-
DRAFT LETTER OF OFFERDated August 21, 2007
For Equity Shareholders of the Company only
TATA STEEL LIMITED(Originally incorporated on August 26, 1907
under the Indian Companies Act, 1882 as The Tata Iron and Steel
Company
Limited and name was changed to Tata Steel Limited with effect
from August 12, 2005)Registered Office: Bombay House, 24 Homi Mody
Street, Fort, Mumbai 400 001, Maharashtra, India
Tel. no. (91 22) 66658282 Fax no. (91 22) 66657724 Contact
Person: Mr. J. C. Bham, Company Secretary and ComplianceOfficer,
E-mail: [email protected]; Website: www.tatasteel.com
FOR PRIVATE CIRCULATION TO THE EQUITY SHAREHOLDERS OF THE
COMPANY ONLY
DRAFT LETTER OF OFFER
SIMULTANEOUS BUT UNLINKED ISSUE OF 121,794,571 EQUITY SHARES OF
RS. 10 EACH AT A PREMIUM OF RS. 290 PER EQUITYSHARE AGGREGATING RS.
36,538 MILLION TO THE EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE
RATIO OF 1 EQUITYSHARES FOR EVERY 5 EQUITY SHARES HELD ON THE
RECORD DATE I.E. [] AND [] CUMULATIVE COMPULSORILYCONVERTIBLE
PREFERENCE SHARES OF THE FACE VALUE RS. 100 EACH AT A PRICE OF RS.
100 EACH IN THE RATIO OF []CUMULATIVE COMPULSORILY CONVERTIBLE
PREFERENCE SHARE FOR EVERY [] EQUITY SHARES HELD ON THE RECORDDATE
(ISSUE) NOT EXCEEDING RS. 60,000 MILLION. THE ISSUE PRICE FOR
EQUITY SHARES IS 30 TIMES OF THE FACE VALUEOF THE EQUITY SHARE.
TOTAL ISSUE OF EQUITY SHARES AND PREFERENCE SHARES WOULD AGGREGATE
Rs. [] MILLION
GENERAL RISKS
Investments in equity and equity related securities involve a
high degree of risk and Investors should not invest any funds in
this Issue unless they can affordto take the risk of losing their
investment. Investors are advised to read the Risk Factors
carefully before taking an investment decision in relation to
thisIssue. For taking an investment decision, Investors must rely
on their own examination of the Issuer and the Issue including the
risks involved. The securitieshave not been recommended or approved
by the Securities and Exchange Board of India (SEBI) nor does SEBI
guarantee the accuracy or adequacy of thisdocument. Investors are
advised to refer to Risk Factors on page 5 of this Draft Letter of
Offer before making an investment in this Issue.
ISSUERS ABSOLUTE RESPONSIBILITY
The Issuer, having made all reasonable inquiries, accepts
responsibility for and confirms that this Draft Letter of Offer
contains all information with regard tothe Issuer and the Issue,
which is material in the context of this Issue, that the
information contained in this Draft Letter of Offer is true and
correct in allmaterial respects and is not misleading in any
material respect, that the opinions and intentions expressed herein
are honestly held and that there are no othermaterial facts, the
omission of which makes this Draft Letter of Offer as a whole or
any such information or the expression of any such opinions or
intentionsmisleading in any material respect.
LISTING
The existing Equity Shares of the Company are listed on The
Bombay Stock Exchange Limited (BSE), The National Stock Exchange of
India Limited(NSE) and the Calcutta Stock Exchange Association
Limited (CSE). The Company has received in-principle approvals from
BSE and NSE for listingthe Equity Shares arising from this Issue
vide letters dated [] and [] respectively. For the purposes of the
issue, the Designated Stock Exchange shall be [].
LEAD MANAGERS TO THE ISSUE REGISTRAR TO THE ISSUE
JM Financial Consultants PrivateLimited141,Maker Chamber
IIINariman Point,Mumbai 400 021, IndiaTel: (91 22) 6630 3030Fax:
(91 22) 2202 8224Email: [email protected]:
www.jmfinancial.inContact Person: Mr. Mayank Jain/Mr. Vikas
Kothari
Citigroup Global Markets IndiaPrivate Limited12th Floor,
Bakhtawar229, Nariman Point,Mumbai 400 021, IndiaTel. : (91 22)
6631 9999Fax. : (91 22) 6631 9803Email:
[email protected]: www.citibank.co.inContact Person:
Mr. Pankaj Jain
DSP Merrill Lynch LimitedMafatlal Center, 10th Floor,Nariman
Point,Mumbai 400 021, IndiaTel. : (91 22) 6632 8000Fax. : (91 22)
2204 8518Email: [email protected]:
www.dspml.comContact Person: Mr. AseemGoyal
Intime Spectrum Registry LimitedC 13, Pannalal Silk Mills
Compound,LBS Marg, Bhandup (West),Mumbai 400 078Tel: (91 22) 2596
0320Fax: (91 22) 2596 0329Email: [email protected]
Person:Mr. S. Ramanujam
ISSUE PROGRAMME
ISSUE OPENS ONLAST DATE FOR REQUEST FOR
SPLIT APPLICATION FORMS ISSUE CLOSES ON
[] [] []
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TABLE OF CONTENTS
I. ABBREVIATIONS & TECHNICAL TERMS . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . 1
II. RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
III. THE ISSUE . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21
IV. SELECTED FINANCIAL INFORMATION . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . 22
V. GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . 25
VI. CAPITAL STRUCTURE . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . 33
VII. OBJECTS OF THE ISSUE . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . 46
VIII. BASIS FOR ISSUE PRICE . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . 49
IX. STATEMENT OF TAX BENEFITS . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 51
X. INDUSTRY OVERVIEW . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . 57
XI. BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
63
XII. REGULATIONS AND POLICIES . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 89
XIII. HISTORY AND CORPORATE STRUCTURE . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . 93
XIV. DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
XVI. MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . 101
XVII. PROMOTER . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . 117
XVIII. GROUP COMPANIES . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . 121
XIX. SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . 134
XX. JOINT VENTURE COMPANIES . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 182
XXI. RELATED PARTY TRANSACTIONS . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . 187
XXII. AUDITORS REPORT . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . 190
XXIII. CONSOLIDATED FINANCIAL STATEMENTS OF CORUS GROUP LIMITED
. . . . . . . . . . . . F-1
XXIV. STOCK MARKET DATA FOR EQUITY SHARES OF THE COMPANY . . . .
. . . . . . . . . . . . . . . . . 193
XXV. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
ANDRESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . 194
XXVI. MATERIAL DEVELOPMENTS . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . 217
XXVIII. DESCRIPTION OF CERTAIN INDEBTEDNESS . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
221
XXIX. OUTSTANDING LITIGATION AND DEFAULTS . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
225
XXX. STATUTORY AND OTHER INFORMATION . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 307
XXXI. TERMS OF THE PRESENT ISSUE . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . 318
XXXII. MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . 335
XXXIII. MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION . . . .
. . . . . . . . . . . . . . . . . . . 348
XXXIV. DECLARATION . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . 349
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OVERSEAS SHAREHOLDERS
The distribution of this Draft Letter of Offer and the issue of
Equity Shares and Cumulative CompulsorilyConvertible Preference
Shares on a rights basis to persons in certain jurisdictions
outside India may be restrictedby legal requirements prevailing in
those jurisdictions. Persons into whose possession this Draft
Letter of Offermay come are required to inform themselves about and
observe such restrictions. The Company is making thisissue of
Equity Shares and Cumulative Compulsorily Convertible Preference
Shares on a rights basis to theshareholders of the Company who have
an Indian address.
No action has been or will be taken to permit this Issue in any
jurisdiction where action would be required forthat purpose, except
that this Draft Letter of Offer has been filed with SEBI for
observations and SEBI has givenits observations. Accordingly, the
Equity Shares represented thereby may not be offered or sold,
directly orindirectly, and this Draft Letter of Offer may not be
distributed in any jurisdiction outside of India. Receipt ofthis
Draft Letter of Offer will not constitute an offer in those
jurisdictions in which it would be illegal to makesuch an offer
and, those circumstances, this Draft Letter of Offer must be
treated as sent for information only andshould not be copied or
redistributed. No person receiving a copy of this Draft Letter of
Offer in any territoryother than in India may treat the same as
constituting an invitation or offer to him, nor should he in any
event usethe CAF. The Company will not accept any CAF where the
address as indicated by the applicant is not an Indianaddress.
Accordingly, persons receiving a copy of this Draft Letter of Offer
should not, in connection with theissue of Equity Shares or the
rights entitlements, distribute or send the same in or into the
United States or anyother jurisdiction where to do so would or
might contravene local securities laws or regulations. If this
DraftLetter of Offer is received by any person in any such
territory, or by their agent or nominee, they must not seek
tosubscribe to the Equity Shares or the rights entitlements
referred to in this Draft Letter of Offer.
Neither the delivery of this Draft Letter of Offer nor any sale
hereunder, shall under any circumstances create anyimplication that
there has been no change in the Companys affairs from the date
hereof or that the informationcontained herein is correct as at any
time subsequent to this date.
