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Tata Metaliks Ltd.

BSE: 513434 Sector: Metals & Mining
NSE: TATAMETALI ISIN Code: INE056C01010
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P/E 15.36
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Tata Metaliks Ltd. (TATAMETALI) - Director Report

Company director report

To the Members

Your Directors take pleasure in presenting the 5th Integrated Report(prepared as per the framework set forth by the International Integrated ReportingCouncil) and the 32nd Annual Accounts on the business and operations of TataMetaliks Limited ('TML' or 'Company') for the financial year (FY) endedMarch 31 2022.

A. Financial Results

(Rs crore)

Particulars Financial Year 2021-22 Financial Year 2020-21
Revenue from operations 2745.53 1916.66
Total expenditure before finance cost depreciation 2367.50 1527.43
Operating Profit 378.03 389.23
Add: Other Income 16.65 8.12
Profit before finance cost depreciation and taxes 394.68 397.36
Less: Finance costs 24.50 23.60
Profit before depreciation and taxes 370.18 373.76
Less: Depreciation and amortization expenses 61.69 67.13
Profit before exceptional items 308.50 306.63
Exceptional Items 30.83
Profit before tax 339.32 306.63
Less : Tax expenses 101.26 86.00
(A) Profit after tax -from continuing operations 238.06 220.62
(B) Loss after tax - from discontinued operations (0.61) (0.81)
(c) Profit for the Year (A+B) 237.45 219.81
(D) Other comprehensive income net of tax 0.40 (0.30)
(E) Total comprehensive income for the year (C+D) 237.85 219.51
Retained Earnings: Balance brought forward from the previous year 700.01 487.52
Add: profit for the period 237.45 219.81
Add: Other Comprehensive Income recognised (in Retained Earnings) 0.40 (0.30)
Add: Other movements within equity - -
Balance 937.85 707.03
Which the Directors have apportioned as under to:
(i) Dividend on Ordinary Shares 12.63 7.02
(ii) Tax on Dividend - -
Retained Earnings: Balance to be carried forward 925.22 700.01

As the second wave of COVID hit the country fresh lockdowns were declared in severalstates during the first quarter. Restrictions were imposed in various parts of the countryincluding West Bengal where intra-state transportation was affected. Consequently thebusiness got adversely affected in Q1 owing to the restrictions and allied disruptions insupply chain. Profits took a hit during Q3 mainly due to lower production in one of theBlast Furnaces owing to planned shutdown and higher cost of raw materials. Despite thecontinuing volatilities and surge in prices of major raw materials like coal coke andiron ore the Company remained resilient to achieve its highest-ever Turnover andhighest-ever PBT. Highlights of the Company's annual performance are:

• Highest-ever annual Hot Metal and DI Pipe production

• Highest-ever annual Coke Plant production

• Highest-ever annual Power Generation

• Highest-ever annual sales of PI and DI pipe from Kharagpur plant

1. Dividend Distribution Policy

In terms of Regulation 43A of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ('SEBI Listing Regulations')the Board of Directors of the Company (the 'Board') formulated and adopted aDividend Distribution Policy.

The policy is available on our website at

https://www.tatametaliks.com/static-files/pdf/policies/dividend-distribution-policy.pdf

2. Dividend

The Board has recommended highest-ever dividend of Rs 8/- per Equity Share on31577500 Equity Shares of Rs 10/- each for FY 2021-22 (previous year Rs 4 per equityshare on 31577500 Equity Shares of Rs 10/- each). The Board has recommended dividendbased on the parameters laid down in the Dividend Distribution Policy and the dividendwill be paid out of the profits for the financial year.

The dividend on equity shares is subject to the approval of the Members at the ensuingAnnual General Meeting ('AGM') scheduled to be held on Tuesday August 02 2022 and willbe paid on and from Saturday August 06 2022.

The dividend if approved would result in a cash outflow of Rs 25.26 crore. The totaldividend outgo works out to 10.64% (FY 2020-21: 5.75%) of the net profits.

Pursuant to the Finance Act 2020 dividend income is taxable in the hands of theshareholders effective April 1 2020 and the Company is required to deduct tax at sourcefrom dividend paid to the Members at prescribed rates as per the Income Tax Act 1961.

The Register of Members and Transfer Books of the Company will remain closed fromFriday July 22 2022 to Tuesday August 02 2022 (both days inclusive) for the purposeof payment of the dividend for the financial year ended March 31 2022 and the AGM.

3. Transfer to Reserves

The Board has decided to retain the entire amount of profit for FY 2021-22 in thestatement of profit and loss and no amount is proposed to be transferred to the generalreserves.

4. Capex and Liquidity

During the year under review the Company incurred capital expenditure of around Rs 324crore which has been funded through internal accruals. Despite adverse impact of twowaves of COVID and geo-political crisis having far reaching impact on input costs theCompany successfully managed its liquidity situation and end the year with highest evercash surplus of Rs 337 crore along with undrawn lines of both fund-based and non-fundbased limits sanctioned by banks.

5. Management Discussion and Analysis Report

The Management Discussion and Analysis Report in compliance with Regulation 34(2)(e)of SEBI Listing Regulations forms an integral part of this report and is annexed herewithas Annexure A.

B. Integrated Report

In line with the Company's commitment to stakeholders to adopt sustainable businesspractices we transitioned from a compliance-based reporting to the governance-basedreporting by adopting the Integrated Report <IR> framework developed by theInternational Integrated Reporting Council (IIRC) in 2017.

Our 5th IR not only highlights our value creation process woven around oursix business pillars but also provides enhanced disclosures around our business modelmaterial issues and stakeholders Environment Social and Governance (ESG) outcomesresponse to external challenges value creation outcomes and risk management andgovernance aspects.

The enhanced disclosures are in line with our commitment to enhance accountability andpromote a transparent approach to corporate reporting.

