MIRA
INFORM REPORT
IDENTIFICATION DETAILS
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Name : |
TATA STEEL LIMITED |
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Registered Office : |
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Country : |
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Financials (as on) : |
31.03.2010 |
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Date of Incorporation : |
26.08.1907 |
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Com. Reg. No.: |
11-260 |
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CIN No.: [Company
Identification No.] |
L27100MH1907PLC000260 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMT00249E MUMT10796C |
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PAN No.: [Permanent
Account No.] |
AAACT2803M AAATT0188H |
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Legal Form : |
Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturers of saleable steel, ferro manganese, charge chrome, welded steel tubes, cold rolled strips, seamless tubes, carbon and alloy steel bearing rings, annular forgings and flanges, metallurgical machinery, ammonium sulphate, ordinary cement, fortland blast furnace slag cement, alloy steel ball bearing rings and bearings. |
RATING & COMMENTS
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MIRA’s Rating : |
A (62) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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Maximum Credit Limit : |
USD 1400000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well established and a reputed company having fine track
records. Financial of the company appears to be sound. Trade relations are reported
as fair. Business is active. Payments are reported to be regular and as per
commitments. The company can be considered normal for business dealings at usual
trade terms and conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – April 1, 2010
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Country Name |
Previous Rating (31.12.2009) |
Current Rating (01.04.2010) |
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A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
LOCATIONS
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Registered Office : |
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Tel. No.: |
91-22-56658282 / 66658282 |
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Fax No.: |
91-22-56658113 / 56658119 / 66657725/ 24 |
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E-Mail : |
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Website : |
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Corporate Office: |
Design Call, 3rd Floor, General Office, Tata
Steel, |
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Websites: |
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Factory : |
·
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Khargapur, · Joda, Orissa - Ferro Manganese Plant ·
Tarapur, Maharashtra; Navsari, Sisodra, · Bamnipal, Orissa - Charge Chrome Plant · States of Jharkhand, Orissa and Karnataka - Mines, Collieries and Quarries · Borivali, Mumbai; Tarapur – Wire Division |
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Branches : |
43, |
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Tel. No.: |
91-657-2431024 |
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Fax No.: |
91-657-2431818 |
DIRECTORS
As on 31.03.2010
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Name : |
Mr. Ratan N. Tata |
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Designation : |
Chairman |
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Name : |
Mr. B. Muthuraman |
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Designation : |
Managing Director
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Name : |
Mr. Nusli N. Wadia |
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Designation : |
Director |
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Name : |
Mr. S. M. Palia |
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Designation : |
Director |
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Name : |
Mr. P. K. Kaul |
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Designation : |
Director –
Nominee [IDBI] |
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Name : |
Mr. Suresh Krishna |
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Designation : |
Director |
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Name : |
Mr. Kumar Mangalam Birla |
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Designation : |
Director |
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Name : |
Mr. Ishaat Hussain |
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Designation : |
Director |
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Name : |
Dr. Jamshed J. Irani |
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Designation : |
Director |
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Name : |
Mr. B. Jitender |
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Designation : |
Director |
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Name : |
Dr. T. Mukherjee |
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Designation : |
Deputy Managing
Director |
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Name : |
Mr. A. N. Singh |
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Designation : |
Director |
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Name : |
Mr. Subodh Bhargava |
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Designation : |
Additional Director |
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Name : |
Mr. Philippe Varin |
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Designation : |
Director |
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Name : |
Mr. Jacobus Schraven |
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Designation : |
Director |
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Name : |
Mr. Anthony Hayward |
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Designation : |
Director |
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Name : |
Mr. James Leng |
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Designation : |
Deputy Chairman |
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Name : |
Mr. Andrew Robb |
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Designation : |
