (` crore) while maintaining a strategic focus on long-term value creation for all KEYWORK SYSTEMS stakeholders. Social and FY15 FY16 Relationship Capital The vision, mission, values, our CSR spend (` crore) 171 204 Spares & systems & process approach and long- Pan-India dealers 9,326 10,991 Services term relationship with stakeholders is Pan-India distributors 70 77 at the very core of our operations that leads to sustainability of our business. Natural Capital FY15 FY16 Engineering & Project Fundamental to our activities and Captive Iron Ore (%) 84 92 processes is the culture of innovation Captive Coal (%) 36 36 and continuous improvement to Water Withdrawal from 74 63 generate new products to meet our surface sources (mn m3) customer requirements. Our goal is to Specific Water 5.54 4.39 leverage best available technologies, consumption from improve resource efficiency, increase surface source Human solid waste utilisation and make Resource (Jamshedpur Steel Iron Making products and processes more 3 Management Works) (m /tcs) 10.5 MnTPA environment friendly. Energy Intensity 25.2 24.1 (Jamshedpur Steel We are unique in not just the Works) (GJ/tcs) magnitude of our operations but also in our people practices, our innovative approach and our overall conduct.

14 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR INTEGRATED REPORT

OUTCOMES

Financial Capital FY15 FY16 Human Capital FY15 FY16 Turnover (` crore) 41,785 38,210 Fatality 5 2 Underlying EBITDA (` crore) 10,102 7,388 LTIFR Index 0.31 0.23 EBITDA (` crore) 10,102 10,896 Health Index 12.21 12.35 EBITDA (%) 24 29 Attrition Rate (%) 3.57 4.47

PAT (` crore) 6,439 4,901 Employee Productivity (tcs/FTE) 623 701 BUSINESS MODEL Working Capital FY15 FY16 Diversity – Women (%) 5.36 5.50 Revenue from Branded Products (%) 48 50 Marketshare in Automotive (%) 43 43 Social and Relationship Capital FY15 FY16 Marketshare in Construction (Projects) 9 11 Lives Impacted (mn) 1.3 1.1 – B2B (%) Affirmative Action (% Employed) 16.3 16.9

Intellectual Capital FY15 FY16 Natural Capital FY15 FY16 New products developed 41 39 Water discharged after use (mn m3) 27 14 Patents: Water discharged after use 2.3 1.2 Filed 56 71 (Jamshedpur Steel Works) (m3/tcs) Granted 36 32 Solid waste Utilisation (%) 78 81 (Jamshedpur Steel Works) Dust Emission (Kg/tcs) 0.57 0.5 (Jamshedpur Steel Works) GHG Emissions (Direct + Indirect) 2.42 2.26 (Jamshedpur Steel Works) (tCO2/tcs) Governance GHG Emissions (Direct scope-1) 2.26 2.11 (Jamshedpur Steel Works) (tCO2/tcs) SUPPORT SERVICES Tree Plantation (mn) 0.3 0.4 Biodiversity Biodiversity assessment caried out in 8 Raw Material locations in FY16 and Corporate Biodiversity Policy launched

Manufactured Capital Jamshedpur Best-ever performance, % increase over FY15: Raw Material Mining & Beneficiation Finance & Accounts Sales: 9.54 MnT, 9% increase 22 MnTPA Crude Steel production: 9.97 MnT, 7% increase Hot Metal production: 10.65 MnT, 4% increase In our continuing efforts towards efficiency improvement, the Blast Furnaces in Jamshedpur achieved best-ever coke rate and highest best-ever coal rate (Indian Benchmark) Environment clearances received for Jamshedpur plant expansion to Shared 11 MnTPA Crude Steel Services Kalinganagar Steel Making Production started at the 3 MnTPA Kalinganagar Steel Plant (currently under stabilisation). This will significantly improve volume growth 9.7 MnTPA Outsourced Rolling, Profit and expand our product portfolio in the L&E, Ship Building, Defence Finishing & Finishing & Centres Downstream Processing Equipment, Energy & Power, Infrastructure and Aviation sectors. Ferro Alloys and Minerals Division Corporate After clearances from Regulators, our FAMD production has been Functions ramped up in FY16 Gopalpur ferrochrome plant to come on board with ~55,000 TPA Customers in FY17

15 STRATEGY AND RESOURCE ALLOCATION Strategy Planning and Deployment Process We follow an Integrated Strategy Planning It is a four - tiered approach which consists • Deployment Phase: and Deployment process through of the following two phases: Strategies are converted into action which the planning and deployment • Development Phase: plans through the process of Long- is standardised across all our business We set our Vision and Strategic term Planning (LTP) and Annual processes and the value chain described Objectives and also the Long-term Business Planning (ABP). Further, under our Business Model. Strategies (LTS) to achieve them. during this phase, requisite resources are allocated to achieve the stated objectives. Integrated Strategy Planning Process for Strategy Formulation and Resource Allocation DEVELOPMENT DEPLOYMENT VISION LTS LTP ABP

Arriving at the Strategic Objectives / Long-term strategy / Evaluating • Detailed planning options. with enablers. • Short-term detailed Long-term vision Scenario Planning • Profit projection; planning.

SCOPE capex requirement. • Analysis of driving forces. • Plausible Futures. • Implications. Time Horizon (year/s) Not pre-determined 7-10 5 1 • Leadership team. • Corporate Strategy & • Leadership team. • Leadership team. Planning (CS&P). Leadership team • CS&P, Business Analysis • CS&P, BAGs. with inputs from • Relevant functional Groups (BAGs). • Departmental heads. employees experts through core strategy teams /cross • Departmental heads. PARTICIPANTS functional team. Refresh Frequency (year/s) NA On continuous basis 3 1

Planning and time horizons are defined for Strategy Governance process resources are allocated through the each, based on the lead time for action and The strategy governance process enables process of LTP and ABP. We also have a urgency required to effectively respond us to identify and test the robustness of five year capital expenditure plan which is to deviations in the external or internal our strategic initiatives against possible aligned to our LTS and LTP. environment. Strategic objectives are an scenarios in the future. Strategic projects outcome of the Strategic Planning Process. identified through this process are Measuring achievements and evaluated and approved by the Strategy target outcomes The Company’s strategies are clearly Committee and then are included in the We use the ‘4 Student Analysis’ tool linked to its Vision, Mission and Values. Long-term Planning Process for execution. to measure the effectiveness of the The planning process takes cognizance strategies deployed and action plans. of both external and internal business Resource allocation to implement Key Performance Indicators (KPI) are environment and suitably factors the strategy identified for all objectives, strategies and opportunities, challenges and past We have a business planning framework action plans. The ‘4 Student Analysis’ also learnings. The overall strategies and plans that enables us to identify the resources helps us to evaluate the KPIs for actions are cascaded down to individual divisions/ (IT, HR, Finance) required for achieving and objectives at various levels in the departments with clearly defined our stated strategic objectives. Functional organisation and to assess if relevant and responsibilities, connected to the last mile teams take suitable actions in ensuring sufficient interventions were deployed to with employees’ Key Result Areas. the availability of resources and these achieve the objectives.

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BUSINESS STRATEGY OBJECTIVE INTEGRATED REPORT STUDENT LEVEL OF KPI ACHIEVED INTERPRETATION FOUR STUDENT ANALYSIS TYPE

Appropriate strategic A Substantial Substantial planning and its implementation. C D Objective achieved by low to medium level of strategy Substantial Low to medium B implementation and/or STRATEGY AND RESOURCE ALLOCATION external factors. OBJECTIVE Strategy is inappropriate. A B Need to strengthen cause C Low to medium Substantial and effect and arrive at the appropriate strategy.

Strategy implementation STRATEGY needs strengthening. Target D Low to medium Low to medium setting needs to be reviewed Achieved and strengthened. Not Achieved

Tracking Strategies and Plans Innovation, Safety Performance, Human b. Peer Review Group & Capital To enable the Company to respond with Resources, CSR activities and policy Expenditure Committee (CEC) agility to changes in the environment, respectively. meeting to review capital the progress of the strategies and plans is management and growth. tracked periodically through various MIS 2. The Managing Director / President / dashboards and reviewed at defined lead the following meetings / Challenges and opportunities intervals by the apex level review forums. forums: arising from the Business Environment in FY16 1. The Managing Director leads the On a Monthly basis During the year, we faced several following meetings / forums: a. Meeting to review the cost and challenges such as uncertainties in the operating KPIs, strategic cost external environment, excess supply On a Monthly basis management, benchmarking and of steel coupled with weak demand a. Meeting to review the monthly competitors’ analysis, and top globally, increased imports of steel production target versus the plan priorities of ABP. from China into India at unsustainable and discuss areas of operational b. Meeting to review improvement prices, steep decline in steel prices (in issues, KPIs, and service delivery in savings for reaching the 25% dollar terms) with international HRC performance to the customer. EBITDA target without captive raw prices plummeting to the 2003 levels, b. Meeting to review market trends, materials. uncertainties around mining operations customer needs and expectations, and higher costs owing to regulatory business results and top priorities On a Quarterly basis changes (such as contribution to District of ABP. Meeting with apex forum to discuss Mineral Foundation and National Mineral strategic projects. Exploration Trust). On a Bi-Monthly basis Apex Environment Forum to review and 3. The Managing Director / President In response to the challenges faced, discuss the Company’s Environmental / Vice President lead the following greater priority was accorded to Performance. meetings / forums: operational excellence through Shikhar-25, the accelerated improvement On a Quarterly basis On a Quarterly basis programme, maintaining cost leadership, Meetings with the Quality Board, Apex a. Meeting to review the status of key focusing on product and service R&D, Apex Safety Committee, Apex HRD, projects and the enablers critical to differentiation/ downstream business and Apex CSR Steering Committee to review the attainment of LTP. safe, steady stabilisation and ramp-up of and address areas of Quality, R&D and the Kalinganagar Plant.

17 Medium term strategic objectives/goals In the medium term, our key focus areas will be: Leadership Product & Benchmark in Corporate Impact based position in Growth Service Citizenship – Safety, Health Corporate Social profitability differentiation and Environment Responsibility Strategic objectives (medium to long-term) and key strategies pursued in FY16

Strategic Objectives Area Strategy / Action Capitals Impacted (Medium to Long-Term) Financial Maintain leadership position in Build and maintain the leadership position in new and existing Social and Relationship chosen segments chosen segments Manufactured Improve product mix and service Timely commissioning and faster ramp up of Kalinganagar Plant Manufactured differentiation Phase 1 Financial Financial Achieve operating profit as per plan Manufactured Financial Maintain leadership position in Shikhar - 25 – double the pace of improvement Manufactured profitability Human Increase employee productivity through structural Manufactured improvements Financial

VALUE CREATION VALUE Strive for raw material Financial Ramp up of Khondbond mine (Iron Ore) and West self-sufficiency and extract value Manufactured Bokaro mine (Coal) from waste Natural Organic growth at 25% below Financial Ongoing projects related to savings from approved capex baseline costs Manufactured Intellectual Leverage digital across value chain Identify and prioritise digital opportunities Manufactured Zero injury to workforce – Initiate safety leadership development, eliminate rail and road Human Committed to Zero incidents, eliminate contractor induced risks Social and Relationship Installation / augmentation of fugitive dust extraction/ Natural suppression systems Social and Relationship Be the steel industry benchmark Natural Solutions for solid waste utilisation in India for environment Financial performance Natural Achieve a Zero Water Discharge regime Social and Relationship Improve access to health, education and livelihood Deliver impact based CSR Social and Relationship opportunities for communities in the areas where we operate CORPORATE CITIZENSHIP CORPORATE Employer of choice in the metal Diversity and Inclusion, capability building through learning Human and mining industry in India and development Social and Relationship

Focus Areas

As we move forward, we work towards: 1. The ramp up and stabilisation of Phase 1 of our Kalinganagar Plant. 2. Scale-up our differentiated services and solutions to customers. 3. Improve despatch cost by reaching benchmark performance in KPIs; reduction in procured raw material and services cost. 4. Seed digital initiatives via organisation-wide mobilisation, pilots and capability building. 5. Continue to be a benchmark in environmental performance by reducing CO2, Dust Emission and increase Solid Waste Utilisation. 6. Continue with the “Committed to Zero” principle to improve the safety performance. 7. Improving employee productivity through various capability building initiatives. 8. Engage on Policy Advocacy. 9. Touch the lives of people through strong focus on livelihood, education and health as part of our Corporate Social Responsibility activities.