C. Operations and Performance

Financial & Operational Performance

The financial year 2021-22 has been a year of twists and turns. The year started withthe deadly second wave of COVID-19 pandemic in India that saw a severe health crisisacross the populace; it also impacted production at several facilities including at ourplant that was partly also due to workforce restrictions imposed by the Govt. However thesituation settled down in Q2 with economic activity picking up & creating an upwardmomentum in the economy. Q4 witnessed a much milder third covid wave hitting the countrybut the economic impact was limited; however the start of the Ukraine-Russia conflict inQ4 triggered a sharp jump in commodity prices which was already on an upward trend. Primehard Coking coal prices reached a record level of USD670/t compared to approx. USD 100/t ayear or so back. This put tremendous pressure on the cost structure of the pig iron and DIpipe makers; however the war in Ukraine also cut off the exports of Pig iron & Steelfrom these two countries which have traditionally been large exporters. This led to asurge in the prices of iron & steel in the global markets and which then startedimpacting the domestic prices as well from MarchRs 22.

Despite the various challenges & price volatility enumerated above the Companyremained resilient and continued to focus on its operational performance. The rising inputcosts coupled with additional royalty on iron-ore for supplies from the captive mines ofTata Steel affected our margins adversely in H2. However increased operationalefficiencies continued focus on improvement initiatives agile procurement strategiesaided by the rise in PI market prices helped in offseting the impact of rising costs tosome extent.

Despite the above the Company's resilience and resource optimization helped it toclock an EBITDA from Operations of Rs 394.68 crore (FY 2020-21: Rs 397.36 crore) andrecord its highest- ever Profit Before Tax (PBT) of Rs 339.32 crore (FY2020-21: Rs 307 crore).

State of Company's affairs

Pig Iron (PI)

During the year under review demand got impacted severely in Q1 due to COVID secondwave as operations in all major Foundry clusters got curtailed and domestic Foundry Grade('FG') PI prices remained volatile in line with related commodities viz. steelscrap sponge iron etc. Demand started recovering from mid-July 21 onwards with averageutilization levels reaching 70-80% at all major foundry clusters. In Q3 demand wasmoderate due to festive season and recovery from second wave of COVID and it ultimatelyshowed signs of recovery in Q4 when utilization levels improved to 80-90% in thefoundries. However the PI prices remained volatile throughout the year and reachedall-time high levels due to unprecedented rise in raw material prices especially cokingcoal and coke.

Ductile Iron Pipe (DIP)

Despite sufficient volume of dispatchable orders and fund clearances from thegovernment DIP industry witnessed muted dispatches in Q1 due to COVID induced lockdowns.With rising demand and buoyant commodity prices DIP prices witnessed a positive movementfrom the beginning of FY 2021-22 and the rising trend continued throughout the year. Inthe second and third quarter of the year industry witnessed moderate increase indispatches. But in Q4 the increase in dispatches was visible with 578 KT in Q4 vs 555 KTin Q3. During FY 2021-22 the Company clocked DIP sales of 237 KT with a market share of12%. The Company's DI pipe business profitability for the year was adversely hit as theCompany continued to support its customers & honour all the old low price contractsdespite the significant increase in raw materials prices.

COVID-19 Response

The second and third wave of COVID-19 pandemic had adverse impact across globaleconomies and financial markets. Most governments reacted by instituting covid-relatedrestrictions business shutdowns quarantines and restrictions on travel.

Such actions led to disruption of economic activity leading to many economiesencountering contractions. The Company continued its agile response in takingprecautionary measures to combat the spike in COVID cases at its plant in Kharagpur wheremost of the employees are based. Besides thermal screening and close medical monitoringthat continued since the previous year the Company focused on vaccination drive foremployees & their families including contract workers ; we also created varioussupport groups and continued the digital health and wellness support for employees andtheir families. The existing Pod (roster system) work from home options along with otherindustry-leading covid protocols continued till the Government of India providedrelaxations. By March 31 2022 we conducted more than 15000 COVID-19 tests of which 529positive cases were detected. There were 22 hospitalization cases with 3 unfortunatedeaths.

In line with our focus on digital and innovation the various contactless and digitalsolutions continued to aid our combat against COVID. Continuing our journey to buildsafety leadership capability in-house online training modules workforce engagementthrough virtual meetings e-workshops e-learning modules helped increase connect withemployees & build their morale. The Company not only provided medical assistance butalso arranged special medical insurance against COVID-19 for its employees and providedspecial COVID leave for employees who were infected with COVID-19 or advised homequarantine due to contact tracing at workplace.

The Company also allocated a special COVID-19 fund to provide immediate relief to thevulnerable communities including daily wage workers who were adversely impacted due to thelockdowns. Assistance was also extended to the local hospitals and nursing homes atKharagpur with beds oxygen cylinders and other medical equipment. There were multipleawareness sessions taken by employees to spread awareness about COVID-19 and theimportance of vaccination. Postlockdown operations continued with strict adherence toSOPs and extensive testing for all employees working in the plant at regular intervalsbased on contact tracing SOP.

D. Key Developments

Change in capital structure

There has been no change in the capital structure of the Company during the year underreview.

The Equity Share Capital of the Company is ^315775000 divided into 31577500Equity Shares of ?10/- each as on the close of the FY 2021-22.

Sale of land at Redi

During the year under review the Company completed sale of the vacant land at RediMaharashtra. The sale proceeds have been recognized as income under exceptional items inthe financial statements.

Scheme of Amalgamation of Tata Metaliks Limited with Tata Steel Long Products Limited

The Scheme of amalgamation of Tata Metaliks Limited into and with Tata Steel LongProducts Limited was approved by the Board of Directors of the Company at its meeting heldon November 13 2020. The statutory submissions were made to the Stock Exchanges i.e.National Stock Exchange of India Limited (NSE) and BSE Limited (BSE). TheStock Exchanges had sought additional information on the scheme and the Company is in theprocess of appropriately responding to the same.