Additional Director |
KEY EXECUTIVES
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Name : |
Mr. A. Anjeneyan |
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Designation : |
Company Secretary |
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Name : |
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Designation : |
Chief Operating Officer |
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Name : |
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Designation : |
Vice President and Tata Steel
Group Director, Global Mineral Resources |
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Name : |
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Designation : |
Vice President, Engineering Services and Projects |
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Name : |
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Designation : |
Vice President, Finance and Tata Steel Group CFO |
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Name : |
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Designation : |
Vice President, Flat Products and TQM |
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Name : |
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Designation : |
Vice President, Raw Materials and CSI |
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Name : |
Mr. Kirby Adams |
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Designation : |
Chief Executive Officer (Tat Steel |
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Name : |
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Designation : |
Vice President, Chattisgarh Project |
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Name : |
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Designation : |
Vice President, Shared Services |
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Name : |
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Designation : |
Chief Human Resource Officer |
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Name : |
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Designation: |
Vice President, Corporate Services |
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Name : |
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Designation: |
Vice President, Safety and Long Products |
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Name : |
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Designation: |
Vice President and Tata Steel
Group Head, M and A |
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Name : |
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Designation: |
Vice President, Orissa Project |
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Name : |
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Designation: |
Vice President, MD Office, Mumbai |
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Name : |
Mr. Jean Sebastien Jacques |
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Designation : |
Group Director (strategy) |
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Name : |
Mr. Manzeer Hussain |
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Designation : |
Group Director (Communications) |
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Name : |
Mr. Avneesh Gupta |
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Designation : |
Group Director (Total Quality Management) |
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Name : |
Mr. Marjan Oudeman |
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Designation : |
Divisional Director (Strip Products) TSE |
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Name : |
Mr. Scott MacDonald |
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Designation : |
Divisional Director (Distribution and Building Systems), TSE |
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Name : |
Mr. Phil Dryden |
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Designation : |
Divisional Director (Long Products) TSE |
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Name : |
Mr. Frank Royle |
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Designation : |
Director (Finance) TSE |
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Name : |
Mr. Tor Farquhar |
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Designation : |
Director (Human Resources) TSE |
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Name : |
Mr. Santi Charnkolrawee |
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Designation : |
President Tata Steel |
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Name : |
Mr. T.V. Narendran |
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Designation : |
President and Chief Executive Officer Natsteel Holdings |
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Name : |
Mr. V.S.N. Murty |
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Designation : |
Chief Fiannacial Controller (Corporate) TSL |
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Name : |
Mrs. Helen Matheson |
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Designation : |
Director (Legal, Compliance and Secretariat)TSE |
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Name : |
Mr. Sandip Biswas |
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Designation : |
Group Head (Corporate Finance, Treasury and Investor Relations) |
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Name : |
Mr. Lim Say Yan |
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Designation : |
Group Head (Corporate Assurance and Risk Management) |
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Name : |
Mr. Bimlendra Jha |
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Designation : |
Principal Executive Officer to Managing Director TSL |
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Name : |
Dr. Debashish Bhattacharjee |
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Designation : |
Director (Research, Development and Technology) |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 31.03.2011
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
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(A) Shareholding of Promoter and Promoter Group |
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292,461,330 |
31.27 |
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1,031,460 |
0.11 |
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1,031,460 |
