To the Members,
Your Directors take pleasure in presenting the 5th Integrated Report
(prepared as per the framework set forth by the International Integrated Reporting
Council) and the 32nd Annual Accounts on the business and operations of Tata
Metaliks Limited ('TML' or 'Company') for the financial year (FY) ended
March 31, 2022.
A. Financial Results
(Rs crore)
Particulars |
Financial Year 2021-22 |
Financial Year 2020-21 |
Revenue from operations |
2745.53 |
1,916.66 |
Total expenditure before finance cost, depreciation |
2367.50 |
1,527.43 |
Operating Profit |
378.03 |
389.23 |
Add: Other Income |
16.65 |
8.12 |
Profit before finance cost, depreciation and taxes |
394.68 |
397.36 |
Less: Finance costs |
24.50 |
23.60 |
Profit before depreciation and taxes |
370.18 |
373.76 |
Less: Depreciation and amortization expenses |
61.69 |
67.13 |
Profit before exceptional items |
308.50 |
306.63 |
Exceptional Items |
30.83 |
|
Profit before tax |
339.32 |
306.63 |
Less : Tax expenses |
101.26 |
86.00 |
(A) Profit after tax -from continuing operations |
238.06 |
220.62 |
(B) Loss after tax - from discontinued operations |
(0.61) |
(0.81) |
(c) Profit for the Year (A+B) |
237.45 |
219.81 |
(D) Other comprehensive income net of tax |
0.40 |
(0.30) |
(E) Total comprehensive income for the year (C+D) |
237.85 |
219.51 |
Retained Earnings: Balance brought forward from the previous year |
700.01 |
487.52 |
Add: profit for the period |
237.45 |
219.81 |
Add: Other Comprehensive Income recognised (in Retained Earnings) |
0.40 |
(0.30) |
Add: Other movements within equity |
- |
- |
Balance |
937.85 |
707.03 |
Which the Directors have apportioned as under to: |
|
|
(i) Dividend on Ordinary Shares |
12.63 |
7.02 |
(ii) Tax on Dividend |
- |
- |
Retained Earnings: Balance to be carried forward |
925.22 |
700.01 |
As the second wave of COVID hit the country, fresh lockdowns were declared in several
states during the first quarter. Restrictions were imposed in various parts of the country
including West Bengal where intra-state transportation was affected. Consequently, the
business got adversely affected in Q1 owing to the restrictions and allied disruptions in
supply chain. Profits took a hit during Q3 mainly due to lower production in one of the
Blast Furnaces owing to planned shutdown and higher cost of raw materials. Despite the
continuing volatilities and surge in prices of major raw materials like coal, coke and
iron ore, the Company remained resilient to achieve its highest-ever Turnover and
highest-ever PBT. Highlights of the Company's annual performance are:
Highest-ever annual Hot Metal and DI Pipe production
Highest-ever annual Coke Plant production
Highest-ever annual Power Generation
Highest-ever annual sales of PI and DI pipe from Kharagpur plant
1. Dividend Distribution Policy
In terms of Regulation 43A of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 ('SEBI Listing Regulations'),
the Board of Directors of the Company (the 'Board') formulated and adopted a
Dividend Distribution Policy.
The policy is available on our website at
https://www.tatametaliks.com/static-files/pdf/policies/dividend-distribution-policy.pdf
2. Dividend
The Board has recommended highest-ever dividend of Rs 8/- per Equity Share on
3,15,77,500 Equity Shares of Rs 10/- each for FY 2021-22 (previous year Rs 4 per equity
share on 3,15,77,500 Equity Shares of Rs 10/- each). The Board has recommended dividend
based on the parameters laid down in the Dividend Distribution Policy and the dividend
will be paid out of the profits for the financial year.
The dividend on equity shares is subject to the approval of the Members at the ensuing
Annual General Meeting ('AGM') scheduled to be held on Tuesday, August 02, 2022 and will
be paid on and from Saturday, August 06, 2022.
The dividend, if approved, would result in a cash outflow of Rs 25.26 crore. The total
dividend outgo works out to 10.64% (FY 2020-21: 5.75%) of the net profits.
Pursuant to the Finance Act, 2020, dividend income is taxable in the hands of the
shareholders effective April 1, 2020 and the Company is required to deduct tax at source
from dividend paid to the Members at prescribed rates as per the Income Tax Act, 1961.
The Register of Members and Transfer Books of the Company will remain closed from
Friday, July 22, 2022 to Tuesday, August 02, 2022, (both days inclusive) for the purpose
of payment of the dividend for the financial year ended March 31, 2022 and the AGM.
3. Transfer to Reserves
The Board has decided to retain the entire amount of profit for FY 2021-22 in the
statement of profit and loss and no amount is proposed to be transferred to the general
reserves.
4. Capex and Liquidity
During the year under review, the Company incurred capital expenditure of around Rs 324
crore, which has been funded through internal accruals. Despite adverse impact of two
waves of COVID and geo-political crisis having far reaching impact on input costs, the
Company successfully managed its liquidity situation and end the year with highest ever
cash surplus of Rs 337 crore along with undrawn lines of both fund-based and non-fund
based limits sanctioned by banks.
5. Management Discussion and Analysis Report
The Management Discussion and Analysis Report, in compliance with Regulation 34(2)(e)
of SEBI Listing Regulations, forms an integral part of this report and is annexed herewith
as Annexure A.
B. Integrated Report
In line with the Company's commitment to stakeholders to adopt sustainable business
practices, we transitioned from a compliance-based reporting to the governance-based
reporting by adopting the Integrated Report <IR> framework developed by the
International Integrated Reporting Council (IIRC) in 2017.
Our 5th IR not only highlights our value creation process woven around our
six business pillars but also provides enhanced disclosures around our business model,
material issues and stakeholders, Environment Social and Governance (ESG) outcomes,
response to external challenges, value creation outcomes, and risk management and
governance aspects.
The enhanced disclosures are in line with our commitment to enhance accountability and
promote a transparent approach to corporate reporting.
