Tata Steel Financial Report

Tata Steel Limited: Financial Analysis

TEAM ACAD

ANISH CHARU ASHWINI DIVAY

Tata SteelF i n a n c i a l A n a l y s i s

The report gives an insight into the financial health and strength of the Tata Steel

Company (formerly known as TISCO). The company’s performance for the Fiscal

Year 2008

sources of information available on the internet. The report also compares

company’s performance on a time line and gives trend analysis for past 5 years.

Submitted to:

Prof. R. Srinivasan

Management and Financial Account

International Management Institute

2008-09Financial Analysis {Fiscal Year 2008

Tata Steel F i n a n c i a l A n a l y s i s



Year 2008-09 has been reviewed by studying the Annual Report, news and other



Submitted to:

Prof. R. Srinivasan

Management and Financial Accounting

International Management Institute

09

ANISH CHARU ASHWINI

November, 2009

{Fiscal Year 2008-09}

F i n a n c i a l A n a l y s i s



the Annual Report, news and other



SHWINI DIVAY November, 2009


TEAM ACAD


INTRODUCTION

We bring to you the story of one of the oldest and most successful organizations of our times and

celebrate the true spirit of steel with Tata Steel Limited. The reasons for

simple.

• It is Asia’s First and India’s larges

Sector

• It is India’s 2nd largest and 2nd most profitable company in

private sector

• It is one of the most admired companies in terms of HR

Practices and Sustainable growth and Corporate Social Responsibility

TATA GROUP

The Tata Group is a multinational

capitalization and revenues, Tata Group is the largest private corporate group in India and has been

recognized as one of the most respected companies in the world. It has interests in

information technology, communication

The Tata Group has operations in more than 85 countries across six continents and its compa

products and services to 80 nations. The Tata Group comprises 114 companies and subsidiaries in seven

business sectors, 27 of which are publicly listed. 65.8% of the ownership of Tata Group is held in

charitable trusts. Companies which form a m

Motors, Tata Consultancy Services

Communications, Tata Teleservices

The group takes the name of its founder,

been the chairman of the group. The current chairman of the Tata group is

from J. R. D. Tata in 1991 and is currently one of the major international business figures in the age of

globality. The company is currently in its fifth generation of family stewardship.

The 2009 annual survey by the Reputation Institute ranked Tata Group as the 11th most reputable

company in the world. The survey included 600 global companies.

Financial Analysis {Fiscal Year 2008


celebrate the true spirit of steel with Tata Steel Limited. The reasons for choosing

• It is Asia’s First and India’s largest steel company in the private

• It is India’s 2nd largest and 2nd most profitable company in

• It is one of the most admired companies in terms of HR

Practices and Sustainable growth and Corporate Social Responsibility

multinational conglomerate based in Mumbai, India


gnized as one of the most respected companies in the world. It has interests in

communication, power, tea and hospitality.

The Tata Group has operations in more than 85 countries across six continents and its compa



charitable trusts. Companies which form a major part of the group include Tata Steel

Tata Consultancy Services, Tata Technologies, Tata Tea, Titan Industries

Tata Teleservices, Tata AutoComp Systems Limited and the Taj Hotels

The group takes the name of its founder, Jamsetji Tata, a member of whose family has almost invariably

hairman of the group. The current chairman of the Tata group is Ratan Tata

n 1991 and is currently one of the major international business figures in the age of

. The company is currently in its fifth generation of family stewardship.

vey by the Reputation Institute ranked Tata Group as the 11th most reputable

company in the world. The survey included 600 global companies.



choosing TSL for our study are

India. In terms of market


gnized as one of the most respected companies in the world. It has interests in steel, automobiles,

The Tata Group has operations in more than 85 countries across six continents and its companies export



Tata Steel, Corus Steel, Tata

Titan Industries, Tata Power, Tata

Taj Hotels.

, a member of whose family has almost invariably

Ratan Tata, who took over

n 1991 and is currently one of the major international business figures in the age of

. The company is currently in its fifth generation of family stewardship.

vey by the Reputation Institute ranked Tata Group as the 11th most reputable


TEAM ACAD


VISION

Guided by a powerful vision, Tata Steel strives forward to reach newer and higher milestones, every year.

TATA Steel: An Overview

• Established in 1907 by Jamshetji N Tata in Jamshedpur

• Formerly known as Tata Iron and Steel Company Limited (TISCO)

• 28.1 million tonnes per annum of crude steel

production capacity

• With Corus acquisition, TSL is world

steel producer

• Ranked “ Best Steel Maker” by World Steel

Dynamics in 2006, 2005 and 2001

• Ranked 315th on Fortune Global 500 (post the

Corus acquisition

• 82,700 employees (2007)

• Listed on BSE and NSE

• Headquartered in Jamshedpur, Jharkhand and

registered office in Mumbai

Backed by 100 glorious years of experience in steel making, Tata Steel is among the top ten steel

producers in the world with an existing annual crude steel production capacity of 30 Million Tonnes Per

Annum (MTPA). Established in 1907, it is the first integrated steel plant in Asia and is now the world`s

second most geographically diversified steel producer and a Fortune 500 Company.



Established in 1907 by Jamshetji N Tata in Jamshedpur

Formerly known as Tata Iron and Steel Company Limited (TISCO)

28.1 million tonnes per annum of crude steel

With Corus acquisition, TSL is world’s 6th largest

Ranked “ Best Steel Maker” by World Steel

Dynamics in 2006, 2005 and 2001

Ranked 315th on Fortune Global 500 (post the

82,700 employees (2007)

Headquartered in Jamshedpur, Jharkhand and

registered office in Mumbai



in 1907, it is the first integrated steel plant in Asia and is now the world`s






in 1907, it is the first integrated steel plant in Asia and is now the world`s


Tata Steel Limited: Financial Analysis {Fiscal Year 2008-09}

TEAM ACAD


Tata Steel has a balanced global presence in over 50 developed European and fast growing Asian

markets, with manufacturing units in 26 countries.

It was the vision of the founder; Jamsetji Nusserwanji Tata., that on 27th February, 1908, the first stake

was driven into the soil of Sakchi. His vision helped Tata Steel overcome several periods of adversity

and strive to improve against all odds.

Tata Steel`s Jamshedpur (India) Works has a crude steel production capacity of 6.8 MTPA which is

slated to increase to 10 MTPA by 2010. The Company also has proposed three Greenfield steel projects

in the states of Jharkhand, Orissa and Chhattisgarh in India with additional capacity of 23 MTPA and a

Greenfield project in Vietnam.

Through investments in Corus, Millennium Steel (renamed Tata Steel Thailand) and NatSteel Holdings,

Singapore, Tata Steel has created a manufacturing and marketing network in Europe, South East Asia and

the pacific-rim countries. Corus, which manufactured over 20 MTPA of steel in 2008, has operations in

the UK, the Netherlands, Germany, France, Norway and Belgium.

