Corporate Governance of Tata Steel

CORPORATE GOVERNANC

E OF TATA STEEL

PRESENTED BY:

AKANSH GARG GULAM SERVAR

NAVEEN KUMAR

Introduction of corporate governance Profile of TATA steel Company’s philosophy Members of BOD Role of BOD Remuneration packages Audit committee Share holders committee Top 10 equity share holders Means Of communication Certificate Conclusion

CONTENTS……………….

CORPORATE GOVERNANCE

It means governing a company in a value based manner.

OBJECTIVE :Enhance of shareholders value keeping in view the interest ofother stakeholders.

KEY CONSTITUTES : 1.Share holders 2.Board of directors 3.Management

CORPORATE GOVERNANCE INVOLVES:

TRANSPARENCY-Everything that happens in the company , if it is not shy to share it publicly ,it is transparent.

ACCOUNTABILITY- The management is accountable for its decisions.

EQUANIMITY- Right of all share holders are equal ,regardless of minor or major share holders.

It involves letting investors know how the company in which they have invested is utilizing their money.

Good corporate governance , companies can reduce vulnerability to financial crisis.

studies world over have shown-markets and investors take notice of well

managed companies.Respond and rely on them.Reward such companies with higher

valuation.

BENEFITS OF CORPORATE GOVERNANCE

Tata Steel ,established in 1907, is among the top ten steel producers in the world with an existing annual crude steel production capacity of 30 Million Tones Per Annum (MTPA).

Tata Steel has a balanced global presence in over 50 developed European and fast growing Asian markets, with manufacturing units in 26 countries.

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, through its joint venture with Tata BlueScope Steel Limited, has also entered the steel building and construction applications market.

TATA STEEL

BUSINEES UNITS OF TATA STEEL:-

Apart from the main Steel Division, Tata Steel's operations are grouped under the following Strategic Business Units:-

Bearings Division Ferro Alloys and Minerals Division Agrico Division Tata Growth Shop (TGS) Tubes Division Wire Division

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

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 emphasizes 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.

BOARD OF DIRECTORSNAMES

Mr. R.N. Tata (chairman)

Mr. James leng

Mr. Nusli N. Wadia

Mr. S .M. Palia

Mr. Suresh Krishna

Mr. Ishaat Hussain

Dr. J.J. Irani

Mr. Subodh Bhargava

Mr. Jacobus Schravan

Dr. Anthony Hayward

Mr. Andrew Robb

Dr. T. Mukherjee

Mr. Philippe varin

Mr. B. Muthuraman

CATEGORY

Not independent , Non-executive

Independent , non-executive

-do-

-do-

-do-

Not independent , Non-executive

-do-

Independent , Non-executive

-do-

-do-

-do-

Not Independent, Non-executive

-do-

Not independent, executive

Board of directors met 10 times in a year and gap between any two meetings did not exceed 4 months.

The Company pays sitting fees of Rs. 20,000 per meeting to the NEDs for attending the meetings of the Board, Executive Committee of the Board, Remuneration Committee, Audit Committee and Committees constituted by the Board from time to time. For other meetings, viz. Investor Grievance Committee and Ethics Committee, the Company pays to the NEDs sitting fees of Rs. 5,000 per meeting.

Full disclosure has been made regarding the remuneration packages of all directors

BOARD ROLE

Name of director Commission*

Sitting fees

Mr. R.N. Tata (chairman)

200.00 3.20

Mr. James leng 15.00 2.20

Mr. Nusli N. Wadia 34.00 2.40

Mr. S. M. Palia 61.00 4.60

Mr. Suresh krishna 10.00 1.10

Mr. Ishaat Hussain 60.00 4.90

Dr. J.J. Irani 25.00@ 3.20

Mr. Subhodh bhargava 40.00 3.40

Mr. Jacobus schraven 10.00 1.00

Dr. Anthony Hayward 25.00 0.20

Mr. Andrew Robb 10.00 2.60#

Dr. t. mukherjee 10.00@@ 1.40

Mr. Philippe varin - 2.40#

Total 500.00 32.60

REMUNARATION PACKAGES

*--payable in 2009-10#--includes amount of Rs.20,000 paid in 2009-10@--Excluding retirement benefits of Rs. 35.68 lakhs paid to Dr . Irani@@-- Excluding retirement benefits of Rs. 28.86 lakhs paid to Dr. mukherjee

NAME SALARY

Rs. Lakhs

PERQUISITES &ALLOWANCES

COMMISIONS@

Rs. Lakhs

Stock options

Mr. B. MUTHURAMAN(MANAGING DIRECTOR)

88.00 69.21 350.00 NIL

Managing director

@--Payable in 2009-10

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

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

AUDIT COMMITTEE

Mr. Subodh Bhargava (Chairman)

Independent, (Non executive)

8

Mr.S.M. Palia , (Member)

Independent,(Non executive)

8

Mr. Ishaat Hussain (C.A)

Non executive, Non Independent

9

Mr. .Andrew Robb( Member )

Independent, Non-executive

6

Audit Committee meetings are attended by the Group Chief Financial Officer, Chief (Corporate Audit) and Chief Financial Controller (Corporate) and Representatives of Statutory Auditors. The Company Secretary acts as the Secretary of the Audit Committee.