0.11 |
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293,492,790 |
31.38 |
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Total shareholding of Promoter and Promoter Group (A) |
293,492,790 |
31.38 |
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(B) Public Shareholding |
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35,172,230 |
3.76 |
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2,369,272 |
0.25 |
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121,659 |
0.01 |
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212,159,493 |
22.68 |
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166,534,385 |
17.81 |
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1,560,116 |
0.17 |
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1,382,511 |
0.15 |
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174,605 |
0.02 |
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3,000 |
- |
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417,917,155 |
44.68 |
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28,443,242 |
3.04 |
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170,032,604 |
18.18 |
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25,404,946 |
2.72 |
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5,925 |
- |
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5,925 |
- |
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223,886,717 |
23.94 |
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Total Public shareholding (B) |
641,803,872 |
68.62 |
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Total (A)+(B) |
935,296,662 |
100.00 |
(1)
Indian
Bodies
Corporate
TrustsBUSINESS DETAILS
|
Line of Business : |
Manufacturers of saleable steel, ferro manganese, charge
chrome, welded steel tubes, cold rolled strips, seamless tubes, carbon and
alloy steel bearing rings, annular forgings and flanges, metallurgical machinery,
ammonium sulphate, ordinary cement, fortland blast furnace slag cement, alloy
steel ball bearing rings and bearings |
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Products: |
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GENERAL INFORMATION
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Bankers : |
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Facilities : |
Note: * Repayable in
foreign currency Loan from the Joint
Plant Committee-Steel Development Fund [item (a) above] is secured by
mortgages, ranking pari passu inter
se, on all present and future fixed assets, excluding land
and buildings mortgaged in favour of Government of India under item (h) hereof, land and
buildings, plant and machinery and movables of the Tubes Division and the
Bearings Division mortgaged in favour of the financial institutions and
banks, assets of the Ferro Alloys Plant at Bamnipal mortgaged in favour of
State Bank of India and assets of Cold Rolling Complex (West) at
Tarapur and a floating charge on other properties and assets (excluding
investments) of the Company, subject to the prior floating charge in favour
of State Bank of India and other banks under items g(i) and g(ii) hereof. Loan from the
Joint Plant Committee-Steel Development Fund included in item (a) above is not secured by
charge on movable assets of the Company and includes Rs. 12025.400 millions (31.03.2009: Rs. 10534.500 millions ) representing
repayments and interest on earlier loans for which applications of funding
are awaiting sanction. On amalgamation of Hooghly Met Coke and Power Company Ltd. (HMPCL) with the Company, the term loan from State Bank of India and others availed by erstwhile HMPCL [Item (f) above] is secured by a first charge on the entire fixed assets (including mortgage over the immovable properties) of erstwhile HMPCL, ranking pari passu with the other term lenders. The term loan is also secured by a first charge on receivables from sale of Hot Flue gases, pari passu with other term lenders and second charge on the current assets comprising of stocks, receivables etc. of HMPCL (other than power receivables on which the term lenders have an exclusive charge). |
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Banking Relations
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-- |
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Auditors : |
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Name : |
Deloitte Haskins and Sells Chartered Accountant |
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Memberships : |
Confederation of Indian Industry |
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Holding Company: |
Tata Steel
Holdings Pte. Limited NSA Holdings Pte
Limited Tata Steel Global
Holdings Pte Limited Corus
International ( NatSteel Holdings
Pte. Limited Orchid |
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Associates/Subsidiaries : |
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CAPITAL STRUCTURE
As on 31.03.2010
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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1750000000 |
Ordinary Shares |
Rs.10/-each |
Rs.17500.000 millions |
|
25000000 |
Cumulative Redeemable Preference Shares |
Rs.100/-each |
Rs.2500.000 millions |
|
600000000 |
2% Cumulative Convertible Preference Shares |
Rs.100/-each |
Rs.60000.000 millions |
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Total |
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Rs. 80000.000 millions |
Issued Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
888126020 |
Ordinary Shares |
Rs.10/-each |
Rs.8881.300
millions |
Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
887214196 |
Ordinary Shares |
Rs.10/-each |
Rs.8872.100
millions |
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Add :Ordinary shares Forfeited |
|
Rs.2.000
millions |
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Rs.8874.100 millions |
Note:
Of the 88,72,14,196 Ordinary Shares:
(a) 95,63,300 shares
represent after sub-division 9,56,330 shares (including 9,35,000 shares issued pursuant
to the Scheme of Arrangement for the conversion of Deferred Shares into
Ordinary Shares and the issue of additional fully paid shares) of the face
value of Rs. 75 per share which were issued as fully paid up pursuant to
contracts for consideration other than cash. The nominal value of these
9,56,330 shares was increased from Rs. 75 to Rs. 100 each with effect from
1.01.1977.