European Economic Area Restrictions
In relation to each Member State of the European Economic Area
which has implemented the ProspectusDirective at any relevant time
(each, a Relevant Member State) the Company has not made and will
not makean offer of the Equity Shares to the public in that
Relevant Member State prior to the publication of a prospectusin
relation to the Equity Shares which has been approved by the
competent authority in that Relevant MemberState or, where
appropriate, approved in another Relevant Member State and notified
to the competent authorityin that Relevant Member State, all in
accordance with the Prospectus Directive, except that it may, with
effectfrom and including the Relevant Implementation Date, make an
offer of Equity Shares to the public in thatRelevant Member State
at any time:
(a) to legal entities which are authorised or regulated to
operate in the financial markets or, if not soauthorised or
regulated, whose corporate purpose is solely to invest in
securities;
(b) to any legal entity which has two or more of (1) an average
of at least 250 employees during the lastfinancial year; (2) a
total balance sheet of more than 43,000,000 and (3) an annual net
turnover ofmore than 50,000,000, as shown in its last annual or
consolidated accounts; or
(c) in any other circumstances which do not require the
publication by the Issuer of a prospectus pursuantto Article 3 of
the Prospectus Directive.
For the purpose of this provision, the expression an offer of
Equity Shares to the public in relation to anyEquity Shares in any
Relevant Member State means the communication in any form and by
any means ofsufficient information on the terms of the offer and
the Equity Shares to be offered so as to enable an investor
todecide to purchase or subscribe for the Equity Shares, as the
same may be varied in that Member State by anymeasure implementing
the Prospectus Directive in that Member State and the expression
Prospectus Directivemeans Directive 2003/71/EC and includes any
relevant implementing measure in each Relevant Member State.
This European Economic Area selling restriction is in addition
to any other selling restriction set out below.
i
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United Kingdom Restrictions
This document is only being distributed to and is only directed
at (i) persons who are outside the UnitedKingdom or (ii) to
investment professionals falling within Article 19(5) of the
Financial Services and MarketsAct 2000 (Financial Promotion) Order
2005 (the Order) or (iii) high net worth entities, and other
persons towhom it may lawfully be communicated, falling within
Article 49(2)(a) to (d) of the Order (all such personstogether
being referred to as relevant persons). The Equity Shares are only
available to, and any invitation,offer or agreement to subscribe,
purchase or otherwise acquire such Equity Shares will be engaged in
only with,relevant persons. Any person who is not a relevant person
should not act or rely on this document or any of itscontents.
NO OFFER IN THE UNITED STATES
The rights and the shares of the Company have not been and will
not be registered under the United StatesSecurities Act of 1933, as
amended (the Securities Act), or any U.S. state securities laws and
may not beoffered, sold, resold or otherwise transferred within the
United States of America or the territories or possessionsthereof
(the United States or U.S.) or to, or for the account or benefit
of, U.S. Persons (as defined inRegulation S under the Securities
Act (Regulation S)), except in a transaction exempt from the
registrationrequirements of the Securities Act. The rights referred
to in this Draft Letter of Offer are being offered in India,but not
in the United States. The offering to which this Draft Letter of
Offer relates is not, and under nocircumstances is to be construed
as, an offering of any shares or rights for sale in the United
States or as asolicitation therein of an offer to buy any of the
said shares or rights. Accordingly, this Draft Letter of Offer
andthe enclosed CAF should not be forwarded to or transmitted in or
into the United States at any time.
Neither the Company nor any person acting on behalf of the
Company will accept a subscription or renunciationfrom any person,
or the agent of any person, who appears to be, or who the Company
or any person acting onbehalf of the Company has reason to believe
is, in the United States. Envelopes containing a CAF should not
bepostmarked in the United States or otherwise dispatched from the
United States, and all persons subscribing forEquity Shares and
wishing to hold such shares in registered form must provide an
address for registration of theEquity Shares in India. The Company
is making this issue of Equity Shares on a rights basis to the
shareholdersof the Company who have an Indian address. Any person
who acquires rights or Equity Shares will be deemed tohave
declared, warranted and agreed, by accepting the delivery of this
Draft Letter of Offer, that it is not and thatat the time of
subscribing for the Equity Shares or the rights entitlements, it
will not be, in the United States.
The Company reserves the right to treat as invalid any CAF
which: (i) appears to the Company or its agents tohave been
executed in or dispatched from the United States; (ii) does not
include the relevant certification set outin the CAF headed
Overseas Shareholders to the effect that the person accepting
and/or renouncing the CAFdoes not have a registered address (and is
not otherwise located) in the United States; or (iii) where the
Companybelieves acceptance of such CAF may infringe applicable
legal or regulatory requirements; and the Companyshall not be bound
to allot or issue any Equity Shares or rights entitlement in
respect of any such CAF.
The Company is informed that there is no objection to a United
States shareholder selling its rights in India.Rights may not be
transferred or sold to any U.S. Person.
ii
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PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA
Unless stated otherwise, the financial data in this Draft Letter
of Offer is derived from the Companysconsolidated financial
statements and has been prepared in accordance with Indian GAAP. On
April 2, 2007, theCompany completed its acquisition of Corus.
Therefore, the consolidated financial statements of the Companyfor
the year ending March 31, 2007 do not include the financial
statements of Corus. The Companys currentfiscal year commenced on
April 1, 2007 and ends on March 31, 2008. Additionally, the
financial data withrespect to Corus is presented under UK GAAP for
financial years ending December 28, 2002 and January 3,2004 and
presented under International Financial Reporting Standards as
adopted by EU (IFRS) for financialyears ending January 1, 2005,
December 31, 2005 and December 30, 2006. The consolidated financial
statementsof Corus, as set out on page F-1 of this Draft Letter of
Offer, have been extracted from the annual reports ofCorus and have
not been prepared in connection with or for the purpose of this
Issue. Any references to pages ofsuch annual reports which have not
been included as a part of the consolidated financial statements of
Corusreproduced herein from the annual reports of Corus may be
referred to in the annual reports of Corus which arepublicly
available.
In this Draft Letter of Offer, any discrepancies in any table
between the total and the sums of the amounts listedare due to
rounding-off, and unless otherwise specified, all financial numbers
in parentheses represent negativefigures.
For definitions, please see the section titled Abbreviations and
Technical Terms on page 1 of this Draft Letterof Offer. All
references to India contained in this Draft Letter of Offer are to
the Republic of India, allreferences to the US or the U.S. or the
USA, or the United States are to the United States of America,and
all references to UK or the U.K. are to the United Kingdom. All
references to Rupees, INR or Rs.are to Indian Rupees, the official
currency of the Republic of India, all references to USD are to
United StatesDollars, the official currency of the United States of
America, all references to GBP or are to Great BritainPounds, the
official currency of the United Kingdom and all references to EURO
or are to the officialcurrency of the European Union.
Unless stated otherwise, industry data used throughout this
Draft Letter of Offer has been obtained from industrypublications.
Industry publications generally state that the information
contained in those publications has beenobtained from sources
believed to be reliable but that their accuracy and completeness
are not guaranteed andtheir reliability cannot be assured. Although
the Company believes that industry data used in this Draft Letter
ofOffer is reliable, it has not been independently verified.
iii
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EXCHANGE RATES
The following table sets forth, for the periods indicated,
information with respect to the exchange rate betweenthe rupee and
the British pound sterling (in rupees per British pound) based on
the noon Reference Rate of theReserve Bank of India. The exchange
rate as at August 8, 2007 was Rs. 81.85 = GBP 1.00 No
representation ismade that the rupee amounts actually represent
such British pound amounts or could have been or could beconverted
into British pounds at the rates indicated, any other rate or at
all.
Rupee and British Pounds Exchange Rates
Year ended March 31, Period End Average(1) High Low
2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 74.92 74.84 79.03 69.962004 . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . 79.60 77.74 85.83 71.822005
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. 82.09 82.95 86.08 77.942006 . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . 77.80 79.02 83.94 75.562007 . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85.53
85.72 88.77 77.15
Month Period End Average High Low
January 2007 . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 86.66 86.73 87.61 85.79February 2007 . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 86.96 86.51 87.01 86.00March 2007 . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . 85.53 85.60
86.62 84.71April 2007 . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . 82.30 83.83 85.36 81.69May 2007 . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . 80.43 80.89 82.02
80.08June 2007 . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 81.63 80.98 81.81 80.21July 2007 . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . 82.03 82.18 83.08 81.23
Source: Reserve Bank of India.(1) Based on the average of the
noon buying rate for each day in the relevant period.
The following table sets forth, for the periods indicated,
information with respect to the exchange rate betweenthe rupee and
the Singapore dollar (in rupees per Singapore dollar). The exchange
rate as at August 8, 2007 wasRs. 26.91 = SGD 1.00. No
representation is made that the rupee amounts actually represent
such Singapore dollaramounts or could have been or could be
converted into Singapore dollars at the rates indicated, any other
rate orat all.