Nine Audit Committee Meetings were held during 2008-09. The necessary quorum was present at the meetings.

Whistle Blower Policy……..

The Audit Committee at its meeting held on 25th October, 2005, approved framing of a Whistle Blower Policy that provides a formal mechanism for all employees of the Company to approach the Ethics Counselor/Chairman of the Audit Committee of the Company and make protective disclosures about the unethical behavior, actual or suspected fraud or violation of the Company’s Code of Conduct. The Whistle Blower Policy is an extension of the Tata Code of Conduct, which requires every employee to promptly report to the Management any actual or possible violation of the Code or an event he becomes aware of that could affect the business or reputation ofthe Company. The disclosures reported are addressed in the manner and within the time frames prescribed in the Policy. Under the Policy, each employee of the Company has an assured access to the Ethics Counselor/ Chairman of the Audit Committee.

SHAREHOLDERS’ COMMITTEE

An Investors’ Grievance Committee was constituted on 23rd March, 2000 to specifically look into the redressal of Investors’ complaints like transfer of shares, non-receipt of balance sheet and non-receipt of declared dividend, etc. One meeting of the Investors’ Grievance Committee was held on 31st March, 2009. The composition of the Investors’ Grievance Committee is given below

:

NAMES OF MEMBERS CATEGORY NO.MEETING ATTENDEDDURING 2008-2009

Mr. Ishaat Hussain Not Independent , Non- Excutive

1

Mr. Suresh Krishna, Member

Independent,Non-excutive

1

Top ten equity share holders of company as on 31th march ,2009 ----

S.N Name of share holders No. of share held

% of holding

1 Tata Sons Limited 213,822,295 29.27

2 Life Insurance Corporation of India 85,334,595 11.68

3 Tata Motors Limited 21,440,882 2.93

4 HSBC Global Investment Funds A/c. 13,600,190 1.86

5 HDFC Standard Life Insurance Company Limited 9,806,254 1.34

6 The New India Assurance Company Limited 9,005,715 1.23

7 National Insurance Company Limited 8,600,000 1.18

8 The Oriental Insurance Company Limited 6,478,606 0.89

9 UCO Bank A/c. Birla Education Trust 5,108,208 0.70

10 Pilani Investment And Industries Corporation Limited 5,078,385 0.70

Month High (Rs.)

Low (Rs.) Volume(no. of shares)

Apr-08 817.60 645.95 1,92,02,856

May-08 922.25 797.00 2,42,12, 679

Jun-08 868.05 711.00 2,62,51,840

Jul-08 741.20 584.30 3,83,22,828

Aug-08 691.75 571.80 3,27,40,944

Sept-08 589.20 425.60 3,86,83,765

Oct-08 438.65 168.50 5,61,32,806

Nov-08 239.85 150.80 7,23,94,978

Dec-08 228.85 148.65 8,98,14,549

Jan-09 246.75 166.35 6,76,40,787

Feb-09 199.55 160.55 5,09,38,279

Mar-09 223.50 152.10 8,53,63,195

Equity shares in secondary market in the FY 2008-09 :------

BOMBAY STOCK EXCHANGE

Graphical representation of company in BSE :

year TATA STEEL SAIL JSW STEEL

2009 160 13 10

2008 160 18 140

2007 155 15 125

2006 130 10 80

2005 130 18 50

Dividend Distribution (in %)

Shareholder/Investor Complaints :

Complaints pending as on 1st April, 2008 391 During the period 1st April, 2008 to 31st March, 2009, complaints identified and reported under Clause 41 of the Listing Agreements :2647

Complaints disposed off during the year ended 31st March, 2009 :3032 Complaints unresolved to the satisfaction of shareholders as on 31st March, 2009 :6 No. of pending share transfers as on 31st March, 2009 i)Ordinary Shares :49 ii)Cumulative Convertible Preference Shares :14

Means of Communication

Half-yearly report –The half-yearly results of the Company are published in the newspapers and posted on the website of the Company.

Results –The quarterly and annual results along with the Segmental Report are generally published in The Times of India ,The Indian Express, Nav Shakti , Free Press Journal, Loksatta and also displayed on the website of the Companywww.tatasteel.com shortly after its submission to the Stock Exchanges. Presentation to Institutional Investors or to analysts –

Official news releases and presentations made to Institutional Investors and analysts are posted on the Company’s website.

Management Discussion & Analysis Report –

The MD&A Report forms a part of the Directors’ Report. All matters pertaining to industry structure and developments , opportunities and threats, segment/product wise performance, outlook, risks and concerns, internal control and systems, etc. are discussed in the said report.

CERTIFICATE

We have examined the compliance of conditions of Corporate Governance by Tata Steel Limited, for the year ended on 31st March, 2009, as stipulated in Clause 49 of the Listing Agreement of the said Company with stock exchanges.

In our opinion and to the best of our information and according to the explanations given to us and the representations made by the Directors and the management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the above mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.

---------- Chartered Accountants

CONCLUSION

From this project we get to learn what is basically corporate governance and how TATA steel maintained its governance in company.

SOURCE OF DATA………………

www.authorstream.com

www.tatasteel.com

THANK YOU