18 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR

MATERIALITY INTEGRATED REPORT

Basis of Materiality • Influencers (Regulators, Politicians, • Rating of each of the sustainability Media, Industry Associations, concerns by external stakeholders We conducted a review of Materiality Customers). through one-on-one meeting and in FY13 to obtain inputs from external workshops. stakeholders and peer companies on Methodology of Materiality Sustainability issues. This exercise The methodology entails carrying out • Rating of each concern vis-a-vis the was carried out to assist our senior each of following steps: identified BSFs.

management in defining material issues STRATEGY AND RESOURCE ALLOCATION / MATERIALITY • Identification of sustainability • Development of a Business Case Matrix and to determine the extent to which concerns based on the opinions of that determines the extent to which sustainability issues impacted factors that peers and our internal discussions on these sustainability concerns impact contribute to our business success. the relevance of each concern with business. Three clusters of stakeholders were respect to our operations keeping in • Plotting of sustainability concerns on a identified: mind the environmental and societal Materiality Map based on their level of considerations. • Business Partners (Investors, societal considerations and impact on Employees and Suppliers). • Identification of our Business Success business and using this map to identify Factors (BSF) based on internal concerns material to our operations. • Civil Society (NGOs working on social & discussion and global research environmental issues, community) and • Using feedback from external publications. stakeholders and the Materiality Map to take further steps. The step-wise process and the output materiality map is depicted below:

Level of Universe of Meetings with external Societal level of concern societal Sustainability stakeholders: Investors, of sustainability issues concern Issues identified Suppliers, NGOs assessed Materiality Map & Material Impact List of Business Impact of sustainability issues on Success Factors Internal workshops issues on business Business identified assessed

Materiality Analysis Key Material Issues

100% Priority 3- Discuss Priority 2- Track Priority 1- Focus ENVIRONMENTAL Resource GHG Emissions Environment 90% D1 F2 D1 D2 E1 Footprints during Reduction Performance E2 80% the entire Product Management Life cycle E3 70% D2 A4 E4 C2 SOCIAL A2 60% A3 B2 F2 A5 B5 C5 C1 Community Local Land acquisition A1 E1 E2 E4 E1 D3 involvement, infrastructure & Resettlement & 50% B1 D4 E5 C3 engagement & development Rehabilitation D5 C3 F4 satisfaction 40% B3 STAKEHOLDER CONCERN STAKEHOLDER Stakeholder Capability Occupational 30% B4 A4 C2 C1 C7 identification & building of Health & Safety 20% F3 C6 management employees C4 10% ECONOMIC Promoting Ethical Benefit Sharing/ 0% A2 E3 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% behaviour Socio Economic

IMPACT ON BUSINESS Benefits

19 OVERVIEW OF CAPITALS

20 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR

The primary purpose of this Integrated Report is to communicate to all our INTEGRATED REPORT stakeholders, how we create value over time. To provide a holistic picture of the value creation process inside the organisation, we have provided a combination of quantitative and qualitative information of the six capitals that we deploy in our operations. We use capitals as stocks of value that are transformed by our business activities to produce outputs. The six capitals we use in our operations are Financial, OF CAPITALSOVERVIEW Manufactured, Intellectual, Human, Social and Relationship and Natural.

Inter-linkages and spend between various capitals represented as percentage of revenue during FY16 to achieve the financial surplus.

Financial Manufactured Intellectual 10.7% surplus earned through 33% on Plant Operations 0.3% on R&D for optimisation effective use of capitals 4% on Depreciation, amortisation, and maximisation of use of + Equity and borrowing impairment Manufactured and Natural Capitals

Human Social and Relationship Natural 10% on Employee benefit 16% on Government levies, 23% on Raw Materials 3% on Finance Cost

STRATEGIC INVESTMENTS IN VARIOUS CAPITALS

21 FINANCIAL CAPITAL

Financial capital is essentially a pool of funds used to create value through conversion into other forms of capital. This capital is raised through financing (equity, debt), operations and investments.

Approach Financial Performance THE COMPANY HAS The Company generates the financial During the year, the global growth capital annually in the form of surplus and financial market conditions were VARIOUS INITIATIVES arising from the current business challenging. Many large emerging market operations, financing activities through economies were stressed owing to TO IMPROVE THE periodical strategic restructuring of debts difficult macroeconomic conditions, sharp OPERATIONAL aligned with the market conditions to decline in commodity prices, volatile minimise the interest cost and investing capital flows, uncertainties and risks of PERFORMANCE activities through monetisation of assets instability of the financial system. We were and investments. also impacted with drop in steel prices THEREBY due to demand-supply imbalance. EXTRACTING VALUE Funds generated are utilised for operation of the business i.e., purchase Detailed discussion on our financial FROM NATURAL, of raw materials, finished, semi-finished and operational performance for FY16 and other products, employee benefit is available in the Directors' Report and MANUFACTURED AND expenses, finance cost, operation and Management Discussion and Analysis. HUMAN CAPITALS. maintenance, Government levies, dividend and funding growth and strategic investments.

22 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR

Key Ratio Trends – Tata Steel India INTEGRATED REPORT

EBITDA/Turnover (%) PBT/Turnover (%)

40 40 FINANCIAL CAPITAL

20 20

0 0 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16

Return on Return on Average Net Worth (%) Average Capital Employed (%)

16 20

12 10

8 0

4 -10

0 -20 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16

Basic Earnings per Share (`) Net Debt/Equity (times)

80 2.50

2.00 40 1.50 0 1.00 -40 0.50

-80 0 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16

23 MANUFACTURED CAPITAL

Manufactured capital represents physical assets that are available to an organisation for use in the production of goods or provision of services.

Overview This also represents our focus on Our end objective is to meet the In recent years, we witnessed growth continuous improvement and expansion requirements of customers as the steel through Brownfield capacity expansion in rolling & finishing capabilities to consumption in India expands in size at our Jamshedpur Works (completed diversify our product portfolio. and depth. in 2012) and Greenfield steel plant at Kalinganagar, Odisha. The Kalinganagar Plant comprises of several facilities, many of which were installed by end of FY15. The Plant was ramped-up during the year for final commissioning.

Approach The milestones on the road map represent capacity expansions and addition of facilities to retain the Company’s status as a market leader in a growing domestic base. As we progress, we have transitioned towards greener technologies in manufacturing with the objective of greater operational efficiencies and business excellence.

24 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR

Growth at Tata Steel India INTEGRATED REPORT

Capacity augmentation and technology change Crude Steel Capacity (MnTPA) through brownfield and greenfield growth MANUFACTURED CAPITAL LD1 Steel making Sinter Plant, Wire Capacity Pellet Plant Tata Steel & Rod Mill upgradation in ~ 6 MnTPA, Kalinganagar – HSM, CRM Utilisation of iron Phase 1 ore fines High-end products ~3 MnTPA Additional for Auto & Other capacity in flats sectors

G Blast Furnace, Largest Blast Thin Slab Caster LD2, Slab Caster, Furnace (H & I) and Rolling HSM Modern BFs, New technology, 13 Energy Efficient, Energy Efficient Environment friendly 9.7

6.6 3.3 4.2 2.0 2.5

1980 1990 2000 2010 2014 2017

Safety Considerations Environmental Considerations

To ensure zero harm, a safety Factors such as water conservation, energy efficiency, waste management and management system is deployed emission reduction have been integrated into each stage of the manufacturing and across the value chain. Requirements logistics processes. Over the years, we have embraced clean technology to reduce for the same are continually captured pollution levels. Some of the implemented projects and key facilities are as follows: through various safety systems and processes such as Fatality Risk • Conversion of all Coal Fired Boilers to Gas Fired Boilers. Control Programme (FRCP), safety • Waste heat recovery from waste gases of stoves at Blast Furnaces. observations, incident investigation, • Dust Extraction / Dust Suppression (DE/ DS) system. consequence management and • Infrastructure development for Weathering of LD Slag. these are deployed to promote and • Central Effluent Treatment Plant (CETP) to treat 4 MGD (mn Gallons per day) of improve the safety culture. wastewater. • Online Stack Emission & Effluent Monitoring to have better control on emissions from all the processes and de-dusting stacks. • Industrial Vacuum Cleaning (IVC) system has been installed in all the major manufacturing units.

25 Our Manufacturing Process

Capturing stakeholder Supply of raw materials Transformation of raw requirements / inputs through inbound supply chain materials to final products

• Voice of customer and various • The captive mines and collieries listening posts for customers, account for a geographical spread of product benchmarking. ~350 km radius around Jamshedpur and Hooghly Met Coke through • Regulatory requirements of which movement of raw materials Heterogenous Ore Government authorities and is executed using a well-designed existing rules & regulations. inbound supply chain. Homogenous Hot Metal • Safety and Green requirements. • Imported raw material sourced from around the world is routed through Liquid Steel three major ports: Dhamra, Paradip and Haldia (approx. 350, 400 and 250 km from Jamshedpur respectively). Customised Products • Collaboration with Indian Railways for dedicated movement of raw materials from mines and ports to Jamshedpur works.

Iron & Steel making Rolling Mills

Our captive raw material resources have high impurities Our rolling and finishing mills help us create and supply a viz., iron ore has high alumina content and coal has high diverse product mix with customised shapes, sizes, chemistry ash percentage. Our processes are designed to deliver high and properties to our customers. productivity with the available resources while managing Manufacturing process is carried out in accordance with customer slag rate and steel making requirements. requirements, aided by a comprehensive quality Assurance These are complex and high temperature operations, process specifying the parameters and role for each stage. requiring frequent adjustments of critical operating In FY16, 39 new products were developed based on customer parameters due to variation in raw materials. needs.

26 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR INTEGRATED REPORT MANUFACTURED CAPITAL

Outbound Supply Chain to deliver Operational excellence to maximise capacity finished products to customers utilisation and improve cost performance

80% of the demand is centred on consumption clusters The complex value chain requires a customised approach to with an average lead distance to serve being 1,700 km problem solving. from the Jamshedpur Works. Our integrated TQM improvement framework provides a Customers are given just in time service from the systematic approach for carrying out improvements. There Jamshedpur Steel Works and various Steel Processing is a dedicated team on problem solving and analytics that Centres (SPCs) spread across the country through a facilitates the process across the organisation. network of 23 stockyards across India. Some of the projects implemented in FY16 are improving Various strategies have been developed and implemented fuel rate at blast furnaces, screen size optimisation for BF to strengthen our supply network and quality assurance and Nut coke to reduce fuel cost and zero dumping of coke system to ensure damage-free products during transit, fractions, speed increase through waiting time reduction at handling and storage. A Hub and Spoke (Stockyards) steel making, value enhancement of pooled Iron and release model with Hubs at Delhi, Faridabad, Chennai, Vijayawada, of high value scrap for sale. Nagpur and Kolkata is followed.

