100th Annual Report 2006-2007 - Tata Steel

Management Discussion and Analysis
The audit activities are undertaken as per the Annual Audit
Plan developed by Corporate Audit based on the risk profile
of business processes/sub-processes of various functions. The
Audit Plan is approved by the Audit Committee who regularly
review compliance to the Plan.
During the year, the Audit Committee met regularly to review
the reports submitted by the Corporate Audit Division. All
significant audit observations and follow-up actions thereon
are reported to the Audit Committee.
The Audit Committee also met the Company’s Statutory
Auditors to ascertain their views on the adequacy of internal
control systems in the Company and their observations on
financial reports. The Audit Committee’s observations and
suggestions were acted upon by the Management.
III) Risk Management
Risk Management is a structured and disciplined approach
to manage enterprise risk. The Company recognises Risk
Management as an integrated, forward looking and process
oriented approach for managing all key business risks and
opportunities. The Company’s Risk Management process is based
on the framework of the Tata Business Excellence Model.
In translating the Company’s vision and mission into specific
strategies, objectives and priorities, each business unit of the
Company addresses opportunities and the attendant risks
through an institutionalised approach that is aligned with
the Company’s objectives. The Managing Director, Deputy
Managing Directors and the Business Heads (Vice Presidents
and Executives-in-Charge) manage risks on a daily basis through
cross functional involvement and intense communication
across businesses. The Risk Management process commences
with the preparation of the Long Term and Annual Business
Plans and managing the performance of the business in
conformity to the above Plan.
The Company reviews, monitors and manages risk under the
following broad category:
Strategic Risks
The Steel Industry today faces several significant strategic issues
which include, inter alia, industry consolidation issues, execution
of profitable growth options, raw material linkages and security,
technology and new product development, raising finance
from global financial markets, protecting the environment and
serving the community while creating value for its shareholders.
The Management of the Company prepares the long term
strategic plans taking into account the long term objectives
of the Company. The Executive Committee of the Board and
the Board of Directors of the Company periodically review the
strategic plan of the Company taking into account the changes
in the global steel industry and advise the management on
various strategic issues. The Company undertakes its growth
projects including acquisitions based on the strategic plan
approved by the Board.
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