C. Operations and Performance
Financial & Operational Performance
The financial year 2021-22 has been a year of twists and turns. The year started with
the deadly second wave of COVID-19 pandemic in India that saw a severe health crisis
across the populace; it also impacted production at several facilities including at our
plant that was partly also due to workforce restrictions imposed by the Govt. However, the
situation settled down in Q2 with economic activity picking up & creating an upward
momentum in the economy. Q4 witnessed a much milder third covid wave hitting the country
but the economic impact was limited; however, the start of the Ukraine-Russia conflict in
Q4 triggered a sharp jump in commodity prices which was already on an upward trend. Prime
hard Coking coal prices reached a record level of USD670/t compared to approx. USD 100/t a
year or so back. This put tremendous pressure on the cost structure of the pig iron and DI
pipe makers; however, the war in Ukraine also cut off the exports of Pig iron & Steel
from these two countries which have traditionally been large exporters. This led to a
surge in the prices of iron & steel in the global markets and which then started
impacting the domestic prices as well from MarchRs 22.
Despite the various challenges & price volatility enumerated above, the Company
remained resilient and continued to focus on its operational performance. The rising input
costs coupled with additional royalty on iron-ore for supplies from the captive mines of
Tata Steel affected our margins adversely in H2. However, increased operational
efficiencies, continued focus on improvement initiatives, agile procurement strategies
aided by the rise in PI market prices helped in offseting the impact of rising costs to
some extent.
Despite the above, the Company's resilience and resource optimization helped it to
clock an EBITDA from Operations of Rs 394.68 crore (FY 2020-21: Rs 397.36 crore) and
record its highest- ever Profit Before Tax (PBT) of Rs 339.32 crore (FY
2020-21: Rs 307 crore).
State of Company's affairs
Pig Iron (PI)
During the year under review, demand got impacted severely in Q1 due to COVID second
wave as operations in all major Foundry clusters got curtailed and domestic Foundry Grade
('FG') PI prices remained volatile in line with related commodities viz. steel,
scrap, sponge iron etc. Demand started recovering from mid-July 21 onwards with average
utilization levels reaching 70-80% at all major foundry clusters. In Q3 demand was
moderate due to festive season and recovery from second wave of COVID and it ultimately
showed signs of recovery in Q4 when utilization levels improved to 80-90% in the
foundries. However, the PI prices remained volatile throughout the year and reached
all-time high levels due to unprecedented rise in raw material prices especially coking
coal and coke.
Ductile Iron Pipe (DIP)
Despite sufficient volume of dispatchable orders and fund clearances from the
government, DIP industry witnessed muted dispatches in Q1 due to COVID induced lockdowns.
With rising demand and buoyant commodity prices, DIP prices witnessed a positive movement
from the beginning of FY 2021-22 and the rising trend continued throughout the year. In
the second and third quarter of the year industry witnessed moderate increase in
dispatches. But in Q4, the increase in dispatches was visible with 578 KT in Q4 vs 555 KT
in Q3. During FY 2021-22, the Company clocked DIP sales of 237 KT with a market share of
12%. The Company's DI pipe business profitability for the year was adversely hit as the
Company continued to support its customers & honour all the old low price contracts
despite the significant increase in raw materials prices.
COVID-19 Response
The second and third wave of COVID-19 pandemic had adverse impact across global
economies and financial markets. Most governments reacted by instituting covid-related
restrictions, business shutdowns, quarantines and restrictions on travel.
Such actions led to disruption of economic activity, leading to many economies
encountering contractions. The Company continued its agile response in taking
precautionary measures to combat the spike in COVID cases at its plant in Kharagpur where
most of the employees are based. Besides thermal screening and close medical monitoring
that continued since the previous year, the Company focused on vaccination drive for
employees & their families, including contract workers ; we also created various
support groups and continued the digital health and wellness support for employees and
their families. The existing Pod (roster system), work from home options, along with other
industry-leading covid protocols continued till the Government of India provided
relaxations. By March 31, 2022, we conducted more than 15,000 COVID-19 tests of which 529
positive cases were detected. There were 22 hospitalization cases with 3 unfortunate
deaths.
In line with our focus on digital and innovation, the various contactless and digital
solutions continued to aid our combat against COVID. Continuing our journey to build
safety leadership capability, in-house online training modules, workforce engagement
through virtual meetings, e-workshops, e-learning modules, helped increase connect with
employees & build their morale. The Company not only provided medical assistance, but
also arranged special medical insurance against COVID-19 for its employees and provided
special COVID leave for employees who were infected with COVID-19 or advised home
quarantine due to contact tracing at workplace.
The Company also allocated a special COVID-19 fund to provide immediate relief to the
vulnerable communities including daily wage workers who were adversely impacted due to the
lockdowns. Assistance was also extended to the local hospitals and nursing homes at
Kharagpur, with beds, oxygen cylinders and other medical equipment. There were multiple
awareness sessions taken by employees to spread awareness about COVID-19, and the
importance of vaccination. Postlockdown, operations continued with strict adherence to
SOPs and extensive testing for all employees working in the plant at regular intervals
based on contact tracing SOP.
D. Key Developments
Change in capital structure
There has been no change in the capital structure of the Company during the year under
review.
The Equity Share Capital of the Company is ^31,57,75,000 divided into 3,15,77,500
Equity Shares of ?10/- each as on the close of the FY 2021-22.
Sale of land at Redi
During the year under review, the Company completed sale of the vacant land at Redi,
Maharashtra. The sale proceeds have been recognized as income under exceptional items in
the financial statements.
Scheme of Amalgamation of Tata Metaliks Limited with Tata Steel Long Products Limited
The Scheme of amalgamation of Tata Metaliks Limited into and with Tata Steel Long
Products Limited was approved by the Board of Directors of the Company at its meeting held
on November 13, 2020. The statutory submissions were made to the Stock Exchanges i.e.
National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). The
Stock Exchanges had sought additional information on the scheme and the Company is in the
process of appropriately responding to the same.