For greener transportation, rail transport is extensively used. Augmentation of an alternate source of bulk transportation through containers is also being explored. ‘Value in Use’ methodology is used for taking decisions on procuring goods and services for operations, maintenance Some initiatives of FY16 were: and repairs. Examples of “value in use” concept applied in FY16 include – opportunistic use of cheaper coal a) 100% dispatch of Cold Rolled / Galvanized / Hot Rolled without impacting coke quality and reduction in specific Pickled and Oiled / Hot Rolled Pickled Skin Passed and consumption of iron ore fines by replacing iron ore with Oiled through customised transportation in West Zone. other iron bearing material. b) Increase in rail coefficient by 8%. c) 3 new state-of-the-art stockyards inaugurated at Ludhiana, Kanpur and Prithla with world-class facilities. d) Reduction in sub-optimal despatches from Works.

27 The key manufacturing processes, facilities, technologies are detailed below:

Process Facilities & Technologies Equipment

• Iron ore Mines – Noamundi, Joda, • Underground and open cast mining. Captive Mining Katamati and Khondbond. • Coal mines – Jharia and West Bokaro. • Heavy Earth Moving Machines. • Beneficiation, Logistics & Handling facilities.

• Coke Plants, Sinter Plants, • Stamp charging battery. Iron and Steel Pelletizing Plant. • Coke Dry Quenching (CDQ). Making • Raw Material Handling Facilities. • Open bed sintering. • Blast Furnaces, LD shops. • Fines utilisation as pellets. • RH Degasser. • Bell less top charge high capacity furnaces. • Basic Oxygen Furnace for steel making. • Online granulation of Blast Furnace Slag. • De-sulphurisation. • Secondary steel making.

• Rolling Mills Flats - HSM, CRM, TSCR. • Slab to coil. Rolling & • Rolling Mills Longs - Merchant Mill, • Billet to bar/ rod. Processing New Bar Mill, Wire Rod Mill. • Rolling Tandem Mill for pickling & • Steel Processing Centres rolling. • Hot dip galvanizing.

Production for the last three years from our facilities is represented below:

Production (MnT) FY14 FY15 FY16

Hot Metal 9.90 10.17 10.66

Crude Steel 9.16 9.33 9.96

Saleable Steel Production 8.93 9.07 9.70

28 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR

CASE STUDY INTEGRATED REPORT Kalinganagar Steel Plant

The Kalinganagar Plant is all set to be our second integrated Plant Details steel plant located in the Jajpur district of Odisha, India. The Kalinganagar plant is being established in two phases of 3 mn tonnes each. In the first phase with a Blast Furnace of Our largest expansion after close to a century of operations 4,330 cum capacity, it will rollout high-end flat products. The in Jamshedpur, the Kalinganagar Plant is slated to become a plant has adopted state-of-the-art technologies to ensure mega greenfield project, with 6 MnTPA capacity. In line with higher productivity with minimal impact on the environment. our vision and commitment to nation-building, dedication MANUFACTURED CAPITAL of the Kalinganagar Steel Plant to the state of Odisha in Benefits November, 2015 was a defining moment in the state’s history. The Kalinganagar plant will give us the advantage in terms of product grades for new segments (oil & gas, ship building, defence), logistics advantage due to its proximity to the port and improved cost competitiveness in terms of higher employee productivity and operating KPIs.

Key Highlights

Blast Furnace • Lower coke rate and slag rate. • Higher operational efficiency. Pulverised Coal Injection • Lower coke rate.

Gas Recovery Turbines • Power generation of ~38 MW.

Stove Waste Heat Recovery • Energy efficiency.

Cast House Slag Granulation System for BF - Granshot • Use of granulated slag in cement making.

Waste recycling/reuse • Lower raw material requirement. • Lower fuel requirement. By-product gas recovery and utilisation • Use in reheating furnaces. • Use in power generation.

29 Adoption of Best Technologies Driving High-End Products

Production of high-end grades of flat products to meet the Designed to have increasing demand of high Large Blast furnace – minimal water strength coils up to 2050 mm width 4330 cubic metre footprint and up to 25 mm thick catering to high-end applications in

• Automative. • Line-pipe segment (API). • Defence. Twin Wagon Tipplers • Infrastucture. for achieving faster 100% by-product turnaround time with gas-based power unloading capacity generation leading to of 20 MnTPA of raw reduction in carbon materials footprint Ability to supply high-end application products in the market (e.g. HS 800, DP 600, DP 1000, API X70/X80, S355, ASTM A572) and • Big LD converter – develop unique grades with tighter Significant reduction dimensional tolerance. 310 tonnes. of noise and dust pollution during • CAS - OB for refining production and of steel. Zero-effluent • Twin Slab Casters. discharge

Key Milestones 2008-2009: Intensifying community poles inside the plant area and work on 2004: Memorandum of Understanding engagement activities with the roads inside the plant. (MoU) was signed between the celebration of Odia New Year Day, Government of Odisha and Tata Steel construction of Gobarghati and Sansailo 2011: Start of on-site construction work for a 6 MnTPA integrated steel plant at rehabilitation colonies, conducting sports with ground breaking ceremonies for Kalinganagar. programmes and to support the local Steel Melting Shop, Main Step Down Sub- youth, sponsoring various local cultural station in the blast furnace area and Hot 2005: Commenced construction of the and sporting events in Kalinganagar Strip Mill. Also, work for the corridor road, boundary wall following the transfer of and its periphery like ‘Pragati’ Inter- civil work for blast furnace construction, the first phase of land to the Company in village Football Tournament and civil building columns of the charging and December 2004. However, work could not ‘Tejaswini’ Women Self Help Group (SHG) converter aisle began. progress at the desired pace due to initial Competition were commenced during the opposition from the local population. year. Members of local PRIs were invited 2012: Significant work is accomplished to visit the Resettlement & Rehabilitation with the structural erection in the mill 2006-2007: Start of Rehabilitation & facilities and were taken for Exposure visit- aisle of Hot Strip Mill, inauguration of Resettlement with the launch of the ‘Tata cum-Empowerment Training Programmes 100 MVA transformer at plant site and Steel Parivar’ rehabilitation scheme in May to Gandhi Labour Foundation, Puri. refractory brick laying in Battery # 2A of 2007, the process of shifting the displaced Coke Ovens. Concreting work in raft of families commenced and the construction 2010: Project gained momentum with an caster foundation at the steel melting of a rehabilitation colony at Trijanga increase in the pace of work - construction shop and shell erection of the blast began in 2007. continued on the boundary wall, followed furnace-1 also began during this year. by land levelling work, erection of electric

30 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR INTEGRATED REPORT

2013: Project makes rapid strides with Mining Operations GOPALPUR work progressing on Coke Ovens, All our iron ore, chromite and manganese Strengthening our century-old erection of equipment at Wagon Tippler, mines (except Malda) in Odisha are relationship with Odisha further, we are Oxygen Plant, Raw Water Treatment currently operational. Supplementary setting up the Gopalpur Industrial Park Plant, Raw Material Handling Section Lease Deeds have been executed for Joda (GIP) at Gopalpur under the district of and other installations at the plant site. East, Khondbond, Joda West, Manmora, Ganjam in southern Odisha. The park is

Other highlights included completion Bamebari and Tiringpahar extending the expected to attract investments ranging MANUFACTURED CAPITAL of pouring of 10 lakh cubic metres of lease period to March 31, 2030 and for from `10,000 to `15,000 crore and concrete, erection of Finishing Mill Gomardih, a non-captive mine, to March generate employment for around 10,000 Housing F7, commencement of work on 31, 2020. The Government of Odisha has people. the erection of 1st Mill Housing at Hot decided and communicated extension of Strip Mill and ground breaking for an Sukinda lease on non-captive basis up to The GIP spanning over 2,970 acres of employee housing project at Bamnipal March 31, 2020. A supplementary lease contiguous land includes a multi-product was performed. deed is expected to be executed shortly. SEZ over 2,570 acres and an anchor project The lease execution process is on-going for by us over 400 acres with the aim to 2014: Installation of several facilities was Katamati iron ore mine. A decision on the attract various national and international completed by the end of the financial extension of the Malda lease is awaited. investors to the industrial park, thus year. Community engagement initiatives making the region the next industrial in and around Kalinganagar area were FERRO ALLOYS AND MINERAL hub of the State. The Park will primarily also stepped up. DIVISION (FAMD) attract investments in steel and allied Our FAMD has been able to ramp up downstream industries, engineering, 2015: Progressive ramp-up of the production in a challenging environment. chemicals and other emerging sectors. installed facilities was undertaken during The ramp up commenced post mining GIP will generate substantial employment the year. The Kalinganagar Steel Plant was was resumed at Sukinda. FAMD generates opportunities and have excellent dedicated to the people of the State of value added and branded products infrastructure facilities including reliable Odisha by Shri Naveen Patnaik, Hon’ble such as ‘TISCROME’, ‘SILICOMAG’ and and adequate power, water along with Chief Minister of the State. A truly historic ‘FERROMAG’. social infrastructure like school, hospital, moment for the Tata family and the nation etc. thus contributing to the at large. The construction of the first phase of socio-economic development the ferro-chrome plant of 55,000 TPA in of the region. Gopalpur is in full swing and is expected to be commissioned in FY17.

Focus Areas

As we move forward, keeping in view the business environment, challenges and our capabilities, we endeavour to focus on: 1. Stabilisation and ramp up of Phase 1 of the Kalinganagar Plant by FY17. 2. Expansion of Jamshedpur Works beyond 9.7 MnTPA. 3. Attain self-sufficiency for iron ore by augmenting Noamundi, Joda and Khondbond. 4. Increase captive coal supplies by augmenting West Bokaro production. 5. Increased use of inferior raw materials through enhanced focus on technology absorption. 6. Create adequate raw material handling facility for future expansion. 7. Reduce manufacturing cost through strategic procurement of raw materials and services. 8. Achieve benchmark operational efficiency through Shikhar-25. 9. Service new segments such as API, L&E, Construction & Projects from Kalinganagar. 10. Increase Downstream and Value added products. 11. Maximising bulk transportation through greener mode. 12. Integration of environmental considerations into each stage of manufacturing and logistics processes.

31 INTELLECTUAL CAPITAL

Intellectual capital represents organisational knowledge-based intangibles.