(b) 1,98,12,460 shares
represent after sub-division 19,81,246 shares of the face value of Rs. 75 per
share which were issued as fully paid bonus shares by utilisation of Rs.
3,81,44,470 from Share Premium Account and Rs. 11,04,48,980 from General
Reserve. The nominal value of these 19,81,246 shares was increased from Rs. 75
to Rs. 100 each with effect from 1.01.1977.
(c) 5,14,40,270 shares
represent after sub-division 51,44,027 Ordinary Shares whose face value was
increased during the year 1976-77 from Rs. 75 to Rs. 100 per share by
utilisation of Rs. 49,760 from Share Premium Account and Rs. 12,85,50,915 from
General Reserve.
(d) 2,05,76,110 shares
represent after sub-division 20,57,611 shares of the face value of Rs. 100 per
share which were issued as fully paid bonus shares by utilisation of Rs.
20,57,61,100 from General Reserve.
(e) 7,21,530 shares
represent after sub-division 72,153 shares of the face value of Rs. 100 per
share which were issued as fully paid up to the shareholders of the erstwhile
Indian Tube Company Limited on its amalgamation with the Company, for
consideration other than cash.
(f) 3,30,51,470 shares
represent after sub-division 33,05,147 shares of the face value of Rs. 100 per
share which were issued as fully paid bonus shares by utilisation of Rs.
33,05,14,700 from General Reserve.
(g) 12,10,003 shares of
the face value of Rs. 10 per share were issued as fully paid up to the
shareholders of the erstwhile Tata SSL Limited on its amalgamation with the
Company, for consideration other than cash.
(h) 18,44,90,952 shares
of face value of Rs. 10 per share were issued as fully paid bonus shares by
utilisation of Rs. 1,84,49,09,520 from Securities Premium Account during the
year 2004-05.
(i) 2,70,00,000 shares
of face value of Rs. 10 per share issued to Tata Sons Limited on a preferential
basis during the year 2006-07.
(j) 2,85,00,000 shares of
face value of Rs. 10 per share allotted to Tata Sons Limited on a preferential
basis during the year 2007-08.
(k) 12,16,11,464 shares
of face value of Rs. 10 per share allotted at a premium of Rs. 290 per share to
the shareholders on Rights basis during the year 2007-08.
(l) 8,151 shares of
face value of Rs. 10 per share allotted on Rights basis at a premium of Rs. 290
per share during 2008-09 to the shareholders whose shares were kept in abeyance
in the Rights issue made in 2007, leaving a balance of 1,74,956 shares being
kept in abeyance.
(m) 9,12,11,001 shares
of face value of Rs. 10 per share allotted at a premium of Rs. 590 per share to
holders of CCPS in the ratio of 6:1 on 1st September, 2009, on conversion.
(n) 135 shares of face
value of Rs. 10 per share allotted on rights basis at a premium of Rs. 290 per
share during 2009-10 to shareholders whose shares were kept in abeyance in the
Rights issue made in 2007. Post the conversion of CCPS, total 3,08,063 shares
are kept in abeyance.