Credit Ratings
The Company enjoys a sound reputation for its prudent financial management and its
ability to meet financial obligations. The credit rating of your Company for long-term
stands at [ICRA] AA- and short-term facilities stands at [ICRA] A1+. Details are provided
in Corporate Governance Report.
E. Sustainability
The Company's philosophy of sustainable value creation is deep rooted with the core
values of the Tata Group. Underpinning this philosophy is a strong focus on zero harm
along with resource efficiency and circular economy, minimising carbon footprint and care
for community and workforce. This is ensured through a broad spectrum of focused
interventions in areas of environment management, water sustainability, carbon emission
reduction, use of alternate fuel and community development. Our commitment to serve our
stakeholders is deployed by the linkage of our business priorities with United Nations
Sustainable Development Goals (UNSDGs). The Company has set in motion a roadmap to
be carbon neutral by 2050, enhancing value proposition on circular economy, implementing
renewable/ alternate energy sources and higher carbon pricing for revenue and capital
decisions, to name a few. During the year, the Company adopted a sustainability policy to
sharpen our sustainability interventions and attain the sustainability targets. The Policy
is available at https://www.
tatametaliks.com/static-files/pdf/policies/sustainabilitv-policv. pdf
Various initiatives taken in the last few years have not only improved our ESG
performance but also improved the lives of the focused communities. External voluntary
assessments by leading institutes and independent agencies, internal benchmarking study of
ESG practices to acknowledge and adopt the best practices and materiality assessment help
us regularly calibrate our interventions in our sustainability journey. The Company in FY
2021-22 also made carbon emission disclosure directly for the first time under Carbon
Disclosure Project (CDP) for its stakeholders and was one of the very few Companies in the
Iron & Steel sector in the country to do so.
The Company remains committed to serving its customers through a portfolio of
eco-friendly products and environmental impact of its products by using Life Cycle
Assessment ('LCA') methodology. During the year under review, the Company also
initiated the process for "GreenCo" certification.
Some of the key interventions on the sustainability front undertaken by the Company
include setting up solar power plant & solar water heating system, GHG emission
profiling, local community development in areas of Education and Essential amenities,
operating a Skill Development Centre, to name a few. In FY 2020-21, the Company also
launched another major initiative for its community called "TML 300 schools" to
transform access & quality of education of children in the nearby villages in two
blocks covering approx. 300 schools around the plant with the ultimate goal of making the
area a child-labour free zone.
Environment & Climate Change
The Company continues its journey towards minimizing environmental impact of its
operations. In line with the Tata Group Core values, concern for environment under the
strategic business pillar of 'Responsible Corporate Citizenship' is deeply embedded in
Company's vision and strategy.
The Company has implemented environment, health and safety management systems in
accordance with standards ISO 14001, ISO 45001 and SA 8000 which provides the necessary
framework for managing compliance and improving environmental performance. The Safety,
Health, & Environment Committee of the Board provides oversight and necessary guidance
on environmental matters. The manufacturing plant at Kharagpur operational excellence in
harmony with environment based on the principles of 3 Rs - Reduce, Reuse and
Recycle.
Climate change is one of the most pressing issues the world faces today and the Company
recognizes the same and is committed to optimise water consumption, reduce waste, reduce
carbon and energy footprints. The drive towards renewable energy and minimizing emissions
is reflected in its various initiatives-setting up a 1 MWp Solar power plant, usage of
Electric vehicles (EVs) inside the plant as also a major drive towards improving energy
efficiency. During the year, Energy Audit for PI division was initiated through a BEE
accredited agency. The Company has also begun its journey to achieve its goal of becoming
carbon neutral by 2050 in line with its longterm decarbonisation strategy.
Safety and Health
The Company under the guidance of the Safety, Health and Environment (SHE) Committee
remains committed to its objective of achieving Zero harm through a set of well thought
out strategies that include Contractor Management Safety, Process Safety, Risk based
thinking and transforming the mindset of employees to enhance Behavioral Safety. During
the year under review, renewed thrust was made on risk- based Safety approach by
eliminating or reducing high risk activities through engineering controls &
automation. Some of the key initiatives taken include commissioning of one-of-a- kind
Vacuum pad system for loading & unloading of DI Pipes, deployment of robotics, and
virtual training in collaboration with JN Tata Vocational Training Institute (JNVTI) on
Safety Competency Building for Service Providers, Safety Supervisor and Site Supervisors.
Further, behavior-based culture study was conducted to understand Safety Maturity Index
Level. Efforts towards Hazard Identification and Risk Assessment (HIRA) in new
recalibrated HIRA matrix and initiation of Process Safety Risk Management (PSRM) in
critical processes are helping develop a Risk based approach to Safety which will give a
thrust to achieving the goal of Zero harm. During the year the Company developed
E-learning modules on Safety Induction & Safety Standards and also developed VR
(Virtual Reality) modules on Lock out Tag out Try out (LOTOTO) & Centrifugal
casting machine (CCM) operation and Fire fighting.
Digital
As part of the Digital Transformation Journey, several initiatives including deployment
of Robotics, use of AI based system and Virtual Reality (VR) based training are being
deployed to reduce Employee Machine interface and improve safety in the workplace. The DIP
plant No. 2 (DIP-2) has been designed with a very high degree of automation & usage of
dozens of robots; the first phase of DIP-2 has been commissioned through usage of digital
technologies like Augmented Reality , a first in the DI Pipe industry. The new digital and
robotics interventions will not only improve safety significantly, but will also enhance
productivity and quality of operations.
Customer Relationship
Customer-centricity forms the core of Company's strategic business pillar of
"Supplier of Choice". The Company's marketing strategy is built around
developing deep customer engagement, differentiated product & service offerings and
leveraging digital to improve the customer experience journey. During the year, the
Company used virtual platforms to engage with customers and offered technical services and
technical webinars with both domestic and international customers further leveraging the
knowledge capital.