Tata Steel Thailand is the largest producer of long steel products in Thailand, with a manufacturing

capacity of 1.7 MTPA. Tata Steel has proposed a 0.5 MTPA mini blast furnace project in Thailand.

NatSteel Holdings produces about 2 MTPA of steel products across its regional operations in seven

countries.

Tata Steel, through its joint venture with Tata BlueScope Steel Limited, has also entered the steel

building and construction applications market.

The iron ore mines and collieries in India give the Company a distinct advantage in raw material

sourcing. Tata Steel is also striving towards raw materials security through joint ventures in Thailand,

Australia, Mozambique, Ivory Coast (West Africa) and Oman. Tata Steel has signed an agreement with

Steel Authority of India Limited to establish a 50:50 joint venture company for coal mining in India.

Also, Tata Steel has bought 19.9% stake in New Millennium Capital Corporation, Canada for iron ore

mining.

Exploration of opportunities in titanium dioxide business in Tamil Nadu, ferro-chrome plant in South

Africa and setting up of a deep-sea port in coastal Orissa are integral to the Growth and Globalisation

objective of Tata Steel.

Tata Steel’s vision is to be the global steel industry benchmark for Value Creation and Corporate

Citizenship. Tata Steel India is the first integrated steel company in the world, outside Japan, to be

awarded the Deming Application Prize 2008 for excellence in Total Quality Management.


TEAM ACAD


Areas of business

The company produces crude steel and basic steel products, and makes steel for building and

construction applications through Tata BlueScope Steel, its joint venture with Australia's BlueScope

Steel.

Tata Steel has also set up joint ventures for the development of limestone mines in Thailand, the

procurement of low-ash coal from Australia and coking coal from Mozambique, and the setting up of a

deep-sea port in Orissa in India. The company is exploring opportunities in the titanium dioxide business

in Tamil Nadu, India, and will soon be producing high carbon ferrochrome from its plant in South Africa.

STEEL PLANT PROJECTS :

India:

The Company has embarked upon setting up three green field steel plants in eastern India:

• 12 MTPA* plant in Jharkhand

• 6 MTPA plant in Orissa

• 5 MTPA plant in Chhattisgarh

• Jamshedpur Steel Works will become a 10 MTPA unit by 2010.

*MTPA = million tonnes per annum

OTHER PROJECTS:

India:

• 1.2 MTPA Metcoke project in West Bengal

• Deep sea port in Dhamra, Orissa

• Titanium Dioxide project in Tamil Nadu

• Joint Venture with BlueScope Steel for metallic coating and painting steel unit

Overseas:

• Development of a source of low ash coal from Queensland, Australia

• Ferro Chrome production in Richards Bay, South Africa

• Coking Coal project in Mozambique

• Development of iron ore deposits in Ivory Coast (West Africa)

• Limestone mining project in Oman

• JV with Steel Authority of India Limited for coal mining in India

• Iron ore mining project with New Millennium Capital Corporation, Canada


TEAM ACAD


Joint ventures, associates and subsidiaries:

Tata Steel has numerous joint ventures and subsidiaries. Among them are:

• Tinplate Company of India

• Tayo Rolls

• Tata Ryerson

• Tata Refactories

• Tata Sponge Iron

• Tata Metaliks

• Tata Pigments

• Jamshedpur Injection Powder (Jamipol)

• TM International Logistics

• mjunction services

• TRF

• Jamshedpur Utility and Service Company (JUSCO)

• The Indian Steel and Wire Products(ISWP)

• Lanka Special Steel

• Sila Eastern Company

Awards and Recognitions

• Tata Steel India awarded the Deming Application Prize 2008 for excellence in Total Quality

Management. It is the first integrated steel company in the world, outside Japan to get this award.

• World Steel Dynamics has ranked Tata Steel as the world's best steel maker (for two consecutive years)

in its annual listing in February 2006.

• Tata Steel has been conferred the Prime Minister of India's Trophy for the Best Integrated Steel Plant

five times.

• It has been awarded Asia's Most Admired Knowledge Enterprise award five times in 2003, 2004, 2006,

2007 and 2008.

• Conferred the prestigious Global Business Coalition Award for Business Excellence in the Community in

recognition of its pioneering work in the field of HIV/ AIDS awareness.

• Tata Steel works has been conferred the prestigious social accountability (SA) 8000 certification by

social. Accountability international (SAI), USA. It is the first steel company in the world to receive this

certificate.

• Corporate Sustainability Report of Tata Steel hailed by United Nations Environment Programme

(UNEP) and Standard and poor as strongest, submitted by any corporate house from emerging

economies.

• Best governed company Award 2006 for setting high standards in governance practices.

• Tata Steel won "Award for Corporate Social Responsibility in Public health" by US- Indian Business

Council (USIBC), Population Services International (PSI) and the center for Strategic and International

Studies (CSIS) in 2007.

MAJOR SOURCES OF REVENUE (Both operating and other):


TEAM ACAD


• According to the annual report 2008

Steel, the particulars are as follows:

• The divisional net sales of the company are shown

here:

Tata Steel Stock Price last 3 Years


According to the annual report 2008-2009 of Tata

Steel, the particulars are as follows:

Figure1: Major Sources of Revenue

The divisional net sales of the company are shown

Figure2: Division-wise major sources of Revenue

Tata Steel Stock Price last 3 Years (30-10-2006 to 30-10-2009)


Major Sources of Revenue

wise major sources of Revenue


TEAM ACAD


RATIO ANALYSIS

a financial ratio or accounting ratio is a ratio of two selected numerical values taken from an enterprise's

financial statements. There are many standard ratios used to try to evaluate the overall financial condition of a

corporation or other organization. Financial ratios may be used b

potential shareholders (owners) of a firm, and by a firm's creditors. Security analysts use financial ratios to

compare the strengths and weaknesses in various companies.[1] If shares in a company are traded in a fi

market, the market price of the shares is used in certain financial ratios.

� OVERALL PERFORMANCE MEASURES

1. Price/earnings ratio:

P/E RATIO 2008-09 2007-08 2006

P/E RATIO = (Market price per share/Net income per share)

Net income

(Rs.)

5073690

0000.00

4687030000

0.00

4222150000

Weighted

Average No.

of Ordinary

Shares for

Basic EPS

(Nos.)

7305848

34.00

697748601.0

0

572409842.0

EPS = Net

Income / No.

of Ordinary

Shares for

Basic EPS

(Rs.)

69.44696

583

67.17362089

Market

Share Price

(Rs.)