Credit Ratings

The Company enjoys a sound reputation for its prudent financial management and itsability to meet financial obligations. The credit rating of your Company for long-termstands at [ICRA] AA- and short-term facilities stands at [ICRA] A1+. Details are providedin Corporate Governance Report.

E. Sustainability

The Company's philosophy of sustainable value creation is deep rooted with the corevalues of the Tata Group. Underpinning this philosophy is a strong focus on zero harmalong with resource efficiency and circular economy minimising carbon footprint and carefor community and workforce. This is ensured through a broad spectrum of focusedinterventions in areas of environment management water sustainability carbon emissionreduction use of alternate fuel and community development. Our commitment to serve ourstakeholders is deployed by the linkage of our business priorities with United NationsSustainable Development Goals (UNSDGs). The Company has set in motion a roadmap tobe carbon neutral by 2050 enhancing value proposition on circular economy implementingrenewable/ alternate energy sources and higher carbon pricing for revenue and capitaldecisions to name a few. During the year the Company adopted a sustainability policy tosharpen our sustainability interventions and attain the sustainability targets. The Policyis available at https://www.tatametaliks.com/static-files/pdf/policies/sustainabilitv-policv. pdf

Various initiatives taken in the last few years have not only improved our ESGperformance but also improved the lives of the focused communities. External voluntaryassessments by leading institutes and independent agencies internal benchmarking study ofESG practices to acknowledge and adopt the best practices and materiality assessment helpus regularly calibrate our interventions in our sustainability journey. The Company in FY2021-22 also made carbon emission disclosure directly for the first time under CarbonDisclosure Project (CDP) for its stakeholders and was one of the very few Companies in theIron & Steel sector in the country to do so.

The Company remains committed to serving its customers through a portfolio ofeco-friendly products and environmental impact of its products by using Life CycleAssessment ('LCA') methodology. During the year under review the Company alsoinitiated the process for "GreenCo" certification.

Some of the key interventions on the sustainability front undertaken by the Companyinclude setting up solar power plant & solar water heating system GHG emissionprofiling local community development in areas of Education and Essential amenitiesoperating a Skill Development Centre to name a few. In FY 2020-21 the Company alsolaunched another major initiative for its community called "TML 300 schools" totransform access & quality of education of children in the nearby villages in twoblocks covering approx. 300 schools around the plant with the ultimate goal of making thearea a child-labour free zone.

Environment & Climate Change

The Company continues its journey towards minimizing environmental impact of itsoperations. In line with the Tata Group Core values concern for environment under thestrategic business pillar of 'Responsible Corporate Citizenship' is deeply embedded inCompany's vision and strategy.

The Company has implemented environment health and safety management systems inaccordance with standards ISO 14001 ISO 45001 and SA 8000 which provides the necessaryframework for managing compliance and improving environmental performance. The SafetyHealth & Environment Committee of the Board provides oversight and necessary guidanceon environmental matters. The manufacturing plant at Kharagpur operational excellence inharmony with environment based on the principles of 3 Rs - Reduce Reuse andRecycle.

Climate change is one of the most pressing issues the world faces today and the Companyrecognizes the same and is committed to optimise water consumption reduce waste reducecarbon and energy footprints. The drive towards renewable energy and minimizing emissionsis reflected in its various initiatives-setting up a 1 MWp Solar power plant usage ofElectric vehicles (EVs) inside the plant as also a major drive towards improving energyefficiency. During the year Energy Audit for PI division was initiated through a BEEaccredited agency. The Company has also begun its journey to achieve its goal of becomingcarbon neutral by 2050 in line with its longterm decarbonisation strategy.

Safety and Health

The Company under the guidance of the Safety Health and Environment (SHE) Committeeremains committed to its objective of achieving Zero harm through a set of well thoughtout strategies that include Contractor Management Safety Process Safety Risk basedthinking and transforming the mindset of employees to enhance Behavioral Safety. Duringthe year under review renewed thrust was made on risk- based Safety approach byeliminating or reducing high risk activities through engineering controls &automation. Some of the key initiatives taken include commissioning of one-of-a- kindVacuum pad system for loading & unloading of DI Pipes deployment of robotics andvirtual training in collaboration with JN Tata Vocational Training Institute (JNVTI) onSafety Competency Building for Service Providers Safety Supervisor and Site Supervisors.Further behavior-based culture study was conducted to understand Safety Maturity IndexLevel. Efforts towards Hazard Identification and Risk Assessment (HIRA) in newrecalibrated HIRA matrix and initiation of Process Safety Risk Management (PSRM) incritical processes are helping develop a Risk based approach to Safety which will give athrust to achieving the goal of Zero harm. During the year the Company developedE-learning modules on Safety Induction & Safety Standards and also developed VR(Virtual Reality) modules on Lock out Tag out Try out (LOTOTO) & Centrifugalcasting machine (CCM) operation and Fire fighting.

Digital

As part of the Digital Transformation Journey several initiatives including deploymentof Robotics use of AI based system and Virtual Reality (VR) based training are beingdeployed to reduce Employee Machine interface and improve safety in the workplace. The DIPplant No. 2 (DIP-2) has been designed with a very high degree of automation & usage ofdozens of robots; the first phase of DIP-2 has been commissioned through usage of digitaltechnologies like Augmented Reality a first in the DI Pipe industry. The new digital androbotics interventions will not only improve safety significantly but will also enhanceproductivity and quality of operations.

Customer Relationship

Customer-centricity forms the core of Company's strategic business pillar of"Supplier of Choice". The Company's marketing strategy is built arounddeveloping deep customer engagement differentiated product & service offerings andleveraging digital to improve the customer experience journey. During the year theCompany used virtual platforms to engage with customers and offered technical services andtechnical webinars with both domestic and international customers further leveraging theknowledge capital.