Rupee and Singapore Dollars Exchange Rates
Year ended March 31, Period End Average High Low
2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 26.91 27.37 28.13 26.432004 . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . 26.03 26.56 27.41
25.952005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . 26.50 26.81 27.53 25.992006 . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . 27.57 26.63 27.67
25.632007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . 28.49 28.88 29.68 27.49
Month Period End Average High Low
January 2007 . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 28.70 28.80 29.12 28.59February 2007 . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 28.91 28.75 28.91 28.63March 2007 . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . 28.49 28.77
29.13 28.07April 2007 . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . 27.21 27.81 28.35 26.96May 2007 . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . 26.65 26.90 27.36
26.65June 2007 . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 26.38 26.61 26.92 26.38July 2007 . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . 26.66 26.46 26.80 26.24
Source: Bloomberg
iv
-
The following table sets forth, for the periods indicated,
information with respect to the exchange rate betweenthe rupee and
the American dollar (in rupees per American dollar). The exchange
rate as at August 8, 2007 wasRs. 40.53 = USD 1.00. No
representation is made that the rupee amounts actually represent
such American dollaramounts or could have been or could be
converted into American dollars at the rates indicated, any other
rate orat all.
Rupee and American Dollars Exchange Rates
Year ended March 31, Period End Average High Low
2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . 47.47 48.40 49.05 47.472004 . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . 43.60 45.94 47.47
43.602005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . 43.75 44.93 46.47 43.422006 . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . 44.62 44.27 46.31
43.182007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . 43.47 45.25 47.00 43.05
Month Period End Average High Low
January 2007 . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . 44.16 44.30 44.57 44.16February 2007 . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . 44.27 44.16 44.27 44.06March 2007 . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . 43.47 44.00
44.68 43.05April 2007 . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . 41.19 42.19 43.29 40.88May 2007 . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . 40.57 40.79 41.43
40.49June 2007 . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . 40.70 40.78 41.16 40.52July 2007 . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . 40.44 40.42 40.66 40.24
Source: Bloomberg
v
-
SUMMARY OF CERTAIN DIFFERENCES BETWEEN IFRS AND INDIAN GAAP
No. Topic IFRS
IndianAccountingStandards Indian GAAP
1 lAS 1, Presentation ofFinancial StatementsComponents of
financialstatements
The requirements for thepresentation of financialstatements, the
guidelines fortheir structure and content areset out in lAS. A
complete setof financial statements underIFRS comprises: (a)
balancesheet; (b) income statement;(c) cash flow statement;
(d)statement of changes inequity; and (d) notesincluding summary
ofaccounting policies andexplanatory notes.
AS- 1 The requirements for thepresentation of
financialstatements are set out inSchedule VI to theCompanies Act
and theAccounting Standards(collectively referred to asIndian GAAP)
issued by theInstitute of CharteredAccountants of India. Exceptfor
statement of changes inequity, all the otherstatements required by
IFRScomprise a complete set offinancial statements underIndian
GAAP.
2 lAS 1, Presentation ofFinancial StatementsFairpresent
at/on
Fair presentation requiresfaithful representation of theeffects
of the transactions,other events and conditions inaccordance with
thedefinitions of and recognitioncriteria for assets,
liabilities,income and expenses set outin the Framework.
Inextremely rare circumstancesin which managementconcludes that
compliancewith requirements of aStandard or Interpretation isso
misleading, it may departfrom the Standard or theInterpretation.
Reasons fordeparture and why applicationof the Standard or
theInterpretation would havebeen misleading and thefinancial impact
of applyingthe standard is required to bedisclosed.
AS- 1 Fair presentation requirescompliance to the
applicablerequirements of theCompanies Act, applicationof the
qualitativecharacteristics of theAccounting StandardsFramework.
Departures fromAccounting Standards orCompanies Act are
prohibitedunless permitted by otherregulatory framework forexample,
the InsuranceRegulatory and DevelopmentAuthority.
3 lAS 1, Presentation ofFinancial StatementsComparative
Information
Nature and amount of eachitem or class of items aredisclosed. If
it isimpracticable to reclassifythen the reason for
notreclassifying and the nature ofthe adjustment that wouldhave
been made if theamounts had been reclassifiedneeds to be
stated.
No specific requirement. Inpractice, an explanatory noteis
included whencomparatives are disclosedwithout identifying the
natureor amount of the itemsreclassified.
vi
-
No. Topic IFRS
IndianAccountingStandards Indian GAAP
4 lAS 1, Presentation ofFinancial StatementsBalance sheet
An entity is required topresent current and non-current assets,
and current andnon-current liabilities, asseparate classification
on theface of the balance sheetexcept when a presentationbased on
liquidity providesinformation that is morereliable and is more
relevant.Specific line itemrequirements are set out inlAS 1.
The Companies Act or otherrelevant statutes prescribe theform
and content of balancesheet. These statutes specifythe order in
which the itemsare presented and the relateddisclosure. The balance
sheetis neither classified intocurrent and non-current and isnot in
order of liquidity.
5 lAS 1, Presentation ofFinancial StatementsClassification of
financialliabilities under refinancingarrangements
Non-current if the agreementto refinance or reschedulepayments
on a long-termbasis is completed before thebalance sheet date.
There is no guidance underIndian GAAP. Generally, notdisclosed
as payable withintwelve months after thebalance sheet date if
theagreement to refinance orreschedule payments iscompleted after
the balancesheet date and before the dateof issue of
financialstatements.
6 lAS 1, Presentation ofFinancial StatementsClassification of
financialliabilities on breach ofundertaking
Non-current if the lender hasagreed by the balance sheetdate to
provide a period ofgrace of minimum twelvemonths after the balance
sheetwithin which the breach canbe rectified and the lendercannot
demand immediaterepayment.
There is no guidance underIndian GAAP. Generally, notdisclosed
as payable withintwelve months of the balancesheet date if the
lender hasagreed after the balance sheetdate and before
theauthorisation of the financialstatements not to demandimmediate
repayment.
7 lAS 1, Presentation ofFinancial StatementsPresentation of
incomestatement
An analysis of expenses ispresented using aclassification based
on eitherthe nature of expenses or theirfunction whichever
providesinformation that is reliableand more relevant.
Profit or loss attributable tominority interests and
equityholders of the parent aredisclosed on the face of theincome
statement asallocations of profit or lossfor the period,
Schedule VI requires onlypermits an analysis ofexpense by
nature. Profit orloss attributable to minorityinterests is
disclosed asdeduction from the profit orloss for the period as an
itemof income or expense.
8 lAS 1, Presentation ofFinancial StatementsStatement of changes
inequity
A statement of changes inequity is presented showingthe profit
or loss for theperiod, items of income andexpense recognised
directly inequity and the total incomeand expense for the
period.
AS-1 A statement of changes inequity is not required.
vii
-
No. Topic IFRS
IndianAccountingStandards Indian GAAP
The amounts attributable tothe parent and minorityinterest are
shown separately.
9 lAS 1, Presentation ofFinancial StatementsExtraordinary
items
Presentation of any items ofincome or expense asextraordinary is
prohibited.
AS-5 Extraordinary items aredisclosed separately in theprofit
and loss account andare included in determinationof net profit or
loss.
Items of income or expense tobe disclosed as extraordinaryshould
be distinct from theordinary activities and isdetermined by the
nature ofthe event or transaction inrelation to the
businessordinarily carried out by anentity.
10 lAS 1, Presentation ofFinancial
StatementsReclassification
When comparative amountsare reclassified, nature,amount and
reason forreclassification are disclosed.
A statement is made infinancial statements thatcomparative
amounts havebeen reclassified to conformto presentation in the
currentperiod without additionaldisclosures for the nature,amount
and reason fordisclosure.
11 lAS 2, Inventories, Deferredsettlement terms
Difference between thepurchase price of inventoriesfor normal
credit terms andthe amount paid for deferredsettlement terms is
recognisedas interest expense.
AS-2 Inventories purchased ondeferred settlement terms arenot
explicitly dealt with in theaccounting standard oninventories.
The cost of inventoriesgenerally will be the purchaseprice for
deferred credit termsunless the contract statesinterest payable for
deferredterms.
12 lAS 2, Inventories, Netrealisable value
A new assessment of netrealisable value is required tobe made in
each subsequentperiod.
Write-down of inventory isreversed if circumstances
thatpreviously caused inventoriesto be written down below costno
longer exist or when thereis clear evidence of anincrease in the
net realisablevalue because of changeseconomic circumstances.
AS-2 It is unclear whether reversalof a write-down of
inventoryis permitted if circumstancesthat previously
causedinventories to be writtendown below cost no longerexist or
when there is clearevidence of an increase in thenet realisable
value becauseof changes economiccircumstances.
13 lAS 3, Cash FlowStatementBank overdrafts
Included if they form anintegral part of an entityscash
management. Usually,these bank balances oftenfluctuate from being
positiveto overdrawn.
AS-3 Bank overdrafts areconsidered to be
financingactivities.
viii
-
No. Topic IFRS
IndianAccountingStandards Indian GAAP
14 lAS 3, Cash FlowStatementCash flows fromextraordinary
items
As presentation of items asextraordinary are notpermitted in
accordance withlAS 1, cash flow statementdoes not reflect any items
ofcash flow as extraordinary.