Approach Objectives Driving Intellectual The technological initiatives driving cost Our intellectual capital is evidenced Assets Creation efficiency across the value chain are: through: COST COMPETITIVENESS 1. Mining a. New Product Development (39 The objectives of our research and Our main focus is to operate the captive products developed in FY16). technology initiatives are to support mines more efficiently and responsibly plant operations across the production through the use of latest technologies b. Process improvements that enable value chain and make our manufacturing that suit our mining conditions. us to improve resource and energy processes robust and efficient. efficiencies and productivity while To enhance the captive coal availability, reducing the environmental impact and We have a long value chain – beginning initiatives such as high wall mining, operating costs. at mining and running through raw shaft deepening, faster excavation material preparation, iron making, methodology, use of high capacity c. Superior marketing enabling price steel making, casting, rolling, finishing equipment, GPS implementation and premium over competition and and finally delivering to the customer. mechanisation, wherever possible, are most-preferred supplier for partnering While this makes it a complex business being implemented. Likewise, we work by B2B customers. chain, it also offers opportunities for towards increasing the clean coal yield improvement along the length of the through increase in combustible recovery We develop intellectual capital through value chain. Our main focus areas are and improvement in separation efficiency. strong process flows, collaboration higher efficiency in iron ore and coal In order to increase productivity of our with technology leaders and active beneficiation, lower carbon consumption open cast mines, we are implementing encouragement by leadership for learning in iron making, optimised steel making fleet management system (for efficient and experimentation. mix, efficiency in lowering slag and 2CO tracking and control of vehicles), generation and improving steel quality advanced blasting techniques, etc. to achieve superior steel properties. Further, to improve resource efficiency,

32 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR

FY12 FY13 FY14 FY15 FY16 New Products Developed

(Nos.) 19 37 40 41 39 INTEGRATED REPORT

New Product Development Environment friendly products New Product Development (Cumulative FY12-16) (%) High strength CRCA and higher (Cumulative FY12-16) (%) production of CRCA/GA IF for Flats internal and skin panel (for Longs automotives), migration from Cr+6 15 to Cr+3 etc. 23 INTELLECTUAL CAPITAL

Energy saving products All TSCR products qualify for energy saving as TSCR obviates need for 75 (1) reheating & (2) roughing mill. 18

Enhance product performance Corrosion resistant 'galvanized' and 'galvalume' coated products. High strength LRPC 10mm. 10 High strength rebars. 59 we are taking initiatives in the area of refinements, increase in flux content Our focus in this area is to improve steel beneficiation of ores, reducing iron ore and burden quality distribution. cleanliness, achieve benchmark casting discard to below 45%. speeds, produce wider width rolling iv. Increase in BF productivity for large BFs steel, eliminate shape issues in cold From a safety and cost perspective, through increase in dry coke %, more rolled close annealed coils, eliminate we are exploring the applicability pellets, increase in Pulverised Coal patch defects and standardise snout of technological developments like Injection and reduction in slag. systems. autonomous haulage, remote operations centre, predictive maintenance and v. Reduce LD slag generation by 40-50% CUSTOMER CENTRICITY drones for mine planning for our mining through designing and installing De-Si For B2B customers, we have developed operations. process in Blast Furnace cast houses, the required ‘know-how’ to be a partner implementing double slag practice and of choice. This has been achieved 2. Iron and Steel Making other similar initiatives. through deploying product application The major thrust areas in iron and steel resource at customer facilities for real making are detailed below: 3. Rolling & Finishing time understanding of issues. Further, We have taken up several technology cross-functional teams from operations i. Increase in usable agglomerates in iron initiatives to improve our product quality (like product technology, product making through reducing the sinter – such as RH Degasser, automatic scarfing, application and marketing & sales) work return fines to global benchmark level vertical bending caster and automotive together with customers to improve and increasing pellet productivity by 30 galvanizing line, among others. product efficiencies and reduce costs; - 35%. ensuring transparency and building New products such as micro-alloyed a win-win culture with customer high strength steels for automotive, high organisation. ii. Increase in coke strength after reaction strength Interstitial Free (IF) steel and Galva through enriching blend with resin Annealed for two-wheeler fuel tanks have For B2C customers, approaches that have addition/shear crushing. been launched. We also achieved cluster of helped us to a premium position with Hot Rolled high-strength steel and became high market share is given in the table iii. Increase in Blast Furnace (BF) the first domestic integrated skin panel overleaf. Pulverised Coal Injection (PCI) level supplier and the first branded cold rolled (all furnaces) through hardware steel seller. upgradation, BF control process

33 During the year, we developed the The know-how behind Wire Rods: HC72A 5.5 following products high premiums for branded • Wire Rods for fine Tyre Bead Wire. products has been developed • Thick Motor Tyre Bead (for Heavy through: Specialty Hot Roll Vehicles). • ASTM Grade 50: Type 2 developed • CAQ for DRAMIX application. 1. Understanding consumer for Pre-engineered Building segment. • High Strength LRPC. needs. • X56: HSLA 500 grade developed for • 10 mm. Long member. • EH-14 for Submerged Arc Welding. 2. Designing the brand promise around the consumer needs. Specialty Rebar/Application CRCA: 3. Developing the Ecosystem to • Fe 500S Rebar (10-16 mm). • Steelium 390W & 440R for deliver Branded offerings. • Seismic Rebar – High ductility. automotive companies. • Fe 600 Grade 36. 4. Dedicated and high • 40 mm High strength for slender Services & Solutions: capability channel network. structures. • Affordable Housing Solutions – Nest-in. 5. Ability to develop Services Coated • Innovative Pravesh Doors with & Solutions addressing • JAC440WN for automotive high durability and aesthetics and consumer needs. companies. improved security measures.

To meet our customer requirements, waste utilisation and energy conservation • Towards achieving zero discharge of we are pursuing new products to be such as de-phosphorisation of LD slag, effluents, we are developing a new developed under the following categories: water consumption optimisation through approach of tertiary treatment of water treatment, recycling, process modification discharged from the coke oven. • Platform products for narrowing the to reduce water wastage, energy technological gap with advanced mills: efficient waste heat recovery, improving • In order to reduce landfills, we are automotive, lifting & excavation, oil & combustion efficiency and hot charging. reusing BOF slag as cement substitute, gas, infrastructure and capital goods road construction and railways ballasts, among others. For this, we are working We are working towards implementing a paver blocks and recovering valuables on improvements in strength and number of projects, some of which are: through smelting. reduction in the number of surface defects for wheels, internal, structural • Reduction in CO2 emission by about • Use of environment-friendly, Restriction and fully finished parts, and reduction 20% through various enablers, like the of Hazardous Substances (RoHS) in hole expansion ratio for structural Top gas pressure Recovery Turbines compliant passivation movement from and wheel parts of automotive. (TRTs) in blast furnaces, Coke Dry Cr+ 6 to Cr+ 3. Quenching in coke plants, increased • Differentiated products: We are use of pellets, reduction in carbon rate, • An environmental research group has developing ultra hi-strength steels, high refining of Basic Oxygen Furnaces (BOF) been formed in the R&D Division to corrosion steel, super-hydrophobic and hot metal treatment shop. carry out Life Cycle Assessment studies steel and cost-effective ultra hi-strength for the environmental sustainability of steels. Additionally, we will increase • Reduction in specific water consumption our products. A researcher is associated our capabilities in downstream value by 35% through effluent treatment with World Steel Association as a fellow added products by entering into new plants, dry Galvanized & Coated Steel for expanding domain knowledge and segments, such as defence, lifting & Products, dry slag granulation etc. networking within the steel industry. excavation. • Our new plant at Kalinganagar will The Company will continue to work ENVIRONMENT-FRIENDLY deploy larger scale units such as 496 on its strategy of ‘Value from Waste’. We PROCESSES m2 Sinter Plant (Jamshedpur 204 m2), launched Ground Granulated Blast Furnace We are committed to minimising the 310 tonnes heat size (155 tonnes at Slag (GGBS) and a downstream product environmental impact of our operations Jamshedpur), 6 MnTPA Hot Strip Mill of Blast Furnace Slag. We re-cycle GGBS and products through the adoption of (2 MnTPA stretched to 4 MnTPA at into cement to make an even stronger sustainable practices and continuous Jamshedpur). This by itself will help concrete and use it as a partial replacement improvement in environmental reduce heat losses and the adverse of Ordinary Portland Cement (OPC) for performance. We have developed several environmental impact. up to 70%, thus bringing down the cost new technological projects linked to of concrete. The concrete made by using

34 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR INTEGRATED REPORT Patent Portfolio (Filed & Granted) Business Value Generation assisted by Information Technology 900 791 350 736.5 800 720 663 318 300 800 700 605 286 250 700 600 549 507.5 250 600 500 200 220 500 387.7 INTELLECTUAL CAPITAL

400 crore

182 150 ` 400 247.1 197.6 300 300 100 229 200 200 140.5

Number of patents Filed Number of patents Granted Number of patents 119.8 50 100 100 36 49.5 0 0 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16

Patent Applications Filed (Cumulative) IT Value Patents Granted (Cumulative) Cumulative

GGBS is stronger, more durable and for efficient day-to-day operations, Automation Systems eco-friendly. The other benefits of using automated a few key business processes, GGBS are higher ultimate strength, low developed hole detection system for (Cumulative FY12-16) permeability, resistance to chloride and cold rolled products and implemented sulphite attacks etc. IT systems to enhance business and workflow systems for employees, In order to use the waste material and customers, suppliers and partners. enhance value from it, we are exploring 41 many futuristic ideas ranging from 3D We have several forums (both internal printing to glazing of ceramics made from and external) to capture futuristic such waste. themes leading to creation of value and intellectual assets. Our initiative PRODUCTIVITY ‘Innovent’ focuses on identifying customer Cost improvement - 1 During the year, we incorporated requirements by using specific tools and Energy improvement - 3 appropriate technology to increase developing them into business concepts. Yield improvement - 3 productivity. We leveraged information Productivity - 14 and communication technology Quality - 20

Focus Areas

In order to support our business and customer focused stakeholders, we aspire to:

1. Assist in developing new, improved products and reduce development cycle time. 2. Enable development of Optical Quality Analysis System (OQAS), an IT-based platform to analyse and process data in IF skin panel production chain, aided by appropriate knowledge management. 3. Assist in implementing technologies and processes that enable Zero Water Discharge in the life cycle of steel products. 4. Innovate and find cost effective alternatives to stainless steel through coating solution. 5. Enable the utilisation of low-grade manganese ore to profitably produce Ferro alloys through appropriate methodologies. 6. Develop methods to convert non-coking coal to coking coal. 7. Graphene-based coating solutions. 8. Initiate a project on coal beneficiation technology to get 8-12% ash from raw coal of higher ash, for operational savings and better utilisation of coal. 9. Develop Environmental Product Declaration for our products and use Life Cycle Analysis for eco-labelling.

35 HUMAN CAPITAL

Human capital represents people’s competencies, capabilities, experiences and their motivation to innovate.

Approach The foundation of long-term value creation An equal opportunity employer, our basic The value we place on our people has rests on our philosophy of participative salary, employee benefits, remuneration been reciprocated with over 87 years management between Management and and career progression is the same for of industrial harmony and a leadership the Union. Trust is the cornerstone on men and women. Our compensation position in the area of Human Resource which industrial harmony has been built. and progression changes are aligned with Management (HRM) in India. Our work The three-tier Joint Consultative Process, our policies, agreements with the various culture ensures safety, good health, depicted on the adjacent page, consisting Unions and Works Standing Orders. development of capabilities, quality of life of Joint Departmental Councils at the and overall well-being of our employees. departmental level, allows issues related Our Human Resource Policy, Health & Human Capital comprises our full-time to collective bargaining, production and Safety Policy, Affirmative Action Policy employees and our contract workforce productivity to be addressed effectively. along with the SA 8000 policy are mindful who are looked after by the HRM, Safety of human rights, non-discrimination, and Health functions. To drive forth our commitment to labour freedom of association, collective and human rights, we implemented the bargaining, zero tolerance for Child Labour, We pride ourselves in the fact that we Social Accountability Policy encompassing forced and compulsory labour and respect have a large number of second generation Human Rights at the Workplace. Since for indigenous rights in all aspects of our and even third and fourth generation 2004, the HRM has been certified to the business. employees. In FY16, we received the All Social Accountability 8000 standard and India Organisation of Employers (AIOE-FICCI) subsequently, other units have also been Further, the ethos of Fair Business Practices National Award for Outstanding Industrial certified. and commitment to principles such as the Relations. United Nations Global Compact, the World

36 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR

Industrial Harmony: INTEGRATED REPORT Working Together Joint Consultative Council of (III Tier Structure) Management (JCCM) • Joint Works Quality Committee. • Hospital Advisory Committee. • Sports Coordination Advisory Committee. HUMAN CAPITAL • Community Development and Social Welfare Advisory Committee. • Joint Amenities Committee. • Joint Committee for Employees Training and Development.

Joint Works Council (JWC) / Group JCCM Joint Council (GJC) (RMD)

• Central Canteen Managing Committee. • Suggestion Box Committee.

JWC / GJC Joint Department Council (JDC) / Unit Joint Council (UJC) (RMD)

JDC / UJC • Suggestion, Agenda and Follow up Sub Committee. Management Representatives: 2 to 10 • Quality and Training Sub Committee. Employee Representatives: 2 to 10 • Safety, Health and Environment Sub Committee. (depending on the size of the department) • Welfare and Amenities Sub Committee.