The Company's digital initiatives served as a big differentiator during the pandemicand helped the Company to develop stronger relationships with customers. Regular usage ofdata analytics tools such as pricing analytics has helped the Company in sharpening itspricing strategy. The Company implemented the Customer Relationship Management (CRM)solution for its Pig Iron business which improved ease of doing business with channelpartners and customers In Q4 of FY 202122 98% of PI orders were booked through CRM ofwhich 40% + orders were logged by channel partners & customers themselves. The CRMsolution of DI pipe business has also gone live in beginning of FY 2022-23. The Companycontinues to promote its Tata eFee and Tata Ductura as premium brands which offerssuperior value to its customers through enhanced digital marketing enablers includingsocial media platforms. During the year various technical webinars technical services andonsite interactions were carried out to facilitate promotion.

Corporate Social Responsibility

The Corporate Social Responsibility ('CSR') initiatives of the Company areembodied in its value chain and aligned with the core purpose of the Tata Group. TheCompany is committed to improving the quality of life of the community through longtermvalue creation for all its stakeholders.

In addition to the response to COVID-19 reported earlier the Company continued withits focused interventions in the areas of Education and Essential Amenities which includeprojects on health sanitation water conservation and sustainability. Further theCompany also engaged with the community to develop entrepreneurs through formation ofself-help groups in partnerships with other organisations. The Company has partnered withTata Strive to impart quality training at its Skill Development Centre with the objectiveof making the youth employable.

The CSR activities are carried out through 'Sadbhavna Trust'.

In terms of Section 135 of the Companies Act 2013 and the Rules framed there underbrief outline of the CSR policy and the prescribed details are part of the Annual Reporton CSR activities annexed to this report as Annexure B. The CSR Policy adopted bythe Company as revised on April 22 2022 can be viewed athttps://www.tatametaliks.com/static-files/pdf/policies/Corporate-Social-Responsibilitv-Accountabilitv-Policv. pdf. For other detailsplease refer to the Corporate Governance Report which forms part of this report.

In FY 2020-21 the Company also launched another major initiative for its communitycalled "TML 300 schools" to transform access & quality of education ofchildren in the nearby villages. The project aims to ensure all children in the age groupof 5-15 years in a defined area covering two blocks near the Plant (approx. 300 schools)are provided quality education so that the area ultimately becomes child labour free.During the year despite the constraints posed by the pandemic the Company has made steadyprogress in this unique Education initiative.

The Company in FY 2019-20 embarked on an ambitious journey to become 'water positive'by FY 2024-25 through focused interventions including steep reduction in waterconsumption creating water conservation & harvesting structures deepening of pondsetc. in and around our plant. In line with the objective of making water available to thecommunity the Jal se Jeevan project saw further progress during the year with excavationof several rainwater capturing ponds and infrastructure.

These two ambitious projects (to be conducted in two phases) are expected to create asignificant positive impact on the community near the Plant. Despite COVID-19 constraintsthe employees of the Company clocked 7246 Employee Volunteering (EV) hours in the serviceof the community. During the year under review a sum of Rs 540 lakhs was contributed tothe Sadbhavna Trust for CSR and Affirmative Action initiatives against the minimumstatutory requirement of Rs 478.13 lakhs for the year under review.

F. Corporate Governance

Guided by the tenets of transparency and openness the governance approach focuses onthe effective working of the Management and the Board while ensuring that corporatebehaviour remains responsible. We consider it our inherent responsibility to disclosetimely and accurate information regarding the operations and performance leadership andgovernance of the Company. The Company remains committed to raise the bar in adopting andadhering to transparent and ethical corporate governance practices. The practices reflectthe Group values and ethos organization culture polices and the relationship withvarious stakeholders. As a responsible organization timely and accurate disclosure inrespect to Company's operational performance material corporate events as well as onleadership and governance is done for the interest of all stakeholders.

In line with the SEBI Listing Regulations Corporate Governance Report along with theCertificate from a Practicing Company Secretary certifying compliance with conditions ofCorporate Governance is annexed to this report as Annexure C.

Meetings of Board and Committees of Board

The Board met six times during the year under review. The intervening gap between themeetings was within the period prescribed under the Companies Act 2013 and the SEBIListing Regulations. The Committees of the Board usually meet prior to the Board meetingor whenever the need arises for transacting business. Details of composition of the Boardand its Committees as well as the meetings held during the year under review and theDirectors attending the same are given in the Corporate Governance Report forming part ofthis Report.

Selection of New Directors and Board Membership Criteria and Policy on Appointment andRemuneration of Directors Key Managerial Personnel and other Employees

The Nomination and Remuneration Committee ('NRC') engages with the Board toevaluate the appropriate characteristics skills and experience for the Board as a wholeas well as for its individual members with the objective of having a Board with diversebackgrounds and experience in business finance governance and public service. The NRCbased on such evaluation determines the role and capabilities required for appointment ofIndependent Director. Thereafter the NRC recommends to the Board the selection of newDirectors.

The Company has a well-defined policy for appointment of Directors Key ManagerialPersonnel (KMP) and other employees including their remuneration. The NRC recommendssuitable candidates to the Board based on their qualifications positive attributes andexperiences for Board Membership. The salient features of the Policy are:

• It acts as a guideline for matters relating to appointment and reappointment ofDirectors

• It contains guidelines for determining qualifications positive attributes ofDirectors and independence of a Director

• It lays down the criteria for Board Membership

• It sets out the approach of the Company on Board diversity

• It lays down the criteria for determining independence of a Director in case ofappointment of an Independent Director.

The Policy is available on our website at https://www.tatametaliks.com/static-files/pdf/policies/TML-NRC-policy.pdf

Familiarization Programme for Independent Directors

As a practice all new Directors (including Independent Directors) inducted to theBoard go through a structured orientation programme. Presentations are made by SeniorManagement giving an overview of the operations to familiarize the new Directors with theCompany's business operations. The new Directors are given an orientation on the productsof the business group structure and subsidiaries Board constitution and proceduresmatters reserved for the Board and the major risks and risk management strategy of theCompany. In compliance with the provisions of the SEBI Listing Regulations your Companyfacilitates various programmes/ awareness sessions for Independent Directors.