AS-3 Cash flows from itemsdisclosed as extraordinary
areclassified as arising fromoperating, investing orfinancing
activities andseparately disclosed.
15 lAS 3, Cash FlowStatementInterest anddividend
Maybe classified asoperating, investing orfinancing activities
in amanner consistent fromperiod to period.
AS-3 Interest and dividendsreceived are required to beclassified
as investingactivities. Interest anddividends paid are required
tobe classified as financingactivities.
16 lAS 8, Accounting Policies,Changes in AccountingEstimates and
ErrorsChanges in accountingpolicies
Retrospective application ofchanges in accountingpolicies is
done by adjustingthe opening balance of theaffected component of
equityfor the earliest prior periodpresented and the
othercomparative amounts for eachperiod presented as if the
newaccounting policy was alwaysapplied. If retrospectiveapplication
is impracticablefor a particular prior period,or for period before
thosepresented, the circumstancesthat led to the existence ofthat
condition and adescription of how and fromwhen the change
inaccounting policy has beenapplied needs to be stated.
AS-5 Changes in accountingpolicies are not
appliedretrospectively. Thecumulative impact arisingfrom such
change is made inthe financial statements in theperiod of change.
If theimpact of the change is notascertainable, this should
bedisclosed.
17 lAS 8, Accounting Policies,Changes in AccountingEstimates and
ErrorsChanges in accountingestimates
Applied prospectively byincluding in the profit andloss account
in the period ofchange and if it affects futureperiods, in the
profit and lossaccount of those periods.
AS-5 Similar to IFRS
18 lAS 8, Accounting Policies,Changes in AccountingEstimates and
ErrorsErrors
Material prior year errors arecorrected retrospectively
byrestating the comparativeamounts for prior periodspresented in
which the erroroccurred or if the erroroccurred before the
earliestperiod presented, by restatingthe opening balances
ofassets, liabilities, and equityfor the earliest
periodpresented.
AS-5 Material prior year errors areincluded in determination
ofprofit or loss in the period inwhich the error is discoveredand
presented in the profitand loss.
19 lAS 8, Accounting Policies,Changes in AccountingEstimates and
ErrorsNewaccounting pronouncements
New accountingpronouncements that havebeen issued but not
effectiveon the balance sheet date are
Not required.
ix
-
No. Topic IFRS
IndianAccountingStandards Indian GAAP
disclosed. Known orreasonably estimableinformation relevant
toassessing the possible impactof the new accountingpronouncements
on initialapplication on the financialstatements is disclosed.
20 lAS 10, Events after balancesheet dateDividends
Liability for dividendsdeclared to holders of equityinstruments
are recognised inthe period when declared.
AS-4 Dividends are recognised asan appropriation from profitsand
recorded as liability at thebalance sheet date, ifproposed or
declaredsubsequent to the reportingperiod but before approval ofthe
financial statements.
21 lAS 12, Income TaxesRecognition of deferredliabilities
Deferred income taxes arerecognised for all taxabletemporary
differencesbetween accounting and taxbase of assets and
liabilitiesexcept to the extent whicharise from (a)
initialrecognition of goodwill or (b)of asset or liability in
atransaction which (i) is not abusiness combination; and (ii)at the
time of the transaction,affects neither the accountingor the tax
profit.
AS-22 Deferred tax liabilities arerecognised for all
timingdifferences.
22 lAS 12, Income TaxesRecognition of deferred taxassets
Deferred tax asset isrecognised for carry forwardof unused tax
losses andunused tax credits to theextent that it is probable
thatfuture taxable profit will beavailable against which theunused
tax losses and taxcredits can be utilised.
AS-22 Deferred tax asset for unusedtax losses and
unuseddepreciation is recognised onlyto the extent that there is
virtualcertainty supported by evidencethat sufficient future
taxableincome will be available againstwhich such deferred tax
assetscan be realised.
Deferred tax asset for all otherunused credits is recognisedonly
to the extent that there is areasonable certainty thatsufficient
future taxable incomewill be available against whichsuch deferred
tax assets can berealised.
23 lAS 12, Income TaxesInvestments in subsidiaries,branches and
associates, andinterests in joint ventures
Deferred tax liability for alltaxable temporary differencesare
recognised except to theextent that: (a) the parent,investor or the
venturer isable to control timing of thereversal of the
temporarydifference, and (b) it isprobable that the
temporarydifference will not reverse inthe foreseeable future.
Not required.
x
-
No. Topic IFRS
IndianAccountingStandards Indian GAAP
24 lAS 12, Income TaxesMeasurement
Current tax liabilities anddeferred tax assets andliabilities
are measured at taxrates that are expected to applywhen the
liabilities areexpected to be paid / settledand assets realised
based on taxrates that have been enacted orsubstantively enacted by
thebalance sheet date.
AS-22 Similar to IFRS.
25 lAS 12, Income TaxesDeferred tax on businesscombinations
If the potential benefit of theacquirees income tax loss,carry
forward or otherdeferred tax assets did notsatisfy the criteria in
IFRS 3for separate recognition whenthe business combination
isinitially accounted for issubsequently realised, theacquirer
recognises theresulting deferred tax incomein the profit and loss
account.The carrying amount ofgoodwill is reduced byrecognising an
expense.
AS-22 Unrecognised tax assets ofthe acquirer which satisfy
therecognition criteria by thefirst annual balance sheet
datesubsequent to anamalgamation (merger) in thenature of purchase
arerecognised as an asset with acorresponding effect togoodwill. If
the recognitioncriteria are not satisfied by thefirst annual
balance sheetdate, any subsequentrecognition of deferred taxassets
are credited to theprofit and loss account.
26 lAS 14, Segment Reportingcombining business orgeographical
segments
Two or more internallyreported segments maybecombined as one
business orgeographic segment if theyexhibit similar
long-termcriteria and are similar in allthe factors set out in lAS
14,which are considered todetermine business orgeographical
segment.
AS-17 Two or more internallygenerated segments arecombined as
one business orgeographic segment if theyare similar in a majority
ofthe factors set out in theIndian accounting standard(AS 17),
which areconsidered to determinebusiness or
geographicalsegment.
27 lAS 14, Segment Reportingdiscontinued operations
Segment results fromcontinuing operations arepresented
separately from theresults of discontinuedoperations.
AS-17 No specific requirement.
28 lAS 14, Segment Reportingchanges in segmentidentification
If identification of segmentschanges and it isimpracticable to
restate priorperiod segment informationon the new basis, then in
theyear of change segment datais reported for both old andnew bases
of segmentation.
AS-17 No specific requirement.
29 lAS 16, Property, Plant andEquipmentreplacementcosts
Replacement cost of an itemof property, plant andequipment is
capitalised ifreplacement meets therecognition criteria.
Carryingamount of items replaced isderecognised.
Replacement cost of an itemof property, plant andequipment are
generally areexpensed when incurred.
xi
-
No. Topic IFRS
IndianAccountingStandards Indian GAAP
30 lAS 16, Property, Plant andEquipmentcost of
majorinspection
Costs of major inspectionsand overhauls are recognisedin the
carrying amount ofproperty, plant andequipment.
AS-10 Costs of major inspections areexpensed when incurred.
31 lAS 16, Property, Plant andEquipmentrevaluation
Revaluations are required tobe made with sufficientregularity to
ensure that thecarrying amount does notdiffer materially from
thatwhich would be determinedusing fair value at the balancesheet
date.
AS-10 No specific requirement.
32 lAS 16, Property, Plant andEquipmentdepreciation
Property, plant and equipmentare componentised and
aredepreciated separately.
AS-6 Property, plant and equipmentare not componentised
anddepreciated.
33 lAS 16, Property, Plant andcompensation for impairment
Compensation from thirdparties for impairment or lossof items of
property, plantand equipment are included inthe profit and loss
accountwhen the compensationbecomes receivable.
AS-28 No specific requirement. Inpractice compensation isoffset
against replaced itemsof property, plant andequipment.
34 lAS 17, Leasesleaseholdinterest in land
Recognised as operating lease(i.e. prepayment) unless
theleasehold interest isaccounted for as investmentproperty in
accordance withlAS 40 and the fair valuemodel is adopted.
AS-19 Recognised as property, plantand equipment regardless
ofwhether title is expected topass to the lessee by the endof the
lease term.
35 lAS 17, Leasesinitial directcosts of lessors
For finance leases other thanthose involving manufactureror
dealer lessors, initial directcosts are included in themeasurement
of the financelease receivable and reducethe amount of
incomerecognised over the leaseterm.
Initial lease costs incurred bymanufacturer or dealer lessorsare
recognised as expensewhen selling profit isrecognised.
AS-19 Initial direct costs are eitherrecognised immediately in
thestatement of profit and loss orallocated against the
financeincome over the lease term.
Initial lease costs incurred bymanufacturer or dealer lessorsare
recognised as expensewhen selling profit isrecognised.