The Company's digital initiatives served as a big differentiator during the pandemic
and helped the Company to develop stronger relationships with customers. Regular usage of
data analytics tools such as pricing analytics has helped the Company in sharpening its
pricing strategy. The Company implemented the Customer Relationship Management (CRM)
solution for its Pig Iron business which improved ease of doing business with channel
partners and customers In Q4 of FY 202122, 98% of PI orders were booked through CRM of
which 40% + orders were logged by channel partners & customers themselves. The CRM
solution of DI pipe business has also gone live in beginning of FY 2022-23. The Company
continues to promote its Tata eFee and Tata Ductura as premium brands which offers
superior value to its customers through enhanced digital marketing enablers including
social media platforms. During the year various technical webinars, technical services and
onsite interactions were carried out to facilitate promotion.
Corporate Social Responsibility
The Corporate Social Responsibility ('CSR') initiatives of the Company are
embodied in its value chain and aligned with the core purpose of the Tata Group. The
Company is committed to improving the quality of life of the community through longterm
value creation for all its stakeholders.
In addition to the response to COVID-19 reported earlier, the Company continued with
its focused interventions in the areas of Education and Essential Amenities which include
projects on health, sanitation, water conservation and sustainability. Further, the
Company also engaged with the community to develop entrepreneurs through formation of
self-help groups in partnerships with other organisations. The Company has partnered with
Tata Strive to impart quality training at its Skill Development Centre with the objective
of making the youth employable.
The CSR activities are carried out through 'Sadbhavna Trust'.
In terms of Section 135 of the Companies Act, 2013 and the Rules framed there under,
brief outline of the CSR policy and the prescribed details are part of the Annual Report
on CSR activities annexed to this report as Annexure B. The CSR Policy adopted by
the Company as revised on April 22, 2022 can be viewed at
https://www.tatametaliks.com/static-files/pdf/
policies/Corporate-Social-Responsibilitv-Accountabilitv-Policv. pdf. For other details,
please refer to the Corporate Governance Report, which forms part of this report.
In FY 2020-21, the Company also launched another major initiative for its community
called "TML 300 schools" to transform access & quality of education of
children in the nearby villages. The project aims to ensure all children in the age group
of 5-15 years in a defined area, covering two blocks near the Plant (approx. 300 schools)
are provided quality education so that the area ultimately becomes child labour free.
During the year, despite the constraints posed by the pandemic the Company has made steady
progress in this unique Education initiative.
The Company in FY 2019-20 embarked on an ambitious journey to become 'water positive'
by FY 2024-25 through focused interventions including steep reduction in water
consumption, creating water conservation & harvesting structures, deepening of ponds,
etc. in and around our plant. In line with the objective of making water available to the
community, the Jal se Jeevan project saw further progress during the year with excavation
of several rainwater capturing ponds and infrastructure.
These two ambitious projects (to be conducted in two phases) are expected to create a
significant positive impact on the community near the Plant. Despite COVID-19 constraints,
the employees of the Company clocked 7246 Employee Volunteering (EV) hours in the service
of the community. During the year under review, a sum of Rs 540 lakhs was contributed to
the Sadbhavna Trust for CSR and Affirmative Action initiatives against the minimum
statutory requirement of Rs 478.13 lakhs for the year under review.
F. Corporate Governance
Guided by the tenets of transparency and openness, the governance approach focuses on
the effective working of the Management and the Board, while ensuring that corporate
behaviour remains responsible. We consider it our inherent responsibility to disclose
timely and accurate information regarding the operations and performance, leadership, and
governance of the Company. The Company remains committed to raise the bar in adopting and
adhering to transparent and ethical corporate governance practices. The practices reflect
the Group values and ethos, organization culture, polices and the relationship with
various stakeholders. As a responsible organization, timely and accurate disclosure in
respect to Company's operational performance, material corporate events as well as on
leadership and governance is done for the interest of all stakeholders.
In line with the SEBI Listing Regulations, Corporate Governance Report along with the
Certificate from a Practicing Company Secretary, certifying compliance with conditions of
Corporate Governance, is annexed to this report as Annexure C.
Meetings of Board and Committees of Board
The Board met six times during the year under review. The intervening gap between the
meetings was within the period prescribed under the Companies Act, 2013 and the SEBI
Listing Regulations. The Committees of the Board usually meet prior to the Board meeting,
or whenever the need arises for transacting business. Details of composition of the Board
and its Committees as well as the meetings held during the year under review and the
Directors attending the same are given in the Corporate Governance Report forming part of
this Report.
Selection of New Directors and Board Membership Criteria and Policy on Appointment and
Remuneration of Directors, Key Managerial Personnel and other Employees
The Nomination and Remuneration Committee ('NRC') engages with the Board to
evaluate the appropriate characteristics, skills and experience for the Board as a whole
as well as for its individual members with the objective of having a Board with diverse
backgrounds and experience in business, finance, governance, and public service. The NRC,
based on such evaluation, determines the role and capabilities required for appointment of
Independent Director. Thereafter, the NRC recommends to the Board the selection of new
Directors.
The Company has a well-defined policy for appointment of Directors, Key Managerial
Personnel (KMP) and other employees including their remuneration. The NRC recommends
suitable candidates to the Board, based on their qualifications, positive attributes and
experiences for Board Membership. The salient features of the Policy are:
It acts as a guideline for matters relating to appointment and reappointment of
Directors
It contains guidelines for determining qualifications, positive attributes of
Directors, and independence of a Director
It lays down the criteria for Board Membership
It sets out the approach of the Company on Board diversity
It lays down the criteria for determining independence of a Director, in case of
appointment of an Independent Director.
The Policy is available on our website at https://www.
tatametaliks.com/static-files/pdf/policies/TML-NRC-policy.pdf
Familiarization Programme for Independent Directors
As a practice, all new Directors (including Independent Directors) inducted to the
Board go through a structured orientation programme. Presentations are made by Senior
Management giving an overview of the operations, to familiarize the new Directors with the
Company's business operations. The new Directors are given an orientation on the products
of the business, group structure and subsidiaries, Board constitution and procedures,
matters reserved for the Board, and the major risks and risk management strategy of the
Company. In compliance with the provisions of the SEBI Listing Regulations, your Company
facilitates various programmes/ awareness sessions for Independent Directors.