Details of the familiarization programmes for the Independent Directors are provided inthe Corporate Governance Report annexed herewith and the policy as adopted by yourCompany is also available on our website at https://www.tatametaliks.com/static-files/pdf/policies/policy-prog-director.pdf

During the year under review no new Independent Director were inducted to the Board.

Board Evaluation

The Board evaluated the effectiveness of its functioning of the Committees and ofindividual Directors pursuant to the provisions of the Companies Act 2013 ('Act') andthe SEBI Listing Regulations. The Board carried out an annual evaluation of its ownperformance the performance of the Independent Directors individually as well as anevaluation of the working of the Committees of the Board. The performance evaluation ofall the Directors was carried out by the Nomination and Remuneration Committee. Theperformance evaluation of the Chairman and the Non-Independent Directors was carried outby the Independent Directors pursuant to the provisions of the Act and SEBI ListingRegulations.

The Board sought the feedback of Directors on various parameters including:

• Degree of fulfillment of responsibilities towards key stakeholders (by way ofmonitoring corporate governance practices participation in the long term strategicplanning etc.);

• Structure composition and role clarity of the Board and Committees;

• Extent of co-ordination and cohesiveness between the Board and its Committees;

• Effectiveness of the deliberations and process management;

• Board/Committee culture and dynamics; and

• Quality of relationship between Board Members and the Management.

The Chairman of the Board had one-on-one meeting with the Independent Directors ('IDs')and the Chairman of NRC had one-on-one meeting with the Executive and Non-ExecutiveNon-Independent Directors. These meetings were intended to obtain DirectorsRs inputs oneffectiveness of the Board/ Committee processes. The above criteria are based on theGuidance Note on Board Evaluation issued by the Securities and Exchange Board of India onJanuary 5 2017. Additionally the evaluation process compared the evaluation reports ofearlier years and reviewed the areas where improvements have been made and the areas wherefurther improvement is desired.

The Independent Directors had their meeting on February 24 2022 and reviewedinter-alia the performance of the NonIndependent Directors and the Board as a wholeincluding the Chairman of the Board. The feedback of the Independent Directors was sharedwith the NRC.

The NRC reviewed the performance of the individual Directors and the Board as a whole.In the Board meeting that followed the meeting of the Independent Directors and themeeting of NRC the performance of the Board its committees and individual Directorswere discussed.

The evaluation process found the overall performance of the Board satisfactory inworking cohesively as a team and guiding the Company to attain its growth vision. TheBoard also appreciated and bestowed full confidence in the Chairman and the Management inguiding the Company through various challenges to be one of the best performing Companiesamongst the Tata Steel group Companies.

Remuneration Policy for the Board and other Employees

In determining the remuneration of the Directors Key Managerial Personnel ('KMP') andother employees of the Company based on the recommendations of the NRC the Board hasapproved the Remuneration Policy for Directors Key Managerial Personnel and all otheremployees of the Company. The policy aims to ensure that the level and composition ofremuneration for Directors KMPs and other employees is reasonable and aligned to themarket to attract retain and motivate them. The remuneration involves a balance betweenfixed and variable pay reflecting short and long term objectives of your Company.

The salient features of the Policy are:

• It lays down the parameters based on which payment of remuneration (includingsitting fees and remuneration) should be made to Independent Directors and NonExecutiveDirectors.

• It lays down the parameters based on which remuneration (including fixed salarybenefits and perquisites bonus/ performance linked incentive commission retirementbenefits) should be given to whole-time directors KMPs and employees.

• It lays down the parameters for remuneration payable to Directors for servicesrendered in other capacity.

During the year under review there has been no change in the Policy. The said policyis available on our website at https://www.tatametaliks.com/static-files/pdf/policies/TML-NRC-policy. pdf.

Particulars of Employees

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are annexed to this Report as Annexure D. Interms of the provisions of Section 197(12) of the Act read with Rule 5(2) and (3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 a statementcontaining names and other related particulars of employees drawing remuneration in excessof the limits set out in the said Rules forms part of this report.

Directors

The year under review saw the following changes to the Board of Directors ('Board').

Re-appointment of Independent Directors

i. The NRC after considering the (1) performance evaluation of Mr. Amit Ghosh (DIN:00482967) as a Member of the Board/ Commitees (2) his contribution in Board/ Committeedeliberations during his tenure as an Independent Director and (3) his skills backgroundand experience recommended to the Board for his re-appointment as Independent Directorfor a second term. The Board unanimously endorsed the view of the NRC and recommended tothe Shareholders of the Company the re-appointment of Mr. Ghosh as an IndependentDirector of the Company not liable to retire by rotation to hold office for a secondterm effective January 24 2022 through July 19 2023. On January 15 2022 theShareholders of the Company through postal ballot approved the re-appointment of Mr.Ghosh as an Independent Director of the Company for the above- mentioned tenure.

ii. The NRC after considering the (1) performance evaluation of Dr. Rupali Basu (DIN:01778854) as a Member of the Board/ Commitees (2) her contribution in Board/ Committeedeliberations during her tenure as an Independent Director and (3) her skills backgroundand experience recommended to the Board for her re-appointment as Independent Directorfor a second term of five years. The Board unanimously endorsed the view of the NRC andrecommended to the Shareholders of the Company the re-appointment of Dr. Basu as anIndependent Director of the Company not liable to retire by rotation to hold office fora second term of five years effective January 24 2022 through January 23 2027.

On January 15 2022 the Shareholders of the Company through postal ballot approvedthe re-appointment of Dr. Basu as an Independent Director of the Company for theabove-mentioned tenure.

Re-appointment of Director retiring by rotation

In terms of the provisions of Section 152 of the Act read with Article 110 of theArticles of Association of the Company Ms. Samita Shah (DIN: 02350176) Non-ExecutiveDirector will retire by rotation at the ensuing AGM and is eligible for reappointment.