36 lAS 17, Leasesinitial directcosts of lessors for assetsunder
operating leases
Initial direct costs incurred bylessors are added to thecarrying
amount of the leasedasset and recognised asexpense over the lease
termon the same basis as leaseincome.
AS-19 Initial direct costs incurred bylessors are either
deferred andallocated to income over thelease term in proportion to
therecognition of rent income, orare recognised as an expensein the
statement of profit andloss in the period in whichthey are
incurred.
37 IFRIC 4Determiningwhether an arrangementcontains a lease
Arrangements that do not takethe legal form of a lease
butfulfilment of which is
AS-19 There is no such requirement.
xii
-
No. Topic IFRS
IndianAccountingStandards Indian GAAP
dependent on the use ofspecific assets and it conveysthe right
to use the assets isaccounted for as lease inaccordance with lAS
17.
38 SIC 15Lease incentives The lessor and lesseerecognises lease
incentives asan increase or reduction ofrental expense over the
leaseterm, on a straight-line basisunless another systematicbasis
is representative of thetime pattern of the lesseesbenefit from use
of the leasedasset.
AS-19 Lease incentives arerecognised by the lessor andthe lessee
in the period whensuch incentives are given orreceived.
39 lAS 18, Revenuesdefinition Revenue is the gross inflowof
economic benefits arisingin the course of the ordinaryactivities of
an entity whenthose inflows result inincreases in equity, other
thanincreases relating tocontributions from equityparticipants.
Amountscollected on behalf of thirdparties such as sales andservice
taxes and value addedtaxes are excluded fromrevenues.
AS-9 Revenue is the gross inflowof cash, receivables or
otherconsideration arising in thecourse of the ordinaryactivities.
Revenue ismeasured by the chargesmade to customers for
goodssupplied and servicesrendered to them and by thecharges and
rewards arisingfrom the use of resources bythem.
Value added taxes and exciseduties are included asrevenues.
40 lAS 18, Revenues,measurement
Fair value of revenue fromsale of goods and serviceswhen the
inflow of cash andcash equivalents is deferred isdetermined by
discounting allfuture receipts using animputed rate of interest.
Thedifference between the fairvalue and the nominal amountof
consideration is recognisedas interest revenue using theeffective
interest method.
AS-9 Revenue is recognised at thenominal amount ofconsideration
receivable.
41 lAS 18, Revenuesexchangetransactions
When goods or services areexchanged or swapped forgoods or
services which areof a similar nature and value,revenue is not
recognised.When goods are sold orservices are rendered inexchange
for dissimilar goodsor services, the exchange isregarded as a
revenuegenerating transaction.
AS-9 Exchange transactions are notdealt with in the
IndianAccounting Standard (AS9).
xiii
-
No. Topic IFRS
IndianAccountingStandards Indian GAAP
The revenue is measured atthe fair value of the goods orservices
received, adjusted bythe amount of any cash orcash equivalents
transferred.When the fair value of thegoods or services
receivedcannot be measured reliably,the revenue is measured at
thefair value of the goods orservices given up, adjusted bythe
amount of any cash orcash equivalents transferred.
42 lAS 18, Revenuesinterest Interest income is recognisedusing
the effective interestmethod.
AS-9 Interest is recognised on atime proportion basis takinginto
account the amountoutstanding and the rateapplicable.
43 lAS 19, Employee benefitsqualifying insurance policy
A policy is a qualifyinginsurance policy if (a) theproceeds can
be utilised topay or fund employeebenefits under a definedbenefit
plan; and (b) cannotbe paid to the reporting entityand is not
available to itscreditors unless the proceedsrepresent surplus
assets thatare not needed to all relatedemployee obligations or
theproceeds are returned toreimburse employee benefitsalready
paid.
AS-15 Similar as IFRS except thatproceeds can be paid to
thereporting entity only toreimburse employee benefitsalready
paid.
44 lAS 19, Employee benefitsactuarial valuation
Detailed actuarial valuation todetermine the present value
ofdefined benefit obligation andthe fair value of plan assetsare
performed with sufficientregularity so that the amountsrecognised
in the financialstatements do not differmaterially from the
amountsthat would have beendetermined at the balancesheet date. lAS
19 does notspecify sufficient regularity.
AS-15 Similar to IFRS, except thatdetailed actuarial valuation
todetermine present value of thebenefit obligation is carriedout at
least once every threeyears and fair value of planassets are
determined at eachbalance sheet date.
45 lAS 19, Employee benefitsactuarial gains and losses
Actuarial gains and losses areamortised and recognised inthe
profit and loss account ifat the end of the previousreporting
period theunrecognised actuarial gainand losses exceed 10% of
thedefined benefit obligation and
AS-15 Actuarial gains and lossesshould be recognisedimmediately
in the statementof profit and loss as incomeor expense.
xiv
-
No. Topic IFRS
IndianAccountingStandards Indian GAAP
10% of the fair value of theplan assets. Other systematicbasis
of recognition ofactuarial gains and losses ispermitted which
results infaster recognition. Actuarialgains and losses can
berecognised immediately in thestatement of changes inequity.
46 lAS 19, Employee benefitsdiscount rate
Market yields at the balancesheet on high qualitycorporate bonds
are used asdiscount rates. In countrieswhere there are no
deepmarkets for such bonds,market yields on governmentbonds are
used.
AS-15 Market yields at the balancesheet date on governmentbonds
are used as discountrates.
47 lAS 20, GovernmentGrantsrecognition
Government grants arerecognised as income tomatch them with
related costswhich they are intended tocompensate on a
systematicbasis. Government grants arenot directly credited
toshareholders interests.
AS-12 Government grants towardstotal capital investmentswhere no
repayment isordinarily expected is crediteddirectly to
shareholdersinterest.
48 lAS 20, GovernmentGrantsnon-monetary assets
The asset and the grant maybe accounted at fair
value.Alternatively, these can beaccounted at nominal value.
AS-12 If the asset is given by theGovernment at a
discountedprice, the asset and the grantis accounted at the
discountedpurchase price. All other non-monetary grants
areaccounted at nominal values.
Grants relating to non-depreciable assets are creditedto
shareholders interest.
49 lAS 20 Government Grantsrepayment
If repayment of governmentgrant relating to an asset isrecorded
by increasing thecarrying amount of the asset,the cumulative
additionaldepreciation that would havebeen recognised in absence
ofthe grant is immediatelyrecognised as an expense.Prohibited to be
disclosed asextraordinary item.
AS-12 If repayment of governmentgrant relating to an asset
isrecorded by increasing thecarrying amount of the asset,the
cumulative additionaldepreciation that would havebeen recognised in
absence ofthe grant is recognised overthe remaining useful life
ofthe asset.
Disclosed as extraordinaryitem.
50 lAS 21, Effects of Changes inForeign Exchange Ratesfunctional
and presentationcurrency
Functional currency is thecurrency of primary
economicenvironment in which theentity operates. Presentation
AS-11 Foreign currency is acurrency other than thereporting
currency which isthe currency in which
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currency is the currency inwhich the financial statementsare
presented.
financial statements arepresented. There is nodistinction
between functionaland presentation currency.The reporting currency
isconsidered as the functionalcurrency.
51 lAS 21, Effects of Changes inForeign Exchange Ratesexchange
differences
Exchange differences arisingon translation or settlement
offoreign currency monetaryitems are recognised in profitor loss in
the period in whichthey arise.
AS-11 Similar to IFRS.
52 lAS 21, Effects of Changes inForeign Exchange Rateschange in
functional currency
Change in functional currencyis applied prospectively.
AS-11 Change in reporting currencyis not dealt with in the
IndianAccounting Standard(AS 11).
53 lAS 21, Effects of Changes inForeign Exchange
Ratespresentation currency
Assets and liabilities fromfunctional to presentationcurrency
are translated at theclosing rate at the date of thebalance sheet;
income andexpenses at average rate forthe period;
exchangedifferences are recognised asa separate component
ofequity.
AS-11 Not applicable as there is nodistinction between
functionaland presentation currency.
54 lAS 21, Effects of Changes inForeign Exchange Ratesexchange
differences
Exchange differences arisingon translation of foreigncurrency
monetary assets andliabilities are included indetermination of
profit or lossfor the period.
AS-11 Exchange differences arisingon translation of
foreigncurrency monetary assets andliabilities are included
indetermination of profit or lossfor the period.
55 lAS 23, Borrowing costrecognition
Borrowing costs arerecognised as incurred and asan allowed
alternative may becapitalised if these costs areattributable to the
acquisition,construction or production ofa qualifying asset.
AS-16 Borrowing costs are requiredto be capitalised if these
costsare attributable to theacquisition, construction orproduction
of a qualifyingasset.
Expense as incurred is notpermitted.
56 lAS 24, Related PartyDisclosures, identification
Related party includes postemployment benefit plans forthe
benefit of employees ofthe reporting entity or anyentity that is a
related party ofthe reporting entity.
AS-18 Post employment benefitplans are not included asrelated
parties.