360.18 379.00 242.72

P/E RATIO 5.19 5.64


ratio is a ratio of two selected numerical values taken from an enterprise's


corporation or other organization. Financial ratios may be used by managers within a firm, by current and


compare the strengths and weaknesses in various companies.[1] If shares in a company are traded in a fi

market, the market price of the shares is used in certain financial ratios.

OVERALL PERFORMANCE MEASURES

2006-07 2004-05 2003-04

(Market price per share/Net income per share)

4222150000

0.00

3506380000

0.00

34741600

000

572409842.0

0

553472856.0

0

55347285

6

73.76 63.35 62.77

242.72 171.68 123.68

3.29 2.71 1.97

Analysis: The P/E gives

you an idea of what the

market is willing

for the company’s

earnings. Here in this

case Price/earnings ratio

in FY2008

increased almost 3 times

from the value in

FY2003-04. However,

due to the recent turmoil

in the financial market,

this ratio is reduced to

5.19 from 5.64 last. This

means that the market has

lower confidence in the

shares of Tata Steel

compared to last year.


ratio is a ratio of two selected numerical values taken from an enterprise's


y managers within a firm, by current and


compare the strengths and weaknesses in various companies.[1] If shares in a company are traded in a financial

The P/E gives

you an idea of what the

market is willing to pay

for the company’s

earnings. Here in this

case Price/earnings ratio

in FY2008-09 had

increased almost 3 times

from the value in

04. However,

due to the recent turmoil

in the financial market,

this ratio is reduced to

5.19 from 5.64 last. This

means that the market has

lower confidence in the

shares of Tata Steel

compared to last year.


TEAM ACAD


2. Return on assets:

2008-09 2007-08 2006-07

Net

Income

5073.69 4687.03 4222.15

Interest 1152.69 786.50 173.90

Tax 2113.87 2379.33 2039.50

Tax

rate

41.66 50.76 58.17

Total

Assets

67715.82 53844.30 31051.16

Return

on

Assets

(Net Income + Interest (1-tax rate))/Total Assets*100

ROA 8.49 9.42 13.83

3. Return on Shareholders’ equity:

2008-09 2007-08 2006-07

Net Income 5073.69 4687.03 4222.15

Shareholders'

equity

30176.26 27300.73 14096.15

Return on

shareholders'

equity

(Net Income/shareholders' equity)*100

16.81 17.17 29.95


2005-06 2004-05

3506.38 3474.16

118.44 186.80

1733.58 1833.66

49.90 43.43

18425.88 15843.29

tax rate))/Total Assets*100

19.35 22.60

Return on Shareholders’ equity:

07 2005-

06

2004-

05

4222.15 3506.38 3474.16

14096.15 9755.30 7059.92

(Net Income/shareholders' equity)*100

29.95 35.94 49.21

Analysis: The ROA is a very

important tool from the investment

point of view. The ROA tells an

investor how much profit a company

generated for each Re.1 in

figure of 22.60% in FY 2004

8.49% in FY 2008-2009 indicates that

the company is steadfastly moving

from being an asset light company to

an asset heavy one. This ratio also

helps the company decide whether or

not to initiate a new projec

of this ratio is that if a company is

going to start a project they expect to

earn a return on it.

Analysis: The ROE is defined as

the amount of net income

returned as a percentage of

shareholders equity. Return on

equity measures a corporation's

profitability by revealing how

much profit a company

with the money shareholders

have invested. Over the years,

Tata steel has been witnessing a

downfall in its ROE, a fact

which is also witnessed in the

S/E ratio. ROE also acts as a

useful tool to compare the

profitability of Tata steel with its

competitors.


The ROA is a very

important tool from the investment

point of view. The ROA tells an

investor how much profit a company

1 in assets. The

figure of 22.60% in FY 2004-2005 to

2009 indicates that

the company is steadfastly moving

from being an asset light company to

an asset heavy one. This ratio also

helps the company decide whether or

not to initiate a new project. The basis

of this ratio is that if a company is

going to start a project they expect to

The ROE is defined as

the amount of net income

returned as a percentage of

shareholders equity. Return on

equity measures a corporation's

profitability by revealing how

much profit a company generates

with the money shareholders

have invested. Over the years,

Tata steel has been witnessing a

downfall in its ROE, a fact

which is also witnessed in the

S/E ratio. ROE also acts as a

useful tool to compare the

profitability of Tata steel with its


TEAM ACAD


� PROFITABILITY MEASURES

Every firm is most concerned with its profitability. One of the most frequently used tools of

financial ratio analysis is profitability ratios which are used to determine the company's bottom

line. Profitability ratios show a company’s overall efficiency and performance. We can divide

profitability ratios into two types: margins and returns. Ratios that show margins represent the

firm’s ability to translate sales dollars into profits at various stage

show returns represent the firm’s ability to measure the overall efficiency of the firm in generating

returns for its shareholders.

4. Gross margin percentage:

2008-09 2007-08 2006-07

Net sales

revenue

24315.77 20028.28 17985.69

Cost of

goods

sold

17308.43 13183.05 11571.94

Gross

margin

Net sales revenue - cost of goods sold

7007.34 6845.23 6413.75

Gross

margin

percenta

ge

Gross margin/Net sales revenues*100

28.82 34.18 35.66


PROFITABILITY MEASURES



Profitability ratios show a company’s overall efficiency and performance. We can divide


firm’s ability to translate sales dollars into profits at various stages of measurement. Ratios that


2005-06 2004-05

17985.69 15394.15 14646.98

11571.94 10101.42 9259.17

cost of goods sold

5292.73 5387.81

Gross margin/Net sales revenues*100

34.38 36.78

Analysis: This number represents

the proportion of each unit of

revenue that the company retains as

gross profit. The Gross margin

percentage of 34.18 percent in

2007-2008 and 28.82 percent in

2008-2009 indicates that

100 paisa that the company

generates in revenue, 34 paisa and

now 29 paisa respectively, can be

put towards paying off selling,

general and administrative

expenses, interest expenses and

distributions to shareholders. Also,

since there has been a 15%

reduction in GMP, it clearly means

that the asset base has reduced.




Profitability ratios show a company’s overall efficiency and performance. We can divide


s of measurement. Ratios that


This number represents

the proportion of each unit of

revenue that the company retains as

gross profit. The Gross margin

percentage of 34.18 percent in

2008 and 28.82 percent in

2009 indicates that for every

100 paisa that the company

generates in revenue, 34 paisa and

now 29 paisa respectively, can be

put towards paying off selling,

general and administrative

expenses, interest expenses and

distributions to shareholders. Also,

a 15%

reduction in GMP, it clearly means

that the asset base has reduced.