The necessary resolution for re-appointment of Ms. Shah forms part of the Noticeconvening the AGM. The Board recommends and seeks your support in confirmingre-appointment of Ms. Shah. The profile and particulars of experience attributes andfunctional expertise that qualify her for Board Membership are duly disclosed in theNotice convening the AGM.

Independent Directors' Declaration

The Company has received the necessary declaration from each Independent Director (IDs)in accordance with Section 149(7) of the Act and Regulations 16(1)(b) and 25(8) of theSEBI Listing Regulations that he/she meets the criteria of independence as laid out inSection 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations.

In the opinion of the Board as per the confirmations received from the IDs there hasbeen no change in the circumstances which may affect their status as IDs of the Companyand the Board is satisfied of the integrity expertise and experience (includingproficiency in terms of Section 150(1) of the Act) of all IDs on the Board. Further interms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification ofDirectors) Rules 2014 as amended IDs of the Company have included their names in thedata bank of Independent Directors maintained with the Indian Institute of CorporateAffairs.

Key Managerial Personnel

Pursuant to Section 203 of the Act Mr. Sandeep Kumar Managing Director Mr. SubhraSengupta Chief Financial Officer and Mr. Avishek Ghosh Company Secretary and ComplianceOfficer are designated as Key Managerial Personnel ('KMP') of your Company as on March 312022. The details are mentioned in the Corporate Governance Report.

Audit Committee

The Audit Committee ('Committee') is duly constituted as per the provisions ofthe Act and applicable Rules framed there under read with the SEBI Listing Regulations.The primary objective of the Committee is monitoring and supervising the Management'sfinancial reporting process to ensure accurate and timely disclosures with highest levelsof transparency integrity and quality of financial reporting. During the financial yearthere have been no instance where the Board have not accepted any recommendations of theCommittee.

The Committee comprises of Mr. Krishnava Dutt (Chairman) Dr. Pingali Venugopal Ms.Samita Shah and Mr. Amit Ghosh.

The Committee met 5 (five) times during the year under review. Details of terms ofreference of the Committee number and dates of meetings held and attendance of Membersduring the year are part of the Corporate Governance Report.

Internal Control Systems

The Board is responsible for ensuring that Internal Financial Controls (IFC) are laiddown in the Company and that such controls are adequate and operating effectively. TheCompany's IFC framework is commensurate with the size scale and complexity of theoperations of the Company. The details of the IFC framework and their adequacy areincluded in the Management Discussion and Analysis Report.

Risk Management

Risks are integral to any business and the Company's Risk Management framework overthe years has evolved in line with the strategic objectives and changes in the operatingenvironment. It helps to predict and undertake pre-emptive response to manage and mitigatekey risks. Amidst various micro and macro uncertainties and volatile business environmentthe Company faces frequent changes in technology geo-politics financial marketsregulations etc. which affect the value chain at large. To build a sustainable businessthat can respond to these changes the Company has an agile and responsive risk managementframework for identifying prioritising and mitigating risks which may impact attainmentof short and long-term business goals of the Company.

The Risk Management framework based on the holding Company's Group Risk Managementprocess is based on international standards like Committee of Sponsoring Organization ofthe Treadway Commission ('COSO') and ISO 31000 and is aligned with strategicplanning and capital project evaluation process of the Company. The process aims toanalyse internal and external environment and manage economic financial marketoperational compliance sustainability and business continuity risks and capitalises onopportunities for business success. The development and implementation of Risk Managementpolicy has been covered in the Management Discussion and Analysis which forms part ofthis report.

The Company periodically reviews the identified key risk areas mapped and linked withoperational objectives. These risks are periodically revisited against their respectivemitigation plans. The Board has a separate Risk Management Committee consisting ofDirectors and a management representative responsible for monitoring and reviewing therisk management plan and ensuring its effectiveness. The Audit Committee also hasadditional oversight in the area of financial risks and controls. The major risksidentified by the businesses and functions are systematically addressed through mitigatingactions on a continuing basis. The Committee meets at periodic intervals and monitorsevaluates and strengthens the effectiveness of risk management framework of the Company.

The Company's risk-based culture enabled it to manage the uncertainties in a volatileand challenging business environment during the year under review. As the COVID-19situation resurfaced "scenario-based risk assessment" was facilitated acrossthe Company. Further business decisions were pivoted to achieve cash neutrality inoperations by reducing spend managing working capital and reducing capital expenditures.Operating regime was recalibrated in response to the decline in domestic demand. Supplychain disruptions were managed through robust planning and developing alternatesuppliers.In view of sluggish domestic dispatches risk to sales was mitigated throughenhanced exports and new international markets were cultivated.

During the year under review the Company has made significant progress in its journeytowards risk intelligence and the management is working under the active guidance of theRisk Management Committee and the Board to navigate the volatile economic environment.

Vigil Mechanism / Whistle Blower Policy

The Company has a well-defined Vigil Mechanism policy in place that provides a formalprocess for all Directors employees business associates and vendors of the Company toapproach the Ethics Counsellor/ Chairman of the Audit Committee. Due awareness is madeacross the organization and business partners to enable anyone to make protectivedisclosures about any unethical behaviour actual or suspected fraud or violation of theTata Code of Conduct (TCoC). During the year under review no person has been deniedaccess to the Chairman of the Audit Committee. In addition Directors employees andvendors can approach the Ethics Counsellor to make any such protected disclosure. Duringthe year under review the Company also undertook a series of communication and trainingprogrammes for various stakeholders.

The Whistle Blower Policy is an extension of the TCoC which requires every Director/employee/business associate/ vendor to promptly report to the Management any actual orpossible violation of the TCoC or any event which he or she becomes aware of that couldaffect the business or reputation of the Company. The said policy is available on theCompany's website at www.tatametaliks.com/static-files/pdf/policies/whistleblower-policy.pdf. The Vigil Mechanism also includes the Anti-Bribery &Anti-Corruption ('ABAC') Policy. During the year under review the Company received 8(Eight) whistleblower complaints which were duly investigated and resolved.