Details of the familiarization programmes for the Independent Directors are provided in
the Corporate Governance Report, annexed herewith, and the policy as adopted by your
Company is also available on our website at https://www.tatametaliks.
com/static-files/pdf/policies/policy-prog-director.pdf
During the year under review, no new Independent Director were inducted to the Board.
Board Evaluation
The Board evaluated the effectiveness of its functioning, of the Committees and of
individual Directors, pursuant to the provisions of the Companies Act, 2013 ('Act') and
the SEBI Listing Regulations. The Board carried out an annual evaluation of its own
performance, the performance of the Independent Directors individually as well as an
evaluation of the working of the Committees of the Board. The performance evaluation of
all the Directors was carried out by the Nomination and Remuneration Committee. The
performance evaluation of the Chairman and the Non-Independent Directors was carried out
by the Independent Directors, pursuant to the provisions of the Act and SEBI Listing
Regulations.
The Board sought the feedback of Directors on various parameters including:
Degree of fulfillment of responsibilities towards key stakeholders (by way of
monitoring corporate governance practices, participation in the long term strategic
planning, etc.);
Structure, composition and role clarity of the Board and Committees;
Extent of co-ordination and cohesiveness between the Board and its Committees;
Effectiveness of the deliberations and process management;
Board/Committee culture and dynamics; and
Quality of relationship between Board Members and the Management.
The Chairman of the Board had one-on-one meeting with the Independent Directors ('IDs')
and the Chairman of NRC had one-on-one meeting with the Executive and Non-Executive,
Non-Independent Directors. These meetings were intended to obtain DirectorsRs inputs on
effectiveness of the Board/ Committee processes. The above criteria are based on the
Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on
January 5, 2017. Additionally, the evaluation process compared the evaluation reports of
earlier years and reviewed the areas where improvements have been made and the areas where
further improvement is desired.
The Independent Directors had their meeting on February 24, 2022 and reviewed,
inter-alia, the performance of the NonIndependent Directors and the Board as a whole
including the Chairman of the Board. The feedback of the Independent Directors was shared
with the NRC.
The NRC reviewed the performance of the individual Directors and the Board as a whole.
In the Board meeting that followed the meeting of the Independent Directors and the
meeting of NRC, the performance of the Board, its committees, and individual Directors
were discussed.
The evaluation process found the overall performance of the Board satisfactory in
working cohesively as a team and guiding the Company to attain its growth vision. The
Board also appreciated and bestowed full confidence in the Chairman and the Management in
guiding the Company through various challenges to be one of the best performing Companies
amongst the Tata Steel group Companies.
Remuneration Policy for the Board and other Employees
In determining the remuneration of the Directors, Key Managerial Personnel ('KMP') and
other employees of the Company, based on the recommendations of the NRC, the Board has
approved the Remuneration Policy for Directors, Key Managerial Personnel and all other
employees of the Company. The policy aims to ensure that the level and composition of
remuneration for Directors, KMPs and other employees is reasonable and aligned to the
market to attract, retain and motivate them. The remuneration involves a balance between
fixed and variable pay reflecting short and long term objectives of your Company.
The salient features of the Policy are:
It lays down the parameters based on which payment of remuneration (including
sitting fees and remuneration) should be made to Independent Directors and NonExecutive
Directors.
It lays down the parameters based on which remuneration (including fixed salary,
benefits and perquisites, bonus/ performance linked incentive, commission, retirement
benefits) should be given to whole-time directors, KMPs, and employees.
It lays down the parameters for remuneration payable to Directors for services
rendered in other capacity.
During the year under review, there has been no change in the Policy. The said policy
is available on our website at https://
www.tatametaliks.com/static-files/pdf/policies/TML-NRC-policy. pdf.
Particulars of Employees
Disclosures pertaining to remuneration and other details as required under Section
197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 are annexed to this Report as Annexure D. In
terms of the provisions of Section 197(12) of the Act read with Rule 5(2) and (3) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement
containing names and other related particulars of employees drawing remuneration in excess
of the limits set out in the said Rules forms part of this report.
Directors
The year under review saw the following changes to the Board of Directors ('Board').
Re-appointment of Independent Directors
i. The NRC after considering the (1) performance evaluation of Mr. Amit Ghosh (DIN:
00482967) as a Member of the Board/ Commitees, (2) his contribution in Board/ Committee
deliberations during his tenure as an Independent Director and (3) his skills, background
and experience, recommended to the Board for his re-appointment as Independent Director
for a second term. The Board unanimously endorsed the view of the NRC and recommended to
the Shareholders of the Company, the re-appointment of Mr. Ghosh as an Independent
Director of the Company, not liable to retire by rotation, to hold office for a second
term, effective January 24, 2022 through July 19, 2023. On January 15, 2022, the
Shareholders of the Company through postal ballot, approved the re-appointment of Mr.
Ghosh as an Independent Director of the Company for the above- mentioned tenure.
ii. The NRC after considering the (1) performance evaluation of Dr. Rupali Basu (DIN:
01778854) as a Member of the Board/ Commitees, (2) her contribution in Board/ Committee
deliberations during her tenure as an Independent Director and (3) her skills, background
and experience, recommended to the Board for her re-appointment as Independent Director
for a second term of five years. The Board unanimously endorsed the view of the NRC and
recommended to the Shareholders of the Company, the re-appointment of Dr. Basu as an
Independent Director of the Company, not liable to retire by rotation, to hold office for
a second term of five years, effective January 24, 2022 through January 23, 2027.
On January 15, 2022, the Shareholders of the Company through postal ballot, approved
the re-appointment of Dr. Basu as an Independent Director of the Company for the
above-mentioned tenure.
Re-appointment of Director retiring by rotation
In terms of the provisions of Section 152 of the Act read with Article 110 of the
Articles of Association of the Company, Ms. Samita Shah (DIN: 02350176), Non-Executive
Director will retire by rotation at the ensuing AGM and is eligible for reappointment.