TEAM ACAD


5. Profit Margin Percentage:

2008-09 2007-08 2006-07

Net

Income 5073.69 4687.03 4222.15

Net sales

revenue 24315.77 20028.28 17985.69

Profit

Margin

Percentage

Net income / net sales revenue*100

20.87 23.40 23.48

6. Earnings per share:

2008-09 2007-08 2006-07

Net

income

(Rs.)

5073690

0000.00

4687030

0000.00

4222150

0000.00

Weighte

d

Average

No. of

Ordinary

Shares

for Basic

EPS

(Nos.)

7305848

34.00

6977486

01.00

5724098

42.00

Earnings

per share

Net income/ No. of shares outstanding

69.45 67.17 73.76


2005-06 2004-05

3506.38 3474.16

17985.69 15394.15 14646.98

Net income / net sales revenue*100

22.78 23.72

2005-06 2004-05

3506380

0000.00

3474160

0000

5534728

56.00

5534728

56

Net income/ No. of shares outstanding

63.35 62.77

Analysis: Indicates what portion

of sales contributes to the

income of a company.

Profit Margin is 20.65 percent in

2008-2009 and 23.8 percent in

2007-2008, respectively, are the

contributions to the income of

the company.

Analysis: Since Tata Steel is a

publically traded company,

Earnings per share becomes

one of the most widely used

and important ratios. EPS

refers to the portion of a

company's profit allocated to

each outstanding share of

common stock. Simply put

Earnings per share serves as an

indicator of a company's

profitability. If we compare

the EPS of Tata steel for the

last two years, we see an

increase of 2 percent. This

means that the there is a 2

percent growth rate in the

company’s earnings.


Indicates what portion

of sales contributes to the

income of a company. Thus the

Profit Margin is 20.65 percent in

2009 and 23.8 percent in

2008, respectively, are the

contributions to the income of

Since Tata Steel is a

publically traded company,

becomes

one of the most widely used

and important ratios. EPS

refers to the portion of a

company's profit allocated to

each outstanding share of

common stock. Simply put

Earnings per share serves as an

indicator of a company's

profitability. If we compare

the EPS of Tata steel for the

last two years, we see an

increase of 2 percent. This

means that the there is a 2

percent growth rate in the


TEAM ACAD


7. Cash Realization:

2008-09 2007-08 2006-07

Cash

generated

by

operations

7397.22 6254.20 5118.10

Net

income

(Rs.)

5073.69 4687.03 4222.15

Cash

realization

(times)

Cash generated by operations / Net income

1.46 1.33 1.21

8. Asset Turnover:

2008-09 2007-08 2006-07

Net sales

revenue 24315.77 20028.28 17985.69

Total

Assets 67715.82 53844.30 31051.16

Asset

turnover

(times)

Sales revenue/total assets

0.36 0.37 0.58


2005-06 2004-05

3631.39 3174.8

3506.38 3474.16

Cash generated by operations / Net income

1.04 0.91

2005-06 2004-05

15394.15 14646.98

18425.88 15843.29

Sales revenue/total assets

0.84 0.92

Analysis: It measures how

close a company’s net income

is to being realized in cash.

Companies such as Tata Steel

that are less risky have cash

realization ratios that exceed

1.0, indicating that income

may not be dependent on non

cash sources such as mark

market accounting valuations,

which can be affected by

aggressive valuation decisions

by management.

Analysis: This ratio is useful to

determine the amount of sales

that are generated from each

dollar of assets. In the case of

Tata steel, it has a low asset

turnover which indicates that it

makes high profit margin on its

products. This ratio is also

indicative of the pricing

strategy employed by the

company.


It measures how

close a company’s net income

is to being realized in cash.

Companies such as Tata Steel

that are less risky have cash

realization ratios that exceed

1.0, indicating that income

dependent on non-

cash sources such as mark-to-

market accounting valuations,

which can be affected by

aggressive valuation decisions

This ratio is useful to

determine the amount of sales

that are generated from each

dollar of assets. In the case of

Tata steel, it has a low asset

turnover which indicates that it

makes high profit margin on its

products. This ratio is also

indicative of the pricing

strategy employed by the


TEAM ACAD


9. Invested capital turnover

2008-09 2007-08 2006-07

Net sales

revenue 24315.77 20028.28 17985.69

Long-term

liabilities +

Shareholders'

equity

58741.77 47075.52 25597.50

Invested

capital

turnover

(times)

Sales revenues/Long term liabilities + shareholders'

0.41 0.43 0.70

11. Day's cash

2008-09 2007-08 2006-07

Total

Expenses

17308.43 13183.05 11571.94

Total non-

cash

expenses

973.40 834.61 819.29

Total Cash

Expenses

Total expenses - Total non

16335.03 12348.44 10752.65

Cash cost

per day

Total cash expenses/365

44.75 33.83 29.46

Cash 1590.60 465.04 7681.35

Day's cash

(days)

Cash/cash cost per day

35.54 13.75 260.74

Analysis: Equity turnover is used to

calculate the rate of return on common

equity, and is a measure of how well a

company uses its stockholders' equity

to generate revenue. The higher the

ratio is, the more efficiently a company

is using its capital. w.r.t Tata Steel's

invested capital turnover, this again

shows a downturn over last 5 years

and gives the impression that the

company is not able to grow its

revenue from stockholder's equity.


. Invested capital turnover

07 2005-06 2004-05

17985.69 15394.15 14646.98

25597.50 14617.16 12143.30

Sales revenues/Long term liabilities + shareholders'

equity

0.70 1.05 1.21

10. Equity turnover

2008-09 2007-08 2006-

Net sales

revenue 24315.77 20028.28 17985.69

Shareholders'

equity 30176.26 27300.73 14096.15

Equity

turnover

(times)

Sales revenues/shareholder's equity

0.81 0.73 1.28

07 2005-06 2004-05

11571.94 10101.42 9259.17

819.29 775.10 618.78

Total non-cash expenses

10752.65 9326.32 8640.39

expenses/365

29.46 25.55 23.67

7681.35 288.39 246.72

Cash/cash cost per day

260.74 11.29 10.42

Analysis: The figures indicate that

there has been a increase in invested

capital, however the increase in return

has not matched the growth in capital

investment. This indicates that Tata

Steel’s overall profitability has not

been healthy for the studied period.

FY % Inves

2005-06

2006-07

2007-08

2008-09

Analysis: The Day's cash or cash

balance ratio indicates the number of

days that a company can pay its

debts, as they become due, out of

current cash. The increase in the

ratio over last few years indicate

better company image in the market.

The abnormal value in 2006

due to the Tata Steel acquiring

Corus.


. Equity turnover

-07 2005-06 2004-05

17985.69 15394.15 14646.98

14096.15 9755.30 7059.92

Sales revenues/shareholder's equity

1.28 1.58 2.07

: The figures indicate that

there has been a increase in invested

capital, however the increase in return

has not matched the growth in capital

investment. This indicates that Tata

Steel’s overall profitability has not

been healthy for the studied period.