Steel Sustainability Charter and Tata Code Challenges of Conduct have ensured that Human During the year, we faced challenges on Rights consideration is well integrated into various fronts. These included – all our decision-making. • Workplace Safety and Health. We are committed to practicing and propagating the SA 8000 standard, • Improving employee productivity and adherence to which is mandatory across maintaining competitive employee our operations and supply chain. We cost. voluntarily submit ourselves to periodic third party audits. • Facilitating HRM policy implementation and issue resolution in Kalinganagar. Safety is viewed as a key parameter to demonstrate commitment to people and • Attraction and retention of talent. the community at large. It is an integral part of our decision-making and is the • Maintaining and encouraging Diversity prime consideration in all spheres of and Inclusion. our activities including the performance management system for all employees. All our meetings begin with a focused Safety pause.

37 Workplace Safety and Health Governance Our Health and Safety Policy is the • The Safety Policy is the foundation guideline for our “Safety Excellence for driving the safety principles. The Journey”. Workplace Safety and Health is Policy is implemented through safety governed through: standards and standard operating procedures at the operating level. • A Management system framework comprising 15 principles and a safety Major safety interventions over the years, governance structure enabling us to under our “Safety Excellence Journey” (SEJ) drive the policy. have resulted in a significant drop in Lost Time Injury Frequency Rates (LTIFR).

PLAN H&S "Foundation Health & Safety Policy (H&S) Policy" in place This document Management Management System Governance sets out the H&S System Framework & Accountability Governance and Framework key Accountabilities of 15 Guiding necessary for the Principles delivery of the Policy

DO Health & Safety Tools SAFETY STANDARDS H&S Tools structure provides a common CODES OF PRACTICE / Standard Operating Procedures platform for H&S Processes and Good GUIDES / Support Documents Practices

M-A-R evaluates CHECK & ACT adequacy of the system, promotes MONITOR, AUDIT & REVIEW (M-A-R) consistency and continuous improvement

KPI UoM Benchmark FY14 FY15 FY16 LTIFR Index 0.20 0.5 0.31 0.23 Fatality Number 0 12 5 2 Lost Time Injury Number 15 164 97 67 Health Index Index NA 12.8 12.21 12.35

38 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR INTEGRATED REPORT

Human Resource Management • building HRM competencies, A key imperative during FY16 was We have an integrated Human Resource implementation of HRM systems for Management system that caters to all • undertaking proactive research on the successful commissioning of the the employees – officers and unionised. strategic issues in the HRM function, Kalinganagar Plant. Significant progress In the past several years, our growth and was made in building infrastructure, and expansion strategy has given rise to providing appropriate policies and staffing needs. These include (i) Capacity • creating shared services to cater to all workplace environment for our colleagues HUMAN CAPITAL expansion of existing units and growth HRM service needs of employees. at Kalinganagar. project, (ii) Closure of older units and (iii) Higher capacity units with technically HRM proactively aligns itself to the strategic upgraded facilities. directions taken by the business, by taking key decisions on People and larger Our HRM structure enables us to be a organisational imperatives. The team has strategic partner in business by – been striving to continuously improve work culture, employee engagement, maintain • providing a single-window service to competitive employee cost, productivity to customers on all aspects of HRM, be the best-in-class organisation.

Key HRM KPIs and Trends

KPI UoM FY12 FY13 FY14 FY15 FY16 Employee Productivity Tcs/emp/year 455 512 597 623 701 Employee Engagement of Officers Score - 67 - - 67 Employee Happiness (Unionised employees) Index (Scale 0-4) - 3.29 - - 3.23 Employees involved in improvement activities % of employees 74.1 79 82 89.4 85.3 Succession Cover Ratio Ratio 1:4.2 1:3.5 1:3.8 1:4.0 1:3.7 Percentage of skilled manpower % - - 69.6 91.1 93.9 Women Employees % 5 5.2 5.4 5.4 5.5 Affirmative Action % 15.7 16.3 16.2 16.3 16.9

Key Achievements and Initiatives A capable and competent line The year was marked by several initiatives organisation, manned by Safety that were rolled out for our employees and professionals and Safety experts provide some significant achievements. Highlights the necessary support and guidance of a few are given below: in the deployment of the six strategies. Progress is monitored and reviewed at Workplace Safety and Health different levels of the organisation from To achieve our corporate objective of the departmental level to the Safety, ‘Committed to Zero’, six long-term safety Health and Environment Committee of strategies were prioritised and are being the Board of Directors. implemented through apex safety sub-committees across the organisation.

39 The Six Safety Strategies Apex Committees (ASC / TSL Board/ SHE Committee) Strategic Directions

Owner Demonstrate felt leadership SEJ Review Committee Agencies Policy Guidelines

Develop competency of all employees Employee Safety Competency Network

Effectively manage contractor safety Contractor Safety Committed Network to Zero Improve Industrial Hygiene

Excellence in Process Safety Process Safety Competency Network APEX SUB-COMMITTEESAPEX REVIEWED BY RELEVANT REVIEWED BY

Eliminate Incidents on Rail & Road

Improving Health Awareness contract workforce, vendor partners We also introduced an improved approach We continually address key factors that and distributors. to Learning & Development using an impact employee health in the Mining and academy approach for various functions. Metals industry. Apart from protective We have adopted three approaches to Employee Competency Building System, measures, we also have key initiatives improve employee productivity of our e-learning and Vendor Capability and processes for preventive healthcare. unionised employees: Development (VCAP), covered the training Recent initiatives, based on evaluation needs of the contract workforce as well as and improvement, include Wellness at • Training is imparted to enhance distributors. Over 85% of the employees Workplace, Emotional Health, Stepathalon/ skills of employees requiring right are involved in improvement activities Marathons and Gyms at the workplace. skilling. across the organisation.

India’s first accredited 25 km run, the • Right skilling is intended to offset Leadership Development Tata Steel Kolkata 25K and Stepathalon recruitment. initiatives unlocked exciting new ways for employees During the year, we conducted the Tata to test and improve their fitness. The • Timely project completion Outbound Leadership Convention, emotional well-being of employees and and faster ramping up of units a programme on Transformational their families is taken care of through an through staffing by reskilled Leadership and the Tata Story and Nav Employee Assistance Programme, “Umang”. employees. Chetna programmes to entrench Tata Values among the employees, especially Employee productivity and Training and Development led to faster the large number of new recruits in competitive employee cost ramp up of new units. Experience Kalinganagar. We also implemented the We assess our employees’ Learning & gained in different projects during Academy Approach for learning to drive Development (L&D) needs through the expansion of the Jamshedpur the design and delivery of functional and the workforce capability and capacity Works was leveraged and used managerial programmes. assessment process. Individual for performance and cycle time development plans are addressed using improvements in Kalinganagar. Introduction of New-age Policies the people development architecture Garnering talent: We undertook several depicted on the adjacent page. The plan is Special focus was placed on Training initiatives to garner the requisite talent. customised to address the needs of various and Skill Development to enhance Talent was targeted through a variety categories of employees and covers all employee productivity by over 12% of programmes for campus relations segments of the workforce including our compared with FY15 to touch and events like 'Mind over Matter' for 701 tcs/emp/year. 40 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR

People Development Architecture INTEGRATED REPORT

Leadership Development Sr. Mgmt. (GLDP, CEDEP, INSEAD, Coaching)

Officer's Employee TQM Directed Developing Contractor Development Learning & Education & Learning Technical Labour (70:20:10, Development Training (Sponsored Experts Capability TCF) Workers (4Q, (Fresh & higher (Technology Building

LATERAL ECBS, Right Experienced education) Group, R&D) HUMAN CAPITAL HIRES skilling) employees)

Cadre Training (MTs, JETs, TA) - 12 to 24 months

MT - Management Trainees JET - Junior Engineer Trainees TA - Trade Apprentice

FRESH RECRUITS

Technology schools and 'Steel-a-Thon' for Diversity and Inclusion: Diversity and employee mentorship programme, Business Schools. A Pre-Placement Offer Inclusion and work-life balance were the christened “Disha” in Jamshedpur and is our pre-hire step to attempt a two-way premise for an array of policies that were “Bandhan” in Kalinganagar. exposure in hiring where the candidate rolled out in FY16. These brought about a gets exposed to the organisation and cultural shift. Key steps taken to align HRM A very new practice, widely appreciated the work culture, while the Company to contemporary needs of employees by employees, is the Reverse-Mentoring gets a fair glimpse of the candidate’s include: process with a focus on technology performance and cultural fit. We aim to and digital. Gen Y engages with our • Five-day work week. achieve 80% conversion rate of our pre- senior leadership to assist them in the placement offer candidates. • Work-from-home policy. understanding and use of latest digital technology and Internet resources. • Satellite office operation for spouses. Retaining talent: Our work culture encourages high performance • Paternity leave. We have a strong job rotation process. through continuous development and Employees with some experience in the opportunities for growth, in addition Succession Planning and organisation are actively encouraged to enhancing engagement and Mentoring to take up different roles. Despite being motivation through distinctive reward We have a robust succession and career a largely flat organisation, this process and recognition programmes. We have planning process which is undertaken offers immense opportunity to people to nurtured a culture of diverse thinking, level-wise through coaching and handle different responsibilities under the leading to an array of ideas and initiatives mentoring. During the year, mentoring same band. that result in sustained workforce received greater focus through the engagement.

Focus Areas

Our aspiration is to provide our employees with the best-in-class work environment. To achieve this, we are working towards strengthening our health and safety practices through various initiatives. We are also focussing on Human Resource Management aspects relating to employee productivity, employee cost, talent management, diversity and inclusion, capability development, employee engagement, contract workforce management and engaging activities to improve employee morale.

41 SOCIAL AND RELATIONSHIP CAPITAL

Social and Relationship capital represent co-operative ties between a Company and different communities and stakeholders' groups that engage with each other for societal welfare.

“In a free enterprise, the community is not just another stakeholder in business but is, in fact, the very purpose of its existence.” — OUR FOUNDER, JAMSETJI NUSSERWANJI TATA `204 crore

spent on Corporate Social Responsibility activities during FY16.

42 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR SOCIAL CAPITAL INTEGRATED REPORT

Approach During the year, we spent `204 crore Social Context Social capital for us has always been of on societal activities. We also strongly Our operations are largely confined to paramount importance. It is manifested encourage our employees and partners in areas that have a sizeable population, in the form of formal and informal fostering a sense of social commitment for primarily scheduled caste and scheduled institutions and associations established stakeholders through various volunteering tribes, who are socially and economically and supported by the Company to programmes and projects guided by the marginalised. Government interventions serve the cause of the Nation, the States Tata Group. alone cannot improve the socio-economic where we have operations, the local conditions of the local community. We, SOCIAL AND RELATIONSHIP CAPITAL communities and the surrounding Governance therefore, share the responsibility of ecosystem. We endeavour to conduct our We have a CSR Advisory Council that meeting the needs of the local community business responsibly, mindful of our social comprises of eminent personalities from through thematic interventions, designed accountability, respect the law of the land the academia and the development in line with our vision. where we operate and with regard for sector which meets annually with our human dignity. senior management. The members of CSR: Areas of Operation the Advisory Council, with their years of We shoulder the responsibility of meeting Our approach to CSR is guided by the experience and multi-functional expertise, the needs of the local community in and CSR and the Affirmative Action policies. provide deep insights on improving the around our manufacturing locations Over a period of time, our social initiatives effectiveness of our CSR initiatives. through various delivery arms the details have evolved from being focused of which are available in the CSR Report on “giving to society” to “creating an Our CSR Committee (sub-committee of the annexed to the Directors' Report. enabling environment” and presently, Board of Directors) oversees and reviews with empowered communities willing our CSR initiatives. An Apex CSR Steering Our areas of operation for CSR include: to participate in partnering with us to Committee, chaired by the Managing In Jharkhand - Noamundi, Manoharpur, “create self-sustained communities”. Long Director and comprising the senior Jamadoba, West Bokaro, Jamshedpur. before the law mandated corporates to management team, reviews the activities In Odisha - Kalinganagar, Gopalpur, Joda, incur CSR expenditure, we have been and monitors achievements against Bamnipal, Gomardih. spending approximately 2-3% of our targets set at the beginning of the year. profits on community-centric initiatives.