Disclosure as per Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013

The Company has zero tolerance towards sexual harassment at the workplace. The Companyhas adopted a policy on prevention prohibition and redressal of sexual harassment atworkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules made there under. Allemployees (permanent contractual temporary trainees etc.) are covered under thisPolicy.

The Company has complied with the provisions relating to the constitution of theInternal Complaints Committee as per the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.

During the year under review the Company received 1 (one) complaint of sexualharassment in the latter half of Q4 FY 202122. As on the date of this report theinvestigation has been completed and the matter is due for final resolution.

Related Party Transactions

In compliance with the Act and the SEBI Listing Regulations the Company has formulateda Policy on Related Party Transactions (RPTs) and manner of dealing with RPTs. During theyear under review the Policy has been amended to incorporate the regulatory amendments inthe SEBI Listing Regulations. The updated Policy can be accessed on the Company's websitewhich is available on the Company's website at the link:https://www.tatametaliks.com/static-files/pdf/policies/rpt-policy.pdf

All transactions with related parties during FY 2021-22 were reviewed and approved bythe Audit Committee and were at Arm's Length Price (ALP) and in the Ordinary Course ofBusiness (OCB). Prior omnibus approval was obtained for all RPTs which were of repetitivenature and entered in the OCB and on an ALP basis. The transactions entered into pursuantto the omnibus approval so granted were reviewed by Audit Committee on quarterly basis.

Pursuant to the third proviso of Section 188(1) of the Act the compliance with theprovisions of Section 188(1) is not applicable where all RPTs are carried out in the OCBand under ALP basis. Accordingly the disclosure of RPTs as required under Section 134(3)(h) of the Act and Rule 8(2) of the Companies (Accounts) Rules 2014 in form AOC-2 is notapplicable to the Company for FY 2021- 22. However the Company had material RPTs duringFY 2021-22 under SEBI Listing Regulations. Hence the same have been disclosure as formAOC-2 enclosed as Annexure E.

Details of RPTs entered into by the Company in terms of Ind AS-24 are disclosed innotes to the financial statements forming part of this Integrated Report. There was noother material RPTs entered into by the Company with its Promoters Directors KMPs orother designated persons during FY 202122 except those reported in the financialstatements. None of your Directors or KMPs had any pecuniary relationships or transactionswith the Company during FY 2021-22 other than remuneration as disclosed elsewhere in thereport.

Approval of Members is being sought for the material RPTs for FY 2022-23 at the ensuingAGM.

Directors' Responsibility Statement

Based on the framework of IFC established and maintained the work performed by theinternal statutory and secretarial auditors and external consultants including the auditof internal financial controls over financial reporting by the statutory auditors and thereviews performed by management and the relevant Board committees including the auditcommittee the Board is of the opinion that the Company's internal financial controls wereadequate and effective during FY 2021-22.

Accordingly pursuant to the provisions of Section 134(3)(c) read with Section 134(5)of the Act the Board to the best of its knowledge and ability confirms that:

a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;

b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitof the Company for that period;

c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls in the Company and that suchinternal financial controls are adequate and were operating effectively; and

f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

Business responsibility and sustainability Report

The Securities and Exchange Board of India ('SEBI') in May 2021 introduced newsustainability related reporting requirements to be reported in the specific format ofBusiness Responsibility and Sustainability Report ('BRSR'). BRSR is a notable departurefrom the existing Business Responsibility Report ('BRR') and a significant step towardsgiving platform to the Companies to report the initiatives taken by them in areas ofenvironment social and governance. Further SEBI has mandated top 1000 listed Companiesbased on market capitalization to transition to BRSR from FY 2022-23 onwards However theCompany has provided the BRSR for FY 2021-22 as a voluntary disclosure and is annexedherewith as Annexure F.

The Company has followed the <IR> framework of the International IntegratedReporting Council to report on all the six capitals that are used by the Company tocreate long-term stakeholder value. Our Integrated Report has been assessed by BureauVeritas for non-financial disclosures and Price Waterhouse & Co Chartered AccountantsLLP has provided the required assurance for the financial statements.

Subsidiaries Joint Ventures and Associates

The Company does not have any subsidiary associate or joint venture Company as onMarch 31 2022. Accordingly the requisite disclosure as per Section 129(3) of the Act inForm AOC-1 is not applicable.

Auditors

Statutory Auditors

Members of the Company at the 27th Annual General Meeting held on July 26 2017approved the appointment of Price Waterhouse & Co Chartered Accountants LLP(Registration No.304026E/ E300009) ('PW') Chartered Accountants as the StatutoryAuditors of the Company for a term of 5 (five) consecutive years commencing from theconclusion of 27th AGM until the conclusion of the 32nd AGM to beheld in the year 2022.

In terms of the provisions of the Companies Act 2013 an audit firm acting as thestatutory auditor of a Company is eligible to be appointed as statutory auditors for twoterms of five years each. The first term of PW as statutory auditors of the Companyexpires at the conclusion of the 32nd AGM of the Company scheduled to be heldon August 2 2022. Considering their performance as auditors of the Company during theirpresent tenure the Audit Committee of the Company after due deliberation and discussionrecommended the re-appointment of PW as statutory auditors of the Company for a secondterm of 5 years to hold office from the conclusion of the 32nd AGM to be heldon August 2 2022 through the conclusion of the 37th AGM of the Company to beheld in the year 2027.

Further the remuneration to be paid to Statutory Auditors for FY 2022-23 is Rs 41lakhs plus out of pocket expense and the remuneration for the remaining tenure of theirsecond term as Statutory Auditors shall be mutually agreed between the Board of Directorsand PW from time to time.