57 lAS 24, Related PartyDisclosureskeymanagement personnel
Compensation of keymanagement personnel isdisclosed in total
separatelyfor (a) short-term employeebenefits; (b)
post-employmentbenefits; (c) other long-term
AS-18 Compensation of keymanagement personnel aredisclosed in
total as aggregateof all items of compensationexcept when a
separatedisclosure is necessary for the
xvi
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IndianAccountingStandards Indian GAAP
benefits; (d) terminationbenefits; and (e)
share-basedpayment.
understanding of the effectsof related party transactionson the
financial statements.For example. share-basedpayments are
disclosedseparately.
58 lAS 24, Related PartyDisclosuresdisclosure ofrelated party
names
Related party disclosuresmade separately for eachcategory of
related party.Names of transacting parties,other than parent, are
notrequired to be disclosed.
AS-18 Disclosure is similar to IFRSexcept that names
oftransacting parties aredisclosed.
59 lAS 27 Consolidated andSeparate FinancialStatementsScope
Required for all entitiesunless specific exemptions inlAS 27
apply.
AS-21 Indian GAAP does notspecify entities that arerequired to
presentconsolidated financialstatements. The accountingstandard is
required to befollowed if consolidatedfinancial statements
arepresented.
SEBI requires entities listedand to be listed to
presentconsolidated financialstatements.
60 lAS 27 Consolidated andSeparate
FinancialStatementscontrol
The existence and effect ofpotential voting rights that
arecurrently exercisable orconvertible, includingpotential voting
rights held byanother entity, are consideredwhen assessing
control.
AS-21 Potential voting rights are notconsidered in
assessingcontrol.
61 lAS 27 Consolidated andSeparate FinancialStatementsexclusion
ofsubsidiaries, associates andjoint ventures
Excluded from consolidation,equity accounting orproportionate
consolidation ifon acquisition it meets thecriteria to be
classified as heldfor sale in accordance withIFRSs.
AS-21 Excluded from consolidation,equity accounting
andproportionate consolidation ifthe subsidiary was acquiredwith an
intent to dispose ofwithin twelve months and if itoperates under
severe long-term restrictions whichsignificantly impair its
abilityto transfer funds to the parent.
62 lAS 27 Consolidated andSeparate FinancialStatementsreporting
dates
The difference between thereporting date of thesubsidiary and
that of theparent shall be no more thanthree months.
AS-21 The difference between thereporting date of thesubsidiary
and that of theparent shall be no more thansix months.
63 lAS 27 Consolidated andSeparate
FinancialStatementsaccountingpolicies
Consolidated financialstatements are prepared usinguniform
accounting policiesfor like transactions and other
AS-21 Similar to IFRS except if isimpracticable to use
uniformaccounting policies, this factand the line items and
amount
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events in similarcircumstances.
to which different policieshave been applied aredisclosed.
64 lAS 27 Consolidated andSeparate FinancialStatementsaccounting
forinvestments in subsidiaries inseparate financial statements
Accounted either at cost lessimpairment loss or asavailable for
sale inaccordance with lAS 39.
AS-21 Accounted at cost lessimpairment loss.
65 lAS 28, Investments inAssociates, significantinfluence
The existence and effect ofpotential voting rights that
arecurrently exercisable orconvertible, includingpotential voting
rights held byanother entity, are consideredwhen assessing
significantinfluence.
AS-23 Potential voting rights are notconsidered in
assessingsignificant influence.
66 lAS 28, Investments inAssociatesgoodwill
Negative goodwill isexcluded from the carryingamount of
investment and isincluded as income indetermination of theinvestors
share of associatesprofit or loss.
AS-23 Negative goodwill (CapitalReserve) is excluded from
thecarrying amount ofinvestment and is credited toshareholders
interest.
67 Investments in Associatesreporting date
The difference between thereporting date of the associateand
that of the parent shall beno more than three months.
AS-23 The maximum differencebetween the reporting date ofthe
associate and that of theparent is not specified.
68 Investments in Associatesaccounting policies
Associates accountingpolicies should be uniformwith the
investors for thepurposes of equityaccounting.
AS-23 Similar to IFRS, except if it isimpracticable, the fact
and abrief description of thedifferences should bedisclosed.
69 Investments in Associatesshare of losses
Losses recognised under theequity method in excess ofthe
investors investment inordinary shares are applied toother
components of theinvestors interest.
AS-23 No specific requirement.
70 lAS 31, Interests in JointVenturesalternativeaccounting
methods
Investments in jointlycontrolled entities can beproportionately
consolidatedor equity accounted by theventurer.
AS-27 Equity method accounting isnot permitted.
71 lAS 32, FinancialInstruments: Disclosure andPresentation,
classification ofconvertible debts
Split the instrument inliability and equitycomponent at
issuance.
Classified as debt. There is noapplicable equivalent
IndianAccounting Standard.
An exposure draft onFinancial InstrumentsPresentation has been
issued.The exposure draft is similarto lAS 32 except that it
doesnot deal with derivative basedon an entitys own equity
xviii
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instrument and buy-back ofshares for issuance toemployees under
anEmployee Share Option Plan.
72 lAS 36, Impairment ofAssetsgoodwill
Impairment loss recognisedfor goodwill is prohibitedfrom
reversal in a subsequentperiod.
AS-28 Impairment loss for goodwillis reversed if the
impairmentloss was caused by a specificexternal event of
anexceptional nature that is notexpected to recur andsubsequent
external eventshave occurred that reverse theeffect of that
event.
73 lAS 37, Provisions,Contingent Liabilities andContingent
Assetsdiscounting
Where the effect of timevalue of money is material,the amount of
provision is thepresent value of theexpenditure expected to
berequired to settle theobligation. The discount rateis a pre-tax
rate that reflectsthe current market assessmentof the time value of
moneyand risks specific to theliability. The discount ratedoes not
reflect risk for whichfuture cash flow estimateshave been
adjusted.
AS-29 Discounting of liabilities isnot permitted and
provisionsare carried at their full values.
74 lAS 37, Provisions,Contingent Liabilities andContingent
Assets onerouscontracts
An onerous contract is acontract in which theunavoidable costs
of meetingthe obligations exceed theeconomic benefits expected tobe
received under it.
Present obligation under anonerous contract should berecognised
and measured as aprovision.
AS-29 No specific requirement.
75 lAS 37, Provisions,Contingent Liabilities andContingent
Assets contingentassets
Contingent assets aredisclosed in the financialstatements where
an inflow ofeconomic benefits isprobable.
AS-29 Contingent assets are notdisclosed in the
financialstatements.
76 IFR.IC 3, Emission Rights Allowances issued by thegovernment
or purchased arerecognised as intangibleassets and are
initiallymeasured at fair value. Whenallowances are issued for
lessthan fair value, the differencebetween the fair value and
theamount paid is recognised asgovernment grant and is
There is no guidance onaccounting for emissionrights.
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No. Topic IFRS
IndianAccountingStandards Indian GAAP
credited as income on asystematic basis over thecompliance
period over whichthe allowances are issued,regardless of
whetherallowances are held or sold.
Emission liability isrecognised for the obligationrequired to
deliver allowancesequal to emissions that havebeen made and is
measured atthe market price of thenumber of allowancesrequired to
cover emissionsmade up to the balance sheetdate.
77 lAS 38, Intangible assetsmeasurement
Intangible assets can bemeasured at either cost orrevalued
amount.
AS-26 Measured only at cost.
78 lAS 38, Intangible assetsuseful life
Useful life may be finite orindefinite.
AS-26 There is a rebuttablepresumption that the usefullife of an
intangible asset willnot exceed ten years from thedate when the
asset isavailable for use.
79 lAS 39, FinancialInstruments: Recognition
andMeasurementinvestments,and loans and receivables
Investments are classified astrading, held-to-maturity,
oravailable-for-sale.Investments acquiredprincipally for the
purpose ofselling, is a part of a portfoliothat are managed
together andfor which there is evidence ofrecent actual pattern of
short-term profit taking.
Held-to-maturity investmentsare investments with fixed
ordeterminable payments andfixed maturity that an entityhas
positive intent and abilityto hold to maturity.
Loans and receivables havefixed or determinablepayments that are
not quotedin active market. Loans andreceivables are measured
atamortised cost using theeffective interest method.
Available-for-saleinvestments are those that donot qualify as
either trading,held-to-maturity investmentsor loans and
receivables.
Changes in fair value of
AS-13 Investments are classified aslong-term or current.
Long-term investments are carriedat cost less provision
fordiminution in value, which isother than temporary.
Current investments carried atlower of cost and fair value.
Loans and receivables aremeasured at cost lessvaluation
allowance.
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trading investments arerecognised through the profitand loss
account.
Held-to-maturity investmentsare measured at amortisedcost using
the effectiveinterest method.
Changes in fair value ofavailable-for-sale investmentsare
recognised directly in thestatement of changes inequity.
Unquoted investments whosefair values cannot be reliablymeasured
are measured atcost.
80 lAS 39, FinancialInstruments: Recognition
andMeasurementimpairment
Impairment losses recognisedin profit or loss for
equityinvestment cannot be reversedthrough profit or loss.
Impairment losses recognisedin profit or loss for
equityinvestments are reversedthrough profit or loss.