(o) 6,54,10,589 shares
of Rs. 10 per share represent the shares underlying GDRs. Each GDR represents
one underlying ordinary share. The proceeds of the GDR issue have been utilised
in accordance with the purpose as stated in the offer document.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
8874.100 |
62034.500 |
62033.000 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
360743.900 |
239728.100 |
210974.300 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
369618.000 |
301762.600 |
273007.300 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
22593.200 |
39130.500 |
35205.800 |
|
|
2] Unsecured Loans |
229798.800 |
230331.300 |
145011.100 |
|
|
TOTAL BORROWING |
252392.000 |
269461.800 |
180216.900 |
|
|
DEFERRED TAX LIABILITIES |
8676.700 |
5857.300 |
6818.000 |
|
|
FOREIGN CURRENCY MONETARY ITEM TRANSLATION DIFFERENCES ACCOUNTS |
2069.500 |
0.000 |
0.000 |
|
|
PROVISION FOR EMPLOYEES SEPARATION COMPENSATION |
9571.600 |
10336.000 |
10713.000 |
|
|
|
|
|
|
|
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TOTAL |
642327.800 |
587417.700 |
470755.200 |
|
|
|
|
|
|
|
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APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
160060.300 |
144822.200 |
126235.600 |
|
|
Capital work-in-progress |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
INVESTMENT |
449796.700 |
423717.800 |
41031.900 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
FOREIGN CURRENCY MONETARY ITEM TRANSLATION DIFFERENCE
ACCOUNT |
0.000 |
4716.600 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
24539.900
|
28682.800
|
20473.100
|
|
|
Sundry Debtors |
4348.300
|
6359.800
|
5434.800
|
|
|
Cash & Bank Balances |
32341.400
|
15906.000
|
4650.400
|
|
|
Other Current Assets |
6240.500
|
6121.900
|
5578.700
|
|
|
Loans & Advances |
54996.800
|
45780.400
|
333487.400
|
|
Total
Current Assets |
122466.900
|
102850.900
|
369624.400
|
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
40866.500
|
38427.900 |
|
|
|
Other Current Liabilities |
25664.400
|
21970.700
|
38552.600
|
|
|
Provisions |
23465.200
|
29341.900
|
29135.200
|
|
Total
Current Liabilities |
89996.100
|
89740.500
|
67687.800
|
|
|
Net Current Assets |
32470.800
|
13110.400
|
301936.600
|
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
1050.700 |
1551.100 |
|
|
|
|
|
|
|
|
TOTAL |
642327.800 |
587417.700 |
470755.200 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
250219.800 |
243157.700 |
196910.300 |
|
|
|
Other Income |
8537.900 |
3082.700 |
2428.000 |
|
|
|
TOTAL (A) |
258757.700 |
246240.400 |
199338.300 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Manufacturing and Other Expenses |
163960.000 |
155259.900 |
118527.500 |
|
|
|
Expenditure (Other than Interest)
Transferred to Capital and other accounts |
(3261.100) |
(3436.500) |
(1755.000) |
|
|
|
Exceptional Item |
0.000 |
0.000 |
(4308.900) |
|
|
|
TOTAL (B) |
160698.900 |
151823.400 |
112463.600 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
98058.800 |
94417.000 |
86874.700 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
15084.000 |
11526.900 |
7865.000 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
82974.800 |
82890.100 |
79009.700 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
10831.800 |
9734.000 |
8346.100 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
72143.000 |
73156.100 |
70663.600 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
21675.000 |
21138.700 |
23793.300 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
50468.000 |
52017.400 |
46870.300 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
95089.800 |
63874.600 |
NA |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Proposed dividend |
7097.700 |
11689.500 |
NA |
|
|
|
Dividend on cumulative convertible
preferences shares |
458.800 |
1094.500 |
NA |
|
|
|
Tax on dividend |
1228.000 |
2141.000 |
NA |
|
|
|
General reserves |
5046.800 |
6000.000 |
NA |
|
|
|
Denture redemption reserves |
4000.000 |
0.000 |
NA |
|
|
BALANCE CARRIED
TO THE B/S |
127726.500 |
94967.000 |
NA |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
60.26 |
69.45 |
NA |
|
KEY RATIOS
|
PARTICULARS |
|
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
PAT / Total Income |
(%) |
19.50
|
21.12 |
23.51 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
28.83
|
30.09 |
35.89 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
25.53
|
29.54 |
14.25 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.20
|
0.24 |
0.26 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
9.35
|
1.19 |
0.91 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.36
|
1.15 |
5.46 |
LOCAL AGENCY FURTHER INFORMATION
GLOBAL ECONOMY
2009 was one of the most challenging years for the global economy in recent