The Board at its meeting held on April 22 2022 endorsed the recommendation of theAudit Committee for re-appointment of PW as statutory auditors and payment of theremuneration as mentioned above and approved the same. The above proposal forms part ofthe Notice of the AGM for your approval. The report of the Statutory Auditor forms part ofthis Integrated Report and Annual Accounts 2021-22. The said report does not contain anyqualification reservation adverse remark or disclaimer. During the year under reviewthe Auditors did not report any matter under Section 143(12) of the Act therefore nodetail is required to be disclosed under Section 134(3)(ca) of the Act.

Secretarial Auditor

Section 204 of the Act inter alia requires every listed Company to annex to itsBoard's report a Secretarial Audit Report given in the prescribed form by a CompanySecretary in practice. Accordingly in compliance with the provisions of the Act and theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Boardupon the recommendation of the Audit Committee had approved the appointment of Mr. P. V.Subramanian Company Secretary in Whole-time- Practice [C.P. No. 2077 ACS 4585] as theSecretarial Auditor of the Company for the financial year ending March 31 2023. TheSecretarial Audit Report for the financial year ended March 31 2022 in Form MR-3 formsan integral part of this report and is annexed herewith as Annexure G.

Cost Auditors

Pursuant to the provisions of Section 148 of the Act and the Companies (Cost Recordsand Audit) Rules 2014 the Company is required to maintain its cost records and get thesame audited by a Cost Accountant in practice. Accordingly the cost records are made andmaintained by the Company as required under Section 148(1) of the Act.

The Board has based on the recommendation of the Audit Committee approved appointmentof Messrs. Shome & Banerjee Cost Accountants (Firm Registration No: 000001) as theCost Auditors of the Company for the financial year ending March 31 2023.

Messrs. Shome & Banerjee have vast experience in the field of cost audit and havebeen conducting the audit of the cost records of the Company for the past several years.Pursuant to Section 148 of the Act read with Rule 14(a)(ii) of Companies (Audit andAuditors) Rules 2014 ratification of the remuneration payable to the Cost Auditors (asrecommended by the Audit Committee and approved by the Board) is being sought from theMembers of the Company at the ensuing AGM. The details of the same are provided in theNotice convening the AGM. We seek your support in ratifying the proposed remuneration ofRs 3.50 lakhs plus applicable taxes and reimbursement of out-of-pocket expenses payable tothe Cost Auditors for the financial year ending March 31 2023.

Auditors' qualification

No qualifications reservations adverse remarks or disclaimers are provided in thereports by the Statutory Auditors Secretarial Auditor and Cost Auditors respectively.

Annual Return

The Annual Return for FY 2021-22 as per provisions of the Act and Rules thereto isavailable on the Company's website athttps://www.tatametaliks.com/static-files/pdf/annual-return- mgt7-21-22.pdf

Significant and Material Orders Passed by the Regulators or Courts

There has been no significant and material order(s) passed by any Regulator(s) orCourt(s) or Tribunal(s) impacting the going concern status of the Company and it's futureoperations. However Members' attention is drawn to the statement on contingentliabilities and commitments in the notes to the Financial Statements. No material changesand commitments have occurred after the close of the financial year till the date of thisReport which affects the financial position of the Company for the year under review.

Particulars of Loans Guarantees or Investments

Particulars of loans guarantees given and investments made during the year underreview in accordance with Section 186 of the Companies Act 2013 is annexed to this reportAnnexure H.

Energy Conservation Technology Absorption and Foreign Exchange Earnings & Outgo

Details of energy conservation technology absorption and foreign exchange earnings andoutgo are annexed to this report as Annexure I.

Deposits

The Company has not accepted any fixed deposits nor does the Company have anyoutstanding amount on account of principal or interest on deposits from public underSection 73 of the Act read with the Companies (Acceptance of Deposit) Rules 2014 as onthe date of the Balance Sheet.

Secretarial Standards

The Company has in place proper systems to ensure compliance with the provisions of theapplicable secretarial standards issued by The Institute of Company Secretaries of Indiaand such systems are adequate and operating effectively.

Other Disclosures

No disclosure or reporting is made in respect of the following items as there were notransactions or change during the year under review:

• There was no revision in the financial statements other than as required to bedone as per Ind AS; and

• There was no change in the nature of business.

Awards and Accolades

Your Directors are happy to report that the Company was bestowed with several awardsduring the year. Noteworthy ones are mentioned below:

• Certified as 'Great Place to Work'

• Winner at the 4th CII National Kaizen Competition 2021 (OfficerLevel) under 'Cost Reduction' & 'Cost Reduction through Digitization' categoryrespectively

• Winner at the CII National level case study competition for the Best case studyon 'Innovative application of Low cost automation (LCA)' project & for the case studyon 'Human safety quality & utility'

• Best case study on low cost automation (LCA) related to Human safety by CII

• "Innovative Best Practice" award for "Robotics Application in DIPIndustry" at CII's National DX Awards 2021

• Silver award under the Cost category for reducing consumable cost per ton of HotMetal through kaizen (PI Team) and Platinum award for logistics management (DIP Team) atthe 14th National CII Competition

• Winner at 4th National Electrical safety competition power qualityand reliability forum organised by CII

Acknowledgements

Your Directors take this opportunity to thank its Stakeholders i.e. MembersCustomers Vendors Dealers Investors Business Associates and Bankers for theircontinued support during the year. They place on record their deep sense of appreciationfor the contribution made by Senior Leadership team and employees at all levels across theorganisation. The resilience to meet and successfully overcome several challenges waspossible due to their hard work solidarity co-operation and support. Your Directors alsoexpress their gratitude towards Government of India Government of West Bengal and otherstates in India concerned Government departments & agencies and regulatoryauthorities for their continued support.

On behalf of the Board of Directors
Sd/-
Koushik Chatterjee
Place: Mumbai Chairman
Date: April 22 2022 DIN:00004989

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