GING COMMUN CSR Model for creating ENGA ITIES value for the community

HEALTH DISASTER ETHNICITY RELIEF

Social LIVELIHOOD well-being EDUCATION

SPORTS ENVIRONMENT

IM E PRO LIF VING QUALITY OF

KEY FOCUS AREAS

OTHER FOCUS AREAS

43 KPIs and Key Achievements: healthcare and adolescent health programmes; Our CSR activities are aligned with the Company’s business objectives. Based on Education – through improving 1.1 mn lives the Business Objectives and Strategy, the the quality of education for all and areas of priority are: scholarships for meritorious students; touched Livelihood – through agricultural Empowerment – through grassroots development, skill development and institutions such as Self Help Groups entrepreneurship; In FY16, our interventions and Village Committees and youth had a positive impact on empowerment. Health – through primary healthcare, 1.1 mn lives. maternal and child healthcare, specialised

Key Performance Indicators Achievements Thematic Intervention Sub Strategy UoM FY13 FY14 FY15 FY16 Agricultural Farmers adopted SRI1 Process Nos. 250 2,200 5,948 8,350 Development Area under 2nd and 3rd Crop In Acres 3,177 5,032 5,510 5,086 Entrepreneurship Business Volume of AA Vendors (` crore) 20.3 29.5 30.8 39 Health MANSI Project – Infant Mortality2 - 53.6 50.4 39.4 32.7 MANSI Project – Neonatal Mortality2 - 40.7 32.6 27.4 22 Primary Healthcare Beneficiaries Nos. 3,72,000 4,19,000 4,85,384 5,33,597 Cataract Operations Nos. 2,890 5,230 6,198 4,099 Education Fellowships Nos. 2,477 3,169 3,567 2,985 Irrigation Ponds Created Nos. - 92 426 200

1 System of Rice Intensification. 2 No. of deaths (< 1 year) per 1,000 births. Figures correspond to calendar year. Vital Rates Survey for 2015 is underway.

Key Achievements Community-centric initiatives based in the areas of priority have progressively changed the quality of life of the communities. We present below some of our key initiatives and achievements.

LIVELIHOOD

1. Agricultural Development Paddy Cultivation: To increase paddy The agricultural economy in the states is yield, we trained over 8,300 farmers in plagued by dependency on nature, low Jharkhand and Odisha to adopt the investment, low productivity, inadequate System of Rice Intensification (SRI) method irrigation facilities and mono-cropping of paddy cultivation. The average yield with paddy as the dominant crop. In has gone up from 0.5 tonnes/acre to 2.1 accordance with the goal of adopting tonnes/acre. 40% of the farmers who have climate-resilient agricultural practices that adopted SRI paddy cultivation are from the can increase productivity we carried out SC/ST communities. SRI method aims to the following – increase rice yield through a

44 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR INTEGRATED REPORT

2. Skill Development 2. Hospitals in Odisha Lack of employable skills deprives Work is underway for the setting up of a scores of youth of gainful employment 500-bed hospital at Gopalpur and a 200- opportunities. We offered skill bed hospital in Kalinganagar. Sankara Eye development training courses through Hospital is also setting up a 100-bed Super Speciality Eye Care Hospital in Ganjam.

(i) Institutes run by Tata Steel Skill SOCIAL AND RELATIONSHIP CAPITAL Development Society, 3. Adolescent Health Programme (ii) Institutes that receive infrastructural Project RISHTA on adolescent health support from us and reached out to over 23,000 adolescents (iii) Courses offered at select institutes. in Jharkhand and Odisha to enable them to make informed decisions and choices All of these courses are meant to prepare about their sexual and reproductive health. unemployed youth to find employment in diverse fields such as construction, 4. Primary and Specialised 1,132 youth automobiles, motor driving, call Healthcare centres, hospitality, apparel designing, Our static clinics and mobile medical vans employed nursing, etc. offered primary healthcare services to nearly 5,70,000 people in Jharkhand and Odisha, including those in far-flung areas of In FY16, 1,573 youth out of HEALTH the two states. Over 30,000 patients availed 3,089 enrolled completed specialised healthcare services from our our skill development 1. Infant Mortality multi-specialty health camps. Antenatal programmes. In partnership with the government health and postnatal check-ups benefitted over system and not-for-profit organisations’ 7,800 women, while the immunisation working on health, we have been working drives covered 8,900 children. Free on Maternal and Newborn Survival hospital-based surgery was provided for low-water, less labour-intensive method. Initiative (MANSI) Project in 167 villages of over 4,000 cataract patients who were SRI technology also addresses climate Seraikela-Kharsawan district in Jharkhand. identified through eye camps organised in change by reducing the methane gas This has reduced the neonatal mortality rural Jharkhand and Odisha. emissions from the paddy fields by up to rate by 46% and infant mortality (up to 60%. one year of age) rate by 39% (Source: Vital Rates Survey conducted by SEARCH, EMPOWERMENT Vegetable Cultivation: Efforts aimed at Gadhchiroli). diversifying agricultural produce have led 1. Irrigation to over 4,200 farmers adopting vegetable In FY16 several districts and blocks of Lack of irrigation facility in water-scarce cultivation as their second or third crop. Jharkhand and Odisha were covered under regions adversely impacts farmers. Project MANSI. Harvesting rainwater through the Irrigation: Attempts to increase the construction of ponds has helped area under irrigation and reduce the overcome this challenge. We partnered dependence of farmers on monsoons with the village community in making resulted in 202 structures being the rainwater harvesting a reality. This has constructed, including ponds, check dams 5,70,000 yielded three benefits: (i) empowering and lift irrigation facilities. people the rural community, (ii) giving people a source of livelihood and (iii) giving them a Farmer-Scientist Interface: The second voice in their growth story. A village pond edition of ‘Vaartaa – An Agriculture Meet’ aided is not merely a water harvesting structure. was held in Jamshedpur and Gopalpur. Primary healthcare services Its utility extends beyond irrigation, with The meet brought farmers and experts on to nearly 5,70,000 people pisciculture, community building and a common platform to facilitate exchange through static clinics and multi-cropping being associated with it. of knowledge and best practices in mobile medical vans offered With planning and technical advice, a pond agriculture. Overall, about 1,200 farmers in Jharkhand and Odisha. is a sustainable water resource that has attended the agriculture meet. multiple benefits for the rural community.

45 2. Youth Empowerment by training them to match the Company’s Sports: Over 44,000 youth and kids, requirements for various products and especially from Jharkhand and Odisha, services. participated in different sporting events. 2 Jharkhand teenagers, found positions 2. Rural Entrepreneurs in the prestigious Tata Football Academy Capacity building programmes undertaken (TFA). 4 tribal boys trained at TFA were to make Self Help Groups (SHGs) more recruited by an infantry of the Indian Army. dynamic, organised and effective, covered 3,400 members of various SHGs in Leadership Camps: Over 1,500 youth Jharkhand and Odisha. During the year, were taken on outdoor leadership and 130 local villagers became entrepreneurs motivational camps in Uttarakhand. benefitting from livelihood opportunities Odisha is aiming to improve the standard offered by us in collaboration with of education in government schools in Bharatiya Yuva Shakti Trust at Kalinganagar. three backward tribal districts i.e. Jajpur, ENTREPRENEURSHIP Keonjhar and Sundargarh.

1. Affirmative Action EDUCATION The Thousand Schools Project comprises a Our support of the Affirmative Action huge capacity building exercise, including Community includes an Affirmative Action With an aim of equitable and quality staff orientation, training of teachers Vendor Development programme. The education, our interventions span all and youth, training and exposure visits procurement department focuses on levels of schooling, i.e. from elementary of School Management Committees progressively improving the vendors’ share school education to the high school (SMC) and members of Panchayati Raj of business from the SC/ST communities level. The Thousand Schools Project in Institutions. Thousand Schools Project Achievements

1,960 children brought back to schooling ACCESS: Bridging dropout students through Bridge Courses, another 4,547 through Residential Bridge Course (RBC) children brought back through direct enrolment (Total 6,507).

ACCESS LEARNING: Learning Enrichment LEP set-up in 150 schools, school libraries Programme (LEP) set-up in 400 schools. LEARNING

GOVERNANCE GOVERNANCE: Training of School SMC training for 733 SMCs, covering 4,252 Management Committee (SMC) SMC members.

As part of the Affirmative Action agenda - • Our preparatory coaching initiative has ETHNICITY helped nearly 5,500 underprivileged • We granted two fellowships viz., the school students in classes 8, 9 and 10 to With the Company’s operations spread Jyoti Fellowship and Moodie Fellowship hone their skills in subjects like English, over areas populated by indigenous tribes, to over 2,800 meritorious SC/ST Mathematics and Science. we consistently endeavour to work with students from economically-challenged these tribes to preserve and promote their families in Jharkhand and Odisha. • We provided nutritious meals to culture and heritage. 49,000 students in 383 government • The Tata Steel Scholars initiative helped schools of East Singhbhum and During the year, we organised the second 83 bright SC/ST students from Seraikela Kharsawan districts to counter edition of “Samvaad”, a pan-India tribal low-income families realise their classroom hunger. conclave that showcased a holistic picture academic dreams.

46 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR

with the legacy we set-up the Tata Football Academy. This academy runs training

centres in at least 16 sports disciplines and INTEGRATED REPORT 3 residential academies for football, archery and athletics. We have built an array of infrastructure matching international standards to support sports. In FY16, the Government of India awarded our employee Ms. Deepika Kumari a Padma Shri for her contribution to Indian Archery.

Over the years, our employees have won prestigious awards, like the Rajiv Gandhi SOCIAL AND RELATIONSHIP CAPITAL Khel Ratna Award (1), Padma Shri (11), Dronacharya Award (5), Arjuna Award (40), Dhyanchand Lifetime Achievement Award (1), Olympians (34), Asian Games Medallist (26) and Commowealth Games (11). Samvaad - A Tribal Conclave, 2015 We are the only Company in the country to have been awarded the Rashtriya Khel of tribal culture and heritage. Around EMPLOYEE VOLUNTEERISM Protsahan Puruskar by the Honourable 1,500 tribal artists, academicians, eminent President of India in 2009 and 2010. personalities and activists attended the We encourage our employees to volunteer event. The participants represented 35 for community-centric initiatives. In FY16, During the year, a total of 5,600 employees different tribes from 20 states across the nearly 18,413 people contributed 26,290 participated in sporting events, health country. Samvaad showcased the cultural hours and volunteered for a host of & fitness and lifestyle management heritage of the tribal community through community activities and services during programmes. The Company’s training unique forms of tribal folk dances, panel the Tata Volunteering Weeks held under centres and academies engaged 1,601 discussions on tribal languages and the group-level Tata Engage initiative. trainees as part of its community outreach literature, as well as paper presentations by initiatives. Of them, 11 trainees got research scholars. SPORTS employment in Army and Jharkhand Police on the basis of their exemplary Around 15,000 youth have learned the Our zeal to nurture sporting talent began performance at National/ International scripts of Ho and Santali tribal languages in the early 1920s when the erstwhile events. Abiding by its Affirmative Action since we launched over 300 language Chairman, Sir Dorabji Tata sponsored the Policy, a total of 512 ST/ SC boys and girls centres. first Olympic team from India. In keeping were provided training in academies and training centres.

identity card specially designed to SOCIAL INVESTMENT IN contain all relevant details of the KALINGANAGAR – AN AFFIRMATION family. “A New Life – a New Hope” was the commitment given by Tata OF INCLUSIVE GROWTH Steel through the Tata Steel Parivar Resettlement & Rehabilitation Plan.