times with the global recession of 2008 and 2009 representing the largest
peacetime downturn in economic activity since the 1930s. The World Bank
reported that the positive growth in the emerging and developing economies was
more than offset by negative growth in the advanced economies resulting in
negative World GDP growth in 2009. The sharp decline in global demand for
consumer durables and investment goods that accompanied the economic crisis,
led to a significant demand contraction particularly in the
The
The
Global effective steelmaking capacity utilization fell sharply in the
second half of 2008 as steelmakers cut production in response to falling
demand, reaching a low of around 61% in December 2008 - a figure which had
improved to 76% by December 2009. Capacity utilization at Tata Steel Europe
improved to 81% in the second half of 2009-10 in comparison to 64% in the first
half of the financial year resulting in a 16% rise in production in H2FY 10
over H1FY 10. Group deliveries for the year 2009-10 at 24 million tones
declined 15% compared to the 28 million tonnes recorded during 2008-09 as
recessionary conditions affected most economies though less so in India. Tata
Steel India registered growth of 18% in the financial year 2009-10 (6.17
million tonnes) over 2008-09 (5.23 million tonnes).
The Turnover for the Group in 2009-10 at Rs. 1023930.000 millions was
30.5% lower than 2008-09 (Rs. 1473290.000 millions) due to the severe contraction
in the end user demand in
The Earnings before Interest, Taxes, Depreciation and Amortization
(EBITDA) of the Group was significantly affected in the first half of the
financial year 2009-10 by the sudden termination of the Teesside Offtake
Agreement by the Consortium members and the challenging market conditions in
the
Consequently, the Profit after Tax for the second half of the year
2009-10 was Rs. 29070.000 millions compared to a loss of Rs. 49160.000 millions
in the first half of the year. This resulted in a loss after tax (after
minority interest and share of profit of associates) of Rs. 20090.000 millions for the year which was significantly lower
compared to the profit of Rs. 49510.000 millions registered in FY 2008-09.
Tata Steel – Indian operations: The steel division of the Indian
operations registered an increase of 20% in their saleable steel from 5.37
million tonnes in FY 2008-09 to 6.44 million tones in FY 2009-10. The
production from the larger furnaces were maximized with better productivity and
lower coke consumption while increased vessel life in the steel melting area
enhanced the production level. The deliveries during the year FY 2009-10 at
6.17 million tonnes were higher by 18% over FY 2008-09 (5.23 million tonnes).
There were several best ever performances recorded by many units in the Steel
Works of the Company. The Ferro Alloys and Minerals division registered an
increase of 22% in their saleable production during FY 2009-10 (1302k tonnes)
over FY 2008-09 (1064k tonnes) while their sales at 1,508k tonnes in the year
were higher by 36% over FY 2008-09(1,105k tonnes). Chrome Alloys exports and
Manganese Alloys sales of the division scaled new peaks during the year. The
Tubes division in FY 2009-10 grew by 11% and 10% in production and sales
respectively over the previous year, boosted by various improvement initiatives
across all its units. The division continues to pioneer the Closed Structural
Business, with landmark structures being built using Tata Structura which
crossed the three lakh tonnes landmark this year. Sales in the Bearings
division registered a growth of 23% while its production increased by 8% driven
primarily by the revival in the domestic auto segment demand.
Tata Steel Europe (TSE): Deliveries in Tata Steel Europe during FY
2009-10 (14.2 million tonnes) declined by 25% over FY 2008-09 (19 million
tonnes) due to the market conditions in Europe and the UK. The recessionary
conditions that commenced in the second half of the previous year continued to
affect the operations for most part of the financial year 2009-10. The two
halves of the financial year were in sharp contrast to each other. The Company
acted swiftly to respond to this downturn by launching two very significant
initiatives i.e. ‘Weathering the Storm’ and ‘Fit for the Future’ program. The
‘Weathering the Storm’ program covering the entire organization in
The performance of the Company was adversely affected by the sudden
termination in April 2009 of the Long-term Off-take Agreement by the Consortium
for the slabs produced by Teesside Cast Products business in the UK thus
burdening the Company with exposure to the small, niche merchant slab market.