The necessary resolution for re-appointment of Ms. Shah forms part of the Notice
convening the AGM. The Board recommends and seeks your support in confirming
re-appointment of Ms. Shah. The profile and particulars of experience, attributes and
functional expertise that qualify her for Board Membership are duly disclosed in the
Notice convening the AGM.
Independent Directors' Declaration
The Company has received the necessary declaration from each Independent Director (IDs)
in accordance with Section 149(7) of the Act and Regulations 16(1)(b) and 25(8) of the
SEBI Listing Regulations, that he/she meets the criteria of independence as laid out in
Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations.
In the opinion of the Board, as per the confirmations received from the IDs, there has
been no change in the circumstances which may affect their status as IDs of the Company
and the Board is satisfied of the integrity, expertise, and experience (including
proficiency in terms of Section 150(1) of the Act) of all IDs on the Board. Further, in
terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of
Directors) Rules, 2014, as amended, IDs of the Company have included their names in the
data bank of Independent Directors maintained with the Indian Institute of Corporate
Affairs.
Key Managerial Personnel
Pursuant to Section 203 of the Act, Mr. Sandeep Kumar, Managing Director, Mr. Subhra
Sengupta, Chief Financial Officer, and Mr. Avishek Ghosh, Company Secretary and Compliance
Officer are designated as Key Managerial Personnel ('KMP') of your Company as on March 31,
2022. The details are mentioned in the Corporate Governance Report.
Audit Committee
The Audit Committee ('Committee') is duly constituted as per the provisions of
the Act and applicable Rules framed there under read with the SEBI Listing Regulations.
The primary objective of the Committee is monitoring and supervising the Management's
financial reporting process to ensure accurate and timely disclosures with highest levels
of transparency, integrity and quality of financial reporting. During the financial year,
there have been no instance where the Board have not accepted any recommendations of the
Committee.
The Committee comprises of Mr. Krishnava Dutt (Chairman), Dr. Pingali Venugopal, Ms.
Samita Shah and Mr. Amit Ghosh.
The Committee met 5 (five) times during the year under review. Details of terms of
reference of the Committee, number and dates of meetings held and attendance of Members
during the year are part of the Corporate Governance Report.
Internal Control Systems
The Board is responsible for ensuring that Internal Financial Controls (IFC) are laid
down in the Company and that such controls are adequate and operating effectively. The
Company's IFC framework is commensurate with the size, scale and complexity of the
operations of the Company. The details of the IFC framework and their adequacy are
included in the Management Discussion and Analysis Report.
Risk Management
Risks are integral to any business, and the Company's Risk Management framework over
the years has evolved in line with the strategic objectives and changes in the operating
environment. It helps to predict and undertake pre-emptive response to manage and mitigate
key risks. Amidst various micro and macro uncertainties and volatile business environment,
the Company faces frequent changes in technology, geo-politics, financial markets,
regulations, etc. which affect the value chain at large. To build a sustainable business
that can respond to these changes, the Company has an agile and responsive risk management
framework for identifying, prioritising and mitigating risks which may impact attainment
of short and long-term business goals of the Company.
The Risk Management framework, based on the holding Company's Group Risk Management
process, is based on international standards like Committee of Sponsoring Organization of
the Treadway Commission ('COSO') and ISO 31000 and is aligned with strategic
planning and capital project evaluation process of the Company. The process aims to
analyse internal and external environment and manage economic, financial, market,
operational, compliance, sustainability and business continuity risks and capitalises on
opportunities for business success. The development and implementation of Risk Management
policy has been covered in the Management Discussion and Analysis, which forms part of
this report.
The Company periodically reviews the identified key risk areas, mapped and linked with
operational objectives. These risks are periodically revisited against their respective
mitigation plans. The Board has a separate Risk Management Committee consisting of
Directors and a management representative, responsible for monitoring and reviewing the
risk management plan and ensuring its effectiveness. The Audit Committee also has
additional oversight in the area of financial risks and controls. The major risks
identified by the businesses and functions are systematically addressed through mitigating
actions on a continuing basis. The Committee meets at periodic intervals and monitors,
evaluates and strengthens the effectiveness of risk management framework of the Company.
The Company's risk-based culture enabled it to manage the uncertainties in a volatile
and challenging business environment during the year under review. As the COVID-19
situation resurfaced, "scenario-based risk assessment" was facilitated across
the Company. Further, business decisions were pivoted to achieve cash neutrality in
operations by reducing spend, managing working capital and reducing capital expenditures.
Operating regime was recalibrated in response to the decline in domestic demand. Supply
chain disruptions were managed through robust planning and developing alternate
suppliers.In view of sluggish domestic dispatches, risk to sales was mitigated through
enhanced exports and new international markets were cultivated.
During the year under review, the Company has made significant progress in its journey
towards risk intelligence and the management is working under the active guidance of the
Risk Management Committee and the Board to navigate the volatile economic environment.
Vigil Mechanism / Whistle Blower Policy
The Company has a well-defined Vigil Mechanism policy in place that provides a formal
process for all Directors, employees, business associates and vendors of the Company to
approach the Ethics Counsellor/ Chairman of the Audit Committee. Due awareness is made
across the organization and business partners to enable anyone to make protective
disclosures about any unethical behaviour, actual or suspected fraud or violation of the
Tata Code of Conduct (TCoC). During the year under review, no person has been denied
access to the Chairman of the Audit Committee. In addition, Directors, employees, and
vendors, can approach the Ethics Counsellor to make any such protected disclosure. During
the year under review, the Company also undertook a series of communication and training
programmes for various stakeholders.
The Whistle Blower Policy is an extension of the TCoC which requires every Director/
employee/business associate/ vendor to promptly report to the Management any actual or
possible violation of the TCoC or any event which he or she becomes aware of, that could
affect the business or reputation of the Company. The said policy is available on the
Company's website at www.tatametaliks.com/static-files/pdf/policies/
whistleblower-policy.pdf. The Vigil Mechanism also includes the Anti-Bribery &
Anti-Corruption ('ABAC') Policy. During the year under review, the Company received 8
(Eight) whistleblower complaints which were duly investigated and resolved.