FY % Investment %Return

24.78 5.10

83.91 16.83

75.12 11.36

20.37 21.41

: The Day's cash or cash

balance ratio indicates the number of

that a company can pay its

debts, as they become due, out of

current cash. The increase in the

ratio over last few years indicate

better company image in the market.

The abnormal value in 2006-07 is

due to the Tata Steel acquiring


TEAM ACAD


12. Day's receivables (or collection period)

2008-09 2007-08 2006-

Accounts

receivables 159.25 143.44 NA

Net sales

revenue 24315.77 19691.00 17985.69

Current

ratio

Accounts Receivables/ (Sales/365)

2.39 2.66 NA

14. Inventory turnover

2008-09 2007-08 2006-07

Cost of

goods

sold

17308.43 13183.05 11571.94

Inventory 2,868.28 2,047.31 1827.54

Inventory

turnover

Cost of sales/inventory

6.03 6.44 6.33

Analysis: A measure of performance,

calculated by average inventory

divided by average daily cost of sales.

This returns a figure equivalent to the

number of days an item is held as

inventory before it is sold. The lower

the days inventory, the more efficient

the company is, all other things being

equal. This again has been almost

constant over the last 5 years with last

year indicating best performance in

this aspect.


. Day's receivables (or collection period)

-07 2005-06 2004-05

NA NA NA

17985.69 15394.15 14646.98

Accounts Receivables/ (Sales/365)

NA NA NA

13. Day's inventory

2008-09 2007-08 2006

Inventory 2,868.28 2,047.31 1827.54

Cost of

goods sold 17308.43 13183.05 11571.94

Day's

inventory

Inventory/(cost of sales/365)

60.49 56.68 57.64

. Inventory turnover

07 2005-06 2004-05

11571.94 10101.42 9259.17

1827.54 1732.09 1523.34

Cost of sales/inventory

5.83 6.08

Analysis: A measure of the average time

a company's customers take to pay for

purchases, equal to accounts receivable

divided by annual sales on credit times

365. The lower, the better. The analysis

couldn't be made as the necessary figures

could be found only for last two years

which display a slight slump. This means

that the number of day in which a sale is

realised has extended by a little margin.

Analysis: The ratio of a company's annual

sales to its inventory; or equivalently, the

fraction of a year that an average item

remains in inventory. Low turnover is a

sign of inefficiency, since inventory

usually has a rate of return of zero.

Inventory turnover has been almost same

over the years which implies

Steel has been successfully in controlling

Inventory (intake of ra

conversion into semi

goods).


. Day's inventory

2006-07 2005-06 2004-05

1827.54 1732.09 1523.34

11571.94 10101.42 9259.17

Inventory/(cost of sales/365)

57.64 62.59 60.05

A measure of the average time

a company's customers take to pay for

purchases, equal to accounts receivable

divided by annual sales on credit times

the better. The analysis

couldn't be made as the necessary figures

could be found only for last two years

which display a slight slump. This means

that the number of day in which a sale is

realised has extended by a little margin.

he ratio of a company's annual

inventory; or equivalently, the

fraction of a year that an average item

remains in inventory. Low turnover is a

sign of inefficiency, since inventory

usually has a rate of return of zero.

Inventory turnover has been almost same

over the years which implies that Tata

Steel has been successfully in controlling

Inventory (intake of raw materials and it's

conversion into semi-finished or finished


TEAM ACAD


15. Working capital turnover

2008-09 2007-08 2006

Net sales

revenue 24315.77 20028.28 17985.69

Current

assets 10285.09 36962.44 13701.89

Current

liabilities 8974.05 6768.78 5453.66

Working

capital

Current assets - current liabilities

1311.04 30193.66 8248.23

Working

capital

turnover

Sales revenue / working capital

18.55 0.66 2.18

17. Acid-test ratio

2008-09 2007-08 2006-07

Monetary

current

assets

6804.62 2211.18 34357.46

Current

liabilities 8974.05 6768.78 5453.66

Current

ratio

Monetary current assets/current liabilities

0.76 0.33 6.30

Analysis: An indication of a company's

ability to meet short-term debt obligations;

the higher the ratio, the more liquid the

company is. If the current assets of a

company are more than twice the current

liabilities, then that company is generally

considered to have good short-term

financial strength. Tata steel's ratio has

always been healthy in last 5 years though

relative to 2007-08, the current ratio has

decreased but still it is still higher than the

first two years of study. This indicates that

Tata Steel is in relatively good short-term

financial standing.


. Working capital turnover

2006-07 2005-06 2004-05

17985.69 15394.15 14646.98

13701.89 4237.60 4083.58

5453.66 3808.72 3699.99

current liabilities

8248.23 428.88 383.59

Sales revenue / working capital

2.18 35.89 38.18

test ratio

07 2005-06 2004-05

34357.46 11368.91 2062.85

5453.66 3808.72 3699.99

Monetary current assets/current liabilities

2.98 0.56

16. Current ratio

2008-09 2007-08 2006-

Current

assets 10285.09 36962.44 13701.89

Current

liabilities 8974.05 6768.78 5453.66

Current

ratio

current assets/current liabilities

1.15 5.46 2.51

Analysis: Current assets minus

current liabilities. Working capital

measures how

a company has available to build its

business. The number can be

positive or negative, depending on

how much debt the company is

carrying. This ratio indicates that

Tata steel has been able to improve

its working capital considerably

this can be used to expand and

improve their operations.

An indication of a company's

term debt obligations;

company are more than twice the current

liabilities, then that company is generally

financial strength. Tata steel's ratio has

always been healthy in last 5 years though

08, the current ratio has

decreased but still it is still higher than the

first two years of study. This indicates that

term

Analysis: This ratio is the most stringent

measure of how well the company is

covering its short-

the ratio only considers that part of current

assets which can be turned into cash

immediately (thus the exclusion of

inventories). The ratio tells creditors how

much of the company's short term debt can

be met by selling all the company's liquid

assets at very short notice. Tata Steel

acquired Corus in the

the ratio has spiked in FY 2005

does justify the fairness of low ration in the

next two Fiscal Years.


. Current ratio

-07 2005-06 2004-05

13701.89 4237.60 4083.58

5453.66 3808.72 3699.99

current assets/current liabilities

2.51 1.11 1.10

Current assets minus

current liabilities. Working capital

measures how much in liquid assets

a company has available to build its

business. The number can be

positive or negative, depending on

how much debt the company is

carrying. This ratio indicates that

Tata steel has been able to improve

its working capital considerably and

this can be used to expand and

improve their operations.