The Company did operate the Teesside plant till February 2010 incurring
significant losses as the slabs are surplus to the requirements of the Company.
Therefore, the Company had to regrettably mothball part of the facilities in
February 2010 including the
The Company registered a significant turnaround in its operations in the
second half of the year. This was achieved through increased deliveries, better
cost structure and improved pricing scenario. Therefore, the EBITDA for the
second half of the year was Rs. 23030.000 millions which was around 163% more
than the negative EBITDA of Rs. 36540.000 millions in the first half.
EXPANSION PROJECTS
Brownfield
Projects:
Tata Steel India is executing its plan to increase its crude steel
capacity from 6.8 million tonnes per annum to 9.7 million tones per annum at
its Jamshedpur Works by 2011-12. Simultaneously the Company also has a few
major ongoing capital projects which include the capacity augmentation of Hot
Strip Mill, Coke Dry Quenching at Coke Ovens Batteries 5, 6 and 7 and setting up a new mill for producing
Full Hard Cold Rolled (FHCR) coils at
Orissa Project: Preliminary work on the 6 million tonne per annum
capacity
Chhattisgarh Project: The Company has signed an MOU with the Government
of Chhattisgarh for setting up of a 5 mtpa
water from river Sabri and the Ministry of Railway, Government of India
has granted an in principle approval for the railway corridor. Prospecting
License for iron ore has been granted in Bailadila-I deposits after approvals
have been obtained from the Ministry of Environment and
The Company continued to implement its long-term strategy to secure
ownership of assets that will increase its raw materials security and share of
value-added products. During the financial year 2009-10 the Company’s primary
focus was on expediting implementation of its existing ventures.
MANAGEMENT
DISCUSSION AND ANALYSIS 2009-10
INDUSTRY STRUCTURE
Global Steel industry: The crude steel production for 66 countries
reporting to the World Steel Association was 1220 million metric tonnes for
calendar year 2009, lower by 8% against that of 2008. Hit by the economic
downturn, the drop in production was nearly in all steel producing countries
barring positive growth recorded in
Steel Industry in
South East Asian Steel Industry: Preliminary assessment suggests that
the steel consumption in the Association of South East Asian Nations (ASEAN)
picked up significantly in the second half of 2009. However, the increase was
not sufficient to offset the sharp drop in the consumption in the first half of
the year. As a result, the ASEAN apparent steel demand for 2009 is around 42.3
million tonnes which is 8% lower than the last year. Production of fl at
products and long products during the year was stable at around 24.4 million
tonnes. However imports and exports dropped significantly. Total imports
reduced from 30 million tonnes in 2008 to 19.7 million tonnes in 2009 and
exports dropped by 50% from 8 million tonnes in 2008 to 4 million tonnes in
2009. Consumption of Long Products recorded at 20.1 million tones in 2009,
reduced by 4% as compared to 2008. The production declined to 16.4 million
tonnes while exports dropped to 5.9 million tonnes. The demand for long
products seemed to pick up fast and at 11.8 million tonnes in the second half
of 2009, was close to the pre-crisis levels resulting in domestic producers
benefiting from the demand growth.