Disclosure as per Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013
The Company has zero tolerance towards sexual harassment at the workplace. The Company
has adopted a policy on prevention, prohibition and redressal of sexual harassment at
workplace in line with the provisions of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 and the Rules made there under. All
employees (permanent, contractual, temporary, trainees, etc.) are covered under this
Policy.
The Company has complied with the provisions relating to the constitution of the
Internal Complaints Committee as per the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013.
During the year under review, the Company received 1 (one) complaint of sexual
harassment in the latter half of Q4 FY 202122. As on the date of this report, the
investigation has been completed and the matter is due for final resolution.
Related Party Transactions
In compliance with the Act and the SEBI Listing Regulations, the Company has formulated
a Policy on Related Party Transactions (RPTs) and manner of dealing with RPTs. During the
year under review, the Policy has been amended to incorporate the regulatory amendments in
the SEBI Listing Regulations. The updated Policy can be accessed on the Company's website
which is available on the Company's website at the link:
https://www.tatametaliks.com/static-files/pdf/policies/rpt-policy.pdf
All transactions with related parties during FY 2021-22 were reviewed and approved by
the Audit Committee and were at Arm's Length Price (ALP) and in the Ordinary Course of
Business (OCB). Prior omnibus approval was obtained for all RPTs which were of repetitive
nature and entered in the OCB and on an ALP basis. The transactions entered into pursuant
to the omnibus approval so granted were reviewed by Audit Committee on quarterly basis.
Pursuant to the third proviso of Section 188(1) of the Act, the compliance with the
provisions of Section 188(1) is not applicable, where all RPTs are carried out in the OCB
and under ALP basis. Accordingly, the disclosure of RPTs as required under Section 134(3)
(h) of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 in form AOC-2 is not
applicable to the Company for FY 2021- 22. However, the Company had material RPTs during
FY 2021-22 under SEBI Listing Regulations. Hence, the same have been disclosure as form
AOC-2 enclosed as Annexure E.
Details of RPTs entered into by the Company, in terms of Ind AS-24 are disclosed in
notes to the financial statements forming part of this Integrated Report. There was no
other material RPTs entered into by the Company with its Promoters, Directors, KMPs or
other designated persons during FY 202122, except those reported in the financial
statements. None of your Directors or KMPs had any pecuniary relationships or transactions
with the Company during FY 2021-22, other than remuneration as disclosed elsewhere in the
report.
Approval of Members is being sought for the material RPTs for FY 2022-23 at the ensuing
AGM.
Directors' Responsibility Statement
Based on the framework of IFC established and maintained, the work performed by the
internal, statutory and secretarial auditors and external consultants, including the audit
of internal financial controls over financial reporting by the statutory auditors and the
reviews performed by management and the relevant Board committees, including the audit
committee, the Board is of the opinion that the Company's internal financial controls were
adequate and effective during FY 2021-22.
Accordingly, pursuant to the provisions of Section 134(3)(c) read with Section 134(5)
of the Act, the Board, to the best of its knowledge and ability, confirms that:
a) in the preparation of the annual accounts, the applicable accounting standards have
been followed along with proper explanation relating to material departures;
b) they have selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view
of the state of affairs of the Company at the end of the financial year and of the profit
of the Company for that period;
c) they have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of this Act for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls in the Company and that such
internal financial controls are adequate and were operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems were adequate and operating effectively.
Business responsibility and sustainability Report
The Securities and Exchange Board of India ('SEBI'), in May, 2021, introduced new
sustainability related reporting requirements to be reported in the specific format of
Business Responsibility and Sustainability Report ('BRSR'). BRSR is a notable departure
from the existing Business Responsibility Report ('BRR') and a significant step towards
giving platform to the Companies to report the initiatives taken by them in areas of
environment, social and governance. Further, SEBI has mandated top 1,000 listed Companies,
based on market capitalization, to transition to BRSR from FY 2022-23 onwards However, the
Company has provided the BRSR for FY 2021-22 as a voluntary disclosure and is annexed
herewith as Annexure F.
The Company has followed the <IR> framework of the International Integrated
Reporting Council, to report on all the six capitals that are used by the Company to
create long-term stakeholder value. Our Integrated Report has been assessed by Bureau
Veritas for non-financial disclosures and Price Waterhouse & Co Chartered Accountants
LLP has provided the required assurance for the financial statements.
Subsidiaries, Joint Ventures and Associates
The Company does not have any subsidiary, associate or joint venture Company as on
March 31, 2022. Accordingly, the requisite disclosure as per Section 129(3) of the Act in
Form AOC-1 is not applicable.
Auditors
Statutory Auditors
Members of the Company at the 27th Annual General Meeting held on July 26, 2017,
approved the appointment of Price Waterhouse & Co Chartered Accountants LLP
(Registration No.304026E/ E300009) ('PW'), Chartered Accountants, as the Statutory
Auditors of the Company for a term of 5 (five) consecutive years commencing from the
conclusion of 27th AGM until the conclusion of the 32nd AGM to be
held in the year 2022.
In terms of the provisions of the Companies Act, 2013, an audit firm acting as the
statutory auditor of a Company is eligible to be appointed as statutory auditors for two
terms of five years each. The first term of PW as statutory auditors of the Company
expires at the conclusion of the 32nd AGM of the Company scheduled to be held
on August 2, 2022. Considering their performance as auditors of the Company during their
present tenure, the Audit Committee of the Company, after due deliberation and discussion,
recommended the re-appointment of PW as statutory auditors of the Company for a second
term of 5 years to hold office from the conclusion of the 32nd AGM to be held
on August 2, 2022 through the conclusion of the 37th AGM of the Company to be
held in the year 2027.
Further, the remuneration to be paid to Statutory Auditors for FY 2022-23 is Rs 41
lakhs plus out of pocket expense and the remuneration for the remaining tenure of their
second term as Statutory Auditors shall be mutually agreed between the Board of Directors
and PW, from time to time.