This ratio is the most stringent

measure of how well the company is

-term obligations, since

the ratio only considers that part of current

which can be turned into cash

immediately (thus the exclusion of

inventories). The ratio tells creditors how

much of the company's short term debt can

be met by selling all the company's liquid

assets at very short notice. Tata Steel

acquired Corus in the year 2006 and hence

the ratio has spiked in FY 2005-07 and this

does justify the fairness of low ration in the

next two Fiscal Years.


TEAM ACAD


18. Capital intensity

2008-09 2007-08 2006-07

Net sales

revenue 24315.77 20028.28 17985.69

Property,

plant and

equipment

14482.22 12623.56 11040.56

Capital

intensity

(times)

Sales revenue/property, plant and

1.68 1.59 1.63

20. Debt/equity ratio(using long term liabilities)

2008-09 2007-08 2006-

Long-term

liabilities

28565.51 19774.79 11501.35

Shareholders'

equity

30176.26 27300.73 14096.15

Debt/equity

ratio (per

cent)

Long-term liabilities/shareholders' equity*100

94.66 72.43 81.59

Analysis: Financial leverage ratios provide

an indication of the long-term solvency of

the firm i.e. the extent to which the firm is

using long term debt. An increase in this

ratio to 2.24 from 1.97 in FY 2007-08

indicates that Tata steel would find it more

challenging to pay interest and principal

while obtaining further funding.


intensity

07 2005-06 2004-05

17985.69 15394.15 14646.98

11040.56 9865.05 9112.24

, plant and equipment

1.56 1.61

. Debt/equity ratio(using long term liabilities)

-07 2005-06 2004-05

11501.35 4861.86 5083.38

14096.15 9755.30 7059.92

term liabilities/shareholders' equity*100

81.59 49.84 72.00

19. Financial Leverage Ratio

2008-09 2007-08 2006

Total Assets 67715.82 53844.20 31051.16

Shareholders'

equity

30176.26 27300.73 14096.15

Financial

leverage

ratio (times)

Assets/shareholders' equity

2.24 1.97 2.20

Analysis: The capital intensity ratio

indicates the relation of sales to that of

current assets. Tata Steel has to use a

majority of its capital to buy expensive

machines instead of more labour and

hence Tata Steel is a capital intensive

industry with its investment increasing

in every fiscal year by a considerable

margin.

Financial leverage ratios provide

term solvency of

the firm i.e. the extent to which the firm is

An increase in this

indicates that Tata steel would find it more

challenging to pay interest and principal

Analysis: The D/E ratio is a financial ratio

indicating the relative proportion of equity and

debt used to finance a company's assets. A high

debt/equity ratio, as is the case with Tata Steel

at 94.66 percent in FY2008

means that a company has been agg

financing its growth with debt. If a lot of debt is

used to finance increased operations (high debt

to equity), the company could potentially

generate more earnings than it would have

without this outside financing.

If this were to increase ear

amount than the debt cost (interest), then the

shareholders benefit as more earnings are being

spread among the same amount of shareholders.

However, the cost of this debt financing may

outweigh the return that the company generates

on the debt through investment and business

activities and become too much for the

company to handle.


19. Financial Leverage Ratio

2006-07 2005-06 2004-05

31051.16 18425.88 15843.29

14096.15 9755.30 7059.92

Assets/shareholders' equity

2.20 1.89 2.24

The capital intensity ratio

indicates the relation of sales to that of

current assets. Tata Steel has to use a

majority of its capital to buy expensive

machines instead of more labour and

hence Tata Steel is a capital intensive

industry with its investment increasing

in every fiscal year by a considerable

The D/E ratio is a financial ratio

indicating the relative proportion of equity and

debt used to finance a company's assets. A high

debt/equity ratio, as is the case with Tata Steel

at 94.66 percent in FY2008-09, generally

means that a company has been aggressive in

financing its growth with debt. If a lot of debt is

used to finance increased operations (high debt

to equity), the company could potentially

generate more earnings than it would have

without this outside financing.

If this were to increase earnings by a greater

amount than the debt cost (interest), then the

shareholders benefit as more earnings are being

spread among the same amount of shareholders.

However, the cost of this debt financing may

outweigh the return that the company generates

he debt through investment and business

activities and become too much for the


TEAM ACAD


21. Debt/equity ratio(using Total liabilities)

2008-09 2007-08 2006-

Total

liabilities

37539.56 26543.57 16955.01

Shareholders'

equity

30176.26 27300.73 14096.15

Debt/equity

ratio (per

cent)

Long-term liabilities/shareholders' equity*100

124.40 97.23 120.28

23. Times interest earned(TIE

2008-09 2007-08 2006-07

Pre-tax

operating

profit

7315.61 7066.36 6261.65

Interest 1152.69 878.70 173.90

Times

interest

earned

(times)

(Pretax operating profit+interest)/interest

7.35 9.04 37.01

Debt/capitalization

Analysis: This ratio is a variation of the

traditional debt-to-equity ratio; this value

computes the proportion of a company's

long-term debt compared to its available

capital. By using this ratio, investors can

identify the amount of leverage utilized

by a specific company and compare it to

others to help analyze the company's risk

exposure. The higher the debt-to-capital

ratio, the more debt the company has

compared to its equity. This tells

investors whether a company is more

prone to using debt financing or equity

financing. This ratio in case of Tata steel

is evenly poised at 48.63 percent for

FY2008-09 thereby meaning that the

company has the flexibility of using

either of the two financing schemes.


bt/equity ratio(using Total liabilities)

-07 2005-06 2004-05

16955.01 16955.01 8783.37

14096.15 9755.30 7059.92

liabilities/shareholders' equity*100

120.28 88.88 124.41

. Times interest earned(TIE)

2005-06 2004-05

5239.96 5297.28

118.44 186.80

(Pretax operating profit+interest)/interest

45.24 25.36

22. Debt/capitalization

2008-09 2007-08 2006-07

Long-term

liabilities

28565.51 19774.79 11501.35

Long-term

liabilities +

Shareholders'

equity

58741.77 47075.52 25597.50 14617.16

Debt/capitalization

(per cent)

Long-term liabilities/ (long-term liabilities + shareholders'

equity)*100

2.24 1.97 2.20

Analysis: This D/E ratio is an

alternative which is not used as

commonly as the previous one, but

is nonetheless an important

financial aid. This ratio also takes

into consideration the current

liabilities since such liabilities are

short-term and involve day to day

operations such as payroll and

interest payment.

Analysis: TIE is a metric used to

measure a company's ability to meet its

debt obligations. Ensuring interest

payments to debt holders and preventing

bankruptcy depends mainly on a

company's ability to sustain earnings.