TATA STEEL GROUP OPERATIONS
During the financial year 2009-10, the Group recorded deliveries of 24
million tonnes against 28 million tonnes in the previous year, the decline
being a reflection of the global economic slowdown mainly in the
Ferro Alloys
and Minerals division
The dramatic and rapid slowdown in industrial production and destocking
which began in the latter part of FY 09 continued to exert a significant
influence over the Ferro Alloy Industry in FY 10. Infrastructural investment in
Chrome Alloys exports (including Charge chrome from Tata Steel KZN Pte
Limited) touched an all time high and the division recorded its highest ever
global market share of 6% in FY 10. The first overseas hub of TSL was
established in
Bearings division
Driven primarily by the revival in demand in the domestic auto segment
in 2009-10, sales and production of the Bearings division were higher by 23%
and 8% respectively over the previous year. Following are the highlights of the
achievements of the division during the financial year 2009-10:
The sales were higher by 9% over the previous best of 29 million numbers
in the financial year 2006-07.
• In the Bearings industry, the division was the only one to win the
Supplier Award from Bosch India Limited and the Silver Award for manufacturing
and supply chain excellence from Economic Times and Frost and Sullivan.
• The Bearings division was awarded certification of upgraded version of
ISO/TS 16949:2009 and ISO 9001:2008 Quality Management System and OHSAS
18001:2007 certifications by Underwriters Laboratories Inc.
Tata Steel
TSE has three main operating divisions; Strip Products, Long Products
and Distribution and Building Systems.
The EU is the most important market for the TSE Group, accounting for 79% of
its total turnover in the financial year 2009-10. TSE produces carbon steel by
the basic oxygen steelmaking method at three integrated steelworks in the
OUTLOOK
The global economic downturn is set to recover at a faster and stronger
rate than expected earlier although the pace of recovery primary drivers for
the consumption. However, significant raw material price increases, interest
rate tightening and inflation may provide some downsides to an otherwise
positive outlook for the industry.
FINANCE
FY 10 has been a period of great economic difficulty in
In May 2009, TSE’s lenders consented to an amendment and waiver proposal
with regard to financial performance covenants. While TSE would continue to
meet interest and repayment obligations, testing of earnings related covenants
was largely suspended till March 2010. The testing of covenants resumed in
March 2010 and TSE is compliant with the same. As part of these amendments,
Tata Steel infused Ł200 mn into TSE in June 2009 and Ł225 mn in September 2009.
In the second half of FY 09 and the first quarter of FY 10, the Company
had focused on raising additional debt in order to maintain a liquidity buffer
given the uncertain nature of the steel markets. As a result in April 2009, the
Company raised Rs. 20000.000 millions
from a term loan and in May 2009, it privately placed Rs. 21500.000
millions of Non-Convertible Debentures
repayable after 10 years. It also contracted a term loan of Rs. 6500.000
millions for 10 years and one of Rs. 1990.000 millions for 7 years. In July
2010, the Company issued GDRs (Global Depository Receipts) worth US$500 Million
at US$7.644/ share (each GDR equals one share). This was one of the largest GDR
offerings by an Indian Company on the London Stock Exchange. In the second half
of FY 10, having weathered the liquidity crisis, the Company focused on
restructuring liabilities and prepaying some of the debt in order to minimize
finance charge costs and repayment risks.
In November 2009, the Company launched an exchange offer of new Foreign
Currency Convertible Bonds (FCCBs) for any or all of its existing
US$875,000,000 Convertible Alternative Reference Securities. The CARS carry a
Yield To Maturity (YTM) of 5.15% p.a. (coupon of 1% p.a. and a one-time
redemption premium of 23.3419%), due to mature in September 2012 and are
convertible Hooghly Metcoke and Power
Company Limited was merged with the Company with effect from 1st April, 2009 as
per the court order dated 20th March, 2010. Accordingly, the Profit and Loss
Account and the Balance Sheet of Tata Steel Limited will have an impact of
incorporation of accounts of Hooghly Metcoke during FY 10.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international anti-terrorism
laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper payments
to government officials for engaging in prohibited transactions or with
designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject are
derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.44.59 |
|
|
1 |
Rs.73.42 |
|
Euro |
1 |
Rs.66.04 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
6 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
6 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
62 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.