Background A total of 1,234 families were displaced The 4 'R' theme of the 'Tata Steel Parivar' Our operations in Kalinganagar due to the allocation of land towards the covers: are equally driven by our business Project and these families were required objectives and social commitments. to be resettled and rehabilitated. Our • Reassuring Communication – 'The A large part of the highly-trained and leadership team ensured development of Vision for a Better Tomorrow'. skilled workforce comprises individuals an IT solution to systematically monitor • Resettling the displaced population who belong to families displaced by the financial position, health situation with care. the project. Our resettlement and and current occupation of each displaced • Rehabilitation – Ensuring better rehabilitation programme for those family. Thereafter, each relocated family quality of life, income and happiness. impacted is anchored on compassion became a member of the Tata Steel • Recheck implementation through and empathy. Parivar, and was issued a tamper-proof self and independent social audits.

47 Initiatives of the following areas have A 200-bed Tata-Medica Specialty Hospital is Employment in non-farm-based upheld the intent of inclusive growth by now being set-up at Kalinganagar. SMEs the 'Tata Steel Parivar'. We organised Self Help Groups to train Economic Rehabilitation and initiate women into thrift and credit, Civic Infrastructure Economic rehabilitation is progressively later leading to bank linkages. Exposure Three rehabilitation colonies were set-up taking place through: to Income Generation programmes at Trijanga, Sansailo and Gobarghati, each like tailoring, pickle-making, poultry of which is equipped with all-weather, • Technical training leading to employment etc. enabled them to feel confident motorable roads, electricity, clean running in different industries and ancillaries. and empowered to take on projects to water from taps, a well laid-out drainage • Training and engagement in non-farm augment their family incomes. system, community halls, recreation areas based SMEs. for children and designated spaces for • Farm-based activities using traditional Business opportunities religious ceremonies. skills. Contracts are awarded to members of the • Upgrading of skills leading to self- Tata Steel Parivar for services in areas like Primary Education and employment. cleaning and maintenance of Resettlement Scholarships • Nurturing entrepreneurship. & Rehabilitation colonies, housekeeping in The most significant achievement has the Company’s premises, waste disposal, been the 100% enrolment in primary Training and Skill Development water supply, grocery supplies etc. education in the schools set-up. Colony We conducted an education and capability students have continuously excelled in mapping of the local youth. Based on the Transformation the Matriculation Examinations. Since findings, the following measures were In less than a decade, our approach 2007, the Tata Steel Parivar Scholarship carried out – has led to significant transformation in has funded the education of meritorious Kalinganagar. Some key changes are as children. • In 2006 group training and skill follows: development began in technical areas, Medical Facilities computers and other skill development • Members have moved from living in A team of doctors, aided by paramedics, options. thatched houses to multi-storeyed community health assistants and • Nominees were handpicked for concreted homes. Members have gone facilitators (Swasthya Mitras) provide round vocational training in trades like welding, from having no electricity connection or the clock, free medical services to 1,033 plumbing, masonry, carpentry, bar medical facility to round the clock access families in the three rehabilitation colonies, bending, etc. to electricity and medical facilities. including pathological services and • Graduate nominees were absorbed • Children who had dropped out of schools ambulance facilities. as Office Associates in different now have access to free quality education. Operational and Service departments, • Families who depended only on rain-fed Specialised healthcare is available at the while matriculates took on the role of agriculture have multiple sources of hospital at Gobarghati Resettlement & Operations & Maintenance Assistants. income including employment with Rehabilitation colony, and is assured via • Those with no formal training were the Company, contracts for work at the tie-ups with hospitals in Bhubaneswar and trained at the Central Tool Room & Company, alternate income for women Cuttack. We hosted the Lifeline Express at Training Centre, Bhubaneswar, through a through SHGs, business opportunities Jajpur in 2010 and 2014, for the families in two-year programme on steel making. such as shops etc. colonies and others from peripheral areas. • Families enjoy food security due to the grocery maintenance allowance provided by the Company.

Focus Areas

Our future focus is to improve the effectiveness of our spends and seek support from the Government and other sources for our initiatives. Going forward we will be leveraging technology and innovation for our CSR activities in order to achieve greater impact in terms of reach and scale.

48 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR RELATIONSHIP CAPITAL INTEGRATED REPORT

Approach For us, Sustainability means another century of inclusive growth.

Our sustainability practices are guided by our Vision, Mission, Values, governance and sustainability policies so as to have an

integrated approach to address the needs SOCIAL AND RELATIONSHIP CAPITAL of People, Planet and Profits.

Through our values & ethical practices, we Vendor Meet aim for mutual value creation by engaging with all stakeholders. The interaction with stakeholders is providing process oxygen, railways, road Stakeholder Engagement General (relationship building), Issue logistics providers, consignment agents Based (related to specifics of projects or for transportation, storage and handling We have three main categories of Consent to Operate) or revolves around of raw material and finished goods. For stakeholders: communication of the Company’s Vision, effectively meeting customer demands we Mission, Values, capability building, have entered into contracts with external directions and expectations. steel finishing factories called “Steel Processing Centres”. Business Partners We have in place, active engagement – investors, employees mechanisms at the various stakeholder We have also forged multiple and suppliers. oriented functions, for example HRM collaborations with various prestigious (employees), Marketing & Sales (Customers, academic and research institutes for distributors and dealers), Procurement procuring cutting-edge knowledge Civil Society (Suppliers), CSR (Community), Corporate on various research and development – NGOs working on social Communication (Media), Centre for initiatives in the areas of products and & environmental issues, Regulatory Effectiveness (Government and processes and for capability building in the community. Bureaucrats), Planning departments (Steel area of Intellectual Capital. Processing Centres). The frequency and forum of engagement Influencers We have entered into long-term strategic depends on the stakeholder and the nature – regulators, politicians, contracts with various utility providers of the concern. Our senior leadership media, industry associations, for augmenting the requirements, for also communicates and engages with customers. running the process or for upkeep of the the Government, Customers, Investors, township, e.g. Tata Power and Damodar Suppliers, Media, Regulatory Authorities, Valley Corporation for power requirements Employees & Unions, Thought Leaders and of the plant and township, Linde for Community through various forums.

We strongly leverage technology in communication and actively use social media platforms to connect with a larger gamut of stakeholders, particularly on key corporate events and dissemination of key corporate updates.

As part of our sustainability practices, the stakeholder engagement process was reviewed by a large consulting firm during the Materiality exercise in 2013. The various stakeholders that we engage with, their concerns, and formal engagement Tata Steel Kolkata Literary Meet, 2016 mechanisms are listed in the table overleaf.

49 Stakeholders, Related Material Concerns and Engagement Approaches

Stakeholders Impact Concerns Approaches for Engagement Frequency of Engagement Human Capital Employees Key workforce • Safety & 1. Managing Director Online 1. Monthly – engaged in Health, Ethics, Communiqué 2. Half-Yearly production & Environment. 2. Dialogue with officers 3. Alternate month services • Infrastructure & 3. Joint Works Quality Committee 4. Annual Unions are Amenities. 4. Joint Works Committee 5. Monthly representatives of • Career Planning. 5. Joint Departmental Councils 6. Monthly non-officers and • Compensation. 6. Joint Consultation Forums help in maintaining 7. Quarterly • Career Growth. harmonious 7. UCM Meetings 8. Yearly • Training & industrial relations 8. Ethics and Quality month 9. Need-based Development. 9. Mass meeting Contract Support workforce • Safety. 1. Safety Mass Meetings, Sumilan, Need-based workforce – engaged in • Wage Parivartan Contractors Safety production & Certification. Management services • Infrastructure 2. Wage certification by PEs and amenities. 3. Grievance forum at Contractor Cell • Skill 4. Training and competency building development. Prospective New ideas, • Competitive 1. Campus recruitment Yearly/ Need-based Employees knowledge and work 2. Job opportunities through internet experience from environment. 3. Employee ward exam etc. outside • Incentives. • Work-life balance. Customers 1. Business to Drive growth • Consistent 1. Parivaar Meet 1-2. Annual Business objectives availability of 2. Customers /Influencers Meet 3-6. Alternate year Revenue generation quality products 3. Steel conference 7-8. Need-based 2. Business to and effective 4. Customer Service Team 9-14. Ongoing Consumers solutions. 5. Senior Management Meetings 3. Business to • Reliable Delivery. 6. Events for Focus Groups and End Emerging • Product Users Corporate conformity to 7. Plant visits, reviews, call centre specification. Accounts (SME) 8. Customer Visit & Report • Technical 9. DPCR (Daily Product Application Support. Group Communication Report) • Products and 10. LINKS (Learning Interaction solutions for new Networking Knowledge Sharing) applications. 11. GalvaKnow – Building technical • Safety. capabilities of sales forces • Ease of doing 12. Wired2Win – Knowledge sharing for business. wire rod customers 13. Suraksha – Safety excellence programme 14. Value in Use – Better understanding of SME Customers

50 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR

Financial Stakeholders INTEGRATED REPORT Shareholders, 1. Source of • Financial and 1. Annual General Meeting/ Corporate 1. Annual banks, credit rating financing Environment, sustainability report/ Annual Report 2. Quarterly/ Half agency 2. Credit Social & 2. Analysts/Press Meets Yearly worthiness for Governance 3. Meetings with senior management 3. Need-based investments Performance. 3. Growth Business Partners Suppliers, vendors, Support the • Transparent and 1. Annual Vendor meets/ Annual 1. Annual distributors and business objectives Ethical Practices. Partner meet / Distributor meet 2. Ongoing SOCIAL AND RELATIONSHIP CAPITAL retailers of the Company • Transactional 2. Meetings with key suppliers, 3. Need-based Issues. retailers and partners • Safety and Health. 3. Supplier Relationship Management • Ease of doing business. Regulatory Bodies Regulatory, Regulatory matters, • Compliances 1. Corporate Relations Department Need-based Central and State including various to regulatory 2. Liaison Cell Government approvals, consents requirements 3. HRM Legal Cell and CTO 4. Environment Management Departments and obligations. Authorities Department 5. Local heads of operations 6. Meeting with Key Managerial Personnel (Managing Director, Chief Financial Officer and Company Secretary) Communities Thought leaders, Social License to Socio- Economic 1. Interaction with key community 1. Ongoing practitioners, local operate uplift through: leaders and media 2. Local area communities, • Sustainable 2. Participatory Rural Appraisals interventions by opinion leaders and Livelihoods. 3. Cultural events - 'Padyatra', Public Head of locations traditional chiefs • Empowerment. Hearings, 'Samvaad' • Education. 4. Meetings with PRI members, • Employment. traditional chiefs, SC/ST intellectuals • Employability. 5. CSR Advisory Council • Access to social and physical infrastructure. Displaced Families Social License to • Resettlement 1. Tata Parivar Scheme Ongoing operate and 2. Resettlement and Rehabilitation Rehabilitation. teams 3. Public Hearings 4. Grievance Redressed Group Industry Associations World Steel Support proactive • Growth of steel Meetings / seminars Ongoing Association, engagement in industry. Confederation of policy–making and • Competition provide a platform Indian Industry, etc. from abroad. for advocacy • Global development.

51 NATURAL CAPITAL

Natural capital represents all renewable and non-renewable environmental resources such as water, land, minerals, forests, biodiversity and health of the ecosystem.