However, a high ratio can indicate that a

company has an undesirable lack of debt

or is paying down too much debt with

earnings that could be used for other

projects.

The rationale is that a company would

yield greater returns by investing its

earnings into other projects and borrowing

at a lower cost of capital than what it is

currently paying for its current debt to

meet its debt obligations. Thus for the

FY2008-09, Tata steel has earned 7.35

times its interest charges.


2005-06 2004-05

4861.86 5083.38

14617.16 14617.16

term liabilities + shareholders'

1.89 2.24

This D/E ratio is an

alternative which is not used as

monly as the previous one, but

is nonetheless an important

financial aid. This ratio also takes

into consideration the current

liabilities since such liabilities are

term and involve day to day

operations such as payroll and

TIE is a metric used to

measure a company's ability to meet its

debt obligations. Ensuring interest

payments to debt holders and preventing

bankruptcy depends mainly on a

company's ability to sustain earnings.

However, a high ratio can indicate that a

any has an undesirable lack of debt

or is paying down too much debt with

earnings that could be used for other

The rationale is that a company would

yield greater returns by investing its

earnings into other projects and borrowing

t of capital than what it is

currently paying for its current debt to

meet its debt obligations. Thus for the

09, Tata steel has earned 7.35

times its interest charges.


TEAM ACAD


Are the sales supported by corresponding

volumes sold in each of its segments The net sales increased by 23% during FY09 over FY08

mainly due to higher prices realised on Steel as well as other

producst during the first half of the year of the financial

year. While realisation declined following the global

economic slowdown, Steel volumes improved significantly in the second half as can be seen from

The divisional net sales of the Company are

shown here:

As explained above net sales in the Steel

division increased by 23% due to increase in

prices in the first half of FY 09 and increase in

volume in the second half of FY 09. Similarly

sales of Tubes and Ferroalloys improved mainly

due to higher realisations experienced during the year on account of increase in prices with lower volumes as

compared to the last year.

24. Dividend yield

2008-09 2007-08

Weighted

Average No. of

Ordinary

Shares for

Basic EPS

(Nos.)

7305848

34.00 697748601.00

Dividend 1168950

0000.00

11689300000.

00

Dividend per

share 16.00 16.75

Market Share

Price (Rs.) 360.18 379.00

Dividend yield

(per cent)

Dividends per share/ Market price per share*100

4.44 4.42

Analysis: Dividend payout ratio is the

percentage of earnings paid to

shareholders in dividends. It provides an

idea of how well earnings support the

dividend payments. Though the FY

2008-09 net income has increased, the

Dividend payout has decreased since

total Dividends paid has been the same

as the previous year.


25. Dividend payout

2008-09 2007-08 2006-07 2005

Dividend 1168.95 1168.93 943.91

Net

income 4849.24 4687.03 4222.15 3506.38

Dividend

payout

(per cent)

Total Dividends / Net income *100

24.11 24.94 22.36

by corresponding increase in

sold in each of its segments

The net sales increased by 23% during FY09 over FY08

mainly due to higher prices realised on Steel as well as other

producst during the first half of the year of the financial

year. While realisation declined following the global

olumes improved significantly in the second half as can be seen from

The divisional net sales of the Company are

As explained above net sales in the Steel

division increased by 23% due to increase in

prices in the first half of FY 09 and increase in

FY 09. Similarly

sales of Tubes and Ferroalloys improved mainly


. Dividend yield

2006-07 2005-06 2004-05

572409842.00 553472856.00 553472856

9439100000.0

0

7195100000.0

0

719510000

0

16.49 13.00 13.00

242.72 171.68 123.68

Dividends per share/ Market price per share*100

6.79 7.57 10.51

Steel volume H1

FY 09 2.38

FY 08 2.26

Net Sales FY 09 FY 08

Steel 20,456 16,539

Tubes 1,410 1,217

Ferroalloys

and Minerals 2,324 1,808

Bearings 127 127

Total 24,316 19,691

Analysis

shows how

company pays out in

dividends each year

relative to its share

price. In the absence of

any capital gains, the

dividend yield is the

return on investment for

a stock. Tata Steel has

given an excellent

dividend yield by

announcing a dividend

of Rs. 16

shareholders in dividends. It provides an

09 net income has increased, the

total Dividends paid has been the same


2005-06 2004-05

719.51 719.51

3506.38 3474.16

Net income *100

20.52 20.71

olumes improved significantly in the second half as can be seen from in the table.


H2 Change%

2.38 2.85 20%

2.26 2.52 12%

FY 08 Change Change %

16,539 3,917 24%

1,217 193 16%

1,808 516 29%

127 0 0%

19,691 4,625 23%

Analysis: Dividend

shows how much a

company pays out in

dividends each year

relative to its share

price. In the absence of

any capital gains, the

dividend yield is the

return on investment for

a stock. Tata Steel has

given an excellent

dividend yield by

announcing a dividend

of Rs. 16 on each share.


TEAM ACAD


Company management

Organizational Structure (Top Management)


TEAM ACAD


Corporate Governance

The Company’s Corporate Governance Philosophy

The Company has set itself the objective of expanding its capacities and becoming globally competitive

in its business. As a part of its growth strategy, the Company believes in adopting the ‘best practices’ that

are followed in the area of Corporate Governance across various geographies. The Company emphasises

the need for full transparency and accountability in all its transactions, in order to protect the interests of

its stakeholders. The Board considers itself as a Trustee of its Shareholders and acknowledges its

responsibilities towards them for creation and safeguarding their wealth.

In accordance with the Tata Steel Group Vision, Tata Steel Group (‘the Group’) aspires to be the global

steel industry benchmark for value creation and corporate citizenship. The Group expects to realise its

Vision by taking such actions as may be necessary in order to achieve its goals of value creation, safety,

environment and people.

Board of Directors

The Company has a non-executive Chairman and the number of Independent Directors is more than one-

third of the total number of Directors. As on 31st March, 2009, the Company has 14 Directors on its

Board, of which 8 Directors are independent. The number of Non-Executive Directors (NEDs) is more

than 50% of the total number of Directors. The Company is in compliance with of clause 49 the Listing

Agreement pertaining to compositions of directors.

None of the Directors on the Board is a Member on more than 10 Committees and Chairman of more

than 5 Committees (as specified in Clause 49), across all the companies in which he is a Director. The

necessary disclosures regarding Committee positions have been made by the Directors.

The names and categories of the Directors on the Board, their attendance at Board Meetings during the

year and at the last Annual General Meeting, as also the number of Directorships and Committee

Memberships held by them in other companies are given below:


TEAM ACAD


* Excludes Directorships in associations, private, foreign and Section 25 companies

** Represents Chairmanships/Memberships of Audit Committee and Shareholders’/Investors’

Grievance Committee.