81 lAS 39, FinancialInstruments: Recognition
andMeasurementforeigncurrency contracts
Forward exchange contract ismeasured at fair value at thebalance
sheet date. If theforward exchange contractmeets the criteria of
aneffective hedge in accordancewith lAS 39 (Revised)Financial
Instruments:Recognition andMeasurement, the gain or lossarising on
fair valuation isrecognised in the statement ofchanges in equity.
If thehedge is ineffective, the gainor loss is recognised
indetermination of net income.
AS-11 Premium or discount onforward exchange contracts
isamortised and recognised inthe profit and loss accountover the
period of suchcontracts, There is noequivalent standard on
hedgeaccounting.
82 lAS 39, FinancialInstruments: Recognition
andMeasurementderivativesand embedded derivatives
Measured at fair values. There is no equivalentstandard on
derivatives.
83 lAS 40, InvestmentPropertymeasurement
Investment properties can bemeasured using the cost or thefair
value model, withchanges in fair valuerecognised in the profit
andloss account.
There is no specific standarddealing with investmentproperties.
All properties aremeasured using the costmodel or revaluation
model.
84 lAS 41, Agriculture Accounting for agriculturalactivities is
set out in thisstandard.
There is no equivalentstandard.
85 IFRS 2, Share basedpaymentsrecognition
Goods and services in a sharebased transaction arerecognised
when goods arereceived or as services arerendered. A
corresponding
There is no equivalentstandard.
The Securities and ExchangeBoard of India required
listedcompanies to recognise anexpense for
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No. Topic IFRS
IndianAccountingStandards Indian GAAP
increase in equity isrecognised if goods andservices were
received in anequity settled share basedpayment transaction, or
aliability if these wereacquired in a cash settledshare
transaction.
equity instruments granted toemployees.
86 IFRS 2, Share basedpaymentsmeasurement
For equity settled share basedtransactions, goods andservices
received and thecorresponding increase inequity is measured at the
fairvalue of the goods andservices received. If the fairvalue of
the goods andservices cannot be estimatedreliably, then the value
ismeasured with reference tothe fair value of the equityinstruments
granted.
Equity instruments granted toemployees are recognised atthe fair
value of theinstruments granted.
87 IFRS 3, BusinessCombinationscostallocations
All business combinations,other than those betweenentities under
commoncontrol, are accounted for byapplying purchase method.An
acquirer is identified forall business combinations,which is the
entity thatobtains control of the othercombining entity.
As at the effective date of thebusiness combination, thecost of
acquisition is allocatedto the identifiable assets,liabilities and
contingentliabilities of the acquiredentity at their fair
values.
AS-14 Amalgamations in the natureof purchase
(businesscombinations pursuant to theCompanies Act or otherrelevant
statute and areapproved by a Court of law)are accounted for
byrecording the identifiableassets and liabilities of theacquiree
at their fair values.Amalgamations in the natureof merger (90%
shareholderof the transferor becomeshareholders in the
transfereecompany pursuant to theCompanies Act or otherrelevant
statute and areapproved by a Court of law)are accounted for in a
mannerconsistent with pooling ofinterest method.
Identifiable assets andliabilities of subsidiariesacquired by
purchase ofshares which are notamalgamations are recordedat the
carrying amounts statedin the acquired subsidiarysfinancial
statements on thedate of acquisition.
Property, plant and equipmentand investments obtained on
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IndianAccountingStandards Indian GAAP
purchase of assets andliabilities of a business arerecorded at
fair values.
88 IFRS 3, BusinessCombinationsgoodwill
Goodwill is not amortised buttested for impairment on anannual
basis or morefrequently if events orchanges in
circumstancesindicate impairment. If theacquirers interest in the
netfair value of the identifiableassets, liabilities andcontingent
liabilities exceedsthe cost of businesscombination, the fair of
netassets acquired and the cost isreassessed and any
excessremaining is recognisedimmediately in the profit andloss
account.
AS-14 Goodwill arising onamalgamations in the natureof purchase
is amortised overa period not exceeding fiveyears.
There is no specific guidanceon goodwill arising onacquisition
of subsidiary. Inpractice such goodwill is notamortised but tested
forimpairment on an annualbasis or more frequently ifevents or
changes incircumstances indicateimpairment. If the
acquirersinterest in the net fair value ofthe identifiable assets
andliabilities the cost of businesscombination, the excess
isrecognised as capital reserve,a component of
shareholdersinterest.
89 IFRS 4, Insurance contracts Applicable to insurance
andreinsurance contracts and todiscretionary participationfeatures
in insurancecontracts.
The insurer at each balancesheet date is required to take
aliability adequacy test toassess whether its recognisedinsurance
liabilities areadequate. If test showscarrying amount of
itsliabilities are inadequate, thedeficiency is recognised inthe
profit and loss account.
Guarantees in the nature ofinsurance contracts aremeasured at
fair value.
No equivalent standard.Guarantees are disclosed ascontingent
liability.
90 IFRS 5, Non-current assetsheld for salerecognitionand
measurement
Non-current assets to bedisposed of are classified asheld for
sale when the asset isavailable for immediate saleand the sale is
highlyprobable.
Depreciation ceases on thedate when the assets areclassified as
held for sale.
There is no standard dealingwith non-current assets heldfor
sale. Non-current assetsare all stated at cost orrevalued amount
lessaccumulated depreciation andimpairment loss.
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. . Non-current assets classifiedas held for sale are measuredat
the lower of its carryingvalue and fair value less coststo
sell.
91 IFRS 5, Non-current assetsheld for
salediscontinuedoperations
An operation is classified asdiscontinued when it haseither been
disposed of or isclassified as held for sale.
AS-24 An operation is classified asdiscontinuing at the earlier
of(a) binding sale agreement forsale of the operation and (b)on
approval by the board ofdirectors of a detailed formalplan and
announcement of theplan.
92 IFRS 6, Exploration for andevaluation of mineralresources
Exploration and evaluationassets are measured at cost
orrevaluation less accumulatedamortisation and impairmentloss. An
entity determines thepolicy specifying whichexpenditures are
recognisedas exploration and evaluationassets.
There is no equivalentstandard.
93 IFRS 7, FinancialInstruments: Disclosures
This standard replaces IAS 30and IAS 32 and is applicablefor
accounting periodscommencing on or after 1stJanuary 2007. It
requiresdisclosure of informationabout the significance offinancial
instruments for anentitys financial position andperformance, the
nature andextent of their risks and howthe entity manages those
risks.
There is no equivalentstandard.
xxiv
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FORWARD LOOKING STATEMENTS
The Company has included statements in this Draft Letter of
Offer which contain words or phrases such aswill, aim, is likely to
result, believe, expect, will continue, anticipate, estimate,
intend,plan, contemplate, seek to, future, objective, goal,
project, should, will pursue and similarexpressions or variations
of such expressions, that are forward looking statements.
All forward looking statements are subject to risks,
uncertainties and assumptions about the Company that couldcause
actual results to differ materially from those contemplated by the
relevant forward-looking statement.Important factors that could
cause actual results to differ materially from the Companys
expectations include butare not limited to:
General economic and business conditions in the markets in which
the Company operates and in thelocal, regional and national
economies;
Increasing competition in or other factors affecting the
industry segments in which the Companyoperates;
Changes in laws and regulations relating to the industries in
which the Company operates;
The Companys ability to meet its capital expenditure
requirements and/or increase in capitalexpenditure;
Fluctuations in operating costs and impact on the financial
results;
The Companys ability to attract and retain qualified
personnel;
Changes in technology in future;
Changes in political and social conditions in India or in other
countries in which the Company hasoperations, the monetary policies
of India or of such other countries, inflation, deflation,
unanticipatedturbulence in interest rates, equity prices or other
rates or prices;
The performance of the financial markets in India and other
countries where the Company hasoperations as well as performance of
financial markets globally; and
Any adverse outcome in legal proceedings in which the Company is
involved.
For a further discussion of factors that could cause the
Companys actual results to differ, please refer to thesections
titled Risk Factors, Business and Managements Discussion and
Analysis of Financial Conditionand Results of Operations of this
Draft Letter of Offer. By their nature, certain market risk
disclosures are onlyestimates and could be materially different
from what actually occurs in the future. As a result, actual
futuregains or losses could materially differ from those that have
been estimated. Neither the Company nor the LeadManagers nor any of
their respective affiliates or advisors have any obligation to
update or otherwise revise anystatements reflecting circumstances
arising after the date hereof or to reflect the occurrence of
underlying events,even if the underlying assumptions do not come to
fruition. In accordance with SEBI / Stock Exchangesrequirements,
the Company and Lead Managers will ensure that investors in India
are informed of materialdevelopments until the time of the grant of
listing and trading permission by the Stock Exchanges.
xxv
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ABBREVIATIONS & TECHNICAL TERMS
In this Draft Letter of Offer, all references to Rupees, Rs. or
INR refer to Indian Rupees, the officialcurrency of India;
references to the singular also refers to the plural and one gender
also refers to any othergender, wherever applicable, and the words
Lakh or Lac mean 100 thousand and the word millionmeans 10 lakh and
the word crore means 10 million or 100 lakhs and the word billion
means 1,000million or 100 crores. Any discrepancies in any table
between the total and the sums of the amounts listed aredue to
rounding off.