Approach industry associations like World Business A significant contributor to a lower CO2 We have always been committed to Council for Sustainable Development intensity in FY16 was a lower coke rate at conservation of natural resources, (WBCSD), multi-stakeholder consortia the blast furnaces. During the year, under preservation of biodiversity and like Natural Capital Coalition and NGOs the TQM initiative, Shikhar - 25 energy abatement of climate change impacts towards protection of Natural Capital. efficiency measures secured abatement due to our operations. There is visible of CO2 emissions (approximately 6% commitment to environmental care reduction of emissions intensity). We and climate change as stated in our also conducted trials at the 3 MW Solar Environment, Climate Change, Energy and Our initiatives and achievements Photo-Voltaic Power Plant at Noamundi Sustainability policies. during FY16 towards protecting (showcased on the adjacent page). Natural Capital were: Recently, we have concluded an WASTE HEAT RECOVERY assessment of the Biodiversity at our select EMISSION ABATEMENT Waste Heat Recovery from the Sulphur raw material locations and have plans in The CO2 emission intensity at the Recovery Unit (SRU), yielded cumulated place to enhance the same. We have an Jamshedpur Steel Works has reduced by emission abatement of 19,534 tCO2 since Environment Management Department over 27% in 11 years and by 10% in the it began operations in the last quarter of (EMD), a dedicated corporate function, last five years. We achieved our best ever FY14 till FY16. for management of environmental monthly performance @ 2.19 tCO2/tcs in performance of the Company. While we February 2016, surpassing the previous We have implemented Waste Heat meet regulatory compliances, we are also best of 2.27 tCO2/tcs in March 2015. Recovery System (WHES) in our BF conscious of the growing emphasis laid by Stoves and used Top gas pressure

52 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR

Recovery Turbines (TRT) at the G, H & INTEGRATED REPORT I Blast Furnaces which deliver 80% of the Hot Metal. Coke Dry Quenching has been installed at Coke Oven Battery Nos. 5, 6 & 7. These systems have helped us significantly reduce the energy consumption.

ZERO EFFLUENT DISCHARGE

With the enhancement of recovery NATURAL CAPITAL systems, we achieved our lowest ever specific effluent discharge, amounting to a 36% reduction of discharge in the last five years and 27% reduction in water intensity over the same period. 27 of our 3 MW Solar Plant at Noamundi Iron Ore Mine 46 operating sites are Zero Effluent Discharge sites.

SOLID WASTE UTILISATION BIODIVERSITY MANAGEMENT We focus on extracting value from waste Biodiversity Management Plan for raw The guidance provided in the plan has through our practice of reduce, reuse material locations is a collaborative effort been derived from our commitment to and recycle. Further, we are also pursuing between Tata Steel and the International restoration of biodiversity, the experience innovative applications with special Union for Conservation of Nature (IUCN). derived from the recent mine closure focus on LD Slag utilisation in agriculture, The Management Plan is intended proceedings, biodiversity assessment, construction and other sectors. to provide practical guidance for the companion preliminary community progressive restoration and enhancement consultation process and the guidance Our objective of zero waste mining is of biodiversity within the mines and to received from IUCN, International Council driven through processes such as ore the extent possible, within the adjacent on Mining and Metals, Indian Bureau characterisation, ore-body modelling and impacted areas. The measures proposed of Mines, World Bank/International block modelling of mining deposits done, in the plan will be subject to annual Finance Corporation guidance on mine LCI studies for mines, etc. State-of-the-art reviews which will strive for a system of reclamation and closure. beneficiation plants are in operation and continuous, adaptive improvement. studies are underway for beneficiating slime and low-grade ores.

Usage of various wastes generated MATERIAL USAGE Jamshedpur Steel Works Solid Waste Recycled: Sold to Cement makers and recycled in steel making (Majority is BF slag & LD slag) Mining Overburden Dump Reused: Partially used for backfilling of demineralised pits used for reclamation and (toe-wall, garland drain) rehabilitation, also exploring usage of carbonaceous shale Reduced: Management of Tailing Pond Tailings Reused: Onsite storage, de-watering, agglomeration Recycled: Tailing from Washeries are sold to third parties Reused: Used in captive power plants Reject Coal Recycled: Sold outside Other Locations Recycled: Half of the slag quantity is sent out for SiMn production by EPA Slag Reused: Balance is landfilled

53 The primary objectives of the Biodiversity Management Plan are: The unique features of the Biodiversity Management Plan are:

Avoid / reduce impacts to biodiversity. Inter-dependence of physical, biotic and cultural elements. Progressive reclamation of mine- altered sites in a manner which restores biodiversity and associated Listing of commitments and ecosystem services. supplementary guidance to address biodiversity and associated ecosystem Long-term improvement in targeted services. biodiversity components from pre-mine conditions. In-depth procedural guidance Use of combination of flora salvage Community engagement and plugs, Miyawaki method and its insights in the process of environmental management and conventional re‐vegetation techniques. mine closure. Broad range of measurable biodiversity performance indicators.

Strong emphasis on community involvement/engagement.

Provision for third party review (air and water)

Raw material locations have taken up Some of the other stakeholder improvement of natural capital while projects as part of the Annual Business engagement initiatives are 'Spot the caring for the safety and productivity of Plan, for implementation of biodiversity Species', 'Green Therapy', 'Jaiba Kala human capital are as follows: management plans such as the: Vividhata', 'Prajatiya Khadyotsav' and 'Snakes are Friends'. • Surveillance of service vehicles through • Butterfly Park at Sukinda and Joda. GPS-based tracking system and speed Biodiversity assessment done with monitoring device was implemented at • Niche Nesting (Artificial bird nesting IUCN has revealed that in some of the Joda East Iron Mine. boxes) at Noamundi. mining sites, biodiversity in our lease area is better than outside our lease area • Steps taken towards green energy • Developing local forest in dump area and that is a testimony of our efforts - Installation and trial of 3 MW Solar at Sukinda. towards maintaining greenery and water Power Plant completed at Hill #1 of harvesting. Environment management Noamundi. • Integrating rain water harvesting plans and progressive mine closure plans structures in periphery for improving are also in place and are being monitored • 13.7% reduction in energy consumption aquatic life at Sukinda. and reviewed internally by Indian Bureau in Ores, Mines and Quarries township of Mines. areas achieved through various • Agro-biodiversity enhancement at initiatives like replacement of Jharia. Key Technological Developments and conventional light fittings with LED Innovations lights, installation of energy-efficient • Dump reclamation using Mulberry Some of the key technological fans/air conditioners, monitoring Plantation at West Bokaro. developments and innovations for and communication (through SMS)

54 INTEGRATED REPORT & ANNUAL ACCOUNTS 2015-16 | 109TH YEAR INTEGRATED REPORT

of energy consumption of individual load in underground mines. It has houses etc. been commissioned in Sijua Colliery Focus Areas and has reduced the average travel • Introduction of pre-fabricated vertical time by 70%, eliminated exhaustive drains for embankment construction of travelling and has resulted in Our aspiration is to be the 'Indian Slime Dam at Noamundi. The vertical productivity improvement of Steel industry benchmark in drains will enhance the stability of the employees. Similar systems may be

Environment Performance' and to NATURAL CAPITAL dam after the augmentation of the installed in two other collieries of the achieve this we are focused on: slime storage capacity. Jharia Division. 1. Implementing Zero Effluent Discharge solutions. • Advanced blast monitoring and • An air-cooling system to be installed 2. Reducing GHG emissions vibration management projects were in the Digwadih Colliery to enable through coke rate reduction. successfully conducted for excavation reduction in the temperature of 3. Implementing solutions/ of critical top benches of Banspani hill underground mines, and thereby help initiatives to improve Solid at Joda East Iron Mine and Khondbond increase the productivity of mines. Waste Utilisation. Iron Mine. 4. Abating dust emissions through Our compliance to most stakeholder installation/augmentation • Aquifer-based Water Harvesting expectations has yielded significant of fugitive dust extraction/ technology used for the Bokaro River benefits such as early issuance of permits suppression systems. project to supply 1,000 KL of water per for Mines, Steel Works at Jamshedpur and 5. Managing biodiversity, an day to seven surrounding villages with Kalinganagar. As a result of our dedicated emerging focus area and of 7-8 km piping laid out. efforts, we have significantly improved significant relevance to us due in the areas of energy consumption, CO2 to our mining operations. • Installation of the Man-Riding system intensity and Stack (dust) emissions. for transportation of man and light

Water Performance (Tata Steel India) WATER AND EFFLUENT MANAGEMENT UoM FY14 FY15 FY16 Water Withdrawal mn m3 76.99 74.38 63.06 Effluent Recycled and Reused % 17.8 22.2 29.4 Effluent Recycled and Reused mn m3 16.70 21.28 26.30

Emission Performance (Jamshedpur Steel Works) EMISSION TRENDS AND ENERGY INTENSITY UoM FY14 FY15 FY16 Specific Particulate Matter Emissions (stack) kg/tcs 0.88 0.57 0.50 Specific Effluent Discharge m3/tcs 2.31 2.31 1.20 Specific Make-up Water Intake m3/tcs 5.57 5.54 4.39 Solid Waste Utilisation % 78.0 78.3 80.6

CO2 EMISSION INTENSITY

Direct Emissions (scope-1) tCO2/tcs 2.23 2.26 2.11

Emission (Direct + Indirect) tCO2/tcs 2.43 2.42 2.26 Energy Intensity1 GJ/tcs 25.19 25.17 24.15

55 MANAGEMENT SPEAK

Mr. T.V. Narendran Mr. Koushik Chatterjee Managing Director Group Executive Director (F&C) and (India and South East Asia) Executive Director – Europe

Despite extremely challenging economic conditions, we We continue to make efforts to deliver sustainable achieved our highest ever sales at 9.5 MnT. This resulted value to stakeholders, even during testing times. in us successfully consolidating our market share in During the year, we have managed our liquidity and India. We witnessed a strong growth in our key segments financial exposure carefully with adequate balance to viz. automotive and branded products. Our investments create long-term assets including capital expenditure towards growing our markets and building our equity of `11,486 crore, largely towards completion of our continue. We have made a good beginning on the greenfield project in Kalinganagar and capability digital journey and notable progress in productivity and enhancement projects in IJmuiden. Despite this, work process improvements. Productivity, Safety and our net debt increase is not sharp and our liquidity Profitability have been built into the union agreements position remains strong. During the year, we took in place of metrics like production and profits. steps to continue our operational excellence initiatives, undertook portfolio actions and monetised investments Our Kalinganagar plant has picked up pace and is to sustain our business performance amidst very volatile expected to aid in further consolidating our presence market conditions. Most of our subsidiaries and joint in existing high-end market segments. We are well- ventures in India and South East Asia also improved positioned to leverage the demand arising out of India's their performance and helped the overall performance economic growth. of the Company. In the near-term, our focus would Our South East Asia operations had encouraging be on ramping up our operations in our Kalinganagar performance. Our interventions on cost rationalisation Plant, restructuring of the European portfolio and and portfolio optimisation have started delivering strengthening our financial position. results. From this year we are formally migrating from We continue our commitment to industry-leading CSR compliance based reporting to governance based practices. A safety and environment conscious culture reporting. Our Integrated Report will give you, has been successfully imbibed across the organisation. the owners of financial capital, visibility into our This is reflected in many of our metrics. We continue to sustainability and people practices. We believe balance business goals and sustainability in all aspects. that fundamental to comprehensive value creation Going forward, we will continue to focus on cost is integrated planning and execution of business improvement initiatives and downstream value-addition strategy across all the capital sources available to the across our products and market segments. organisation. We will endeavour to expand the coverage of the Integrated Report and disclosures in phases in the coming years to cover the wider Tata Steel Group.

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