The Board at its meeting held on April 22, 2022, endorsed the recommendation of the
Audit Committee for re-appointment of PW as statutory auditors and payment of the
remuneration, as mentioned above, and approved the same. The above proposal forms part of
the Notice of the AGM for your approval. The report of the Statutory Auditor forms part of
this Integrated Report and Annual Accounts 2021-22. The said report does not contain any
qualification, reservation, adverse remark or disclaimer. During the year under review,
the Auditors did not report any matter under Section 143(12) of the Act, therefore no
detail is required to be disclosed under Section 134(3)(ca) of the Act.
Secretarial Auditor
Section 204 of the Act, inter alia, requires every listed Company to annex to its
Board's report, a Secretarial Audit Report, given in the prescribed form, by a Company
Secretary in practice. Accordingly, in compliance with the provisions of the Act and the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board,
upon the recommendation of the Audit Committee, had approved the appointment of Mr. P. V.
Subramanian, Company Secretary in Whole-time- Practice [C.P. No. 2077, ACS 4585], as the
Secretarial Auditor of the Company for the financial year ending March 31, 2023. The
Secretarial Audit Report for the financial year ended March 31, 2022, in Form MR-3, forms
an integral part of this report and is annexed herewith as Annexure G.
Cost Auditors
Pursuant to the provisions of Section 148 of the Act and the Companies (Cost Records
and Audit) Rules, 2014, the Company is required to maintain its cost records and get the
same audited by a Cost Accountant in practice. Accordingly, the cost records are made and
maintained by the Company as required under Section 148(1) of the Act.
The Board has, based on the recommendation of the Audit Committee, approved appointment
of Messrs. Shome & Banerjee, Cost Accountants (Firm Registration No: 000001) as the
Cost Auditors of the Company for the financial year ending March 31, 2023.
Messrs. Shome & Banerjee have vast experience in the field of cost audit and have
been conducting the audit of the cost records of the Company for the past several years.
Pursuant to Section 148 of the Act, read with Rule 14(a)(ii) of Companies (Audit and
Auditors) Rules, 2014, ratification of the remuneration payable to the Cost Auditors (as
recommended by the Audit Committee and approved by the Board) is being sought from the
Members of the Company at the ensuing AGM. The details of the same are provided in the
Notice convening the AGM. We seek your support in ratifying the proposed remuneration of
Rs 3.50 lakhs plus applicable taxes and reimbursement of out-of-pocket expenses payable to
the Cost Auditors for the financial year ending March 31, 2023.
Auditors' qualification
No qualifications, reservations, adverse remarks or disclaimers are provided in the
reports by the Statutory Auditors, Secretarial Auditor and Cost Auditors respectively.
Annual Return
The Annual Return for FY 2021-22 as per provisions of the Act and Rules thereto, is
available on the Company's website at
https://www.tatametaliks.com/static-files/pdf/annual-return- mgt7-21-22.pdf
Significant and Material Orders Passed by the Regulators or Courts
There has been no significant and material order(s), passed by any Regulator(s) or
Court(s) or Tribunal(s), impacting the going concern status of the Company and it's future
operations. However, Members' attention is drawn to the statement on contingent
liabilities and commitments in the notes to the Financial Statements. No material changes
and commitments have occurred after the close of the financial year till the date of this
Report which affects the financial position of the Company for the year under review.
Particulars of Loans, Guarantees or Investments
Particulars of loans, guarantees given and investments made during the year under
review in accordance with Section 186 of the Companies Act, 2013 is annexed to this report
Annexure H.
Energy Conservation, Technology Absorption and Foreign Exchange Earnings & Outgo
Details of energy conservation, technology absorption and foreign exchange earnings and
outgo are annexed to this report as Annexure I.
Deposits
The Company has not accepted any fixed deposits nor does the Company have any
outstanding amount on account of principal or interest on deposits from public under
Section 73 of the Act, read with the Companies (Acceptance of Deposit) Rules, 2014 as on
the date of the Balance Sheet.
Secretarial Standards
The Company has in place proper systems to ensure compliance with the provisions of the
applicable secretarial standards issued by The Institute of Company Secretaries of India
and such systems are adequate and operating effectively.
Other Disclosures
No disclosure or reporting is made in respect of the following items as there were no
transactions or change during the year under review:
There was no revision in the financial statements other than as required to be
done as per Ind AS; and
There was no change in the nature of business.
Awards and Accolades
Your Directors are happy to report that the Company was bestowed with several awards
during the year. Noteworthy ones are mentioned below:
Certified as 'Great Place to Work'
Winner at the 4th CII National Kaizen Competition 2021 (Officer
Level) under 'Cost Reduction' & 'Cost Reduction through Digitization' category
respectively
Winner at the CII National level case study competition for the Best case study
on 'Innovative application of Low cost automation (LCA)' project & for the case study
on 'Human safety, quality & utility'
Best case study on low cost automation (LCA) related to Human safety by CII
"Innovative Best Practice" award for "Robotics Application in DIP
Industry" at CII's National DX Awards 2021
Silver award under the Cost category for reducing consumable cost per ton of Hot
Metal through kaizen (PI Team) and Platinum award for logistics management (DIP Team) at
the 14th National CII Competition
Winner at 4th National Electrical safety competition, power, quality
and reliability forum organised by CII
Acknowledgements
Your Directors take this opportunity to thank its Stakeholders, i.e. Members,
Customers, Vendors, Dealers, Investors, Business Associates and Bankers, for their
continued support during the year. They place on record their deep sense of appreciation
for the contribution made by Senior Leadership team and employees at all levels across the
organisation. The resilience to meet and successfully overcome several challenges was
possible due to their hard work, solidarity, co-operation and support. Your Directors also
express their gratitude towards Government of India, Government of West Bengal and other
states in India, concerned Government departments & agencies and regulatory
authorities for their continued support.
|
On behalf of the Board of Directors |
|
Sd/- |
|
Koushik Chatterjee |
Place: Mumbai |
Chairman |
Date: April 22, 2022 |
DIN:00004989 |
|