100th Annual Report 2006-2007 - Tata Steel

Business and Operational Risk
The management of the Company headed by the Managing
Director is responsible for managing the day to day affairs of
the Company.
The Company has adopted the framework of Corporate
Sustainability Management System and Triple Bottom Line
performance (Economic, Environmental, and Societal)
reporting. This facilitates the Company’s efforts to proactively
manage concerns and address the needs beyond compliance
to norms. The Company’s goals of ensuring safety, improved
quality of life and environmental sustainability are cascaded
down the organisation through the deployment of its
Environmental, Health & Safety Policy.
The steel industry is still highly fragmented and cyclical in
nature as well as demand for steel products is generally
affected by macroeconomic fluctuations in the global markets.
The Company has undertaken several initiatives to insulate
itself from volatility in steel prices by continuously enriching
its product mix and moving up the value chain, branding
its products and entering into long term contracts with
its customers. The Company is relatively protected from
increases in the prices of key raw materials since it meets
100% of iron ore and around 70% of coal requirements from
its captive mines.
The impact of Company’s products, services and operations
on employees, society and environment are systematically
analysed through stakeholder engagement, “risk analysis”
under ISO-14001, OHSAS-18001 and “Life Cycle Assessment”
of products.
The Company has taken number of initiatives to mitigate
risks arising from concentration risk at a single location in
Jamshedpur. The overseas acquisitions of NatSteel Asia Pte.
Ltd. having presence in seven countries of South-East Asia and
Tata Steel (Thailand) Public Company Ltd. were steps taken
in this direction. Further, beside expanding steel capacity in
Jamshedpur, the Company is also executing greenfield projects
in Orissa, Chhattisgarh and Jharkhand in foreseeable future.
The Company has taken a Mega Insurance Policy to insure
all its operating assets against property damage, business
interruption losses due to fire and allied perils (such as fire,
explosion, earthquake, flood, storm etc.) and terrorism damages.
The Company has also taken a Comprehensive General
Liability Insurance and Product Liability Insurance. The risks are
periodically reviewed by the top management to ascertain
the adequacy of coverage and if required, corrective action
is taken to mitigate the risks to levels considered acceptable
by the Company.
Implementation of a robust communication process across the
organisation is a key element of the Risk Management process.
Tata Steel has adopted the framework of
Corporate Sustainability Management System
and triple bottom line performance reporting
that facilitates the Company’s efforts to
proactively manage concerns and address the
needs beyond compliance to norms.
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