DEFINITIONS
Term Description
the Company means Tata Steel Limited, a public limited company
incorporated under theprovisions of the Indian Companies Act, 1882
having its registered office atBombay House, 24 Homi Mody Street,
Fort, Mumbai 400 001, Maharashtra,India. Unless otherwise
specified, where discussed in a pre-Acquisition context,including
with reference to historical consolidated financial
statementspresented herein, these references mean Tata Steel
Limited on a consolidatedbasis. Where discussed in a
post-Acquisition context, these references meanTSL together with
Corus after giving effect to the Acquisition on aconsolidated
basis.
TSL means Tata Steel Limited and its consolidated subsidiaries
and associates, butexcluding Corus.
Tata Steel Limited means Tata Steel Limited on a stand alone
basis, excluding its subsidiaries andassociates.
TISCO means The Tata Iron and Steel Company Limited, name
changed to Tata SteelLimited with effect from August 12, 2005.
COMPANY/ISSUE RELATED TERMS
Term Description
Acquisition means the acquisition of the entire issued share
capital of Corus with effectfrom April 2, 2007.
Articles/Articles ofAssociation
means articles of association of the Company
Auditor means the statutory auditor of TSL: Deloitte Haskins
& Sells
Board / Board of Directors means the Board of Directors of the
Company
Bankers to the Issue means HSBC Limited, Standard Chartered
Bank, Citibank N.A., HDFC BankLimited and ABN AMRO Bank N.V.
Chairman means Mr. Ratan N. Tata, a resident of India
Consolidated Certificate means in case of physical certificates,
the Company would issue one certificatefor the Equity Shares
allotted to one folio
Cumulative CompulsorilyConvertible PreferenceShare(s) or
CCPS
means the cumulative convertible preference shares of the
Company of facevalue Rs. 100 each
Conversion Period the period commencing [] months from the date
of allotment and concluding[] months from the date of allotment
Conversion Price []
Corus means Corus Group Limited a company incorporated under the
laws ofEngland and Wales having its registered office at 30
Milbank, London SW1P4WY, United Kingdom
Corus Group means Corus Group Limited, including its
subsidiaries from time to time
Designated Stock Exchange means the []
Draft Letter of Offer means this Draft Letter of Offer dated
August 21, 2007 filed with SEBI for itscomments
1
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Term Description
Equity Share(s) or Share(s) means the Ordinary Share(s) of the
Company having a face value of Rs. 10unless otherwise specified in
the context thereof
Equity Shareholder means a holder of Equity Shares
Financial Year/Fiscal/FY means any period of twelve months ended
March 31 of that particular year,unless otherwise stated
Issue means the simultaneous but unlinked issue of 121,794,571
Equity Shares at apremium of Rs. 290 per Equity Share aggregating
Rs. 36,538 million to theEquity Shareholders on rights basis in the
ratio of 1 Equity Share for every 5Equity Shares held on the Record
Date i.e. [] and [] CumulativeCompulsorily Convertible Preference
Shares each at a price of Rs. 100 perCumulative Compulsorily
Convertible Preference Share in the ratio of []Cumulative
Compulsorily Convertible Preference Share for every [] equityshares
held on the Record Date []
Issue Closing Date []
Issue Opening Date []
Issue Price Rs. 300 per Equity ShareRs. 100 per CCPS
Investor(s) shall mean the holder(s) of Equity Shares of the
Company on the Record Date,i.e. [] and Renouncees
Lead Managers shall collectively refer to JM Financial
Consultants Private Limited, CitigroupGlobal Markets India Private
Limited and DSP Merrill Lynch Limited andindividually refer to any
of them
Letter of Offer means the letter of offer to be filed with the
Stock Exchanges afterincorporating SEBI comments on this Draft
Letter of Offer
Memorandum/Memorandumof Association
means the memorandum of association of the Company
Promoter means Tata Sons Limited
Record Date []
Registrar to the Issue orRegistrar
means Intime Spectrum Registry Limited
Renouncees shall mean any persons who have acquired Rights
Entitlements from EquityShareholders
Rights Entitlement means the number of Equity Shares and
Cumulative Compulsorily ConvertiblePreference Shares that a
shareholder is entitled to in proportion to his/hershareholding in
the Company as on the Record Date
SPN Holders means the holders of Secured Premium Notes
Stock Exchange(s) shall refer to the BSE and NSE where the
Equity Shares of the Company arepresently listed
Tata Group means the Tata Group of companies
Conventional/General Terms
Term Description
Act / Companies Act means the Companies Act, 1956 and amendments
thereto
BPO means business process outsourcing
Cenvat means the Central Value Added Tax
CESTAT means the Customs, Excise, Service Tax Appellate
Tribunal
CLRA means the Contract Labour (Regulation and Abolition Act),
1970 andamendments thereto
Competition Act means the Competition Act, 2002 and amendments
thereto
2
-
Term Description
Criminal Procedure Code means the Criminal Procedure Code, 1973
and amendments thereto
Depositories Act means the Depositories Act, 1996 and amendments
thereto
EPS means earnings per share
ESI means employees state insurance
GDR means global depository receipts
IT Act means the Income Tax Act, 1961 and amendments thereto
Indian GAAP means the generally accepted accounting principles
in India
Industrial Policy means the industrial policy and guidelines
issued thereunder by the Ministry ofIndustry, Government of India,
from time to time
IPC means the Indian Penal Code, 1860 and amendments thereto
MCR Rules means the Mineral Concession Rules, 1960 and
amendments thereto
MMDR Act means the Mines and Minerals (Development and
Regulations) Act, 1957 andamendments thereto
Modvat means the Modified Value Added Tax
MVA means million volts per annum
Naked Warrants means a stand-alone warrant
NAV means net asset value
NMP means the National Mineral Policy, 1993 and amendments
thereto
NRE Account means a Non-Resident External Account
NRO Account means a Non-Resident Ordinary Account
PAT means profit after tax
SEBI Act, 1992 means the Securities and Exchange Board of India
Act, 1992 and amendmentsthereto
SEBI DIP Guidelines means the SEBI (Disclosure and Investor
Protection) Guidelines, 2000 issuedby SEBI on January 19, 2000 and
amendments thereto
SIA means the Secretariat of Industrial Assistance
SICA means the Sick Industrial Companies (Special Provisions)
Act, 1985
Securities Act means the United States Securities Act of 1933,
as amended
Takeover Code means the SEBI (Substantial Acquisition Of Shares
and Takeovers)Regulations, 1997 and amendments thereto
UK GAAP means the generally accepted accounting principles in
the United Kingdom
Wealth-Tax Act means the Wealth-tax Act, 1957 and amendments
thereto
Abbreviations
Term Description
AGM means Annual General Meeting
AS means Accounting Standards, as issued by the Institute of
CharteredAccountants of India
Bn means billion
BSE means The Bombay Stock Exchange Limited
CAF means Composite Application Form
CCPS means Cumulative Compulsorily Convertible Preference
Shares
CDSL means Central Depository Services (India) Limited
CSO means Central Statistical Organisation
DP means Depository Participant
DSA means Direct Selling Agents
DSE means Designated Stock Exchange
EGM means Extraordinary General Meeting
3
-
Term Description
FCCB means Foreign Currency Convertible Bonds
FDI means Foreign Direct Investment
FEMA means the Foreign Exchange Management Act, 1999
FERA means the Foreign Exchange Regulation Act, 1973
FI means Financial Institutions
FII(s) means Foreign Institutional Investors registered with
SEBI under applicablelaws
GDP means Gross Domestic Product
GOI means the Government of India
HUF means Hindu Undivided Family
HP means Horsepower
IC means Investment Company
IRR means Internal Rates of Return
ITAT means the Income Tax Appellate Tribunal
LPG means Liquefied Petroleum Gas
KM means Kilometre
KVA means Kilovolt Amperes
KW means Kilowatts
Mn means Million
Mt means Million Tonnes
MoU means Memorandum of Understanding
MTPA means Million tonnes per annum
NCAER means the National Council for Applied Economic
Research
NCD means Non-Convertible Debentures
NR means Non Resident
NRI(s) means Non Resident Indian(s)
NSDL means National Securities Depository Limited
NSE means National Stock Exchange of India Limited
OCB means Overseas Corporate Body
OECD means the Organisation for Economic Co-operation and
Development
OEM means Original Equipment Manufacturer
RBI means the Reserve Bank of India
ROC means Registrar of Companies, State of Maharashtra, located
at Everest House,Marine Lines, Mumbai 400 020
SAARC means the South Asian Association for Regional
Co-operation
SCB means Scheduled Commercial Banks
SCN means Show cause notice
SEBI means Securities and Exchange Board of India
SPN means Secured Premium Notes
STT means Securities Transaction Tax
Tpa means Tonnes per annum
ttpa means Thousand tonnes per annum
UTI m