Ten Board Meetings were held during the year 2008-09 and the gap between two meetings did not

exceed four months. The dates on which the Board Meetings were held were as follows:

• 8th April 2008, 26th June 2008, 31st July 2008, 28th August 2008, 24th October 2008, 2nd

December 2008, 18th December 2008, 8th January 2009, 28th January 2009 and 27th February

2009.

• Dates for the Board Meetings in the ensuing year are decided well in advance and communicated

to the Directors.

• Board Meetings are held at the Registered Office of the Company. The Agenda along with the

explanatory notes are sent in advance to the Directors. Additional meetings of the Board are held

when deemed necessary by the Board.

• The information as required under Annexure IA to Clause 49 is being made available to the

Board.

• The Board periodically reviews compliance reports of all laws applicable to the Company. Steps

are taken by the Company to rectify instances of non-compliance, if any.

• During 2008-09, the Company did not have any material pecuniary relationship or transactions

with Non-Executive Directors, other than Dr. J. J. Irani and Dr. T. Mukherjee, to whom the

Company paid retiring benefits aggregating to Rs. 35.68 lakhs and Rs. 28.86 lakhs respectively.

• The Company has adopted the Tata Code of Conduct for Executive Directors, Senior

Management Personnel and other Executives of the Company. The Company has received

confirmations from the Executive Director as well as Senior Management Personnel regarding

compliance of the Code during the year under review. It has also adopted the Tata Code of

Conduct for Non-Executive Directors of the Company. The Company has received confirmations

from the Non-Executive Directors regarding compliance of the Code for the year under review.

Both the Codes are posted on the website of the Company.


TEAM ACAD


Audit Committee

The Company had constituted an Audit Committee in the year 1986. The scope of the activities of the

Audit Committee is as set out in Clause 49 of the Listing Agreements with the Stock Exchanges read

with Section 292A of the Companies Act, 1956. The terms of reference of the Audit Committee are

broadly as follows:

• To review compliance with internal control systems;

• To review the findings of the Internal Auditor relating to various functions of the Company;

• To hold periodic discussions with the Statutory Auditors and Internal Auditors of the Company

concerning the accounts of the Company, internal control systems, scope of audit and

observations of the Auditors/Internal Auditors;

• To review the quarterly, half-yearly and annual financial results of the Company before

submission to the Board;

• To make recommendations to the Board on any matter relating to the financial management of the

Company, including Statutory & Internal Audit Reports;

• Recommending the appointment of statutory auditors and branch auditors and fixation of their

remuneration.

Mr. Subodh Bhargava, Chairman of the Audit Committee was present at the Annual General Meeting

held on 28th August, 2008.

The composition of the Audit Committee and the details of meetings attended by the Directors are given

below:

Ethical Practices

Since Tata Motors is a part of a large conglomerate company it needs to have a strong corporate

governance to ensure that its employees act ethically and the business continues to run smoothly

especially during the ever changing and dynamic global economy. “Tata Group’s corporate governance is

founded upon a rich legacy of fair, ethical, and transparent governance practices”

(tatacarsworldwide.com). One of the more important parts of this is the transparency of the company

people have a right to know what the company is doing not only to ensure ethical practices, but for the

insurance of their many shareholders whom have a right to know the inner workings of the company.

Tata has created some models for employees to guide themselves through everyday business practices to

ensure that the corporate governance is continuously being upheld. The Tata business excellence model is

upheld by Tata quality management services. Quality management is an in-house group dedicated to

helping the various Tata companies achieve their business objectives through specific processes. The two


TEAM ACAD


main processes that the quality management services employees focus on are business excellence and

business ethics. These two objectives have helped build Tata into the strong, Business Policy &

Competitive Strategy dynamic company it is today. These models are entrenched in the company’s

ethnical standards and Tata feels strongly about enforcing both throughout the company. “Tata quality

management services plays the role of supporter and facilitator in the journey that Tata enterprises

undertake to reach the peaks of business eminence while, at the same time, adhering to the highest ethical

standards” (Tata.com).

To further prove their commitment to quality and ethical practices Tata has introduced annual quality

awards for those companies conducting business with the utmost quality. These awards are called the

JRD quality value awards named after the late chairmen JRD Tata. These awards are presented annually

on July 29th birthday of JRD Tata. Tata has committed to ensuring quality and ethical standards not only

within Tata Motors, but throughout their many other branches and sectors of the Tata Group. They have

done so by benchmarking quality standards through the Tata business excellence model as well as

providing incentives for companies to strive to improve the quality of their service, by awarding JRD

quality management awards.

SWOT analysis of the company

Strengths

• strong brand name of TSL and Tata Group

• India Operations capable of meeting its own iron ore requirements

• raw material security building through global operations

• leading sales and distribution capability

• low ware labor availability

• EVA+ Company

Weakness

• Low R&D investment

• Unscientific Mining

• Low Productivity

Opportunites

• Unexplored rural markets

• Growing domestic markets

• Growing global markets

• Developin countries not restrained under the kyoto protocol

• carbon credit traing on the rise

• high investment in infrastructure development

Threats

• World's big producers entering Indian Markets

• China set to becoming a net exporter

• High duties relating to pollution control and high energy cost

• Global economin slowdown


TEAM ACAD


Comparison with Tata Steel’s major competitors

Major Domestic Steel Producers

• ISPAT

• SAIL

• JSW

• BHUSHAN

• TATA

• ESSAR

Leading Global players

• Arcellor Mittal

• Posco

P/E Comparison of Tata Steel, Arcelor Mittal and Sail (for investment purpose)

Company

Tata Steel

Arcelor Mittal

SAIL

Last Price Market Cap

(Rs. cr.)

SAIL 164.55 67,965.74

Tata Steel 471.55 41,836.58

JSW Steel 755.5 14,131.53

Visa Steel 36.4 400.4


major competitors

Major Domestic Steel Producers

Comparison between major Indian Steel Players

Arcelor Mittal and Sail (for investment purpose)

P/E ratio Debt Equity Ratio

4.0

6.8

8.4

Market Cap. Sales Net Profit Total

(Rs. cr.) Turnover

67,965.74 44,208.43 6,174.81

41,836.58 24,315.77 5,201.74

14,131.53 14,158.42 458.5

400.4 1,035.01 -66.81


Comparison between major Indian Steel Players

Debt Equity Ratio

0.68

0.47

0.24

Total Assets

35,522.89

56,650.78

19,231.88

1,173.12


TEAM ACAD


*HRC - Rockwell C Hardness

Sources have been mentioned wherever applicable

the necessary credentials.


wherever applicable to the best of our knowledge, however, in case any source is missing, we intend to mention


in case any source is missing, we intend to mention

Documents

Tata Steel Financial Report